Insured individuals must fully disclose all material facts to avoid policy repudiation; failure to do so constitutes deliberate or reckless misrepresentation under the Financial Services Act.

Introduction

[1] This is a trial heard over 3 days on 7 February 2025, 16 April 2025 and 18 April 2025. The plaintiffs are Therumoorthi A/L Appalanaidu [Suing In Person And As Administrator For The Estate Of Vishnu Murthy A/L Therumoorthi (Si Mati)] and Anjelai Devi A/P Maniam.

[2] They sued Public Bank Berhad ["Public Bank"] and AIA Berhad. The suit against Public Bank the 1st defendant had been struck out. The trial proceeded against AIA Berhad the 2nd defendant ["AIA Berhad"].

[3] Oral submissions by counsel were held before me on 23 July 2025. On conclusion of oral submissions, I had dismissed the suit with costs of RM10,000.00 subject to allocatur. My Broad Grounds for dismissing the suit [Encl 144 Amended SOC] were:

Broad Grounds

[4] In my view, the 2nd Health Question in the Application Form is not confined to the period of 6 months before the date of the Application Form.

[5] The evidence presented in court shows that the deceased had several material medical histories, which were acute hepatitis, major depression and young hypertension, prior to the application for the insurance policy.

[6] In breach of the principle of utmost good faith (uberrima fides) and the Financial Services Act 2013 (Act 758) [" FSA "], the deceased failed to disclose these material medical histories in his proposal for the insurance policy. In fact, he had given a wrong answer of 'Negative'.

[7] The deceased is a medical doctor. I therefore do not accept the submission of the plaintiffs that the case of Pacific & Orient Insurance Co Sdn Bhd v. R Kathirvelu 1992 MarsdenLR 590 ; 1992 MarsdenLR 766 ; 1992 MarsdenLR 770 ; [1992] 1 CLJ (Rep) 251; [1992] 1 MTC 54 ; [1992] 1 BLJ 54 , SC, supports the plaintiffs' case. That case is premised on the finding by the Supreme court that the illness in question did not fall within the notification clause based on the ejusdem generis rule of interpretation.

[8] AIA Berhad is entitled to repudiate the policy.

[9] An appeal was filed by the plaintiffs on 20 August 2025 to the court of Appeal. These are my Grounds of Judgment.

Relevant Facts

Parties

[10] The 1st plaintiff is the father of the late Dr Vishnu Murthy A/L Therumoorthi ("Deceased"). He is also the Administrator of the Estate of the deceased pursuant to the Letter of Administration issued by the High court of Kuala Lumpur on 27 October 2016 through Civil Suit No: (WA-31NCVC-1354-08/2016).

[11] The 2nd plaintiff is the mother of the deceased.

[12] AIA Berhad is a life insurance company.

[13] The deceased served as a doctor at Kuala Lumpur General Hospital until 18 May 2016. He tragically passed away on 18 May 2016.

Deceased Obtained A Mortgage Decreasing Term Assurance ("MDTA")

[14] Prior to his passing, the deceased had purchased a property. To do so, he applied for a loan from Public Bank to finance the said purchase. [Ref: Facilities Agreement dated 30 March 2016 at pp 15-90 of Bundle B4 [Encl 83]].

[15] A condition precedent for the release of the loan was the requirement for the deceased to obtain a MDTA for the sum insured of RM500,000.00 solely under the deceased's name, with the benefit coverage for 23 years. [Ref: Letter of Offer dated 5 February 2016, specifically at p 13 of Bundle B3 [Encl 127]].

The Application Form

[16] Vide an 'Application Form for Credit Life Term Assurance' dated 29 February 2016 ("Application Form"), the deceased applied and/or proposed to AIA Berhad fo