Case Review: Insurance
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose.
FMB/LI 0325 Non-disclosure of Pre-Existing Illness
The assured was diagnosed as suffering from hernia on 6.8.2005 and a surgery was performed on 7.8.2005. It was stated in the medical report that the assured had experienced pain in the abdomen when carrying heavy object or jogging for about 5 years. The insurers declined the claim for hospitalization benefit on the ground that the assured failed to disclose that he had hernia in the proposal form.
Based on the documents submitted the assured had symptoms of the illness for a duration of 5 years. However he only knew that he had hernia on 6.8.2005. Where the assured does not know that he is suffering from a particular disease he has not failed in his duty to disclose if subsequently ( after the contract is concluded ) he discovers that he is suffering from the disease ( Kathirvelu v Pacific & Orient Insurance Co Sdn Bhd  3 MLJ 312 ;  2 MLJ 249 ).
The insurers maintained that the assured should disclose about the pain he suffered in the proposal form. The insurers also raised the issue of admission to the hospital within 30 days of the policy which is not covered.
As stated in the repudiation letter issued by the insurers the claim was declined on the ground of non-disclosure of pre-existing illness ( hernia ) in the proposal form. An insurer should conduct all dealings fairly and equitably and should not forward new ground of repudiation after being queried by the Mediator.
Based on the medical report the assured had no acknowledge that he was suffering from hernia at the time of completing the proposal form. The Mediator found it unreasonable to expect the assured to disclose in the proposal form that he experienced pain in the abdomen when carrying heavy object or jogging, taking into account the manner in which the questions in the proposal form are framed. On the authority of Kathirvelu v Pacific & Orient Insurance Co Sdn Bhd the Mediator found there was no non-disclosure of illness in the proposal form. Accordingly the Mediator held the insurers liable to settle the assured's claim.