Death Claim - Non-Disclosure
The assured passed away on 4 January 2016 due to “Subarachnoid Hemorrhage due to ruptured berry aneurysm”. The assured’s son filed a claim and the death claim was repudiated on the ground of non-disclosure of the Assured’s illness of “Hyperlipidemia” in the proposal form dated 14 September 2015.
Investigation and Findings
The Case Manager observed that the Insurer’s decision was based on the following:
- medical report by her treating doctor from Klinik Y wherein it was reported that the Assured was diagnosed with “Hyperlipidemia” on 25 April 2014 ;
- Blood test report dated 17/4/2014 which showed high total cholesterol and LDL cholesterol ; and
- Part (V) of the Proposal form dated 14/9/2015 wherein the medical history which is material was not disclosed.
The Case Manager noted that the Assured was only informed of her diagnosis of Hyperlipidemia during her visit to the clinic on 25/4/2014, which was after her blood test on 17/4/2014. The Case Manager also observed that the Assured was only advised to be on diet control and she was not on any follow-up or medication.
The Case Manager was of the view that for a lay person, being on diet control without any medication is not considered as an illness or disease yet. As such, the Case Manager opined that this misrepresentation can be classified as innocent.
The Case Manager highlighted to the Insurer that under Schedule 9 of Financial Services Act 2013, for policy issued after 1 January 2015, the Insurer needs to classify the misrepresentation whether it is deliberate/reckless, careless or innocent. Schedule 9 had also set out the “Remedies for careless or innocent misrepresentation” to licensed insurer for a misrepresentation made in respect of a consumer insurance contract of life insurance which has been effected for a period of two years or less.
Thus, the Insurer was requested to advice on what the underwriting decision would be if the Assured’s Hyperlipidemia condition in 2014 was disclosed during her proposal on 14/9/2015 and also to explain the remedy that would be taken for such decision.
The Insurer reviewed the case and agreed to settle the death claim.