DR GANESAN A/L PERIASAMY v GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD

Case Significance

Illustrates the pre-contractual duty of disclosure under Schedule 9 of the Financial Services Act 2013: material non-disclosure of medical history, an applicable waiting-period exclusion and a recklessly supported claim entitled the insurer to repudiate and led to the dismissal of the policyholder's claim.

This High Court decision in the Commercial Division at Kuala Lumpur concerns an insurer's repudiation of life insurance policies for pre-contractual non-disclosure and misrepresentation, decided under Schedule 9 of the Financial Services Act 2013. The plaintiff, a medical practitioner, had applied on 29 March 2020 for two policies from the defendant, Great Eastern Life Assurance (Malaysia) Berhad, one for RM3,000,000 and one for RM250,000, both taking effect on 9 April 2020 and both subject to a sixty-day waiting period excluding cover for any condition for which signs or symptoms existed during that period. The defendant repudiated the claim, contending that the plaintiff had failed in his pre-contractual duty of disclosure, that he had made a deliberate or reckless misrepresentation about his medical history, including echocardiogram findings of left ventricular hypertrophy, and that the condition claimed for fell within the waiting-period exclusion. Under Schedule 9 of the Financial Services Act 2013, a proposer for consumer insurance owes a duty to take reasonable care not to make a misrepresentation, and a deliberate or reckless misrepresentation entitles the insurer to avoid the contract; the statutory presumption in paragraph 7(8) assists in characterising the proposer's state of mind. The court, applying the duty of utmost good faith and drawing on authority such as Veheng Global Traders Sdn Bhd v AmGeneral Insurance Bhd, found that the plaintiff had materially failed to disclose his medical history, that the exclusion applied, and that the plaintiff's submission of a document with materially incorrect, altered dates was at least reckless and amounted to a breach of the duty of utmost good faith, rendering the claim fraudulent. Being satisfied that the defendant had established grounds to repudiate, the court dismissed the plaintiff's claim with costs. The judgment is a useful illustration of the pre-contractual duty of disclosure under Schedule 9 of the Financial Services Act 2013 and of the consequences of a material non-disclosure and a fraudulently supported claim.