The Insurer and Agent not following the Duty of Disclosure

The insurer and agent not following the duty of disclosure. In all the insurance industry, there is a rule that the applicant must the sign in the applicant dotted line before the agent can submit the proposal form to the company.

In the life insurance industry, in order to fulfill the quote or qualify for the company incentive oversea trip, the agent will be very darling to alternative or add any extra rider to earn more commission or quota purpose.

A lady’s voice called me once day.

” Are you Mr. Jamin?” she inquired me.

” Yes, Miss, how can I help you?” I asked her.

” So, you are the modern Justice Bao in the insurance industry, Can you do me a favor?”

” Thanks for the compliment, but I am not a Justice Bao, I do what I can, what are all about?

“It is concerned about my life insurance that I bought from an agent almost 2 years ago. Can we make an appointment next week?  Is that convenience to you?”

“Ok. It fine with me.”

She showed me all the relevant documents.  She wanted to cancel the life policy with half yearly term payment and seeking for the full refund of premium.

At first, I was reluctant to help as the life insurance was not my cup of tea. I specialize in general Marine Insurance. After seeing her persistent to get full premium with the help of a few of her life insurance agents and also a few appeal letters to the Bank Negara, to no avail.

“What did your agent say to you?” I asked her.

“The insurance company will only willing to settle for amount up from the range of RM22k to RM24K”

“Why like that? It was a bargain game to me.” I replied.

“The insurer needed to deduct all the agent’s and up line commission then the balance would refund to me.”

“Why you want to cancel this policy?

“It was not an honest dealing, I did not want any hospital benefit in the policy.

I carefully scan through the proposal form, I noticed there was an alternation.

I wrote a letter on her behalf to the Bank Negara Customer Services Bureau on 23-9-2005. On October 2005, the concerned authority wrote a letter to the insurance company giving 14 days to reply to the complaint letter.

On 8th December 2005, she received two cheques one for RM33 750 being full premium refund and another Rm2 700 being 8% interest charge respectively.

DUTY OF DISCLOSURE

Your duty of disclosure: Before you enter a contract of general insurance with an Insurer, you have a duty, under the Insurance Contracts Act 1996 to disclose to the Insurer every matter that you know or could reasonably be expected to know, is relevant to the Insurers’ decision whether to accept the risk of insurance and if so, on what terms.  You have the same duty to disclose these matters to the Insurer before you renew, extend, vary or reinstate a contract of general insurance.

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The Insurer and Agent not following the Duty of Disclosure 1




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