Most of the disputes concerning non-disclosure of material information are related to the medical history of applicants. What follows is an example quoted from The Insurance Claims Complaints Bureau (“the Bureau”):

Mr. Lee took out critical illness insurance when he was aged 23 without declaring any medical history, so the insurance company issued a policy to Mr. Lee at standard terms and conditions. Unfortunately, Mr. Lee was diagnosed with a brain tumour a few years later and filed a claim with his medical insurance company. During the claim investigation, the insurance company found that Mr. Lee had hepatitis B which he had acquired from his infected mother. As such information was not disclosed when he took out the insurance, his insurance company declined his critical illness claim for the reason that material information had not been disclosed.

Mr. Lee complained to the Bureau that it was not until he was hospitalised for his brain tumour, that he learnt from his mother that he was a hepatitis B carrier. Although a diagnosis was made when he was aged 11, he did not remember the details of the consultation when he took out his critical illness insurance.

After investigation, the Complaints Panel decided that there was no evidence showing that Mr. Lee had attended any follow-up consultation or treatment which would have alerted him to his hepatitis B carrier status. Therefore, the Complaints Panel was of the view that it was not reliable to expect an 11-year-old boy to have fully understood the implications of being a hepatitis B carrier. The Complaints Panel also believed that it was very likely that Mr. Lee was not aware of his hepatitis B carrier status when he took out his critical illness insurance when he was 23 years old.

In conclusion, based on the above information, the Complaints Panel disagreed with the insurance company’s decision to reject his claim for non-disclosure of material information and ruled in favour of Mr. Lee.

Although there is no evidence of non-disclosure in the above case, non-disclosure of material information may result in policy repudiation and claim rejection, even though the non-disclosed information is unrelated to the claimed illness. Customers are advised to disclose all information accurately when applying for insurance to avoid unnecessary disputes.

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