Friday, July 18, 2008

Unfair rejection of Shield claim

A policyholder upgraded into an expensive private Shield plan. He had to undergo angioplasty. The insurance company rejected this claim on the grounds for non-disclosure of high cholesterol. The policyholder was not aware that this condition was serious to be disclosed, as his doctor did not ask him to take medication. He asked the insurance company to justify their decision for non-disclosure.

After one month, the insurance company replied that the policyholder did not reply to a question that ask if he has "suffered from any other illness". They consider that the high cholesterol should be answered under this question. This was the position taken by a senior management of the company.

I consider this rejection to be unfair and advised the policyholder to lodge a complaint to CASE or FIDREC.
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2 comments:

siewkhim said...

The insurance company has the legal right to reject the claim on ground of non-disclosure regardless of its materiality.

If it pays the claim, that is not admission of liability but ex-gratia.

This is contract law 101.

July 18, 2008 5:09 PM
C H Yak said...

It could also be argued as "misrepresentation" especially if the Agent is irresponsible and unprofessional, and had not explain clearly to the Insured what the declaration requirement was all about.

There is also "equity" in law that dictates that the seller "should let the buyer beware" of such need to declare "any other illnesses" or even "medical conditions". The seller should also keep the buyer informed of the "non-disclosure" clause. A trap in contract is still illegal and can be fraudulent and punisable under Penal Code.

As ordinary consumers, I support reporting any mishandling to the regulators, and if necessary to file a police report as early as possible.

July 18, 2008 10:33 PM

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