Friday, December 30, 2016

Risk of non-disclosure

An insurance company can reject your claim on the grounds that you did not disclose relevant facts. This is dangerous right? How can a consumer know what is or what is not relevant? He has to rely on the agent, right? What if the agent did not ask the question or choose to hide the fact? Who bear the consequences?

1 comment:

JW said...

I am facing the same predicament and I believe the inclusion of insurance products under CPFTA is to help consumers address these unfair practices. My reading:

First, if there's an unfair practice involved, CPFTA 'No contracting out' clause nullifies all policy clauses that allows the insurer to legally avoid the breach. That includes termination for non-disclosure as the basis not to pay a legitimate claim.

Second, insurers have been using ambiguity to their advantage. What is "Significant" during disclosure is ambiguous as it's subjected to the interpretation of the insurer and the insured. But under CPFTA 'Interpretation of documents', any ambiguity must now be interpreted to the advantage of the insured.

Third, CPFTA's 'Meaning of unfair practice' is very specific - when the insurer knows or ought reasonably to know that the consumer is not reasonably able to understand the disclosure requirements and risks of non-disclosure.

Fourth, CPFTA 'Burden of proof' - onus in on the insurer to prove that the consumer understands the disclosure and non-disclosure risks. I would assume that will be very difficult to prove if there was a sale of a policy written entirely in English to an uncle who does not understand English.

As my dispute with NTUC Income is ongoing, I would like to see if CFPTA has any real teeth and whether NTUC Income and FIDReC will honor their responsibilities to uphold the provisions of CPFTA.

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