Utmost good faith principle fall on wayside

FOR the past 10 years, my office had not made any significant medical claims for any of our staff under the Group Employee Policy, which we had taken each year from the same insurance company.

Sometime in early 2020, one of our staff met with an accident during work hours and was admitted to a private hospital. We were grateful that his medical expenses were fully covered under this Group Employee Policy.

However, when we tried to renew the policy at the end of the insurance term (i.e. renewal for year 2020-2021), the insurance company denied our application on the basis that we had exceeded our claim amount (unfavourable claim ratio) under the policy for the year, notwithstanding that we had made a legitimate claim and were a loyal and faithful insurance holder for over 10 years.

We were in utter shock as we had never been informed of the unfavourable claim ratio in the past 10 years. Furthermore, it was also very disappointing that the insurance company completely disregarded our loyalty with the paid premiums all these years.

The insurance principle of utmost good faith (uberrimae fidei) before the policy inception was sadly not taken into account in this case.

We made inquiries to the relevant authorities about the matter, but to our dismay, we were simply dismissed after being told that the issue was not within their control and it was at the absolute discretion of the insurance company.

We were left in the dark by the insurance company which we had trusted all these years. We hope insurance companies can be more transparent with their policies terms and clauses from now on.

JRM Kajang