Policyholders have multiple avenues of recourse if they are having disputes regarding their insurance, according to the Life Insurance Association (LIA) Singapore.
In a response to several reader letters regarding insurance disputes published by The Straits Times, Pauline Lim, executive director of LIA Singapore, discussed the legal principles that apply to insurance.
According to Lim, the association is not in position to comment on claims assessments by specific insurers, but several general principles apply. Lim said applicants are bound by good faith to exercise truthfulness and honesty in answering all questions in the application form. On the insurer’s side, the company must be able to prove that the non-disclosure of the health condition had a material effect on underwriting outcome. That means, had the applicant answered truthfully, the terms of the policy would have changed from the terms that were issued.
Insurers must also prove that the undisclosed fact was one the applicant knew of and could be reasonably expected to disclose.
In case of disputes, Lim said policyholders can approach the Financial Industry Disputes Resolution Centre (FIDREC).
FIDREC is an independent institution that provides mediation and adjudication for disputes involving retail financial products and services, including insurance. If the policyholder is not satisfied with the FIDREC’s decision, then they have the option to initiate legal action against the insurer, Lim said. Policyholders may also opt to skip FIDREC and go for legal action directly, if they wish so.