Non-disclosure of medical history in the proposal form

The following is a case study published in OFS Annual report:

Ravi’s takaful operator declined his Guarantee Letter request for admission for a medical condition due to a possible pre-existing condition. Their investigation revealed that Ravi was diagnosed with Aortic Valve regurgitation in 2017 and hypertension in 2018, which
were not disclosed in the takaful proposal form.

Thus, by Schedule 9 of the Islamic Financial Services Act 2013, the takaful operator voided Ravi’s certificate immediately, and no cash value was available to be refunded.

Based on the Health Questionnaire completed by Ravi and Medical Questionnaire from Institut Jantung Negara (IJN), it is clear that he has had a pre-existing condition of Heart Murmur since 2017, which was not disclosed in the proposal form dated 21/8/2019.

Questions about heart valve disorder, heart murmur and echocardiogram were available in the proposal form, but Ravi failed to answer the questions truthfully.

Ravi claimed that he informed the agent that he had not been hospitalised for heart-related issues but had a heart valve defect requiring surgery. He left it to the agent’s discretion to submit the proposal and seek the takaful operator’s approval.

On the contrary, the agent confirmed that Ravi did not disclose his heart valve defect condition despite his advice to Ravi to disclose all his existing medical conditions.

Ravi demanded that the takaful operator refund his full contribution since the policy had been voided. In this regard, the amount of money returnable to a takaful participant for a contract voided by a takaful operator shall consist of the initial contribution in the Participants Investment Fund after the deduction of Tabarru’ (excluding profits; and unearned Wakalah fee). The takaful operator confirmed that no cash value was available to return to him.

Ravi’s misrepresentation is considered “deliberate or reckless misrepresentation”, and the “Remedies for deliberate or reckless” under Paragraph 3 of Schedule 9 of IFSA 2013 is to void the policy.

Therefore, Adjudication was issued in favour of the takaful operator.