CR156 Rejection of death claim – non-disclosure of alcohol consumption
Rejection of death claim – non-disclosure of alcohol consumption
The policyholder submitted a proposal for life assurance on 7 April 2003 with the inception date being 1 May 2003. In responding to certain specified questions which featured in the proposal form, the applicant indicated that he had not consulted any medical practitioner during the preceding twelve months for conditions which he had not previously mentioned, nor that he had an alcohol problem. In response to the questions relating to alcohol consumption he had indicated that he drank five pints / dumpies / cans of beer per week.
The policyholder died in a motor vehicle accident on 30 July 2004. His wife thereafter applied to the insurer for payment of the death benefits. The claim was rejected on the grounds of non-disclosure of material facts. The insurer had obtained a medical report from the deceased’s family doctor which referred to a visit by the policyholder on 25 January 2003. From this medical report it appeared that the policyholder had indicated to his doctor that he wished to stop drinking as he was drinking six to twelve beers daily. He requested the doctor to prescribe antebuse tablets (medication that makes the recipient ill when taken with alcohol, and it is a treatment which can only commence after a patient has abstained from consuming alcohol for 72 hours). Had the life assured wished to take advantage of the antebuse treatment he was to return at least 72 hours after the consultation on 25 January 2003 in order to obtain a prescription. He did not return for this purpose.
The surviving spouse of the life assured had instructed a firm of attorneys to act on her behalf in the claim against the insurer and following the rejection of the claim the attorneys referred the matter to the Ombudsman’s office.
It is a basic principal that an insurance contract is one of utmost good faith. A life assurer, in order to assess the risk, has to rely almost exclusively on information provided by the proposer applying for the cover. Consequently the proposer is duty bound to voluntarily disclose all material information relevant to the risk that is to be underwritten. The case rested on details contained in the family doctor’s clinical notes relating to the consultation on 25 January 2003. The policyholder had signed the application form in April 2003, i.e. some three months following that consultation and failed to disclose details of the consultation.
Although the information regarding the alcohol history was somewhat limited it was our view that material information had not been disclosed and it was felt that had full disclosure been made by the policyholder, the insurer would have made further enquiries before making a final decision as whether the application should be accepted or not.
The insurer’s decision to deny liability was supported and the complaint was not upheld.