Non-disclosure – extent of disclosure required for compliance with duty to disclose information which is likely to have materially affected the assessment of the risk – applicant disclosed treatment for depression, including a suicide attempt, in response to questions contained in a questionnaire – insurer relies on non-disclosure of bulimia.
Ms T applied for a policy on 29.11.2002. A medical report was completed at application stage, as well as Asthma and Mental Health questionnaires.
Ms T disclosed that she had received treatment for depression in the proposal form. She answered “yes” to the question whether she experienced any disorder of the neurological system or any psychiatric complaint. In the medical report submitted with the proposal form, it was disclosed that she was receiving psychotherapy and that she was on medication for her condition. It was further disclosed that she was previously treated at a clinic for her depression. In the Mental Health questionnaire submitted, completed by the applicant’s medical practitioner, it was disclosed that she had previously attempted to commit suicide
Taking the information into consideration, the insurer granted the policy at standard rates and the policy commenced with effect from 01.02.2003. the policy provided death and disability benefits.
During May 2003 Ms T was hospitalised for major depression and a claim was submitted to the insurer. Additional information was requested during the assessment of the claim. In the doctor’s clinical extracts it was mentioned that he treated her for “depression/eating disorder” during 1999. The insurer then requested Ms T to complete a special questionnaire with specific reference to “bulimia symptoms”. In this questionnaire she mentioned that the symptoms started in 1994 and that she was treated for depression and bulimia since 1999.
Based on the above information the insurer cancelled the policy from inception.
The insurer denied liability on the ground that the medical information disclosed by Ms T was limited and in particular that she failed to disclose that she had been receiving treatment for an eating disorder since 1994.
The central issue was whether the information disclosed in the Mental Health questionnaire submitted at proposal stage was so incomplete that the insurer was entitled to deny liability in reliance on the information contained in the clinical extracts and the special questionnaire with specific reference to “bulimia symptoms”.
We took the view that there were two aspects to this issue. Firstly, whether there has been a failure to comply with her duty to disclose by Ms T and secondly, whether in the light of the disclosure, it was not “sufficient to call the attention of the insurer in such a manner that they can see that if they require further information they ought to ask for it”.
From the supplementary questionnaire which Ms T completed at claim stage, it appeared that she considered the bulimia to be a symptom of the depression from which she suffered, and according to her answers it was diagnosed as such. A reasonable person in her position would consider the disclosure of depression to be sufficient. As regards the second aspect we took the view that sufficient disclosure had been made to call the attention of the insurer’s underwriters to the sources of further information. As the experts they had in their possession sufficient information to realise whether further enquiries were required. They cannot take advantage of their failure to follow up on this information.
We did not suggest that the insured’s duty of disclosure should be replaced by a duty on the insurer’s part to make enquiries. However, where there had been reasonably sufficient disclosure, such as this instance, and the insurer “shut their eyes to the light, it is their own fault”.
If the information regarding bulimia was considered material, the insurer seemed to have had pointers to the sources of further information and the means of obtaining such information.
We recommended that the insurer reinstate the policy, consider the claim on the merits and pay a solatium to Ms T, which they did.