Precedent no. 22/2018/AL on non-breach of obligation to disclose pre-existing medical conditions in life insurance policy

Life insurance policy, insurance rules, and application for insurance have unclear requirement for declaration of medical conditions of the insured. Information in the requirement is not the basis for contracting parties to establish the life insurance policy.

* Claim of the plaintiff, Mr. Dang Van L, in the lawsuit petitions dated November 10, 2010, dated December 8, 2010:

The People’s Court of District 1 must compel C Life Insurance Co., Ltd (hereinafter referred to as Company C) to make the insurance payout of VND 405,000,000 and the interest accrued until the effective date of the Judgment, which the amount the Company C shall compensate for two insurance policies below which his wife took out:

- Policy No. S11000009505 dated October 14, 2008 for the indemnity of VND 265,000,000.

- Policy No. S11000040924 dated March 25, 2009 for the indemnity of VND 190,000,000.

The Company paid him VND 50,000,000 in advance.

* Claim of Mr. Dang Van L in the amended lawsuit petition dated May 30, 2011:

 Compel Company C to pay him VND 470,000,000 and the interest accrued until the effective date of the Judgment. The provisional interest calculated up to present is VND 43,000,000.

- Policy No. S11000009505 dated October 14, 2008 for the indemnity of VND 287,000,000.

- Policy No. S11000040924 dated March 25, 2009 for the indemnity of VND 190,000,000.

* Claim of Mr. Dang Van L in the amended lawsuit petition dated June 22, 2011:

Compel Company C to pay VND 203,772,500 for 02 insurance policies No. S11000009505, S11000040924 and keep performing the policy No. S11000009505 dated October 14, 2008; and return two original insurance policies No. S11000009505; S11000040924, in specific:

In respect of the policy Thinh Tri Thanh Tai Bao Gia, the Company has to make the payout of VND 35,000,000 upon the policyholder's death (Article 4.1.2) up to present equivalent to 50% of the insured amount.

The annual support in cash of VND 7,000,000 (Article 4.4) equivalent to 10% of the insured amount.

And the insurance policy No. S11000009505 shall keep being performed until the maturity date mentioned in the policy.

- Refund term insurance policy.

Benefit of insurance upon death (Article 4.1): VND 190,000,000 (Company C paid VND 50,000,000).

Interest on late payment up to present: VND 21.772.500

* Claim of Mr. Dang Van L in the additional lawsuit petition dated April 18, 2015:

Compel Company C to pay him VND 405,000,000 and the interest accrued until the effective date of the Judgment.

Compel Company C to return the two original insurance policies No. S11000009505 and S11000040924 held by the Company.

* Representation of the defendant, Company C, in the response No. 008/2011/CV dated January 28, 2011:

The customer, Mrs. Truong Thi H, who had had stomach pain and high cholesterol before entering into two insurance policies, did not declare her medical conditions in the questionnaire of her application for insurance. If Company C previously knew her stomach pain and high cholesterol, it would decline to enter into an insurance policy with her. Therefore, Company C declines to pay the insurance benefit and decides to cancel two insurance policies of Mrs. H as a well-grounded decision (specified in Article 11.2 Rules and terms of policy) and as per the law (stipulated in Article 19 of the Law on Insurance Business).

Company C requests the People’s Court of District 1 to reject the lawsuit petition of Mr. L.

* Representation of the defendant, Company C, in the response No. 024/2011/CV dated May 16, 2011:

1. In respect of the claim requesting Company C to pay VND 405,000,000 and interest accrued of two insurance policies No. S11000009505 and S11000040924, Company C still upholds its point of view. The Company paid all the amounts as its obligations in two mentioned insurance policies. Additionally, the claim of Mr. Dang Van L has no valid ground as stipulated in the Rules and terms of the insurance contract and has no legal basis. Thus, Company C requests the Court to reject the claim of Mr. L.

2. In respect of claim requesting Company C to return two (02) original insurance policies No. S11000009505 and S11000040924, Company C accepts it.

* Representation of the person with relevant rights and obligations, Mrs. Luong Thi T, in the depositions dated April 14, 2011 and dated May 9, 2011:

She is the mother of Mrs. Truong Thi H who died on January 9, 2010; she requests Company C to pay her and the family the insurance payout. She agrees to give her son-in-law, Mr. Dang Van L, the insurance payout she may benefit in order for Mr. L to have full rights and advantages in the dispute with Company C.

* Representation of the person with relevant rights and obligations, Mrs. Dang Kieu L, in the deposition dated April 14, 2011:

Mrs. L is the child of Mrs. Truong Thi H who died on January 9, 2010. She is also entitled to a part of the insurance payout as prescribed, hence, she requests Company C to pay her the amount of her inheritance in such insurance payout upon her mother’s death. She agrees to give her father, Mr. Dang Van L, her part of the insurance payout and the claim right which she supposedly inherits from her mother, and Mr. L have full rights in the dispute with Company C to claim the insurance payout of her mother, Mrs. H.

* Representation of legal representative of Dang Linh N, Mr. Dang Van L, in the deposition dated May 9, 2011:

Request the Court to bring to case into trial as soon as possible in order to return justice and honor to his family and many Vietnamese citizens who have bought life insurance of Company C and other life insurance companies.

- In respect of the observance of law on civil procedures of presiding officers and procedural participants, the representative of the People’s Procuracy of District 1 expressed as follows: 

The Judge has complied with regulations of the Civil Procedure Code.

The dispute was rightly determined, the case is still within the litigation prescriptive period and sufficient evidence has been taken.

Litigation documents have been issued and served to the People’s Procuracy and procedural participants in accordance with Article 147 of the Civil Procedure Code

Legal statuses of litigants are rightly determined, decision to bring the case to trial was issued and documents were sent to the People’s Procuracy within the statutory time limit.

The preparatory process of trial exceeds the time limit prescribed in Article 179 of the Civil Procedure Code.

The Trial Panel conducted the court hearing on time and at the predetermined location with litigants mentioned in the decision to bring to case to trial and the trial was conducted in accordance with prescribed rules of trial. During the trial, the presiding judge ensured that the litigants could present their opinions.

The extent of observance of regulations by the litigants: Since the acceptance of the case and at today’s court hearing, the plaintiff, the defendant, and person with relevant rights and obligations have complied with laws and regulations on civil procedures.

First Instance Judgment:

* Pursuant to:

- Clause 3 Article 25, Point a Clause 1 Article 33, Point a Clause 1 Article 35, Article 245 of the Civil Procedure Code 2004, amended in 2011;

- Article 21, Article 29 of the Law on Insurance Business, coming into force on April 1, 2001;

- Article 305, Article 407 of the Civil Code, coming into force on January 1, 2006;

- Ordinance on Court Fees and Charges, coming into force on July 1, 2009;

- Joint Circular No. 01/TTLT dated June 19, 1997 of the Ministry of Justice - the Ministry of Finance - the Supreme People’s Court - the People’s Supreme Procuracy;

- Decision No. 2868/QD-NHNN dated November 29, 2010 of the State Bank of Vietnam.

* Judges:

1. Accept the claim of the plaintiff.

- Compel C Life Insurance Co., Ltd to make Mr. Dang Van L the insurance payout of VND 300,875,342 (Three hundred million eight hundred seventy five thousand three hundred forty two dong).

- C Life Insurance Co., Ltd has to return Mr. Dang Van L two insurance policies Thinh Tri Thanh Tai Bao Gia dated October 14, 2008, refund term insurance policy dated March 25, 2009.

- Insurance policy No. S11000009505 dated October 14, 2008 (Thinh Tri Thanh Tai Bao Gia) will keep being performed and pay the maturity benefits when Dang Linh N reaches 22 years of age and is alive on the maturity date.

Enforce as soon as practicable when the Judgment takes effect under supervision of the competent civil enforcement agency.

From the date on which Mr. Dang Van L submits a request for judgment enforcement, if C Life Insurance Co., Ltd fails to pay the above amount, it must also pay Mr. L monthly interest according to the basic interest rate quoted by the State Bank equivalent to the delayed enforcement time.

2. With reference to court fees: C Life Insurance Co., Ltd has to pay the first instance civil court fee of VND 15,043,767.

The plaintiff does not have to pay the first instance civil court fee and is refunded the paid court fee advance of VND 11,925,000, including: VND 10,100,000 according to the receipt No. 05237 dated January 5, 2011, VND 200,000 according to the receipt No. 05621 dated April 26, 2011 and VND 1,625,000 according to the receipt No. 05737 dated January 5, 2011 of Sub-Department of Civil Judgment Enforcement of District 1, Ho Chi Minh City.

3. With reference to right to appeal:

- Mr. Tran Xuan H - authorized representative of Mr. L, Mrs. T, Mrs. Kieu L, is present in the trial date but absent at the pronouncement, thus, Mr. L, Mrs. T, Mrs. Kieu L have right to appeal the Judgment within 15 days from the date on which the Judgment is duly served.

- C Life Insurance Co., Ltd has the right to appeal the Judgment within 15 days from the pronouncement date.

In case the judgment or court decision is enforced as per regulations in Article 2 of the Law on enforcements of civil judgments, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments.

On September 9, 2015, the defendant - C Life Insurance Co., Ltd (hereinafter referred to as Company C) filed an appeal against the entire First Instance Judgment.

At the appellate court hearing:

The plaintiff does not withdraw the lawsuit petition and the appellant does not withdraw the appeal. The litigants fail to agree on lawsuit settlement.

Representation of the appellant, Company C, represented by Mr. Hoang P and the lawyer:

When entering the insurance policy with Company C, Mrs. H made untruthful declaration, in specific, she made untruthful declaration in two matters below in the application for insurance:

1. According to the Medical Consultation Report No. 42/BV-99 of Hospital B dated September 3, 2009, Mrs. H had medical history of stomach pain in 2 years.

Company C claims that this matter was declared by Mrs. H and recorded by the doctor in the above Medical Consultation Report.

Therefore, it may be determined that Mrs. H had had stomach pain since September 3, 2007, before she concluded the insurance policy. Company C claims that the phrase “stomach disorders” refers to all diseases related to stomach, including stomach pain. At the question 54 in the application for insurance dated March 25, 2009: “peptic ulcers, peptic bleeding, pancreatitis, colitis, frequent dyspepsia, dysphagia, or disorders in stomach, innards or gallbladder?” Mrs. H ticked in the “no” box (it means that Mrs. H declared that she had no stomach disorders), which is an untruthful declaration.

2. At the appellate court hearing, Company C provided a certified copy of the blood biochemical test dated September 22, 2008, gathered from the periodic medical records of employees in the Kindergarten C, for which Mrs. H previously had worked. Company C claims that although Mrs. H had the blood test on September 22, 2008 but she intentionally declared untruthful information in the item 61 of the application for insurance.

From the mentioned two matters, it is well-founded that Mrs. H declared untruthful information and violated the obligation to disclose information. Therefore, pursuant to Article 11.2 of Rules and terms of the insurance contract, Company C cancels above 2 insurance policies and they are invalid.

In addition, on September 15, 2010, Mr. L receipt VND 50,000,000 and signed the document specifying payment and certification of completely paying out the claim. In this slip, Mr. L agreed to terminate two insurance policies No. S11000009505 and S11000040924, and admitted that Company C made full insurance payout and no longer has responsibility to pay the insurance benefits in these two policies.

As Company C has no liability to make the insurance payout to Mr. L, request the Court of Appeal to consider correcting the First Instance Judgment not accepting the lawsuit petition of the plaintiff.

Representation of Mr. Dang Van L, represented by Mr. Tran Xuan H:

In the common sense, "stomach pain" and "stomach disorder" are two different concepts, none of document or evidence says that stomach pain is stomach disorder. Mrs. H often has annual checkups at her workplace. However, this is a normal thing that most agencies and organizations provide for their employees. When undergoing regular checkups, the participant does not know and should not have known what measures and methods that the health facility carried out. Moreover, this regular health checkup sheet does not state that Mrs. H’s disease relates to rejection of the conclusion of the insurance policy with Company C. Therefore, it is unfounded for Company C to state that Mrs. H provided untruthful information to decline her claim. Request the Court of Appeal to uphold the First Instance Judgment.

The persons with relevant rights and obligations, Mrs. Luong Thi T, Mrs. Dang Kieu L, Dang Linh N (Mr. Dang Van L acts as legal representative of his minor), represented by Tran Xuan H:

Persons with relevant rights and obligations have same opinions with the plaintiff, requests the Trial Panel to uphold the First Instance Judgment.

Opinions of the representative of the People’s Procuracy of Ho Chi Minh City:

With reference to format: The appeal of the litigant, which was made within the statutory time limit, is considered valid, so request the Court to accept it. The Trial Panel and proceeding participants have complied with laws and regulations during the lawsuit settlement in the appellate stage.

With reference to the content of the case: According to the appeal presented by Company C and the lawyer, it is unfounded to determine that Mrs. H declared untruthful information and violated the obligation to disclose information. Thus, there are insufficient conditions for canceling 02 insurance policies as represented by Company C and there are inadequate valid grounds for accepting the appeal of Company C, request the Trial Panel to uphold the First Instance Judgment.

DECIDES

Hereby judges:   

Do not accept the appeal of the defendant, C Life Insurance Co., Ltd. and uphold the First Instance Judgment No. 1211/2015/TLST-DS dated August 26, 2015 of People’s Court of District 1, Ho Chi Minh City. 
Accept the claim of the plaintiff
Compel C Life Insurance Co., Ltd to make Mr. Dang Van L the insurance payout of VND 300,875,342 (Three hundred million eight hundred seventy five thousand three hundred forty two dong). 
C Life Insurance Co., Ltd has to return Mr. Dang Van L two insurance policies Thinh Tri Thanh Tai Bao Gia dated October 14, 2008, refund term insurance policy dated March 25, 2009. 
Insurance policy No. S11000000505 dated October 14, 2008 (Thinh Tri Thanh Tai Bao Gia) will keep being performed and pay the maturity benefits when Dang Linh N reaches 22 years of age and is alive on the maturity date. 
Enforce as soon as practicable when the Judgment takes effect under supervision of the competent civil enforcement agency. 
From the date on which Mr. Dang Van L submits a request for judgment enforcement, if C Life Insurance Co., Ltd fails to pay the above amount, it must also pay Mr. L monthly interest according to the basic interest rate quoted by the State Bank equivalent to the delayed enforcement time 
First instance civil court fee: C Life Insurance Co., Ltd has to pay the first instance civil court fee of VND 15,043,767. Mr. Dang Van L does not have to pay the first instance civil court fee and is refunded the paid court fee advance of VND 11,925,000, including: VND 10,100,000 according to the receipt No. 05237 dated January 5, 2011, VND 200,000 according to the receipt No. 05621 dated April 26, 2011 and VND 1,625,000 according to the receipt No. 05737 dated January 5, 2011 of Sub-Department of Civil Judgment Enforcement of District 1, Ho Chi Minh City. 
Appellate civil court fee: C Life Insurance Co., Ltd has to pay the appellate civil court fee of VND 200,000 (Two hundred thousand dong), which is deducted from the paid court fee advance of C Life Insurance Co., Ltd according to the receipt No. AE/2014/0005146 dated September 10, 2015 of Department of Civil Judgment Enforcement of Ho Chi Minh City. C Life Insurance Co., Ltd paid full appellate court fee advance. 
In case the judgment is enforced as per regulations in Article 2 of the Law on enforcement of civil judgments, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments. 

The Appellate Judgment shall take legal effect from the date of pronouncement.

JUDGEMENT OF THE COURT

 [1] After consideration of the case files assessed and the adversarial process at the court hearing, the Trial Panel judges as follows: 

[2] In terms of court procedures: The appeal of Company C was made within the statutory time limit, Company C followed procedures for appeal as per the law, so it is well-founded to accept it. 

[3] With reference to content: Deeming the appeal of the defendant to reject the lawsuit petition of the plaintiff, the Trial Panel considers that: 

[4] The question 54 of the application for insurance dated March 25, 2009 states: “peptic ulcers, peptic bleeding, pancreatitis, colitis, frequent dyspepsia, dysphagia, or disorders in stomach, innards or gallbladder?” Mrs. H ticked the “no” box. In the medical consultation report No. 42/BV-99 of Hospital B dated September 3, 2009, Mrs. H declared her stomach in 2 years. According to the medical consultation report, Mrs. H had had stomach pain since September 3, 2007, before she concluded the insurance policy. Company C claims that the phrase “stomach disorders” refers to all diseases related to stomach, including stomach pain. However, at the appellate court hearing, the defendant does not provide any evidence to prove it and any scientific explanation that stomach pain is stomach disorder. 

[5] Pursuant to Clause 2 Article 407 of the Civil Code 2005: “In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions”;

[6] Pursuant to Clause 4 Article 409 of the Civil Code 2005: “When a contract contains a provision or wording that is difficult to understand, such provision or wording must be interpreted according to practices at the place where the contract is entered into”;

[7] Pursuant to Article 21 of the Law on Insurance Business: “Where an insurance contract contains ambiguous clauses, such clauses shall be interpreted in favor of the insurance buyer”. 

[8] According to the above laws and regulations, if parties have different and ambiguous explanation, such provision shall be interpreted in favor of Mrs. H. Accordingly, there are inadequate grounds for determining that stomach pain is included in the stomach disorder as stated by Company C. 

[9] Considering that the application for insurance does not have a question related to stomach pain. Accordingly, Company C has no valid ground for claiming that Mrs. H had stomach pain and declared untruthful information and violated the obligation to disclose information. 

[10] The question 61 of the application for insurance dated March 25, 2009: “In recent 5 years, did you have any diagnose test such as X-ray, ultrasound, cardiogram, blood test, biopsy? or suffer sickness, underwent health examination and treatment at the hospital not stated in above section?” Mrs. H ticked the “no” box. At the appellate court hearing, Company C provided the biochemical blood test dated September 22, 2008 in the name of Truong Thi H. Company C determines that this is the document it took from the regular heath checkup records of the Kindergarten C for which Mrs. H previously worked. Company C claims that although Mrs. H had the blood test on September 22, 2008 but she intentionally declared untruthful information in the question 61 of the application for insurance. Considering that regular health checkups are periodically carried out by agencies and organizations. When undergoing regular checkups, the participant does not know and should not have known what measures and methods that the health facility carried out. Moreover, when undergoing regular checkups, Mrs. H did not detect signs of any disease leading to the Company C’s refusal to conclude the insurance policy with Mrs. H. Therefore, it is unfounded that Mrs. H had felt unusual symptoms in her body before had the blood test and then bought insurance from Company C.

[11] Accordingly, there are insufficient grounds for determining that Mrs. H committed fraud when concluding the insurance policy, there are no valid grounds for identifying that the “no” boxes at questions 54 and 61 ticked by Mrs. H in the application for insurance directly affect whether Company C concludes the insurance policy with Mrs. H. 

[12] Moreover, the rules and terms of the refund term insurance and Thinh Tri Thanh Tai Bao Gia of Company C indicate: 

[13] “Article 11.2. If any information provided by the policyholder or the insured person intentionally conceals or misrepresents that seriously affects the decision to assess insurance acceptance, the company may cancel the contract and the contract is not valid from the beginning”. In respect to the phrase “seriously affects” in Article 11.2, at today’s court hearing, Company C does not clearly explain that how “serious” can be interpreted and as stated by the defendant, the insurance seller does not confirm whether the application for insurance is accepted in the case that the buyer of term life insurance has medical history of stomach pain and high cholesterol. In the response No. 008 dated January 28, 2011, Company C asserts: “ If we knew that Truong Thi H had stomach pain and high cholesterol, we would decline to conclude the insurance policy”. At the first instance and appellate court hearing, the representative and lawyer of Company C state that if they knew that Mrs. H had stomach pain and high cholesterol, they would consider concluding an insurance policy with her. This proves that Company C has no specific criteria to deal with such a case as mentioned. Therefore, the phrase “seriously affect” should be interpreted that a disease not qualified for life insurance, but not be understood as may be qualified or not qualified for life insurance as stated by Company C, this provision is also ambiguous; so pursuant to Clause 2 Article 407 of the Civil Code: “5] Pursuant to Clause 2 Article 407 of the Civil Code 2005: “In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions” and Article 21 of the Law on Insurance Business: “Where an insurance contract contains ambiguous clauses, such clauses shall be interpreted in favor of the insurance buyer”, so such provision should be understood and interpreted in favor of Mrs. H.

[14] Representation of Mrs. Nguyen Thi Diem P, a witness of this case: she bought a preferential periodic insurance product from Company C according to the insurance policy No. S11000297923. At the time of insurance policy conclusion, she told Company C that she had been using drugs for stomach pain, she has occasionally suffered stomach pain for about 3 years and has had regular check-up, Triglycerid 2.2 mmol/l. According to the verification of People’s Court of District 1 at People’s Hospital of District 1 dated July 28, 2015, Triglycerid 2.2 mmol/l is higher than normal. 

[15] Deeming that, when buying term life insurance from Company C, although Mrs. Nguyen Thi Diem P declared that she had stomach pain and high cholesterol, Company C still sold her insurance with standard premium. This proves that the stomach pain and high cholesterol is regarded as “not seriously affect” so Company C sold insurance with standard premium as the same as ordinary cases. It could be concluded that the fact that the insurance buyer’s failure to declare their stomach pain and high cholesterol does not seriously affect to Company C’s decision in consider whether to conclude an insurance policy, hence, the insurance buyer does not violate Article 11.2 of Rules and terms stipulated by Company C. The Court of First Instance has valid ground to make such a judgment. 

[16] Company C asserts that it paid all the amounts as its obligations in two mentioned insurance policies. With regard to this dispute, Company C and Mr. L reached final settlement, as stated in the document specifying payment and certification of completely paying out the claim dated September 15, 2010. In the section 3 of this document, Mr. L certified that Company C made full insurance payout and no longer bear any responsibility for paying insurance benefits for these two contracts; in section 4, Mr. L committed not to take any action that will affect Company C from now on, and Company C is not obliged to discharge any responsibility or obligation against the policies No. S11000009505 and S11000040924. Considering that Mrs. L’s signing in the document specifying payment and certification of completely paying out the claim dated September 15, 2010 does not make Mr. L lose his right to sue if Mr. L thinks that this agreement affects his legal rights and interests. 

[17] Based on foregoing consideration, there are valid grounds for determining that the Court of First Instance accepted lawsuit petition of the plaintiff legally and on valid basis Thus, it is un-founded to accept the appeal of Company C and Trial Panel will uphold the First Instance Judgment. 

[18] Other decisions of the First Instance Judgment against which the litigants and the People’s Procuracy have not appealed still remain effective. 

[19] Regarding appellate criminal court fee: Because the First Instance Judgment is upheld, Company C has to pay an appellate civil court fee of VND 200,000. 

Based on above-mentioned facts and matters,

Pursuant to Clause 1 Article 132, Clause 1 Article 275 of the Civil Procedure Code;

Pursuant to Clause 1 Article 30 of Ordinance on Court Fees and Charges 2009.

SUMMARY

[4] The question 54 of the application for insurance dated March 25, 2009 states: “peptic ulcers, peptic bleeding, pancreatitis, colitis, frequent dyspepsia, dysphagia, or disorders in stomach, innards or gallbladder?” Mrs. H ticked the “no” box. In the medical consultation report No. 42/BV-99 of Hospital B dated September 3, 2009, Mrs. H declared her stomach in 2 years. According to the medical consultation report, Mrs. H had had stomach pain since September 3, 2007, before she concluded the insurance policy. Company C claims that the phrase “stomach disorders” refers to all diseases related to stomach, including stomach pain. However, at the appellate court hearing, the defendant does not provide any evidence to prove it and any scientific explanation that stomach pain is stomach disorder. 

[8] According to the above laws and regulations, if parties have different and ambiguous explanation, such provision shall be interpreted in favor of Mrs. H. Accordingly, there are inadequate grounds for determining that stomach pain is included in the stomach disorder as stated by Company C. 

[9] Considering that the application for insurance does not have a question related to stomach pain. Accordingly, Company C has no valid ground for claiming that Mrs. H had stomach pain and declared untruthful information and violated the obligation to disclose information. 

[10] The question 61 of the application for insurance dated March 25, 2009: “In recent 5 years, did you have any diagnose test such as X-ray, ultrasound, cardiogram, blood test, biopsy? or suffer sickness, underwent health examination and treatment at the hospital not stated in above section? Mrs. H ticked the “no” box. At the appellate court hearing, Company C provided the biochemical blood test dated September 22, 2008 in the name of Truong Thi H. Company C determines that this is the document it took from the regular heath checkup records of the Kindergarten C for which Mrs. H previously worked. Company C claims that although Mrs. H had the blood test on September 22, 2008 but she intentionally declared untruthful information in the question 61 of the application for insurance. Considering that regular health checkups are periodically carried out by agencies and organizations. When undergoing regular checkups, the participant does not know and should not have known what measures and methods that the health facility carried out. Moreover, when undergoing regular checkups, Mrs. H did not detect signs of any disease leading to the Company C’s refusal to conclude the insurance policy with Mrs. H. Therefore, it is unfounded that Mrs. H had felt unusual symptoms in her body before had the blood test and then bought insurance from Company C.

[11] Accordingly, there are insufficient grounds for determining that Mrs. H committed fraud when concluding the insurance policy, there are no valid grounds for identifying that the “no” boxes at questions 54 and 61 ticked by Mrs. H in the application for insurance directly affect whether Company C concludes the insurance policy with Mrs. H.”

 [1] After consideration of the case files assessed and the adversarial process at the court hearing, the Trial Panel judges as follows: 

[2] In terms of court procedures: The appeal of Company C was made within the statutory time limit, Company C followed procedures for appeal as per the law, so it is well-founded to accept it. 

[3] With reference to content: Deeming the appeal of the defendant to reject the lawsuit petition of the plaintiff, the Trial Panel considers that: 

[4] The question 54 of the application for insurance dated March 25, 2009 states: “peptic ulcers, peptic bleeding, pancreatitis, colitis, frequent dyspepsia, dysphagia, or disorders in stomach, innards or gallbladder?” Mrs. H ticked the “no” box. In the medical consultation report No. 42/BV-99 of Hospital B dated September 3, 2009, Mrs. H declared her stomach in 2 years. According to the medical consultation report, Mrs. H had had stomach pain since September 3, 2007, before she concluded the insurance policy. Company C claims that the phrase “stomach disorders” refers to all diseases related to stomach, including stomach pain. However, at the appellate court hearing, the defendant does not provide any evidence to prove it and any scientific explanation that stomach pain is stomach disorder. 

[5] Pursuant to Clause 2 Article 407 of the Civil Code 2005: “In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions”;

[6] Pursuant to Clause 4 Article 409 of the Civil Code 2005: “When a contract contains a provision or wording that is difficult to understand, such provision or wording must be interpreted according to practices at the place where the contract is entered into”;

[7] Pursuant to Article 21 of the Law on Insurance Business: “Where an insurance contract contains ambiguous clauses, such clauses shall be interpreted in favor of the insurance buyer”. 

[8] According to the above laws and regulations, if parties have different and ambiguous explanation, such provision shall be interpreted in favor of Mrs. H. Accordingly, there are inadequate grounds for determining that stomach pain is included in the stomach disorder as stated by Company C. 

[9] Considering that the application for insurance does not have a question related to stomach pain. Accordingly, Company C has no valid ground for claiming that Mrs. H had stomach pain and declared untruthful information and violated the obligation to disclose information. 

[10] The question 61 of the application for insurance dated March 25, 2009: “In recent 5 years, did you have any diagnose test such as X-ray, ultrasound, cardiogram, blood test, biopsy? or suffer sickness, underwent health examination and treatment at the hospital not stated in above section?” Mrs. H ticked the “no” box. At the appellate court hearing, Company C provided the biochemical blood test dated September 22, 2008 in the name of Truong Thi H. Company C determines that this is the document it took from the regular heath checkup records of the Kindergarten C for which Mrs. H previously worked. Company C claims that although Mrs. H had the blood test on September 22, 2008 but she intentionally declared untruthful information in the question 61 of the application for insurance. Considering that regular health checkups are periodically carried out by agencies and organizations. When undergoing regular checkups, the participant does not know and should not have known what measures and methods that the health facility carried out. Moreover, when undergoing regular checkups, Mrs. H did not detect signs of any disease leading to the Company C’s refusal to conclude the insurance policy with Mrs. H. Therefore, it is unfounded that Mrs. H had felt unusual symptoms in her body before had the blood test and then bought insurance from Company C.

[11] Accordingly, there are insufficient grounds for determining that Mrs. H committed fraud when concluding the insurance policy, there are no valid grounds for identifying that the “no” boxes at questions 54 and 61 ticked by Mrs. H in the application for insurance directly affect whether Company C concludes the insurance policy with Mrs. H. 

[12] Moreover, the rules and terms of the refund term insurance and Thinh Tri Thanh Tai Bao Gia of Company C indicate: 

[13] “Article 11.2. If any information provided by the policyholder or the insured person intentionally conceals or misrepresents that seriously affects the decision to assess insurance acceptance, the company may cancel the contract and the contract is not valid from the beginning”. In respect to the phrase “seriously affects” in Article 11.2, at today’s court hearing, Company C does not clearly explain that how “serious” can be interpreted and as stated by the defendant, the insurance seller does not confirm whether the application for insurance is accepted in the case that the buyer of term life insurance has medical history of stomach pain and high cholesterol. In the response No. 008 dated January 28, 2011, Company C asserts: “ If we knew that Truong Thi H had stomach pain and high cholesterol, we would decline to conclude the insurance policy”. At the first instance and appellate court hearing, the representative and lawyer of Company C state that if they knew that Mrs. H had stomach pain and high cholesterol, they would consider concluding an insurance policy with her. This proves that Company C has no specific criteria to deal with such a case as mentioned. Therefore, the phrase “seriously affect” should be interpreted that a disease not qualified for life insurance, but not be understood as may be qualified or not qualified for life insurance as stated by Company C, this provision is also ambiguous; so pursuant to Clause 2 Article 407 of the Civil Code: “5] Pursuant to Clause 2 Article 407 of the Civil Code 2005: “In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions” and Article 21 of the Law on Insurance Business: “Where an insurance contract contains ambiguous clauses, such clauses shall be interpreted in favor of the insurance buyer”, so such provision should be understood and interpreted in favor of Mrs. H.

[14] Representation of Mrs. Nguyen Thi Diem P, a witness of this case: she bought a preferential periodic insurance product from Company C according to the insurance policy No. S11000297923. At the time of insurance policy conclusion, she told Company C that she had been using drugs for stomach pain, she has occasionally suffered stomach pain for about 3 years and has had regular check-up, Triglycerid 2.2 mmol/l. According to the verification of People’s Court of District 1 at People’s Hospital of District 1 dated July 28, 2015, Triglycerid 2.2 mmol/l is higher than normal. 

[15] Deeming that, when buying term life insurance from Company C, although Mrs. Nguyen Thi Diem P declared that she had stomach pain and high cholesterol, Company C still sold her insurance with standard premium. This proves that the stomach pain and high cholesterol is regarded as “not seriously affect” so Company C sold insurance with standard premium as the same as ordinary cases. It could be concluded that the fact that the insurance buyer’s failure to declare their stomach pain and high cholesterol does not seriously affect to Company C’s decision in consider whether to conclude an insurance policy, hence, the insurance buyer does not violate Article 11.2 of Rules and terms stipulated by Company C. The Court of First Instance has valid ground to make such a judgment. 

[16] Company C asserts that it paid all the amounts as its obligations in two mentioned insurance policies. With regard to this dispute, Company C and Mr. L reached final settlement, as stated in the document specifying payment and certification of completely paying out the claim dated September 15, 2010. In the section 3 of this document, Mr. L certified that Company C made full insurance payout and no longer bear any responsibility for paying insurance benefits for these two contracts; in section 4, Mr. L committed not to take any action that will affect Company C from now on, and Company C is not obliged to discharge any responsibility or obligation against the policies No. S11000009505 and S11000040924. Considering that Mrs. L’s signing in the document specifying payment and certification of completely paying out the claim dated September 15, 2010 does not make Mr. L lose his right to sue if Mr. L thinks that this agreement affects his legal rights and interests. 

[17] Based on foregoing consideration, there are valid grounds for determining that the Court of First Instance accepted lawsuit petition of the plaintiff legally and on valid basis Thus, it is un-founded to accept the appeal of Company C and Trial Panel will uphold the First Instance Judgment. 

[18] Other decisions of the First Instance Judgment against which the litigants and the People’s Procuracy have not appealed still remain effective. 

[19] Regarding appellate criminal court fee: Because the First Instance Judgment is upheld, Company C has to pay an appellate civil court fee of VND 200,000. 

Based on above-mentioned facts and matters,

Pursuant to Clause 1 Article 132, Clause 1 Article 275 of the Civil Procedure Code;

Pursuant to Clause 1 Article 30 of Ordinance on Court Fees and Charges 2009.

[4] The question 54 of the application for insurance dated March 25, 2009 states: “peptic ulcers, peptic bleeding, pancreatitis, colitis, frequent dyspepsia, dysphagia, or disorders in stomach, innards or gallbladder?” Mrs. H ticked the “no” box. In the medical consultation report No. 42/BV-99 of Hospital B dated September 3, 2009, Mrs. H declared her stomach in 2 years. According to the medical consultation report, Mrs. H had had stomach pain since September 3, 2007, before she concluded the insurance policy. Company C claims that the phrase “stomach disorders” refers to all diseases related to stomach, including stomach pain. However, at the appellate court hearing, the defendant does not provide any evidence to prove it and any scientific explanation that stomach pain is stomach disorder. 

[8] According to the above laws and regulations, if parties have different and ambiguous explanation, such provision shall be interpreted in favor of Mrs. H. Accordingly, there are inadequate grounds for determining that stomach pain is included in the stomach disorder as stated by Company C. 

[9] Considering that the application for insurance does not have a question related to stomach pain. Accordingly, Company C has no valid ground for claiming that Mrs. H had stomach pain and declared untruthful information and violated the obligation to disclose information. 

[10] The question 61 of the application for insurance dated March 25, 2009: “In recent 5 years, did you have any diagnose test such as X-ray, ultrasound, cardiogram, blood test, biopsy? or suffer sickness, underwent health examination and treatment at the hospital not stated in above section? Mrs. H ticked the “no” box. At the appellate court hearing, Company C provided the biochemical blood test dated September 22, 2008 in the name of Truong Thi H. Company C determines that this is the document it took from the regular heath checkup records of the Kindergarten C for which Mrs. H previously worked. Company C claims that although Mrs. H had the blood test on September 22, 2008 but she intentionally declared untruthful information in the question 61 of the application for insurance. Considering that regular health checkups are periodically carried out by agencies and organizations. When undergoing regular checkups, the participant does not know and should not have known what measures and methods that the health facility carried out. Moreover, when undergoing regular checkups, Mrs. H did not detect signs of any disease leading to the Company C’s refusal to conclude the insurance policy with Mrs. H. Therefore, it is unfounded that Mrs. H had felt unusual symptoms in her body before had the blood test and then bought insurance from Company C.

[11] Accordingly, there are insufficient grounds for determining that Mrs. H committed fraud when concluding the insurance policy, there are no valid grounds for identifying that the “no” boxes at questions 54 and 61 ticked by Mrs. H in the application for insurance directly affect whether Company C concludes the insurance policy with Mrs. H.”

Hereby judges:   

Do not accept the appeal of the defendant, C Life Insurance Co., Ltd. and uphold the First Instance Judgment No. 1211/2015/TLST-DS dated August 26, 2015 of People’s Court of District 1, Ho Chi Minh City. 
Accept the claim of the plaintiff
Compel C Life Insurance Co., Ltd to make Mr. Dang Van L the insurance payout of VND 300,875,342 (Three hundred million eight hundred seventy five thousand three hundred forty two dong). 
C Life Insurance Co., Ltd has to return Mr. Dang Van L two insurance policies Thinh Tri Thanh Tai Bao Gia dated October 14, 2008, refund term insurance policy dated March 25, 2009. 
Insurance policy No. S11000000505 dated October 14, 2008 (Thinh Tri Thanh Tai Bao Gia) will keep being performed and pay the maturity benefits when Dang Linh N reaches 22 years of age and is alive on the maturity date. 
Enforce as soon as practicable when the Judgment takes effect under supervision of the competent civil enforcement agency. 
From the date on which Mr. Dang Van L submits a request for judgment enforcement, if C Life Insurance Co., Ltd fails to pay the above amount, it must also pay Mr. L monthly interest according to the basic interest rate quoted by the State Bank equivalent to the delayed enforcement time 
First instance civil court fee: C Life Insurance Co., Ltd has to pay the first instance civil court fee of VND 15,043,767. Mr. Dang Van L does not have to pay the first instance civil court fee and is refunded the paid court fee advance of VND 11,925,000, including: VND 10,100,000 according to the receipt No. 05237 dated January 5, 2011, VND 200,000 according to the receipt No. 05621 dated April 26, 2011 and VND 1,625,000 according to the receipt No. 05737 dated January 5, 2011 of Sub-Department of Civil Judgment Enforcement of District 1, Ho Chi Minh City. 
Appellate civil court fee: C Life Insurance Co., Ltd has to pay the appellate civil court fee of VND 200,000 (Two hundred thousand dong), which is deducted from the paid court fee advance of C Life Insurance Co., Ltd according to the receipt No. AE/2014/0005146 dated September 10, 2015 of Department of Civil Judgment Enforcement of Ho Chi Minh City. C Life Insurance Co., Ltd paid full appellate court fee advance. 
In case the judgment is enforced as per regulations in Article 2 of the Law on enforcement of civil judgments, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments. 

The Appellate Judgment shall take legal effect from the date of pronouncement.