The content of Precedent No. 22/2018/AL regarding non-compliance with the obligation to provide information on medical conditions in life insurance contracts in Vietnam

The content of Precedent No. 22/2018/AL regarding non-compliance with the obligation to provide information on medical conditions in life insurance contracts in Vietnam - image from the internet

According to Decision No. 269/QD-CA in 2018, Precedent No. 22/2018/AL regarding non-compliance with the obligation to provide information on medical conditions in life insurance contracts has the following content:

Source of the Precedent:

Civil appellate judgment No. 313/2016/DS-PT dated March 16, 2016, of the People's Court of Ho Chi Minh City in the dispute over an insurance contract between the plaintiff, Mr. Dang Van L (represented by Mr. Tran Xuan H), and the defendant, Company C Life Insurance Limited (represented by Mr. Hoang P, with legal rights and interests protected by Mr. Dinh Quang T and Mr. Tran Ngoc T).

Location of the content in the Precedent:

Paragraphs 4, 8, 9, 10, 11 of the "Court's Assessment" section.

Summary of the content of the Precedent:

- Case scenario:

Life insurance contract, insurance rules, insurance application form with unclear requirements regarding the disclosure of the insured person's medical conditions. The information requested for disclosure is not the basis for determining the establishment of a life insurance contract by the parties.

- Legal solution:

In this case, it must be determined that the policyholder did not violate the obligation to provide information when signing the insurance contract and submitting the insurance application.

- Legal provisions related to the Precedent:

Clause 2 of Article 407 of the Civil Code 2005 (corresponding to Clause 2 of Article 405 of the Civil Code 2015);

Clause 4 of Article 409 of the Civil Code 2005 (corresponding to Clause 3 of Article 404 of the Civil Code 2015);

Article 21 of the Insurance Business Law 2000 as amended and supplemented in 2010.

Keywords of the Precedent:

"Insurance contract"; "Insurance rules"; "Insurance application form"; "Non-compliance with the obligation to provide information"; "Unclear information disclosure requirements"; "Medical conditions".

CASE CONTENTS:

In the initial lawsuit filed on November 10, 2010, Mr. Dang Van L requested:

The People's Court of District 1 ordered Company C (hereinafter referred to as Company C) to pay him 405,000,000 dong and the accrued interest until the effective date of the judgment as compensation for the two insurance contracts purchased by his wife, which are as follows:

- Contract S11000009505 purchased on October 14, 2008 with a compensation amount of 265,000,000 dong.

- Contract S11000040924 purchased on March 25, 2009 with a compensation amount of 190,000,000 dong.

The company has already paid him 50,000,000 dong in advance.

In the supplemental lawsuit filed on May 30, 2011, Mr. Dang Van L requested:

Company C is obligated to pay him 470,000,000 dong and the accrued interest until the effective date of the legal judgment. The estimated interest amount as of now is 43,000,000 dong.

- Contract S11000009505 purchased on October 14, 2008 with a compensation amount of 287,000,000 dong.

- Contract S11000040924 purchased on March 25, 2009 with a compensation amount of 190,000,000 dong.

In the amended lawsuit filed on June 22, 2011, Mr. Dang Van L changed his initial lawsuit request as follows:

Company C is required to pay him a total amount of 203,772,500 dong for the two insurance contracts S11000009505 and S11000040924, and continue to fulfill the contract S11000009505 purchased on October 14, 2008; return the original two contracts S11000009505 and S11000040924 specifically:

Contract Thinh Tri Thanh Tai Bao Gia: The company must pay the insurance benefits upon death (Clause 4.1.2) which is 50% of the insurance amount, 35,000,000 dong.

Annual cash support benefits (Article 4.4) which is 10% of the insurance amount, 7,000,000 dong.

At the same time, continue to fulfill the insurance contract S11000009505 and pay the benefits when the specified time in the contract is reached.

- Contract with a term and refundable premium.

Insurance benefits upon death (Article 4.1): 190,000,000 dong (Company C has already paid 50,000,000 dong).

The estimated interest amount until now is the interest amount due to the company's delayed payment, which is 21,772,500 dong.

In the supplementary lawsuit request dated 18-04-2015, Mr. Dang Van L requested:

Company C is required to pay him the amount of 405,000,000 Vietnamese Dong and the accrued interest until the time the judgment becomes legally effective.

Company C is required to return the two insurance contracts with the numbers S11000009505 and S11000040924 that the company has withheld from his family.

In the response document No. 008/2011/CV dated 28-01-2011, the defendant Company C presented:

Before entering into the two insurance contracts, customer Truong Thi H had a history of stomach pain and increased blood fat, but did not declare it in the questionnaire. If Company C had known about Truong Thi H's stomach pain and increased blood fat, it would have refused to enter into the insurance contracts. Therefore, Company C refused to pay the insurance benefits and decided to cancel the two insurance contracts of Ms. H based on Article 11.2 of the Rules and Provisions of the contract and in accordance with the law (according to Article 19 of the Insurance Business Law).

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

In the response document No. 024/2011/CV dated 16-05-2011, the defendant Company C presented:

1. Regarding the request for Company C to pay the amount of 405,000,000 Vietnamese Dong and the accrued interest of the insurance contracts with the numbers S11000009505 and S11000040924, Company C maintains its position. The company has fulfilled all its obligations as stipulated in the aforementioned insurance contracts. At the same time, Mr. Dang Van L's request has no basis according to the provisions of the Rules and Provisions of the insurance contract and has no legal basis. Therefore, Company C requests the court to reject Mr. L's request.

2. Regarding the request for Company C to return the two insurance contracts with the numbers S11000009505 and S11000040924, Company C agrees to return the original contracts to Mr. L.

In the self-declaration dated 14-04-2011; on 09-05-2011, Ms. Luong Thi T, who has the rights and obligations related, presented the following:

She is the biological mother of Ms. Truong Thi H, who passed away on 09-01-2010. She requested that Company C compensate her and her family the insurance amount. She agreed to transfer the insurance compensation to her son-in-law, Mr. Dang Van L, so that he has full authority and convenience in disputing with Company C.

In the self-declaration dated 14-04-2011, Ms. Dang Kieu L, who has the rights and obligations related, presented the following:

She is the biological daughter of Ms. Truong Thi H, who passed away on 09-01-2010. The insurance company paid the insurance benefits to Ms. H and herself according to the law, so she requested Company C to pay her the rightful amount that she inherited from her mother's insurance. She agreed to give the insurance compensation to her father, Mr. Dang Van L, as well as the right to claim the insurance amount from Company C on behalf of her mother.

In the statement dated 09-05-2011, Mr. Dang Van L, the legal representative of his daughter Dang Linh N, presented:

He requested the Court to promptly handle the case in a fair and honorable manner for his family as well as for many Vietnamese people who have participated in buying life insurance from Company C and other life insurance companies.

- The representative of the People's Procuracy of District 1 stated the following in regards to complying with the law in civil litigation of the litigants and participants:

The judge complies with the legal provisions of the Civil Procedure Code.

Correctly identifies the disputed relationship, pending litigation, and collects sufficient evidence.

Provides and delivers the procedural documents to the People's Procuracy and the litigants as stipulated in Article 147 of the Civil Procedure Code.

Correctly determines the legal status of the parties, decides to bring the case to trial, and submits the case file to the People's Procuracy for timely study as prescribed by law.

The preparation period for the trial is delayed, violating Article 179 of the Civil Procedure Code.

During the trial, the trial panel conducted the proceedings within the specified time and place as stated in the decision to bring the case to trial, and the principles of the trial were complied with. During the trial, the presiding judge ensured that the litigants were given the opportunity to express their views.

The compliance with the law by the participants in the litigation: Since taking over the case and at today's trial, the plaintiff, defendant, and persons with rights and obligations related to the case have complied with the provisions of the Civil Procedure Code.

Judgment of the first-instance trial:

Application:

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

- Article 21, Article 29 of the Insurance Business Law effective from 01-04-2001;

- Article 305, Article 407 of the Civil Law effective from 01-01-2006;

- Law on Court Fees and Charges effective from 01-07-2009;

- Joint Circular No. 01/TTLT dated 19-6-1997 of the Ministry of Justice - Ministry of Finance - Supreme People's Court - Supreme People's Procuracy;

- Decision No. 2868/QD-NHNN dated 29-11-2010 of the State Bank of Vietnam.

Adjudication:

1. Accept the request of the plaintiff.

- Company C must be responsible for paying Mr. Dang Van L the insurance amount of 300,875,342 dong (Three hundred million eight hundred seventy-five thousand three hundred forty-two dong).

- Company C must transfer to Mr. Dang Van L two insurance contracts: Thinh Tri Thanh Tai Bao Gia dated 14-10-2008 and Tu Ky Co Hoan Phi dated 25-03-2009.

- Insurance contract number S11000009505 dated 14-10-2008 (Thinh Tri Thanh Tai Bao Gia) shall continue to be implemented and the maturity benefit shall be resolved when Mr. Dang Linh N reaches 22 years old and is still alive on the maturity date.

Enforce immediately when the judgment takes legal effect under the supervision of the competent civil enforcement authority.

From the date Mr. Dang Van L submitted the enforcement request, if Company C does not fully pay the above-mentioned amount, then Company C must also pay Mr. L monthly interest at the basic interest rate published by the State Bank of Vietnam for the period of non-enforcement.

2. Regarding court fees: Company C must bear the first-instance civil court fee of 15,043,767 dong.

The plaintiff does not have to bear the first-instance civil court fee, so the temporary advance court fee paid totaling 11,925,000 dong shall be refunded, including: 10,100,000 dong according to receipt number 05237 dated 05-01-2011, 200,000 dong according to receipt number 05621 dated 26-4-2011, and 1,625,000 dong according to receipt number 05737 dated 05-01-2011 issued by the Civil Enforcement Agency of District 1, Ho Chi Minh City.

3. Regarding the right to appeal:

- Mr. Tran Xuan H - Representative of Mr. L, Mrs. T, and Ms. Kieu L, present at the trial, absent during the pronouncement of the judgment, therefore Mr. L, Mrs. T, and Ms. Kieu L have the right to appeal the judgment within 15 days from the date of the valid pronouncement of the judgment.

- Company C has the right to appeal the judgment within 15 days from the date of the pronouncement.

In cases where the judgment or decision is enforced according to the provisions of Article 2 of the Law on Civil Execution, the person to be enforced, the person obliged to enforce, have the right to agree on the enforcement, the right to request enforcement, voluntary enforcement, or compulsory enforcement according to the provisions of Articles 6, 7, and 9 of the Law on Civil Execution; the time limit for enforcement shall be implemented according to the provisions of Article 30 of the Law on Civil Execution.

On September 9, 2015, the defendant - Company C filed an appeal, appealing the entire content of the first-instance judgment.

At the appellate hearing:

The plaintiff did not withdraw the claim, and the appellant did not withdraw the appeal. The parties involved did not reach an agreement on the settlement of the case.

The appellant, Company C, represented by Mr. Hoang P and a lawyer protecting legal rights and interests, presented:

When signing the insurance contract with Company C, Mrs. H made false statements, specifically in the insurance application form, Mrs. H made two false statements as follows:

According to Medical Report No. 42/BV-99 from Hospital B dated September 3, 2009, it shows that Mrs. H has a history of gastric pain for 2 years. Company C believes that this information was provided by Mrs. H and recorded by the doctor in the aforementioned Medical Report. Therefore, it can be determined that Mrs. H had a gastric condition since September 3, 2007, which is before the date Mrs. H signed the insurance contract. Company C argues that the term "digestive disorder" includes all diseases related to the stomach, including gastric pain. In question number 54 of the insurance application form dated March 25, 2009: "Ulcer, gastrointestinal bleeding, pancreatitis, colitis, frequent indigestion, difficulty swallowing, or gastric disorder, liver or gallbladder disorder?" Mrs. H marked "no" (meaning she declared she did not have a gastric disorder), which is a false statement.

2. At the appellate hearing, Company C provided a photocopy of a blood biochemistry test form dated September 22, 2008, collected by Company C during the regular health check-up for the employees of the C Kindergarten, where Mrs. H used to work. Company C argues that on September 22, 2008, Mrs. H underwent a blood test but did not declare it in question 61 of the insurance application form, deliberately providing false information.

Based on the two points mentioned above, it is determined that Mrs. H made false statements and violated the obligation to provide information. Therefore, based on Article 11.2 of the Insurance Contract Terms and Conditions, Company C cancels the two insurance contracts mentioned above, and the two contracts are deemed invalid.

Furthermore, on September 15, 2010, Mr. L received the amount of 50,000,000 VND and signed a Payment Voucher and Confirmation of Insurance Responsibility. In this voucher, Mr. L agreed to terminate the two insurance contracts with policy numbers S11000009505 and S11000040924, and acknowledged that Company C had fully paid the insurance amount and no longer had any responsibility to settle insurance claims for these two contracts.

Therefore, Company C has no obligation to pay insurance money to Mr. L, and requests the appellate court to consider revising the first-instance judgment in the direction of not accepting the plaintiff's claim.

The plaintiff, Mr. Dang Van L, presented by Mr. Tran Xuan H, stated:

According to common understanding, "gastric pain" and "gastric disorder" are two different concepts, and there is no evidence to prove that gastric pain is the same as gastric disorder. Every year, Mrs. H undergoes regular health check-ups organized by the institution where she works. However, this is a normal practice that most organizations arrange for their employees. When participating in the regular health check-up, the person being examined does not know and is not obligated to know what measures or methods the healthcare organization has taken. Furthermore, this regular health check-up form does not indicate that Mrs. H has any illness related to her refusal to sign the insurance contract with Company C. Therefore, Company C's claim that Mrs. H provided false information to deny insurance payment is unfounded. The plaintiff requests the appellate court to uphold the first-instance judgment.

Mrs. Luong Thi T, Mrs. Dang Kieu L, and the child Dang Linh N (represented by Mr. Dang Van L as the legal representative of the minor) who have rights and obligations related to the case have the same opinion as the plaintiff and request the appellate court to uphold the first-instance judgment.

The representative of the People's Procuracy of Ho Chi Minh City participated in the hearing and expressed their opinion:

Regarding the formality: The appellant's appeal was made within the prescribed time limit and is therefore valid. The trial court and the participants in the hearing have complied with the legal provisions during the proceedings at the appellate stage.

Regarding the content: Based on the content of the appeal presented by Company C and the lawyer representing Company C, there is not enough evidence to determine that Mrs. H made false statements and violated the obligation to provide information. Therefore, there is not enough grounds to cancel the two insurance contracts according to Company C's presentation. Therefore, there is not enough basis to accept the appeal of Company C, and the trial court is requested to uphold the first-instance judgment.

COURT'S FINDINGS:

[1] After studying the documents in the case file examined at the trial and based on the arguments presented at the trial, the Trial Council has made the following findings:

[2] Regarding the litigation: The appeal submitted by Company C was made within the prescribed time limit and in accordance with the legal provisions, therefore, it has a basis for acceptance.

[3] Regarding the content: Considering the appeal of the defendant requesting the dismissal of the plaintiff's claim, the Trial Council found:

[4] In question number 54 of the insurance claim dated March 25, 2009, the question: "gastric ulcer, gastrointestinal bleeding, pancreatitis, colitis, frequent indigestion, difficulty swallowing, or disorders in the stomach, liver, or gallbladder" was marked as not applicable by Ms. H. In the medical report No. 42/BV-99 from Hospital B dated September 3, 2009, Ms. H stated that she had a history of gastric pain for 2 years. According to the medical report, Ms. H had stomach pain since September 3, 2007, which was before she signed the insurance contract. Company C argues that the term "disorder in the stomach" includes all diseases related to the stomach, including gastric pain. However, during the appellate trial, the defendant failed to present any evidence to prove, or provide any scientific explanation to determine that gastric pain is indeed a disorder in the stomach.