Agent Negligence - It was revealed in court that the agent admitted that he had never met the insured, witnessed the signing of the proposal form, or verified the information submitted before the policy was issued. However, the judge said these failures did not invalidate the contract as Zurich Takaful had accepted the proposal, issued the certificate and collected RM3,000 in contributions.
The judge said an insurer could not rely on its agent’s negligence to escape contractual liability. However, the judge found that the policy had been obtained through deliberate and coordinated misrepresentations by the nominee, allowing Zurich Takaful to void the contract under Schedule 9 of the Islamic Financial Services Act 2013.
Zurich Takaful filed the suit after rejecting a claim following the death of the insured in a bicycle accident in April 2018, about six months after the policy was issued. The insurer alleged that the proposal form contained false declarations regarding the deceased’s marital status, occupation, income, address, literacy, alcohol consumption and relationship with the nominee.
The nominee denied the allegations and filed a counterclaim for the policy proceeds. In his 39-page judgment, the judge said evidence, including another takaful policy with similar fabricated family relationships, pointed to a fraudulent scheme rather than innocent mistakes.
The judge found it highly unlikely that the insured, who remained married and supported his wife and five children, would have excluded them and nominated a distant relative to receive more than RM800,000 in takaful benefits.
The judge concluded that the proposal form was likely completed by the nominee to ensure the policy proceeds would be paid to him.
Fraudulent Application - Although Zurich Takaful also questioned the circumstances surrounding the insured's death, the judge declined to find that the nominee had committed any criminal offence, noting that police had classified it as an accidental death. The judge said that the claim failed because of the fraud committed when the policy was obtained.
The court also rejected allegations that Zurich Takaful’s former solicitors conspired with the insured’s widow to fabricate evidence, saying there was no proof despite concerns over how confidential policy documents came into her possession.
Allowing Zurich Takaful’s claim, the judge declared the policy validly voided, dismissed Yathavan’s counterclaim and ordered the insurer to refund the RM3,000 contribution to insured’s lawful widow. He made no order as to costs, saying the case should never have reached court because the insurer’s own agent had abandoned basic underwriting safeguards in pursuit of a quick commission.
Zurich Takaful filed the suit after rejecting a claim following the death of the insured in a bicycle accident in April 2018, about six months after the policy was issued. The insurer alleged that the proposal form contained false declarations regarding the deceased’s marital status, occupation, income, address, literacy, alcohol consumption and relationship with the nominee.
The nominee denied the allegations and filed a counterclaim for the policy proceeds. In his 39-page judgment, the judge said evidence, including another takaful policy with similar fabricated family relationships, pointed to a fraudulent scheme rather than innocent mistakes.
The judge found it highly unlikely that the insured, who remained married and supported his wife and five children, would have excluded them and nominated a distant relative to receive more than RM800,000 in takaful benefits.
The judge concluded that the proposal form was likely completed by the nominee to ensure the policy proceeds would be paid to him.
Fraudulent Application - Although Zurich Takaful also questioned the circumstances surrounding the insured's death, the judge declined to find that the nominee had committed any criminal offence, noting that police had classified it as an accidental death. The judge said that the claim failed because of the fraud committed when the policy was obtained.
The court also rejected allegations that Zurich Takaful’s former solicitors conspired with the insured’s widow to fabricate evidence, saying there was no proof despite concerns over how confidential policy documents came into her possession.
Allowing Zurich Takaful’s claim, the judge declared the policy validly voided, dismissed Yathavan’s counterclaim and ordered the insurer to refund the RM3,000 contribution to insured’s lawful widow. He made no order as to costs, saying the case should never have reached court because the insurer’s own agent had abandoned basic underwriting safeguards in pursuit of a quick commission.
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