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CASE REVIEW
1 January to 31 December 2007

Insurance contracts are based on trust. The insurer trusts the policyholder to give precise and true details of the subject matter to be insured. This is called the principle of Utmost Good Faith. The nature of the subject matter of insurance and the circumstances pertaining to it are facts within the knowledge of the insured. Insurers, on the other hand, are not aware of these facts unless the insured tells them. The policyholder, therefore, should always take care to tell the whole truth. Non-disclosure arises when an applicant for an insurance policy fails to disclose on the application form facts within his actual or presumed knowledge. It should be noted that the information given by an applicant on the application form has great impact on the insurer’s underwriting assessment. From the information given on the application form, the insurer can identify high-risk features and decide whether or not to take the risk and at what premium and terms. Over the years, the majority of non-disclosure disputes were related to the medical history of applicants. In dealing with non-disclosure disputes, the Complaints Panel focuses on whether or not the 1. a material fact, which would influence a prudent underwriter in accepting or declining a risk or in fixing the premium or terms and conditions of the contract; 2. a fact within the knowledge of the applicant; 3. a fact which the applicant could reasonably be expected to disclose. The decision as to whether a piece of medical information is important in underwriting lies with the insurer, not the applicant. An insurance agent is not trained as a professional underwriter. An applicant should not rely solely on his insurance agent on whether a piece of information is material. One should always bear in mind that non-disclosure could result in policy repudiation and claim rejection. In order to avoid unnecessary claims disputes, an applicant should disclose all information fully and accurately when filling in the application form. There is one golden rule to follow: if in doubt as to whether a fact is material, it is
better to disclose it.
The Complaints Panel upheld the insurer’s decision in the following case as the non-disclosure concerned a material fact within the knowledge of the applicant. The complainant bought a life policy with a waiver of premium rider in 1989. He presented with right-sided tremor and sought consultation at a government hospital in 1995. He was diagnosed as suffering from Parkinson’s disease. He then lodged a waiver of premium claim to the insurer. During its claims investigation, the insurer noted from the medical reports that the complainant had experienced right-sided rigidity and was known to have young onset of Parkinson’s disease since 1988. As the complainant had not disclosed such medical history on the policy application form, the insurer declined his waiver of premium claim on the ground of material non-disclosure. Although he had consulted for right-sided tremor and rigidity in 1988, the complainant emphasized that it was not until 1991 that his attending doctor confirmed that he was suffering from Parkinson’s disease. He also furnished a letter from the government hospital confirming that there was no information on when he was actually informed of the diagnosis. The Complaints Panel noted from the medical report that since 1988 the complainant was put on Madopar and Artane, which were medications specific for Parkinson’s disease. Even though the complainant might not be informed of the diagnosis of Parkinson’s disease at the time of policy application, the Complaints Panel believed that his suffering from right-sided tremor and rigidity, as well as the continuous medical treatment received were all material and would have affected the insurer in making a proper underwriting decision at the time of policy application. In this regard, the Complaints Panel ruled that the insurer was appropriate to decline the waiver of premium claim for nearly HK$50,000 on the ground of material non-disclosure. The duty of disclosure may continue even after the application form is signed. In most circumstances, an applicant still has the responsibility to disclose the change of his/her health condition and/or the medical consultations received after signing the application form, but before the policy is finally approved or issued. The following case is an example. The complainant performed a chest x-ray and an ultrasound the day after she signed the application form for a life policy with hospitalization benefit. The x-ray revealed abnormal result and elevated Alanine Aminotransferase (ALT) and the ultrasound confirmed mild splenomegaly. The complainant was admitted to hospital due to diarrhea six months after the policy was effected. Having leant that the complainant had been determined to have abnormal chest x-ray result, raised blood ALT and splenomegaly before the policy was issued, the insurer rejected her hospitalization claim for material non-disclosure. According to the ‘Declaration and Authorization’ section of the application form signed by the complainant, she had declared and agreed to disclose to the insurer any change in her health and/or medical consultation that occur after signing the application form but before the policy is Although the complainant was found to have abnormal chest x-ray result, elevated ALT and spleen problem after she had signed the application form, the Complaints Panel considered that she still had the obligation to disclose to the insurer the changes in her health condition before the policy was issued. As the non-disclosed information was material which would have affected the insurer’s underwriting decision, the Complaints Panel upheld the insurer’s decision to decline the hospitalization claim for around HK$3,600. On the contrary, if the non-disclosed information is immaterial to influence the insurer’s underwriting decision, the Complaints Panel will rule in favour of the claimant. Here below The complainant lodged a hospitalization claim to the insurer for her hospital admission due to uterine fibromyomata 10 months after she had effected a medical policy. During its claims investigation, the insurer found that the complainant had other inforce policies with other insurance companies. In addition, she had undergone a CT scan one year prior to policy application and had regular gynecological check up. As the complainant had not disclosed all such information on the application form, the insurer rejected her hospitalization claim. The complainant alleged that those medical policies from other insurance companies were actually provided by her past and current employers as a kind of employee benefits. She had not effected any medical insurance with other insurers herself. Besides, the CT scan showed no abnormality and it was later confirmed that her chest pain was due to badly fitting underwear rather than a health problem. The routine gynecological check up also revealed normal result. Having considered that the question on the application form asks if the applicant has ever bought any medical insurance, the Complaints Panel found that it was logical for the complainant to answer “no” to the question. As regards the non-disclosure of CT Scan and gynecological check up, the Complaints Panel believed that the impact on the insurer’s underwriting decision might not be substantial as all those tests revealed no health abnormality. All in all, the Complainants Panel concluded that the insurer’s rejection of the claim on the basis of material non-disclosure was weak. It therefore ruled in favour of the complainant and resolved that she should be entitled to the hospitalization claim of around HK$3,500. If it is proved that the insured has disclosed all the information to the best of his/her knowledge at the time of policy application and the non-disclosed information is not a fact which the insured could reasonably be expected to disclose, the Complaints Panel will usually rule in favour of the insured. This is illustrated in the following case. The insured applied for a life insurance with critical illness and hospitalization supplementary riders. She declared on the application form that she had attended a hospital for urinary tract infection one month ago. She also informed the medical examiner of the same fact during the medical examination and indicated that she had fully recovered after medical treatment. The policy was then issued with an exclusion of urinary tract infection and related diseases imposed on The insured was diagnosed as suffering from multiple sclerosis (demyelination of neurological brain tissue) seven months later. She then lodged a critical illness claim to the insurer. The insurer later discovered that the insured had also complained of lower limbs weakness when she was admitted to hospital for urinary tract infection. Besides, she consulted for non-specific bilateral lower limbs fatigue and weakness five months after taking out the policy and had indicated to the attending doctor that these symptoms had existed for almost one year. As the insured had not disclosed the symptom of lower limbs weakness at the time of policy application, the insurer declined her critical illness claim on the ground of material non-disclosure. Although the insured complained of lower limbs weakness during her stay in the hospital, the Complaints Panel was mindful of the fact that she was not diagnosed as having any problem with her limb. In addition, the result of pelvic and renal ultrasound showed no abnormality and there was no focal neurological sign on examination. Indeed, the diagnosis of multiple sclerosis was made only seven months after the policy had been taken out. Given that the insured had never been diagnosed as suffering from any limb problem and that there was no specific question asking the insured if she had ever suffered from weakness of limbs, the Complaints Panel was convinced that the insured had already fully disclosed her medical history to the best of her knowledge at the time of policy application and during the medical examination. As there was no solid evidence of material non-disclosure, the Complaints Panel decided that the insurer should honour the critical illness benefit of nearly HK$310,000. The Complaints Panel came across many cases where an insurer denied a hospitalization claim on the ground that hospitalization was deemed unnecessary, either because no treatment had been applied during hospitalization or the diagnostic tests conducted during the hospital confinement could be effectively performed in an outpatient establishment. As the circumstances may differ greatly from case to case, the Complaints Panel, when reviewing this type of dispute, pays particular attention to the following: 1. whether the attending physician had explained the reasons for the necessity to admit the 2. whether any treatment was given during hospitalization, other than the diagnostic tests 3. whether the diagnostic tests formed part of the treatment which had to be done in a If hospital confinement is only for the sake of diagnostic or laboratory tests without any medical emergency, the Complaints Panel will usually adhere to the insurer’s decision to The insured was admitted to a hospital for ocular myasthenia gravis. During hospitalization, CT scan of thorax, nerve conduction test and various laboratory tests were performed. She was Given that the series of investigative tests could have been effectively performed on an outpatient basis without inpatient stay, the insurer thus concluded that the insured’s hospital confinement was not medically necessary and rejected the hospitalization claim. The insured disagreed with the insurer and presented a letter from her attending doctor to support her case. The attending doctor indicated that the insured presented with left ptosis which might herald the onset of myasthenia gravis and thymoma. She therefore required urgent investigation The Complaints Panel noted from the discharge summary that only investigative tests were performed during the insured’s hospitalization and there was no medication prescribed to treat her condition of dropping eyelid. In addition, the claim form completed by the attending doctor stated that the insured’s symptom of dropping eyelid had persisted for one month prior to her first consultation and the hospital admission was arranged 10 days later. This transpired that the insured’s condition was not an emergency condition requiring immediate inpatient treatment. Given that the insured’s admission was solely and primarily for the purpose of performing the investigative tests which could have been performed on an outpatient basis, the Complaints Panel agreed that her inpatient confinement was not medically necessary. It therefore concurred with the insurer to reject the hospitalization claim of around HK$10,000. The following illustrates a case where the complainant extended his stay in the hospital in order to wait for a suitable kidney for renal transplantation. Such an extended hospital stay was deemed to be not medically necessary by the Complaints Panel. The complainant was admitted to a hospital in China for six months due to chronic renal failure, chronic cholecystitis and gallstone. Cholecystectomy and renal transplantation were performed The insurer paid the hospital cash benefit for the complainant’s hospital confinement for the first and the last months but declined to pay the benefit for the rest of his hospital stay. This was because the complainant requested to stay in hospital from the second month onwards in order to wait for a suitable kidney for renal transplantation. The Complaints Panel noted from the medical report that the complainant only received general medicine and haemodialysis treatment starting from the second month of his hospital stay. His mobility was free without much constraint. He requested to stay in hospital to wait for kidney from the donor. It was not until four months later that appropriate kidney was available and renal Based on the above, the Complaints Panel was not convinced that the complainant’s hospitalization during the middle four months’ period was medically necessary. As the medical treatments rendered during the aforesaid period could have been performed on an outpatient basis and the aforesaid confinement was requested by the complainant himself instead of his attending physician, the Complaints Panel thus concurred with the insurer to decline the hospital cash benefit for the aforesaid period for nearly HK$77,000. A personal accident insurance policy or rider provides cover for the insured when he sustains an accidental bodily injury. This type of policy usually contains the proviso of a visible bruise or wound on the exterior of the body as evidence of an accidental bodily injury. The Visible Injury Clause is widely adopted because it is clear and unambiguous. Over the years, when assessing this type of dispute, the main focus of the Complaints Panel is to determine whether or not there has been a genuine injury caused solely and directly by an accident independently of all other causes. It is the understanding of the Complaints Panel that the requirement of apparent contusion exists only to protect insurers from being prejudiced by invalid or fraudulent claims. Moreover, it would not be used as a ready and handy excuse by insurers to deny liabilities. If there is concrete and supportive evidence to prove beyond reasonable doubt that an insured did suffer from a genuine injury directly and independently caused by an accident, the Complaints Panel will rule in favour of the claimant despite the fact that there is no visible bruise or wound because this is only fair and reasonable to the claimant. The explicit powers of the Complaints Panel to go beyond the strict application of contact terms were given to it by Members of the Bureau effective 13 March 2000. The following case is a case where the Complaints Panel ruled in favour of the insured as there was strong evidence to support a genuine injury despite the lack of any visible wound or The complainant injured her left shoulder, elbow and wrist in a mini-bus traffic accident. She immediately attended a government hospital. Redness and tenderness were noted over her left wrist and x-ray showed no fracture. She consulted a private doctor three days later, presenting with mild bruise and swelling. The final diagnosis was left ulna nerve palsy and she was granted Given that there was insufficient evidence to prove that the complainant’s left ulna nerve palsy was caused directly and independently by the alleged accident and that there was no visible contusion or wound as confirmed by the first attending physician, the insurer rejected the accident claim. The complainant emphasized that although there were only redness and tenderness over her left wrist during her first consultation at government hospital, she did present with bruise and swelling when she consulted the private practitioner three days later. That being the case, the insurer The Complaints Panel also noted that the cause of ‘ulna nerve palsy’ might vary from direct trauma, prolonged external pressure on the nerve to compression of nerve caused by swelling or injury of Having considered the whole circumstances, the Complaints Panel was convinced that a genuine accident had happened resulting in the complainant’s wrist injury. Given there was no evidence that the complainant had previous history of ulna nerve palsy or degenerative changes, the Complaints Panel ruled in favour of the complainant and awarded her the accident benefit, The information recorded during the claimant’s first consultation for injury is a piece of crucial evidence from which one may draw a conclusion as to whether or not the injury was caused solely and directly by an accident independently of all other causes. The following case illustrates a case where the Complaints Panel endorsed the insurer’s claim decision as the records of the first consultation did not support that the insured had experienced any traumatic The insured worked in a supermarket. She alleged sustaining a right arm injury at work while she was using a chisel to hit and remove the ice in the refrigerator. She was admitted to a government hospital the next day due to right-sided numbness, shoulder pain and headache. She continued her treatment for the following eight months and was subsequently diagnosed as suffering from carpal tunnel syndrome. In total, she was granted 479 days sick leave. The Insurer denied the insured’s accident claim on the ground that there was no evidence of The Complaints Panel noted from the attendance records of the government hospital that the insured presented with right-sided numbness and clumsiness associated with shoulder pain, dizziness and headache during the first consultation. The injury was classified as a non-traumatic type. The medical report of the hospital also revealed that there was no definite history of trauma or sprain at the insured’s first and subsequent consultations. The insured first indicated to the attending doctor eight months after the incident that she had injured her right arm at work while she was removing ice in the refrigerator. Besides, the Complaints Panel learnt from the consultation summary that the attending doctor had suggested the insured to resume light duty. However, this was refused by the insured who, on the contrary, requested for a longer sick leave. The Complaints Panel took note that the insured’s final diagnosis of carpal tunnel syndrome is a painful progressive condition caused by compression of a key nerve in the wrist. The etiology of such diagnosis is not likely accidental in nature. Having duly considered all the relevant factors, the Complaints Panel was not convinced that the insured’s disability was caused directly and independently by external, violent and accidental means. It therefore concurred with the insurer’s decision to reject the accident claim for HK$22,000. In order to ascertain whether an injury was caused directly and independently by an accident, the Complaints Panel will also consider the nature of the injury and how the injury happens. The following is an interesting case where the insured injured her eye while applying mascara. However, the Complaints Panel endorsed the insurer’s decision to decline the claim as the cause of injury was not accidental in nature. The insured injured her left eye while applying mascara. She attended a specialist eye clinic immediately and was diagnosed as suffering from corneal erosion from accidental injury. It is stipulated in the accident policy provisions that ‘Injury’ means ‘any abnormal bodily condition caused solely by accident and independently of any other causes…… ’ while ‘Accident’ means ‘an unforeseen and involuntarily event which causes an injury’. The insurer considered that the complainant’s injury was not accidental in nature and declined her accident claim accordingly. The injury happened while the insured was applying mascara at work. Her colleagues talked to her and the conversation distracted her concentration. As a result, the mascara hit her left eye The Complaints Panel was of the view that the interpretation of the term ‘injury’ was something more than just looking at whether the injury itself was unexpected or involuntary. Although the result of the insured’s injury was unforeseeable or involuntary and was not due to self-harming, given that there was no external force or any impact by other object or third party which would lead to the injury, the Complaints Panel could hardly see the cause of the injury as being of accidental nature. The Complaints Panel further believed that the injury was due to the insured’s carelessness and the nature of injury in this case was just like injuries arising from self-biting of tongue while eating, scratching nasal cavity while self-cleaning or corneal scratch while wearing contact lens, of which none could be regarded as an accidental injury. All in all, the Complaints Panel was not convinced that the outcome of the insured’s eye injury was caused solely by an accident and independently of any other causes. As such, it endorsed the insurer’s decision to reject the accident claim for almost HK$2,100. The Complaints Panel supported the decision of the insurer in the following case as the insured died of an illness, rather than an accident. A mother bought a juvenile personal accident policy for her son. Unfortunately, the insured passed away after participating in a fieldtrip and the cause of his death was heatstroke. The Insurer declined to pay the accidental death benefit on the ground that the insured’s death did not fulfil the policy definition of ‘injury’ which was defined as ‘bodily injury effected directly and independently of all other causes by accident’. Although the police report stated that the insured died from an accident, the Complaints Panel learnt from the death investigation report issued by the Coroner’s Court that police investigation found no suspicious circumstance surrounding the death of the insured. It was believed that the insured suffered heatstroke as a result of strenuous hill walking during the fieldtrip in hot weather, causing him to collapse and thus resulted in his death. In terms of medical literature, heatstroke is a form of heat illness and is the result of long, extreme exposure to the sun, in which a person does not sweat enough to lower body temperature. Given that there was no accidental means for the insured’s death and that heatstroke is a kind of heat illness, the Complaints Panel ruled that it was appropriate for the insurer to decline the Temporary Total Disability vs Temporary Partial Disability Many personal accident policies or riders have two kinds of temporary disability benefits, namely Temporary Total Disability (TTD) and Temporary Partial Disability (TPD). TTD means ‘total and continuous disability which prevents the insured from the date of accident from performing each and every duty of the insured’s regular occupation’, while TPD means ‘partial disability which prevents the insured from the date of accident or immediately following TTD from performing one or more duties of the insured’s regular occupation’. The compensation amounts for these two types of disability differ significantly. The amount payable under TPD benefit is usually a quarter of that payable under TTD benefit. This may explain why disputes often centre on the date when an insurer replaces TTD benefit with a The Complaints Panel ruled in the following case that the insured should be entitled to TTD benefit for the entire sick leave period as it was satisfied that the injury had prevented him from performing each and every duty of his regular occupation. The insured is a decorator. He cut his left wrist with a sharp object while at work and consulted a private doctor immediately. The cut wound was about 1.5 inches across with active bleeding, bruise, swelling, local tenderness and pain over his wrist. He was granted 21 days sick leave. The insurer paid the insured TTD benefit for the initial 10 days of his sick leave and revised the offer to TPD benefit for the remaining 11 days. Given the fact that he was unable to handle heavy electrical appliances for the entire 21 days sick leave, the insured was dissatisfied with the payment and was of the view that the insurer should pay his entire sick leave period as TTD benefit. The difference in the claim amount was around HK$900. The Complaints Panel noted from the claim form completed by the attending doctor that the insured’s wound was still under healing during the last consultation, which was 14 days after the accident. The attending doctor further clarified that the insured was totally unfit for work for the entire sick leave period because he was unable to handle heavy electrical and mechanical Having taken into the consideration that the insured’s job duties would involve heavy manual works, the Complaints Panel was inclined to believe that the insured was totally unable to perform his job duties for the entire sick leave period. As 21 days sick leave was not excessive in term of the severity of the injury, the Complaints Panel ruled in favour of the insured and resolved that the insurer should revise the last 11 days TPD benefit to TTD benefit. On the contrary, the Complaints Panel concurred with the insurer’s decision in the following case as the insurer’s offer should have well compensated the loss the insured had sustained in The insured sustained a left little finger injury while she was performing the cleaning duties at school. She consulted a private doctor four days later, presenting with tenderness, swelling and bruise over her left little finger. X-ray revealed undisplaced fracture of distal phalanx. She was The insurer paid the insured 76 days TTD benefit and 39 days TPD benefit. This was because the x-ray done two and a half months after the accident showed healed fracture at distal phalanx of the insured’s left little finger and another one performed one month later revealed normal bony alignment with no abnormal soft tissue swelling. The insured was not satisfied with the settlement and submitted a medical report from her attending doctor who confirmed that she was not suitable to return to work as she was unable to carry goods or tools. She insisted that the insurer should settle her entire 115 days sick leave as TTD benefit. The difference in the claim amount was nearly HK$3,600. From the subsequent x-rays performed which revealed healed fracture with normal bony alignment, the Complaints Panel believed that the insured’s fracture had satisfactorily healed. Taking into consideration the nature of the insured’s occupation and the seriousness of the injury, the Complaints Panel ruled that the insurer’s offer of 76 days TTD benefit and 39 days TPD benefit Serious Injury or Sickness in Travel Policy Most travel insurance policies compensate the insured person for loss of irrecoverable deposits or charges paid in advance in the event of necessary and unavoidable cancellation of trip arising from death or serious injury or sickness of the insured or the insured’s immediate family member…… or other specified circumstances. The insurance market provides a great variety of travel insurance products. Given that the premium, terms and conditions vary among different products, the Complaints Panel urges all insuring public to look carefully into the policy terms and conditions and to compare the products so as to choose the one which best fits his/her individual needs. The complainant injured his right ankle during a football match three days before he commenced his trip to India. He was admitted to a government hospital and was diagnosed as suffering from ‘acute traumatic closed fracture of right tibia and fibula’. Application of cast was performed during the hospitalization. Due to the injury, he cancelled his journey to India and lodged a claim under his travel insurance policy for the deposits and cancellation charges incurred, totally HK$1,400. According to the policy provisions, the insurer will reimburse the insured person for loss of travel expenses paid in advance by the insured person or for which the insured person is legally liable and which are not recoverable from any other source upon the cancellation of the journey arising from…… serious injury or sickness of the insured person. And ‘serious injury or sickness’ is defined in the policy as ‘injury or sickness certified by a qualified medical practitioner as being Given that there was no medical evidence to support that the complainant’s injury was certified by a qualified medical practitioner as being dangerous to his life, the Insurer rejected his claim on the basis that the event did not fall within the policy scope. The complainant disagreed and claimed that it was not stated in the insurance leaflet that an injury should be certified by a qualified medical practitioner as being dangerous to life in order for the insured to claim for the journey Technically, the Complaints Panel considered that the insurer had the right to repudiate the policy liability based on strict policy wordings as the complainant had not provided any medical certification to show that his condition was dangerous to life. However, the Complaints Panel was aware of the difference in emphasis on the scope of cover between the actual travel policy and the travel insurance leaflet. As most travel insurance policies will reimburse the insured person for loss of unrecoverable expenses paid in advance upon cancellation of journey arising from similar circumstances as the case of the complainant, the Complaints Panel considered that the aforesaid definition of ‘serious injury or sickness’ requiring the insured person to be certified by a qualified medical practitioner as being dangerous to life was rather uncommon in the market and was thus worth bringing to the attention of policyholders in the insurance leaflet. In the circumstances, the Complaints Panel believed that there were extenuating circumstances that would merit the insurer to consider an ex-gratia payment to the The insurer emphasized that the insurance leaflet had given sufficient and clear notice to the insuring public that the brochure only outlines the brief summary of the policy and they should refer to the insurance policy for terms and conditions. In order not to deliver a wrong message to the complainant that the claim settlement was not necessarily subject to the policy terms and conditions, the Insurer refused to settle the claim on an ex-gratia basis, but agreed to take the opportunity to review the contents of the policy and the insurance leaflet as a whole in future. All insurance policies contain an ‘exclusion’ section which lists all losses, perils, situations, conditions or circumstances that are excluded from the policy coverage. The purpose of this is to limit the coverage to only those risks the policies are intended to cover, at the agreed premium. Claims disputes often arise when the insured neglects or fails to make reference to ‘Pre-existing Conditions’ Exclusion in Travel Policy ‘Pre-existing Conditions’ exclusions are commonly found in travel insurance policies to exclude those illnesses or injuries which have existed before taking out the policies. Although the Complaints Panel agrees that the insurer shall adopt a more lenient approach in handling this kind of claim bearing in mind that the spirit of travel insurance is to provide coverage to an insured for unexpected and sudden medical conditions during a journey, it supports the insurer to decline the claim if there is concrete and sufficient evidence to show that the insured does suffer from certain illnesses or the signs or symptoms of which have manifested before a travel policy is effected. The insured suffered from headache and vomiting during her trip in Japan. She consulted a local clinic and was later admitted to a local hospital. The diagnoses were gastritis and headache. After returning back to Hong Kong, she consulted a private doctor and was diagnosed as suffering The insurer noted from the medical report of a government hospital that the insured had experienced persistent headache and vomiting a few days prior to her trip to Japan. Given that her sickness was not contracted and commenced during the insured journey, the insurer declined her travel claim for the medical expenses incurred. The insured contested that the diagnoses of gastritis and headache during her trip was not related to the headache and vomiting she suffered in Hong Kong. She was in good health when she departed Hong Kong and the sickness only commenced three days after she arrived in Japan. The Complaints Panel understood from the available medical information that the insured had been admitted to hospital for headache and vomiting four days prior to the trip. The attending doctor opined that her headache was likely due to viral infection. She was discharged on the next day with home medication. Besides, the insured’s younger sister and brother also contracted upper respiratory tract infection in the previous one to two weeks. Based on the above, the Complaints Panel was more inclined to believe that the insured had not fully recovered from the viral infection when she commenced her trip to Japan. It was likely that the headache and vomiting during her trip were due to viral infection which was a pre-existing condition before the trip. Given that the insured’s sickness was not contracted and did not commence during the insured journey, the Complaints Panel concurred with the insurer’s decision to deny her claim for HK$11,500, being the medical expenses incurred during the journey, on the Most hospitalization policies contain an exclusion clause to exclude loss directly or indirectly The complainant complained of swelling of her neck which increased in size for one month. She was admitted to a private hospital for nine days and the diagnosis was thyroglossal cyst. Excision was performed to remove the cyst. Given that the complainant’s suffering was congenital in nature, the insurer denied the hospitalization claim on the basis that her condition fell According to the policy provisions, ‘congenital condition’ means ‘medical abnormalities existing at the time of birth, regardless of whether they are known or unknown to the insured’. The complainant’s attending doctor clarified that the complainant did not have any swelling over her neck at birth or during her childhood. He further explained that thyroglossal cyst arises from the thyroglossal duct which is associated with the normal downgrowth and development of the thyroid gland. As such, it is not a developmental abnormality. The Complaints Panel noted from the medical literature that thyroglossal cyst is a fluid-filled sac present at birth in the midline of the neck. A thyroglossal cyst is a congenital malformation (a birth defect). It results from incomplete closure of a segment of the thyroglossal duct, a tube-like structure that normally closes as the embryo develops. Although the cyst was not present at the time of the complainant’s birth or during her childhood, the medical abnormality that gave rise to thyroglossal cyst did beyond doubt exist at the time of birth. Given that the cyst fell into the policy definition of ‘congenital condition’, the Complaints Panel supported the insurer to decline the complainant’s hospitalization claim for around All insurance contracts are subject to conditions. Insurers usually impose certain conditions in insurance policies to ensure that no high risk features would be introduced without their knowledge. In dealing with disputes arising from a breach of policy condition on the part of the insured, the Complaints Panel pays particular attention to determine whether or not the circumstances of loss are connected or related to the breach. Taking Reasonable Care of Personal Belongings It is commonly found that most travel insurance policies contain similar policy conditions which require the insured persons to take reasonable care and due precautions to prevent loss Whilst the Complaints Panel appreciates that such a policy condition is not meant to avoid claims but to ensure that the insured persons take proper care of their personal belongings, it is inclined to make its judgment based on the circumstances giving rise to the loss from a The following is a case where the Complaints Panel considered that the complainant had failed to take reasonable care to prevent the loss of his personal belongings. The complainant bought a travel policy for his three-day trip to Macau. He lost his waist bag which was left on a bench while he was taking photographs at a distance of around six to seven feet away. Two gold bracelets, a gold necklace, a luxurious watch, a mobile phone and HK$10,000 cash were put inside the waist bag. He immediately reported the loss to the local police and lodged a claim to the insurer. The insurer appointed an independent loss adjuster to investigate the claim and found that the complainant had left his waist bag unattended in a public place for around five minutes at a distance of six to seven feet away while he was taking photographs with his friend. It is stipulated in the policy condition provisions of the travel policy that ‘the insured shall act in a prudent manner and exercise reasonable care and prevent accidents, injury, illness, loss or damage’. As such loss could have been easily avoided if the complainant carried the bag with him instead of leaving it unattended, the insurer denied the claim on the basis that he had failed to comply with the policy condition for taking reasonable care of his belongings. The Complaints Panel noted that the incident happened after twilight where properties being left in a public area were more vulnerable to the risk of pilferage. It believed that a reasonable person in similar circumstances as the case of the complainant should have taken the waist bag with him when leaving the bench as a matter of prudence. As the complainant had failed to act in a prudent manner and exercise care to prevent the loss, the Complaints Panel agreed that he had breached the said policy condition. It therefore ruled in favour of the insurer. It is always the Bureau’s conviction and belief that the best solution to claims disputes lies in mediation and reconciliation. The existing claims handling procedures provide an opportunity for insurers to settle cases without having to be adjudicated by the Complaints Panel. The referral of cases to the Honorary Secretaries for assessment is an important and critical step. In quite a number of cases, insurers alter their positions after duly taking into consideration the opinions of the Honorary Secretaries who are experienced professionals within the industry. Of the 297 cases closed in 2007, 42 cases (14%) were mutually and satisfactorily settled between the complainants and the insurers under the auspices of the The insurer imposed an exclusion clause of ‘bronchitis and gastritis or any related disease’ under the hospitalization rider of the insured because she had history of such diseases. The insured was admitted to hospital for reflux oesophagitis and colonic polyp. Gastroscopy was performed. The insurer considered that reflux oesophagitis and the procedure of gastroscopy were related to gastritis. It thus declined to pay for the related expenses incurred on the ground that the condition fell under the imposed exclusion clause. The case was referred to the Honorary Secretaries. Whilst one Honorary Secretary agreed with the insurer’s decision, the other two Honorary Secretaries opined that the insurer should honour the insured’s claim. This was because the insured’s attending physician had explained that the gastroscopy performed was to investigate the insured’s oesophagus and upper gastro-intestinal tract and was not related to gastritis. One of them further viewed that reflux oesophagitis occurs when the contents in stomach leak back into the oesophagus. The opinions of the Honorary Secretaries were relayed to the insurer who subsequently settled the expenses in full, amounting to approximately HK$7,600. The Complaints Panel would like to remind consumers of the following points when taking Disclose fully and accurately all information in the application form. Ask the agent to explain fully the implication of the questions. If in doubt as to whether a fact is Check personally if all the facts are included in the application form. Your signature on the form is taken as evidence that you are satisfied with the facts. Read the policy, in particular any exclusion clauses.

Source: http://www.iccb.org.hk/files/e_CaseReview_2007.pdf