DRAFT LAW NO. 22/2024 REGARDING VIOLATION OF THE INSURANCE BUYER'S OBLIGATION TO PROVIDE MEDICAL CONDITION

The legal precedent is derived from the Supervisory Decision No. 37/2023/DS-GDT dated August 24, 2023, by the Supreme People's Court regarding an insurance contract dispute.

The case involves a dispute over an insurance contract between the plaintiffs, Dang Ngoc M, Tran Thi T, and Dang Ngoc Anh T1, and the defendant, General Company V. On June 17, 2014, and July 24, 2014, Dang Lam Quoc B signed insurance application forms, and the beneficiaries were Tran Thi T, Dang Ngoc M, and Dang Ngoc Anh T1. General Company V conditionally accepted the insurance for Mr. B due to his health condition and required him to pay additional premiums. On March 12, 2015, Mr. B passed away. However, General Company V refused to pay the insurance benefits to the beneficiaries, citing that Mr. B had not disclosed his health conditions before entering the insurance contract.

In the first-instance judgment on September 25, 2017, the People's Court of Thu Dau Mot City ordered General Company V to pay the insurance benefits. General Company V appealed, and the appellate court reversed the decision on March 6, 2018. Finally, the case was reviewed by the Judicial Council of the Supreme People's Court, which concluded that Dang Lam Quoc B had violated his obligation to disclose his health condition when signing the insurance contract. Consequently, General Company V is not liable for the insurance benefits. The relevant legal provisions include point b, clause 2, Article 18, and clause 2, Article 19 of Law on Insurance Business 2000, and point a, clause 2, Article 21, and clause 2, Article 22 of Law on Insurance Business 2022.

The content of Draft Precedent No. 22/2024 is extracted from paragraphs 1, 2, 6, 7, 8, and 14 of the "Court's Findings" section. Accordingly, on June 17, 2014, and July 24, 2014, Mr. Dang Lam Quoc B purchased insurance with a total value of VND 5,500,000,000. He answered "no" to all health-related questions, including those about tumors and cancer. On March 11, 2015, he was hospitalized and died the next day. The hospital confirmed he had metastatic carcinoma in the terminal stage. The court ruled that he violated his obligation to provide accurate health information, voiding the insurance contracts. Thus, the insurance company is not liable for the risks and only needs to refund any additional premiums paid, minus benefits already paid and any debts, with the first year's refund value being zero.

The purpose of Precedent No. 22/2024 is to provide clear legal guidance on the application of regulations related to the disclosure of health information when entering into insurance contracts. It clarifies the duty of insured individuals to provide honest information and the insurer's right to deny claims if this duty is breached.

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Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

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Attention: This legal update is not an advice and should not be treated as such.