The Taiwan High Court rendered the 108-Bao-Xian-Shang-Yi-1 Civil Decision of July 17, 2019 (hereinafter, the “Decision”), holding that whether there is any irregularity in an insured’s physical condition relies on the truthful statement of the insured, and the insured’s obligation to provide a truthful explanation cannot be deemed released simply because the insured has authorized the insurer to check his/her medical data.
According to the facts underlying this Decision, the Appellant entered into the insurance contract at issue for an amount of NT$500,000 for a major illness with Appellee. The Appellant was then found to have a malignant brain tumor, went through a craniotomy and brain tumor resection and subsequently claimed NT$500,000 for each major illness (for a total of NT$1 million) from the Appellee pursuant to the insurance policy. However, the claim was rejected by the Appellee. Therefore, a complaint was filed to compel the satisfaction of the claim. The trial court ruled against the Appellant and the Appellant appealed to the Taiwan High Court.
It was first pointed out in the Decision that when executing the insurance contract at issue, the Appellant knew that he had been diagnosed to have brain tumor in 2014. However, he misrepresented in the notification section of the contract that he had not received any physician’s treatment, diagnosis or prescription for brain tumor in the past five years. The Appellant’s misrepresentation regarding to the Appellee’s written questions could be determined. Therefore, the Appellee could certainly rescind the insurance contract at issue in accordance with Article 64, Paragraph 2 of the Insurance Law without any liability.
It was further pointed out in this Decision that Article 62, Subparagraph 2 of the Insurance Law refers to the circumstances where an insurer exercising normal caution should know or cannot claim to be ignorant of the increasing risk of the insured after execution of the contract. This is different from the violation of the truthful statement obligation under Article 64 of the Insurance Law before the insurance contract was executed. In addition, whether there is any irregularity in an insured’ physical condition is part of the insured’s privacy and cannot be easily probed by others. In addition, there are various possibilities for a patient visiting hospitals or seeking medical cares, not to mention that there are hundreds of medical institutions today and that personal data protection under existing laws is getting more and more stringent. Therefore, an insurer in fact cannot collect medical information about the insured without any constraint and thus still relies on the truthful explanation of the insured to determine whether the insurance shall be underwritten. Therefore, it should not be concluded that an insured can certainly be released from the obligation to provide a truthful explanation of his/her physical condition simply because the insured has authorized the insurer to check his/her medical data. Since such assertion of the Appellant was not acceptable, the appeal was dismissed.