SINGAPORE Law and Practice Contributed by: Simon Goh and Wang Ying Shuang, Rajah & Tann Singapore LLP
9. Insurance Disputes 9.1 Insurance Disputes Over Coverage Forums for Resolving Insurance Disputes There is no specific statutory or procedural framework that governs insurance coverage disputes. As most (if not all) coverage disputes are contractual in nature, parties will be able to avail themselves of the usual dispute resolution mechanisms and forums – ie, by commencing court proceedings or arbitration (if there is an arbitration clause in the insurance policy or if par- ties otherwise agree to refer the matter to arbitration). There are also other platforms where specific types of insurance disputes may be heard and resolved. In 2005, the Financial Industry Disputes Resolution Centre Ltd (FIDReC) was launched as an independ- ent and impartial alternative dispute resolution institu- tion that offers services to resolve disputes between insureds and insurers in an amicable, expeditious and affordable manner. FIDReC offers two schemes, both of which consist of a mediation and adjudication stage: • the FIDReC Non-Injury Motor Accident Scheme (“FIDReC NIMA Scheme”), which applies to third- party motor accident claims (ie, where the insured is making a claim against an insurer that is not his/ her own insurer) where no bodily injury is suffered and the claim amount is below SGD3,000; and • the FIDReC Dispute Resolution Scheme. It is mandatory for matters that fall within the FIDReC NIMA Scheme to first be heard by FIDReC before court proceedings may be commenced. FIDReC has a track record of handling claims made against insurers, pertaining to the following: • market conduct issues such as mis-selling or mis- representation of the product sold to the consumer in life insurance, accident and health insurance and investment-linked products; and • disputes on liability relating to general insurers, involving policies such as travel insurance, motor insurance, and accident and health insurance.
depends on the wording used. The mere labelling of a statement as a warranty may not, without more, necessarily confer upon the statement the status of a “warranty”. In order to give a statement or promise the force of a warranty, it must be shown that it was the intention of the parties that this should be so. It is also not uncommon for proposal forms to contain a declaration to the effect that the matters stated in the proposal form are to form “the basis of the con- tract”. This phrase is typically repeated in the policy documents that are eventually issued. Such a “basis of the contract” clause can have the effect of making the statements or answers provided in the proposal forms warranties, the breach of which would release the insurer from liability as of the date of such breach. This is the case even if the contents of the warranty may not have been material to the risk and/or if the breach of warranty may not have caused nor be con- nected to a loss in respect of which a claim is brought. 8.3 Conditions Precedent There is no legal requirement for conditions prece- dent to an insurer’s liability to be expressly described as such for the term to be construed as a condition precedent to the insurer’s liability. Whether a term is construed as a “condition precedent” may depend on whether – taking the contract as a whole – the term in question was fundamental to the whole contract, but the same result can be achieved if the parties have agreed that a term, otherwise less than a fundamental term, is to be deemed a condition precedent to the contract. Whilst the labelling of a term as a “condition” or “condition precedent” is a relevant factor, it is not decisive of the contractual term’s legal effect. This is particularly so if the label is attached generally to a number of terms of a different nature. If a term is found to be a “condition”, the breach of such a term entitles the insurer to claim for damages but not to deny coverage under a policy. If, however, a term is construed as a “condition precedent”, the breach of such a term entitles the insurer to repudiate liability under the policy. This is the case even if the insurer does not or is unable to prove that it has suf- fered prejudice as a result of the breach.
407 CHAMBERS.COM
Powered by FlippingBook