INSURANCE

INTERMEDIARIES
Dr Nurjaanah Chew Li Hua
LLB(Mal)(Hon), LLM (Mal), PhD (Manchester)
March 2018
Definition – s.2, FSA 2013

Insurance agent
• Acts on behalf of insurer

Insurance broker
• Acts on behalf of proposer/insured
Insurance intermediaries
Agent

Others Broker

Intermediary

Banks Adjuster
chewlihua
Insurance agent – proposal/ policy

Acts on
solicits behalf of
insurer

negotiates
Insurance broker

Independent contractor

Solicit, negotiate or procure policy for proposer

Para. 12, Sch. 9, FSA 2013

Insurance agent

Authorized

Contract – deemed 2b insurer’s agent

chewlihua
Para. 12(1), Sch. 9

Knowledge of agent
•=

Knowledge of insurer

chewlihua
Para12(2), Sch.9

s/m made, act done by ins. agent

4 formation or variation of contract

Deemed 2b insurer’s s/m or act despite breach

of para 11 by agent

chewlihua
Exception – para.12(3), Sch.9

Collusion or connivance
• Ins. Agent + proposer

Agent ceased
• Insurer taken all reas steps 2
inform
chewlihua
United Oriental Assurance
Sdn Bhd v Mazzarol [1984]
• Boat – The Melanie
• Insured had disclosed to agent earlier
mishap
• Boat grounded and could not be salvaged.
Claim rejected – non-disclosure.
• Fed. Ct – knowledge acquired by the
agent could be imputed to the insurers.

chewlihua
Mackie v European Assurance
Society (1869)
• Wool mill, bonnet factory & wool store
• Insurance agent changed company.
• Renewed policy with new company without
informing insured. Memo of deposit – covered
for 1 mth.
• Plaintiff wrote to agent – prefer to stay on with
original insurer.
• Fire destroyed the mill

chewlihua
Mackie v European Assurance
Society
• Insurer – denied liability:
• Agent had no authority to enter into a
binding contract on behalf of company
• P’s letter = repudiation of the contract

Ct – authority of the agent could be

implied from the conduct of the insurer.
Agent had effected more than 160
policies. The company leave it to him to
accept or reject proposals.
chewlihua
 Syarikat Uniweld Trading v Asia
Insurance Co Ltd [1996]

• Motor workshop – welding

• Insured could not understand English. Agent
filled in the form.
• Policy covers TP liability but exclude injury or
damage caused by fire
• Fire damaged a car. Insured liable to vehicle
owner – RM9000
chewlihua
Syarikat Uniweld Trading
• Ct – the exclusion clause to be construed
in such a manner that the commercial
object of the contract would not be
defeated
• The knowledge of the agent regarding
the type of insurance coverage required
by the insured might be imputed to the
insurer

chewlihua
Filling up proposal form by agent

English position
• Newsholme Brothers

Malaysian position
• Para.12, Sch.9, FSA
Basis of contract clause

Breach of warranty
• Enables insurer to avoid the contract

Ousted by para.10, Sch.9, FSA

• Basis of contract clause prohibited
Leong Kum Whay v QBE Insurance
• Q - 'What Accident, Sickness or Life Insurance do you now carry or applied for?‘
• Answer in proposal form: two life policies and one personal accident policy
• The appellant had two life and seven personal accident policies.
• Disclosed all these nine policies to an agent of Great Eastern who witnessed the
proposal form
• Arbitrator found for Great Eastern on the ground that the disclosure to agent was
not disclosure to Great Eastern

• CA – s.44A Insurance Act 1963 – general authority of agent.

LEONG KUM WHAY & ANOR v AMERICAN
INTERNATIONAL ASSURANCE CO LTD
• 2 life policies
• Accident – permanent total blindness of right eye
• AIA avoiding policies – non-disclosure of other PA policies with other companies
• Section 15C(4) - no life policy shall be called in question by an insurer after the
expiry of two years from the date on which it was effected on the ground that the
statement made in the proposal for insurance was inaccurate or false.
• The defendant had to show why and how such suppression and/or non-disclosure
of facts had influenced itself and whether those facts are material.
• [para.13, Sch.9, FSA 2013]
LEONG KUM WHAY & ANOR v AMERICAN
INTERNATIONAL ASSURANCE CO LTD

•HC allowed the claim

•The number of other
policies was not a material
fact
Poh Siew Cheng v American
International Assurance Co Ltd
• PA policy
• Disclosure of other life & PA policies in Singapore to agent
• Disclosure of diabetes
• Agent did not state in the form
• Injury to eye due to accidental fall
• Claim rejected – non-disclosure & basis of contract clause
Poh Siew Cheng
•HC – s.44A, Insurance
Act 1963 – k/l of
agent = k/l of insurer
•no breach of basis
clause.
Duties of an agent

To solicit
To comply with To act with
insurance
instruction reasonable skill
business

To receive
To act in good
payment on
faith
behalf of insurer
Duties of an agent

Tort Agency

Contract
LAW OF AGENCY