General insurance What is Utmost Good Faith?

[Mataracy]

Utmost good faith is defined as the positive duty to voluntary disclose, accurately and fully, all facts materia to the risk being proposed, whether asked for them or not.
From this however, the duties expected of an insurer or underwriter are :
(a) not to accept an insurance which they know is unenforceable at law.
(b) to issue policies in an unambiguous terms.
(c) to avoid making untrue statement during negotiation.
The detonation of Utmost Good Faith has been altered by the various legislation especially in my country. The insurance Decree No 80 of 1991 compelled all insurance companies to insert every material question in the proposal form as anything not asked for and not disclosed will not be construed to be material.
Also part IX sections 54 and 55 of the 2003 insurance Act provides that:
(1) Where an insurer requires an insured to complete a proposal form or other application form for insurance, the form shall be drawn up in such information as the insurer considers material in accepting the application as any information not specifically requested shall be deemed not to be material.

(2) A disclosure or representation made by the insured to the insurance again shall be deemed to be a disclosure or representation to the insurer provided the agent is acting within his authority.etc.

 

[btaliat]

This is the first time I am hearing this and to be frank, it is an educative post. I dont see any reason why someone that's seeking to be insured won't disclose all the relevant information the insurance company may need even if they are not asked to. The information given to the insurance company is what they always work with.

 

[Chibson]

I think the post is good under in some sense it is very important for anyone who wants to ensure his property or anything to disclose all the needed information for transparency. it is also very important for the insurance company to be truthful in their dealings with their customers.