Mis-selling in health insurance

Utmost good faith is the underlying principle of any insurance product

Insurance is unique among products, especially financial products, in that the contract is based on a few underlying principles that are immutable.

They include Insurable Interest, Indemnity and Subrogation and one of the important principles is that of Utmost Good Faith.

This principle, uberrimae fidei in Latin, says that BOTH the insurer and the insured must disclose all material facts before the policy inception. A Material Fact is one that has a bearing on the risk proposed to be covered and hence the insurer’s decision whether to cover it, and if so, at what (premium) rate and terms.