Section 147. Mis-statement of age and non-avoidance of policy.
(1) A licensed life insurer shall not dispute liability under a life policy by reason only of a mis-statement of the age of the life insured.
(2) Where the true age as shown by the proof is greater than that on which the life policy is based, the licensed life insurer may vary the sum insured by, and the bonuses allotted to, the life policy so that, as varied, they bear the same proportion to the sum insured by, and the bonuses allotted to, the life policy before variation as the amount of the premiums that have been paid under the life policy as issued bears to the amount of the premiums that would have become payable if the life policy had been based on the true age.
(3) Where the true age as shown by the proof is less than that on which the life policy was based, the licensed life insurer-
(a) may vary the sum insured by, and the bonuses allotted to, the life policy so that, as varied, it bears the same proportion to the sum insured by, and the bonuses allotted to, the life policy before variation as the amount of the premiums that have been paid under the life policy as issued bears to the amount of the premiums that would have become payable if the life policy had been based on the true age; or
(b) may reduce the premium as from the date of issue of the life policy, to the amount that would have been payable if the life policy had been based on the true age and repay the policy owner the amount of over-payments of premium less any amount that has been paid as the cash value of bonuses in excess of the cash value that would have been paid if the life policy had been based on the true age.
(4) A licensed life insurer shall not dispute the validity of a life policy after the expiry of two years from the date on which it was effected on the ground that a statement made or omitted to be made in the proposal for insurance or in a report of a doctor, referee, or any other person, or in a document leading to the issue of the life policy, was inaccurate or false or misleading unless the licensed life insurer shows that the statement was on a material matter or suppressed a material fact and that it was fraudulently made or omitted to be made by the policy owner.
(5) For the purpose of subsection (4), "material matter" or "material fact" means a matter or fact which, if known by the licensed life insurer, would have led to its refusal to issue a life policy to the policy owner or would have led it to impose terms less favourable to the policy owner than those imposed in the life policy.
(6) Nothing in this section shall prevent the licensed life insurer from calling for proof of age at any time and no life policy shall be deemed to be disputed merely because the terms of the life policy are adjusted in accordance with subsections (2) or (3).