(1) Before a contract of insurance is entered into, a proposer shall disclose to the licensed insurer a matter that-
(a) he knows to be relevant to the decision of the licensed insurer on whether to accept the risk or not and the rates and terms to be applied; or
(b) a reasonable person in the circumstances could be expected to know to be relevant.
(2) The duty of disclosure does not require the disclosure of a matter that-
(a) diminishes the risk to the licensed insurer;
(b) is of common knowledge;
(c) the licensed insurer knows or in the ordinary course of his business ought to know; or
(d) in respect of which the licensed insurer has waived any requirement for disclosure.
(3) Where a proposer fails to answer or gives an incomplete or irrelevant answer to a question contained in the proposal form or asked by the licensed insurer and the matter was not pursued further by the licensed insurer, compliance with the duty of disclosure in respect of the matter shall be deemed to have been waived by the licensed insurer.
(4) No licensed insurer, insurance agent, licensed financial adviser or financial adviser's representative, in order to induce a person to enter into or offer to enter into a contract of insurance with it or through him-
[Am. Act A1247:s.23]
(a) shall make a statement which is misleading, false or deceptive, whether fraudulently or otherwise;
(b) shall fraudulently conceal a material fact; or
(c) in the case of an insurance agent, a licensed financial adviser or financial adviser's representative, use sales brochure or sales illustration not authorized by the licensed insurer.
[Am. Act A1247:s.23]
Penalty: One million ringgit.
(5) Where a person is induced to enter into a contract of insurance in a manner described in subsection (4), the contract of insurance shall be voidable and the person shall be entitled to rescind it.