CMFAS BCP Principles of Insurance question: CONSUMER insurance contract in Singapore

Answer: B. Volunteer every material fact they know or ought to know, whether or not the insurer asks

Singapore has not enacted a separate consumer-insurance disclosure regime, so the duty of utmost good faith applies to consumer and commercial policies alike. Before the contract is made, the proposer must volunteer every material fact they know or ought to know, whether or not the insurer asks, and material non-disclosure lets the insurer avoid the policy. Insurance Act 1966 s 23(5) reinforces this: every proposal form must warn that a proposer who does not fully and faithfully give the facts they know or ought to know may receive nothing from the policy. A duty only to take reasonable care not to misrepresent, with proportionate remedies, comes from the UK's Consumer Insurance (Disclosure and Representations) Act 2012. Singapore's Law Reform Committee proposed something similar in February 2020, but it has not been enacted. The LIA Code of Life Insurance Practice limits when life insurers act on non-disclosure, but it is a voluntary industry code and still asks applicants for the important facts they know or ought to know. Taking advice and signing a declaration is not the legal test, and warranting that every answer is true describes the effect of a basis clause, not the duty of disclosure.