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singapore. Singapore Academy of Law Journal, 30(1), 345-366.

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Singapore," Singapore Academy of Law Journal 30, no. 1 (March 2018): 345-366

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 (2018) 30 SAcLJ 345
(Published on e-First 21 February 2018)

OF SHIFTING WINDS - INSURED'S PRE-CONTRACTUAL

DUTY OF GOOD FAITH IN SINGAPORE

Just over 250 years ago, the infamous landmark case of

Carterv Boehm laid the foundation for the principle of
utmost good faith in insurance law in common law
jurisdictions as well as established the uberrimae fidei
principle in Singapore. At its core, the uberrimae fidei
principle imposes a reciprocal duty on both the insurer and
the insured to demonstrate good faith. Naturally, the most
classic and notorious aspect of the duty pertains to the
insured's pre-contractual duty of disclosure. As an ex-British
colony and a legatee nation, Singapore has received much of
this jurisprudence. This paper examines how the courts in
Singapore have dealt with this doctrine of pre-contractual
duty of disclosure and whether Singapore has similarly
imported the unsatisfactory position.

YEO Hwee Ying*

LLB (Singapore), LLM (London);
Associate Professor, Faculty of Law, University of Singapore.

I. Introduction

1 The iconic English case of Carter v Boehm' laid the foundation

for the principle of utmost good faith in insurance law in common law
jurisdictions (including Singapore). As this 1766 case has just marked its
250th anniversary in 2016, the time is ripe for a re-examination of such
a seminal judgment and its impact on the Singapore jurisprudence.

2 The uberrima fides principle essentially imposes a reciprocal

duty on both the insurer and the insured to demonstrate good faith
pre-contractually and post-contractually. Of particular concern in this
article is the insured's duty of good faith because the doctrine has
evolved over the centuries in favour of the insurer. In recent years,
however, the content of the duty has been in a state of flux and the
problems of the much-criticised pre-contractual duty have finally been
addressed in England via the enactment of the Consumer Insurance
(Disclosure and Representations) Act 20122 ("CIDRA') (which applies to

* The author would like to thank the Centre for Banking & Finance Law, Faculty of
Law, National University of Singapore, for funding this research.
1 (1766) 3 Burr 1905.
2 c 6 (UK).
346 Singapore Academy of Law Journal (2018) 30 SAcLJ

consumer insurance policies) and the Insurance Act 2015' (which

applies to business insurance policies).

3 As a former colony and legatee nation, Singapore has received

much of the English jurisprudence. This article traces how the local
courts in Singapore have dealt with this doctrine and developed the law,
with the discussion primarily focusing on the perspective of the
insured's pre-contractual duty. It is submitted that Singapore is now at a
crossroads and has to decide whether to remain static or opt to be
unshackled from the worst excesses of the common law pre-contractual
duties. The article will additionally consider how Singapore should forge
ahead to ameliorate the problems still associated with the good-faith
doctrine in the local insurance industry.

II. Legal legacy

4 It should be worthwhile at this juncture to reflect on the

historical background before proceeding to the main discussion on how
Singapore ought to deal with the various insurance issues stemming
from Carterv Boehm.

A. Weaknesses spawned by Carter v Boehm

5 The development of the duty of good faith may be traced to the

well-known articulation of Lord Mansfield in Carterv Boehm: 4
Insurance is a contract upon speculation. The special facts, upon
which the contingent chance is to be computed, lie most commonly in
the knowledge of the insured only: the underwriter trusts to his
representation, and proceeds upon the confidence that he does not
keep back any circumstance in his knowledge, to mislead the
underwriter into a belief that the circumstance does not exist, and to
induce him to estimate the risk as if it did not exist . .

This oft-cited passage formed the foundational basis for the insured's
pre-contractual duty. In view of the poor communication facilities and
delayed overseas-news coverage that existed in the 18th century, the
insured was presumed by Lord Mansfield to be the party with superior
knowledge regarding the matter to be insured. There was a clear-cut
case of information imbalance existing then in Carterv Boehm: the
insurer, who was based in London, was not apprised of what the insured
knew was happening thousands of miles away in Sumatra, given the

3 c 4 (UK).
4 (1766) 3 Burr 1905 at 1909; see also Peter Tyldesley, "Utmost Good Faith
-

Unintended Injustice?" (2011) 86 Amicus Curiae 1 at 2.

 Of Shifting Winds - Insured's Pre-contractual
(2018) 30 SAcLJ Duty of Good Faith in Singapore 347

technology that was available at the time. Nowadays, however, in the

world of data analytics and real-time news, the insurer can no longer
claim to be disadvantaged with regard to the availability of information.
In fact, modern-day insurance companies - with their heavy reliance on
statistical analysis and information-technology tools - have even more
access to superior knowledge than the layman insured.

6 Carter v Boehm was essentially the headwaters from which the

streams of good faith in insurance law flowed. Since communication
technologies were rather rudimentary then, the way the duty of good
faith had evolved over the past centuries was pivoted on the
presumption of information asymmetry. There arose a trail of English
judgments that readily favoured the insurer who found it all too easy to
avoid liability by faulting the insured for not disclosing material
information. In 1906, the UK Marine Insurance Act5 ("MIA 1906")
codified the common law insurance principles, and the disclosure test
contained in s 18 chose the perspective of the prudent insurer. The
doctrine was further blighted in 1984 when Container Transport
International, Inc v Oceanus Mutual Underwriting Association
(Bermuda) Ltd6 ("Oceanus") applied a very low threshold for the
materiality test where "mere influence" (as opposed to "decisive
influence") was all that was needed for the information to be viewed by
the insurer as material; the single-pronged test thus created for
triggering the disclosure obligation was manifestly unfair to the insured
and fortified the insurer's hand considerably.

7 Some glimmer of hope surfaced around 1990 with the

resuscitation of the reciprocity doctrine in La Banque Financiare
de la Cit6 SA v Westgate InsuranceCo Ltd(" Westgate Insurance"). However,
serious breakthrough came only in 1995 with Pan Atlantic Insurance
Co Ltd v Pine Top Insurance Co Ltd' ("Pan Atlantic") introducing the
second limb of inducement in the test of materiality. In the upshot, the
materiality test henceforth became two-pronged - with the objective test
of the prudent insurer having to be influenced by the material
information and the subjective test of the particular insurer having
to be induced to arrive at a different decision had there been no
non-disclosure or misrepresentation.

5 Marine Insurance Act 1906 (c 41).

6 [1984] 1 Lloyd's Rep 476.
7 [1990] 2 Lloyd's Rep 377.
8 [1995] 1 AC 501; [1994] 2 Lloyd's Rep 427.
348 Singapore Academy of Law Journal (2018) 30 SAcLJ

B. Effect on Singapore

8 The jurisprudential foundation for Singapore to follow English

law had been set out by her British colonial master. To provide the legal
framework for governing the Straits Settlements (which included
Penang, Malacca as well as Singapore), 9 the British issued in 1826 the
Second Charter of Justice" as the basis for the general reception of
English law existing in England at the time; it may thus be said that
English insurance principles have applied to Singapore since then. The
Civil Law Ordinance" ("CLO") was enacted later in 1878 to allow for
the continuing reception of English mercantile law; according to s 5 of
this Ordinance, the law for application when dealing with local
commercial activities (including insurance-related businesses) "shall be
the same as would be administered in England in the like case at the
corresponding period, if such question or issue had arisen or had to be
decided in England".

9 After attaining independence in 1965, Singapore still found it

beneficial to retain the common law legacy in order to attract businesses
and investments. However, Singapore could not continue to be
permanently tethered to England. Hence, Singapore Parliament enacted
in 1993 the Application of English Law Act1 2 ("AELA 1993") to cut off
the apron strings and declare the extent to which English law remained
applicable to Singapore. On 12 November 1993, the provision for the
continuing reception of English law under s 5 of the CLO was repealed;
that became the cut-off reception date and "the common law of England
(including the principles and rules of equity), so far as it was part of
Singapore law immediately before 12 November 1993, shall continue to
be part of the law of Singapore"." The English MIA 1906 was thereafter
re-enacted as a local statute in 1994;14 although a codification of the law
relating to only marine insurance, this statute can be taken to be
generally reflective of the common law position of and shares much
commonality with general insurance law (especially with regard to the
good-faith doctrine).

10 What then is the implication for Singapore? Do English

decisions still apply after 12 November 1993? It is submitted that they
continue to have very strong persuasive force in Singapore. However,

9 Other minor settlements (Labuan, Dinding, Christmas Island and Cocos-Keeling

Islands) were also added to the Straits Settlements but they did not play any
significant role.
10 Granted on 27 November 1826.
11 Ordinance IV of 1878.
12 Application of English Law Act 1993 (Act 35 of 1993).
13 See s 3(1) of the Application of English Law Act (Cap 7A, 1994 Rev Ed).
14 See Marine Insurance Act (Cap 387, 1994 Rev Ed).
 Of Shifting Winds - Insured's Pre-contractual
(2018) 30 SAcLJ Duty of Good Faith in Singapore 349

Singapore courts retain much judicial discretion in determining

whether to follow English common law after 12 November 1993, as
asserted extrajudicially by Andrew Phang Boon Leong JA." When
fleshing out transplanted doctrine, Singapore courts may adapt the
jurisprudence to meet the local social, legal and political context.

11 Rather than eschewing the baggage of Carterv Boehm and

re-fashioning the doctrine of the utmost good faith, Singapore had
unfortunately inherited all the weaknesses - warts and all. The first
Singapore case where Carterv Boehm was explicitly mentioned is
Tat Hong Plant Leasing Pte Ltd v Asia Insurance Co Ltd 6 ("Tat Hong"),
where the insured (which was in the business of leasing cranes) was not
required to complete any proposal form by virtue of its long-standing
business relationship with the insurer. Hence, the insured argued that
the insurer had waived the obligation to disclose material information
because the latter chose not to enquire about the subject matter of the
insurance. However, both first-instance and appellate courts decided in
favour of the insurer as the insured's variation of its standard lease
agreement with the lessee was found to be "a material fact ... which a
prudent insurer would take into account when reaching his decision
whether or not to accept that risk or what premium to charge"" and "the
fact that in this case the insurer did not specifically ask for the terms of
the lease agreement or ask for a proposal form to be completed prior to
the issue of the policy does not affect the obligation of the insured to
disclose the terms of the lease agreement where those terms are
material"" In doing so, the Court of Appeal effectively embraced the
English approach of Oceanus with its low-threshold test of materiality.
That the Court of Appeal did not demur in the face of such an
unpopular and oppressive test of materiality could perhaps reflect the
tractable spirit adopted by the Singapore courts in readily accepting that
the reception provision of the CLO brought in the MIA 1906. In
addition, the Court of Appeal's reference to the MIA 1906 signified the

15 Andrew Phang, "Cementing the Foundations: The Singapore Application of

English Law Act 1993" (1994) 28 UBC Law Review 205 (noting the most plausible
interpretation of s 3 of the Application of English Law Act 1993 (Act 35 of 1993)
places discretion with the Singapore courts as to whether post-1993 English
common law applies).
16 [1993] 1 SLR(R) 728. Some of these insurance issues were decided obiter but
because of the paucity of direct local insurance cases on these critical doctrinal
issues, these obiter decisions are relied upon to reflect the court's direction; there is
no obvious reason why the local courts would digress from an entirely commercial
doctrine that is embodied in a UK statute which Singapore has chosen specifically
to re-enact.
17 Tat Hong Plant Leasing Pte Ltd v Asia Insurance Co Ltd [1993] 1 SLR(R) 728
at [15].
18 The Asia Insurance Co Ltd v Tat Hong Plant Leasing Pte Ltd [1991] SGHC 158
at [12].
350 Singapore Academy of Law Journal (2018) 30 SAcLJ

Singapore courts' acknowledgment that in the realm of non-disclosure,

the marine insurance principles apply to general insurance cases as
well - as in the seminal English appellate decision of Lambert v
Co-operative Insurance Society Ltd.19

12 With the embrace of the much-criticised "prudent insurer" test,

the Singapore jurisprudence thus suffers from the affliction similar to
that existing in England during the pre-reform era - opting for the view
of the insurer rather than the perspective of the insured (who is the one
saddled with the job of disclosing information). How is the insured
supposed to step into the mind of the insurer and speculate on the
latter's thirst for information? The aggravation of Tat Hong endorsing
the low-threshold "want to know" test painted an altogether bleak
jurisprudential picture for Singapore.

13 The Singapore High Court affirmed in Tat Hong that "an

insurance contract is a contract uberrima fides; as such it can be
avoided not only for misrepresentation of material facts but also for
non-disclosure of material facts".20 There was even earlier support for the
Carter v Boehm position from a fraternal jurisdiction: in 1921, the
Malaysian Supreme Court in Teh Say Cheng v North British & Mercantile
Insurance Co Ltd categorically recognised that a contract of fire
insurance "is as much a contract of uberrimafides as is a contract of
marine insurance" 22 and then proceeded to adopt the "prudent insurer"
test, thus applying the standard of an insured's duty of disclosure in
marine insurance to that in non-marine insurance.

III. Duty of disclosure in Singapore

14 Unlike England, which recently introduced sweeping reforms

via the enactment of the CIDRA and the Insurance Act 2015, the present
situation in Singapore regarding pre-contractual disclosure in non-
marine insurance remains outdated and unduly skewed in favour of the
insurer. Reform is therefore long overdue.

A. "Prudentinsurer" test

15 As mentioned earlier under the preceding sub-heading, the

Court of Appeal in Tat Hong decided to adopt the "prudent insurer" test

19 [1975] 2 Lloyd's Rep 485.

20 The Asia Insurance Co Ltd v Tat Hong Plant Leasing Pte Ltd [1991] SGHC 158
at [12].
21 (1921) 2 FMSLR 248.
22 Teh Say Cheng v North British & Mercantile Insurance Co Ltd (1921) 2 FMSLR 248
at 258.
 Of Shifting Winds - Insured's Pre-contractual
(2018) 30 SAcLJ Duty of Good Faith in Singapore 351

propounded in the English case of Oceanus. With such a low threshold

for the test of materiality, it was not surprising that the insurer could
avoid the policy without much difficulty.

16 The Court of Appeal also applied the "prudent insurer" test in

Everbright Commercial Enterprises Pte Ltd v AXA Insurance Singapore
Pte Ltd,23 where the insurer argued that the insured had not fully
disclosed the details of the vessel that carried the shipment of logs. Once
again, the low threshold of the "prudent insurer" test led the appellate
court to rule against the insured since a prudent insurer would not have
been prepared to provide insurance for this particular risk.

17 Requiring the insured to step into the shoes of a prudent insurer

is, in effect, an exercise in speculation as the insurer is, in fact, not under
a duty to explain to the proposer what information is considered to be
material. In Singapore, there is some legislative attempt to compel the
insurer to draw the proposer's attention to the need to disclose material
information: s 25(5) of the Insurance Act 2 4 states that the proposal form
needs to contain "a warning that if a proposer does not fully and
faithfully give the facts as he knows them or ought to know them, he
may receive nothing from the policy" However, this provision is phrased
too generally to provide any actual guidance to the proposer and it is
impractical to expect the insurer to spell out in detail what information
the prudent insurer would be looking for. Typically, in Singapore, the
warnings found in insurers' proposal forms 25 tend to be of anaemic value
in clarifying what facts the proposer ought to disclose. The inadequacy
of such warnings was noted extrajudicially to be not "sufficient to ensure
that [the proposer] would appreciate its scope and significance".26

18 For consumer insurance, there are other practical constraints to

be taken into consideration as well. When consumers apply for travel
insurance online or over the telephone, for example, it will be unrealistic
to expect the insurers to receive unstructured disclosures under such
circumstances as "direct marketing placed greater emphasis on making a

23 [2001] 1 SLR(R) 672.

24 Cap 142, 2002 Rev Ed.
25 Such warnings are typically phrased as: "if a material fact is not disclosed in this
application, any policy issued may not be valid. If you are in doubt as to whether a
fact is material, you are advised to disclose it". However, flouting the provision
merely incurs the penalty of a fine on the insurer's part. The insurer is not
precluded from exercising his civil remedy of avoidance; contra the Australian
approach, which impels the insurer to elaborate to the insured the nature of the
disclosure duty and what it entails, failure of which would preclude the insurer
from relying on the insured's non-disclosure: see ss 22(1)(a) and 22(5) of
Australian Insurance Contracts Act 1984 (Cth).
26 Michael Kirby, "Australian Insurance Contracts Law: Local Reform with a Global
Relevance" [2011] Journalof Business Law 309 at 321.
352 Singapore Academy of Law Journal (2018) 30 SAcLJ

sale rather than obtaining the relevant information". 27 Hence, a more

efficient process is recommended for the mass commoditised market of
consumer insurance.

B. Inducement requirement

19 In England, the harshness of the low threshold allowed in

Oceanus had provoked a barrage of criticism. Some glimmer of hope
emerged as the courts attempted to make amends for such excesses. In
particular, the House of Lords in the landmark case of Pan Atlantic
redressed the imbalance by introducing inducement in the following
two-pronged requisite:
(a) The first limb (which is objective) requires the
misrepresented or undisclosed facts to be technically material to
a prudent insurer28 - the "want to know" test. This means that
the information is material so long as an objective prudent
insurer would want to know about it.
(b) The second limb (which is subjective) requires
the particular insurer to have been induced, either by the non-
disclosure or misrepresentation of the material information,
into accepting the risk or entering the contract on the
prescribed terms.

The second limb of this two-pronged test helps to avoid the

senselessness in allowing an imprudent or feckless insurer escape
liability by simply asserting that the non-disclosed or misrepresented
fact would have been material to a prudent insurer's assessment of the
risk, even if subjectively it mattered not one whit to him. In such a
scenario, there is "patently no absence of consensus that robs it of being
a true agreement",2 9 which was one of the normative rationales
underpinning the disclosure rule as articulated in Carter v Boehm.

27 Michael Kirby, "Australian Insurance Contracts Law: Local Reform with a Global
Relevance" [2011] Journalof Business Law 309 at 316.
28 See Container Transport International, Inc v Oceanus Mutual Underwriting
Association (Bermuda) Ltd [1984] 1 Lloyd's Rep 476. The materiality test has been
settled in favour of a very low relevance threshold; in other words, a material fact is
one which a prudent insurer would take into account when deciding whether to
underwrite the risk and when determining the relevant premium and/or terms to
be included.
29 Yeo Hwee Ying, "Recent Developments in Materiality Test of Insurance Contracts"
[1995] Sing JLS 56 at 70.
 Of Shifting Winds - Insured's Pre-contractual
(2018) 30 SAcLJ Duty of Good Faith in Singapore 353

While the importation of subjectivity involves a difficult ex post facto

judgment as to the particular insurer's attitude:"
[I]t does close the door on the obvious anomaly of a negligent or
careless insurer calling evidence to show that his/her more prudent
counterpart would have been influenced by a non-disclosure, and thus
avoid a contract on the basis of non-disclosure which the particular
insurer would not consider material.

The House of Lords' decision was subsequently discussed at length in

the English case of Assicurazioni Generali SpA v Arab Insurance Group,"
which provides useful pointers on what constitutes necessary
inducement. In essence, truth has to be tested: the insurer's assertion of
influence by the non-disclosure or misrepresentation must be borne out
in the underwriting trail.

20 Although this House of Lords case occurred after 12 November

1993 (the cut-off reception date for the AELA 1993), Singapore
embraced the tempering foil which was subsequently applied to local
cases. In, for example, the local case of American Home Assurance Co v
Hong Lam Marine Pte Ltd3 2 ("Hong Lam Marine"), the insurer argued
that the insured failed to disclose the backdating and variation of an
agreement. However, the arbitrator found that Tan (the chief witness for
the insurer) had initialled the backdated agreement without any
comment and thus inferred that Tan was clearly disinterested in the
backdating of the agreement for whatever reason this was done; a mere
assertion by Tan that he would have been influenced had he known the
undisclosed facts was deemed to be insufficient. The first-instance and
appellate courts then went beyond Tan's bare assertion to look for
indicia of inducement and they agreed with the arbitrator that "the
question of a breach [of the duty of disclosure] did not arise because it
was not established that the insurer had been induced by the alleged
non-disclosure to enter into the contracts"." Previously, with the single-
pronged approach, the insurers could readily win their cases by calling
for expert witnesses to assert that they would have wanted to know the
undisclosed information; now, however, the inducement requisite as a
second prong has become a game changer. Hence, insurers can no

30 Anthony A Tarr & Julie-Anne Tarr, "The Insured's Non-disclosure in the

Formation of Insurance Contracts: A Comparative Perspective", (2001)
50(3) International& Comparative Law Quarterly577 at 582.
31 [2003] 1 All ER (Comm) 140; [2003] Lloyd's Rep IR 131. For more detailed
discussion on the case, see Yeo, "Of Inducement and Non-disclosure in Insurance
Contracts" (2004) 10 The Journal of InternationalMaritime Law 84.
32 [1999] 2 SLR(R) 992. Once again, the insurance comments were made obiter but
they essentially reflected the judicial direction and philosophy.
33 American Home Assurance Co v Hong Lam Marine Pte Ltd [1999] 2 SLR(R) 992
at [70].
354 Singapore Academy of Law Journal (2018) 30 SAcLJ

longer expect walkover victories by merely making bald assertions that

they would have been influenced by the non-disclosure because the
courts will look for supporting evidence of inducement in the
underwriting trail.

21 In addition, the Court of Appeal in Hong Lam Marine drew

attention to the arbitrator's finding that the insurer was only interested
in receiving the premiums. This is reminiscent of the UK Law
Commission's criticism of the unacceptable mercenary underwriting
practice of grabbing the business first and underwriting at the claims
stage.34

22 In the 2008 case of UMCI Ltd v Tokio Marine & Fire Insurance
Co (Singapore) Pte Ltd," which also amply demonstrates the court's
insistence on specific proof of inducement in the context of
misrepresentation, the insured (who had previously suffered cargo
shipment losses) engaged the broker, Willis, to spruce up the shipment
processes so as to minimise further cargo losses. The Willis report,
which was prepared in consultation with the insured, had been
forwarded to the insurer. After the insured lodged another claim for
damaged cargo on a subsequent voyage, the insurer cried foul and
contended that some of the representations contained in the Willis
report were materially inaccurate. However, the court found that there
was no reference to the Willis report in any of the insurer's documents
and concluded that the alleged misrepresentations in this report were
irrelevant to the insurer during the underwriting evaluation. The only
evidence of inducement was a bare statement in the insurer's affidavit
that "I was induced" but the court refused to rubber-stamp such an
assertion. After conducting a meticulous examination of the evidence,
the court was not convinced that the insurer in this case had been
induced:36
There was no evidence that the representations in the Willis report
were relied upon by the defendant apart from a bare statement in the
affidavit of ... the defendant's deputy general manager. There was no
document which showed that the representations in the Willis report
were considered by the defendant in assessing the risk and/or
determining the rates to be applied to the policy. In particular, none of
the defendant's marine underwriting profile forms mentioned the

34 See American Home Assurance Co v Hong Lam Marine Pte Ltd [1999]
2 SLR(R) 992 at [71]; see also UK Law Commission & Scottish Law Commission,
Insurance Contract Law: The Business Insured's Duty of Disclosure and the Law of
Warranties (Consultation Paper No 204/Discussion Paper No 155) at paras 5.37
and 5.6.
35 [2008] SGHC 188.
36 UMCI Ltd v Tokio Marine & Fire Insurance Co (Singapore) Pte Ltd [2008]
SGHC 188 at [30].
 Of Shifting Winds - Insured's Pre-contractual
(2018) 30 SAcLJ Duty of Good Faith in Singapore 355

representations in the Willis report. Although the correspondence did

discuss the recommendations in the Willis report, there was no
mention of the representations therein. The addendum issued by the
defendant to record the agreement reached between the parties did
not mention the representations in the Willis report . .

23 How then should the insurer prove that he had been induced by
the non-disclosure or misrepresentation? In the past, the insurers would
call for expert underwriters - fellow insiders in the industry - as the
hypothetical prudent insurer in order to fortify the doctrine in their
favour. Nowadays, however, the insurers need to be more diligent and
detailed in their underwriting evaluation. There should be, at the very
least, some reference to the undisclosed or misrepresented information
in the underwriting notes; it ought to be obvious from the underwriting
evaluation how the information, if disclosed or not misrepresented,
could have influenced the insurer's decision-making process. In
addition, the court may look back at the insurance company's past
underwriting practice in order to ascertain how the particular insurer
had usually reacted in previous instances. In fact, the court may even
theorise on how the information or lack thereof would have played out
in the particular underwriter's mind. The upshot of it all is that the
inducement evidence must be able to withstand judicial scrutiny.

24 An area of practical concern is that the requirement of

inducement or its fuller application may not have entirely filtered down
to the junior courts. In the 2012 case of QBE Insurance (International)
Ltd v USL Asia-PacificPte Ltd,17 the District Court noted that the storage
of flammable substances was "material information which would
influence the underwriter's assessment of risk"' and proceeded, without
explicitly examining the inducement requirement, to hold that the
insured had breached his duty of disclosure. It was not discernible from
the court proceedings that the two-pronged test had been taken into
consideration: the District Court either failed to take cognisance of the
inducement requirement or assumed that the inducement requirement
had been satisfied without bothering to examine the evidence in detail.
This case lends credence to the argument that the inducement
requirement may not be adequate in protecting the insured especially if
the exact procedural burden of proof is not fully appreciated.

25 In any event, that material non-disclosure remains a scourge can

be seen from the articulation of local judges like Tan Lee Meng J, who

37 [2012] SGDC 84.

38 QBE Insurance (International) Ltd v USL Asia-Pacific Pte Ltd [2012] SGDC 84
at [65].
356 Singapore Academy of Law Journal (2018) 30 SAcLJ

proffered the following stinging rebuke for the ubiquity of this defence
by the insurers:3 9
Why material non-disclosure, which is so widely relied on by insurers
that Lord Sumner warned in Niger Company, Ltd v Guardian
Assurance Company (1922) 13 Ll L Rep 75 at 82 that this indispensable
shield for an insurer should not be turned into an engine of oppression
against the insured, was not pleaded from the very start cannot be
fathomed . .

C. Challenges posed by current law

26 Regrettably, the silver lining of inducement does not go far

enough. It has not made adequate compensation for the hitherto
lopsided development of the uberrima fides doctrine. The test of
materiality continues to be very insurer-centric and there are still
challenges posed by the current law.

27 In the first limb, materiality is an objective test used

to determine the information that is required by the insurer
pre-contractually. In the second limb, inducement is a subjective test
used to determine whether the particular insurer would have entered
into the contract had the information been disclosed or not
misrepresented. In both limbs, there is clearly nothing to accommodate
the lay insured and the way he would approach the situation. Research
has also shown that even professional risk managers may fail to
understand the law in this area - not because the words and terms are
complex, but because the concept is counter-intuitive.4 0

28 Furthermore, the inducement requirement is conceptually

unsatisfactory: not only is it effectively judicial legislation, the
inducement requirement also sits uneasily with the materiality
requirement as it potentially introduces via the back door the "decisive
influence" test. Although the addition of the inducement limb was used
to alleviate the harshness of the "prudent insurer" test in the first limb, it
is submitted that the element of inducement would have been
unnecessary if the court had instead adopted the "decisive influence"
test for the first limb in the first place. Decisive influence calls for a
change in position. This is something that inducement demands as well
but then each is, in theory, pitched differently - an objective standard
for the former versus a subjective standard for the latter.

39 NTUC Income Insurance Co-operative Ltd v Toh Kheng Boon [2007] 3 SLR(R) 772
at [16].
40 UK Law Commission & Scottish Law Commission, Insurance Contract Law: The
Business Insured's Duty of Disclosure and the Law of Warranties (Consultation
Paper No 204/Discussion Paper No 155).
 Of Shifting Winds - Insured's Pre-contractual
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29 The problem is exacerbated when there is a lack of clarity as to

whether the duty of disclosure to volunteer information exists
independently on top of the requirement to answer the questions in the
proposal form and to what extent the drafting of the questions in the
proposal form affects the scope of the duty. In fact, the use of questions
in proposal forms can be rather misleading because the impression thus
given is that the proposal form is already comprehensive and the
proposer need only respond to what the insurer has asked for. To expect
a lay consumer to additionally consider other information (which may
possibly be completely unrelated to the insurance policy and the
questions asked) and volunteer this information to the insurer may be
placing too much of a burden on the insured. It should also be pointed
out that the duty to disclose material information has thus far not been
sufficiently highlighted and explained to the insured (especially at the
contract renewal stage when lay persons are generally not cognisant of
the fact that the duty to disclose arises afresh).

IV. Remedy of avoidance in Singapore

30 Another major problem that Singapore has embraced is that

avoidance remains the sole remedy for breach of the duty of disclosure
and there is no possibility for the courts to consider the award of
damages instead. This was confirmed obiter in, for example, the local
case of The Stansfield Group Pte Ltd v Consumers' Association of
Singapore4 1 - in sync with the common law case of Westgate Insurance,
which had been brought into Singapore jurisprudence.

31 Upon a breach of the duty of disclosure, the contract is avoided

ab initio: the insured is not only unable to recover his current losses
under the policy, but also liable to pay back all previous successful
claims which had been paid out by the insurer.4 2 The insured is thus
unable to enjoy the protection which he assumed he was entitled to. This
is despite the fact that the insurer might only have increased the
premiums by a small amount had there been disclosure of the facts.43

32 The rationale often proffered for avoidance being the sole

remedy is that "the risk run is really different from the risk understood

41 [2011] 4 SLR 130.

42 Franziska Arnold-Dwyer, "The Disclosure of Unfounded Allegations in Business
Insurance" (2014) 3 UCL Journal of Law and Jurisprudence 173.
43 UK Law Commission & Scottish Law Commission, Insurance Contract Law: The
Business Insured's Duty of Disclosure and the Law of Warranties (Consultation
Paper No 204/Discussion Paper No 155) at para 4.53.
358 Singapore Academy of Law Journal (2018) 30 SAcLJ

and intended to be run, at the time of agreement".44 However, this line of

argument, which was based on the information asymmetry prevalent
during preceding decades, is no longer convincing nowadays since
insurers already have at their disposal the means to discover the
information they need for risk assessment.45

33 The blanket remedy of elective avoidance is disproportionately

harsh towards the insured. In fact, this one-size-fits-all remedy leaves
little room for the courts to manoeuvre; for example, the insurer is
allowed to repudiate the policy even if the undisclosed or
misrepresented information bears no relevance to the actual loss
suffered by the insured. Repudiation by the insurer also has adverse
implications for the insured in future: it will affect the insured's ability to
obtain new insurance coverage because any previous cancellation of
insurance coverage becomes a material fact that has to be disclosed in
the future to other insurers.

34 Another weakness of this blunt remedy is that it completely

disregards the fault or culpa of the insured. Even if the proposer
had acted "honestly and reasonably" during the disclosure period,
the insurer is still entitled to repudiate the policy in the event of any
non-disclosure or misrepresentation. As long as the insurer is able to
prove both materiality and inducement, it does not matter whether the
insured was innocent or whether the insurer would have demanded any
changes of policy terms had the information been disclosed or not
misrepresented. Such an inflexible instrument equiparates the
fraudulent insured with the innocent (or careless) insured. This is
grossly unfair especially to the insured who innocently runs afoul and is
then deprived of the benefits provided in the policy because the insurer
is allowed to "escape retrospectively the liability to indemnify which he
has previously and ... validly undertaken".46

35 It should also be pointed out that good faith is actually

reciprocal in nature: the insurer is equally under a duty of disclosure.
However, while the remedy of avoidance offers a windfall to the insurer
when the insured has breached his duty of disclosure, such a remedy is
of cold comfort to the insured in the case of the insurer's breach of duty.
For the latter scenario, the insured will most likely prefer to retain

44 See para 5, n 4 above. It is submitted that this harsh remedial approach is

unjustified. The remedy emanated from Carterv Boehm (1766) 3 Burr 1905, where
Lord Mansfield founded the right of avoidance based on the fact that the insurer
was misled. Yet, it was clear that Lord Mansfield did not intend for the right to
arise in every case of non-disclosure; see para 53, text to n 70, below.
45 Yeo Hwee Ying, "Call for Consumer Reform of Insurance Law in Singapore"
(2014) 26 SAcLJ 215 at 228.
46 Manifest Shipping Co Ltd v Uni-PolarisShipping Co Ltd [2001] 2 WLR 170 at [57].
 Of Shifting Winds - Insured's Pre-contractual
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insurance coverage instead of recovering all the premiums he had

previously paid to the insurer.

36 There is, in principle, some form of soft-law mitigation in

Singapore. The Life Insurance Association Singapore ("LIA") seeks to
constrain the life insurers' right to avoid; accordingly, life insurers
should not unreasonably reject a claim or invalidate a policy on grounds
of non-disclosure or misrepresentation (unless fraud or deception is
involved). However, there is a lack of evidence showing how much this
has been applied in practice in Singapore. Without a similar constraint
by the General Insurance Association of Singapore ("GIA') on the
general insurers' right to avoid, the situation is even more pessimistic for
Singaporean consumers with general insurance policies. Hence, the
possibility of relying on soft-law mitigation in Singapore appears slim
at best.

37 Prior to the enactment of the CIDRA and the Insurance Act

2015, England had been more successful in implementing such soft-law
mitigation: the Financial Ombudsman Service ("FOS") was created in
2001 with the aim of protecting consumers by determining complaints
not based on the "strict letter of the law" but according to "what is fair
and reasonable in all the circumstances of the case".4 7 An important
feature of FOS (which was a compulsory scheme for insurers in
England) was that its awards could be enforced through the courts.
There were also published reports on the disputes resolved by FOS.
Singapore has similarly set up in 2005 the Financial Industry Disputes
Resolution Centre ("FIDReC") to adjudicate the complaints lodged by
the insured; unfortunately, there were no published reports (including
the grounds of decisions) released to the general public. There is
therefore no documentary trail to show that FIDReC applies rules that
are remotely close to the ameliorating and equitable yardstick of the
UK FOS.

38 In summary, the ombudsman regime in Singapore is not as

developed as that in England (prior to the legislative reforms). In
addition, there is a lack of reported court judgments on insurance-
related disputes in Singapore - understandably so as the country is small
with a population that is only one-tenth that of England.4 8 Consequently,

47 Baris Soyer, "Reforming the Assured's Pre-contractual Duty of Utmost Good Faith
in Insurance Contracts for Consumers: Are the Law Commissions on the Right
Track?" [2008] Journal of Business Law 385 at 389-390; see also UK Insurance
Ombudsman Bureau's Annual Report 1989 at pp 29-30.
48 Christopher Chen, "Measuring the Transplantation of English Commercial Law in
a Small Jurisdiction: An Empirical Study of Singapore's Insurance Judgments
between 1965 and 2012" (2014) 49 Tex Int'1 LJ 469 at 496. Chen has argued that
(cont'd on the next page)
360 Singapore Academy of Law Journal (2018) 30 SAcLJ

the local judges lack much opportunity to evaluate controversial

insurance issues and the hope of "moving the law forward by case law is
limited".49

V. Recommendations for Singapore

39 Perhaps the strongest indication that the duty of disclosure and

remedy of avoidance in Singapore are outdated can be seen from the fact
that other commonwealth jurisdictions" have already surged ahead in
terms of reforms (which have also incorporated the need for added
consumer protection). In response to the heightened jurisdictional
competition for the position of having the most optimal and progressive
laws which best address modern business requirements, England has
found it necessary to proceed with reforms (after having experimented
with self-regulation by industry for several decades). These English
reforms have serious implications for Singapore, which seeks to become
an insurance hub like England.

40 As discussed earlier, the duty of disclosure and remedy of

avoidance in Singapore remain imbalanced in favour of the insurers.
The local courts' ability to do justice is fenced in by strict law and
precedence. Singapore clearly requires reforms in these areas. This is
possible via:
(a) judicial development;
(b) soft law; or
(c) hard law.

Singapore, with a more Asian culture, tends to adopt a less litigious approach,
which has thus generated a smaller pool of insurance cases than in England.
49 Christopher Chen, "Measuring the Transplantation of English Commercial Law in
a Small Jurisdiction: An Empirical Study of Singapore's Insurance Judgments
between 1965 and 2012" (2014) 49 Tex Int'1 LJ 469 at 496.
50 Examples include Australia, New Zealand and Malaysia. See, eg, Robert Merkin,
"Reforming Insurance Law: Is There a Case for Reverse Transportation?", available
at http://www.lawcom.gov.uk/app/uploads/2015/03/ICL Merkin report.pdf (accessed
31 January 2018), Michael Kirby, "Australian Insurance Contracts Law: Local
Reform with a Global Relevance" [2011] Journal of Business Law 309and Kate
Lewins, "Going Walkabout with Australian Insurance Law: the Australian
Experience of Reforming Utmost Good Faith" [2013] Journalof Business Law 1.
Although the New Zealand Law Commission and governmental authorities had
considered insurance law reform on various occasions since the 1970s, the actual
legislative output has been piecemeal and only minimal changes have been made
(in particular, remedies for misrepresentation). Basically, the New Zealand law
reform consideration process has been described as painfully slow.
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41 Technically speaking, the local courts may proceed

incrementally to adopt a piecemeal approach to develop the law (such as
by adopting the Australian approach in Barclay Holdings (Australia)
Pty Ltd v British National Insurance Co Ltds" or by finding that the
Singapore Marine Insurance Act5 2 ("MIA') is non-exhaustive with regard
to remedies)." However, it is submitted that this is not preferred as such
an approach will naturally entail a judicial massaging of the MIA by
stretching its language or reading extra requirements into the text. In
fact, this is tantamount to judicial legislation and will in all likelihood
lead to confusion in the insurance industry.

42 Reform by way of soft law - such as insurance practice codes

-
is also inadequate. It is difficult to monitor how assiduously the
insurance industry in Singapore adheres to the soft law, especially in
light of the opacity of the financial ombudsman5 4 (which does not
publish tribunal decisions for dissemination to the general public). The
tribunal (unlike its UK counterpart) lacks a clear direct remit of
applying the yardstick of what is fair and reasonable in all the
circumstances of the case and subordinating legal technicality to general
principles of good insurance practice, regulatory guidance and
statements of practice in consumer cases. In addition, applying industry
codes allows insurers to be judges of their own cause; the insured can
only rely on the integrity of the insurer and there is no legal recourse
because such codes lack the force of law.

43 Hence, the preferred reform method is by way of hard law; this

will have the advantage of stifling any objections of judicial legislation.
Singapore Parliament needs to enact new legislation so as to address the

51 (1987) 8 NSWLR 514. In this case, the New South Wales Court of Appeal
distinguished between an investigative stage and an ultimate decision-making
stage, and held that only facts which would affect the latter stage would be
considered material.
52 Cap 387, 1994 Rev Ed.
53 Howard Bennett, "Mapping the Doctrine of Utmost Good Faith in Insurance
Contract Law" [1999] Lloyd's Maritime and Commercial Law Quarterly 165 at 182.
The learned author rightly points out that if ss 18 and 20 of the English Marine
Insurance Act 1906 (c 41) are not exhaustive with respect to the requirements for a
legally actionable non-disclosure (ie, the requirement of inducement), it is difficult
to see why ss 17 and 18 should be read as exhaustive with respect to remedies.
54 In the UK, individuals with rejected insurance claims may complain to the
Financial Ombudsman Service, which may investigate the complaint and order a
reinstatement of the insurance policy on original terms. Although it is true that the
Financial Industry Disputes Resolution Centre in Singapore can adjudicate
disputes between the insured and the insurance company, this is of limited utility
as it is only open to individuals and sole proprietors and its jurisdiction is limited
to claims of up to $100,000: see Financial Industry Disputes Resolution Centre,
"The Jurisdiction of FIDReC" <http://www.fidrec.com.sg/website/jurisdiction.
html> (accessed 31 January 2018).
362 Singapore Academy of Law Journal (2018) 30 SAcLJ

problems associated with the duty of disclosure and the remedy of

avoidance in insurance contracts. To that end, Singapore can draw some
inspiration from the CIDRA and the Insurance Act 2015 enacted by the
English Parliament.

44 For a start, Singapore should initiate consultations with

stakeholders as soon as possible with a view to law reform - drafting
rules that encapsulate what, in essence, are the best practices in the
insurance industry. At present, the overriding concern should be for the
vulnerable consumers who need the peace of mind that they will be
treated fairly by the insurers and that valid claims will be paid without
undue delays.

45 Similar to England (which recently bifurcated insurance into

consumer insurance and business insurance), an even balance must be
sought in Singapore by way of a separate consumer regime. This worked
out far more easily for England, which primarily legislated the then-
existing soft law. However, Singapore's soft law is much more opaque
and, in truth, may not have operated like that in England. It should be
pointed out that in Singapore both LIA and GIA had previously adapted
British Insurance Law Association's code of practice but there is a lack of
information on whether the local insurers have been adhering to their
respective statements of practice (which had evolved since then).ss
Nevertheless, these two local insurance associations appear to recognise
the normative ethos of fairness and good industry practice which no one
ought to quarrel with; given this frame of mind, a move towards a
separate consumer regime should not be met with too much objection.

46 Since there is a need to protect local consumers who do not

understand enough English 56 to decipher the insurance proposal forms
(especially for those who speak their mother tongues), Singapore should
consider the possibility of embracing the CIDRA, which has
technically" abolished the duty of disclosure in one bold legislative
stroke: s 2(2) states that "it is the duty of the consumer to take
reasonable care not to make a misrepresentation to the insurer" while
s 2(4) adds that "the duty set out in sub-section (2) replaces any duty
relating to disclosure or representations by a consumer to an insurer

55 See Yeo Hwee Ying, "Call for Consumer Reform of Insurance Law in Singapore"
(2014) 26 SAcLJ 215.
56 The courts are increasingly mindful of the insured's level of sophistication as a
consideration in determining duties: see, eg, Eurokey Recycling Ltd v Giles
Insurance Brokers Ltd [2014] EWHC 2989 (Comm) at [86] and Osman v J Ralph
Moss Ltd [1970] 1 Lloyd's Rep 313.
57 "Technically" here implies that the soft-law position in the consumer realm has
already dealt the consumer with kid gloves and moved on to a more inquiry
approach.
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which existed in the same circumstances before this Act applied". The
burden has been effectively reversed in England: instead of the insured
having to disclose all information of material interest to a prudent
insurer, the duty is now foisted on the insurer to pose a series of
carefully crafted questions so as to elicit the information required for
evaluating the risks. This should not pose too much of a problem for the
insurer because the range of relevant factors is rather predictable for
consumer insurance; for example, in motor vehicle insurance, the
standard factors that are relevant to the insured risk are usually the
road-worthiness condition of the vehicle and the driving experience of
the owner.

47 In effect, the CIDRA merely imposes on the consumer proposer

a passive reactive duty "to take reasonable care not to make a
misrepresentation during pre-contractual negotiations"" (that is, merely
to "answer insurers' questions honestly and to take reasonable care that
their replies are accurate and complete").5 9 This statute also offers some
guidance on the issue of whether the consumer insured has taken
reasonable care to answer questions correctly: s 3(1) specifies that that
this "is to be determined in the light of all the relevant circumstances",
with the provision spelling out an indicative (rather than exhaustive) list
that includes, inter alia, the type of consumer insurance contract, the
relevant explanatory materials and the clarity of the insurer's questions.6 0
The standard of care in England is that of a reasonable consumer 6 1 - an
objective yardstick that disregards the particular characteristics of the
individual consumer but is still subject to the following riders:
(a) "If the insurer was, or ought to have been, aware of any
particular characteristics or circumstances of the actual
consumer, those are to be taken into account". 62
(b) "A misrepresentation made dishonestly is always to be
taken as showing lack of reasonable care".63

48 The arguments for abolishing the duty of disclosure in

consumer insurance cannot be directly transposed to non-consumer
insurance. Unlike consumers who tend to be more homogeneous (for

58 Consumer Insurance (Disclosure and Representations) Bill (Bill 68 of 2011)

Explanatory Notes, cl 10.
59 Consumer Insurance (Disclosure and Representations) Bill (Bill 68 of 2011)
Explanatory Notes, cl 21.
60 See s 3(2) of the Consumer Insurance (Disclosure and Representations) Act 2012
(c 6) (UK).
61 See s 3(3) of the Consumer Insurance (Disclosure and Representations) Act 2012
(c 6) (UK).
62 Consumer Insurance (Disclosure and Representations) Act 2012 (c 6) (UK) s 3(4).
63 Consumer Insurance (Disclosure and Representations) Act 2012 (c 6) (UK) s 3(5).
364 Singapore Academy of Law Journal (2018) 30 SAcLJ

instance, car owners applying for motor vehicle insurance) and who
generally contract on standard policy terms, businesses are more
heterogeneous given the diversity of specialist or unusual risks often
encountered in commerce or industry.6 4 This is especially so for
Singapore, which strives to be an insurance hub serving the wide array
of different businesses found in various countries. Hence, bifurcation
into consumer and non-consumer regimes merits serious consideration
for Singapore.

49 For non-consumer insurance, England has boldly adopted the

duty of fair presentation as specified in ss 3(1) and 3(4) of the Insurance
Act 2015, where the business insured's duty to disclose material
information is complemented by the insurer's duty to ask relevant
questions in order to elicit further information or clarify any doubts
after the insured has disclosed "sufficient information to put a prudent
insurer on notice that it needs to make further enquiries for the purpose
of revealing those material circumstances".6 5 Instead of remaining
passive during the information discovery process (and underwriting
only at the claims stage), the insurer in England now needs to engage
the insured by actively making enquiries when required. The insurer's
failure to do so constitutes a waiver of the insured's duty of disclosure;
this should help businesses in England to save costs as they no longer
have to disclose copious amounts of information to the insurers.
Singapore should thus monitor how this duty of fair presentation will
pan out in future.

50 In point of fact, the wording of s 3(4)(b) in the Insurance Act

2015 appears reflective of the doctrine of waiver embodied in cases such
as Garnat Trading & Shipping (Singapore) Pte Ltd v Baominh Insurance
Corp66 and WISE (Underwriting Agency) Ltd v Grupo Nacional
ProvincialSA. 67 Since this concept of "being put on inquiry" is similar to

64 UK Law Commission & Scottish Law Commission, Insurance Contract Law:

Business Disclosure; Warranties; Insurers' Remedies for Fraudulent Claims; and
Late Payment (Consultation Paper No 353/Discussion Paper No 238) at para 6.28;
see also Peter Macdonald Eggers QC, "The Past and Future of English Insurance
Law: Good Faith and Warranties" (2012) 1(2) UCL Journal of Law and
Jurisprudence 211 at 226.
65 Insurance Act 2015 (c 4) (UK) s 3(4)(b). Working out the parameters of this
reformed duty in the UK has its own challenges: see Rob Merkin & Ozlem Gcirses,
"The Insurance Act 2015: Rebalancing the Interests of the Insurer and Assured"
[2015] 78(6) MLR 1004 at 1007-1008 and Professors B Soyer & AM Tettenborn,
"Mapping (Utmost) Good Faith in Insurance Law - Future Conditional?" (2016)
132 Law Quarterly Review 618; see also Simon Goh, "The Impact of the UK
Insurance Act 2015 on Singapore Insurance Law and Practice" Singapore Law
Gazette (October 2016).
66 [2011] 1 Lloyd's Rep 589.
67 [2004] 2 Lloyd's Rep 483.
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that found in common law, s 3(4)(b) is arguably more iterative than

groundbreaking. Nevertheless, having this concept elevated from a mere
defence as expounded in common law to that of a positive step in
discharging the duty of fair presentation will serve to highlight its
importance.

51 Reforming the duty of disclosure alone will not make for an

adequate response if the common law scourge of the sole remedy of
retrospective avoidance is not re-calibrated as well. Hence, Singapore
should additionally consider the possibility of proportionate remedies as
spelt out in both CIDRA and Insurance Act 2015:
(a) Where the insured's breach was reckless or deliberate,
the insurer is still entitled to avoid the contract unless fairness
demands otherwise.
(b) Where the insured's breach was neither reckless
nor deliberate, the remedies are based on what the insurer
would have done if the information had been disclosed or
not misrepresented. If, for example, the proposal would
have been rejected had there been no non-disclosure or
misrepresentation, the insurer can still avoid the policy and
refuse all claims. If, on the other hand, the insured would
merely be charged a higher premium, the insurer may then
proportionately reduce the amount to be paid out on the claim.

52 Although the introduction of a proportionate remedy structure

will entail major changes in the one-size-fits-all remedy regime
currently existing in Singapore, such reform is desirable as it allows the
local courts greater flexibility to obtain fairer results. Adopting a
proportionate remedy that is pegged to the insured's level of fault will
mitigate the overly harsh application of the avoidance remedy while
achieving a more equitable result for both parties. On the one hand, the
honest insured will not be denied coverage under the policy in the
unfortunate event of an unintentional mistake. On the other hand,
allowing the insurer to avoid the contract if there had been deliberate or
reckless misrepresentation will address the insurers' concern that
proposers may be given free licence to conceal any unfavourable
information so as to secure lower premiums.

53 Veritably, the classical notion of good faith underpinning

insurance contracts does not contemplate that any non-disclosure
should result in avoidance. Although Lord Mansfield said in Carterv
Boehm 68 that what mattered was whether an insurer had been misled, he

68 (1766) 3 Burr 1905 at 1909.

366 Singapore Academy of Law Journal (2018) 30 SAcLJ

pointed out later in Mayne v Walter69 that "it must be a fraudulent

concealment of circumstances that will vitiate a policy".'" Hence,
proportionate remedies based on fault will bring the remedies doctrine
back into alignment with the original conception of good faith as
articulated by Lord Mansfield.

VI. Conclusion

54 It is no longer acceptable for Singapore, which aims to be an

insurance hub, to be stuck with outdated English case law in insurance."
The insurance regime in Singapore should be aligned with global
standards of best practice; otherwise, businesses may be discouraged
from investing here due to a lack of confidence in the local insurance
law.

55 In particular, the time has come for Singapore to initiate

reforms for the insured's duty of good faith which has remained largely
unchanged over the past fifty-odd years since independence. Despite
having put off reforms for so long, England (the progenitor jurisdiction)
eventually found it necessary to introduce sweeping changes via the
enactment of the CIDRA and the Insurance Act 2015. Ushering in some
radical far-reaching changes, these two statutes provide a useful model
for Singapore to consider. Naturally, the sociopolitical context in
Singapore is different and certain aspects of the two statutes may not be
appropriate for the insurance industry here. Nevertheless, the English
insurance reforms offer a useful starting point for the local consultations
to begin and Singapore should then adapt what is best for the local
jurisprudence.

69 (1782) 99 ER 548.
70 James Allan Park, A System of the Law of Marine Insurances (Butterworth, 4th Ed,
1800) at p 195.
71 See Ravi Menon, Managing Director, Monetary Authority of Singapore,
"Singapore as a Global Insurance Marketplace", keynote address at the 12th
Singapore International Reinsurance Conference (6 November 2013).