Pre-Contractual Duty to Disclose Material Circumstances in Life Insurance: A Case for Reform

25 Pages Posted: 3 Aug 2014

Date Written: May 31, 2014


The principle of uberrima fidei or utmost good faith is one of the hallmarks of insurance law and has been in vogue at least since the eighteenth century. However, the insurance market as was in existence at that time has changed considerably in the present. This has resulted in a review of the principle in the past decade and its consequent dilution, especially in prominent insurance markets such as United Kingdom and New York. The Indian insurance law, however, has stuck to its colonial past, although there have been several pro-consumer reforms. The leitmotif of this paper is that the existing state of law of pre-contractual duty to disclose material circumstances in life insurance contracts largely ignores the problems in life insurance. The present state of affairs often results in unjust and unfair results to the family of the life insured. The penalties levied in respect of the life insurance consumers are wholly disproportionate to the failure to disclose material circumstances. While there have been several reforms proposed by the Law Commission of India, it is the argument of this paper that the reforms are insufficient in addressing the concerns of the Indian life insurance market. Consequently, this paper recommends certain reforms in Section 45 that would go a long way in making the law fair, just and efficient.

Keywords: Indian Insurance, Uberrima Fidae, Utmost Good Faith, Life Insurance, Section 45, Insurance Act, 1938

JEL Classification: G22, K12, K39

Suggested Citation

Srinivasan, Badrinath, Pre-Contractual Duty to Disclose Material Circumstances in Life Insurance: A Case for Reform (May 31, 2014). Available at SSRN: or

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