Deviation Of The Principle Of Utmost Good Faith In Preexisting Conditions Related To Rejection Of Insurance Claims By Insurance Companies Based On Law Number 40 Of 2014 Concerning Insurance And Pojk No. 23 Of 2023

Abstract

The principle of utmost good faith (uberrimae fidei) is a fundamental tenet of insurance contracts, requiring parties to provide information honestly, completely, openly and without misleading—particularly regarding material facts that could influence risk assessment. In insurance practice, the application of this principle faces challenges, especially concerning "pre-existing conditions," which insurance companies frequently cite as grounds for denying claims. These issues arise from the absence of clear, uniform standards defining and establishing proof of pre-existing conditions, creating a potential imbalance between the insured and the insurer. This study aims to analyze deviations from the principle of utmost good faith regarding the disclosure of pre-existing conditions and the resulting legal consequences for insurance claim denials, in light of Law Number 40 of 2014 concerning Insurance and Financial Services Authority Regulation Number 23 of 2023. The study employs a normative legal research methodology based on statutory regulations. Data collection involved a literature review of primary and secondary legal documents, followed by qualitative analysis using a descriptiveanalytical approach. The findings indicate that failure to disclose information, the provision of incorrect information and the concealment of information constitute violations of the standard of good faith. However, insurers may also deviate from this principle if they fail to provide clear, complete, transparent and easily understandable information regarding pre-existing condition clauses. The legal consequences of such deviations depend on the party in breach and must be assessed based on evidence regarding material facts and the respective transparency obligations of each party.