Utmost good faith principle in Indonesian insurance law as a legal reason to harm the insured party
-
DOIhttp://dx.doi.org/10.21511/ins.13(1).2022.07
-
Article InfoVolume 13 2022, Issue #1, pp. 81-89
- 460 Views
-
166 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The principle of utmost good faith has been recognized as one of the essential principles in insurance, and its practice in other countries has been fairly applied to both parties. It is suspected that this insurance principle in regulation and its implementation in Indonesia only burdens one unilateral. Therefore, this study aims to prove the allegation that the principle of utmost good faith favors only the insurer and its application in dispute resolution directed at harming the insured party. This study uses a case study approach, with five insurance legal cases in the form of court decisions as purposively selected objects. Qualitative analysis (content analysis) was then carried out to obtain data: data codification, data presentation, and conclusions/verification. The principle of utmost good faith is regulated by the following documents of Indonesian insurance law: Indonesian Commercial Law Code, Act No.7/1992 and Act No.40/2014. The results showed that the utmost good faith principle in several Indonesian insurance regulations is more in favor of insurance companies. The insurance company always utilizes Article 251 of the Indonesian Commercial Law Code or the utmost good faith principle as a shield to commit fraud, and refuses to fulfill its legal liability with the aim of harming the insured.
Acknowledgments
We thank to the Ministry of Education, Culture, Research and Technology of the Republic of Indonesia for supporting and funding this research until it was completed on time.
- Keywords
-
JEL Classification (Paper profile tab)G22, G52, K12
-
References27
-
Tables2
-
Figures0
-
- Table 1. Highest good faith regulation in insurance regulation
- Table 2. Utmost good faith principle as a legal reason for insurers to harm the insured party
-
- Agumya, A., & Hunter, G. J. (2002). Responding to the consequences of uncertainty in geographical data. International Journal of Geographical Information Science, 16(5), 405-417.
- Ahmad, J. (2018). Desain penelitian analisis isi (Content analysis). Research Gate, 5(9).
- Birds, J. (2019). Modern Insurance Law. UK: Sweet & Maxwell.
- Bork, K., & Wandt, M. (2020). “Utmost” good faith in German contract law. Zeitschrift für die gesamte Versicherungswissenschaft, 109, 243-254.
- Carter, R. L. (Ed.). (2013). Reinsurance. Springer Science & Business Media.
- Chassagnon, A., & Chiappori, P. A. (1997). Insurance under moral hazard and adverse selection: the case of pure competition. Delta-CREST Document.
- Cohen, D. F., DeMasi, T. E., & Krauss, A. (1993). Uberrimae Fidei and Reinsurance Rescission: Does a Gentlemen’s Agreement Have a Place in Today’s Commercial Market. Tort & Insurance Law Journal, 29(3), 602-622.
- Collins English Dictionary. (2022). Definition of utmost “good faith”.
- Dixon, R. (2012). A Leap of Good Faith: A Possible Response to Unfair Claims-Handling Practices in Insurance (Barchelor’s Thesis). New Zealand: University of Otago.
- Dorfman, R. S. (2012). The regulation of fairness and duty of good faith in English contract law: A relational contract theory assessment. Leeds Journal of Law & Criminology, 1(1), 91-117.
- Ericson, R., & Doyle, A. (2004). Catastrophe risk, insurance and terrorism. Economy and Society, 33(2), 135-173.
- Fuhr, C., & Panesar, J. (2022). The Duty of Good Faith in Insurance Law.
- Hartono, S. R. (1985). Asuransi dan Hukum Asuransi di Indonesia. IKIP Semarang Press.
- Huda, M. K. (2020). Hukum Asuransi Jiwa: Masalah-Masalah Aktual di Era Disrupsi 4.0. Scopindo Media Pustaka.
- Klijnsma, J. (2015). Contract law as Fairness. Ratio Juris, 28(1), 68-88.
- Morris, S. (1994). Trade with heterogeneous prior beliefs and asymmetric information. Econometrica: Journal of the Econometric Society, 62(6), 1327-1347.
- Raslin Saluja. (2021). Application of the concept of “utmost good faith” in English Insurance Law.
- Rawls, J. (1973). Some ordinalist-utilitarian notes on Rawls’s theory of justice. The Journal of Philosophy, 70(9), 245-263.
- Stepchenkova, S., Kirilenko, A. P., & Morrison, A. M. (2009). Facilitating Content Analysis in Tourism Research. Journal of Travel Research, 47(4), 454-469.
- Suparman, M., & Endang, H. A. (2007). Perlindungan Tertanggung Asuransi Deposito Usaha Perasuransian. Alumni, Bandung.
- Torbira, L. L. (2018). Insurance risk management: a correlate of economic growth in Nigeria. Research Journal of Finance and Accounting, 9(7), 1-10.
- Vásquez-Vega, D. (2014). A comparative analysis of utmost good faith in Colombian and English insurance law. EAFIT Journal of International Law.
- Wild, S. E. (Ed.). (2006). Webster’s new world law dictionary. John Wiley & Sons.
- Wright, L. (2017). Utmost Good Faith and Fairness in Life Insurance: Restoring Consumer Confidence (UNSWLJ Student Series No. 17-03).
- Yang, Y. (2017). The Past and Future of Utmost Good Faith: A Comparative Study Between English and Chinese Insurance Law (Doctoral Thesis).
- Yohannan, D. (2022). Principle of Utmost Good Faith in Insurance.
- Zakariyah, H., Al-Own, A. A. O., & Ahmad, A. (2023). Exploring the Potential of Using the Zakat Fund in Structuring Islamic Micro Takaful. In International Conference on Business and Technology (pp. 121-132). Cham: Springer.