Heirs of Insurance Beneficiaries Revises Petition on Commercial Code

Petition revision examination during judicial review hearing of Commercial Code. Photo by MKRI/Ilham WM.

JAKARTA, HUMAS MKRI - Maribati Duha, the heir of the beneficiary on behalf of the late Sopan Santun Duha, revised her petition for judicial review of Article 251 of the Commercial Code (KUHD). The Petitioner of Case No. 83/PUU-XXII/2024 added an alternative petitum. The Petitioner provides three alternative interpretations or new meanings of Article 251 of the KUHD.

“This is [revised] with adjustments to the petitum that we requested, Your Honor,” said the Petitioner's legal counsel, Eliadi Hulu, in the petition revision hearing on Thursday, August 15, 2024, in the courtroom.

This petition is related to the constitutional review of the norm contained in Article 251 of the KUHD, which reads, “Every incorrect or false notice, or every concealment of facts known by the insured party, even though made in good faith, the nature of which is such that the agreement concerned would not have been made, or would not have been made under the same conditions if the insuring party learned the factual situation of all these matters, shall render the insurance concerned void.”

In his petitum, The Petitioner requests the Court to declare Article 251 of the KUHD insofar as the phrase “render the insurance concerned void” is contrary to the 1945 Constitution of the Republic of Indonesia (UUD NRI) and does not have binding legal force to the extent that it is not interpreted as “the cancellation of coverage must be based on a decision of an authorized court unless the cancellation is based on an agreement between the insurer and the insured” or “cancellation of coverage must be based on a decision of the competent court unless the cancellation is made by the insurer within a maximum period of 6 (six) months due to the discovery of discrepancies in the data of the insured between the data stated in the coverage form and the actual data” or “All false or incorrect notifications, or all concealment of circumstances known to the insured, even if done in good faith, which is of such a nature that the agreement would not have been made, or not made on the same conditions.

“We have a ratio legis why then we determine six months and usually in we see from the official website of the Indonesian Life Insurance Association there is usually a waiting period from one month to 12 months / one year, but we take the middle, Your Honor,” said Eliadi.

According to the Petitioner, the norms in the article provide ample room for insurance companies to use the law in their personal interests. The norm provisions of Article 251 KUHD can also be utilized to avoid liability for errors or omissions made by the insurance company's internal team. The negligence in question includes re-underwriting or risk selection, which is the process of assessing and classifying the level of risk that exists in a prospective insured.

Underwriting is often conducted again and almost always performed by insurance companies when the heirs file a claim for the value of the benefits promised in the policy, this is as experienced by the Petitioner when submitting a claim to Prudential. The company's action is a motive or a trick to cancel the policy or at least reduce the value of benefits that can be claimed as experienced by the Petitioner. The motive seems valid in the eyes of the law because of the enactment of Article 251 of the KUHD.

Article 251 KUHD allows insurance companies to use it as a magic weapon to do various tricky things aimed at avoiding the responsibility of paying claims. In addition, Article a quo does not provide room for the insured/policyholder or his heirs to prove that the fault or negligence does not lie with him and prove that the insured has exercised utmost good faith. This is certainly contrary to the principle of the rule of law stipulated in Article 1, paragraph (3) of the 1945 Constitution.

Also read: Insurance Beneficiary Challenges Commercial Code

Sopan Santun Duha is an insured/policyholder on behalf of the late Latima Laia who is registered as an insured/policyholder of life insurance from PT Prudential Life Assurance. Until this request is made, Prudential still has an obligation to pay the remaining value of benefits that should be received by the beneficiary on behalf of Sopan Santun Duha, amounting to IDR 510.5 million. However, Sopan Santun Duha passed away on January 7, 2024 so the benefit value has not been paid by Prudential. According to the Petitioner, it legally falls to him or becomes the right of the Petitioner, who is the legal heir of the beneficiary.

Previously, Sopan Santun Duha had submitted a similar petition registered under Case No. 2/PUU-XXII/2024. However, at the revision hearing on February 5, 2024, Sopan Santun Duha was found to have passed away on January 7, 2024. Then, the Court declared the petition void at the hearing on the pronunciation of the decision/decree on February 13, 2024. This is because the petitioner passed away, so the petition lost its legal subject, and the petition could not be continued.

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Heirs of Insurance Beneficiaries Revises Petition on Commercial Code