The Government’s proxies asking for a delay of testimony at a material judicial review hearing of Article 251 of the Commercial Code, Wednesday (9/25/2024). Photo by MKRI/Ifa.

---

JAKARTA (MKRI) — The Constitutional Court (MK) postponed the material judicial review hearing of Article 251 of the Commercial Code (KUHD) for case No. 83/PUU-XXII/2024 because the President/Government was not prepared to testify. The House of Representatives (DPR) did not attend but had sent a letter requesting for a reschedule.

“The Government is not prepared with its testimony, and the House requested a reschedule. Therefore, this hearing cannot continue and is rescheduled for Tuesday, October 15, 2024 at 10:30 WIB,” said Chief Justice Suhartoyo alongside the other eight constitutional justices on Wednesday, September 25, 2024 in the plenary courtroom.

The Government’s proxies from the Ministry of Law and Human Rights, the Ministry of Finance, and the Attorney General’s Office stated that they would still need to coordinate to discuss the President’s testimony.

Also read:

Insurance Beneficiary Challenges Commercial Code

Heirs of Insurance Beneficiaries Revises Petition on Commercial Code

Maribati Duha, heir to and beneficiary of the deceased Sopan Santun Duha, has filed a material judicial review petition No. 83/PUU-XXII/2024 against Article 251 of the Commercial Code (KUHD). She believes the provision of the norm has often been used as a legal loophole by insurance companies.

Article 251 of the Commercial Code 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 learnt the factual situation of all these matters, shall render the insurance concerned void.”

In the petitum, the Petitioner requests that the Court declare the phrase “the insurance concerned void” in Article 251 of the Commercial Code unconstitutional and not legally binding if not interpreted as “cancellation of insurance 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 insurance must be based on a decision of an authorized 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 insured’s data between the data stated in the insurance 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.”

The Petitioner believes the article has allowed insurance companies to use the law for their own gain. It can also be used to avoid liability for errors or omissions made by the insurance company’s own internal team. Such negligence 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 almost always done by insurance companies when the beneficiary files a claim for the benefits promised in the policy. The Petitioner experienced this when submitting a claim to Prudential. In such a situation, insurance companies frequently cancel the policy or at least reduce the benefits that can be claimed by the beneficiary, which the Petitioner experienced. The move seems valid in the eye of the law because of Article 251 of the Commercial Code.

Article 251 of the Commercial Code allows insurance companies to use it as a loophole to avoiding the responsibility of paying claims. In addition, it does not allow the insured/policy holder or their beneficiary to prove if that the fault or negligence does not lie with them and to prove that the insured has made the 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.

Sopan Santun Duha was the beneficiary of PT Prudential Life Assurance policyholder Latima Laia. Until the petition was filed, Prudential still has an obligation to pay the remaining claim by Sopan Santun Duha amounting to Rp510.5 million. However, until he passed away on January 7, 2024, Prudential had not paid the claim. The Petitioner asserts that as the legitimate heir to the policy’s beneficiary, she has the right to the insurance claim.

Also read:

Insurance Payout Inaccurate, Commercial Code Challenged

Petitioner of Commercial Code Passed Away

Sopan Santun Passed Away, Petition on Commercial Code Dismissed 

Sopan Santun Duha filed a similar petition, No. 2/PUU-XXII/2024. However, at the petition revision hearing on February 5, it was revealed that he had passed away on January 7. At the ruling hearing on February 13, the Court declared the petition inadmissible since with the petitioner’s passing the petition lost its legal subject and could not continue.

Author              : Mimi Kartika
Editor               : N. Rosi
PR                   : Fauzan F.
Translator         : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

---