An insurance company was justified in refusing to honour the terms of a life insurance policy issued because the holder had not disclosed a material fact, a court ruled today.

The court, presided over by Mr Justice Anthony Ellul, heard the claim filed by Ambrose, Jessica and Doris Mackay, the heirs of Jesmond Mackay, against Citadel Insurance.

They told the court that they were the heirs of Mr Mackay who died in August 2008, aged 45.  According to the heirs, Mr Mackay had taken out a life insurance police to guarantee bank loans totalling €151,407.

But when Mr Kackay died, the insurance company refused to pay the proceeds of the insurance policy to the bank to make good the outstanding loans.

Citadel Insurance pleaded that the insurance cover was null and void because when applying for the policy, Mr Mackay had failed to disclose a material fact.

Client failed to complete form fully and sincerely- Court

The court pointed out that Mr MacKay had been referred to hospital on January 3, 2008 suffering from abdominal pain.  One week later, he applied for a life insurance policy.

He was again admitted to hospital on January 25, 2008 for further tests and four days later he was examined by a doctor engaged by the insurance company.

In March 2008, Mr MacKay was diagnosed with cancer and he died in August that year.

Mr Justice Ellul said that it was a duty imposed on an applicant for an insurance policy to make a full disclosure to the underwriters, without being asked, of all the material circumstances.

The court added that no evidence had been produced to show that there was any suspicion, before March 2008, that Mr Mackay was suffering from cancer.

However, when completing the application form for the insurance policy Mr Mackay had claimed that he was not receiving any medical treatment, though he had been prescribed antibiotics by his doctor.  Nor had he mentioned that he had been referred to hospital for tests.

Mr Justice Ellul said that Mr Mackay had been obliged to complete the proposal form fully and sincerely, but had failed to do so.