Utmost good faith principle in Indonesian insurance law as a legal reason to harm the insured party

  • 333 Views
  • 117 Downloads

Creative Commons License
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.

view full abstract hide full abstract
    • 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
    • Conceptualization
      Mulhadi Mulhadi
    • Data curation
      Mulhadi Mulhadi
    • Formal Analysis
      Mulhadi Mulhadi, Dedi Harianto
    • Funding acquisition
      Mulhadi Mulhadi
    • Methodology
      Mulhadi Mulhadi
    • Project administration
      Mulhadi Mulhadi, Dedi Harianto
    • Software
      Mulhadi Mulhadi, Dedi Harianto
    • Supervision
      Mulhadi Mulhadi, Dedi Harianto
    • Resources
      Dedi Harianto