Insurance companies are usually not obligated to make payment to the families of clients who died in connection with alleged criminal activities, industry sources said today.

They were responding to the case of Vasanthi Perumal, widowed by a police shooting, who had complained that her husband's insurance company refused to pay up.

Her claim was rejected by the company, MCIS Zurich Insurance Bhd, on the grounds that her husband, Anthony Ponnusamy, had died in pursuance of a criminal case.

V Nathan, the adjuster who investigated Ponnusamy's case for MCIS Zurich, said he was "quite convinced" that Vasanthi's claim should be denied.

"Under common law, anyone who has been killed by the police in relation to a criminal activity will be ineligible to make the insurance claim," he said when contacted.

Ponnusamy, 30, and his alleged accomplice, Letchumanan Moneandy, 24, were shot dead after a car-chase and shoot-out in Pajam, Negeri Sembilan, on Aug 24.

Police said they gave chase when they spotted the men at a highway rest-stop where the suspects were allegedly waiting to hijack a lorry laden with RM3 million of microchips and compact discs.

Vasanthi has since demanded an inquest into her husband's death, alleging that police pre-meditated the shooting.

Inquest results

According to Nathan, even if that were the case, the insurance company cannot make payment until the results of the inquest are known.

"If the inquest can prove otherwise, then the family can come back to the insurance company and make a claim," he said.

When contacted, a senior industry source who wished to remain anonymous agreed with Nathan's assessment, classifying Anthony's case as a "clear-cut" one.

"If the family sues the police for negligence, for example, then that would prove their (police's) guilt. The family can then claim payment from the insurance company.

"Since they have already asked for an inquest, they should wait for the result," he said.

He added that although an individual is innocent until proven guilty, his individual rights would be reduced if he was suspected of conducting criminal activities.

He added that exclusions in insurance policies for deaths related to war, acts of terrorism and criminal activity are commonly found around the world.

However, he noted that these exclusions did not mean that the insurance company would categorically deny payment to these bereaved families.

"With the World Trade Center attacks, for example, the victims died in connection to a terrorist act, but they were not terrorists. So that's where we have to draw a line," he said.