Case Study 2
Complainant B also lodged complaints against Insurers X, Y and Z.
On 18 December 2014 the complainant applied for the following insurance cover from Insurer X:
Life cover R6m
In the application the complainant declared ownership of a business and an income of R80 000 per month. Cover commenced on 1 January 2015. On or about 22 October 2015 the complainant underwent a pacemaker implantation and submitted a claim under the illness benefit, which the insurer rejected.
During its investigations the insurer established that the complainant’s average income for 2014 was less than R6 000, which stands in stark contrast to the more than R600 000 per year declared at application stage. The insurer pointed out that the complainant had answered in the negative (by leaving it blank) a question in the application form relating to “previous and existing assurance”. After referring to the insurance cover which had been granted to the complainant by Insurers Y and Z, with effect from January 2015 and February 2015, respectively, Insurer X averred that the complainant was “hugely over-insured”. The complaint against Insurer X was dismissed on the basis that the insurer established material non-disclosure by the complainant.
In the application, dated 18 December 2014, to Insurer Y the complainant reflected ownership of a business; a taxable monthly income of R90 000 for the current year and a taxable monthly income of R85 000 for the previous year. The complainant deleted a question in the application form which relates to “benefit amounts of other existing insurance policies”. On the facts of this matter that deletion conveyed a negative reply. Such a reply was false because the complainant had applied for the following insurance:
With Insurer X:life cover of R6m and illness benefit of R5.5m which
commenced on 1 January 2015.
With Insurer Z:life cover of R6m and illness benefit of R4m, which
commenced on 1 May 2015.
The Insurer also averred that, during 2013 (i.e. the “previous year” envisaged in the application form) the complainant had applied for a State pension. The complaint against Insurer Y was dismissed on the grounds of the material non-disclosures by the complainant.
In the complaint against it Insurer Z indicated that it was awaiting “the outcome of the SAPS investigation”. A provisional ruling was made similar to the provisional ruling in the matter of complainant A against Insurer Z. Thereafter the insurer indicated that it “has not yet made any decision to decline that claim on any ground, whether fraud or otherwise” and that it “cannot be blamed for not making a decision before the SAPS have concluded their investigation.” A final determination was then made dismissing the complaint and pointing out to the complainant that the matter could in the future be re-opened in terms of our Rule 2.2.2 if new evidence became available.