CR69 Disability claim – claimant involved in small scale catering operation
Disability claim – claimant involved in small scale catering operation – disability payments terminated.
The complainant was seriously injured in an explosion in his place of work during November 1994. His injuries were severe and the early prognosis was that he would not survive the accident. He did, however recover and his physical rehabilitation was slow and painful. The complainant was a member of his employer’s non-cancellable sickness and accident disability insurance scheme, but as a result of his accident, his employment was terminated in March 1996. The complainant applied for disability benefits under the scheme and on the basis of the injuries he sustained, he received a disability pension from the insurer. He was required to have a medical examination every six months with a doctor as chosen by the insurer. The last occasion such medical examination took place was on 31 August 2001, but apparently the medical report was not finalised timeously and the report arrived late at the insurer’s office. In the meantime, the insurer had ascertained through its own enquiries, including reports from a private investigator, that the complainant had been receiving an income from a catering business which he ostensibly had been running. The catering business was primarily a spit-braai concern. The complainant alleged that he had been advised by his medical advisor that the spit-braai operation was important both therapeutically as well as psychologically – the latter because he was afraid of fire following the explosion in which he had been injured. The insurer, on the other hand, argued that the catering concern in which the complainant was involved was evidence of the fact that he was not truly disabled and that he was capable of engaging in another occupation.
In the light of the insurer’s attitude, the disability pension was terminated. The insurer expressed the opinion that the post-traumatic stress disorder and major depression from which the complainant suffered following the explosion was treatable and persons suffering from these conditions, were able to return to a functioning state. The insurer furthermore alleged that since he had been working with fire, the very circumstance which had traumatised him most, as part of his rehabilitation therapy for more than three years, the claimant had reached the point where he was able to deal with the effect fire had on him and that he was able to function in a working environment. Following the insurer’s decision to terminate payment of the disability pension the complainant turned to our office for assistance.
The insured was relying on the definition of disablement as contained in the policy document in terms of which disablement “shall mean a state of ill health or incapacity of a member due to accident, injury, disease or illness, resulting in:-
“Any member of the administration/professional/sales group being totally unable to engage either in his occupation or any other occupation for which he is reasonably fitted, having due regard to his standard of education, training and experience or to any member of the other group being totally unable to engage in any occupation”. Since the insured believed that the complainant was engaged in the catering business from which he was receiving remuneration, it was of the opinion that the complainant was not disabled in terms of the policy and the benefits under the policy were accordingly discontinued. We were of the opinion that the onus to confirm that the disability of a member had ceased, rested with the insurer. We pointed out to the insurer that it had not provided any basis to justify its allegation that the complainant had failed to prove to the insurer’s satisfaction that he was disabled in terms of the policy. We furthermore drew the insurer’s attention to the inherent dangers that existed in relying on reports obtained from secret investigators.
The main issue was whether the catering operation conducted by the complainant was, in fact, “an occupation” or merely a hobby or a part-time activity. Further examinations by a medical practitioner, an occupational therapist and a clinical psychologist, all appointed by the insurer followed. We made a provisional ruling that on a balance of probabilities the termination of the benefits to the complainant on the grounds referred to above was not justified and that subsequent information was not sufficient to support a justifiable basis for termination of the benefits. We were of the opinion that the following aspects were relevant:-
1. the onus to confirm that the disability of a member has ceased, rests on the insurer;
2. to discharge such onus, the insurer must confirm on a balance of probabilities that the insured is able to engage in an occupation.
We considered that the information provided in respect of the complainant’s functional abilities at the time of the termination of the benefit, was not sufficient to discharge the onus which would justify termination of the benefit. Furthermore, involvement in spit-braai and catering activities as reported to the insurer could not reasonably be interpreted as an engagement in an occupation. The insurer had not provided sufficient information confirming that the complainant had the ability to expand the existing activities into what may reasonably be considered to be an occupation. We concluded that the available information confirmed on a balance of probabilities that the complainant is involved in activities which are primarily of a therapeutic nature and a pasttime, but which do not confirm the ability to perform an occupation.
We provisionally ruled that the income benefit should be reinstated with immediate effect, whereupon payment in respect of the disability benefit duly recommended.
The insurer was not prepared to accept our provisional ruling and expressed the opinion that the claim for ongoing occupational disablement could not be substantiated. Relying on the most recent medical reports and the objective results of the functional evaluation and psychometric testing, the insurer concluded that the complainant is capable of performing a suitable alternative occupation. As a last step, our office requested an opinion from a former chairman of the medical and underwriting standing committee of the Life Office’s Association of South Africa Dr Pieter Coetzer who was considered to be an expert on the assessment of disability in terms of long-term insurance policies. After consideration of all documentation in the matter, the expert concluded that the complainant’s part time activity of spit-braais could not be regarded as an occupation and to expect the complainant to expand the business into a succesful full time business should be regarded as unreasonable. We advised the insurer of this opinion and confirmed our provisional ruling that the insurer was to reinstate the income benefit with immediate effect. In addition the insurer was to pay to the complainant an amount equal to the benefit which would have been paid from date of termination together with compensation calculated at consumer price index plus 2%.
The insurer accepted our ruling and full payment was made.