CR249 Exclusion clause – is the insurer entitled to rely on the exclusion clause?

CR249

Exclusion clause – is the insurer entitled to rely on the exclusion clause?

Background

Mr N had two policies with the insurer. They were ceded to the bank to provide cover for his housing loan. On 14 January 2007 he died in a motor vehicle accident. The insurer declined both claims, relying on the alcohol exclusion clauses in the contracts.

Their reasoning was set out as follows in their letter to our office:

“In this specific instance the deceased died in a motor vehicle accident. During the time of his death it was determined that the deceased was under the influence of alcohol.

In support of our claims decision we received confirmation from the forensic lab that the blood alcohol tested, which correspond with the Post Mortem Report, was at the time of death 0.16, which is above the limit in terms of the exclusion clause.

Our policy exclusion reads as follows:

‘F POLICY EXCLUSION
No claim will be admitted which has arisen, or has been accelerated directly or indirectly as a result of

3. The Life Assured being under the influence of alcohol where the blood alcohol level exceeds 0.05, …’ “

According to an affidavit by the Assistant Forensic Analyst who performed the blood alcohol test, the laboratory received the blood sample in “an unsealed polystyrene container (seal not closed properly)” from the Forensic Pathology Service.

Discussion

We took the matter up with the insurer and asked them to advise us on what basis they sought to rely on a compromised sample. They replied by sending us a copy of their previous letter. We repeated the question and they informed us that if the sample was contaminated in any way, the beneficiaries should obtain written confirmation from the pathologists to this effect. On receipt of such confirmation they would be prepared to review the matter.

The matter was discussed at an adjudicators’ meeting and we took the view that the insurer could not impose the exclusion, as the blood alcohol sample was compromised. The onus to prove that the exclusion is applicable rested on the insurer, not on the beneficiaries.

The decision of the meeting was that, in the absence of any countervailing evidence, the claims in respect of both policies be paid, together with interest as set out in the LOA guidelines.

The meeting also decided that the insurer was to pay a solatium amounting to the sum of at least R5000.00 to the complainant to compensate her for inconvenience and distress experienced in delaying payment of the claim.

Result

The insurer settled both claims and paid the solatium to the complainant.

HE
May 2008

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