CR356 Interpretation Insurance policy contract
Insurance policy contract: interpretation and application of pre-existing conditions exclusions clause.
This case concerns the complainant’s eligibility for a Disability Income Benefit, payable in terms of the provisions of a group disability income benefit insurance policy issued to an employer. The issue in contention was the interpretation and application of a pre-existing conditions exclusion clause.
The complainant started working for the employer on 1 February 2012 and on the same date became a member of the fund by virtue of his being an employee.
Prior to becoming an employee, he had consulted various medical experts on several occasions (as set out below), displaying symptoms in respect of which no positive diagnosis of the medical condition giving rise to his claim, was made:
• He had a history of cardiac problems for which he had had a stent inserted in 2005.
• In November 2010, he had consulted an ENT specialist for a sudden onset of dizziness and intermittent balance problems. The diagnosis was that of a fistula in the left ear which was leaking fluid. A tympanotomy was performed in October 2011 and the leak was sealed, after which his condition improved.
• In August 2011, he was referred to a neurologist for “problems with memory; loss of social graces; and vertigo with imbalance”. An MRI of the brain was done and it showed compression of the medulla on the left, but no focal lesion which may be associated with cognitive abnormalities. A diagnosis of vitamin B deficiency, compression of the medulla and probable dementia (Alzheimer’s vs. Fronto-temporal) was made.
• He was referred to a specialist gastroenterologist and a clinical psychologist. The former performed an endoscopy, which however, revealed no signs an underlying gastro-intestinal disease.
• During or about November 2011, he had a relapse of the symptoms of dizziness, and also complained of tinnitus and deafness in the left ear. He consulted a Neurosurgeon, and an MRI and MRA showed compression of the lower cranial nerves and brain stem on the left, including a vascular loop displacing the 8th cranial nerve. Due to the danger of possible complications involving macro-vascular decompression (“MCV”) and the fact that he was “subjectively improving”, the neurosurgeon advised him against undergoing the procedure.
• He consulted with the psychologist four times during January 2012, once in February 2012, and once in September 2012.
• He took vacation leave on 31st January 2013, so as to attend a family funeral that was to be held on the 1st February 2013.
• On 1st February 2013, the clinical psychologist noted, inter alia, a “decline in his cognitive functioning; problems with memory and abstract thinking; slowed speech”, and expressed a concern that he should not be driving in his condition. She recommended that the complainant be treated for depression.
• On 4th February 2013, he was advised to stop working, and on 20 February 2013 was diagnosed with senile dementia.
He last went to work was on 31st January 2013 (because he had subsequently gone on vacation leave). However, his last date of service due to the medical condition giving rise to his claim was 4th February 2013.
He subsequently submitted his claim for a disability benefit, which was rejected in March 2013, on the basis of the insurer’s reliance on the following policy provision:
“4.2 Pre-Existing Conditions
4.2.1. No Benefit shall be payable under this Policy if a Member has a pre-existing condition. A Member shall be regarded as having a pre-existing condition if, during the first twelve months following the New Member’s Entry Date, in the opinion of [the insurer], the Member is Disabled as a result of any injury, illness or condition which the Member knew about, or could reasonably be expected to have known about or was diagnosed with or treated for, or displayed symptoms of within 6 months prior to the Member’s Entry Date” (Emphasis added).
The insurer’s contention was that the evidence suggested that the complainant’s neurological and psychological symptoms were present at least 6 months prior to commencement of employment even though a definitive diagnosis was only made after he had commenced employment. Its conclusion was that the exclusion clause applied because in the insurer’s opinion, the complainant had become disabled as a result of a condition which he knew about or was diagnosed with or was treated for, or displayed symptoms of within six months before his entry into the fund, and that therefore the claim should be rejected.
We explained to the insurer that in order for it to rely on the above-quoted provision, it is not enough that the complainant knew about, or could reasonably be expected to have known about, or was diagnosed or treated with, or displayed symptoms of, the condition forming the basis of the claim in the 6 months prior to his becoming a member. We set out the pre-requisites for applying the provision as follows:
(a) The member must have known about, or be reasonably expected to have known about, or have been diagnosed with, or treated for, or displayed the symptoms of the condition giving rise to the claim in the 6 months before he became a member of the fund; AND
(b) His disablement must have occurred during the first 12 months after he became a member of the fund.
We held the view that the application of the exclusion clause is limited to the first twelve months after becoming a member, and that therefore, if the disability due to the pre-existing condition occurred after the first twelve months of becoming a member, the clause does not apply.
The complainant had indeed displayed the symptoms of dementia in the 6 months before he became a member of the fund. However, he was only advised to stop working due to the condition and diagnosed with it more than 12 months after he became a member of the fund. We pointed out that since he started working and became e member on 1st February 2012, his being declared as disabled from performing his duties on the 4th February 2013 took place after the first 12 months of his becoming an employee and a member of the fund.
The insurer accepted our recommendation and paid out the claim.