Posts in category: Interpretation

CR34

Interpretation – loan protection insurance – retrenchment cover – interpretation of term “retrenched” and date of retrenchment – exclusion where person had knowledge of retrenchment prior to commencement date or retrenched within three months of retrenchment date.

This case required an interpretation of the term “retrenched” and a determination of the date of retrenchment, with reference to labour law.

The complainant had a housing loan protection policy which included retrenchment cover. The policy stated that “The insurer will regard the insured person as retrenched if termination of employment complies with the legal termination of the insured person’s employment by reason of retrenchment, provided for in the Basic Conditions of Employment Act and the Labour Relations Act”. No retrenchment benefit would be paid to “any person who had knowledge of retrenchment prior to the commencement date, or who is retrenched within three months of the commencement date”.

The policy commencement date was 29 April 2003. On 23 June 2003 the employer gave the complainant a letter headed “Notice to terminate employment”. The letter indicated that the company was under financial strain and that certain staff positions needed to be reduced. The complainant was invited to make representations about her position, and told that options short of retrenchment would be discussed and considered. It was stated that, should no suitable vacancy or other alternative exist, her last working day would be 31 July 2003.

As it turned out, no alternative was found and her last working day was indeed 31 July 2003. The insurer declined the complainant’s claim for the retrenchment benefit on the basis that her retrenchment date was 23 June 2003 (the date of the letter), which fell within the three month period from commencement of the policy.

Establishing the date of retrenchment is a matter of fact and law; the date must be determined with reference to the relevant provisions of the Labour Relations Act.

A retrenchment is a type of dismissal, known as a dismissal for operational requirements; for reasons related to the needs of the business, employees’ positions have become redundant. Section 190 of the LRA fixes the date of dismissal as being the earlier of the date on which the contract is terminated, or the date on which the employee left the service of the employer.

When termination is on notice, the contract ends on the last day of the notice period, since this is the date on which the parties’ obligations under the contract cease.

Section 187(3) of the Labour Relations Act requires an employer contemplating retrenchment to issue a written notice inviting the other party to consult and to disclose in writing all relevant information. The proper procedure would be to go through a process of consultation and then, once a decision has been made to retrench, to give notice of dismissal.

The notice given in this case to the complainant on 23 June 2003 does not constitute a retrenchment. It is an attempt to afford prior notice of retrenchment to the employee, while at the same time giving notice that, if alternatives fail, the contract of employment will terminate on 31 July 2003. The fact that these stages were collapsed into one here does not alter the fact that the date of dismissal for operational requirements (retrenchment) was, in terms of section 190(1), 31 July 2003, since this was the date on which, alternatives having failed, the contract terminated, and it was the date on which the employee left the service of the employer.

We advised the insurer that, since the complainant had no knowledge of the retrenchment prior to the commencement date of the policy, and since the date of retrenchment fell outside of the three month period stipulated, no exclusion applies and she qualifies for the retrenchment benefit in terms of the policy. The insurer settled the claim.

SM

CR377

Interpretation and application of the restriction period due to a breach of the 20% rule in terms of section 54 of the Long-Term Insurance Act, 52 of 1998

Insurer applying restriction period at the end of the premium paying period (policy year)

Background

1. The policy was an investment policy that commenced on 1 June 2007.

2. The Complainant needed to withdraw the funds from the investment as she needed the cash for oncology treatment.

3. The insurer declined her request for the reason that the policy was in an extended restriction period which only ended on 1 May 2017.

4. The Complainant had increased the monthly premium in July 2010 and June 2011.

5. Both increases had breached the 20% rule in terms of Section 54 of the Long-Term Insurance Act.

Discussion:

6. The insurer’s interpretation was as follows:

• The premium paying calendar (premium period) year starts on 01 June and ends on 31 May of the next year. The extension of a restriction period takes into account the total premiums received in the calendar year/premium period to determine if a client has breached the 20% rule as per The Long-term Insurance Act. The change could therefore be affected anytime during the colander year and only if, by the end of the calendar year (31 May,) the increased premium breaches the 20% rule will the restriction period be extended from that date onwards.”

7. The insurer therefore applied the extended restriction period from the end of the premium paying period as it held that it was only at the end of the premium period that it could be determined if an excess premium had been received. The restriction period was extended for a further 5 years until May 2017 as the excess premium, following the increase in June 2011, was only calculated at the end of May 2012.

8. The Long-term Insurance Act states:

“”restriction period” means a period of 5 years which commences…
a) on the date with the first premium period begins; or
b) during a premium period after the first such period, on the first day of the month in which an excess premium is received by the insurer.” (own emphasis)

9. “Excess premium” is defined by the Act as follows:

“…means a premium which is received by, or becomes due to, a long-term insurer during a premium period and which-
a) by itself exceeds;
b) when aggregated with all premiums already received, and still be to received, during the premium period, exceeds; or
c) …
By a rate of more than 20 per cent, the higher of the total value of the premiums received by the long-term insurer during any one of the two premium periods immediately preceding that premium period…” (own emphasis)

10. Having regard to the bold type above, we wrote to the insurer and advised that we were of the view that the extended restriction period must be calculated from June 2011 for a further 5 years, thus ending June 2016.

Result:

11. The insurer accepted our view. The restriction period was amended to expire on 1 June 2016.

GB
October 2017

CR340
Interpretation

Definition of diabetes.

Background

Mrs M had a policy that provided cover inter alia for diabetes. The diabetes benefit was set out as follows in the contract:

“Diabetes

Diagnosis by a paediatrician, endocrinologist or physician specialist of

Type 1 diabetes.

10% of the Cover Amount is payable.”

On 08.10.2009 she visited a specialist physician and presented “with a 2-week
history of severe upper abdominal pain, nausea and vomiting.” He assessed her
condition as:

“1. Acute pancreatitis secondary to hyperlipedemia

2. Diabetes mellitus.”

Based on the diagnosis Mrs M submitted a claim to the insurer which the insurer declined because –

“The doctor has clearly stated that this is secondary to pancreatic failure which in itself is difficult to understand seeing this was an isolated case of acute pancreatitis.

Be that as it may diabetes that develops as a result of pancreatic failure or disease is known as Type 3 (c) Diabetes and seeing our product only covers Type 1, this is a decline.”

Assessment

We referred the matter to an independent medical consultant for an opinion and he stated the following in his report:

“Dr P reported that Mrs M presented on 08/10.2009 with a 2 week history of acute abdominal pain. A diagnosis of acute pancreatitits was made, and this was ascribed to hyperlipidaemia; her serum triglycerides were markedly raised. She was also found to have diabetes, evidently not previously diagnosed.

She was discharged on medication to control hyperlipidaemia, and oral anti-diabetic agents. Dr. P’s diagnoses were:

1. Acute pancreatitis secondary to hyperlipidaemia

2. Diabetes mellitus.

A note written in April 2010 by Dr P states that ‘Mrs M is presently Type 1 Diabetic – insulin dependent. This is secondary to pancreatic failure following pancreatitis related to hyperlipidaemia.’

A follow up report by Dr P on 06/07/2010 indicates that Insulin had been added to oral therapy…

Evaluation

It would appear that Dr P decided that Mrs M’s dependence on insulin to control her diabetes, had enabled him to classify her as a type 1 Diabetic.

Though this approach may be understandable in the case of a 36 year old patient presenting de novo with insulin dependent diabetes, an attack of acute pancreatitis preceding the initial diagnosis of diabetes would warrant a diagnosis of diabetes secondary to pancreatic disease.

She should thus fall in the least common category, Type 111 Diabetes which is secondary to various underlying disorders. It is likely that, had a low C-peptide level been a diagnostic definer of Type 1 Diabetes, she might have qualified in terms of the contract, as loss of insulin producing beta cells is common to both Type 1 and Type 111 diabetes.

This is an unusual variation on the recurrent problem arising from the insurer’s definition of Type 1 Diabetes, which implies that pronouncement by, inter alia, ‘A Physician’ is an accepted criterion. Evidently Dr P considers Insulin dependence to be a ‘working’ diagnosis, without resorting to further investigation. As already stated, she is likely to have a significantly reduced C-peptide level. However, I would consider the insurer to have been justified in declining this claim in terms of the contract.

Apart from the clause related to diabetes, it is not clear whether the insurer should be unable to respond to this claim for a major and life changing illness affecting a relatively young woman. At age 35 years she was found to have pronounced hyperlipidaemia causing acute pancreatitis followed by diabetes.”

A copy of the report was provided to the insurer.

Result

Without admission of liability the insurer decided to make an ex gratia payment, in an amount equal to what would have been payable had the insurer admitted the claim under the Diabetes benefit.

HE
February 2013

CR356
Interpretation

Insurance policy contract: interpretation and application of pre-existing conditions exclusions clause.

Introduction

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.

Factual background

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.

Discussion

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.

CNN
September 2014

CR325
Interpretation / Policy wording

Interpretation – policy requiring that certificate by a medical practitioner be furnished for a sickness benefit claim – certificate provided by policyholder issued by a psychologist, not a medical practitioner – insurer refusing to pay claim

Background

1. The complainant, a senior public prosecutor, had an episode of depression/anxiety in October 2010 during stressful divorce proceedings. He consulted a psychologist, who diagnosed major depression and booked him off work for eight working days. When he claimed for a sickness benefit under his policy the insurer declined the claim, rejecting the certificate from the psychologist and stating that “psychologists are not registered as medical or dental practitioners and are also not approved by us”.

2. The relevant clause in the policy read as follows:

“A policyholder, who is totally or partially unable to attend to his usual professional duties on account of sickness and who complies with all the applicable requirements of his contract for valid claims, may receive Sick Pay Benefit in terms of this contract, provided that:

1. he submits to [the insurer] … a claim for Sick Pay Benefit and a certificate from the medical or dental practitioner or any other practitioner who attended to him, which practitioner has to be both registered with the Health Professions Council of South Africa and approved by [the insurer] (both the claim and the certificate must be on the prescribed form provided by [the insurer])”.

Discussion

3. In its first response to our office the insurer maintained that it was entitled to insist on a certificate from a doctor or dentist registered with the HPCSA, stating that “one has to accept that a certificate, signed by any practitioner could lead to various claims that are perhaps not based on scientific diagnoses but on mere speculation”.

4. It was then established, however, that the psychologist was indeed registered with the HPCSA and we pointed out to the insurer that the contract provided for a certificate to be submitted from a medical or dental practitioner, “or any other practitioner who attended to him”. As long as that practitioner was registered with the HPCSA the insurer would therefore have a discretion as to whether or not to approve the practitioner, and such discretion would have to be exercised reasonably.

5. The insurer responded that psychologists are registered under ancillary professions, not as medical practitioners. The insurer pointed out that the prescribed form referred to in the abovesaid clause is entitled “Claim for sickness benefit (declaration by doctor/dentist)”, and Part A of the form adds that it is “To be completed by the attending doctor/dentist ONLY”. The form goes on to ask for the primary and secondary diagnoses, and it was contended by the insurer that requiring a “proper medical diagnosis” is a reasonable exercise of its discretion, and that only medical practitioners can make medical diagnoses.

6. The complainant maintained that the requirement that psychologists must have been registered with the HPCSA gives recognition to psychologists as health practitioners, and therefore as professionals able to diagnose and treat ill-health/sickness of a particular kind. He felt that the wording of the contract should have precedence over that on the claim forms, and stated that “it can also be argued that [the insurer] has been careless and/or slothful by failing to synchronise the wording of their official documents and that clients should, therefore, be given the benefit of the doubt”. He also stated that he had never been given a list of approved practitioners.

Result

7. The matter was referred to a meeting of the office’s adjudicative staff for consideration. In the view of the meeting there was no reason why a registered psychologist should not make a diagnosis of depression since this lay within his field of training and competence. The fact that a psychologist may not prescribe medication does not preclude him from making a reliable diagnosis, or from being able to certify a period during which a patient was unable to perform his normal duties. The insurer had not suggested any specific reason why the psychologist in this case, as a registered practitioner who attended to the policyholder, should not be approved by the insurer.

8. It was furthermore pointed out that the claim form and certificate were not part of the contract, and that the wording of the contract must take precedence.

9. We made a provisional determination that the insurer should pay the complainant’s sickness benefit claim, together with interest from the date of repudiation to date of payment, and the insurer accepted it.

SM
January 2012

CR326

Interpretation / Exclusion

Interpretation – meaning to be given to wording of an exclusion for “intervertebral disc disorders” – insurer using International Classification of Diseases (ICD) coding and descriptions

Background

1. The complainant was hospitalised for a back operation and, having been off work for some months, claimed sickness benefits under his policy. His claim was rejected, the insurer maintaining that his sickness fell within the ambit of an exclusion on his policy for “intervertebral disc disorder”. This exclusion had been imposed at application stage after the complainant disclosed two prior incidents, one a spinal stenosis necessitating a back operation many years earlier, and the other a slipped disc.

2. The insurer stated that in interpreting the exclusion for intervertebral disc disorder, it made use of the ICD 10 Code M51, and that in so doing the exclusion “was meant as a broad exclusion, covering the entire spine”. According to the insurer the ICD 10 M51 description included thoracic, thoracolumbar and lumbosacral disc disorders. The complainant’s latest back operation had been for spinal stenosis, at a higher level on the spine than previously. The insurer argued that the exclusion applied because a “spinal stenosis is generally regarded as an intervertebral disc disorder”.

3. We asked the insurer to explain what “ICD 10 Code M51” stood for, and what it provided for. We also asked the complainant to obtain a written opinion from his surgeon on whether or not the spinal stenosis could be considered in his particular case to be an intervertebral disc disorder.

4. The insurer replied that ICD stood for the International Statistical Classification of Diseases and Health Related Problems, a coding system endorsed by the World Health Organisation (WHO), and that 10 refers to the 10th Revision of the code, which is the international standard diagnostic classification for all general epidemiological purposes, for many health management purposes, and for clinical use. They added that some insurers use the coding system to describe diseases and other health problems for the purpose of defining policy exclusions, and referred us to the WHO website which sets out the various codes and descriptions.

5. In a letter the complainant’s surgeon elaborated on the diagnosis of spinal stenosis, explaining that the complainant “was operated for an intradural arachnoid cyst which caused compression of his cauda equina. It is seen as a benign cyst”.

Discussion

6. We reviewed the ICD codes on the WHO website, and noted that spinal stenosis was not in fact classified under M51, being “Other intervertebral disc disorders”, but under M48 as “Other spondylopathies”. As the diagnosis of the complainant’s condition was spinal stenosis, we put it to the insurer that this did not appear to fall within the terms of the exclusion on the policy, as it was not an intervertebral disc disorder.

Result

7. After considering the additional medical information, the insurer accepted that there was insufficient evidence of the presence of an intervertebral disc pathology, and agreed to pay the claim.

SM
January 2012

Interpretation CR310

Termination of cover upon a policyholder “ceasing to substantially practice his profession” as envisaged in policy provision.

Background

The complainant, a marketer by profession, had been a policyholder with the insurer since about 1995. In January 2009, shortly after emigrating to Canada, he was involved in a serious motor vehicle collision in which he sustained injuries that rendered him totally, but temporarily, incapable of attending to his usual professional duties.

In the course of assessing his claim for a sickness benefit, the insurer discovered that he had been unemployed during the period covered by the claim, being 1 November 2008 to 1 September 2009. It thereupon sought to invoke the provisions of clause 4(c)(ii) read together with 4 (c) (v) of the policy contract, which stated:
“4. A Policyholder shall cease to be covered by and he shall pay no further premiums to, nor receive further benefits from this contract …

(c) (ii) at the end of the month during which the Policyholder, before reaching the mandatory termination date retires from practice, or is, in the opinion of [the insurer] no longer substantially practising his profession,…

(v) A Policyholder who retires from practice or is no longer substantially practising his profession as envisaged in section 4 (c) (ii) … shall inform [the insurer] in writing within 30 days of so having retired from practise or ceasing to substantially practise his profession. Should the Policyholder fail to so inform [the insurer], and [the insurer] only at a later stage becomes aware of the fact that the Policyholder has retired from practise or that he ceased substantially to practise his profession, [the insurer] shall cancel the Contract with retrospective effect at the end of the month during which the Policyholder retired from practice or ceased substantially to practise his profession …”

The complainant contended that although he was unemployed during the relevant period, his being unemployed was due to his having lost his job rather than to having voluntary ceased his employment. He added that although he was not earning an income he had not left his profession, but had been attending business workshops, doing market research and writing a chapter in a marketing-related book for a publishing company.

Discussion
In contending that the complainant was no longer substantially practising his profession, the insurer argued that the complainant was not earning an income from his profession during the relevant period. It explained its conclusion by stating that the amount of risk cover that a policyholder enjoys is based on his gross professional income derived from the practice of his profession, and that should he stop deriving an income from his profession he no longer qualifies for cover.

As the basis for the above contention it relied inter alia on a clause in the contract that stipulated that the amount of a sick pay benefit or permanent incapacity benefit to which a policyholder becomes entitled shall not exceed two-thirds of the amount of his gross income from the practice of his profession; and another that stipulated that a policyholder who is totally or partially unable to attend to his usual professional duties on account of sickness may receive a sick pay benefit, provided that he shall furnish the insurer with such information as it may require in respect of the income earned from the practice of his profession.

The office made a provisional determination holding that the insurer had not discharged the onus resting on it to prove that the complainant had ceased to substantially practise his profession, and pointed out that:

• Clause 4 (c)(ii) and (v) do not stipulate that unless the policyholder is earning an income he will not be deemed to be practising his profession;

• The two other clauses referred to likewise do not contain any such stipulation. In fact they respectively only place a limit on the quantum of the sick pay or permanent incapacity benefit that a policyholder may receive, and stipulate the requirements that a policyholder must meet in order to qualify for and continue to receive payment of a benefit.

Result
The insurer accepted the provisional determination.

CNN
March 2011

Interpretation CR303

Meaning of redundancy/retrenchment

Background

1. The complainant, a salesman for a truck company, lost his job when he did not meet his sales targets. He disputed his dismissal, and the dispute was settled. The settlement agreement stated that the employer would pay a severance package to him, consisting of some R10 000 notice pay and R30 000 severance pay.

2. The complainant had two credit life insurance policies covering his private vehicle loan, and after the settlement he submitted claims to the insurer for redundancy benefits. The insurer refused to pay the claims, stating that the reason for the termination of employment did not fall within the meaning of redundancy as defined in the policy.

3. Policy A defined redundancy to mean “termination of the life assured’s position by his/her employer as a result of the introduction of new technology or re-organisation of his/her employer’s enterprise”. “Redundancy” was also stated to include “Retrenchment”, and this was defined to mean “termination of the life assured’s position by his/her employer based on adverse conditions (including insolvency of the employer) or anticipation thereof or upon any other business decision of his/her employer resulting in staff reduction”.

4. Policy B provided for payment of a retrenchment benefit “in the event of the life assured suffering loss of employment resulting from the implementation of a staff reduction program by his employer”.

Discussion
5. In our view the settlement agreement between the complainant and the employer constituted proof of the complainant’s retrenchment in terms of Policy A, in the sense that it in fact evidenced a termination of his employment on a business decision of the employer resulting in staff reduction.

6. We reasoned that the fact that the complainant had been dismissed for not meeting sales targets did not detract from the validity of his claim. In labour law a dismissal for not meeting sales targets is generally seen as a dismissal for incapacity and as such as a “no fault” dismissal, like dismissal for operational reasons, and as such is not necessarily a dismissal for misconduct. We pointed out that these categories are not water-tight. As stated by John Grogan in Dismissal (2002, p 195): “A distinction between incapacity dismissals and dismissals for operational requirements is in a sense artificial, because the latter subsume the former. When an employee is unable to perform properly, the ultimate reason for dismissal is that the employer cannot afford to retain the employee”. The ultimate reason for the dismissal is thus the operational requirements of the business.
7. We were alive to the fact that the word “program” in the definition in Policy B might imply that more than one person should have been dismissed, but this would not necessarily be so. Nevertheless it appeared from the claim form that six employees were dismissed at the same time as the complainant.

8. In our view it could well be argued that the requirements of Policy B had been met, in that the complainant suffered loss of employment resulting from the implementation of a staff reduction programme by his employer, whose operational requirements were such that it could no longer retain his services.

Result
9. We put the above reasoning to the insurer. The insurer explained that the intention behind retrenchment cover was based on the principle of the “unforeseen” or “out of control”, adding that “if an employer institutes retrenchment for whatever reason and the insured played no part in whatever gave rise to such process being considered, then a claim would be considered as valid”. On the facts of this case the insurer nevertheless agreed to pay the claims.

SM
March 2011