CR155

Non-disclosure – whether evidence supported insurer’s view that false information had been disclosed

Facts

The insured applied for two policies during late 1999 for R1,5 million through a broker, with inception dates 1 November 1999 and 1 April 2000. In response to a question in the application form, the insured answered that his occupation was “flying”. The insured was subsequently required to complete an “aviation questionnaire” in which the insured indicated that he had a “commercial” pilot’s licence.

The insured was killed when the chartered aeroplane which he piloted crashed on 2 April 2000. Claims were instituted for death benefits under both policies.

An investigation was launched which resulted in the insurer concluding that the insured did not hold a valid commercial pilot’s licence but only a private pilot’s licence. This was clearly a …factor and the insurer repudiated liability.

The claimant’s representative submitted a complaint and argued that the Civil Aviation Authority’s (CAA) records were inaccurate and that the insured had in fact held a commercial pilot’s licence. As evidence he submitted that :

• the CAA had more than once inspected the insured’s licence at his workplace where he had been employed as a commercial pilot and had not raised any questions about his licence;

• the aeroplane operating certificate showed the insured as the named pilot.

Discussion

What complicated matters was the fact that no original licences were available. These had been confiscated by the Moçambiquen authorities where the accident had happened.

We took all of the above into account, as well as the 2000 Report of an Independent Review Panel into Fraudulent Air Transport Licence Examination Practices which stated:

“After the aircraft accident on 2 April 2000, two pilot’s licences were found in the insured’s bag. The Moçambique authorities took possession of these documents, and submitted faxed copies to the CAA. In addition, the pilot’s logbook was obtained from his family, and in the back of the logbook was a copy of the pilot’s licence printout that is usually handed to a pilot after he renewed his licence. On this copy the information reflected the insured as a holder of CPL and instrument rating issued by the CAA. The information in this licence print-out is not consistent with the pilot’s records held by the CAA. The Panel concluded that the insured did not hold a valid CPL with instrument rating.” (We substituted to words “the insured” for the name of the deceased.)

On the other hand, the report did reflect that the records of the CAA were not always accurate.

In weighing up the evidence the probabilities were fairly evenly balanced but the abovementioned report tipped the scale against the insured. In applying the test for the materiality of information one uses the reasonable person test. The reasonable person would not have disclosed false information. Our office found that the evidence on balance supported the insurer’s position that the insured had disclosed false information about his pilot’s licence. Consequently we could not, on the documents on file, find in favour of the complainant.

Result

We had been made aware of the fact that the insured’s wife could not afford to institute legal proceedings. A court might have been a more appropriate forum for dealing with a dispute of this nature. At the representative’s request we, approached the insurer to consider an ex gratia payment. It did so and we were able to advise the widow that an offer of R250 000 had been made in full and final settlement which she accepted. We expressed our appreciation to the insurers.
JP
April 2006