CR178

Delay – late submission of claim – equity jurisdiction – funeral insurance

Background

The deceased, who died on 11 November 2004, was the policyholder and life insured of a policy offering funeral cover for R10 000.

The policy stated:

“Upon the death of any person insured under the policy, notice of the claim together with all the necessary supporting documentation required by Insurer X must be sent to Insurer X within 6 (six) months of the date of death. No claim, where documentation is submitted after 6 months of the date of death, will be paid.”

The deceased’s family was unaware of the existence of the policy and were only alerted when they received a cancellation letter addressed to the complainant and dated 14 March 2005. The deceased’s mother-in-law then lodged a claim on 8 June 2005. The insurer, relying on the clause in the policy, repudiated it as the claim should have been made by 10 May 2005 at the latest.

The attorneys who complained to our office on behalf of the deceased’s mother-in-law were the executors of the deceased estate. They contended that the time bar should only commence from the moment the family received notice of the policy and that the family should not be penalised by a provision of which they were unaware.

Discussion

Without agreeing with that submission but taking into account the guidelines set out in the practice note referred to earlier, we were inclined to think that fairness to both parties required that our office should exercise its equity jurisdiction in favour of the complainant. We put this suggestion to the insurer and invited their comments.

Result

The insurer, having given the matter due consideration, thereupon decided to admit the claim.

AS
November 2006