CR20
• Funeral Insurance – potentially competing claimants

Mrs A, many years ago, took out a policy for R3000 as a form of insurance for her then domestic servant, Mrs B. Mrs B was described in the policy as “a dependant assured”. That meant that on the death of either of them the survivor would be paid out R3000. The relevant clause of the policy provided: “Indien ek sterf en daar nie ‘n begunstigde(s) vir poliseienaarskap aangewys is nie, sal die eerste oorlewende versekerde uit die lys van versekerdes in die uiteensetting van voordele in die kontrak genoem, in die volgorde waarin hulle name van bo na onder gedruk is, die nuwe poliseienaar word”.
The insurer maintained that on a strict interpretation of the clause Mrs B, if she were alive at the time of Mrs A’s death, would have to be substituted as the nominee for ownership and would as such be entitled to payment.
The difficulty was that Mrs B had in the meantime left Mrs A’s employ and, despite all efforts, could not be traced. Nor was it possible to determine whether she was alive at the time of Mrs A’s death. If she was not alive at the time of Mrs A’s death the clause would not be operative; consequently the benefit that would otherwise have devolved on her would accrue to Mrs A’s estate.
The insurer proposed to keep matters in a state of suspense on the remote chance that Mrs B might come forward as a claimant. The office suggested as a practical alternative solution that the insurer enter into an arrangement with the estate that payment be made to the estate on condition, and subject to an appropriate indemnity, that should Mrs B surface as a claimant the status quo be restored until the completing claims had been evaluated.

Acting on this suggestion an indemnity form was prepared by the insurer and signed by Mrs A’s widower and sole heir. Payment was duly made and our file was closed.

PMN