CR206 Reinstatement of policy – poor service – policy wrongly terminated


Reinstatement of policy – poor service – policy wrongly terminated – provisions not allowing insurer’s action –.


The complainant wrote to us in June 2005 and advised us that when she was nursing she took out a policy with an insurer via the SA Nursing Association.
The premiums had been paid up to 3 January 2005 when she received a letter from the insurer who advised her that the policy had now expired.
As this policy was a funeral (family) policy and she was in need of the cover she was most surprised to receive this notification from the insurer.
She further pointed out that she had been paying for the policy for 13 years and that she had no idea that the policy would come to an end as there was no expiry date on the certificate which had been issued to her.
The master policy was in fact held by the SA Nursing Association. The insurer, after some delay, responded that the policy, which had cover of R5 000, was pure risk cover and the only benefit which became due was on the death of the life assured prior to the expiry date.
According to the insurer the policy expired at the age of 65 which was the age the complainant had reached on 1 April 2000. They stated that they were prepared to refund all the premiums which had been deducted after the age of 65.


We advised the insurer that we needed to see the copy of the conditions on which they relied in order to terminate the policy.
The insurer then wrote back and said that they had scrutinised the policy schedule and it appeared that their previous letter stating that the benefit had expired at the age of 65, was incorrect.


The insurer thereupon advised that they had reinstated the policy at their expense and that they would start deducting the premiums for the complainant’s policy with effect from the next due date.
The insurer also confirmed that the policy would in fact continue until the client died, unless she terminated the policy.
November 2006