CR327 Jurisdiction Deceased employed by an insurer



Deceased employed by an insurer – as such a member of its group scheme underwritten by the same insurer – on his death his life partner not satisfied with allocation by his employer of group scheme death benefit – office not having jurisdiction over a decision by the insurer in its capacity as employer.

The deceased was employed as a financial planner by the insurer, and as such was a member of its group scheme. He died in 1997 and was survived by his ex-wife, two minor children and a life partner who he had been living with for 12 years by the time of his death.

In its capacity as the employer the insurer made an allocation of the relevant life plan benefit, the proceeds of the provident fund and the group life plan, and it did so in terms of the authority given to it by two rules of the group life plan, which read as follows:

“Where payments are to be made to Dependants, the Association in its
absolute discretion:

– shall determine who are the Dependants of the Member

– may select the Dependant or Dependants to whom payments are to be made and the proportions of such payments, and from time to time vary such selection.”


“The Association may request (the insurer) to use any lump sum benefit to purchase an annuity, or to make payment of the lump sum by installments.”

For the purpose of these rules the Association referred to therein was elsewhere defined in the rules as meaning “the (insurer) group in its capacity as Employer”.

The issue that arose was whether the office had jurisdiction to make a decision on an allocation made by the insurer, not in its capacity as insurer, but in its capacity as an employer.

The complainant argued that the office did have jurisdiction because the insurer and the employer were one and the same entity, and further that because the deceased had been an agent of this entity no employer/employee relationship existed.

The above rules clearly provided, however, that it was the insurer in its capacity as the deceased member’s employer that was vested with the discretionary power to decide on the allocation of the death benefits concerned, and that it was in that capacity that it in fact did so.

Our Rule 2.1 clothes the office with jurisdiction over complaints against an insurer concerning inter alia the “…administration (and) implementation” of an insurance contract. The decision as to the allocation concerned, however, did not lie with the insurer, and was not made by it in its capacity as insurer.

The office therefore held that it did not have jurisdiction to deal with the complaint.

January 2012