CR385 Exclusion of psychiatric disorders; constitutional rights infringed?


Exclusion of psychiatric disorders; constitutional rights infringed?


1. Mr X submitted a disability claim to the insurer based on a mental condition. It was declined by the insurer due to material non-disclosure at application for a history of this condition, supported by medical evidence. A psychiatric disorder exclusion was placed on the policy. He submitted a complaint to this office and the complaint was dismissed in a provisional ruling. Material non-disclosure was evident. Mr X was not happy with the outcome of the provisional ruling, stating that neither the insurer, nor this office, had taken his constitutional rights into consideration in that there ought to be no discrimination against persons suffering from a mental condition.

2. He stated that the imposition of a pre-existing condition to deny the benefit is a violation of his human rights, contending that the insurer’s risk analysis and imposition of the exclusion is illegal.

3. He added the policy contract does not stand above the Constitution.

4. His view was that the insurer did not apply TCF by the need of equal treatment for persons who suffer mental disorders.

5. The insurer responded:

  • The disclosure of previous diagnoses is vital for the insurer in the underwriting process.
  • The differentiation methods are applied equally and consistently to all applicants and does not amount to unfair discrimination.
  • Psychiatric disorders present with an increased risk to the insurer.
  • The complainant was duty bound to make disclosures to provide the insurer the opportunity to properly assess the risk; the contract of insurance is one of good faith and the insurer treats its customers in line with the contractual provisions and in the spirit of TCF.

6. As is the procedure at this office the file was re-allocated for review of the provisional determination since Mr X had made further representations. In the final ruling he was advised that in terms of our rule 3.3.4 our office does not intervene with the insurer’s legitimate exercise of its commercial judgement, and the fair application of the criteria. Mr X was informed that his proposition that insurers should, in any event, provide cover for persons where a condition had manifested, so as not to discriminate against that group of persons, was untenable and to add such persons to the risk pool would not make business sense and would not protect the rights of other persons in that pool.  The insurer therefore poses the underwriting questions to counteract adverse selection by limiting coverage, the basis of insurance.

7. The conclusion reached in the provisional ruling, covering the non-disclosure, was confirmed in the final ruling, and this final ruling also reiterated this office’s stance on complaints about the alleged infringement of constitutional rights.


8. We informed Mr X that our office does not have the power or jurisdiction to consider the question of the infringement of constitutional rights. This power vests in the High Court, more specifically when it sits as an Equality Court, for the purposes of the adjudication of matters relating to infringements of, inter alia, the right to equality and unfair discrimination. We could therefore not assist Mr X and the file was closed.