CR392 – Non-disclosure matter re-opened; death occurred 18 years ago

A. Background

  1. The policy commenced on 1 January 1998 covering the life of Ms T. She passed away on 1 October 2001 after an ear operation. The cause of death is noted as spontaneous cerebral haemorrhage. The death benefit claim was declined by the insurer on the basis that there had been material non-disclosure at application of Apert Syndrome, a genetic condition whereby bones are fused and causes the deformity in the skull, feet and hands.
  2. The relevant question that Ms T had responded to in the negative and on which the insurer relied to decline the claim, on the basis of non-disclosure, was as follows: “5. Do you have any form of disability, eg loss of use of any limb, impaired sight or hearing?”
  3. In November 2018, one of the two beneficiaries of the policy, the Late Ms T’s mother, contacted this office with the request that the case be re-opened on the basis that her late daughter had not suffered from a disability but a deformity and had in fact responded correctly to the health questions that were posed to her at application. She stated that the insurer should not have cancelled the policy and should have admitted the claim in 2001.
  4. Our office wrote to the insurer, and from the information provided to our office, pointed out:
    • Ms T had deformity of bones, which did not impact on her ability to occupy a position as a data capturer at a large organization.
    • She used her hands, which were deformed, to good use on the computer.
    • There was no loss of the use of a limb.
    • There was no evidence that she suffered any other kind of disability.
    • Ms T’s doctor advised that she could have expected to live a normal lifespan.
    • Medical information furnished indicated that the cause of death was not related to Apert Syndrome.
    • Ms T may have suffered from deformity but not disability and therefore it could not have expected from her to respond in the positive to the question set out in paragraph 2.
  5. We requested the insurer to consider the claim once again even though the claim event had occurred 18 years ago.

B. Conclusion

  1. It transpired that the matter had been dealt with by an insurer which the current insurer had taken over. The current insurer agreed to settle the matter on an ex gratia basis, without admission of liability.
  2. The life cover benefit was R199 195 at the time of death in 2001. The insurer increased the settlement amount to R555 274. Each of the two beneficiaries received 50% in April 2019.
  3. This office noted that the insurer showed distinction in service in this matter, having promptly and justly settled it after an extended period of time had expired from the date the claim arose.