CR45 Non-disclosure – claim for disability repudiated on the basis of material


• Non-disclosure – claim for disability repudiated on the basis of material non-disclosure – incorrect answer to a question in the proposal form – materiality.

This case is to be contrasted with the previous one.

The complainant applied for a whole life policy including a total disability benefit of R300 000. The proposer answered “no” to the following question:

“Have you …..ever suffered from or been treated for any of the following?
9.5 Disorder of muscles, bones, joints, limbs or spine? e.g. back pain or operations etc”

The complainant was a welder at the time and his duties were fifty percent supervisory and fifty percent manual. The application was accepted and cover commenced on 1 June 2003. In October 2003 the complainant lodged a disability claim stating the due to motor neurone disease he was unable to work as a self-employed shield metal worker.

According to the medical evidence obtained at the time of claim assessment the insured had been treated by his GP for backache in July 1998, October 2000 and January 2002. He was also treated for arthralgia in 1997 and June 1998. The GP described the insured’s backaches and pains as being of a minor nature and stated that it in no way related to the insured’s current condition.

The insurer cancelled the disability benefits on the grounds of non-disclosure.

This was again not a clearcut case but the adjudicators meeting, after considerable debate, came to the conclusion that, in contrast to the previous example, the condition was more serious. Moreover the proposer’s attention was specifically directed to backache and a reasonable proposer should have appreciated that this was a matter which the underwriter would wish to explore if backache, even of a minor nature, was experienced. The claim was accordingly not upheld.

These two cases illustrate how difficult it can be to draw the line and how relevant the exact formulation of the questions in the application form could be.

The complainant, understandably was unhappy with the outcome but as far as we know did not take the matter further.