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Whose responsibility is it to ensure full disclosure?

Can brokers do more to protect their clients?

In the wake of the Momentum-Ganas case there is no question that something has to change in the way life insurance is written. Effectively a precedent has now been set that has established a new standard in the industry.

What is up for debate, however, is where that change can best happen.

The conundrum is that both clients and insurers need protection from each other. Clients must have more assurance that their policies are going to pay out when they need them, but insurers also have to be protected against clients deliberately providing false information on their application forms.

Who better to manage both of these concerns than those who already intermediate this relationship – the brokers and financial advisors?

“I believe that every broker should look at the way they work,” says Roger Hendricks, an independent financial advisor who runs a practice called DiscloseAll with his wife Sumari. “Industry standards need to change.”

Mutual benefit

From his own experience, Hendricks has found that brokers have the means to ensure that a client makes the maximum disclosure possible when applying for life insurance. This has substantial benefits for both parties.

“The first thing I ask a client is their consent to look at their medical aid claims history,” Hendricks explains. “I then scan back as far as I can go to look at every doctor they went to, every specialist, and every hospital visit. If there’s anything in there I don’t understand, I go through it with the medial aid. I can also request medical reports from any of the doctors.”

This, in essence, is much the same process that an insurer would follow when someone makes a claim. They go back in the policy holder’s medical history to confirm that there is nothing material in there that they didn’t disclose. They will also request medical reports from every doctor they have seen to confirm every diagnosis that was made.

If your broker has already done this at the time of applying for the policy, it significantly reduces the chances of either party being surprised at claims stage.

“Its not 100% guaranteed that you are now secure, but you have a far better chance of not having a claim repudiated knowing that we’ve done that amount of work on you,” Hendricks explains. “The insurance company also has so much information that they now can make a more informed decision about the policy they are giving, and that means they do better underwriting as well.”

Less than total recall

The reality is that there is a fair chance that any non-disclosure is not deliberate. If you are relying on your memory alone, you cannot be certain that you will recall every relevant detail of your medical history.

“You probably won’t even remember some of the doctors you have seen,” says Hendricks. “Really, it’s a fine line between whether you are lying or if you just can’t remember. There’s too much going on to remember everything.”

Even if you do remember seeing certain doctors, you may easily forget or misunderstand what they told you. Hendricks gives an example of a recent case where a severe illness claim after a triple bypass was repudiated because the client did not mention a visit he had made to a neurologist.

He had gone because he was suffering from headaches, and his GP had recommended that he see a specialist. The neurologist’s verdict was that he needed to stop smoking, which he did, and prescribed medication for anxiety.

However, when the insurer requested a report from the neurologist, the doctor noted in his report that the client had high cholesterol, and a family history of heart disease. Neither of these things was addressed in the recommended treatment, but they were now relevant to the insurance claim.

“He walked out of the appointment thinking that there was nothing wrong with him, and he just had to stop smoking,” says Hendricks. “So how do you draw that line?”

Professional standards

Going through the process of having your full medical history available from the start takes away these questions. If you know you have disclosed everything, you can be more confident that your policy is going to serve its purpose.

Hendricks says that it is the case that more clients receive exclusions or have to pay higher premiums due to the level of disclosure, but they’re happy to accept this knowing that they will ultimately get what they are paying for. He therefore believes that this is a professional service that brokers and advisors should provide.

“We are trained about different products, and we have to deal with compliance documents by the thousands, but nobody is taught about how underwriting works,” he says. “That is a flaw. That is really the first step when applying for insurance, and we should do it properly for the sake of our clients.

“It’s only fair,” he adds. “You’re the client, spending the money, and we’re getting the commission. We should do it correctly.”

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COMMENTS   33

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This sounds like an ideal solution if the broker is prepared to spend time and money getting all the medical information together.
But it also looks like using a sledgehammer to crack a nut.
In the example you mention, the client was given medication for anxiety.
“He walked out of the appointment thinking that there was nothing wrong with him, and he just had to stop smoking,” And the prescription for anxiety ? Did he think that was unimportant ?
Did he forget to mention on the application form that he had been diagnosed with anxiety for which he had been prescribed treatment ? If he had mentioned it, the insurer would have investigated further.
Did he reveal his family history on the application form ?
I agree that you cannot remember every little detail of your medical history, but being referred to a neurologist by your GP is not something you would forget in a hurry, especially if you were prescribed medication.
It seems this was another case of selective memory.

So for instance if I forget to mention or forgot that I had mumps as a child 40 years ago the insurer wont pay out if I am shot and killed by a burglar or hijacking because I did not disclose it.???

If you had declared mumps on your application form, the insurance would not have called for further medical information and issued a standard policy,
If you had not declared it and they found out after you had been shot and killed by a burglar, they would have said the non-disclosure was irrelevant to the initial risk, and would have paid the claim.
You can’t compare mumps 40 years ago to a recent visit to a neurologist who gave you medication for anxiety.

A lot of food for thought!

I suppose, there’s 2 costing models: (i) risk insurance is done without any medical or HIV check, then everyone pays the same (nicely high) risk premiums, with the health subsidizing the less healthy. (ii) then the healthier citizens recon “why should I pay the cost to subsidize the less healthy, when I look well after myself”…I want lower cost, and will be prepared to be underwritten….and the rest was history.

How would the insurer knows if I’m about to “abuse” the 2-year SUICIDE clause, when taking out a new policy? …i.e. the state of mind of policyholder?

It is known in some sport circles that “You do NOT NEED a parachute to successfully complete a sky-dive. You only need it if you want to jump more than once” *lol*

My spouse puts in a claim in year-3?

Please, this is URGENT….I need to know RIGHT NOW….as tomorrow morning I visit the local sky-diving club, and my life cover policy has already run past the 2 year exclusion clause…

Nice one Michael.
Anyone contemplating suicide is usually not in a good state of mind.
I don’t think they would take out a policy, wait two years, and only then commit suicide.
It’s like the guy who decided to commit suicide by swallowing a whole bottle of Valium. But after he took two he felt better.

Nice article (again)! Thank you, Patrick for being so diligent on this issue. You are, almost single-handedly, providing an extremely important public/consumer interest contribution to this issue.

In my opinion,the issue raised by the Momentum/Ganas is not unique to the Life Insurance, but is a GENERAL ISSUE that is also WIDELY PREVALENT – if not more prevalent – in other insurance industries (eg vehicle insurance).

In ALL these industries it has become an increasing practice (the deliberately egregious customer-hostile business model) of insurance companies accepting clients on the basis of very little proper due-diligence by the insurer themselves – in the FULL KNOWLEDGE, that when it comes to claim stage, there is a very good possibility that the insurer will be able to find “some” pretext – however frivolous – to weasel out paying the claim.

This is a disturbing – and immoral – trend that has been slowly increasing in these industries for DECADES. To the point now, that every smart aleck operator in this industry actually thinks this is the NEW NORMAL.

Never even occurred to these “operators” to check that their business model even remotely complied with the CLIENT’S TCF expectations, eh?

The industry is making its rules up as it goes along, and what they can get away with.

Times have changed …

There is NO WAY an ordinary individual can today personally sign off on a form declaring his medical history with unequivocal certainty and authority.

But decades ago, this was usually indeed the case. Life was simple and uncomplicated. You went to your family doctor. The records were simple and the tests were few, and the outcome so straightforward that even the patient could understand.

Gradually, this whole landscape has changed over the last 50 years. Now, there is no such thing as a single family doctor.Your doctor is merely the one that is available today fro a panel. Next time it will be somebody else! There are THOUSANDS of more tests, some done by doctors in there rooms, others by a range of intermediaries – all of whom have their records and interpretations. There are HUNDREDS of specialists in every field, and thousands of interpretations that can be made on this data.

My point is, we have reached a CRITICAL moment in this COMPLEX process, where we (all the stakeholders) HAVE to recognise, that even with the best will in the world, and the most honest and full co-operation from the client, it is now IMPOSSIBLE for the ordinary citizen to simply sign a form and assume the responsibility for TOTAL validity of the medical information he provides.

It is SIMPLY NOT POSSIBLE TO DO THIS ANYMORE !!!

There is no question what the “industry” has to decide what to do.

The solution is simple.

The medical information for the client is now HUGELY ASYMMETRIC – and ALL in the favour of the Insurer. The client is a virtual David against an Industry Goliath in this regard!

Your insurer – any insurer – can now at the touch of a few buttons on a keyboard – be able to tell you more quickly, and more accurately, about your self, and properly assess your risk, than you ever can! (Momentum aptly demonstrated this facility when it suited themselves!)

So my simple proposal is:

1. The industry MUST accept that THEY are now the better party to conduct a proper due diligence of a potential client BEFORE accepting a client.

2. Upon accepting the client, the client is assured of an IRREVOCABLE contract. Insurers that make mistakes and can’t get their act together must either get efficient quickly or go to the wall. Simple as that – no place for assholes and shysters.

3. It becomes an IMMUTABLE principle in the industry that a claim will ONLY be denied on the basis of DIRECT, MATERIAL, RELEVANCE. There is plenty of actuarial data to cost the premiums properly for this model. And no, it won’t cause premiums to become outrageously expensive. If you believe otherwise, produce real figures!

4. I do not see the need for Brokers to get involved. They are middlemen who will only be adding an extra layer of cost and bureaucracy. A well-designed, efficient system does NOT need middlemen to facilitate it. If you do, revisit the design!

The advantages of my proposal is:
It fixes this ethical problem ONCE and FOR ALL !

It fixes the SAME problem across all insurance types – especially including the dreadfully-behaving motor insurance industry.

Everybody – client and insurer alike – knows EXACTLY where they stand.

It’s politically easy to understand for the public, and will attract their immediate backing.

As for potential resistance from the industry:
The industry either listens to the anger the public has expressed and complies (FULLY!!!) with the public expectation.

OR they risk this becoming a MAJOR election issue, and having legislation introduced to FORCIBLY drive a sorely-needed moral re-calibration onto them.

And if that becomes the case, the EFF will use this issue as an election tool to punish greedy white capitalists … and then you only have yourselves to blame, because the fallout for your industry is going to get a LOT worse (look at how Macron in France foolishly initially ignored the Yellow Vests, and now their demands have escalated to other issues which also cannot be ignored).

Jonnoxxo has an endless supply of red herrings.
Who cares how many Doctors, specialists etc there are ? You are asked specific questions on an application form. Have you ever suffered from …… ?
So by all means lie and say “No” I have never had raised blood sugar. Lie and say “No” I have never received medication for anxiety. But don’t cry when you get caught.
If it’s true that companies always look for loopholes to avoid paying claims, there must be dozens, if not hundreds, of valid claims being turned down every day. Why don’t we hear about them ?

“OR they risk this becoming a MAJOR election issue” … I can only hope this was said tongue in cheek.
And to try to relate fraudulent claims to riots in Paris is laughable,

These financially semi-literate articles on the Ganas case are becoming tedious. The fact that one person deliberately lied to his insurer to induce the insurer to provide cover when he was ininsurable – and then died under tragic circumstances, does not mean that the entire long term insurance industry needs to change fundamentally. People are hysterical: “how will I ever know if I’m covered?!” “What if I didn’t know I had a condition?” “What if I omit something trivial about my medical history? What then?!”

As the proposer of insurance, you have a duty to fully disclose everything of which you are aware at the time the policy is written. If you have cancer, but legitimately did not know and had not been tested or diagnosed or sought treatment, you cannot and are not held to have a duty to disclose something of which you were unaware. The policy questionnaires are clear. If you choose to lie, you choose to run the risk of being uninsured. Why is this difficult to grasp? Insurance operates like this everywhere in the world. The types of things that are material to insurance risk are not the sorts of things that just somehow slip one’s mind.

Momentum panicked at the social media hysteria, and have muddied the waters for everybody as a result. What if somebody now dies accidentally, but not in a violent crime incident, having fraudulently misled his/her insurer? Should we all go bananas demanding a payout because “it’s not fair” and “companies are evil”?!

What is tedious, is the continued inability of people like yourself to grasp the fundamentals of what “fairness” means – that claims should ONLY be denied on the basis of DIRECT material reasons relevant to the particular claim.

It’s called “client expectations”.

Look it up, pay attention to it, and above all, ADDRESS it

It seems that YOU are the one that needs to CHANGE.

Not sorry if this message has become “tedious”. Until you and your ilk “get it”, you will keep hearing it.

It actually turns out that what you die of is irrelevant. Insurance is a contract between 2 parties. If you knowingly misrepresent the facts, the contract is null and void. Fairness and other notions have nothing to do with it.

‘Contract’
A contract is a promise or set of promises that are legally enforceable and, if violated, allow the injured party access to legal remedies. Contract law recognises and governs the rights and duties arising from agreements.

‘Misrepresentation’

Definition: Getting into a contract with a person or a company on false grounds by making statements that are not in accordance with the facts is known as misrepresentation. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy.

Tedious is harping on about fairness. You think it is fair to lie on an application form and misrepresent the facts. Some of us have higher moral standards.
“claims should ONLY be denied on the basis of DIRECT material reasons relevant to the particular claim.” Utter nonsense.
Now try to get your head around this. You are asked a straightforward question on an application form. You must be fair and give an honest answer. Not lie, and hope you don’t get found out at claim stage.

It’s called “client expectations”.
Client expectations to you is to lie on the application form and expect to get away with it.
The support for fraudsters in this country is frightening.

@Be serious

You are seriously amusing … a stuck record, quite incapable of remembering facts when they don’t suit your off-the-wall hysteria.

NOWHERE have I said that it’s acceptable to blatantly lie on forms. It is in fact on the record in my comments that I ACTUALLY said this was NOT acceptable!

I ALSO said that it was dishonest AND unethical of insurance companies to rely on irrelevant NON-MATERIAL facts to disqualify a claim. You are strangely quiet in addressing that.

Please explain why the client expectation that a claim should be denied on ONLY material grounds HAS to be “utter nonsense”.

If it was as you suggest, there would have been NO public outcry. Unless you can provide a satisfactory explanation here, So somebody (you!) is out of step here.

Seems the “industry of shysters” opinion is at HUGE variance with the greater public opinion.

Explain to me why it is “impossible” for your industry to have a business model which costs itself on the basis of DIRECT material facts only when paying out a claim. It can be done. Easily. You must just want to do it. And YOU clearly DON’T want to.

Or is the problem that YOUR company is too stupid/incompetent to be able to do that simple stuff??? And your business model is much more profitable by being intentionally lazy at the client acceptance stage,and super-energetic in ripping the customer off when he claims?

Seriously … have you got real answers?

Death by crime or accidental should be no part of discussion involving insurance. All other reasons of death, yes.
By not doing this, fallen back on other future possible hypothetical death reasons, makes them death to, as bushiness enterprise.

“Reasonable Person.” A phrase frequently used in tort and Criminal Law to denote a hypothetical person in society who exercises average care, skill, and judgment in conduct and who serves as a comparative standard for determining liability.

Did Gana behave as a reasonable person when he did not fully declare his medical history?

Is it reasonable to expect me to remember that I had measles 30 years ago?

Did Gana behave as a reasonable person when he did not fully declare his medical history?
NO.

Is it reasonable to expect me to remember that I had measles 30 years ago?
YES. A reasonable person would remember having measles, mumps (especially if you were a teenage boy !!), chicken pox etc as a child. Maybe not the specific dates though.

Flying. Plane comes down way to early. All death. Insurance start scrutinizing death body’s in the hope of finding undisclosed illness or ingrown toenails. Making this industry the most promising for 2019, after Eskom.

Any known cases of this ?

Yes!

Momentum/Gana!

Enough said.

The bottom line is “Be Serious”, would you rather have an advisor in your corner that works correctly, and knows what he/she is doing or a person like yourself that leaves all the responsibility up to the client?
You sit with the family who has had their claim reputated and then explain to them the questions on the application form as you put in your previous comments.
This is not a joke, it affects people’s lives with massive trauma. Be the person that created the change and not just sits there and comments on what could have been.
The industry needs to change and the time is now.

You mean explain to the family that the claim is not paid because the insured lied on his application form.

Jonnoxxo,
“Or is the problem that YOUR company is too stupid/incompetent to be able to do that simple stuff???” …. I do not have a company, nor am I involved in the financial services industry.
“I ACTUALLY said this was NOT acceptable!” So what then ? The client lied and he must just be allowed to get away with it ? That encourages everybody else to lie.
“I ALSO said that it was dishonest AND unethical of insurance companies to rely on irrelevant NON-MATERIAL facts to disqualify a claim. You are strangely quiet in addressing that.” See comments below from Lemon. The contract is null and void because of the client’s dishonesty.”
Please explain why the client expectation that a claim should be denied on ONLY material grounds HAS to be “utter nonsense”.” As above. He lied on the application form and still expects to be paid ? Crime mustn’t pay.
The good thing to come out of this is that the public will be a bit more careful when applying for insurance. It has highlighted the need to tell the truth.
I know I sound like a stuck record. That’s because I can’t understand why you keep defending a fraudster. There is no need to turn the industry upside down. Clients just need to be honest.

You seem to have a lot more skin in this game than you are letting on.

Was Gana more transparent on his form than you are here?

Given by your own admission that you supposedly have nothing to do with this industry, then your comments make no sense at all. They didn’t make any sense in the first place either.

You must be a lonely teenage troll then, desperately looking for attention.

Go back and stay under the bridge with your pal, Lemon. You have made zero contributions to this discussion.

Shame on you Jonnoxxxox, resorting to personal insults. Looks like you have run out of red herrings.

“Effectively a precedent has now been set that has established a new standard in the industry.”
I am afraid that this is an entirely erroneous conclusion. No precedent has been set and no new standard “established”.
Precedents and standards have been set and re-set according to sound legal principles by the courts over several centuries in SA and across the globe, not by individual aberrations. SA cannot suddenly make its own law if it wants inter alia, to enjoy the indispensable benefits of the international re-insurance market. If we do not act according to the globally established LAW OF CONTRACT and insurance practice, the world and its investors will quickly stop doing business with us – not only in insurance but in all other contractual transactions. If they cannot rely on our industry and our courts to act according to the terms of a contract, according to precedent and according to global common law, they will rapidly desert us and go elsewhere with their money to where the investment climate is friendlier and certain. Indeed, one wonders just how much damage this “monumental mistake” has already caused us. Precisely like “expropriation without compensation” is presently doing, the mere suggestion that a precedent of this unclear and uncertain nature has been set, inflicts serious long term harm on our country.
Please cease and desist!

In the court of public opinion, a precedent has indeed been set.

This must now be followed up and made the immutable industry-wide decision.

The only “monumental mistake” that has been made here, is that a shyster insurance company was caught out in the open trying to get away with the industry-standard egregious practice of weaseling out of paying a claim by seizing on a trivial non-material reason to do so.

You are right that Momentum’s initial refusal to pay out on this claim has caused enormous damage to an industry that THOROUGHLY deserves a complete reset on what “FAIRNESS” means. Hint: the public has a FAR BETTER appreciation of what this means than the “industry” has.

Clearly, if the industry is recalcitrant in this regard, then the solution is simple. Parliament must introduce legislation which fixes this problem by mandating that an insurance claim may ONLY be denied on the basis of proven DIRECT, MATERIAL facts DIRECTLY RELEVANT to the circumstances of a particular claim.

Such legislation will remove the opportunity for shenanigans by BOTH dishonest clients AND UNETHICAL companies. Dishonest clients are easy to root out (Momentum ably showed that).

The BIGGER problem is with the industry, which has entrenched unethical and sharp business practice as the new normal,in a hugely asymmetrical contractual relationship in their own favour, with clients who are very much at a contractual disadvantage in almost every metric that counts.

Your remarks about “contract Law” are hysteria and nonsense. There is no such impact or consequences. Clearly you are not a lawyer.

In the meantime, until the industry comes to its senses, the most appropriate course of action for the public is a focused CONSUMER-BOYCOTT of Momentum.

Seems that not only do you want premiums to quadruple and policy acquisition to become impossibly difficult and inconvenient for the average person, you also want the insurance industry across the globe to “come to its senses”. The practice in SA is identical across the rest of the world – as it is with all binding contracts in all fields.
This case was indeed declined on the basis of “proven DIRECT, MATERIAL facts DIRECTLY RELEVANT to the circumstances of the claim.” The contract, and therefore the claim, was void ab initio. It’s that simple, direct, material and relevant. The cause of death is entirely irrelevant in such circumstances.
There is nothing hysterical about that.
What is profoundly troubling though, is the murmuring already being heard in the international re-insurance and investment markets, EWC and Rupert-bashing adding concentration to the mix.

Jonnnoooxxxo
You’ve fallen into the quicksand, and the more you struggle to get out, the deeper in you get.

“by seizing on a trivial non-material reason to do so.”
Lying on an application form is not trivial or non-material.

“Dishonest clients are easy to root out (Momentum ably showed that).”
The dishonest client was rooted out and you continue to defend him ?

@Ayanda

“Premiums are going to quadruple …” Highly unlikely! This specific problem supposedly represents a trivial <0.7% of the market.

If Momentum had done a proper job of vetting their client Ganas in the FIRST place, then they would (supposedly according to the received wisdom now) never have accepted him in the first place, and the problem would magically never have arisen at all. Iff you believe in the Tooth Fairy.

This of course is what the pundits here argue (and only now that they have the 20/20 after-the-event hindsight). Yeah, right!

Methinks that had Ganas anyway put all the missing detail on his form, he would STILL have been given a policy (albeit possibly at a higher premium). The notion that Momentum would NEVER have given him a policy is just convenient after-the-fact speculation (read BS).

The basic problem here is that the insurers (including Momentum) KNOW they cannot rely on the records and "memory" of the data provided by their clients (this for any client – never mind Ganas). This is nothing new! Every insurer knows they have this problem. It is a real problem.

Momentum knew that when they signed Ganas up, if THEY didn't TEMSELVES vet him, then he would have to automatically fall into this "suspect" cohort.

However, the business imperative for the insurers (and certainly, their agents) is to sign the client up before he goes elsewhere. And then sort out the due-diligence later on when the claim arises.

In the meantime, they have achieved the important step, and locked a paying client in to themselves (he doesn't go the competition), and they get the steady stream of premium payments. Quite probably for MANY years – before there is an "event".

The only real risk is to the client. He's betting the farm on this, and playing for keeps. The insurer? Not so much. Their risk is spread across thousands of clients.

The Fox is looking after lots of Chickens if you will. And the Chickens (who are very naive and trusting) think its wonderful that they have this nice Mr Fox to protect them from all those other insurance predators out there.

Except the client is blissfully unaware how this game is going to be played out when push comes to shove.

The insurer however, KNOWS that when claim-time eventually comes, they will at that point probably have a good chance to be able to "find" some pretext on which they can at that point disqualify the claim.

This is what happened in the Ganas case.

Momentum COULD have established the complete medical facts at acceptance stage, but they CHOSE not to. Why did Momentum not do a proper due-diligence at acceptance stage?

It certainly can't be because of "costs". Their routine claim-acceptance process is to do a full-on due-diligence at claim-stage anyway. In fact, the more they delay doing a proper due diligence, the more the costs go up (inflation). So it's better all round if they do this at acceptance stage. Then EVERYBODY has all the trusted information right at the outset. And ALL info this was completely available to Momentum at the mere touch of a button.

Momentum have no excuse for not properly vetting Ganas at the acceptance stage They certainly have the efficient facility to do so. And they should have done so. Period.

To imply that ALL premiums will quadruple because of adjusting for Ganas is nonsensical. Bring real data to back up your case, otherwise you're just throwing out hysterical hype.

Even if it did happen in the rare case of Ganas that his premium may increase drastically (as it would for ANYBODY the insurer feels is an excessive risk), such a change is for the tiny minority (<0.7%), and will not affect the general client anywhere near as you claim.

I'm amazed that you can claim that Momentum declined the case on the basis of logical, direct, material facts. So the public is just plain stupid and has zero understanding of what fairness is?

What planet are you from?

Just because Momentum (supposedly) claimed this, only makes it THEIR argument. Certainly does not make it THE argument that will be endorsed by a court or the public. Its a silly argument, and as Momentum soon found, did not go far.

Momentum apparently initially declined the case on the basis of an outright fraudulent supposition on their part – that because there was a missing detail on his form, the complete contract becomes invalid.

How convenient for Momentum to pull this sly move!

But this is not how contract law works!

It's seldom that you can completely pull a contract down simply because of a one-sided dispute over a few clauses.

Yes, its the usual (one-sided) opening plaintiff's ploy, but these one-sided legs are usually easily kicked away by the opposing argument. Yes, strange that, Ayanda? There is usually an opposing argument in a court! And who will ALSO draw on decades of case-history to support HIS counter-claim.

Gosh, Ayanda, who would have thought of that?

Usually in a dispute, the gravity of the clauses and consequences are individually weighed against the complete contract, and then apportioned accordingly, and the dispute resolved within the TOTAL context.

The predicted implosion of our legal system, contract law, the insurance industry, and international investment (did i leave something out?) by you (and others) as a result of the Momentum case, is a wild, unhinged, and hysterical view.

Bring real figures to back up this view. Otherwise – to quote your own dictum – "cease and desist" from espousing this unvalidated hysterical nonsense. Without real data, you have no credibility.

The SA environment is hardly threatened by this case.

SA will in fact be strengthened by positive legislation that puts a robust stop to the unethical, plain dishonest, and consumer-hostile shenanigans in the insurance industry.

Couldn't happen to a more deserving bunch of skelms. And can't come soon enough!

And it may well be that other nations with similar problems will follow our cue!

Wouldn't that be something …!

Absolutely. Troubling that this article (and others) were written by a financial journalist without recognising the essential points you’ve made. This is one isolated case of insurance fraud frothed up into a big drama because of the insured’s death in a violent crime incident – it does not change the industry as we know it. And the industry as we know it is simply not repudiating valid claims all over the place. Fewer than 1% of all life/disability claims were repudiated in SA in 2017, for reasons like outright fraud or non-disclosure. There is simply not the massive problem that the ranting, semi-lucid, CAPITALISED comments upon these articles would suggest. If you want the peace of mind of insurance (whether short- or long-term), just don’t lie to your insurer – simple solution. The problem is that some people only think they have been treated “fairly” if they get precisely what they want; the world just doesn’t work like that.

It seems to be considerably under 1% of claims that are repudiated. The figure that I’ve seen quoted recently relating to 2017 was Momentum 0.4% and industry average 0.7%. If, as people are suggesting, the insurance companies are looking for any reason not to pay, they certainly are not trying very hard:-)

Wendy, there you go with boring things like hard facts and data, which we can – quite frankly – do without, thank you very much. Fewer facts, less data and more irrational hysteria and ranting tweets are what we need, please, when we apply our minds to financial policy-making. How in heaven’s name are we supposed to rush around like giraffes on rollerblades, ranting about how ghastly life insurers are when you tell us that they pay more than 99% of claims?! Insurance must fall! Raze their buildings to the ground! Let their management be hung, drawn and quartered! Down with this sort of thing! May South Africa revolutionise insurance as the world knows it!

Jonnoxxoon,
You really have lost the plot now.

“Why did Momentum not do a proper due-diligence at acceptance stage?”
Because they trusted that the client was telling the truth.

“Except the client is blissfully unaware how this game is going to be played out when push comes to shove.”
The client is blissfully unaware of how the game is going to be played out when he gets caught lying.

“And it may well be that other nations with similar problems will follow our cue!” You just cannot be serious. There is limited interest in this case in South Africa. Do you honestly believe the rest of the world cares ? If anything they would be astonished at the level of support for a fraudster. It is a poor reflection on our society.

You keep ignoring the critical fact that if the client had told the truth at the outset, this situation would not have arisen. But you keep defending him. It’s ok to lie because it’s up to the insurer to catch him ?
And do you honestly believe that this will become an election issue and legislation will be changed ? You are living in a dream world.

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