Insurance Law

• Published date: 14 April 2023
• Pages: 693-747
• Author: Millard, D.
• Date: 14 April 2023

693

1. INTRODUCTION

This chapter covers the most recent developments in i nsurance law. The

chapter on Insurance Law in t he previous edition of the Year bo ok conta ined

detailed discu ssion on the interpretation of in surance contracts. Thi s year,

there have not been any legislative developments and, in this rega rd, the

Conduct of Financial Inst itutions Act is stil l to be promulgated.

A variety of topics were adjudicated upon, and no distinct t heme can be

distilled. The ca se law is something of a mixed bag, dealing with a mi xture

of common-law rules that apply to insurance.

2. LEGISLATION

No relevant legislation was promulgated during the period u nder review.

3. CASES

3.1 APPLICATION FOR THE REVIEW OF A DECISION OF THE

OMBUDSMAN FOR LONG-TERM INSURANCE

The first case for di scussion is Ngwenya NO v Ombudsman fo r Long-term

Insurance.1

3.1.1 Facts in Ngwe nya

The applicant was the husband of the late Mrs Ngwenya, and the executor

of her estate. The applicant brought this application in his re presentative

capacity.2 On 7 September 2011, Mrs Ngwenya applied for a loan of

R40 000 with the th ird respondent, Nedbank Ltd, and a credit life

* BIur LLB LLM (UP) LLD (UJ); Dean: Faculty of Law, Thompson Rivers University.

ORCID: https://orcid.org/0000-0002-4668-9320.

1 [2021] ZAGPJHC 172.

2 Para 2.

Insurance LawInsurance Law

Daleen Millard*

2021/2022 YSAL 693

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YeArbooK oF south AFrICAN LAW

694

policy by completing a pre-agreement quotation with a duly authori sed

representative of the third res pondent. On 19 September 2011, the deceased

and the representative of the th ird respondent signed an application for a

secured persona l loan document. This doc ument was a combination of the

forms required for the loa n and the policy. The purpose of the polic y was

to serve as security for t he R40 000 personal loan, should Mrs Ngwenya

pass away. The policy was covered by the second respondent. According

to the second respondent, the policy was concluded with t he deceased on

19 September 2011.3 The third respondent paid the loan amount of R40 000

into the deceased’s bank account on 29 September 2011 and the first in surance

premium in the amount of R104,71 was debited from the deceased’s bank

account on 4 October 2011.4 The deceased died on 24 September 2012. The

applicant notified the second res pondent of her death on 1 October 2012 and

submitted the clai m documentation on the same day.5

In assessing the c laim, the second respondent found t hat the deceased

had consulted medical practitioners a nd had been treated for a medical

condition, which was related to the cause of her death, since 10 June 2011.

This was prior to the commenceme nt of the policy. On 19 March 2013, the

second respondent rejected the c laim since an exclusion u nder the policy

provided that liability would not arise where death r esulted from a condition

that pre-existed the e xistence of the policy, if such death occurred b efore

the expiration of 12 months from the date of commenceme nt of the policy.6

The applicant lodged a complaint with the first re spondent regarding the

rejection of the clai m. The first respondent gave a provisional determination

on 13 October 2016, finding against the applicant. The applicant made

further submi ssions on 26 October 2016. The first respondent gave the final

determination on 18 November 2016, dismissing the applicant’s claim.7

On 14 December 2016 the applicant filed an application with the first

respondent for leave to appeal to the Appeal Tribunal against the f irst

respondent’s final determin ation. The first respondent refu sed leave to

appeal. The applicant sought to have this decision reviewed and se t aside.8

3.1.2 Decision

The court stated that the centra l issue for determination was whet her the

first respondent had committe d a reviewable error in determin ing the

applicant’s leave to appeal. The main question to be answered was therefore

the inception and commenc ement date of the policy and whether the

3 Ibid.

4 Para 3.

5 Para 4.

6 Para 5.

7 Ibid.

8 Para 6.

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INsurANCe LAW 695

deceased died before the expi ration of the 12-month period referred to in

the exclusion.9

The court first di sposed of the second prayer in the applicant’s notice

of motion where he sought payment of R40 000 against the second and

third respondents.10 The court r uled that Rule 3.5 of the Rules of the

Ombudsman for Long-term Insura nce provides that a determination made

by the Ombudsman shall b e binding on the subscribing member concer ned.

Therefore, the applicant could not disregard the fi nal determi nation and

seek payment from the court without fi rst seeking that it be reviewed a nd

set aside and substituted, and as a result t he relief sought in prayer 2 could

not be sustained.11

On the matter of a reviewable error, the court mentioned th at the

applicant brought the review both under common law and under

s 6(2)(e )(iii) of the Promotion of Administrat ive Justice Act12 (PAJA), even

though no mention was made of PAJA anywhere in the papers filed by t he

applicant. The court stated that the applicant could not rely on PAJA, as

the exercise of power by the first respondent did not fal l within the a mbit

of PAJA. 13 This was bec ause the Ombudsman’s decision did not constitute

administrat ive action as defined in PAJA, and the first respondent is not

an organ of state. The court relied on De L ange v Ombudsman for Long Term

Insurance.14

In dealing with the r eview in terms of common law, Mdalana-Mayisela J

stated that Rule 6.1 of the Ombudsman Rules provided that a complaina nt

who or a subscribing member which fee ls aggrieved by any determinat ion

by the Ombudsman may apply to the Ombudsman for leave to appeal

against it to a designated Appeal Tribunal. In t erms of Rules 6.6 and 6.7, the

Appeal Tribunal is vested with power to determi ne all issues of a procedural

or evidentiary nature, and its deci sion shall be fina l and binding. The

applicant had not exhausted the interna l remedy provided by the Rules of

the Ombudsman. The cour t stated that because the review application was

however brought under common law, the existence of an inter nal remedy

was not in itself sufficie nt to defer access to judicial review unti l it has been

exhausted. In this r espect, the court relied on K oyabe v Minister for Home

Affairs.15

9 Para 11.

10 Para 7.

11 Ibid.

12 3 of 2000.

13 Para 7.

14 [2012] ZAECPEHC 45 paras [10] to [11]. Ibid.

15 2010 (4) SA 327 (CC). See para 9.

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