We acknowledge the tragic circumstances of Mr Ganas’ death and would like to clarify the detail that led us to make this very difficult decision.
Momentum's FAQs addressed (PDF)
We are truly sorry for the tragic death of Mr Ganas. We also have sympathy for the views that the cause of death is not related to the non-disclosure. Because the cause of death is not related to the non-disclosure, many ask why the claim is not simply paid. Our position on this matter is the following: once we have evidence that a client has not acted in good faith, we rectify the matter in an objective manner, and in the interest of fairness to all our clients. If we do not do so, we indirectly encourage the practice of non-disclosure. This will in turn result in a worsening claims experience which would ultimately increase the premiums for all our clients.
At the start of a policy, we rely on the quality of information that is provided by the client when completing the medical questionnaire, which determines whether or not further medical information is required, and whether there are any pre-existing conditions which could lead to a decision not to extend cover at all. The strict requirement for full disclosure is a fundamental principle of insurance, and a breach of this duty, however innocent, obliges the insurer to decline the claim and to deal with the policy as if the non-disclosed information had in fact been disclosed.
When it comes to insuring lives, we consider all facts at the start of a policy so that we make an informed decision about the terms of the policy, or whether we are willing to extend cover to the client. This is important to all our clients as we underwrite with the intention to pay claims, and to this end we require clients to fully disclose all material information before inception of a policy. Clients who fully disclose relevant information have complete peace of mind.
Unfortunately, in this instance, the client did not disclose material information. The rejection of the claim was referred to the Ombudsman for Long Term Insurance, who determined that Momentum’s decision was the correct one under the circumstances. In this instance, had the information been known to us, no cover would have been issued in the first place, and no claim would have been paid, regardless of the cause of death. In line with our standard practice in non-disclosure cases where we repudiate the claim, we will reimburse the premiums paid over the course of the contract.
We have a proud history of paying all valid claims. In 2017 we declined very few claims (only 0.4%) based on non-disclosure of material facts, and only once we’ve established beyond doubt that there was material non-disclosure of known conditions by the client. Over the past 15 years we have paid out more than R42 billion in claims.
Very few claims are declined as the vast majority of our clients fully disclosed all relevant medical information during application stage and they can rest assured that their claims will be honoured. If a client was not aware of a medical condition prior to the commencement of their policy, it is not viewed as non-disclosure. If a client finds out later that they have a condition, they are also not obliged to notify the insurer regarding the existing policy, but will have to notify the insurer if they take up additional cover.
The insurance industry has an obligation to existing clients to act on a consistent basis to manage the shared pool of risk. In spite of the fact that we have absolute sympathy with the widow, it is important to treat non-disclosure in a consistent way and not prejudice the benefits of clients who act in good faith by making concessions to accommodate claims where important information was withheld. We unfortunately have to make this difficult decision, in order to protect the integrity of our business – in the interest of all our clients who complete their applications with full disclosure.