PRETORIA – An insurance brokerage and one of its representatives have been ordered to pay a wildlife farmer R456 000 following the death of a golden wildebeest he bought and insured for R570 000.
Naresh Tulsie, the financial advisory and intermediary services (Fais) ombud, ordered UMC Brokers in Florida Glen and Mark Freswick to pay this amount to Petrus Hermanus Wessels, who purchased the golden wildebeest in September 2015.
The amount they have to pay Wessels was based on the amount the underwriter of the policy would have paid in settlement if such a claim had arisen while the cover was in place and after deducting the policy excesses.
On the advice of UMC Brokers and Freswick, Wessels applied for and obtained a wildlife insurance policy with New National Assurance Company, which was underwritten by Savannah Marine, to insure the wildebeest for R570 000 from September 7, 2015 to August 31, 2016.
The policy was subsequently renewed and scheduled to expire on August 31 last year.
However, Savannah Marine told UMC Brokers in January last year that New National had not renewed its wildlife facility and all existing policies would expire on March 31 last year.
UMC Brokers informed Wessels telephonically on March 15 last year his policy would be transferred to Risk Guard Alliance.
Wessels sent an email to UMC Brokers on the same day recording that Freswick had informed him that his policy would be moved to another insurer, and requested confirmation that, in the event of a claim, the insurer would pay out the same amount for the animal.
Tulsie said Wessels followed this question with a statement that “otherwise we need to cancel”.
He said Freswick advised Wessels on March 20 the maximum market value the animal would be insured for with the “new insurer” was R80 000 to R100 000, and asked Wessels if he wished to cancel the policy.
There was no response from Wessels, but UMC Brokers sent an email to Wessels on March 22 last year advising him that his policy was cancelled.
Tulsie said UMC and Freswick claimed the alleged instruction from Wessels to cancel his policy meant Wessels no longer required the insurance and Wessels relied on the clause in the contract of insurance that required the insurer provide him with 30 days’ written notice to relieve him of the effect of “his own failure”.
Tulsie said at no time, even up to March last year, did New National or Savannah Marine on behalf of New National provide Wessels with written notice of the intended cancellation from April 1 last year.
This meant the insurer would have been required still in April last year to collect the premium due from Wessels, and he would have retained the right to claim from the policy when the animal died.
Tulsie added that Freswick knew what the consequences of cancelling Wessels’ policy were but did so anyway.
He was therefore satisfied that UMC and/or Freswick legally caused the loss suffered by Wessels, and they should compensate him for such loss.