Much has been written about Momentum and its reluctance to pay a claim, where the deceased was killed in a hijacking, on the grounds of non-disclosure of a medical condition unrelated to the cause of death.
I was, before retirement, the claims manager of a large international life reinsurance company and, as such, was particularly interested in how this event unfolded.
Many international insurance companies have in their life insurance policy contracts an incontestability clause.
This clause is a provision in a life or health insurance policy that precludes the insurer from alleging that the policy, after it has been in effect for a stated period (typically two or three years), is void because of misrepresentations made by the insured in the application for it.
In some countries, inclusion of this clause is required in terms of insurance law to avoid just what Momentum did - “underwriting at claim stage”.
In South Africa, life insurers are not legally required to have such a clause but, despite this, a good claims manager should not only consider the legal aspects but what is morally correct.
I think it is time for the South African regulators to revise the law and require that an incontestability clause be included in all life and health policies.
This will go a long way to restoring faith in life insurance contracts, which has been shaken by Momentum.