Ensuring that your policy wording is reasonable and compliant with TCF

1. Ensuring that your policy wording is reasonable and compliant with TCF Daleen Millard

2. “I may or may not sign. Show me the fine print!”

3. POLICY WORDING The issue of policy wording is addressed by Outcome 3 of Treating Customers Fairly: Insurers should ensure that customers are given clear information and are kept appropriately informed before, during and after the time of contracting. (Policy wording)! Before & during stages (FAIS Act, General Code of Conduct in terms of FAIS). For this discussion, let’s assume that there is a valid contract of insurance between an insurer and an insured. TCF.POLICY WORDING

4. THE TEST: WHEN REASONABLE? WHEN COMPLIANT WITH TCF? -When judged by the Ombudsman or by the court, how will one determine whether policy wording is reasonable and compliant with TCF? -Reasonable policy wording = Compliant with TCF when policy contains clear information ! -Two legs, possibly three: Comply with the lawPlain language Mother tongue! (Clear information) TCF.POLICY WORDING

5. 1. COMPLY WITH THE LAW, e.g. time bar clauses -Barkhuizen v Napier(time bar clause: “the clause offended public policy in our new constitutional dispensation and that it should not be enforced”) -Dealernet (Pty) Ltd v Mamahlodi Rule 7.4: According to this rule, any time limitation provision that may be provided for in a policy entered into after 1 January 2010 may not include the 90 day period within which the insured may make representations to the insurer and it must provide for a period of not less than 6 months after the expiry of the 90 day period for the institution of legal action. Even where the time bar period had expired, the policyholder may request the court to condone non-compliance if the court is satisfied that “good cause” exists for the failure to institute legal proceedings and “that the clause is unfair to the policyholder. Ibid. TCF.POLICY WORDING

6. COMPLY WITH THE LAW, E.g. meaning of a word or phrase Mutual & Federal Insurance Co Ltd v SMD Telecommunications CC -Insurer to compensate the insured for the death or disability of a member of its managerial staff as a result of “bodily injury or death caused solely by violent accidental external and visible means which injury shall independently of any other cause be the sole cause of the member’s disability or death. -Court: In the absence of appropriate wording in the insurance contract to the contrary, the proximate cause between the insured event and the loss is sufficient to render the insurer liable. Proximate cause is not the same as immediate or sole cause. Furthermore, an insurer may exclude liability for loss where a pre-existing condition is in any way related to that condition. In that case, the insured should prove that the accident was the proximate case of the injury or death and that the pre-existing condition was not a contributory cause. TCF.POLICY WORDING

7. WHERE DOES ONE FIND THE LAW? -Legislation Long-term Insurance Act and PPR’s Short-term Insurance Act and PPR’s FAIS Act, GCC and other codes -Cases Court Ombudsman -Common law! TCF.POLICY WORDING

8. Common law (Or statute) CONTRACTUAL TERMS CONSENSUAL TERMS IMPLIED BY LAW specific contractual terms agreed upon Naturalia, have a must agree on essentials (terms vital for complementary function, not an insurance contract) andincidentalia) based on consensus, common law or statute (subrogation) EXPRESS TACIT = Term that has been ex- All other consensual terms, pressed in so many words incorporated by implication, expressed in conduct other than words, taken for granted Actual terms Imputed terms . TCF.POLICY WORDING

9. Plain (legal) language defined Plain language is clear, straightforward expression, using only as many words as are necessary. It is language that avoids obscurity, inflated vocabulary and convoluted sentence construction. It is not baby talk, nor is it a simplified version of the English language. Writers of plain language let their readers concentrate on the message instead of being distracted by complicated language. They make sure that their audience understands the message easily (by Robert Eagleson)

10. YOU NEED TO UNDERSTAND IN ORDER TO AGREE AND TO REACH CONSENSUSA definition of plain legal language (by Robert Eagleson): Plain language is clear, straightforward expression, using only as many words as are necessary. It is language that avoids obscurity, inflated vocabulary and convoluted sentence construction. It is not baby talk, nor is it a simplified version of the English language. Writers of plain language let their readers concentrate on the message instead of being distracted by complicated language. They make sure that their audience understands the message easily.

11. GUIDELINES (PLEASE REFER TO HAND-OUT) (Nienaber, Kok and Viljoen) 1. Write short, concise and clear sentences. Limit each sentence to one idea. Avoid long, complicated sentences. E.g. Injury means physical trauma to an Insured Person caused by an Accident occurring on an Insured Journey resulting, solely and independently of any other cause or any other physical defect or infirmity existing prior to the Accident, in an Insured Event within 24 months of the date of the Accident. Physical trauma caused by exposure to the elements of nature as a direct result of an Accident will be deemed to be an Injury. TCF.POLICY WORDING

12. GUIDELINES 2. Use the active, not passive voice. Using the passive voice can easily hide the subject of the sentence. E.g. Waiver Of Excess means that if the Insured Person has selected Phase II, the Excess of R2,000 applicable to any emergency medical assistance and expenses will be waived, if the Insured Person is hospitalised as an in-patient. An excess of R500 will apply for out-patient treatment. TCF.POLICY WORDING

13. GUIDELINES 3. Use only one tense per sentence. 4. Avoid negative sentences. E.g. This Policy does not extend to an Insured Person of the age of 70 years and older in the event of a claim as a result of any cardiac or cardio vascular or vascular or cerebro vascular illness or conditions or sequelae thereof or complications that, in the opinion of a Medical Practitioner appointed by the Company, can reasonably be related thereto. TCF.POLICY WORDING

14. GUIDELINES 5. Do not unnecessarily use capital letters such as Plaintiff, Government, State, Negligence, Claim. Automatic Extension If an event occurs after commencement of the Insured Journey giving rise to a legitimate claim under Section 1 Emergency Medical and Related Expenses and/or Section 3 Curtailment, the Insured Journey shall automatically be extended. If an event occurs in terms of Section 11 Hijack, Kidnap and Wrongful Detention the cover shall be extended and shall continue in force for the duration of the seizure or control of the Public Conveyance or 12 consecutive months from the date of such seizure or control, whichever is the lesser period. TCF.POLICY WORDING

15. GUIDELINES 6. Use me, you en we rather than a person or one. 7. Avoid difficult words. This Policy is between the Company and the Insured Person only and all of its provisions and conditions are for the sole and exclusive benefit of those parties. Nothing in this Policy, express or implied, is intended to confer upon any other person, any rights or remedies of any nature whatsoever under this Policy or any of its provisions. Without limitation, no third party shall have any rights under this Policy or any right to receive Policy benefits. OR This Policy does not extend to an Insured Person of the age of 70 years and older in the event of a claim as a result of any cardiac or cardio vascular or vascular or cerebro vascular illness or conditions or sequelae thereof or complications that, in the opinion of a Medical Practitioner appointed by the Company, can reasonably be related thereto. TCF.POLICY WORDING

16. GUIDELINES 8. Avoid foreign words and phrases. mutatis mutandis bona fide prima facie 9. Avoid archaic (outdated) words. E.g. If an Insured Person dies, the Company will pay for the coffin expenses when the mortal remains are returned to the Point of Departure. TCF.POLICY WORDING

17. GUIDELINES 10. Avoid using “shall”.  E.g. Costs incurred by an Insured Person for a maximum of 4 (four) credit reports from an entity approved by us. The credit reports shall be requested during the Insured Journey or within 3 months of return to the Point of Departure. The first credit report may not be requested until after the discovery of the Identity Theft. 11. Avoid the use of "said" and "such" as articles replacing “a” or “the”. E.g. Where Theft or attempted Theft occurs while such Golf Equipment is unattended other than when securely locked inside a building or securely locked out of sight inside a motor vehicle. TCF.POLICY WORDING

18. GUIDELINES 12. Avoid nominalisations (nouns that are constructed and used as verbs). By acceptance of this contract of insurance or the benefits under this Policy the Policyholder or Insured Person acknowledges that the sharing of claims and underwriting information by the Company is essential to enable the Company to underwrite policies, assess risks fairly, ensure compliance with all and necessary applicable legislation, regulations and business compliance requirements (including any overseas laws, regulations and compliance requirements binding on the Company) and to reduce the incidence of fraudulent claims, in the public interest and with a view to limiting premiums. TCF.POLICY WORDING

19. GUIDELINES 13. Cut out repetitive words. E.g. By acceptance of this contract of insurance or the benefits under this Policy the Policyholder or Insured Person acknowledges that the sharing of claims and underwriting information by the Company is essential to enable the Company to underwrite policies, assess risks fairly, ensure compliance with all and necessary applicable legislation, regulations and business compliance requirements (including any overseas laws, regulations and compliance requirements binding on the Company) and to reduce the incidence of fraudulent claims, in the public interest and with a view to limiting premiums. TCF.POLICY WORDING

20. GUIDELINES 14. Cut out wasted words and long phrases. E.g. The Insured Person shall submit to medical examination at the expense of the Company as often as shall be required in connection with any claim. Any report generated as a result of such examination shall be the property of the Company and shall be deemed to be confidential information of the Company. TCF.POLICY WORDING

21. GUIDELINES 15. Avoid gender-specific language. E.g. Every person is entitled to his or her privacy. Everyone is entitled to their privacy. 16. Use simple words to connect ideas and sentences. E.g. If the Insured Person wants the Company to pay for emergency transportation, Travel Guard must be contacted and their prior written agreement obtained. (This requirement does not include in-country emergency ambulance transfers from place of Illness or Injury to a Hospital, which will be paid for by the Company provided that such service was medically necessary or was authorised by a local authority such as the police or a medical officer.) TCF.POLICY WORDING

22. AFRICAN LANGUAGES “Welcome to the LexisNexis South Africa Multilingual Glossary. This application has been designed to aid users in understanding subject specific terminology in their own language. This interactive audio enhanced experienced aims to improve literacy by allowing for highly technical terms to become part of the user’s vocabulary. Each term includes : · -The English term and a full subject specific explanation thereof· -Audio to illustrate correct pronunciation· -Translation of both the term and explanation in Afrikaans, isiZulu, isiXhosa and Sepedi” TCF.POLICY WORDING

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24. THANK YOU! TCF.POLICY WORDING