AFTER REFUSING to pay out a life cover claim to the family of a man who was shot dead in a Durban hijacking, insurer Momentum on Tuesday did an about-turn saying the family would receive all that was due to it.
The insurance company had initially refused to play the 2017 claim, saying that their client, Nathan Ganas, had not disclosed his high blood-sugar levels at the time of signing the contract in 2014. Therefore, they said, his contract was void.
However, in a statement released on Tuesday afternoon, Momentum said it was “providing a solution for the victims of violent crime”. It added that it had since reviewed its policies.
There had been widespread social media outrage over the company’s decision not to pay out, with many people saying they had – or would – cancel their contracts with the insurer.
“It is clear from market reaction over the last two days that under certain circumstances, current industry practice creates the impression that insurers are looking for reasons not to pay a claim. Momentum is in the business of paying claims and we have therefore taken the criticism to heart.
“We have created a solution that will pay an amount equal to the death benefit (limited to a maximum of R3m) in the case of violent crime, regardless of previous medical history. This will apply to all existing as well as future life cover clients,” it said.
Momentum said that, from now on, it would guarantee a payout when the death was a direct result of violent crime, even when material medical non-disclosure impacts the legitimacy of the contract.
“The payout is not in addition to the normal death benefit. It only applies in circumstances when the death benefit will not be payable or has been reduced,” the company said.
Momentum said it would not only move to pay Ganas’s widow, but it would also identify clients who were impacted by this policy in the past, contact their families and arrange payment.
The company stressed however that “the importance of full and honest disclosure at application stage cannot be over-emphasised”.
“The only time your health status matters, is when you apply for cover. This is when you need to share all your medical and health information. If your health deteriorates after commencement of the policy, there is no need for you to inform Momentum – your claim will be completely valid if the information provided at the start of the policy was accurate,” Momentum said.
“With exception of the new guarantee, full disclosure remains non-negotiable to ensure peace of mind. We care for our clients and always strive to solve for their needs. We hope that this solution illustrates that.”
Momentum had received a severe backlash from South Africans‚ including a warning from Economic Freedom Fighters leader Julius Malema and a tweet from former public protector Thuli Madonsela after news of the Ganas’s rejected claim made headlines.
Many of its clients took to social media to state that they would be cancelling their policies.
Madonsela questioned Momentum’s refusal to pay.
“This answer is perfectly legal. The question is‚ is it just and ethical? @Momentum_za must answer this question for itself in line with its commitment to doing business with integrity #IntegrityMatters‚” her tweet read.
Ganas’s widow, Denise, had been expecting to receive a R2.4m life-cover payout from Momentum after Ganas was shot dead in a hijacking outside his Durban home in March last year.
Commenting on their refusal to pay, Momentum had initially said: “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. ”
Momentum said that failure to conduct proper checks [when a payout was claimed] would “indirectly encourage the practice of non-disclosure”.
Hillie Meyer‚ CEO of Momentum holding company MMI‚ told Radio 702 on Monday morning that if Ganas had answered truthfully during his application‚ there would not have been a contract.
After the furious public reaction‚ Momentum said it would pay back all of the premiums Ganas had paid and would retract its demand for the return of the R50,000 it had paid Denise to cover funeral expenses.
But Denise Ganas said she would continue to fight until the full payment was made.