Hollard ordered to pay client R1.7m after settling only 25% of claim

Hollard Life Assurance has been ordered by the High Court in Johannesburg to pay one of its clients more than R1.7 million, which is the balance of the policyholders’ claim, after it decided the client was entitled to only 25% of the policy benefit amount following a heart attack.

Judge Ingrid Opperman said in her judgment handed down on Friday that a number of facts were common cause at the commencement of the trial, including that the Hollard client had paid all his monthly premiums as at the date of the heart attack and the policy was therefore in operation.

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It was also common cause that the client:

• Submitted a claim in April 2012 under the Cardiovascular Benefit Group for ischaemic heart disease and peripheral arterial disease, which resulted in a coronary stent and was paid 10% of the benefit amount (Event 1).
  
• Submitted a claim in July 2012 for peripheral arterial disease, which resulted in a bi-femoral bypass and was paid 90% of the benefit amount (Event 2).
  
• Suffered an acute heart attack in August 2015 and was paid out 25% of the benefit amount (Event 3).

Judge Opperman said the policy provides that the “benefit”, as specified in the schedule, shall be payable if the policyholder suffers one of the events or conditions described in the policy.

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Drilling down …

She said the amount payable under the policy is expressed as a percentage of the benefit amount for each event and the policy describes, under headings, 13 separate “Benefit Groups”.

“Each group identifies ‘Events’ under subheadings. The Cardiovascular Benefit Group identifies 12 events and provides that only one payment will be made per cardiovascular event, with a single event being defined as all cardiovascular conditions or procedures that occur within a 30-day period,” she said.

Judge Opperman said the benefit amount at the time the claim was instituted – had no claims been made prior to that claim – was R2 315 250.

Hollard claimed the benefit amount is static and, upon each claim being submitted under a particular Benefit Group, the balance reduces.

Judge Opperman said it is clear from reading the policy as a whole that the percentages shown for each event within a Benefit Group, is payable “per cardiovascular event”.

She said that by way of example, if 50% of the benefit amount for the event described as ‘heart transplant’ is paid, the percentage paid is deducted from the 100% benefit amount (R2.3 million) and what remains left for that event – R1.15 million – can be claimed in the future.

Judge Opperman added that if that remaining 50% is also paid out, the benefit amount is reinstated after 90 days but the subsequent claim for the event of “heart transplant” would be limited to 25% for that event if the claim was made prior to the insured reaching the age of 75.

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Court ‘left in the dark’

Judge Opperman said the ‘Reinstatement of Benefit Amount’ clause places much reliance on whether the claim was for a related or an unrelated condition.

She said no evidence was presented about the related or unrelated nature of Events 1, 2 and 3, nor of Hollard having formed any particular view in a clinical, rather than a mere legal interpretive sense, on whether the conditions were related or not.

She said this gap leaves the court in the dark about which of the scenarios contemplated in the ‘automatic reinstatement of the benefit amount’ clause applies to this case.

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Reason for repudiation of claim

What is perhaps more problematic, she added, is that Hollard seems to have changed its reason for repudiating the claim.

Hollard, initially and in its letter dated 4 September 2015, relied on an exclusion in the policy.

This exclusion said: “No claim will be paid under the reinstated cover where, in the opinion of Hollard Life, the claim is a direct consequence of the event for which a 100% payment was made before reinstatement.”

Hollard further stated that: “Unfortunately the current claim cannot be considered under the re-instated cover as the condition currently being claimed for is directly related to the ischaemic heart disease that resulted in the previous claim paid in 2012.

“We regret no further claim is payable under the cardiovascular benefit group.”

However, Judge Opperman noted that Hollard had paid 25%.

“If consistent, it ought to have paid nothing,” she said.

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Which argument then?

“The version sought to be advanced during re-examination was that all ‘3 Events’ were related.

“This is a causation issue which would require medical evidence, which was not presented.”

Judge Opperman said she is persuaded by the wording of the policy and the evidence, or lack of evidence presented in the trial, and therefore concludes that the amount payable for the heart attack suffered by the policyholder –and claimed for on 15 August 2015 as Event 3 – entitles the policyholder to payment of 100% of the benefit amount as at that date.

She said the benefit amount was R2 315 250, of which 25% or R578 787.50 had been received by the policyholder.

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Order

In addition to paying the policyholder the R1 736 437.50 balance of the benefit amount in the policy, Judge Opperman ruled that Hollard must:

• Pay interest on this amount at the rate of 10.25% per annum from 23 May 2018 to date of final payment;
• Pay the costs of the court case; and
• Remove certain specified documents from Caselines, an electronic court case management system, within 24 hours of her order being mailed to the attorney of Hollard’s client who brought the application.

The order to remove certain documents from Caselines followed Advocate Willie Wannenburg, appearing for the policyholder, arguing unsuccessfully for a punitive costs order against Hollard because it uploaded 957 pages onto Caselines on the Friday before the trial commenced on Monday 23 January 2023.

He stressed that not a single document of those uploaded was used and that these documents were not only irrelevant but also of a highly confidential nature consisting of medical reports, pathology reports, laboratory results and the like – all of which were now part of a public record.

Judge Opperman said she did not consider the uploading of the vast amount of documents at the 11th hour deserving of a punitive costs order in the circumstances of this case, adding the objection related to the timing and not the content of the uploaded documents.

“As it turns out, the documents were not used and, as they are confidential, they should be removed from the Caselines file within 24 hours of this judgment being handed down, failing which the matter may be enrolled before me for this costs order to be revisited,” she said.

Comment was requested from Hollard on the judgment and order but has not yet been received.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.