20.1 Definitions
For purposes of this rule—
"material change"
means any change in circumstances that results in a policyholder or beneficiary not being entitled to claim a policy benefit under a policy; and
"termination"
or any derivative of the term, in relation to a policy, means that a policy comes to an end, for any reason, and includes—
| (a) | the cancellation or lapsing of a policy; or |
| (b) | the non-renewal of a policy where the policy provides for the automatic renewal of that policy or if the policyholder has a legitimate expectation that the policy will be renewed. |
20.2 Termination of policies by insurer
Individual policies
| 20.2.1 | If an insurer intends to terminate a policy because of circumstances other than— |
| (a) | non-payment of a premium, subject to the insurer complying with the provisions of rule 15A; or |
[Rule 20.2.1(a) substituted by rule 10(e) of Notice No. 997, GG 41928, dated 28 September 2018]
| (b) | a material change in the risk covered under the policy that, in terms of the policy,— |
| (i) | results in the policy automatically coming to an end; or |
| (ii) | provides the insurer with a right to end the policy; or |
| (c) | where immediate termination is required in law; |
the insurer, despite any terms and conditions provided for in a policy, must give the policyholder at least 31 days' written notice of the intended termination.
| 20.2.2 | In the event that the insurer terminates a policy in circumstances other than those set out in rule 20.2.1(a) - (c), the insurer will remain liable under the policy for the shorter of— |
| (a) | a period of 31 days after the date on which the insurer receives proof that the policyholder has been made aware of the intended termination of the policy; or |
| (b) | the period until the insurer receives proof that the policyholder has entered into another policy in respect of similar risks to those covered under the policy that the insurer intends to terminate. |
| 20.2.3 | In the event that the insurer is unable to obtain the proof referred to in rule 20.2.2 above, the insurer must be able to prove that— |
| (a) | a period of 31 days had passed since notification was sent to the last known address of the policyholder; and |
| (b) | it took all reasonable steps to— |
| (i) | ensure the contact information of the policyholder is correct, and |
| (ii) | to contact the policyholder. |
Group schemes policies
| 20.2.4 | If an insurer intends to terminate a group scheme policy, the insurer, despite any terms and conditions provided for in a policy, must— |
| (a) | give the policyholder and the Authority at least 31 days' written notice of the intended termination; and |
| (b) | be able to demonstrate that it has taken reasonable steps to provide the members of the group scheme with notice of the intended termination. |
| 20.2.5 | Where the insurer can demonstrate that due to the nature of the group scheme it is not reasonably practicable to directly notify the members of the group scheme of the intended termination as contemplated in rule 20.2.4(b), the insurer must— |
| (a) | provide the policyholder with reasonable support in providing the notice of intended termination to the members of the group scheme; and |
| (b) | satisfy itself that the policyholder concerned has provided the notice of intended termination to the members of the group scheme. |
| 20.2.6 | An insurer referred to in rule 20.2.4 will remain liable under the policy for the shorter of— |
| (a) | a period of 31 days after the date on which the insurer has complied with rule 20.2.4 and 20.2.5; or |
| (b) | the period until the insurer receives proof that the policyholder has entered into another policy providing cover to the members of the group scheme in respect of similar risks as those covered under the policy that the insurer intends to terminate. |
| 20.3 | Termination and replacement of group scheme policy by policyholder |
| 20.3.1 | If a policyholder terminates or intends to terminate a group scheme policy, the insurer of the policy being terminated must notify the Authority of the termination or intended termination as soon as reasonably possible after becoming aware of the termination or proposed termination. |
| 20.3.2 | An insurer must before entering into a group scheme policy determine whether the group scheme policy is intended to replace or substitute a group scheme policy. |
| 20.3.3 | It would, for purposes of rule 20.3.2, constitute prima facie evidence that it is the intention to substitute or replace a group scheme policy if— |
| (a) | the policyholder under the new group scheme policy to be entered into is the same person as the policyholder under the previous group scheme policy; and |
| (b) | the lives to be insured under the new group scheme policy are substantially the same as the lives insured under the previous group scheme policy. |
| 20.3.4 | If the group scheme policy is intended to substitute or replace a group scheme policy as contemplated in rule 20.3.2, the insurer must, subject to rule 20.3.5, at least 31 days before entering into the group scheme policy, take reasonable steps to provide the members with details of— |
| (a) | any material differences between the terms and conditions of the new group scheme policy and the group scheme policy being substituted or replaced, and |
| (b) | the reasons for the differences referred to in paragraph (a). |
| 20.3.5 | Where the insurer can demonstrate that due to the nature of the group scheme it is not reasonably practicable to communicate directly with the members of the group scheme in the normal course of business as contemplated in rule 20.3.4, the insurer must— |
[Words preceding 20.3.5(a) substituted by rule 10(f) of Notice No. 997, GG 41928, dated 28 September 2018]
| (a) | provide the policyholder with reasonable support in providing such information to the members; and |
| (b) | satisfy itself that the policyholder concerned has provided the information referred to in rule 20.3.4 to the members of the group scheme. |
| 20.3.6 | Any new waiting periods imposed by an insurer in respect of a group scheme policy which substitutes or replaces a previous group scheme policy will be void. |
20.4 Communication with members of a group scheme
For purposes of rules 20.2.4(b) and 20.3.4 an insurer must be able to demonstrate that—
| (a) | it has taken reasonable steps to communicate with the members using the contact details referred to in rules 13.4 and 13.5; and |
| (b) | where it has any reason to believe that the contact details of the members of a group scheme are incomplete or there is a material risk that the required information may not reach members, it has made reasonable steps to communicate with such members using other appropriate communication channels. |
[Rule 20.4(b) substituted by rule 10(g) of Notice No. 997, GG 41928, dated 28 September 2018]
