Long Term Insurance Act, 1998 (Act No. 52 of 1998)RulesPolicyholder Protection Rules (Long-term Insurance), 2017Chapter 7 : No Unreasonable Post-sale BarriersRule 21 : Misrepresentation |
| 21.1 | Notwithstanding anything to the contrary contained in a policy, but subject to rule 21.2— |
| (a) | the policy must not be invalidated; |
| (b) | the obligation of the insurer under the policy must not be excluded or limited; and |
| (c) | the obligations of the policyholder must not be increased, |
on account of any representation made to the insurer which is not true, or failure to disclose information, whether or not the representation or disclosure has been warranted to be true and correct, unless a reasonable, prudent person would consider that representation or non-disclosure as being likely to have materially affected the insurer’s ability to assess the risk under the policy concerned at the time of issue or time of any variation thereof.
| 21.2. | The representation or non-disclosure shall be regarded as material if a reasonable, prudent person would consider that the particular information constituting the representation or which was not disclosed, as the case may be, should have been correctly disclosed to the insurer so that the insurer could form its own view to the effect of such information on the assessment of the relevant risk. |
| 21.3 | If the age of a life insured under a policy has been incorrectly stated to the insurer, the policy benefits must, notwithstanding rules 21.1 and 21.2 and subject to rule 21.4, be those which would have been provided under that policy in return for the premium payable had the age been correctly stated. |
| 21.4 | If the nature of the policy is such as to render such arrangement as referred to in rule 21.3 inequitable, the Authority may direct the insurer to apply such different method of adjustment to the policy benefits of the policy as the Authority considers equitable in relation to the misstatement of age |
[Rule 21 inserted by rule 10(h) of Notice No. 997, GG 41928, dated 28 September 2018]