Long Term Insurance Act, 1998 (Act No. 52 of 1998)RulesPolicyholder Protection Rules (Long-term Insurance), 2017Chapter 3 : ProductsRule 5 : Negative option selection of policy terms or conditions |
| 5.1 | An insurer or any person acting on behalf of the insurer may not, where more than one option in respect of a policy term or condition (including, but not limited to, options relating to a premium increase, variation of benefits or exclusion) is available to the policyholder, potential policyholder, member or potential member on entering into, varying or renewing the policy or becoming a member, stipulate that a specific term or condition will apply except if such person explicitly elects a different term or condition. |
| 5.2 | Rule 5.1 does not apply— |
| (a) | to a specific term or condition that is required by legislation; or |
| (b) | where a specific term or condition is designed to address circumstances that arise during the duration of a policy that require a policyholder or member to make an election, provided the insurer can demonstrate that the specific term or condition is reasonably required to achieve fair treatment of the policyholder or member, and the policyholder or member fails to make the required election. |
| 5.3 | Any specific term or condition applied In terms of rule 5.2 must be clearly and prominently disclosed to the policyholder or member in accordance with rule 11.5.1(i) and may only be implemented after the insurer has taken reasonable steps to enable the policyholder or member to make the election concerned. |
| 5.4 | This rule only applies to new policies or variations or renewals of existing policies. |