Long Term Insurance Act, 1998 (Act No. 52 of 1998)RegulationsRegulations under the Long-term Insurance Act, 1998Part 7 : Contracts Identified as Health Policies under Section 72(2A)(a) of the Act7.3 Limitations applicable to category 1 contracts |
Prohibition of policy benefits that fully or partially indemnifies against medical expenses under category 1
| (1) | A contract referred to in category 1 in the table under regulation 7.2(1) may not provide policy benefits that are fully or partially related to indemnifying the policyholder against medical expenses incurred in respect of a relevant health service. |
Underwritten on a group basis and non-discrimination
| (2) | A contract referred to in category 1 and 3 in the table under Regulation 7.2(1) must— |
| (a) | be underwritten on a group basis; and |
| (b) | not discriminate against a policyholder or potential policyholder on the basis of race, age, gender, marital status, ethnic or social origin, sexual orientation, pregnancy, disability, state of health or any similar grounds. |
| (3) | An insurer may not refuse to enter into a contract referred to in category 1 with a potential policyholder unless where that potential policyholder has previously committed a fraudulent act related to insurance. |
| (4) | Despite subregulation (2)(b), an insurer may in respect of contracts referred to in category 1 in the table under Regulation 7.2(1) require a policyholder that enters into a contract after a specific age to pay a higher premium than a policyholder that entered into the contract at a younger age, provided that the same higher premium is payable by all policyholders entering into a product line after a specific age. |
Waiting periods
(5) Despite subregulation (2), a contract referred to in category 1 and 3 in the table under Regulation 7.2(1) may provide for a—
| (a) | general waiting period of up to 3 months; and |
| (b) | condition-specific waiting period of up to 12 months. |
| (6) | An insurer may not impose a condition-specific waiting period on a policyholder's health policy if that policyholder, for at least 90 days before entering into a health policy with the insurer, had a health policy with materially similar benefits and had completed the condition-specific waiting period in respect of that health policy. |
| (7) | Where a waiting period of a policyholder under a previous health policy referred to in subregulation (6) had not expired at the time that that policyholder enters into a new health policy with materially similar benefits, the insurer may only impose a waiting period equalling the unexpired part of the waiting period in respect of that previous policy. |
Variation of contracts
| (8) | For the purposes of this Part, the variation of a contract includes premium adjustments under a contract, unless agreed to at the commencement of the contract and such adjustments are not inconsistent with subregulation 7.3(2)(b). |
| (9) | Despite subregulation (2}, a contract referred to in category 1 and 3 in the table under Regulation 7.2(1) may be varied as a result of the health or claims experience of all policies forming part of a product line but may not be varied as a result of the health or claims experience of an individual policyholder. |
Termination of contracts
| (10) | A contract referred to in category 1 in the table under Regulation 7.2(1) may be terminated by an insurer only if— |
| (a) | the policyholder – |
| (i) | fails to pay (within the time allowed in the contract and subject to any legislative requirements) the premium under the contract; |
| (ii) | submitted fraudulent claims; or |
| (iii) | committed any fraudulent act; or |
| (b) | the insurer will no longer be offering a specific product line as part of its long-term insurance business and the insurer has given all of that product line policyholders 90-day notice before termination. |
| (11) | For the purposes of this Part, termination of a contract includes the non-renewal of a contract by an insurer. |