Short-Term Insurance Act, 1998 (Act No. 53 of 1998)Policyholder Protection RulesPolicyholder Protection Rules (Short-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 of a group scheme or potential member of a group scheme on entering into, varying or renewing the policy or becoming a member of a group scheme, 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 of a group scheme 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 of a group scheme, 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 of a group scheme 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 of a group scheme to make the election concerned. |
| 5.4 | This rule only applies to new policies or variations or renewals of existing policies. |