Category Legal Affairs

Fraudulent insurance claims

13 May 2022 Donald Dinnie, Norton Rose Fulbright
Donald Dinnie, Norton Rose Fulbright

Donald Dinnie, Norton Rose Fulbright

Recent media reports highlight the challenges faced by the insurance industry in dealing with fraudulent insurance claims.

Reportedly South African life insurers detected 4287 fraudulent and dishonest claims worth R787.6 million for the 2021 year.

This blog frequently reports on South African judgments, and those from around the world, dealing with rejection of fraudulent claims.

It is worth bearing in mind that our courts in considering such rejections will:

  • Always interpret fraud clauses narrowly and in favour of an indemnity;
  • Consider carefully questions of causation and materiality of the alleged fraud;
  • Apply the approach that our law is not punitive;
  • Interpret forfeiture clauses contained in fraud clauses narrowly applying the principle that any such penalties must be commensurate with the insurer’s prejudice.

Remember that the onus lies on the insurer to prove an alleged fraud and that the conduct complained of falls within the relevant fraud clause or the common law, on a balance of probabilities.

It is preferable for insurers who want a clear right to decline claims by reason of fraud or fraudulent conduct to ensure that the policies contain appropriately worded fraud clauses, updated having regard to the learning to be derived from the more recent insurance fraud cases, and not to rely on the common law.

First published by: Financial Institutions Legal Snapshot


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