Insurance is a contract (agreement) between an insurance company (e.g. Santam) and a person. It is meant to protect the person and their family from financial hardship in case something very serious like an accident or unexpected death happens.

The insured person pays a monthly premium, and the insurance company in turn promises to pay the insured or their dependents money to cover the loss when the event happens. Insurance policies may be especially important to families where there is only one breadwinner or where there are still young children.

The Association for Savings and Investment South Africa (ASISA) is the umbrella body of the insurance industry. ASISA represents the majority of South Africa’s asset managers, collective investment scheme management companies, linked investment service providers, multi-managers, and life insurance companies. It was formed in 2008, combining several key players in the saving and investments industry, including the Association of Collective Investments (ACI), the Investment Management Association of South Africa (IMASA), the Linked Investment Service Providers Association (LISPA) and the Life Offices’ Association (LOA). ASISA comprises voting and non-voting members. The following insurance companies are among its members:

• Liberty Group Ltd
• Hollard Life Assurance Company Ltd
• Old Mutual (South Africa) Ltd
• Discovery Holdings Ltd
• OUTsurance Life Insurance Company Ltd
• Lombard Life Ltd
• Clientèle Life Assurance Company Ltd
• Sanlam Ltd

There are 2 main types of insurance contracts:

• Indemnity insurance
• Non-indemnity insurance

People living with HIV or AIDS can also speak to their insurance company about what other financial planning options there are (besides a life insurance policy). For example, it may be better to consider an education policy to make sure that children are provided for.

INDEMNITY INSURANCE

Indemnity insurance is when the insurance company agrees to compensate you for a loss that you may suffer as a result of the event you have insured yourself against – for example, if you insure your house against fire and your house burns down, you will be compensated. When the contract is taken out, a maximum amount that the insurance company will pay out is agreed in the contract and your monthly premiums are based on this maximum amount. But the actual amount that the insurance company will have to pay in the end is not known and will depend on the value of your loss.

NON-INDEMNITY INSURANCE

Non-indemnity insurance is a type of insurance where the insured and insurer agree on the amount that the insurance company will pay if something happens to you – for example, life insurance or disability insurance. The higher the amount you want you or your dependants to receive, the higher the premium that you will have to pay.

THE APPROACH OF MOST INSURANCE COMPANIES

Your decision to apply for life insurance or disability insurance is voluntary. Equally, the insurance company does not have a duty to accept your application. Before entering into an insurance contract, the company needs information from you to help assess the risk to the company of issuing a contract. This information also helps the company to decide what premiums to charge. Insurance companies check applicants for serious diseases (e.g. diabetes), or habits (e.g. smoking), that may affect their life expectancy (how long you are likely to live). This is done through questionnaires, medical examinations, urine, blood and other tests.

HIV TESTING PROTOCOL

The ASISA HIV Best Practice Testing Guidelines (1 November 2021) encourage the insurance industry to provide life cover for HIV-positive applicants. The purpose of the HIV Testing Best Practice Guideline is to ensure that the life industry follows the highest standards in all aspects of HIV screening of applicants for life insurance. This guideline applies to all HIV tests performed by ASISA members. It addresses issues such as identification, confidentiality, informed consent, pre- and post-test counselling transmission of test results and approval of test kits and laboratories.

THE RIGHT TO PROPER COUNSELLING

The ASISA Testing Guidelines, state that an applicant has the right to give informed consent. The Guidelines say the insurer must cover:

• Costs of pre-test counselling
• One session of post-test counselling.

This means it is your right to ask the broker for proper counselling before and after the HIV test.

CHALLENGING VIOLATIONS OF YOUR RIGHTS

If you are asked to sign a consent form without pre-test counselling and informed consent, this violates your right to autonomy (to make decisions for yourself). If you do not receive pre- and post-test counselling, you can make a civil claim against the company.

APPLICANT’S DUTY TO DISCLOSE MATERIAL FACTS

When entering into an insurance contract it is important to fully disclose one’s medical history for a claim not to be rejected.

CASE STUDY – SOUTHERN LIFE ASSOCIATION v JOHNSON (1993)

Mr Johnson applied for life and disability cover. When he applied, he was asked to say if he had had a blood test in the last 5 years. He did not disclose a blood test that was carried out on him to decide if he had a blood disorder. He was not aware that he suffered from the blood disorder. No symptoms had developed at the time of the application and he believed that he was in good health.

Only later, when his health got worse, his doctor told him what the problem was. The insurance company decided not to pay him the disability cover.

The Supreme Court decided that Mr Johnson should have disclosed the fact that he had the blood test. The undisclosed fact was ‘material’ and thus the company was allowed to refuse to make any payment under the insurance policy.

PROCEDURES FOLLOWED BY MOST INSURANCE COMPANIES

CONSENT FORM

You will be asked to fill in an application form. This form will probably include a consent form – the form that says you give your permission for an HIV test to take place.

DOCTOR DETAILS

You will also be asked to give details of your doctor (your family doctor or a doctor who you trust). The results of the HIV test will be sent to this doctor, so it is important that their details are correctly written down.

THE TEST

A doctor or laboratory chosen by the insurance company will do an HIV test. They will tell you where to go for the test.

TEST RESULT

The result of the HIV test is then usually sent to a doctor employed by the insurance company. This person is usually called the ‘chief medical officer’. The chief medical officer will open a file for you. The file will include all medical information relevant to the application, including the results of the HIV test.

POSITIVE TEST RESULT – LIFE REGISTER: If a test result is positive, your insurance application may be rejected. If it is rejected, your name will be put in the code on the LOA’s life register as someone who has been refused insurance. This means that if you apply for insurance at another company, they will also reject your application. ‘In code’ means that the information about your HIV status will not be able to be read by anyone, except those people who know what the code is. This is done to stop unauthorised people from getting to know your status.

POSITIVE TEST RESULT – TELLING YOUR DOCTOR: If the result is positive, your personal doctor will be told in writing. This doctor is expected to contact you to tell you the result. An insurance company will not tell you directly.

NEGATIVE TEST RESULT: If the results are negative, and all the other conditions of the insurance company have been met, you will be told that your insurance application has been successful. Your doctor is not contacted if the results are negative.