By Suzanne Daniels

JOHANNESBURG, South Africa, 20 November 2018.

The public outcry in response to Momentum’s decision not to pay Nathan Ganas’ family out following his tragic death at the hands of hijackers has raised some ethical questions. While Momentum may legally be in the right, South Africans are questioning the morality of its decision, writes Suzanne Daniels, lawyer and fellow of the Institute of Directors.

In March last year, Ganas was fatally wounded in a hail of bullets while trying to protect his wife and daughter during a hijacking. Ganas, however, was well insured through Momentum Life and thankfully the policy kicked in with an immediate release of R50,000 to cover urgent expenses such as funeral and living costs following the tragedy.

But that did not happen. The media reported that Ganas’ widow would have to pay back the instant cash pay-out and she would not be receiving the insured amount. Apparently, Ganas had a pre-existing condition, diabetes, which should have precluded him from even being insured in the first place. While his death was not even remotely caused by the condition, Momentum is within its legal rights to not pay out.

This decision resulted in public outrage – nobody can quite understand how bullets and blood-sugar relate to each other. The horrific way in which Ganas died would have happened no matter what his health status was.

Notably, South African law is very clear that contracts are binding. When it comes to civil law, such as in this case, there are no grey areas. If the contract states you will not be paid out if you did not disclose a pre-existing medical condition, then that’s what will happen. The manner of death does not come in to play.

The bottom line is that Momentum is correct in terms of the law. The public outcry has been about the morality of it. But just how do you navigate the grey areas between law and morality?

While Momentum may be correct in law and maintaining its business equity balance, it is displaying a lack of moral equity in this instance. The company has, however, redeemed itself somewhat by allowing Ganas’ widow to keep the R50 000 funeral benefit and agreeing to pay the premiums back to her.

Unfortunately, there are no courts of equity in South Africa and the law can be relatively heartless. This is why it is vital that South Africans know what they are signing. Contracts are fully binding and if they don’t understand what their role is, or what the insurer’s role is, they can find themselves in a very tricky situation.

In an interview on Radio 702 with Bongani Bingwa, Momentum CEO Johan Le Roux stated that Nathan Ganas should not have been insured in the first place. So, whose fault is it then? Why was he given a policy and why did the insurer accept his monthly premiums? The answer isn’t exactly clear.

The insurance industry is highly regulated and there are checks and balances in place to ensure that both parties understand what is expected of them. But it seems there needs to be even more stringent checks in place so that a situation like Nathan Ganas doesn’t happen again. Consumers cannot be passive participants in their own lives and have a responsibility to educate themselves.

What is worth pondering, however, is whether the decision to not pay the claim was worth the subsequent negative publicity and potential loss of existing and future clients. Perhaps if Momentum had acted in good faith and supported the grieving family, it would have elevated its reputation amongst South Africans and boosted its social license to operate.

On a final note, I cannot stress enough how consumers need to know what they are signing. There does need to be an element of trust as well – they need to trust that the insurer can and will pay out a verified claim, and the insurer needs to trust that the consumer has actually been open and honest when answering questions relating to the risk assessment.