Full Binder Claims Mandates and Guidelines · Full Binder Claims Mandates and Guidelines 2015/2016...

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Full Binder Claims Mandates and Guidelines

Page | 1Full Binder Claims Mandates and Guidelines – 2015/2016

TABLE OF CONTENTS

PROCUREMENT PHILOSOPHY 2

GENERAL PROCEDURES 3

MOTOR CLAIMS PROCEDURES 19

LIABILITY CLAIMS PROCEDURES 32

NON-MOTOR CLAIMS PROCEDURES 33

RECOVERIES AND THIRD-PARTY PROCEDURES 41

TERMINOLOGY 43

Page | 2 Full Binder Claims Mandates and Guidelines – 2015/2016

Procurement Philosophy

PROCUREMENT PHILOSOPHY

Managing suppliers, the direction of spend and claims leakage in respect of claim disbursements and payments made on behalf of Company

1. THE FOLLOWING IDENTIFIED FUNCTIONS ARE REQUIRED

1.1 Managing procurement: Hollard has a procurement panel which it makes available to you. Hollard strongly encourages the Binder Holder to make use of the panel as it assists the Binder Holder to make use of properly vetted suppliers such as panelbeaters, general repairers, salvage dealers in motor, loss adjusters, assessors and attorneys. These suppliers have also been accredited in terms of Black Economic Empowerment, which will have an effect on Hollard’s Black Economic Empowerment score. While Hollard will not contractually force the Binder Holder to use its procurement panel at the outset of the Binder Agreement, it does retain the right to do so should portfolio management of the scheme be necessary, or if Hollard is required to do this because of its Black Economic Empowerment score.

1.2 Managing the direction of spend.

1.3 Managing claims cost leakage.

2. THE FOLLOWING MINIMUM PROCESS MUST BE FOLLOWED

2.1 Managing direction of spend

2.1.1 Facilitating the use of BEE partners versus non-BEE partners.

2.1.2 Ensuring quality of service from suppliers (i.e. product and service quality).

2.1.3 Managing the grading of skills and workmanship according to criteria.

2.1.4 Managing supplier capacity.

2.2 Managing claims cost leakage

2.2.1 Implementing formal cost management strategies and action plans.

2.2.2 Providing channel cost analysis reports (reflecting supplier adherence to procurement contracts and agreed pricing models).

3. THE FOLLOWING MINIMUM CONTROLS MUST BE IN PLACE

3.1 Ensuring that all suppliers are loaded on the system. For the purposes of good governance, the client profile and banking details will be processed (and updated) by the finance team upon being presented with a signed contract and other relevant details.

3.2 Providing exception reports (for example, number of suppliers or assessors used, as well as authorised spend directed to suppliers not on the list of approved providers).


General Procedures

GENERAL PROCEDURES

1. RED FLAG INDICATORS

1.1 On Policies/Underwriting

1.1.1 Frequent changes of address

1.1.2 Incomplete or vague proposals

1.1.3 A criminal record

1.1.4 Poor credit history

1.1.5 Poor insurance history

1.1.6 Vehicles not registered in Policyholder’s name

1.1.7 Driver’s licence endorsements

1.1.8 Undated/unsigned Proposals

1.1.9 No previous insurance

1.1.10 Vague occupation details – i.e. ‘Businessman’ or ‘ Self-employed’

1.1.11 Proposal completed by the Broker

1.1.12 Photocopies (possibly altered) valuation certificates

1.1.13 Specific questions left unanswered

1.1.14 Unoccupied situations

1.1.15 Missing engine/chassis/VIN numbers

1.1.16 Physical address not noted – Only PO Box

1.1.17 A defined pattern in previous claims history

1.1.18 ‘Emergency’ cover – Late Friday afternoon, before long weekend/holidays, etc.

1.1.19 Gaps in periods of Insurance

1.1.20 Proposal applications completed in different handwriting

1.1.21 Vehicle number plates not matching province of residence

1.2 Claims

1.2.1 Vague description of loss

1.2.2 Vague occupation – for example ‘Businessman’ or ‘Self-employed’

1.2.3 Item claimed – Recently added

1.2.4 DOL close to inception of Policy

1.2.5 Claim forms not signed

1.2.6 More than one handwriting on claim

1.2.7 Single vehicle accident claims/late at night, early morning

1.2.8 Unknown TP claims, TP to claim at later stage

1.2.9 Unclear/illegible photocopies

1.2.10 No physical address – People do not live in Post Boxes

1.2.11 Known multi-claimants

1.2.12 Continuous All Risks type claims

1.2.13 Important questions left unanswered:

1.2.13.1 Date/time of loss

1.2.13.2 SAPS case number

1.2.13.3 Occupation

1.2.13.4 Use of vehicle


General Procedures

1.3 Fraud

1.3.1 Fraud can present itself in a number of ways:

1.3.1.1 The fraudulent creation of a claim

1.3.1.2 Overstatement of the claimed amount

1.3.1.3 Misrepresentation to get cover

1.3.1.4 Insider fraud

1.3.2 There are three stages at which fraud can enter the claims process:

1.3.2.1 The event

1.3.2.2 The quantification of the loss

1.3.2.3 The information of evidence supporting the claim

2. CLAIMS TO BE REPORTED TO HOLLARDAll claims will be administered by the Hollard partner according to the delegated authority and mandate agreement. The Claims mandate will be agreed, and therefore, as soon as the claim is, for example, R50 000 (fifty thousand Rand) or above (inclusive of VAT and prior to excess deduction, recovery or salvage money) the claim needs to be reported to Hollard.

2.1 Claims that exceed the Claims Mandate may therefore NOT be authorised by the partner without Hollard’s authorisation. Authorisation will be provided by the HBM Claims Manager once all the claim documentation has been received and reviewed.

2.2 Claims over (outside) MandateWhen a claim is outside of the scope of your broker mandate agreement with Hollard

The following are claims that are considered to be outside of your claims mandate:

2.2.1 Over the value of R50 000 (fifty thousand Rand) (as stated above), for example:

2.2.1.1 (Authorisation required for you to proceed)

All fire claims, irrespective of the quantum, are to be referred to Hollard PRIOR to any loss adjusters/assessors being appointed.

Any claims where drunken driving is suspected must be referred to Hollard immediately.

Any claims where fraud is suspected must be referred to Hollard immediately.

2.2.2 Late notification – Claims older than 45 days


2.2.3 Liability (except General Motor)

2.2.3.1 (These claims will be dealt with by Hollard)

2.2.4 Any Staff claim (including HBM staff)


2.2.5 Ex gratia claims

2.2.5.1 (Request with reasons to be forwarded for approval)

2.2.6 Sasria There are various specific Sasria requirements – Any Sasria claims should be reported to Hollard on receipt.

2.2.6.1 (These claims will be dealt with by Hollard)

2.2.7 Any Possible Rejections

2.2.7.1 (Documents to be sent to Hollard in order to finalise)


General Procedures

2.2.8 Stolen vehicles

2.2.8.1 For ALL stolen vehicle claims, a stolen vehicle data entry form needs to be completed and forwarded to Hollard – [email protected].

2.2.8.2 An investigator must be appointed on all stolen vehicle claims regardless of quantum.

2.2.8.3 If the claim is below your mandate, the claim can be settled if all in order.

2.2.8.4 Should the claim exceed your mandate, the file and all investigation reports and claims documents need to be reported to Hollard for authorisation.

2.2.9 Forward original vehicle deregistration and keys on stolen vehicles to Hollard

All the claims mentioned above will still be required to be administered by the Hollard Team. However, the claims should be sent to Hollard either for notification and record purposes or for authorisation in order for you to proceed.

2.3 Technical assistanceWhen you are unsure of the course of action or how to handle claims

There may be situations where you are faced with an uncertainty. This may be in terms of either how to process a specific claim or on the application of specific conditions of the policy. These claims can then be sent to Hollard in order to assist you in taking the correct action. Please always ensure that all claims documentation is provided in order for Hollard to make a decision on the claim.

2.3.1 Claims documentation required:

When referring a claim to Hollard

Always provide the following documentation in order for Hollard to make a decision on the claims:

2.3.1.1 Claim form

2.3.1.2 Policy schedule

2.3.1.3 Premium confirmation

2.3.1.4 Assessor/loss adjuster’s report with photos or addendums

2.3.1.5 Driver’s licence in the case of a motor vehicle accident

2.3.1.6 Identity document in the case of foreigners or temporary residents in South Africa

2.3.1.7 Technical reports

2.3.1.8 Claims history

2.3.1.9 Quantum documentation

2.3.1.10 Investigator’s report

2.3.1.11 Any additional information that we may require to make a decision on the claim.

3. GENERAL CLAIMS PROCEDURES

3.1 The claims technician must check the file and establish what type of claim is being dealt with and become familiar with the procedures which are to be followed for the type of claim, after completing the steps below:

3.1.1 Ensure that documentation for proof of cover and premium confirmation is on file, for the specific date of loss for which the claim is submitted.

3.1.2 Verify that the client has the appropriate cover for the type of claim submitted, print a schedule and put on file.

3.1.3 Ensure that all the required documents are contained in the file. If any documents are missing, take steps to obtain them. Documents should preferably be requested by letter/e-mail and a copy of the letter/e-mail and be kept on file.

3.2 Check that the necessary steps have been instituted to have the claim processed as soon as possible (assessor/investigator appointed, etc.).


General Procedures

3.3 Check the claims history of the claimant to:

3.3.1 check information on proposal and verify;

3.3.2 determine whether there is a possible trend in the claimant’s claim submission;

3.3.3 establish whether the previous claims (if any) can assist with the handling of the current claim (for example on a Stolen Vehicle claim, refer to the assessor’s report on previous Own Damage claim for details on condition of vehicle, alarm/mobiliser, radio, etc.);

3.3.4 advise Underwriting in the event that a claimant is an undesirable risk. Discuss with Hollard prior to taking action.

3.4 If the claim form is incomplete, contact the Insured and arrange for the completion thereof. Under no circumstances may you alter or complete the claim form. Supplement missing information on a separate sheet.

3.5 Check the claims printout and verify the following on the administration system:

3.5.1 the estimates are correct and update same if necessary;

3.5.2 the claim type codes are correct and update same if necessary;

3.5.3 the excess has been calculated correctly and correct same if necessary;

3.5.4 the claim has been registered on the claims system, and that all the required information is completed and update same if necessary.

4. CLIENT LIAISON RESPONSIBILITIES

4.1 Advise/inform the claimant:

4.1.1 the claim form must be completed in full and verify that all the relevant information is supplied, i.e.:

4.1.1.1 name of police station where case reported, as well as the case number and the name of the officer who took down the details;

4.1.1.2 names and addresses of any witnesses;

4.1.1.3 names, addresses and registration numbers of any other vehicle involved (if any);

4.1.1.4 purpose for which the vehicle was being used at the time of the event;

4.1.1.5 full details of any injuries sustained;

4.1.1.6 return the fully completed claim form by e-mail (if possible), and thereafter post the original completed claim form to the Broker, together with the relevant documents according to the type of claim.

4.2 In the case of a personal visit:

4.2.1 advise the claimant in completing a claim form;

NOTE: Under no circumstances may the Broker alter or complete any information on the claim form.

4.2.2 make photocopies of all original licence documents;

4.2.3 sign these as true copies; and

4.2.4 arrange with the claimant to forward any outstanding documents/information as soon as possible.

4.3 Where the claimant is unable to read or write, the Broker should endeavour to get an independent third party to assist the claimant in completing the claim form.

4.4 Inform the claimant of the procedures to be followed, depending on the claim type, i.e.:

4.4.1 Accident own damage

4.4.2 Stolen vehicle

4.4.3 Radio theft

4.4.4 Windscreen/glass damage.

NOTE: It is the responsibility of the Broker to ensure that costs are minimised and that the client’s discomfort is kept to a minimum. If in doubt about any aspect, refer to Hollard.


General Procedures

5. EX GRATIA PAYMENTS

5.1 If a claim has been rejected and it has been decided in your offices to request an ex gratia payment, the following is required:

5.1.1 Ex gratia request form

This form, detailing the reasons for the request, must be signed by management (a director or shareholder) and forwarded to Hollard together with any supporting documents.

NOTE: The reasons for granting the ex gratia payment are confidential and are under no circumstances to be discussed with the Insured/Claimant/or any outside party. It must further be noted that this payment is a ‘without prejudice payment’ and is not in terms of any existing policy, and is made without any admission of liability.

5.2 Once you have been advised that the ex gratia payment has been approved:

5.2.1 prepare a letter addressed to the Insured advising him of the ex gratia payment as well as any conditions applicable thereto

5.2.2 obtain a signed ex gratia agreement of loss.

5.3 Please ensure that the Insured is aware that in the event of a total loss, payment will be made to the institution who has an interest in the vehicle first and foremost.

NOTE: An ex gratia payment is made based on the condition that no admission of liability is accepted in terms of the policy, we cannot institute a recovery action, nor can we retain the salvage, unless we ensure that we make this a condition of payment, and the Insured has agreed to this in writing to the ex gratia agreement of loss. Furthermore, it must be noted that we cannot entertain a third-party claim or a liability claim or any other liability claim.

6. CHECKLISTS

Before any claim may be finalised the following have to be checked on claims for all classes of business:

6.1 Always check the policy wording first in order to consider if the loss was caused by an insured peril or event. Please also note and compare claims to all exclusions, terms and conditions of the policy.

6.2 Confirm that the premium for the appropriate month of cover has been paid. Has the premium been paid up for the period of insurance in which the claim occurred?

6.3 Are we in receipt of a fully and properly completed claim form, which has been completed by the Insured, signed and dated. Please note that only the Insured can make a claim against his policy and that the claim form is a legal document which requires full disclosure of how the loss occurred should the claim form not be complete we cannot process the claim. No employee may complete a claim form on behalf of an Insured under any circumstances. If the Insured is unable to complete the claim form a legal entity or person can be appointed by him with the appropriate power of attorney to complete the claim on the client’s behalf. If the client is deceased, an executor of his estate would be granted power of attorney.

6.4 Verify the police case numbers where applicable. Where an assessor is appointed it would be required from the assessor to do this and to note our interest with the Police.

6.5 Did the client select the appropriate cover to allow a valid claim on that section of the policy and is the Sum Insured adequate? Is there an Insurable interest?

6.6 Check whether the claim was submitted within the time limit allowed.

6.7 Consider if the client has had similar losses previously, either within the time of being insured with you or previous insurance. This will allow you to see if there may have been corrective underwriting or additional terms to apply to his contract of insurance.

6.8 Does the risk address correspond with the address given on the claim form?

6.9 Check recent policy amendments.

6.10 Check policy endorsements and the client’s proposal form that may state specific terms and conditions.

6.11 Check previous claims history, and/or previous insurance.

6.12 Salvage: where applicable we require a full report from the repairer.

6.13 Do reinsurance and/or co-insurance contribution apply?


General Procedures

6.14 Are there any recovery prospects to consider on this matter?

6.15 Remember always to communicate corrective underwriting suggestions made by the loss adjuster and to adjust the policy with applicable NCB and/or Endorsements after a claim where the need for this becomes apparent, for example delete cover, upgrade cover, upgrade security, change address, change underwriting details on file. (Refer to the relevant underwriter)

6.16 The second page of a property loss claim form often requires the client to state and list specifically what he is claiming for. Please make sure the client has completed this as well.

7. CLAIM PAYMENTS

7.1 The Broker is responsible for requisitioning the cheques/EFT payments payable to VAT/non-VAT Vendors.

7.1.1 If the invoice has VAT included in the amount, calculate the VAT implication and show the two amounts separately. VAT = 14/114 of total amount, for example on an amount of R228:

VAT = 228 X 14/114Therefore VAT = R28

7.2 On receipt of a request for payment the following procedures should be followed:

7.2.1 On all invoices:

7.2.1.1 check that the amount on the invoice is as authorised;

7.2.1.2 check that supporting documentation is attached;

7.2.1.3 check that the release/discharge is attached; check that the release/discharge has been signed by the Insured or the nominated representative;

7.2.1.4 ensure that a valid tax invoice was received if the supplier is registered for value-added tax;

7.2.1.5 if the above requirements are not met, advise the panelbeater/supplier/assessor, giving details of the problem being experienced;

7.2.1.6 for motor repair invoices, all additionals have to be checked and queried, the loss adjuster or assessor has to sign this off as well;

7.2.1.7 ensure the correct VAT numbers (if applicable) are on the invoices.

7.2.2 For repairs:

7.2.2.1 check to see that the documents are correct and in accordance with the letter of authorisation for that particular claim;

7.2.2.2 check to see that the negotiated discount has been applied by the creditor according to the list of pre-arranged discounts;

7.2.2.3 run through the claims checklists for the main underlying claim;

7.2.2.4 ensure that the invoice complies with the guidelines as in 7.2.1 above.

7.2.3 Write-off/Theft/Hi-jack

7.2.3.1 Upon receipt of the signed Agreement of Loss/Discharge form/Approved calculation, the Broker is to ensure that the deregistration certificate as well as all other documents that might have been requested, are on file.

NOTE: The cheque requisition should not be approved by the authorised signatory unless all the requested documents are on file, especially the deregistration.

7.2.4 Ex gratia payments

7.2.4.1 On receipt of the signed ex gratia Agreement of Loss, ensure that all conditions which may have been stipulated in the ex gratia Agreement of Loss have been complied with.

NOTE: Ex gratia payments are non-VAT-rateable, zero rated.


General Procedures

7.2.5 Service providers

7.2.5.1 On receipt of the invoice, ensure that the amount is as per the approved fee structure-negotiated discount. This can be checked and verified on Hollard’s Procurement Pages.

7.2.5.2 Ensure that the invoice complies with the guidelines as in 7.2.1 above.

If the payment is payment towards towing and storage charges on a Total Loss claim, update the Salvage Register.

7.3 Perform the following procedure:

7.3.1 Stamp paid invoices with a ‘Paid’ stamp.

NOTE: No alteration of cheques will be accepted.

7.4 If the cheques are to be collected, a signature plus positive proof of identification is required, and must be recorded in a register.

8. CLAIM REJECTION

8.1 On receipt of information where the claim should be considered for rejection, the file has to be referred to Hollard without delay for final decision for consideration.

8.1.1 If rejection is not justified, Hollard will liaise with the Broker;

8.1.2 If further information is required to assist with the decision to be made, Hollard:

8.1.2.1 records the requirements in the file, and

8.1.2.2 instructs the Broker to follow up on the requirements.

NOTE: It is of the utmost importance that the grounds of rejection are supported by the necessary documents/evidence (for example, where client has made a verbal statement this must be supported by a written statement to the same effect).

8.2 The original signed letter of rejection is distributed by Hollard in terms of PPR requirements to:

8.2.1 the Broker:

8.2.1.1 a phone call is made by the Broker to the client advising him of the letter.

8.3 The Broker files a copy of each letter in the claims file.

8.4 The Broker notifies other interested parties (i.e. contractor and panelbeater).

8.4.1 If the vehicle is salvage/burnt-out or stolen, the relevant registers are to be updated.

8.4.2 If the vehicle is with a salvage contractor, the Insured and/or the finance house must be advised to collect the vehicle. The towing and storage costs will be for the account of the Insured, and the contractor must be advised of this urgently in writing by e-mail.

The Broker diarises the file to remove the estimates, and finalises the claim after the prescriptive period, should nothing further have taken place in the interim. The prescriptive period in terms of a Personal policy is 180 (one hundred and eighty) days plus 270 (two hundred and seventy) days which totals 450 (four hundred and fifty) days and for Commercial policies it is 90 (ninety) days plus 90 (ninety) days which totals 180 (one hundred and eighty) days.

If the matter is referred to the Ombudsman, prescription is interrupted and the file has to remain open until further notice.

8.5 Ombudsman Procedure

The Office of the Ombudsman for Short-term Insurance provides consumers with a free, efficient and fair dispute resolution mechanism. It offers consumers a “no risk” mechanism to resolve disputes with insurers.

The Ombudsman's office assists consumers with the following Personal Lines short-term insurance:

8.5.1 Motor

8.5.2 Buildings


General Procedures

8.5.3 Householders (Contents)

8.5.4 Cell phone

8.5.5 Travel

8.5.6 Disability

8.5.7 Credit protection insurance

8.5.8 Commercial Insurance on a Limited basis, i.e. claimants such as small businesses, including a sole proprietor or trader, a juristic person, partnership or trust that has had a turnover in the last financial year of less than R25 million (twenty five million Rand).

8.6 When a claim has been rejected, and the Insured has approached the Ombudsman

8.6.1 Hollard’s legal division will be notified of the Ombudsman complaint via the Ombudsman’s office.

8.6.2 The complaint will be noted on the legal system.

8.6.3 Should further information be required by the legal team in order to formulate their response to the Ombudsman, contact will be made to the Broker’s office.

8.6.4 The merits of the claim and the rejection will be discussed between the legal team and the Ombudsman.

8.6.5 Should the Ombudsman rule in the Insured’s favour and determine that the claim should be settled:

8.6.5.1 Hollard will advise you of the decision

8.6.5.2 settlement will be requested

8.6.5.3 proof of payment needs to be sent to your Claims Manager in order to forward to the Ombudsman in order for them to close their file.

8.6.6 Should the Ombudsman rule in Hollard’s favour, the file will be closed and prescription will continue to run on the claim. The Insured needs to issue summons on Hollard before the prescription period ends.

9. CATASTROPHE CLAIMS

In the event of a major event giving rise to a large amount of claims being submitted for the insured perils of Fire, Storm, Hail, Flood, etc., a register of the individual claims has to be completed for Reinsurance purposes. A catastrophe claim, in terms of Hollard’s current treaties, will normally include FST activities over a period not exceeding 72 (seventy two) hours, and where it can be regarded as one weather pattern.

Hollard will communicate identified catastrophes.

10. SASRIA CLAIMS AND PROCEDURES

10.1 General

10.1.1 All claim notifications and document submission must be done on the Customer Web Portal (CWP) for all companies on the CWP system otherwise by email to [email protected]

10.1.2 Claims must be submitted to Sasria SOC Limited (Sasria) by the Non-Mandatory Intermediary (NMI) or Broker and where the broker has submitted a claim, the underlying insurer must be copied.

10.1.3 NMIs are to submit potential Sasria claims within one month of being notified of the claim. Late submission of claims may attract penalties.

10.1.4 Minimal information may be utilised to notify Sasria of a claim; however, all relevant claim documents are required in order for Sasria to make a decision on liability.

10.1.5 All claim documents required to proceed with a claim must be submitted to Sasria without delay.

10.1.6 The NMIs must handle all potential Sasria claims as if the claim is in terms of the underlying policy and with the utmost level of professionalism and analysis.

10.1.7 Before submitting a claim to Sasria the NMIs is expected to establish that the events causing the loss, or damage:


General Procedures

10.1.7.1 are excluded in terms of the NMIs Policy General Exceptions;

10.1.7.2 that the loss occurred during the Period of Insurance of the NMI’s Policy.

10.1.7.3 that the insured had Sasria cover at the time of loss.

10.1.8 All information relating to Sasria claims is to be treated as confidential.

10.1.9 The appointment of a Loss Adjuster, prior to notifying Sasria of a claim has been reported, is at the discretion of the NMIs on all claims below R1 000 000.

10.1.10 On all claims above R1 000 000 Sasria must be contacted before a loss adjuster is appointed. Should a loss adjuster be appointed without Sasria consent adjusting fees will be for the NMIs account.

Under no circumstances is anyone allowed to amend any documentation issued by Sasria without the knowledge of and consent from Sasria Limited.

10.2 Sasria Limited PerilsIn terms of the Sasria policy wording, Sasria will cover loss of, or damage to the property insured directly related to or caused by:

10.2.1 any act (whether on behalf of any organization, body or person, or group of persons) calculated or directed to overthrow or influence any State or government, or any provincial, local or tribal authority with force, or by means of fear, terrorism or violence;

10.2.2 any act which is calculated or directed to bring about loss or damage in order to further any political aim, objective or cause, or to bring about any social or economic change, or in protest against any State or government, or any provincial, local or tribal authority, or for the purpose of inspiring fear in the public, or any section thereof;

10.2.3 any riot, strike or public disorder, or any act or activity which is calculated or directed to bring about a riot, strike or public disorder;

10.2.4 any attempt to perform any act referred to in clause (i), (ii) or (iii) above;

10.2.5 the act of any lawfully established authority in controlling, preventing, suppressing or in any other way dealing with any occurrence referred to in clause (i), (ii),(iii) or (iv) above.

NOTE: In this Policy, the term "Public Disorder" shall be deemed to include civil commotion, labour disturbances or lockouts.

10.3 DocumentationThe NMI is requested to submit the following documentation to Sasria as well as any photographs whenever these are available. Please note that all documents submitted must be clear, descriptive of the item damaged or claimed for and preferably on PDF or word format. Communication must identify the NMI’s Claim Number, and where available Sasria’s Claim Number.

The following documents constitute an essential part of each and every claim and may be required to properly assess a claim:

10.3.1 Preliminary Claims Advice Form (Annexure A)

10.3.1.1 It may be utilised to notify Sasria of a new claim especially if there are minimal details.

10.3.1.2 It can be submitted on its own prior to submission of all required claim documents or submitted together with first notification documents.

10.3.1.3 All fields must be completed in full to enable Sasria to register the claim. Of utmost importance is the information relating to the name of the Insured, NMI name, Coupon number, date of loss, rating classification (section of policy being claimed under), area of loss and estimate of claim.

10.3.1.4 In the event of the Insured, for example, being a Holding Company, and the subject matter of the claim being the property belonging to its Subsidiary Company, the name of the Subsidiary Company must follow that of the Holding Company for example, ABC Ltd/XYZ Pty Ltd.

10.3.1.5 The estimated quantum of the claim must be provided in all instances to indicate the potential level of exposure for which Sasria may be liable.


General Procedures

10.3.2 Sasria Coupon/Policy

10.3.2.1 The Sasria Coupon/Policy forms an integral part of registration of a claim and analysis of cover, therefore a legible copy of the relevant Coupon/Policy must be submitted. The Coupon/Policy must be for the correct period of insurance and class of business, for example Motor, Fire, Goods in Transit, Money, Consequential Loss or Contract Works.

10.3.2.2 If the Coupon/Policy has been backdated by more than 30 (thirty) days, in terms of the Hold Covered Procedures, or that it has been signed after the Date of Loss, proof that permission to backdate was requested and granted must be submitted.

10.3.2.3 In respect of Fleet Motor Policies (Categorized), a copy of the Declaration Endorsement in respect of the previous Period of Insurance must be attached. Alternatively the fleet list or the previous year’s coupon must be submitted.

10.3.2.4 On monthly policies where the applicable coupon is not yet available, the previous month’s coupon will be required. However, Sasria reserves the right to request the applicable coupon.

10.3.2.5 Group scheme and Fleet coupons must be accompanied by a Motor Specification.

10.3.2.6 If a Coupon/Policy has been issued for a Period of Insurance less than 12 (twelve) calendar months and premiums charged on a pro rata basis, a copy of the Renewal Warranty must be submitted.

10.3.2.7 Copies of all Endorsements and any other documents relative to the Coupon/Policy must be submitted.

10.3.3 NMI’s Underlying Policy Schedule

10.3.3.1 A full schedule of the NMI’s underlying Policy must be submitted with all claims supported by the applicable wording.

10.3.3.2 On Motor claims where a Blanket Coupon has been issued a fleet list of the insured’s motor vehicles and proof of ownership for the vehicle that is the subject of the claim must also be submitted.

10.3.3.3 The policy schedule must be for the correct period of insurance.

10.3.4 Claim Forms

10.3.4.1 The Insured must in all cases complete an appropriate NMI or Broker Claim Form.

10.3.4.2 The Claim Form must be completed in full and signed by the Insured. For direct insurers a screen shot showing details of loss will be permissible.

10.3.4.3 Full details as to the circumstances of the loss or damage must be stated in the Claim Form.

10.3.4.4 In respect of Motor claims, the Driver’s Statement must be as explanatory as possible.

10.3.5 Proof of Premium

10.3.5.1 All claims must be accompanied by proof of premium payment for the month of loss.

10.3.5.2 Where proof of premium is not available i.e. midmonth loss, the NMI can at least submit 3 (three) months proof of paid policy premium prior to loss.

10.3.5.3 On Group scheme policies where premiums are forwarded to the NMIs after 45 (forty five) days, proof of premium payment to the broker for the month of loss is acceptable.

10.3.5.4 Annexure 1 is not acceptable.

10.3.6 Repair Documentation

10.3.6.1 Under no circumstances may the NMI, the Loss Adjuster or the broker authorize any repairs without first obtaining permission from Sasria.

10.3.6.2 Where applicable a minimum of 2 (two) repair quotations must be obtained and submitted to Sasria.

10.3.6.3 In case of emergency repairs i.e. windscreen or glass replacements; authorization for these repairs may be undertaken but for the account of the NMI or the Insured. Should it be established that the loss or damage is in terms of the coverage provided by Sasria Coupon/Policy, then Sasria will reimburse the Agent, or Insured in terms of the issued Coupon/Policy.


General Procedures

10.3.6.4 Once Sasria has accepted liability, the Repair Invoice may be made out to Sasria and submitted for payment with all pertinent documentation. Sasria details for invoicing purposes are:

Sasria SOC Limited

PO Box 653367

Benmore

2010

VAT no: 4140119340

10.3.6.5 The Insured must sign all Clearance Certificates which must be supplied to Sasria with all invoices.

10.3.7 Loss Adjuster and Assessor Report

10.3.7.1 The loss adjuster’s report is the property of Sasria, it is highly confidential and under no circumstances cannot it be made available to any other party without knowledge of and prior consent of Sasria.

10.3.7.2 The merits of the claim must be clearly stated on the report and the onus is on the insured to warrant that all information pertinent to the claim is made available to the loss adjuster.

10.3.7.3 The loss adjuster’s report must indicate or describe the item claimed for and any number used to define the asset.

10.3.7.4 Quantum must be clearly stated and supported by quotations from reputable suppliers.

10.3.7.5 The report must indicate the preferred supplier being selected from a list of two or three quotations.

10.3.7.6 The loss adjuster must ensure that salvage is disposed of immediately to the highest bidder and money collected made payable to Sasria. Sasria will issue a VAT invoice in favour of the buyer.

10.3.8 Other Documents

10.3.8.1 All other/additional documents not mentioned above but deemed relevant to finalise the claim must be submitted to Sasria. These would include endorsements attaching to the coupon and any other supporting documents e.g. coupon specification, magnitude discount endorsement, etc.

10.3.8.2 The loss adjustor’s and motor assessor’s reports must be submitted with all annexures and pictures, no selection on the parts of the report is allowed.

10.3.9 Submission Period

Documents relevant for a loss are required as soon as possible to enable efficient settlement of the loss. Although the NMI has thirty days to notify Sasria of any potential loss following notification by the insured, it will help to Sasria notified in immediately.

The following will be required from the NMI

10.3.9.1 Submit all the above required documents at first notification (schedule & wording, claim form and proof of premium).

10.3.9.2 Within seven days submit copy of Sasria coupon and proof of premium payment.

10.3.9.3 Where current month proof of premium is not available, proof for the previous three months must also be submitted in seven days.

10.3.9.4 Within seven days of notification from the loss adjuster or assessor, submit all circumstantial reports.

10.3.9.5 All enquiries must be replied to within seven days.

10.4 Appointment of Loss Adjusters and Motor AssessorA Loss Adjuster must be appointed where the claim estimate is over R50 000.00 (non-motor claims) and R250 000 (motor claims). All claim estimates over R1 million must be referred to Sasria for instructions prior to appointing a Loss Adjuster. When appointing a loss adjuster, the Agent or broker must provide the loss adjuster with a copy of the loss adjuster’s mandate.


General Procedures

Loss Adjusters’ mandate:

10.4.1 At all times act in the best interest of the insured and Sasria.

10.4.2 To confirm and make sure that the NMI has supplied a copy of the Coupon/Policy including all Endorsements and attachments to the Coupon/Policy.

10.4.3 Obtain the underlying policy schedule and applicable wording.

10.4.4 To submit reports directly to Sasria and the NMI.

10.4.5 To verify cover as per the Coupon and the underlying policy schedule and comment on the adequacy of cover (underinsurance, no cover, sections etc.)

10.4.6 All the activities of the Loss Adjuster are to be treated as confidential.

10.4.7 Investigate all the circumstances surrounding the loss or damage and to obtain sufficient proof, statements and other information to substantiate all findings to enable Sasria to assess their obligations and liability.

10.4.8 To quantify the loss or damage in accordance with the cover provided.

10.4.9 In the case of a ‘cash in lieu’ settlement the loss adjustor must agree quantum on a without prejudice basis.

10.4.10 Where reinstatement or repairs are to be carried out the following must be undertaken:

10.4.10.1 A competitive bidding process must be followed for any procurement.

10.4.10.2 The loss adjuster will be provided with the names of companies from Sasria’s database.

10.4.10.3 Local suppliers should also be invited to bid. Since they are not on Sasria’s database the following documents must accompany their bids.

a. BBBEE certificate

b. Tax clearance certificate

c. Latest AFS

d. Company Registration Certificate

e. VAT Certificate number

f. Bank letter confirming account number

10.4.10.4 The invitation to bid must be in writing.

10.4.10.5 A record of site meetings must be kept at all times.

10.4.10.6 Submission dates must be communicated to all bidding companies and fair timelines must be allowed.

10.4.10.7 Once all the bid documents are received the loss adjuster must prepare a report advising his recommendations on the results.

10.4.10.8 The adjudication process will be conducted by Sasria in line with the Preferential Procurement Act.

10.4.10.9 Sasria will confirm its decision to the Loss Adjuster in writing confirming the name of the selected Construction Company.

10.4.10.10 The loss adjustor will need to prepare an engagement letter and a copy must be submitted to Sasria for filing.

10.4.10.11 Sasria should invite and accept written price quotations for requirements from as many suppliers as possible that are registered on the list of prospective suppliers.

10.4.10.12 Where no suitable suppliers are available from the list of prospective suppliers, written price quotations may be obtained from other possible suppliers.

10.4.10.13 If it is not possible to obtain at least 3 (three) written price quotations, the reasons should be recorded and approved by the Executive Insurance Operations.

10.4.10.14 Where the settlement is processed by way of repairs or replacement, the repair invoices must be accompanied by a Clearance Certificate signed by the Insured.

10.4.11 To monitor repairs on a regular basis and in this regard provide Sasria with regular progress reports.


General Procedures

10.4.12 To personally ensure that repairs have been completed to the Insured’s satisfaction.

10.4.13 To obtain the Insured’s written confirmation that repairs have been satisfactory completed.

10.4.14 In cases of cash in lieu settlement to obtain a completed and signed Sasria release.

10.4.15 To submit the repairer’s invoice debited in favour of Sasria and clearance certificate signed by the insured.

10.4.16 To dispose of any salvage at the highest possible amount.

10.4.17 To submit their fee account debited to Sasria.

Motor Assessor’s Mandate

a) A motor assessor must be appointed on all motor claims above R10 000 (ten thousand)other than Glass claims.

b) The assessor must authorise the repairs immediately once values are agreed.

c) The assessor must track progress of the repairs until completed, and sign off to confirm that the repairs were done accordingly.

d) Where the agreed amounts change the assessor must sign off for additional costs and advise Sasria on the changes.

e) The assessor must track progress of the repairs until completed, and sign off to confirm that the repairs were done accordingly.

10.5 Salvage

10.5.1 Sasria is not party to any agreements between the NMI and Salvers, whereby salvage is sold at set rates.

10.5.2 All salvage sale negotiations must be carried out by the Loss Adjuster/assessor, and the sale of same must be to the highest bidder.

10.5.3 For motor claims, the assessor must ensure the vehicles are deregistered with the correct code as per the SAIA code of conduct.

10.5.4 Salvage or scrap must be disposed of immediately.

10.5.5 The proceeds from the sale of salvage must be made payable to Sasria who will provide the purchaser with a Tax Invoice.

10.6 Release Form

10.6.1 A Release must be obtained when a ‘cash in lieu’ settlement is to be made.

10.6.2 Only the Sasria Release Form is to be used.

10.6.3 The Release may only be made available to the Insured once Sasria has accepted liability of the claim, in writing.

10.6.4 The Release must be fully completed and signed by the Insured. Of utmost importance is the name of the Payee and the correct banking details of the Insured.

10.6.5 A copy of the Sasria Release will be accepted on receipt of a guarantee from the NMI Company that they have satisfied themselves with the originality of the signature on the release.

10.7 Prescription

10.7.1 The Prescription period as stated in the (Non-Motor) NMI’s underlying Policy is imported as an Additional Term and Condition of the Sasria Coupon/Policy. Where this is not stated 24 (twenty four) months will be applicable for this class of business.

10.7.2 The Prescription period in terms of the Sasria Motor Policy is 12 (twelve) months from the date of the incident.

10.7.3 The NMI is expected to apply these Prescription periods strictly.

10.8 Value Added Tax

10.8.1 Indemnity

10.8.1.1 Where indemnity is by way of a cash settlement to the Vendor Insured, Sasria will include the VAT component of such cash indemnity in the settlement amount.


General Procedures

10.8.1.2 Where the cash indemnity is made to a Non-vendor Insured the same basis of indemnification is adopted.

10.8.1.3 Where Sasria elects to settle the claim by replacing or repairing the property, Sasria will pay the repairer or supplier according to their VAT status.

10.8.2 Tax Invoices

10.8.2.1 Where a cash indemnity is made by Sasria to an Insured, or reimbursement is made to the Agent or Broker, it will not be necessary for such Vendor (or Non-vendor) Insured to furnish Sasria with a Tax Invoice.

10.8.2.2 Where a settlement is made directly to a supplier of goods and services and/or contractors or repairers, Sasria must be in possession of a Tax Invoice from such persons.

10.8.2.3 Accordingly, all accounts submitted for payment to suppliers of goods and services or contractors or repairers, must be debited to Sasria.

10.9 Deductibles/Excesses/First Amount PayablesOnly the Contract Works coverage includes a Deductible, other than when the Insured has elected a Voluntary Deductible. The application of a Deductible, in terms of Sasria shall be on the basis that the deductible is deemed to be VAT inclusive.

10.10 Payments All payments will be made by Electronic Fund Transfer (EFT) into the payee’s bank account.

To the Insured

a. Payment to the insured will be made electronically using details furnished to Sasria by the insured on the Release. Sasria reserves the right to request proof of bank details by way of a bank letter.

Confirmation

a. Sasria will supply the NMI with a full copy of the settlement details to enable the NMI to complete their claim records.

10.11 Compliance

10.11.1 To prevent any undue delay in the settlement of any claim against a Sasria Coupon/Policy, it is imperative that the NMI complies with the above procedures.

10.11.2 NMIs are encouraged to submit to Sasria comments and advice that may aid in improving service to our mutual insured.

Annexure A

PRELIMINARY CLAIMS ADVICE FORM

Agent company :

Number of coupon/policy :

Nominated agent claim number :

Name of Insured :

Insured's postal address :

Contact person (where the insured is a Co.) :

Insured's reference :

Insured's bank details :


General Procedures

Sasria deductible/Co-insured applicable : YES NO

If YES, state amount/percentage :

Period of insurance :

Rating classification :

Estimate of claim :

Date of loss :

Address at which loss occurred :

Brief description of loss :

Name of Loss Adjusters :

If appointed and date of appointment :

Broker's name :

Broker's address :

Broker's contact person :

Broker's claim number :

Agent's contact person :

Date submitted :

Signed by (name in block letters) :

11. UNDERINSURANCE AND CONTRIBUTION

Where the Insured has not adequately insured himself, we will apply average in the event of a claim, as he is deemed to be his own Insurer for the balance of the loss proportionately. Average will be calculated as follows:

Sum Insured X adjusted loss Value of risk 1 = claim – excess = amount payable

The Insured’s contribution, whether it be average, or betterment, or dual insurance (other Insurer’s contribution), and excesses have to be agreed before the claim is authorized or finalised.

Where the underinsurance factor is 10% (ten percent) or less, Hollard generally does not apply average as a rule, but will, however, insist that the cover is amended to the increased cover.

12. POLICE REPORT REQUEST

12.1 Establish from the claim form to which police station the accident was reported and:

12.1.1 whether any criminal action resulted from the event.

12.2 Police reports are requested under the following circumstances:

12.2.1 CR/MR (i.e. criminal report);

12.2.2 AR/BR (accident report – dependent on accident details);

12.2.3 If there is any cause for suspicion.


General Procedures

12.3 Arrange to send a letter to the police station concerned requesting a police report and payment for the cost of obtaining same:

12.3.1 Send payment together with the letter to the police station.

12.4 Should a police report be required:

12.4.1 advise the Insured that the claim cannot proceed without the police report, and request that the Insured obtains the report and provides it to your offices;

12.4.2 diarise the file for 14 (fourteen) days hence to follow up if the report is not received.

12.5 If a case is pending against the claimant for any reason related to the accident, then diarise the file to send a letter after one month.

13. RECEIPT OF MONIES BY BROKERS

13.1 In each and every case where monies are due to Hollard for payment of salvage, stolen and recovered vehicles, recoveries, etc., the nominated person in the office/Claims Supervisor should perform the following:

13.1.1 The issuing of a company tax invoice, where applicable, with a full description of the transaction.

13.1.2 The issuing of a Hollard company receipt, recording from whom the money was received, the allocation vehicle registration number, claim number and amount allocated.

13.1.3 If a cheque is received, the deposit slip must reflect the details as in 13.1.2 above – deposits are to be made to the claims account.

13.1.4 The Salvage Register and the Stolen Vehicle Register need to be updated accordingly.

13.2 All cash received must be kept locked away in a safe.

13.2.1 ’Holding deposits’ are not acceptable.

13.2.2 Monies received may not be used to offset other debts or defray expenses.

13.3 The deposit slip, together with the relevant copies of the receipts, need to be handed to the person assigned the bookkeeping functions, for reconciliation.


Motor Claims Procedures

MOTOR CLAIMS PROCEDURES

1. GENERAL MOTOR CLAIMS PROCEDURES

1.1 Read the claim form and check that it has been completed correctly and that all the necessary information is available. Specifically check and verify the following:

1.1.1 time period between date of loss and date claim reported;

1.1.2 time of loss, linked with the description of accident as well as the possible usage of the vehicle;

1.1.3 details of vehicle (registration number, odometer reading, vehicle description and engine and chassis numbers);

1.1.4 description of the use of the vehicle;

1.1.5 client’s personal details and specifically the client’s employment details linked to use of the vehicle;

1.1.6 if driver other than Insured, driver’s employment details linked to use of the vehicle;

1.1.7 if an own damage and/or third-party claim, insurance details of the driver, if Insured was not the driver at the time of the event;

1.1.8 description of the incident in relation to the type of damage described (if any);

1.1.9 details of police station and case number/s;

1.1.10 details of whether any criminal action has resulted from the event;

1.1.11 details of third party/ies and witnesses (if any);

1.1.12 signature/s of Insured and driver.

1.2 Scrutinise all the details on claim form and follow the correct procedure:

1.2.1 if there is a possibility of a salvage/burnout;

1.2.2 if there is a possibility of liability as a result of a fire or explosion claim or other injuries;

1.2.3 if there is a possibility of a Sasria claim;

1.2.4 if there is a possibility of a third-party claim or recovery from a third party;

1.2.5 if there is car hire cover available/applicable (follow policy wording).

1.3 If the claim falls within the claimant’s excess and all the checks are satisfactory, advise him/her to deal directly with the relevant panelbeater. Repairs will be authorised by the claimant and a copy of the invoice must be submitted to the Broker should the claimant wish us to pursue a recovery on his behalf. (Always discuss first.)

1.4 Refer all claims over mandate to Hollard.

The claim amount refers to own damage, plus third-party damage, plus any liability claims added together, before the deduction of any excess and salvage.

1.5 Manage the client’s expectations and inform him what the Claims department will do in order to process the claim accordingly.

1.6 Provide the client with an approximate time that it may take to for assessors or loss adjusters to meet and report on the claim. If you have committed to a time – abide by it diligently and keep your client informed about unexpected changes that may occur.



2. VALIDATING A DRIVER'S LICENCE

2.1 Credit Card LicencesThe SAIA position as set out in their press release of 28 February 2003 reads:

“Credit Card Licences – Claims will be considered without prejudice.

SAIA’s stance on the credit card licence issue is that insurers will maintain their current position, their claims will be considered without prejudice. This means that an insured will not be deemed to be unlicensed after the deadline date, however before considering any claim, the insured will be required to provide proof that the underlying licence was validly issued and has not been cancelled or suspended. If the law resolves that a person, who has not obtained a credit card licence is deemed to be unlicensed and has to retake the learner’s and drivers test then the insurer will not be able to consider these claims. Until absolute clarity is given by the Government and the Law, claims will be considered without prejudice. The short-term industry wants to act in the best interest of its customers by honouring claims as far as possible but at the same time wishes to uphold the law.”

The expiry date was extended to end September 2003 in respect of conversions.

Licences contained in identity documents will therefore no longer be considered as valid.

2.2 Learner's Licences

2.2.1 In terms of section 12 of the National Road Traffic Act (the Act):

“No person shall drive a motor vehicle on a public road:

2.2.1.1 except under the authority in accordance with conditions of a licence issued to him in terms of this chapter or any document deemed to be a licence for the purposes of this chapter and

2.2.1.2 unless he keeps such licence or document or other prescribed authorisation with him in the vehicle.”

2.2.2 Section 13 of the Act contemplates two types of licences, namely:

2.2.2.1 A provisional licence known as a learner’s licence or

2.2.2.2 A driving licence.

2.2.3 The regulations of the Act deal with the issue of learner’s licences in more depth. Regulation 99 (2)(a) provides:

“The holder of a learner’s licence shall, except where such licence relates to a motor vehicle having no seating accommodation for a passenger or to a motorcycle, when driving the vehicle concerned be accompanied in or on that vehicle by, and under the direct supervision of a person seated next to him/her or immediately behind him/her, where such person cannot be seated next to him/her, and who is in possession of a licence, other than a learner's or similar licence, authorising him/her to drive that class of motor vehicle.”

2.2.4 Regulation 99 also prohibits a holder of a learner’s licence of a motorcycle to convey passengers on the motorcycle. A person with a learner’s licence is not allowed to carry passengers for reward. There is no prohibition on a learner driver conveying additional passengers.

The Act and its regulations are quite clear in their intent and their consequence. A driver with a learner’s licence must be accompanied by a fully licensed driver who must exercise direct and personal supervision over the learner-licensed driver and be seated next to the learner or immediately behind him. If the learner-licensed driver is carrying numerous social passengers, as long as a fully licensed driver is seated next to the learner driver and is exercising direct supervision over the learner driver this would not breach the provisions of the Act or the policy.



2.3 Foreign and International Licences

2.3.1 Section 23 deals with licences which have not been issued in terms of the Act but are deemed to be valid licences. Section 23 contemplates two categories of licences, namely:

2.3.1.1 Licence issued in a foreign country

2.3.1.2 An international driving permit.

2.3.2 These licences are in certain circumstances deemed to be valid licences issued under the Act.

Regulation 110 deals with the procedural details insofar as foreign and international licences are concerned.

2.3.3 Insofar as foreign licences are concerned the following requirements must be met:

2.3.3.1 The holder of the foreign licence was not permanently or ordinarily resident in South Africa when issued.

2.3.3.2 The foreign licence has been issued in an official language of the Republic or if in a non-official South African language, be accompanied by a certificate of authenticity or validity, which certificate must be issued in an official language of South Africa or a translation of that licence in an official language attached to it.

2.3.4 Regulation 110(3) provides:

“When a holder of a licence referred to in section 23(1)(a) of the Act (a licence issued in any other country (i.e. a foreign licence)) or the holder of an international driving permit referred to in section 23(1)(b) of the Act:

2.3.4.1 returns to the Republic to resume permanent residence, such licence or permit shall no longer be deemed to be a valid licence for the purposes of Chapter 4 of the Act, after one year from the date of return or

2.3.4.2 obtains permission in terms of any law for permanent residence in the Republic, such licence or permit shall no longer be deemed to be a valid licence for the purposes of Chapter 4 of the Act, after one year from the date upon which such person has taken up permanent residence.”

Insofar as international driving permits are concerned, these are deemed to be valid licences, however are subject to the conditions under which such international permit was issued. The holder of an international driving permit may convert that permit into a valid licence but must do so within one year of his returning to South Africa to resume permanent residence. There is no requirement for an international permit to be accompanied by a certificate of validity or translation.

The Act does not make any distinction between countries which drive on the other side of the road to South African drivers. As long as the foreign licence holder or international permit holder complies with the regulations of the Act as set out above, the licences will be deemed to be valid.

2.4 International Driving PermitsA person who wishes to drive temporarily in another country, may apply for an International Driving Permit, in their country of residence, before departure. An International Driving Permit will only be issued for the class of vehicle for which the applicant currently has a valid driver's licence.

An International Driving Permit issued under the 1968 Convention is generally valid for a period of 3 (three) years as from date of issue, while other International Driving Permits may be valid for only 1 (one) year, but subject to the laws of the respective country.

2.5 Visitors/Immigrants to South AfricaCertain licences issued in other countries are deemed as valid driver's licences for the class of vehicle for which they were issued by the relevant country, and they are valid in South Africa. All conditions or restrictions on such a licence in the country of issue will still apply to that licence in South Africa.



2.5.1 There are 3 (three) types of documents which are deemed to be valid driver's licences, subject to certain limitations and regulations:

2.5.1.1 A driver's licence issued in a Prescribed territory;

2.5.1.2 A driver's licence issued in another country.

2.5.2 An International Driving Permit issued while the holder was not ordinarily, or permanently, resident in South Africa.

Any driver's licence issued in another country or territory which is a provisional licence, or any International Driving Permit, may not be used where passengers are conveyed for reward, and where a Professional Driving Permit (PrDP) is required.

2.6 Professional Driver's Permits (PRDP’S)In terms of section 32 of the Act professional drivers are set elevated standards with regards to their medical condition and previous driving convictions and must apply for a PrDP every two years. The Act prohibits professional drivers from driving on public roads without a PrDP. Regulation 115 of the Act sets out the categories of drivers that require PrDP’s.

2.6.1 The categorisation is based upon two criteria:

2.6.1.1 The type of vehicle being driven; and

2.6.1.2 the use of the vehicle.

2.6.2 The driver of the following categories of vehicles, regardless of the use to which that vehicle is being put is required to have a PrDP:

2.6.2.1 A goods vehicle with a GVM of more than 3 500 kg

2.6.2.2 A breakdown vehicle

2.6.2.3 A bus

2.6.2.4 A minibus which exceeds 3 500 kg or is designed to carry more than 12 (twelve) people.

2.6.3 If a motor vehicle, regardless of the categorisations above is used for any of the following purposes then a PrDP is required:

2.6.3.1 Used for the conveyance of passengers for reward

2.6.3.2 A goods vehicle carrying dangerous goods

2.6.3.3 Any vehicle conveying 12 (twelve) or more persons including the driver.

The status of PrDP’s was recently adjudicated upon in the case of Napier N.O. v Spearhead Rice Mills (Pty) Ltd 2002 (4) SA 530 WLD. The policy under review was a Multimark III wording. A tow truck was involved in an accident whilst towing another vehicle but the driver of the breakdown vehicle did not have a PrDP. The insurers declined the claim to an indemnity and the matter was originally heard in the Magistrate’s Court. The court found for the Insured against the underwriter who then took the matter on appeal. The driver of the tow truck did originally have a PrDP which he had simply failed to renew. On the wording of the Multimark III policy it was argued that the PrDP was subject to periodic review and the mere failure to renew the licence did not disentitle the insured to an indemnity. The court held:

“….The granting of such permits (PrDP’s) depends on stringent compliance with several requirements aimed at insuring the competence of applicants as drivers, for example medical certification of their fitness and insistence on not having been convicted of certain specified offences.”

The court accordingly found that the PrDP was not a licence “subject to periodic renewal” and the failure to be in possession of a valid PrDP was a failure to be licensed. The decision is being taken on appeal but we do not think that it will be altered. Having said that, we therefore do not agree with the contention that the issuing of PrDP’s is merely a mechanism to collect tax. It is a mechanism that has been put in place to ensure that professional drivers adhere to an elevated set of standards and these relate to such driver’s medical condition and past driving experience. Therefore if a driver of an insured vehicle is required to be in possession of a PrDP and is not, we believe that he is not licensed in terms of the Act and such a claim may validly be declined.



2.6.4 Where a motorist is not in possession of an International Driving Permit, and only has a licence issued in a Prescribed territory or another country, that licence will only authorise the driving of a vehicle of the class for which issued, and will be deemed a valid driver's licence provided :

2.6.4.1 It is issued in one of the official languages of South Africa.

2.6.4.2 If it is not in one of the official languages, it must be accompanied by either a certificate of validity or authenticity issued by a competent authority (Provincial or Local licensing Department), or a translation into an official language.

2.6.4.3 The licence must have a photograph and signature of the holder attached to, or contained in the licence.

Once a person enters South Africa to resume permanent residence, or obtains permission to take up permanent residence, or becomes permanently resident in South Africa, their foreign driver's licence or International Driving Permit, will only be deemed as a valid South African driver's licence for a period of six months* as from the relevant date relating to the person's permanent residence. * – 1 Year as from 1/9/94.

An International Driving Permit cannot be issued by one's country of residence for use in South Africa while resident in South Africa. Similarly when issued with an International Driving Permit in South Africa, that International Driving Permit is not valid to be used in South Africa as a driver's licence.

2.6.5 A foreign licence as well as an International Driving Permit may be converted into a South African driver's licence at any time during the period of validity. In effect this means that although a foreign licence, or International Driving Permit, may no longer authorise one to drive a vehicle 6* months after:

2.6.5.1 taking up residence,

2.6.5.2 obtaining permission for permanent residence, or

2.6.5.3 becoming permanently resident,

2.6.5.4 one may still exchange such a licence or International Driving Permit, for a South African driver's licence. A licence or International Driving Permit must, however, still be valid in the original country of issue. * – 1 Year as from 1/9/94.

2.7 Validity of licencesIf a driver's licence is lost, stolen, destroyed or defaced one may apply for a temporary document B1-5 from the Department of Home Affairs. This will serve as a valid driver's licence until the identity document is replaced.

A carbon copy of an affidavit, or sworn statement made at a driver's licence testing centre or a police station, that a licence was lost, stolen, destroyed or defaced will act as a valid driver's licence for a period of 3 (three) days. This should then be substituted by a form B1-5 by the driver.

A form RID or TDL issued by a testing centre is valid for a period of 2 (two) months and replaced by the original learner's or driver's licence.

A driver's licence is valid for 4 (four) years, while a learner's licence is valid for a period of 18 (eighteen)months from the date of issue.

An endorsement by court on a driver's licence is valid for 3 (three) years as from the date when the endorsement was made.

2.7.1 If there is any cause for suspicion, fax the details of the driver's licence to Hollard for verification on the microfiche facility.

If the licence is hand-written, the licence must be verified on the microfiche or with the Department of Home Affairs.

2.7.2 If no trace of the licence exists at any of the above facilities, advise the claimant that he must produce documentary proof of having a valid driver's licence, i.e. a letter from the driver's licence testing centre where the driver was tested for the licence, confirming the existence and validity of such a licence.



2.7.3 Check that the licence has not been endorsed by any of the local authorities; if it has, refer to the policy conditions.

3. ACCIDENT OWN DAMAGE

3.1 The following documents should be submitted, in addition to the completed claim form, at the inception of the claim:

3.1.1 Copy of driver’s licence (both sides), and front page of ID or passport, together with any other related documents pertaining to the specific driver’s licence held by the driver;

3.1.2 Professional driver’s permit (PrDP), if vehicle is insured/used as a taxi, is a bus or a goods-carrying vehicle;

3.1.3 Ask the claimant whether the vehicle is driveable.

3.1.3.1 If the vehicle is not driveable, obtain the exact location of the vehicle and ask the claimant if he is in a position to arrange for the vehicle to be towed to the nearest approved panelbeater (refer to Hollard’s Procurement Pages website for a full list of service providers – https://procurement.hollard.co.za/).

3.1.3.2 Obtain 2 (two) quotes from an approved panelbeater if the vehicle is driveable. Immovable vehicles – only 1 (one) quote.

3.2 Once you have received the relevant documents and registered the claim, it is recommended that you:

3.2.1 check the claims history of the claimant to:

3.2.1.1 avoid duplications of claims or possible fraudulent submission of claims;

3.2.1.2 in the event of previous claims, to ensure that the Broker is aware of the previous claims which might be of assistance in the handling of the current claim;

3.2.2 ensure that all the information is available and that the estimate has been raised correctly and as accurately as possible.

3.3 If there is a third party involved, ensure all the details of the third party are on the claim form as well as the details of any witnesses.

3.4 Should there be any documents outstanding, contact the Insured and request these from him telephonically or by e-mail.

3.5 Check that the licence is in order.

3.6 Contact the claimant and inform him/her of the claim number which is to be used in all correspondence, as well as the name of the claims technician who will be handling the claim.

3.7 Place the following on the file:

3.7.1 A claims checklist

3.7.2 Action sheet/File note

3.7.3 A printout of the client’s policy document details schedule (proposal, if required)

3.7.4 One hard copy of the claims printout

3.7.5 Any other documentation and copies of letters

3.7.6 A note of any other relevant information gleaned from the conversation with the client (noted on the action sheet).

3.8 Check to see whether the following have been requested and/or received:

3.8.1 Any outstanding documentation

3.8.2 Assessor’s report (if required)

3.8.3 Validation of the driver’s licence (if required).



3.9 Send a letter to the police enquiring about the availability of an accident report (if required):

3.9.1 If a criminal case is being investigated, relating to any of the policy exclusions (i.e. drunken driving, driver has no licence), the outcome of the case must be obtained before any authorisation can be given.

3.9.2 Diarise the file to follow up on the reply from the SAP.

NOTE: The case number prefix CR/MR and CAS/MAS are current case number prefixes which must be investigated. Should any other prefixes become known to a claims person, this information must be forwarded to Hollard. Sometimes there will be both an AR/OR number and a CR/MR or CAS/MAS number. Always ask if a criminal docket has been opened.

4. WINDSCREEN/GLASS DAMAGE

4.1 When you are notified of a potential windscreen claim:

4.1.1 Instruct the claimant to contact the relevant glazier (if they have not already done so).

4.1.2 The claimant is requested to have his ID book, driver’s licence and policy number ready (if possible), when the glazier repairs or replaces the glass.

4.2 If the windscreen has to be replaced, inform the claimant of the excess payable by him.

NOTE: Inform the claimant that if the damage can be repaired instead of the windscreen being replaced, there will be no excess applicable.

4.3 The glazier will contact the Broker, and has to provide the following:

4.3.1 Policy number (wherever possible)

4.3.2 Registration number of vehicle

4.3.3 Make/model of vehicle.

4.4 Place the following onto the file:

4.4.1 A claims checklist

4.4.2 Action sheet

4.4.3 A printout of the client’s policy document details

4.4.4 One hard copy of the claims printout

4.4.5 A note of any other relevant information gleaned from the conversation with the client (noted on the action list).

5. RADIO

5.1 Attempted theft and damages

5.1.1 The claims technician must check the file and establish what type of claim is being dealt with and become familiar with the procedures which are to be followed for the type of claim, after completing the steps below:

5.1.1.1 Ensure that documentation for proof of cover and premium confirmation is on file, for the specific date of loss for which the claim is submitted.

5.1.1.2 Verify that the client has the appropriate cover for the type of claim submitted, print a schedule and put on file.

5.1.1.3 Ensure that all the required documents are contained in the file. If any documents are missing, take steps to obtain them. Documents should preferably be requested by letter/e-mail and a copy of the letter/e-mail should be kept on file.



5.1.2 Documents to be submitted, in addition to the completed claim form, at the inception of the claim, are the following:

5.1.2.1 Copy of the original purchase invoice of the radio (if not factory-fitted):

a) Immediately check the policy to see whether the claimant has taken out additional cover should the radio exceed the normal claim price limits (refer to the applicable policy).

5.1.2.2 A quote for repairs should any damages, other that the radio and windscreen have been caused:

a) If glass damages occurred, instruct the claimant to phone the authorised glazier.

b) If any other damages occurred, this is recorded as a sub-claim.

5.1.3 Ensure that all the information is available and that the estimate has been raised correctly.

5.1.4 Place the following on the file:

5.1.4.1 A claims checklist

5.1.4.2 Action sheet

5.1.4.3 A printout of the client’s policy document details

5.1.4.4 One hard copy of the claims printout

5.1.4.5 A note of any other relevant information gleaned from the conversation with the client (as noted on the action sheet).

5.2 Theft of a radio

5.2.1 The claims technician must check the file and establish what type of claim is being dealt with and become familiar with the procedures which are to be followed for the type of claim, after completing the steps below:

5.2.1.1 Ensure that documentation for proof of cover and premium confirmation is on file, for the specific date of loss for which the claim is submitted.

5.2.1.2 Verify that the client has the appropriate cover for the type of claim submitted, print a schedule and put on file.

5.2.1.3 Ensure that all the required documents are contained in the file. If any documents are missing, take steps to obtain them. Documents should preferably be requested by letter/e-mail and a copy of the letter/e-mail should be kept on file.

5.2.1.4 Verify that the client has reported the theft to the police.

NOTE: Refer to the policy wording for the clarity of the excess.

5.2.2 Irrespective of whether the radio was a standard or non-standard make or factory-fitted model:

5.2.2.1 Satisfy yourself that the claim is valid.

5.2.2.2 Ensure that the Sum Insured is adequate.

NOTE: It must be noted that if the radio was an optional extra, the client should be in a position to supply the purchase invoice stating this. Should the client not be able to provide a valid copy/original purchase invoice, use your discretion on the validity of the claim.

5.2.3 Once this has been done as stated in 5.2.2.1 and 5.2.2.2:

5.2.3.1 Negotiate a replacement with an approved radio merchant.

5.2.3.2 Send an authorisation letter to the client.



6. TOW-IN PROCEDURE

6.1 Towing queries – Assist line contact: 086 003 8262Other divisions have a dedicated person dealing specifically with towing-related queries or car hire. HBM has a towing specialist to sort out towing-related queries, namely [email protected]. This is also part of the claims administrator’s duties. Hollard has select suppliers and repairers. This simply means that there are special rates that have been agreed on between Hollard and the suppliers. There are agreements in place between the following towing associations:

6.1.1 South African Towing and Recovery Association (SATRA)

6.1.2 UTASA

6.1.3 First Road Emergency.

When vehicle is towed from an accident scene by one of the above-mentioned towing operators, then they will need to apply the agreed rates. In a case where the towing operator was not aware that the vehicle belonged to a Hollard client at the time they towed the vehicle. They will need to amend the amount they charged according to the agreed rates as soon as Hollard contacts them. That is where the towing specialist comes in. It is the responsibility of the towing specialist to negotiate with the towing operators to reduce the price accordingly. You need to have strong negotiation skills, be tactful, diligent and assertive as well. Should the towing operator refuse to charge according to the agreed rates, the query can be escalated to the towing association or procurement. The towing operator is not allowed to charge storage from the day the query arose up until it has been resolved.

The towing operators can be very aggressive at times and it is very important that the towing specialist handle the conversation in a professional manner. Every query should be recorded and filed. There is a towing query template under Management Drive. The claims administrator needs to draw up a report on a quarterly basis for all the savings made for that quarter. The report needs to be forwarded to the Claims team and Procurement.

Panelbeaters are not allowed to pay towing invoices. They should always forward the invoices to the Insurer for settlement. This is important as it is always a mission to recover money from towing operators who were overpaid.

6.1.4 In many cases, the vehicle has already been removed from the scene of the accident by a tow truck and taken to a panelbeater.

6.1.5 Arrange for the vehicle to be moved to one of the relevant panelbeaters if not already there, to arrange for the obtaining of a quotation for repairs.

6.1.6 Refer the client to the limits of liability regarding towing, as detailed in the policy, where applicable.

7. THIRD-PARTY CLAIM AGAINST HOLLARD (if mandated to handle on behalf of Hollard)

NOTE: Estimate for Third Party must be raised immediately where our client appears to be at fault.

NO OWN DAMAGE EXISTS/NO OWN DAMAGE CLAIM SUBMITTED

7.1 If the Insured has notified the Broker of a potential claim, even if no own damage exists, or damage is less than the applicable excess check to see whether a valid claim document has been submitted and, if not, advise the client to submit a completed claim form and supporting documents (for example the driver’s licence).

7.1.1 The incident MUST still be reported to the SAPS.

7.1.2 Even if there is no damage to the insured vehicle, the section II excess is still payable and the client must be advised of this, at the initial notification of the claim.

7.1.3 Once liability has been admitted by Hollard, the Broker will be responsible for collecting this excess from the Insured.

NOTE: If the section II excess applies, the knock-for-knock is not applicable.



7.2 On receipt of the claim form:

7.2.1 Open a new claims file.

7.2.2 Place the following into the file:

7.2.2.1 A claims checklist

7.2.2.2 Action sheet

7.2.2.3 A print-out of the client’s policy document details

7.2.2.4 One hard copy of the claims print-out

7.2.2.5 A note of any other relevant information gleaned from the conversation with the client (noted on the action sheet).

7.3 All terms and conditions apply, as if the client had suffered damage to the vehicle.

7.4 No further action must be taken until a third party claim is received from the third party, his Insurers or his attorneys.

7.5 If a third party contacts the Broker/Hollard and no claim has been lodged, refer third party directly to the Insured.

NOTE: Refrain from accepting any liability for a claim until the claim has been duly processed provided that the claim has not been rejected.

8. WRITE-OFF PROCEDURE

If a vehicle is for any reason a write-off or uneconomical to repair:

8.1 Receive the notification from the assessor that the vehicle is a write-off in terms of its retail value/Sum Insured related to the cost of repairs

8.2 If the case is marginal, a decision in conjunction with Hollard, can be made as to the viability of the repairing or writing off of the vehicle.

8.3 If the vehicle is a write-off, request the following from the Insured:

8.3.1 The original (de)registration certificate if the vehicle is not subject to a credit agreement.

8.3.2 If the vehicle is under credit agreement request a copy of the contract with the bank, together with the settlement figure.

8.3.3 The assessor will determine the code status of the vehicle and this will guide you to determine if a registration or deregistration document needs to be requested. However, Code 2 documents should always be requested.

8.4 If the vehicle is within the recognised towing area (refer Salvage Contract):

8.4.1 Instruct the salvage dealer to move the vehicle into his yard immediately.

8.4.2 Obtain a stock number for the salvage.

8.4.3 A salvage invoice book will be provided by Hollard, and the relevant invoice and documents to be sent to the salvage contractor before the vehicle is disposed of.

8.4.4 You must inform the salvage dealer not to dispose of or dismantle the vehicle until the salvage dealer is in possession of:

8.4.4.1 a copy of the Agreement of Loss;

8.4.4.2 the original deregistration certificate and keys; and

8.4.4.3 the Salvage Tax Invoice.

8.5 If the vehicle is outside of the recognised contract area, the Broker will consult with the loss adjuster, and make a decision as to how best to dispose of the salvage, either by tender or otherwise.

8.6 If the vehicle is a total burn-out, and the salvage is to be abandoned, photographs must be obtained to depict clearly that there is no salvage value.

8.7 Record the details in the Salvage Register.



8.8 Upon receipt of the documents requested in the above prepare the Agreement of Loss for authorisation by the authorised signatory, unless the claim is over mandate, then Hollard will authorise accordingly.

8.9 On receipt of the original deregistration certificate, as well as the signed Agreement of Loss, arrange to conclude the transaction with the salvage contractor/HP agent/Insured.

8.10 The Broker continually monitors the payments from the salvage contractor and, on receipt of the payment, the Broker carries out the procedure for receipt of monies from a debtor, back into the claims account.

8.11 Upon completion of all the above:

8.11.1 update the Salvage Register and ensure that all the information is recorded;

8.11.2 print out the hard copy of the claims printout and arrange for the file to be finalised.

The Salvage Register must be submitted to Hollard monthly for sign-off and the salvage amounts must be indicated.

NOTE: NO SETTLEMENT CAN BE DONE WITHOUT THE ORIGINAL DOCUMENTS.

9. MAINTENANCE OF SALVAGE REGISTER

9.1 Each Broker will maintain a separate register for salvage.

9.1.1 The Salvage Register shall be used to record all written-off vehicles for salvage.

9.1.1.1 As soon as the Broker becomes aware of a write-off, the details must immediately be recorded in the Salvage Register under the schedule headings.

9.1.1.2 If the vehicle is abandoned and has no value it must be noted in the register and authorised by Hollard. The vehicle must be deregistered.

9.1.1.3 Vehicles may only be disposed of or stripped once Hollard have taken lawful possession of the vehicle and legally and fully disposed of the vehicle to the relevant salvage contractor.

9.1.1.4 Deregistration/registration papers must be obtained.

9.1.1.5 On a monthly basis, a copy of the Salvage Register must be given to Hollard.

9.1.1.6 Receipt of monies must be recorded in Hollard’s Receipt Book and deposited into the Claims account.

9.2 The responsibility lies with the Broker for ensuring that the Salvage Register is:

9.2.1 kept up to date and balanced;

9.2.2 that vehicles are disposed of in accordance with prescribed procedures; and

9.2.3 that all monies due to Hollard are collected.

NOTE: No staff may tender on salvage WHATSOEVER.

10. STOLEN/HIJACKED VEHICLE

10.1 As soon as you are notified of a stolen/hijacked vehicle claim:

10.1.1 Complete the stolen vehicle data entry form and send it to Hollard within 48 (forty eight) hours.

10.2 As soon as you are notified of a stolen/hijacked vehicle claim and received all the relevant documents:

10.2.1 Appoint an investigator to determine the merits – irrespective of the quantum.

10.2.2 If the claim is over mandate, before the excesses are deducted, please refer the entire file to Hollard for authorisation.

10.2.3 If all is in order, proceed to settle the claim.

10.2.4 The original registration documents and keys need to be sent to Hollard for safekeeping.



10.3 If the vehicle is recovered before the claim is settled:

10.3.1 Notify Hollard immediately of the recovered vehicle, unless the notification came from Hollard.

10.3.2 Advise if assistance is required in the upliftment of the vehicle.

10.3.3 Appoint a Loss Adjuster to determine if there are any damages to the vehicle as a result of the loss.

10.3.4 An Upliftment agent can accompany the Insured to identify and release the vehicle.

10.3.5 The vehicle should then be taken to a panelbeater or salvage contractor, where a motor assessor can assess the vehicle, to determine if there are any damages as a result of the loss.

10.4 Maintenance of a Stolen Vehicle Register: each broker should maintain a separate register for stolen/hijacked vehicles.

NOTE: NO SETTLEMENT CAN BE DONE WITHOUT THE ORIGINAL DOCUMENTS.

11. STOLEN AND RECOVERED VEHICLES

11.1 There are three ways of being notified of a recovered vehicle and they are as follows:

11.1.1 Notification from an Investigating officer (SAPS)

The investigating officer will contact the Insured/Insurer/Broker about the recovered vehicle. The Broker can then decide if they would use their own upliftment agent or if they need any assistance from Hollard.

11.1.2 Notification from an Upliftment agent

The Upliftment agent will inform Hollard of the recovered vehicle. Hollard will then contact the relevant broker to determine if they want to uplift themselves or if assistance from Hollard is required. If assistance is required the Hollard will request the upliftment agent to remove the vehicle and take it to the panelbeater/salvage contractor of the broker's choice.The Broker is responsible for the upliftment fee, and must settle the fees as soon as they receive the invoice.

11.1.3 Notification from other sources

Should we be notified from an alternative source of the recovered vehicle we will notify the Broker thereof. The same procedure will be followed as in point 11.1.2.

NOTE: If no assistance is required with the upliftment of the vehicle, please refer to the document template in the attached document annexures.

11.2 If the vehicle is recovered before settlement

11.2.1 Notify Hollard immediately of the recovered vehicle, unless the notification came from Hollard.

11.2.2 The Loss Adjuster can accompany the Insured to identify and release vehicle.

11.2.3 The vehicle should be uplifted to a panelbeater or salvage yard to be assessed.

11.2.4 Appoint a Motor Assessor to assess damages.

11.4 If the vehicle is recovered after settlement

11.4.1 Notify Hollard immediately of the recovered vehicle, if the notification did not come from Hollard.

Hollard Stolen and Recovered team will:

11.4.2 The vehicle needs to be dealer stocked in Hollard's name. Contact your Hollard Claims Manager for more information.

11.4.3 Vehicle to be uplifted to salvage contractor.

11.4.4 Motor Assessor to be appointed to obtain closed tenders, if salvage contract not in place.

11.4.5 Highest tender to be accepted.

11.4.6 If the vehicle is recovered, this must be noted in the register and advised to Hollard.



Recovered vehicles may be disposed of or stripped only once Hollard has taken lawful possession of the vehicle and in accordance with the terms and conditions of the policy. This means that the salvage contractor can sell the vehicle only once the claim has been paid AND we have provided the salvage contractor with original cancelled deregistration paper. If a claim is rejected – advise the Insured to uplift the vehicle and also advise the salvage contractor that we are no longer liable for storage.

Each Broker will lay down a specific process for disposing of recovered vehicles in his/her area.

On a monthly basis, the stolen vehicles register must be physically compared with Hollard’s.

Receipt of monies must be recorded and deposited into Hollard’s Claims account. In the event that a recovered vehicle is salvaged, all conditions as per the salvage contract/s must be adhered to and monitored on a monthly basis by the Broker.


Liability Claims Procedures

LIABILITY CLAIMS PROCEDURES

1. LIABILITY CLAIMS/ALL LIABILITY

1.1 Refer to Hollard who will pass it to their legal department.

1.2 On notification of a potential liability claim, the following documentation must be reported to Hollard.

1.3 All liability claims should be referred to Hollard including, but not limited to:

1.3.1 Liability as a result of fire and explosion

1.3.2 When a minor is involved we also require the date of birth of the minor.

1.5 We will require the following documents when the claim is reported:

1.5.1 Notification schedule

1.5.2 Schedule of Insurance

1.5.3 Completed claim form

1.5.4 Any other details, i.e. letter of demand, summons

1.6 We may instruct loss adjusters or attorneys to deal with these matters subject to the merits, quantum, and our reinsurance treaties.


Non-motor Claims Procedures

NON-MOTOR CLAIMS PROCEDURES

1. CLAIMS PROCEDURE FOR NON-MOTOR CLAIMS

As soon as the Insured advises you of a loss or an event that could result in a loss:

1.1 Obtain a completed claim form from the Insured.

1.1.1 The claim form has to be completed and signed and dated by the Insured himself.

1.1.2 You or any marketer within your organisation may not complete or sign the claim form for or on behalf of the Insured.

1.1.3 You will normally either meet the Insured face to face in your offices, or communication will alternatively be by telephone or e-mail.

1.1.4 It is important to pay special attention to the date of loss and the description of the loss. This is important because it is the client’s disclosure of how the loss occurred and details of the claim. If this information is not completed the claim form cannot be accepted.

Example: DOL 16 May 2010 at 3pm.

I left my laptop on the back seat of the vehicle when I went shopping.

NOTE: The description indicates where the client was at the time of the loss and where the item which the client is claiming for was at the time it was stolen.

1.1.5 Manage the client’s expectations and inform him what the Claims department will do in order to process the claim accordingly.

1.1.6 Provide the client with an approximate time that it may take to for assessors or loss adjusters to meet and report on the claim. If you have committed to a time – abide by it diligently and keep your client informed about unexpected changes that may occur.

1.2 Register the claim on the relevant computer system as soon as you receive the claim form together with any other relevant claims documentation, for example quotes, proof of purchase and ownership. Open a claim file and use the action sheet/s to keep detailed notes on the file.

1.3 Advise and report the claims to Hollard by contacting Hollard where the claim is any one of the following:

1.3.1 Value over your claims mandate

1.3.2 Any liability

1.3.3 Late notification

1.3.4 Staff claim

1.3.5 Ex gratia

1.3.6 Sasria

1.3.7 Any possible rejections

1.3.8 Technical (Assistance required).

1.4 You may proceed with appointment of the appropriate assessor, loss adjuster or Investigator where the merit of the claim allows you to do so. If you are unsure of how to proceed, please contact your Claims manager. Appoint a loss adjuster to assess the loss subject to the following criteria:

1.4.1 Appoint only loss adjusters that are approved by Hollard. Make use of the Hollard Procurement Pages to assist you with your decision.

1.4.2 All assessments are instructed on a ‘without prejudice’ basis. The loss adjuster is not authorised to negotiate settlement or to formulate an agreement of loss, without having received the authorisation from your office to do so.

1.4.3 Where the value of the claim adds to the merit of appointing a loss adjuster.



1.4.4 Provide the loss adjuster with the appropriate details of the loss as well as the details of your client.

1.4.4.1 It is most beneficial always to provide the loss adjuster with a copy of:

a) the policy wording applicable

b) policy schedule

c) proposal form.

1.5 The value of the claim should be taken into account with the circumstances of the incident. If subsidence or fire is suspected the value is irrelevant. Hollard needs to be advised to enable the correct assessor or engineer to be appointed.

1.5.1 The nature of the claim

1.5.2 If the claim forms a part of a catastrophe claim:

1.5.2.1 make a separate listing on the catastrophe register.

1.5.2.2 provide Hollard with the follow-up information on a weekly basis as you may progress through the claim and specifically when the claim has been finalised in order for the correct settlement amounts to be processed by Hollard (please note you have 3 (three) months from date of loss to advise Hollard of all your catastrophe claims).

1.6 Quotes:

1.6.1 Ask the Insured to obtain quotes for items claimed. This will assist with correctly estimating the loss and understanding the type and make of item for which client is claiming.

1.6.2 Quotes are generally a requirement on all claims for property loss and will be required to be placed on the claims file for audit purposes. There are various alternatives available to assist in quantifying a loss besides a written quote.

1.7 An Assessor’s report MUST contain the following minimum information:

1.7.1 A detailed description of the value at risk, to establish whether the Insured is adequately insured.

1.7.2 Details about the risk, for example address, construction of the house and roof, any other material information about the risk.

1.7.3 Circumstances surrounding the loss. Does this correspond with the description on the claim form?

1.7.4 Description of the loss.

1.7.5 Is the loss covered in terms of the policy? Was it caused by an insured event? Recommendations.

1.7.6 Costing in terms of the claim. The assessor has to confirm that the quote is a fair quote and that the quote is comprehensive.

1.7.7 Photographs depicting the loss for file purposes.

1.7.8 Remedial action to be taken by the Insured should the claim be rejected.

1.7.9 Previous insurance check has to be done.

1.7.10 Dual insurance.

1.8 Proceed with authorisation of the claim only if the claim does not form part of the criterion as mentioned in point 3 of this section: for example, outside your claims mandate:

1.8.1 In accordance with the loss adjusters’ report, provided that the Insured is not under-insured and premium has been paid on time.

1.8.2 Where there is under-insurance, the assessor calculates the average and then provides us with their settlement recommendations. The claim may then be considered to be settled on a cash in lieu settlement basis.

1.8.3 No authorisation can be given for replacement where the Insured is not adequately insured (for example, where average applies).



1.9 Appoint a contractor to do the repairs:

1.9.1 In accordance with the assessment report, provided that the insured is not under-insured.

1.9.2 Where there is under-insurance, the assessor has to provide us with full details of value at risk and average calculations before we obtain the signed Agreement of Loss and settle cash in lieu.

1.9.3 No authorisation can be given for repairs where the insured is not adequately insured (for example, where average applies).

1.10 Where you have provided authorisation for replacement of any items diarise your file and follow up on invoices. Once the invoice is received be sure that you proceed with payment only once you have:

1.10.1 received a signed release or delivery note from the Insured, and

1.10.2 received the original vat invoice, not an e-mail document.

1.11 Ensure that you compare the invoice amount to the amount that you have authorised or that has been agreed by the loss adjuster. If the amount of the invoice does not match the authorised amount, investigate and always question any additional amount that may not have been agreed upon.

1.12 Where the claim may be considered as a possible rejection:

1.12.1 Prepare the file together with all the claims documentation, and forward copies to Hollard.

1.12.2 Based on the merit of the matter and considering the policy wording Hollard may decide on proceeding with a rejection by drawing up a rejection letter. The original rejection letter will be forwarded to the client via registered mail and a copy of the rejection letter will be forwarded to you to place on your claims file.

1.12.3 Please note that it is imperative that any possible rejection be properly communicated to the client and explained.

1.12.4 Please also note that the claims decision from Hollard’s perspective should always adhere to the claims philosophy as set out and agreed by Hollard.

2. GUIDELINES FOR APPOINTING LOSS ADJUSTERS

It is important to remember that the claims department of an insurance company is the showcase of the company, and whilst the Loss Adjuster is independent, in the public eye he represents the company.

Please ensure loss adjuster/motor assessor is advised of our requirements.

2.1 Common benefits and reasons for appointing loss adjusters

2.1.1 Indication of moral hazard.

2.1.2 Report on physical hazard.

2.1.3 Checking adequacy of Sum Insured.

2.1.4 Advising of insurance history.

2.1.5 Handling the complexity of a claim and to adjust claim accordingly.

2.1.6 Refer to specialists for repairs and replacement to adjust claim accordingly.

2.1.7 Where there is doubt regarding circumstances and quantum and/or fraud is suspected, thorough investigation is to be undertaken.

2.2 Loss adjusters’ responsibilities

2.2.1 All reports to be addressed to Hollard care of the Broker and sent to the Broker.

2.2.2 The loss adjuster must conform to a Code of Conduct and Ethics laid down by the ILA and have professional indemnity insurance in place.

2.2.3 The loss adjuster may not conduct any other form of conflicting business.

2.2.4 Conflict in interpretation of policy wordings – the loss adjuster must consult with the Principal, and present his own views. He must, however, follow Principal's guidelines and instructions and not venture into offering legal opinions.



2.2.5 The acceptance of affidavits as proof of ownership may not be accepted without consulting Principals.

2.2.6 Where the loss adjuster suspects fraud of any nature, he must immediately contact Hollard concerning the matter before drafting any report. The report needs to be forwarded to Hollard immediately, as the insurer may wish to take legal advice.

2.3 Insurers’ responsibilities

2.3.1 Clear written mandates and instructions to be given.

2.3.1 Full details of cover to be given – copy of schedule, endorsement, wording, proposal forms.

2.3.2 Be reasonable – often the loss adjuster has to act speedily with limited information, for example fire claim, to prevent further loss or damage.

2.3.3 Attempt to estimate the Assessor’s fee at time of appointment.

NB: All reports must be without prejudice.

NOTE: Whenever there is a fire claim, only approved loss adjusters may be appointed. To verify which loss adjuster to appoint, please consult Hollard.

3. MINIMUM REQUIREMENTS FOR THEFT/HOUSEHOLDER’S ASSESSMENTS

3.1 Minimum requirements for theft/householder's assessments are as follows:

3.1.1 We suggest that a flat fee be negotiated for services rendered. More specifically, we would suggest a checklist for a burglary assessment as follows:

3.1.1.1 ITC report

3.1.1.2 Inventory

3.1.1.3 List of items claimed, where and when purchased and if proof of ownership is provided

3.1.1.4 Detailed description of loss

3.1.1.5 SAPS details and report verified, Insurer's interest with SAPS noted

3.1.1.6 Costing relating to claim and where possible costing from more than one supplier

3.1.1.7 Photographs, especially to show visible, forced and violent entry or exit if applicable. Photographs are also needed to illustrate point of entry and exit from premises and any other detail to illustrate claim

3.1.1.8 Verification of proof of quantum and ownership

3.1.1.9 Check previous insurance, and any potential non-disclosure referring to proposal form

3.1.1.10 Risk profile relating to security requirements

3.1.1.11 Assessor to report on occupants, permanent and otherwise, as well as occupation, and ID numbers where possible

3.1.1.12 Check proposal and verify underwriting details

3.1.1.13 Suggested corrective underwriting and possible steps that can be taken to limit similar future losses.

Should a further investigation be necessitated by the preliminary investigation, then the Loss Adjuster/Assessor may negotiate a further fee. These could be considered as minimum requirements for an assessment. We suggest using the Hollard Procurement pages for preferred suppliers and we encourage feedback about these assessors and loss adjusters on the procurement pages web-site.

4. INSURED PERILS EXPLANATION PER INSURED EVENT

When the Insured seeks to claim from his Insurers he must show that the loss was caused as the result of a peril covered by the policy. On the other hand, the onus of showing that the loss is not covered by reason of a specific exception in the policy, rests with the Insurers. THE POLICY WORDING SHOULD ALWAYS BE CAREFULLY EXAMINED, NOTWITHSTANDING THE EXPLANATIONS GIVEN IN THIS DOCUMENT.



4.1 Proximate cause Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source.

4.2 Fire Active principle operative is combustion, in which substances join chemically with oxygen in air and usually give out bright light and heat, flame, incandescence.

There is no fire within the meaning of a fire policy unless there is an ignition either of the property Insured or of the premises where it is situated. Damage caused by heat or fermentation, unaccompanied by ignition is not covered. The loss to the insured property must be proximately caused by the ignition. Loss due to lightning is not covered by a fire policy but if the lightning results in fire, damage caused so is covered. The fact that the Insured’s negligence caused the fire will not exempt the Insurer from liability. Similarly the Insured may recover where the fire is caused by the wilful act of a third party without his knowledge or consent. But the Insured will not be able to recover where the loss is caused by his own wilful act or that of someone acting with his knowledge or consent. The onus will be on the Insurer to prove the Insured committed arson. Damage by water used to extinguish the fire or to prevent it from spreading will be covered. So will damage caused by explosion caused by fire. Loss by theft during the fire will be covered. So will expenses incurred in the reasonable removal of property in order to save it from the fire.

4.3 Lightning/thunderbolt Visible electric discharge between clouds or cloud and ground causing damage to the insured property. The electric flash is usually followed by thunder.

Damage as a result of power surge from the power supplier is not insured. (It presents itself in a similar manner as lightning.)

4.4 Explosion Damage caused to insured property due to: sudden expansion of gas, gunpowder, bomb, boiler, etc. with loud noise owing to release of internal energy (with very violent shattering effect); sudden violent burst with a loud report, an outburst. Loss or damage by explosion of gas for domestic purposes in a building is deemed to be loss by fire.

4.5 Subterranean fire Damage caused to insured property by fire existing, occurring, or done under the earth’s surface, underground. There was a very good example of this in the Witbank area some years ago when one of the underground coal-mines caught alight. This will be covered as long as the policy does not exclude damage as a result of mining operations.

4.6 Earthquake Damage caused to insured property by convulsion of earth’s surface due to faults or volcanic action, a heaving of the ground, or a shaking of the earth. Most policies exclude damage due to mining operations, or have other limitations relating to mining operations.

4.7 Storm Damage caused to insured property by violent disturbance of the atmosphere with thunder, strong wind, or heavy rain or snow or hail, a tempest, a wind just short of a hurricane; any intense meteorological phenomenon, a fall of snow, long frost.

4.8 Wind Air in more or less rapid natural motion, breeze or gale causing damage to the insured property; a current of air usually horizontal, either natural or produced by artificial means; air in motion.

4.9 Flood Damage to insured property as a result of the inflow of tide, river stream, sea. Eruption of water over land, inundation, outpouring of water, torrent downpour, in great quantities; a great flow of water, deluge, a condition of abnormal flow of water.



4.10 Water Damage caused by water in its liquid form. (Mildew, damp, wet or dry rot, or any gradually operating cause are not covered by this peril.)

4.11 Hail Damage to insured property as a result of pellets of frozen rain falling in shower or hailstorm.

4.12 Snow Snow means atmospheric vapour frozen into ice crystals and falling to earth in light white flakes, or spread on it as a white layer after falling. Snow storm, heavy fall of snow especially with wind. The policy would cover damage as a result of snow or the melting of the snow.

4.13 Freezing Damage as a result of frost, to be converted into or covered up with ice, become rigid as a result of cold. Frost: Freezing, prevalence of temperature below the freezing point of water.

4.14 External impact, excluding impact by trees or part thereof whilst being felled or trimmed Damage caused by striking on or against, or the collision with insured property.

4.15 Bursting or overflowing of geysers, water tanks or pipes, excluding damage caused to such apparatus or pipes Damage caused to insured property by water as a result of the overflowing of the above. This means that the resultant water damage is specifically included in this section, even though it might be excluded elsewhere.

4.16 Escape of oil from a fixed oil heater or associated apparatusDamage caused to insured property by the oil escaping as described above.

4.17 Burglary or theft or any attempt thereat, but excluding whilst the property insured is let, or sub-let by you, or is occupied by any other person

4.17.1 Burglary: When someone enters a building illegally with the intent to commit a felony; robbery by burglary. Burglary is usually accompanied by force.

4.17.2 Theft: Stealing, dishonest appropriation of another’s property with intent to deprive him of it permanently. Theft usually occurs without force.

4.18 Malicious damage Damage occasioned by active ill-will, or by the wilful and wanton act of another party other than the Insured and without the knowledge and/or consent of the Insured.

4.19 Subsidence The downward movement of a site on which buildings stand, from causes unconnected with loading from a building. Examples are underground mining and erosion due to water passing through the sub-soil, but excluding the compaction of ground or infill. Most policies exclude damage due to mining operations.

4.20 Landslip Downward movement of sloping ground resulting from the action of self-weight stresses and imposed loadings exceeding the available strength of the ground. Landslip may be triggered by the application of superimposed loadings from buildings or may be induced by excavating into sloping ground with the result that material fails and moves down the slope.

4.21 Settlement (NOT COVERED) The downward movement of the site due to the application of superimposed loadings from a building; it is the wholly natural effect of superimposing a load on a site and is predictable.



4.22 Ground heave (NOT COVERED) Upward movement or expansion of the site due to the removal of load from it or to actions within the site itself. An example is the rehydration of a shrinkable clay sub-soil following the removal of mature trees or hedgerows.

4.23 Rise in underground water level (NOT COVERED) When the water-table rises due to a downpour of water or continuous downpour over a period, this can be visible or not. Rising groundwater can cause resulting pressure and any damage caused by this rise in underground water or the resultant pressure is normally excluded from cover.

4.24 Accidental DamageDamage that occurs suddenly as a result of an unexpected and non-deliberate external action. In layman’s terms, that usually means an unintentional one-off incident that harms your property or its contents, such as damage arising as a result of an accident, for example paint spilled on a carpet.

5. MOISTURE CONTROL

5.1 Where there has been extensive water damage due to an insured peril, and the damage appears to be mainly water damage (for example, no additional excess rubble, mud, etc.), then moisture control becomes a viable option of remedy to the situation.

5.2 With moisture control one is able to dry out the interiors of the buildings and save furniture, electric and electronic equipment, and stop capillary water into walls, save carpets, and reduce refurbishment costs.

5.3 When does this become an option?

5.3.1 Heavy rainstorms causing flooding

5.3.2 Hail storms that create flooding

5.3.3 Burst geysers

5.3.4 Water damage in fire claims

5.3.5 Burst pipes (where this is covered).

5.4 Moisture control is effected by the use of dehumidifiers, and in the process it prevents rot (dry as well as wet) from setting in, as well as rust and corrosion. There have been examples of parquet flooring being salvaged due to this process. Surplus water is removed, general clean-up measures are taken and then the dehumidifiers are set to work. What makes this process attractive is that normal life can continue while the drying out takes place.

5.5 Other benefits include that it is:

5.5.1 faster

5.5.2 cost-effective

5.5.3 less damaging

5.5.4 less disruptive as there is no use of heat.

6. GEYSER CLAIMS

There has been a fair amount of discussion relating to geysers, how a claim might occur, when cover is valid or not, etc.

6.1 Insurance Policy wordings usually provide cover for geysers:

6.1.1 Loss or damage to geysers by an insured peril provided that:

6.1.1.1 the Insurer's liability in terms of this loss be limited to Policy specification

6.1.1.2 with an excess as specified, where applicable.



6.2 At all times remember:

6.2.1 Bursting, overflowing or escape of water or oil from fixed tanks, geyser apparatus or pipes including bursting of pipes inside the house due to severe cold or as a result of unusually high pressure but excluding bursting of pipes due to corrosion. Many policies exclude pipes in total.

6.2.2 Corrosion: a chemical act or process that eats away by degrees, especially rust. This can also include the action that lime or any other substance may have on the pipes.

6.2.3 The policy exceptions are applicable to all sections of the policy and must be taken into consideration when dealing with a claim.

6.2.4 All contractors’ quotations/invoices must indicate the geyser make, size and serial numbers.

6.3 Geyser warranties: Each geyser has a warranty tag fitted to it, and where the warranty is still valid, the geyser claim should be redirected to the manufacturer of the original geyser and not to the scheme.

6.4 We would insist that the plumber attach the warranty tag to the invoice to ensure that he does not receive double payment for a claim, for example, both from ourselves and the manufacturer in terms of a warranty claim.

6.5 A warranty tag will contain the following information: H 10 **** 5

H or V indicates that it was a H=horizontal or V=vertical geyser10 Indicates the month of manufacture, in this example the 10th month (October)

**** Will indicate the year of manufacture, for example 19965 Will indicate the period of warranty, in this example 5 (five) years.

6.6 Always remember that thermostats, elements and valves are not included in the scope of cover as these are considered to be consumables, and are therefore not covered.


Recoveries and Third-party Procedures

RECOVERIES AND THIRD-PARTY PROCEDURES

1. SMALL CLAIMS COURT PROCEDURE

THE HOLLARD INSURANCE COMPANY LIMITED

“GUIDE TO INSTITUTING ACTION IN THE SMALL CLAIMS COURT”

Prepared by: The Hollard Insurance Company Limited Legal Department for the assistance of our clients.

1.1 General

1.1.1 This document is merely a guide to the workings of the Small Claims Court and how to utilise it. It is not legal advice and should you decide to proceed in the Small Claims Court, you must find out all the information you require from the Small Claims Court.

1.1.2 The detailed provisions are set out in the Small Claims Court Act No. 61 of 1984 and the rules in terms of the Act are published in the Government Gazette of 30 August 1985 as amended from time to time. These may be obtained from any branch of the Small Claims Court itself.

1.1.3 The purpose of the Small Claims Court is to provide a forum for the swift and inexpensive adjudication of a range of minor civil disputes where the plaintiff is a natural person.

1.2 What can I claim and how do I go about it?

1.2.1 Your claim, any counterclaim or the value of the matter in dispute may not exceed R15 000 (fifteen thousand Rand) unless you abandon the difference.

1.2.2 The Small Claims Court also cannot decide matters which are excluded from its jurisdiction, such as the validity or interpretation of a will, any divorce proceedings, any maintenance proceedings and any actions to declare a person insane. It also cannot hear actions on defamation, malicious prosecution, wrongful imprisonment, wrongful arrest, seduction or breach of a promise to marry someone.

1.2.3 As stated, only a natural person can issue summons in the Small Claims Court and no juristic person, such as a company or close corporation, may do so, nor may it lodge a counterclaim.

1.2.4 Action must be instituted against a defendant in the Small Claims Court of the district in which the defendant resides, carries on business or is employed, or in the area where the cause of action arose, for example where the accident occurred.

1.2.5 You may not cede your claim to somebody else and allow that person to institute action against a defendant on the basis of your claim and in your name.

1.2.6 No one is entitled to representation by an attorney or advocate in the court as the court is intended to be far more informal than the Magistrate’s Court or Supreme Court proceedings and readily accessible to the man in the street. You may, of course, consult an attorney at your own cost to advise you of your rights and to assist you in whatever other way before the hearing. Your attorney’s costs are not recoverable from the defendant.

1.2.7 There is a Small Claims Court in each magisterial district and the Clerk of the Small Claims Court is located in the Magistrate’s Court building. The actual hearings are not always heard at the Magistrate’s Court and may be held at some other place which is practical or convenient, having regard to the community which the Small Claims court serves.

1.3 How is an action begun?

1.3.1 Action is instituted by means of a letter of demand to the defendant, which must set out the particulars upon which your action is based, and the amount of your claim. A standard form letter of demand is available at the Small Claims Court office and the Clerk will assist you in drafting it.

1.3.2 The letter of demand must be delivered by hand or registered post to the defendant, giving him 14 (fourteen) days from the date he receives it in which to pay your claim, or to tell you that he intends defending your action.

1.3.3 If the defendant does not pay your claim on receipt of the letter of demand within the stipulated period, you are then entitled to issue a Small Claims court summons against him.


Recoveries and Third-party Procedures

1.3.4 Again, the Clerk of the Small Claims Court will assist you in preparing the summons. The summons must:

1.3.4.1 contain the time, date and place of the trial which must not be less than 10 (ten) days from the date the summons is served on the defendant by the Sheriff of the Court; and

1.3.4.2 advise the defendant that he is entitled to formulate his defence to your claim in the form of a written statement that he must serve on you; and

1.3.4.3 contain the particulars of your claim and specify how much of your claim has been abandoned (if you have had to abandon a portion of it to bring your claim within the R3 000 (three thousand Rand) limit); and

1.3.4.4 advise the defendant that default judgement may be obtained against him if he does not appear in Court on the day of the trial; furthermore, that the defendant can consent to a judgement against him and, where he elects to do so, he must approach you and that upon his failure to pay once judgement is awarded against him for payment of the money, an investigation may be conducted into his financial affairs; it must also advise him of the fee payable to the Sheriff for service of the summons.

1.3.5 The defendant must provide a written statement setting out the basis of his defence and why he feels that he is not liable for your claim and this “statement of defence” must be filed at Court and given to you at any time before the hearing – even on the day of the hearing.

1.4 What happens at the hearing?

1.4.1 A Commissioner (who can be a Magistrate, an attorney or an advocate of substantial experience) presides over the hearing. Each party presents his/her case and the Commissioner can ask questions and direct that further evidence be required if necessary.

1.4.2 The parties should bring to court whatever witnesses are relevant to their case.

1.4.3 An order for costs in the Small Claims Court may only include Court fees (being the prescribed amount for the issue of the summons) and the Sheriff’s charges for serving the summons.

1.4.4 If judgement is granted in the form of payment of a sum of money by the defendant to the plaintiff, the Commissioner must enquire from the defendant whether he is able to pay the judgement debt and costs and if he says that he is not able to, the Commissioner may conduct an enquiry into the defendant’s financial position and then order how the defendant must pay.

1.4.5 If the Commissioner is not satisfied that you have made out a case against the defendant, he will either dismiss your claim or absolve the defendant.

1.4.6 The decision of the Small Claims Court is final and no appeal may be lodged against its decision.

1.5 You may locate the Small Claims Court for your magisterial district by telephoning the Magistrate’s Court

at the telephone number you will find in your local telephone directory.


Terminology

TERMINOLOGY

Abandonment the giving up by an Insured to the Insurer of damaged property when a total loss is claimed.

Acceptance an absolute and unqualified agreement to the terms of an offer, so creating a contract.

Accident an unforeseen and unintended event or occurrence.

Accident Insurance a term used to describe all classes of insurance which do not fall within the meaning of the generic terms:

Life, Fire, Engineering, Marine or Motor Insurance.

Thus: Theft, Money, Fidelity Guarantee, Householders, All Risks, Glass and Public Liability are all classes of the Accident Class of Insurance.

Accommodation Business normally unacceptable business taken by an Insurer as a goodwill gesture in the hope that further business will materialise.

Act of God an event that is the result of natural forces and which arises without human intervention.

Acquisition Costs the costs to an insurance company to gain or retain business. These costs include: the Commission payable to the intermediary; the advertising and marketing costs; new business processing costs; processing costs of existing business, and any other “hidden” costs which occur during the process of writing business to the books of the insurance company.

Adjustable Policy a policy where the exact extent of the value at risk cannot be known in advance (for example goods in transit insurance). A provisional premium is charged and adjusted at the end of each period of insurance.

Adjuster/Assessor see LOSS ADJUSTER/ASSESSOR.

Agent a person who acts on behalf of another and in the case of insurance is the intermediary between the proposer and the Insurer.

Agreed Value the sum to be paid in the event of a total loss under a valued policy.

Apportionment of Damages Act provides that a claim for damages will not be defeated by the contributory negligence of the claimant, but that the damages recoverable shall be reduced by the court to such extent as it may deem just and equitable having regard to the degree of contributory negligence. (See: Contributory Negligence)

Arbitration a means of settling disputes legally without going to court where the issue concerns the amount of a claim and not liability. A qualified person or persons whose appointment has been agreed to by the parties involved, will hear the case and give a decision.

Arson the act of setting property alight for malicious purposes. In the insurance context arson also means the deliberate burning of property in order to claim in terms of a policy of insurance. (Sometimes called: “a fire of convenience.”)

Asset a property or financial commodity which can, if necessary, be converted into cash.

Assurance a term interchangeable with insurance, which is often used in the case of Life and Marine business.

Attestation the signing clause in a contract of insurance.


Terminology

Automatic Increase Margin an automatic increase of the Sums Insured buildings and contents by a percentage commensurate with the prevailing inflation index. This does not affect the application of average and the Insured’s duty to ensure that the Sums Insured are adequate.

Average a condition or clause in a policy which stipulates that if the Sum Insured is less than the value of the property insured, the policyholder will be his own insurer for the difference and will carry a proportionate share of the loss.

Example: Contents of a house are insured for R100 000. The actual replacement cost of the contents is R200 000. If the contents were damaged by an insured peril to the value of R50 000 the claims settlement would be calculated as follows:

Value at Risk R 200 000Sum Insured R 100 000Amount of loss R 50 000 Sum Insured

Amount Payable = Value at risk X Amount of loss

R100 000 X R50 000 = R25 000 The amount payable.R200 000

Average is applied for three main reasons:

(i) To avoid underinsurance.(ii) To obtain a full premium for the risk the Insurer is carrying.(iii) To ensure that each party bears a fair share of each loss.

in general insurance, this is a policy provision which has the effect of reducing a claim payment where under-insurance is discovered.

Balance of Third Party, Fire and Theft Beneficiary

the terms used in South Africa for the form of motor insurance which covers the Insured’s liability for:

(i) injury to passengers not covered in terms of the Road Accident Act 1996; and

(ii) damage to the property of third parties caused by the vehicle.

This type of policy provides a limited extent of cover to owners of motor vehicles. The balance of Third Party risk is covered, as well as loss or damage from the perils of Fire and Theft.

Betterment the value of the improvement in an insured property when it has been repaired or rebuilt following loss or damage.

Blanket Policy a policy covering several items under one Sum Insured.

Bordereaux the sheets of information prepared by an Insurer detailing cessions under reinsurance treaties.

Broker an insurance broker is usually an agent of the Insured. A Broker advises the Insured on matters of insurance, and acts on behalf of the Insured in negotiations and purchase of insurance cover. The Broker is usually remunerated by the Insurer by payment of commissions, however Brokers charge clients handling/service fees on a policy as well. Brokers may be responsible to clients for errors or omissions that prejudice the client’s interests.

Brokerage the commission or fee paid to the Brokers by the Insurers for placing business with them.

Burglary a term (without legal meaning in South Africa) is often used to describe theft accompanied by forced and violent entry into or exit from a building.

Burning Costs method of calculating the insurance premium (especially in reinsurance) taking account of previous claims.


Terminology

Business Interruption Insurance the class of insurance which provides cover for consequential loss arising directly from another loss (for example, loss of profits following fire damage).

Cancellation Clause this is a condition or clause in a policy which allows one party to cancel the contract following due notice to the other, premium payment and refund conditions.

Capacity insurance companies have a limit to the extent that they can expose themselves to probable losses. Acceptance of risk above capacity limits would require reinsurance be placed.

Captive Insurance Company an insurance company set up by a parent company, in order to receive that parent’s insurance business.

Catastrophe Cover a form of excess of loss reinsurance which protects the Insurer against losses arising from major catastrophes.

Certificate of Insurance a document issued by an Insurer which is used mainly in the marine market to certify that cover is in force.

Cession that part of insurance transferred to a reinsurer. The transfer of rights, title and interest under a contract.

Chance the probability or likelihood that an event occur.

Claim a formal application from the Insured to the Insurer for payment or compensation following a loss, damage or injury which has occurred as a result of the operation of a peril covered by the insurance policy.

Claim Form a form supplied by an Insurer to enable an Insured to lodge a claim in terms of the policy.

Claim-Free Group (CFG) the term used in motor insurance to indicate into which of the rating groups a policyholder will fall according to his claims record.

Claims-Made Basis of Insurance an underwriting method used for Public Liability Insurance, based on the payment of losses which occur on or after the retroactive date shown in the schedule of the policy and which results in a claim being made during the period of insurance, or during a limited period thereafter (known as the discovery period).

Claims Ratio see LOSS RATIO.

Co-Insurance the division of a risk between two or more Insurers where each is individually liable to the Insured for their proportion of claims.

Co-Insurer an Insurer who shares with others in co-insurance.

Collective Policy policy issued by the leading Insurer on behalf of all the Insurers who share a risk by way of co-insurance.

Commission the payment made to intermediaries by Insurers for placing business with them.

Common Law the part of a country’s legislation built up from customs and usages which have been recognised by its courts and thereby given the force of law.

Composite Insurance Company an Insurer undertaking both life and non-life business.

Comprehensive Policy a policy covering a wide variety of perils.

Concealment the deliberate non-disclosure of a material fact.

Condition part of a contract which must be complied with by one party or another.

Consequential Loss a loss directly arising from another loss. The term is used to describe the class of business also known as LOSS OF PROFITS or BUSINESS INTERRUPTION INSURANCE.


Terminology

Consideration the payment or promise of payment for goods or services, this being the premium in the case of insurance.

Contingency an unforeseen occurrence.

Contingency Fund monies put aside by a company in order to pay for unexpected losses.

Contract an agreement made by two or more parties with the intention of creating a legal obligation between them.

Contract of Insurance an agreement between Insurer and Insured whereby, in return for the payment of a premium, the Insurer undertakes to indemnify the Insured upon the happening of a specified event.

Contra Proferentum Rule any ambiguity in contract wordings is construed against the drafter of those wordings.

Contribution the principle whereby two or more Insurers covering the same risk contribute proportionately to any losses.

Cover the protection provided by insurance.

Cover Note temporary evidence of the granting of insurance

Damages an amount of money claimed by or awarded to a third party as compensation for injury or loss.

Declaration the statement on a proposal form signed by the proposer certifying the truthfulness and accuracy of the information supplied.

Declaration Policy a policy requiring the Insured to declare periodically the value of fluctuating items, such as stocks or goods-in-transit, to enable the Insurer to adjust the premium accordingly.

Deductible an American term, similar in meaning to excess and being the first portion of a loss payable by the Insured.

Delegated Authority the authority given to an agent of an Insurer to act on its behalf in accepting risks within agreed guidelines.

Deposit Premium an advance payment made by the Insured before the actual premium has been decided.

Depreciation the extent to which (insured) property has diminished in value due to factors such as wear and tear.

Direct Insurance an original insurance contract between Insurer and Insured.

Direct Insurer an Insurer in contact with insuring members of the public or corporations.

Disclosure the duty of the parties to a contract of insurance to reveal all material facts to each other before it is concluded and prior to each renewal.

Due date the date on which a policy becomes due for renewal.

Earned Premium that part of a premium relating to a completed or expired period of risk; the actual premium chargeable under an adjustable policy.

Endorsement documentary evidence of some alteration to a policy of insurance.

Escalator Clause the clause in a policy which allows the Sum Insured on property to rise throughout the period of insurance in step with the assumed rate of inflation.

Ex Gratia Payment a payment made to an Insured where there is no liability under the policy.

Exception a peril specifically excluded from the insurance.

Excess that part of a loss for which the Insured is liable.


Terminology

Excess of Loss a form of insurance where the reinsurer agrees to pay the balance of any losses exceeding a stated monetary amount.

Executor the person named in a will who has agreed to carry out its terms.

Expense Loading that part of the premium which meets the policyholder’s share of the Insurer’s administrative costs.

Fire the accidental or fortuitous ignition of something that should not be on fire.

First Amount Payable the amount payable by an Insured in the event of a claim.

First Loss Policy an insurance policy where the Insurer pays all losses up to a given limit.

Fleet Insurance a motor policy covering a group of vehicles with the premiums calculated on an experience basis.

Flood an inundation, overflowing or eruption of a body of water over land that is not usually submerged. This is taken to include overflowing of bathtubs, etc. In other words, water which is somewhere it is not supposed to be.

Forced and violent a term used to limit the scope of cover against theft from a building. Both force and violence must be used to gain entry to or exit from the building.

Franchise the amount of a loss at or below which no claim is payable by the Insurer. Above that amount, the loss will be met in full.

Fund the common pool into which premiums for each class of insurance are paid and from which the losses are met.

General Insurance insurance which is not long-term business.

Landslip a small landslide or rapid downward movement of a mass of rock or earth under the force of gravity.

Lapse the termination of an insurance contract through the non-payment of the premium or by the Insurer’s decision not to invite renewal.

Latent Defect hidden or concealed fault in an article.

Law the rules enacted or customary in a country ordering or prohibiting certain actions.

Leading Case a legal case where the decision has been widely followed.

Leading Insurer the Insurer who accepts a share of risk on a co-insurance agreement – often the one who first signs a broker’s slip.

Letter of Acceptance a letter from an Insurer to a proposer indicating that his application for cover has been accepted.

Liability a claim upon one’s assets by another person.

Limit of Liability the maximum amount that an Insurer will pay for one loss in terms of a liability policy.

Line a share of an insurance which is divided among two or more Insurers.

Lloyd’s the corporation which organises the market of individual underwriters in London (but accepts business introduced by brokers from all parts of the world) and provides a full range of ancillary services.

Loading those elements added to a premium to allow for Insurer’s expenses.

Loss Adjuster/Assessor an independent, qualified person who assesses the size or value of a loss on behalf of an Insurer, but who may also be employed by an Insured to look after his interests in a loss settlement.


Terminology

Loss of Profits Insurance see BUSINESS INTERRUPTION INSURANCE.

Loss Prevention activities undertaken to prevent losses from occurring.

Loss Ratio the ratio of claims to premiums.

Malicious Damage damage resulting from the deliberate, willful or wanton act of any person, or persons, committed with intent to cause damage. The term excludes loss or damage caused by theft.

Market Value the price at which an investment can be sold or bought at any specific time.

Material Damage Warranty before interruption insurance is effective, a material damage claim under other property insurances must have been admitted.

Material Fact anything which would affect the judgement of a prudent underwriter in accepting or deciding terms for a risk.

Misdescription a false description of a material fact.

Misrepresentation a false statement of a material fact which can be innocent or fraudulent.

Mortgage Bond a loan made for the purpose of purchasing, adding to or improving property.

Mutual Insurance Company an insurance company owned by its policyholders, i.e. it has no shareholders.

Name an underwriting member of Lloyd’s.

Negligence failing to act in what the law considers to be a reasonable manner.

Net Claim the Insurer’s own share of claim payments after deduction of the amount payable by the reinsurers.

New For Old insurance where the replacement value of the property which has been lost or damaged is payable without deduction for depreciation.

Non-disclosure the failure to disclose material facts before entering or renewing a contract of insurance. Non-disclosure of facts that would have influenced the underwriter’s decision to accept business or to impose terms and conditions on the policy may render the policy voidable.

Offer the communication of the proposed terms of a contract by one party to another

Operative Clause the clause in a policy which sets out the circumstances in which the Insurers will make claim payments.

Outstanding Claims Reserves the funds put aside by Insurers to cover claims that have been incurred but not yet paid.

Outstanding Losses claims not yet paid where estimated figures are used in the Insurer’s accounts.

Package Policy a policy into which several different types of insurance have been combined.

Pairs and Sets a clause usually found in an All Risks policy, which stipulates that the Insurer will pay no more than the proportionate value of any article or part that is one of a pair or set and may be damaged, lost or destroyed. Any special value that the item has as part of a set is not taken into account.

Partial Loss a loss of less than the total value of the property, or a loss of less than the full Sum Insured on a policy.

Peril a contingency or fortuitous happening which could cause losses.

Policy written evidence of the terms of an insurance contract.

Policyholder the Insured person.


Terminology

Pooling the basis of insurance whereby premium contributions are funded and used to pay losses.

Preamble Clause the clause in a policy which sets out the essential elements of the contract.

Premium the money paid by the Insured to the Insurer for cover as provided in the policy.

Premium Rate the price per unit of insurance.

Principal a person instructing an agent to act on his behalf.

Pro Rata Premium the premium based on the length of time for which the Insurer was actually on risk.

Probability the chance of an event occurring.

Professional Reinsurer a reinsurance company not transacting any direct insurance business.

Proportional Reinsurance reinsurance where reinsurers take a given proportion of the direct Insurer premiums and losses.

Proposal Form an application for insurance which seeks to obtain from the proposer all the information relating to the risk.

Proposer the individual or organisation seeking insurance.

Proprietary Company a company owned by its shareholders.

Proviso a policy condition whose observance is essential for the enforcement of the contract.

Proximate Cause the direct cause of a loss uninterrupted by any other event.

Quota Share proportional reinsurance where the reinsurer accepts a fixed percentage of every risk written by the ceding company.

Rate the sum charged per unit of exposure by which the premium is calculated.

Rated Up the term applied to insurance where the premium is higher than usual.

Reinstatement the making good of damaged property; the restoration of the Sum Insured after settlement of a loss on payment of an additional premium.

Reinstatement of Sum Insured the restoration of the Sum Insured after it has been reduced through the payment of a claim.

Reinsured an Insurer who effects and is entitled to be indemnified under a contract of reinsurance.

Reinsurer an Insurer or reinsurance company which accepts contracts of reinsurance.

Renewal the process continuing insurance for a further period after the first or current period of cover has ended.

Renewal Notice the notice issued by a short-term Insurer to remind a policyholder that his contract will shortly terminate.

Replacement Cost the value of property as indicated by the current purchase price of a similar article.

Representation a written or spoken statement made during contract negotiations.

Retention Limit the maximum liability which an Insurer wishes to keep for his own account in respect of a particular risk.

Risk a) a situation which cannot be controlled or perfectly foreseen

b) the subject matter of an insurance contract.


Terminology

Risk Management the business discipline applied by large commercial and industrial organisation to manage those risks which can cause losses

Salvage whatever is recovered of an Insured item or part of it, on which a claim has been paid.

Schedule the list of personal details of the Insured and the subject matter of the insurance in a policy.

Self-insurance insurance which a business organisation finances internally by establishing a fund to meet losses.

Short-period Rate the rate of premium applied to insurances in force for periods of less than twelve months and which is higher proportionately than the annual rate.

Short-term Insurance insurance that operates on a year-to-year basis and which may be terminated by the Insurer or the Insured.

Slip a form submitted by a Broker to Underwriters containing particulars of the risk proposed for insurance.

Solvency Margin the minimum size of shareholders’ funds required by the supervisory authorities.

Special Perils extra risks added to a policy to give cover not provided in terms of the basis wording; the term usually applies to storm, water, wind and impact damage added to a fire policy.

Specification the form on which details of large risks are set out and appended to the policy.

Statute Law laws promulgated by the government of a country.

Stop Loss Reinsurance a form of reinsurance used as a means of limiting aggregate net losses on a particular class of business in any one year of account.

Subrogation the right of one party to stand in a place of another and take up the latter’s legal rights against a third party.

Subsidence a shifting or falling away of ground in such a manner that a building is left wholly or partially unsupported in its original position.

Sum Insured the monetary limit of the Insurer’s liability under a policy.

Surplus that part of the Sum Insured which the Insurer does not retain and consequently reinsures.

Target Risk the main risk where the client has more than one premises. This is the risk which if damaged, will affect the Insurer the most.

Third Party a person who is not a party to a contract.

Third-party Insurance (Motor) motor insurance cover providing compensation for injury to third parties and damage to their property.

Third-party, Fire And Theft Insurance (Motor)

third party insurance plus cover for fire damage to and the theft of the Insured’s own vehicle.

Treaty Reinsurance a contract between an Insurer and a reinsuring company under which the former agrees to give and the reinsurer agrees to accept reinsurance for risks falling within the terms of the agreement.

Uberrima Fides the duty of good faith imposed on both parties to an insurance contract to disclose all material facts.

Under-insurance insurance for a Sum Insured less than the value at risk.

Underwriter an Insurer; a person who makes decisions on whether or not to accept insurance business.


Terminology

Underwriting the process of assessing a proposal for insurance to decide on its acceptability and if so, on what terms.

Utmost Good Faith see UBERRIMA FIDES (“Utmost” has been ruled to have no particular meaning in South Africa).

Valuations a list of property with values allocated to each item as the basis of insurance.

Valued Policy a contract in which the Insurers agree to pay the sum stated in the event of total loss without the usual allowance for depreciation or appreciation.

Void Contract a contract that cannot be enforced by either party.

Voidable Contract a contract which one party can choose not to enforce.

Waiver an act of relinquishment or of giving up a right. The voluntary surrender of a right or privilege known to exist.

Warranty a condition, which must be complied with literally.

Write (Insurance Business) provide insurance cover.

The Hollard Insurance Co. Ltd (Reg No 1952/003004/06) is an authorised Financial Services Provider

www.hollard.co.zaTel: (011) 351 5000

The Hollard Insurance Co. Ltd (Reg No 1952/003004/06) is an authorised Financial Services Provider

www.hollard.co.zaTel: (011) 351 5000

Full Binder Claims Mandates and Guidelines · Full Binder Claims Mandates and Guidelines 2015/2016...

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Transcript of Full Binder Claims Mandates and Guidelines · Full Binder Claims Mandates and Guidelines 2015/2016...