Flemming v MMI Group (73982/16) [2017] ZAGPPHC 650 (2 October 2017)

Flemming v MMI Group (73982/16) [2017] ZAGPPHC 650 (2 October 2017)

The Court found that the insurance contract does permit the Respondent to review and increase premiums after the guarantee period, but the discretion to do so is not unfettered. The Respondent must exercise its discretion reasonably and in good faith, and is obliged to disclose the facts and methods used in determining premium increases. The Applicant is entitled to receive information regarding the factors considered, the calculation methods, and any changes in circumstances from the inception of the policies. However, the Applicant is not entitled to an order preventing premium increases or to monetary relief solely on the basis of non-disclosure. The relief granted is limited to...

Citation
[2017] ZAGPPHC 650
Parties
Applicant: Hermanus Christoffel Johannes Flemming; Respondent: MMI Group (Reg. No.: 1904/002186/06)
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
2 October 2017
Case Number
73982/16
Procedural Posture
Civil Application / Final Judgment
Outcome
Application partially granted: Respondent ordered to disclose information regarding premium increases; costs awarded to Applicant.
Judges
G Rautenbach
Legal Topics
Insurance Contracts, Implied Terms, Contractual Discretion, Good Faith, Public Policy, Actuarial Calculation
Commercial and Corporate Civil Procedure Insurance Contracts Implied Terms Contractual Discretion Good Faith Public Policy Actuarial Calculation

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Parties

Hermanus Christoffel Johannes Flemming

Applicant

MMI Group (Reg. No.: 1904/002186/06)

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the Respondent is contractually obliged to disclose the methods and factors used in determining premium increases for the Applicant's insurance policies.
  2. 2 Whether implied or tacit terms requiring such disclosure can be read into the insurance contract.
  3. 3 Whether the Respondent's discretion to increase premiums is fettered by objective standards and public policy.

Ratio Decidendi

The Court found that the insurance contract does permit the Respondent to review and increase premiums after the guarantee period, but the discretion to do so is not unfettered. The Respondent must exercise its discretion reasonably and in good faith, and is obliged to disclose the facts and methods used in determining premium increases. The Applicant is entitled to receive information regarding the factors considered, the calculation methods, and any changes in circumstances from the inception of the policies. However, the Applicant is not entitled to an order preventing premium increases or to monetary relief solely on the basis of non-disclosure. The relief granted is limited to...

Court Disposition

Application partially granted: Respondent ordered to disclose information regarding premium increases; costs awarded to Applicant.

Orders

  • The Respondent is ordered to provide to the Applicant the facts and information considered in deciding to increase premiums and the extent of increases for policies 089560601, 099671567, and 20052330.
  • The Respondent must disclose the method of calculation and other information used to arrive at the new premiums.