Old Mutual Wins Judgment In Life Insurance Court Case |
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30 October - A decision in the Cape Town high court will have a significant impact on the South African life insurance industry. The judge found in favour of Old Mutual and dealt a blow to Vuyani Ngalwana, the outgoing adjudicator of pension funds in South Africa. Ngalwana has taken up the fight of individual policyholders and attempted to bring the life insurance giants to task by previously ruling that long-term insurance provoders could not simply deduct substantial amounts of money from policyholders' retirement annuities as these kind of deductions were not specifically allowed in the rules of the policy. However, in a court case where Old Mutual appealed this ruling the judge determined that the insurance company is permitted to make these deductions in order to cover their own costs even though it is not explicitly mentioned in the policy itself. The case in question revolved around an individual's annuity that was cancelled prematurely in 2002 (it was supposed to run until 2006). Old Mutual calculated a reduction in the value of that annuity and paid out the reduced amount to the policyholder. She was dissatisfied with the new amount and petitioned Ngalwana, who agreed with her and ordered Old Mutual to pay the difference. The ruling means that life insurance companies can behave this way, but they must demonstrate how they reach these new amounts using transparent actuarial methodologies. This ruling clearly deals a blow to the fragile rights of the little man and helps out the faceless corporate titans, although the long-term insurance companies are still going to be held in check in terms of the amount that they are able to adjust retirement annuities thanks to an earlier agreement reached with government minister Trevor Manuel. Related Insurance Articles: * Liberty Life To Buy Out STANLIB * Blue Financial Services Maiden Earnings Up 225% * Lloyds Investors Lose Insurance Regulation Lawsuit * Insurance Stats Prove Crime Rate In South Africa Is Rising * UK Insurance News - Legal And General Sales Are Up * Financial Advice And A Little Insurance For Newlyweds * Can OUTsurance Cover Us Against Jacob Zuma * First For Women Insurance Leads The Way 
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| 3/14/2010 7:06:25 AM | |||||||||||||||||||||
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