CASE NO: NBFIT – 0010/2023

APPLICANT 10 V. NBFIRA
CASE NO: NBFIT – 0010/2023

Sector - Insurance
1.    Issue
1.1.    Insurance Policy providing that a policyholder’s claim can be repudiated for failure to provide breath specimen to the police for purposes of breath analysis for alcohol level;

1.2.    Insurer repudiating a Policyholder’s claim on account of failure to provide sufficient specimen for purposes of breath analysis for alcohol level;

1.3.    Provision of insufficient breath specimen for purposes of breath analysis, whether such could be deemed as failure to provide breath specimen;

2.    Summary of Facts
2.1.    In the matter between Applicant 10 v. NBFIRA case number NBFIT-0010/2023, the Applicant lodged a review application against the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) after it directed the Applicant to make payment to the Policyholder for the rejected insurance claim.

2.2.    The Policyholder had undertaken a motor vehicle insurance policy with the Applicant. The Insurance Policy contained an exclusionary clause which provided that the Applicant will not be liable for an insurance claim in instances where there is failure to provide a breath specimen to a police officer or any other recognized authority for analysis of alcohol level.  

2.3.    The Policyholder was involved in a car accident on September 17, 2022, and was charged with failure to provide sufficient breath specimen for alcohol analysis contrary to section 47(5) of the Road Traffic Act [CAP 69:01]. The Policyholder submitted an insurance claim to the Applicant for the repair and replacement of the damaged insured vehicle. The Policyholder’s claim was repudiated on account of breach of the exclusionary clause under the Insurance Policy.

2.4.    The Policyholder lodged a complaint with the Authority and the Authority ruled in favour of the Policyholder and directed the Applicant to pay the Policyholder’s claim.

3.    Issues for Determination by the Tribunal:

3.1.    Whether failure to provide sufficient breath specimen amounts to failure to provide breath specimen for purposes of breath analysis for alcohol level in terms of the exclusionary clause; and

3.2    Whether the exclusionary clause is capable of being interpreted to mean that there is “failure” to provide breath specimen for purposes of breath analysis where insufficient breath specimen is provided.

4.    Relevant Provisions of the Law

4.1.    Policy Holder Protection Rules

Rule 3.1 (8) (i)

The following should be disclosed in a policyholder contract, where relevant:

(i)    Concise detail of any special terms and conditions, exclusions, waiting periods, loadings, penalties, excesses, restrictions, or circumstances in which benefits will not be provided.

4.2     Insurance Policy Contract (Policy Wording)

Section 3.1 (1.2)

We will not be liable for claims where there was failure to provide a breath specimen to a police officer or any other recognized authority for purposes of analysis of alcohol level.

5.    Tribunal Judgment

The Tribunal dismissed the application for the following reasons:
5.1.    Clause 3.1(1.2) of the Insurance Policy does not provide the Applicant with the right to repudiate an insurance claim where the Policyholder has complied with the request by a police officer and provided breath specimen even where such breath specimen yields insufficient result.

5.2.    An exclusionary clause is not interpreted widely to extinguish rights and obligations unless the clause itself provides otherwise and its language clearly shows such meaning. In order for an insurer to rely squarely on an exclusionary clause, its meaning and effect must be certain, clear and stable.

Full Judgement Here