Another disability claim dispute decided in favour of complainant

Fedgroup Life has accepted and implemented a final determination by the Long-Term Insurance Ombud to pay a disability and critical illness claim lodged by an employee benefits consultant after initially repudiating both the woman’s claim and the ombud’s provisional determination.

Long-Term Insurance Ombud Judge Margie Victor, in a recent final determination, ruled that Fedgroup Life had failed to take a holistic approach to the woman’s claim and to have regard to the totality of the evidence.

The quantum of the claims was not disclosed.

In a similar recent case, Discovery Life was ordered by the High Court in Johannesburg earlier this year to pay a former stockbroker more than R25 million after previously repudiating his claim that he was “totally and permanently unable” to work as a stockbroker.

An application by Discovery Life for leave to appeal this judgment was dismissed with costs, but it has petitioned the Supreme Court of Appeal for leave to appeal the judgment and order.

In the Fedgroup Life case, the complainant – who suffered from migraines with anxiety, depression, memory loss and cognitive challenges – was insured as an employee member under a group risk policy between Fedgroup Life and her employer.

After some serious mistakes at work, her employers met with her and it was agreed her employment would be terminated on 18 July 2022, although the employer kept her on the payroll and paid premiums in respect of her risk benefits up to November 2022.

The woman and her employer signed a termination settlement agreement on 22 July 2022, recording her termination date in a clause to 18 July 2022 but also changing that date in another clause effectively to 17 October 2022.

Fedgroup Life declined the income disability claim on the grounds the medical evidence “does not tender sufficient, objective medical information to support a disability as at the last day actively at work” on 18 July 2022.

Dispute lodged

The employer, which represented the complainant throughout, lodged a dispute because the treating psychiatrist had had the complainant admitted for psychiatric care in August 2022 and booked her off until 31 January 2023.

Fedgroup Life stated it would review the matter with comprehensive reports from an independent neuropsychologist, psychiatrist and occupational therapist (OT) at the complainant’s cost.

The complainant was also diagnosed with breast cancer on 17 October 2022.

Her employer maintained that a critical illness claim for this should be paid as premiums were paid for July to November 2022, alternatively that a conversion option form had been submitted on 15 December 2022, which was within the 60 days of her actual termination date of 17 October 2023.

However, Fedgroup Life also declined this claim, stating it would refund any premiums paid after 18 July 2022, the member’s last day at work.

Fedgroup Life’s view on the critical illness claim was that the complainant was not an eligible employee at the date of diagnosis.

Insurer ‘dismissive’ of medical reports

The complainant provided a treating psychiatrist report and an independent OT report, but the ombud said Fedgroup Life was dismissive of the independent OT report as it “contains some inaccuracies and creates the impression that the therapist might not have had access to or did not consider all relevant information”.

Fedgroup Life repeated its offer to brief independent evaluating specialists with a referral letter and relevant information to produce an “accurate and objective” report but that these consultations were to be for the complainant’s account.

It further argued the complainant was performing her work satisfactorily as there was no evidence to the contrary and there was no excessive sick leave or medical treatment to suggest or support a disability as she was receiving study assistance and had received a salary increase in January 2022.

Fedgroup Life claimed “health problems” were used by the employee as the reason for the incident and accepted by the employer instead of gross negligence and dismissal.

The ombud said it appeared to be Fedgroup Life’s position that the termination of employment, loss of income and subsequent cancer diagnosis precipitated the complainant’s distress and disability, but this was not present before she lost her job, or “as at” 18 July 2022.

Insurer not happy with claim form

She said Fedgroup Life was dismissive of the claim form completed by the psychiatrist “who makes mention of a bipolar mood disorder but there is no supporting investigations or report”.

Fedgroup Life also stated it could not process a continuation option because the request was submitted 150 days after the resignation/dismissal of 18 July 2022, instead of within 60 days as provided for in the contract.

The employer stated the medical reports indicated that the complainant suffered from severe anxiety and saw several physicians about this and her condition directly affected her performance at work, with several incidents recorded.

It said the salary increase had been companywide and referred again to the agreed extension of the termination of employment date, with continued payment of premiums.

The employer further believed the reinsurer opinion provided by the insurer actually contradicted the insurer’s position.

Fedgroup Life, in response, maintained it was unable to determine a date of disability as all medical information provided was post the complainant’s termination.

Ombud assessment

The case was discussed at an adjudicators’ meeting presided over by the ombud and deputy ombud.

The meeting did not accept Fedgroup Life’s “overly technical argument” to justify it requiring the claimant to pay for independent reports for a review of its decision.

It decided the fact that there was some confusion because of two different termination dates in the termination settlement agreement could not be held against the complainant, and also did not agree that the policy definition of an eligible employee was correctly invoked in this case to argue that the complainant was not covered at the time of the diagnosis of breast cancer on 17 October 2022.

The meeting was satisfied that the complainant had cover in place for critical illness in terms of the policy as at the date of diagnosis of breast cancer and the critical illness claim must be assessed, and, if found to be valid, must be paid.

In regard to the income disability claim, the meeting considered all the medical and collateral employer evidence and decided it was clear that cognitive as well as psychiatric problems were at issue.

The meeting further noted that the reinsurer opinion was in fact not in support of the insurer’s position on the income disability claim and the reassurer’s opinion that the decline could not be upheld was correct.

Determination

The provisional determination by the ombud was that the critical illness claim must be assessed, and paid if valid, and the monthly income disability claim must be paid from the expiry of the waiting period after 18 July 2022, and must continue to be paid until there were grounds for termination of payments in terms of a clause in the policy.

The complainant’s representative accepted the provisional determination but Fedgroup Life objected to it and persisted with its position that the date of termination of employment was 18 July 2022.

The matter was discussed again at an ombud adjudicators’ meeting, which decided that Fedgroup Life had failed to engage with the extensive canvassing of the medical evidence in the provisional determination, as well as the extensive employer evidence of the complainant’s inability to cope with her work prior to the termination of her employment.

The meeting’s unanimous view was that the objections to the provisional determination could not be sustained.

Its final determination was that the critical illness claim must be assessed, and paid if valid, and the monthly income disability claim must be paid from the expiry of the waiting period after 18 July 2022, and must continue to be paid until there were grounds for termination of payments in terms of a clause in the policy.