The impact of material non-disclosure and misrepresentation in South African insurance law : a comparative study

Abstract

Section 53 of the Short-term Insurance Act 53 of 1998 and section 59 of the Long-term Insurance Act 52 of 1998 deal with misrepresentation, and denies the parties to the insurance contract of the common law right to cancel the policy on the ground of misrepresentation, unless such misrepresentation is material. Both Acts did not define what is material and to what extent does the parties have to disclose during negotiation stages. Our courts depend on the Roman-Dutch law when confronted with insurance dispute whereas, the principle of utmost good faith had been rejected as it is part of the English law. Different types of misrepresentation call for different remedies in terms of the common law. The comparation with one of the best world insurance law, Australia was made. The uncertainty of duration upon which the parties to insurance contract may disclose the change in the material circumstances had been explored, although seem to favours the insurers than the insured. In this dissertation, ways in which the parties to insurance contract may reduce having their contract be invalidated due to misrepresentation and non-disclosure had been investigated. The impact of rejecting the utmost good faith principle had been discussed and the proposal to harmonize the Roman-Dutch law and English, which will reduce the impact of non-disclosure and misrepresentation in insurance contract.