Promotion of Equality & Prevention of Unfair Discrimination Bill [B57-99]
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4. The long-term insurance industry in South Africa is principally responsible to provide financial security for millions of policyholders in the face of danger to life, person or estate. These policyholders are representative of all of South Africa’s people, whatever their race, gender, marital status, ethnic and social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language or birth. 5. The majority of registered long-term insurers in South Africa are public companies with shareholders from all walks of life. The companies furthermore have other stakeholders, such as the thousands of employees employed by them. 6. The long-term insurance business therefore forms an integral part of the social and economic structure of our country and provides a necessary service to the people of South Africa. C. THE BILL AND THE LONG-TERM INSURANCE INDUSTRY 7. Although many provisions of the Bill impact on the Life Assurance industry, the most significant are:- 7.1 Section 20(2); 7.2 Sections 25 and 26; 7.3 Sections 43 to 45 8. The aforesaid sections manifest an intention on the part of the drafters to promote equality by prohibiting differentiation. 9. The LOA and its members fully supports the letter and spirit of the Constitution regarding the prohibition of unfair discrimination. It also supports measures for the promotion of equality, provided that such measures are in keeping with the reality that differentiation is inherent to a free open and democratic society. As was held by our constitutional court in the matter of PRINSLOO v VAN DER LINDE AND ANOTHER 1997(3) SA 1012(CC) by the honourable Justices Ackerman, O’Hagan and Sachs, at 1022B-E: “If each and every differentiation made in terms of the law amounted to unequal treatment that had to be justified by means of resort to s 33, or else constituted discrimination which had to be shown not to be unfair, the Courts could be called upon to review the justifiability or fairness of just about the whole legislative programme and almost all executive conduct. As Hogg puts it: ‘What is meant by a guarantee of equality? It cannot mean that the law must treat everyone equally. The Criminal Code imposes punishments on persons convicted of criminal offences; no similar burdens are imposed on the innocent. Education Acts require children to attend school; no similar obligation is imposed on adults. Manufacturers of food and drugs are subject to more stringent regulations than the manufacturers of automobile parts. The legal profession is regulated differently from the accounting profession. The Wills Act prescribes a different distribution of the property of a person who dies leaving a will from that of a person who dies leaving no will. The Income Tax imposes a higher rate of tax on those with higher incomes than on those with low incomes. Indeed, every statute or regulation employs classification of one kind or another for the imposition of burdens or the grant of benefits. Laws never provide the same treatment for everyone.” and at 1024D: “It must be accepted that, in order to govern a modern country efficiently and to harmonise the interest of all its people for the common good, it is essential to regulate the affairs of its inhabitants extensively. It is impossible to do so without differentiation and without classifications which treat people differently and which impact on people differently.” and at 1026G: “In Dworkin’s words, the right to equality means the right to be treated as equals, which does not always mean the right to receive equal treatment.” 10. It is unfortunate that the drafters of the Bill did not consider it necessary to consult the LOA, as an analysis of the relevant provisions clearly illustrates a misapprehension of the concept of insurance, its origins, development and fundamental principles, a summary of which is contained in the annexure hereto. 11. Proper underwriting is a prerequisite for the financial soundness of any insurance industry. Differentiation is the inevitable result of proper underwriting. 12. Differentiation on the basis of sound and established underwriting principles and actuarial grounds does not constitute unfair discrimination, as envisaged in Section 9(4) of the Constitution. 13. The Canadian Human Rights Code of 1981 and the New Zealand Human Rights Act of 1993, specifically provide that differentiation on reasonable and bona fide grounds, supported by e.g. actuarial and statistical data or medical opinion, does not constitute unfair discrimination. 14. Sections 20(2) and 26 of the Bill in effect prohibits Insurers from making any differentiation as to whom they are willing to assure, or with regard to the terms and conditions on which they are willing to provide life, disability or health assurance, unless the Insurer can show that the person affected by any differentiation cannot be accommodated “without unjustifiable hardship”. 15. Regard being had to the operation of insurance, any legislation which directly (or indirectly) prohibits non-arbitrary differentiation founded on proper risk assessment constitutes a threat to the very existence of the Insurance Industry and millions of policyholders, as it is only through proper risk assessment that an insurer can ensure its solvency and ability to continue to indemnify its policyholders for losses suffered. 16. The provisions of Section 26(d), which effectively compels Insurers to grant life, disability or health assurance cover for people who are HIV positive or suffer from AIDS poses a real and imminent threat to the continued existence of risk insurers. 17. Regard being had to the recorded escalation of AIDS, mortality of people who suffer from AIDS and the costs incidental to the treatment of patients, the costs incidental to death, disability and health benefits cover for people with HIV and AIDS will be astronomical and will have to be recovered from other policyholders by way of inevitable premium increases. This will eventually make risk insurance unaffordable. 18. The preferential provisions regarding people with HIV or AIDS are in any event discriminatory of people with other life threatening diseases, such as CANCER. 19. In addition to the imminent threat to the Insurance Industry the Bill also infringes:- (a) The universally accepted principle of equitable sharing. It is simply inequitable to expect a 25 year old person, who is in a perfect state of health, to pay the same premiums for life, disability or health benefits cover as a 80 year old person with serious health problems; (b) The contractual freedom of Insurance Companies; (c) The right to sell products which are marketable and profitable. 20. Section 43 of the Bill does not alleviate the untenable provisions of Sections 20(2) and 26. Insofar as differentiation on the basis of many of the “prohibited grounds” constitutes a fundamental principle of insurance, any proposed assured whose proposal has been declined, or accepted on different terms by reason of, for example, age, gender or disability, will be entitled to institute proceedings in the Equality Courts. 21. As Section 45(2) provides that “a prima facie case” includes a “differentiation or failure to differentiate on a prohibitive ground”, the Insurer will in each and every case have to prove that the differentiation is “reasonable and justifiable in the circumstances”, which onus entail proof that the proposed assured cannot be accommodated without “unjustifiable hardship.” 22. The human and financial resources which the Insurer will have to expend, will directly impact on its profitability and therefore on the cost of insurance and could very well lead to a situation where Insurers will not be able to continue to offer risk assurance at all. RECOMMENDATION 23. The Constitution does not require that legislation promoting equality be passed prior to the 4th of February 2000. Whilst section 9(4) specifically prescribes that “national legislation must be enacted to prevent or prohibit unfair discrimination”, section 9(2) provides that “legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair, discrimination may be taken.” 24. The Long-Term Insurance Industry is regulated by the Long-Term Insurance Act (Act 52 of 1998) and the Regulations passed in terms thereof. Registered Long-term Insurers, being Financial Institutions, are furthermore also regulated by the Financial Institutions Act. The industry resorts under the Minister of Trade and Industry and is regulated by the Registrar of Insurance. 25. Section 46 of the Long Term Insurance Act, which was drafted and adopted in accordance with the Constitution, already provides that an insurer may only make a distinction between premiums, benefits and other values if actuarially justified. If shown to be necessary, additional measures to prohibit unfair discrimination in the insurance industry can easily be incorporated in the Long-Term Insurance Act by way of an amendment. 26. A provision in the Bill, such as the present section 27 and 51(4), which obliges the Minister of Trade and Industry to take steps to prevent unfair discrimination and to promote equal enjoyment of human rights and freedom in the Insurance industry, will not only constitute compliance with Section 9 of the Constitution, but will pave the way for responsible legislation which will not negatively impact on the Insurance industry and the economic and social structures of the country. 27. It is therefore recommended that issues relating to Insurance as contained in sections 20(2), 25 and 26 of the Bill, should be excluded from the Bill and that the relevant sections be removed. 28. The Bill should furthermore be amended so as to clearly stipulate that the provisions of the Bill are not infringed where a contract of insurance differentiates or makes a distinction, exclusion or preference on bona fide and reasonable grounds, founded on actuarially and statistically based considerations. SUMMARY 29. The relevant provisions in the Bill pertaining to the insurance industry negates the basic principles of Risk Insurance and is therefore fundamentally flawed. The Bill threatens the very existence of Risk Insurance in South Africa and if passed, will have a detrimental impact on our economy and will prejudice millions of people who wish to insure themselves and their families against the perils of life. 30. Insofar as the Bill impacts on the continued ability of Insurers to meet their obligations to policyholders, and ultimately the survival of the Insurance Industry, it should also be referred to the Registrar of Insurance and the Department of Finance, who are responsible for the regulation of the Insurance Industry. -------- ANNEXURE INSURANCE (i) The concept of insurance 1. Despite caution, people cannot completely avoid danger. Accident, sickness, death, fire, earthquake, tornado, lightning, theft and some of the hazards we face! The impact of an occurrence of this type is not only physical, but economical as well.1
3. Men have, thoughout the ages, sought protection for his person, family and property. The modern contract of insurance has its roots in two distinct lines of development, i.e:- 3.1 Mutual Insurance – The idea of mutual assistance in the case of materialisation of risks was prevalent amongst the Romans and according to some historians, even in ancient Greece and Egypt. This idea came to the fore in guilds and similar associations and societies which existed in Europe and England during the middle ages, which afforded members and their dependants assistance in the case of loss caused by peril such as fire, shipwreck, theft, sickness or death.4 3.2 Insurance for profit – The idea underlying modern profit insurance manifested in Babylonia almost 2000 years B.C in the contract of loan of trading capital to travelling merchants.5 Maritime risk, the risk of loosing ships and cargo’s at sea, instigated the practice of medieval insurance and dominated insurance for many years. From the late 17th century onwards maritime insurance was increasingly transacted at the Coffee Shop in the city of London owned by a man called Lloyds, where a merchant wishing insurance would pass round to the people willing to provide it.6 The principles developed in regard to maritime insurance have by large been applied to the other types of insurance subsequently developed. One of the first which was fire insurance, stimulated by the great fire of London in 1966. Another was life and personal accident insurance, which grew rapidly as the railway and industrialisation spread in the 19th century.7 Examples of individual life and/or health insurance can however be traced back to 1427. This type of insurance of necessity has to be profitable and marketable.8 (iii) The introduction and development of underwriting 4. Although the friendly societies and associations referred to in paragraph 3.1 hereinabove did a vast good, they were often inequitable as “young and old, hail and frail all paid alike.” It was largely founded on the pass the hat basis, and the “young and the hail saw more hats than the aged and the frail. The assessment idea came into being and entrance requirements were set up to eliminate the aged and the frail.9 5. With the passing of time individual underwriters for profit learned that individual cases carry hazard and the safety of averages is obtained if they shared the risk. Examples of selection requirements can be traced back to 1725, in a letter from the Corporation of London Insurance, which specified that every proposed insured was to be seen personally and careful equiry made as to state of health and manner of life.10
9. Insurance is a plan of risk management that for a price offers the insured an opportunity to share the cost of possible economic loss through an insurer. Insurance operates by spreading the risk of economic loss due to an unforeseen incident over a number of people so that the many people who could have the loss, but don’t, help to repay the loss of those few that do.14 10. The concept of “risk”, in relation to insurance, pertain to the person insured, the peril assured against and the chance of loss assured by the insurer.15 11. The assessment of risk involves various criteria, which are not independent of each other, being:- - Randomness of the occurrence the cause of the loss; - Maximum possible loss; - Average loss amount upon occurrence; - Average period of time between two loss occurrences; - Moral hazard; - Public Policy; - Legal restrictions - Cover Limits16
14. A contract of insurance is essentially one whereby one party (the “insurer”) promises to pay the other party (the “assured”) a sum of money or to provide a corresponding benefit upon the occurrence of one or more specified events, in which the assured has some interest, in return for a money consideration (the “premium”).18 15. In general insurers do not make binding offers to insure, but invite the public to apply for insurance, normally by way of proposal from which are designed to provide the insurer with such information of the proposed assured as it may require to properly assess its risk and the premium payable for its assumption of the risk.19 16. If the proposal is acceptable to the insurer, it will normally convey its acceptance by sending the assured a policy. 17. If the proposal is not acceptable to the insurer, in view of its underwriting principles, it will either reject the proposal or make a counter-offer to contract on equal terms. In such event a contract of insurance only comes into effect once the proposed assured accepts the counter proposal. 1. HIAA, Individual Health Assurance, Part A, pg 11 (issued by Health Insurance Association of America (HIAA) 2. LAWSA volume 12 paragraph 1 3. HIAA, supra, pg 11 4. LAWSA supra paragraph 4 5. LAWSA supra paragraph 5 6. John Birds, Modern Insurance Law Second Edition pg 1-2 7. Birds, supra 8. LAWSA, supra, paragraph 5 9. Dingman, Risk Appraisal, page 6 sub-paragraph 2 10.Dingman, supra pg 7-8 11. Dingman, supra, pg 8 12. Dingman, supra, pg 9 13. Dingman, supra, pg 10 14. HIAA, pg 11-12 15. HIAA pg 13 16. Baruch Berliner – Limits of Insurability of Risk, pg 3 17. HIAA pg 127 18. MacGillivray on Insurance Law, Ninth Edition, pg 1 19. Lake v Reinsurance Corp Ltd 1967(3) SA 124(W) 20. LAWSA vol 12 paragraph 46 LOA MEMBER OFFICES Absa Life Ltd African Life Assurance Ltd AVBOB Mutual Assurance Society Capital Alliance Life Limited Charter Life Insurance Co. Clientele Life Cologne Reinsurance Co of SA Ltd Discovery Health Limited Fedsure Health Assurance Ltd Fedsure Life Gerling Global Reinsurance Co Guardrisk Life Limited HTG Life Limited Hollandia Life Reassurance Co Ltd Investec Assurance Limited Liberty Life Association Metropolitan Life Ltd Metropolitan Odyssey Momentum Life Ltd Munich Reinsurance Co of Africa Ltd NBS Life Assurance Co Ltd New Era Life Insurance Co Ltd Old Mutual Prosperity Insurance Co Ltd PSG Anchor Life Ltd Regent Life Assurance Co Ltd Rentmeester Versekeraars Bpk Saambou Life Assurers Ltd Safrican Insurance Co Ltd Sage Life Ltd Sanlam
The Southern Life Association Ltd Standard General Insurance Co Ltd Swiss Re Life & Health
THE MALAMULELA SOCIAL MOVEMENT FOR THE UNEMPLOYED THE PROMOTION OP EQUALITY AND PREVENTION OF UNFAIR DISCRIMINATION BILL Introduction Malamulela Social Movement for the Unemployed is a legitimate voice of the unemployed. It is an A-political organisation which is national based. It was founded in Kathorus in 1996 and represents well above 250000 members throughout the country. Malamulela and the Equality Bill The organisation has continued to lobby for the removal of labour legislation that discourages an environment that will increase the demand for labour. This Bill will do exactly the same thing i.e. to scare away potential investors, both local and foreign investors. The Bill will further exacerbate poverty and unemployment because the Bill will be regarded as a punitive measure by business and will be painful to comply with. In this transaction the unemployed will be the victims of the very same Bill that seeks to protect them. We therefore do not support such a Bill whose main purpose is to require everyone to be equal. This is not possible. Detailed comment on the Bill and its implications:
It seeks to ensure that everybody becomes equal and that no one discriminates against anyone. We discriminate in our everyday lives in whatever we do. Is it unfair if a man discriminates against an unemployed girl from a poor family and chooses to many one who is from a well-off family? lt may be unfair but it is surely his right to do so. Should he be punished for this under the gender discrimination provision? This Bill is a futile exercise. We believe that the government should be concentrating on creating an enabling environment for the market to deal with the inequalities. This was the logic of GEAR and we believe this is the correct option for government to follow. Government should not act out of emotions but should look at the economic consequences. The unemployed will not become less unemployed and the poor will not become less poor because of this Bill. Only the elite will benefit from the Bill. It is a legislative framework that encourages especially small business to hire more people that will suffice to deal with the problems of unemployment and inequalities. 2, The Bill and unemployment As the unemployed we have come to understand very well what makes employers hesitate to employ more people. Businesses are very much afraid of the myriad of labour legislation which puts too much non-labour costs on them e.g. The Basic Conditions of Employment Act which requires all businesses big and small to comply with minimum conditions of employment. This in essence further excludes potential job-seekers from being absorbed in the labour market. Our fear is that the Equality Bill will further encourage the labour market to shrink and shed more jobs. In light of such consequences the Bill does not address joblessness and access to employment opportunities. Despite what this Bill says we believe it will have further negative effects. When the Labour Bills were adopted we had high hopes and expectations that they would unleash massive job opportunities but instead the labour market shed more jobs than it created. This Bill will have the same adverse effects on employment creation and as unemployed people we would not support it. 3. Prohibition on Unfair Discrimination in Employment The unemployed currently experience a myriad of unfair practices orchestrated by organised trade unions and big business. There have now of late been certain agreements signed ensuring that those union members who have been retrenched should be given priority when companies need to employ people e.g. in the mining sector. This is public knowledge. It is blatant unfair discrimination aimed at the unemployed which cannot be justified. The Bill does not specify as to how it will deal with such an inequality and what shock-absorbers will be put in place to monitor this. There is a myriad of other shop-floor agreements which we can cite which are as unfair as the above example, whether intentional or unintentional. A Bill such as this one will be of no use to deal with real problems of racism in this country. Who wants to go to court to make a racial bigot employ them? 4,Conclusion Malamulela would like to see the government concentrating on policies that will increase economic growth and demand for labour. This can only be achieved if government listens to the real concerns of the army of unemployed and poverty-stricken people. The unemployed cannot eat pieces of legislation. What they need is bread. This Bill will not put bread in their mouths. Yüklə 1,52 Mb. Dostları ilə paylaş:
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