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UNIVERSITY EXAMINATIONS

May/ June Exam 2024

LML4805

Insurance Law

75 marks
4 Hours

First examiner: Adv ML Padi

Second examiner: Prof W Jacobs
External examiner: Dr Lisbeth L Letsoalo

This paper consists of 9 pages.

Instructions:

PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY BEFORE ANSWERING THE

EXAMINATION QUESTIONS.

1. The examination question paper counts 75 marks.

2. It consists of THREE questions. Answer ALL THREE questions.

3. The duration of the examination is 4 hours. Your answers must be submitted via the myExams
platform on 06 June 2024 before 17h15 (South African Standard Time).

4. This is an open-book examination. You may consult your prescribed study material during
the examination.

5. This examination is proctored via the Invigilator App. You are required to activate (or log in to)
the Invigilator app between 12:30 and 13:15 (South African Standard Time).

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Please note: If a student is found to have been outside the invigilator app for a total of 10 minutes
during their examination session, they will be considered to have violated Unisa's examination
rules and their marks will be withheld.

6.2 You only have 10 minutes after the scheduled (timetabled) exam time to submit your script on
the Invigilator App. Remove this sentence if the module uses Turnitin.

6.3 You will have 48 hours from the date of their examination to upload their invigilator results from
the Invigilator App. Failure to do so will result in students deemed not to have utilised the
invigilation or proctoring tools.

7. The uploading of your exam file on the myExams platform must be finalised within 30 minutes
of the scheduled (timetabled) end of the exam.

7.1 When ready to submit, open the Take-Home (Assignment) assessment again and click on the
Add Submission button. 7.1-7.6 is optional (amend the numbering)

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7.2. Note the file requirements such as:

a. File size limit.
b. Number of files that can be submitted.
c. File formats allowed.

7.3. Check the acknowledgment checkbox and upload your answers document and then click on the
Save changes button.

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7.4. Review your submission information regarding the status and click on your submission file link
to check if it's correct.

7.5. If you need to resubmit a file, you can click on the Edit Submission button. Do not click on the
Remove submission button. Note: You will need to delete any existing files by clicking on the file and
then on delete.

7.6 Use proper PDF conversion software to create the final file for upload. Free PDF conversion
software is available on the Internet. Please ensure that you use Abode PDF if your submission
must go through Turnitin.

7.7 Add your student number and the module code in the file name. That will assist you to select
the correct document to upload during submission.

7.8 You are advised to preview your submission (answer script) to ensure legibility and that the
correct answer script file has been uploaded.

8. The cover page for your take-home exam must include your name, student number and the
module code.

9. It is preferred that your take-home exam is typed. However, handwritten submissions will also
be accepted. If the take-home exam is typed, the maximum length is 8 pages (which includes
the cover page and the bibliography). If the take-home exam is handwritten, the maximum
length is 10 pages (which includes the cover page and the bibliography).

10. Whether your answers are typed or handwritten your submission on the myExams platform on
Moodle must be made in the form of one PDF document. Only the last file uploaded and
submitted will be marked.

10.1 The exam answer file that you submit must not be password protected or uploaded as a “read
only” file.

10.2 Your examination answer file will not be marked if:

10.2.1 you send your examination answer file via email.

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10.2.2 you submit the incorrect examination answer file. A mark of 0% will be awarded.
10.2.3 you submit your exam answer file on an unofficial examination platform.
10.2.4 you submit your examination answer file in the incorrect file format.
10.2.5 you submit a password-protected document.
10.2.6 you submit your examination answer file late.
10.2.7 you submit your answer file from a registered student account that is not your own.

10.3 The mark awarded for an illegible examination answer file submission will be your final mark.
You will not be allowed to resubmit after the scheduled closing date and time of the exam.

10.4 Listening to audio (music) and utilising audio-to-text software has been strictly prohibited
during your examination session, unless use of the software is related to a student’s assistive
device which has been declared. Listening to music, utilising such software and/or failing to
declare the software is a transgression of Unisa’s examination rules and the student's marks
will be withheld.

11. You must complete the online declaration of own work when submitting.

11.1 By ticking the Honesty Declaration, you confirm that you have read (i) the University’s Policy
on Copyright Infringement and Plagiarism and the Student Disciplinary Code, which are both
available on myUnisa: www.unisa.ac.za/unisarules, and (ii) the information relating to student
values and plagiarism that is found at https://www.unisa.ac.za/sites/myunisa/default/Study-@-
Unisa/Student-values-and-rules.

11.2 Students suspected of dishonest conduct during the examinations will be subjected to
disciplinary processes. Students may not communicate with any other person or request
assistance from any other person during their examinations. The use of Telegram, WhatsApp
or any other instant messaging services with any other person (except when asking for
technical assistance via official channels of the SCSC or the Invigilator WhatsApp line) are
strictly prohibited. Plagiarism is a violation of academic integrity and students who plagiarise,
copy from published works or use Artificial Intelligence Software (e.g. ChatGPT) or online
sources (e.g. course material.will be in violation of the Policy on Academic Integrity and the
Student Disciplinary Code and may be referred to a disciplinary hearing. Unisa has a zero
tolerance for plagiarism and/or any other forms of academic dishonesty.

11.3 Unless a student is exempted because of disability or incarceration, students who have not
utilised invigilation or proctoring tools will be deemed to have transgressed Unisa’s examination
rules and will have their marks withheld.

PLEASE NOTE:
If you experience challenges with the Invigilator app, please send a WhatsApp message to the
technical helpdesk on 073 505 8273. Do not contact the lecturers.

For all other exam-related challenges, you may contact the SCSC on 080 000 1870 or e-mail
Examenquiries@unisa.ac.za or refer to Get-Help for the list of additional contact numbers.

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QUESTION 1

1. Explain the usual application of the contra proferentem rule as well as the
exceptions thereto. (5)

2. Briefly discuss the requirements for validity of an insurance contract. (5)

3. Distinguish between indemnity and non-indemnity insurance and explain

why it is necessary to distinguish between the two. (5)

4. Explain the differences between under-insurance and under-valuation,

and between over-insurance and over-valuation, with the aid of examples
and discuss the effects of both under-insurance and over-insurance on an
insured’s claim. (5)

5. Explain the similarities and differences between insurance contracts and

wagering contracts and discuss how one can distinguish between them.
(5)

[25]

Question 2

1. Evaluate the correctness of the following statement critically: “Legislation and

statutory instruments restrict the insurer’s common-law rights to rely on
incorrect representations about age in life insurance (long-term insurance)”.

(5)

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2. Identify and discuss the ways in which a third party may acquire rights under
the insurance contract. (5)

3. Identify one clause that may be inserted into insurance contracts to enhance
the position of the insured and explain the effect thereof. (5)

4. Analyse the function of a fraudulent claim’s clause in the insurance contract

and consider the impact of recent statutory change on the position. (5)

5. Suzette and her husband Johan are in a flowers business together. Deliveries
for the business are done by a vehicle owned by Suzette. Johan insured the
vehicle in his own name. When the vehicle is stolen and Johan lodges a claim
against the insurer, the insurer refuses to pay. It contends that Johan had no
insurable interest in the vehicle.

Advise Johan on his legal position. (5)

[25]

Question 3

1. Hutchison describes a number of informal risk-spreading mechanisms like

stokvels, burial societies and funeral parlours in his article on customary
insurance law and he then evaluates them. Give a brief evaluation of these
mechanisms with reference to advantages and disadvantages in the context
where they operate. For example, are these mechanisms beneficial to
community members or are there too many risks involved?

(Do not define or refer to particular types of informal risk-spreading

mechanisms. Evaluate them as a group). (5)

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2. Lelethu insures her own life for R5 million and appoints her husband Konrad
as the sole beneficiary in terms of the life policy. The policy contains a clause
stating that the insurer will not be liable for suicide committed within two
years of its existence. Three years after concluding the contract, Lelethu
commits suicide. Konrad now wishes to claim from Lelethu’s insurer, but he is
not sure if the insurer will be liable as he has been advised that suicide is an
intentional act, and therefore not covered by an insurance contract.
Advise Konrad whether the insurer will be liable in terms of South African
insurance law. (5)

3. “The Constitution of 1996 is an important source of South African insurance

law”.
Comment on the validity of this statement and explain your answer with
reference to practical examples in current insurance practice. Also refer to
any relevant legislation that may support your answer.

(5)

4. Insurance against “all risks” does not mean cover against all losses. Explain
the ambit of this type of insurance by providing examples of losses that will
be covered and of losses that will not be covered. (5)

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5. Lentumetse Padi applies for insurance on her own life. She is unaware that
she has contracted lung cancer. Consequently, she does not disclose this
fact to the insurer. Also, on the proposal form for insurance, the insurer does
not ask her any question about her health.
Would the insurer be able to avoid liability for a claim on the contract should it
appear, after her death, not only that she had in fact been suffering from lung
cancer at the time when she applied for the insurance cover, but also that the
cancer had been the cause of her death? (5)

[25]
[TOTAL 75]

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UNISA 2024