In this judgment the applicant retired in 2020 and arranged for his pension fund to transfer his retirement benefit to the respondent insurer, after withdrawing the tax-free lump sum (one third of his pension benefits). The funds were invested in a number of life and annuity policies.
The applicant tried to cancel the policies a few months later, alleging that he had not agreed to the commission due to his financial advisor, that he had not seen the policy documents until after the funds were invested, and that he was not given proper advice and that it was not explained to him that he could not cancel or withdraw the investment. Evidence showed that the applicant had been made aware of the nature of the policies. He had agreed to them and was told they were non-cancellable.
The insurer argued that in terms of the relevant provisions of the Pension Funds Act and the SARS General Note 18 under the Income Tax Act, the applicant was not entitled to cancel the policies and be paid the commutation benefit.
The court agreed with the respondent that the court could not direct the insurer to cancel the policies, since that would contravene legislation. The applicant’s claim therefore failed.
Ntlokwana v Sanlam Life Insurance Limited (2023-053497) [2024] ZAGPPHC 1092 (22 October 2024)