Description
The claimant in this matter suffered catastrophic injuries in a road traffic accident and came substantially to a settlement with the defendant's motor insurer. The settlement included provision for periodical payments. Two issues remained between the parties. Firstly, the defendant insurer wanted a requirement that in addition to regular medical updates the claimant be required to give the defendant insurer updated life expectancy updates, in order that the defendant insurer be able to maintain an appropriate reserve. Secondly, the defendant insurer wanted a requirement that they receive yearly confirmation from the claimant's GP that the claimant was alive; and that in default of receiving such confirmation the defendant insurer would be entitled to suspend periodical payments without further order.
At first instance, the judge refused to sanction either requirement sought by the defendant insurer. The insurer appealed.
The Court of Appeal held that an insurer was obliged to maintain a reasonable reserve and therefore was at a disadvantage if it was unable to have a reasonable idea about life expectancy. Accordingly, the proposed settlement would include a provision that the claimant be examined at the defendant's request, upon reasonable notice, and that such examination would be for the purpose of obtaining a general opinion as to the claimant's state of health in order for the defendant insurer to obtain a quotation for an annuity.
The Court of Appeal further held that the claimant's GP should write to the defendant insurer on a yearly basis to confirm that the claimant was still alive. In default of such a letter being received, the obligation of the defendant insurer to make payments would be suspended until seven days after written confirmation was provided to the defendant insurer.
