What about Insurance Law Principles? A Comment on the South African Case of African Unity Life Limited v Prosper Funeral Solutions Case No 2021/55922

This article discusses the legal implications of an insurance net premium. A net premium refers not only to a single premium but also to premiums in the aggregate, commonly referred to as a loss ratio calculation. This calculation is relevant to a specific agent of an insurance company, namely a binder holder, the equivalent of which as regards Lloyd’s of London is a cover holder. A binder holder is a South African approach to a cover holder and acts as an insurance company without an insurance company licence in order to, for example, draft policy wordings, and accept or reject claims. The article discusses an instance where the court did not consider the importance of a binder holder and a net premium, nor the importance of a bordereau and how it related to the business activities of Prosper Funeral Solutions. Keywords: cover holder; binder holder; net premium; loss ratio; acknowledgment of debt; bordereau; premium collection company.