Mthokozisi Maphumulo | Partner | Litigation Attorney | Insurance & Financial Sector Laws | Adams and Adams | mail me |
On 6 January 2026, the Pretoria High Court delivered judgment in a case concerning an insurance living annuity. The matter involved competing beneficiary nominations made shortly before the deceased’s death. Importantly, it highlights the risks associated with beneficiary disputes in living annuities.
The plaintiff, who was the widow, relied on a nomination signed on 25 June 2021 in her favour. She argued that this nomination was the last valid one. In contrast, the first defendant, who was the deceased’s daughter, submitted a nomination dated 15 July 2021. She lodged this document after the deceased’s death and claimed it reflected his final intention. As a result, the insurer, cited as the second defendant, sought the court’s direction due to uncertainty over the rightful beneficiary. This situation illustrates common triggers of beneficiary disputes in living annuities.
Background and common cause facts
The parties accepted that the deceased had completed multiple beneficiary forms over time. In several instances, the first defendant acted under a general power of attorney dated 9 September 2019.
Key facts were not in dispute. The deceased purchased the policy in 2012. He granted the power of attorney in 2019. He alternated beneficiary nominations between the plaintiff and the first defendant from 2019 to 2021. He personally signed the 25 June 2021 form in favour of the plaintiff. Thereafter, the first defendant signed a form on 15 July 2021 naming herself, and she submitted it after his death.
Given this uncertainty, the insurer withheld payment. It required a court order to determine the correct beneficiary. This reflects how administrative uncertainty can escalate into beneficiary disputes in living annuities.
Issues for resolution
The court identified several key issues. First, it had to determine whether the first defendant had authority under the power of attorney to sign nomination forms. Second, it considered whether an agent may lawfully nominate herself as beneficiary.
Third, the court examined whether the 15 July 2021 nomination involved misrepresentation or fraudulent misrepresentation. Finally, it assessed whether submitting or effecting the nomination after death invalidated it under the policy terms.
Legal principles considered
On the issue of authority, the court interpreted the broad power of attorney. It concluded that the document authorised the agent to execute written instruments. This included the insurer’s beneficiary nomination form.
Regarding self-benefit, the court applied established fiduciary principles. It emphasised that an agent must avoid conflicts of interest and secret profits. However, an exception applies. If the principal provides informed consent after full disclosure, the agent may benefit.
The court distilled two key principles. First, an agent may benefit from transactions conducted on behalf of the principal. Second, such a benefit is lawful when the principal has full knowledge and provides consent. These principles are central to resolving beneficiary disputes in living annuities.
On misrepresentation, the court outlined the required elements. A party must prove a false and wrongful representation made knowingly or negligently. In addition, the representation must cause patrimonial loss.
The court also considered the policy framework. Clause 10 required the insurer to pay the investment value to the nominated beneficiary at the time of death. If no nomination existed, the insurer would pay the deceased’s estate. Importantly, the policy did not prescribe a rigid nomination process. Instead, it required proof that the deceased had nominated a beneficiary before death.
Court’s findings and reasoning
The court held that the power of attorney authorised the first defendant to sign nomination forms. It classified the nomination form as an “instrument in writing”.
On the fiduciary issue, the court found that the deceased knew about and instructed the nominations. He intended for the first defendant to benefit. Therefore, her self-nomination was lawful because it occurred with his knowledge and consent.
The court rejected the misrepresentation claim. It found no evidence of a false or wrongful representation that caused loss. Importantly, the court focused on the substantive requirement in Clause 10. It asked whether the deceased had nominated a beneficiary before death. It did not focus on administrative formalities.
The court accepted the duplicated and amended form as valid evidence. It showed that the deceased nominated the first defendant before his death. Therefore, the nomination satisfied the policy requirement. The court also clarified the timing issue. The insurer processed the nomination after death. However, this did not invalidate the nomination.
The policy required nomination before death, not processing before death. This distinction often lies at the centre of beneficiary disputes in living annuities. Accordingly, the plaintiff failed to prove that the nomination in favour of the first defendant was invalid. The court dismissed the claim with costs.
In conclusion
This judgment provides important clarity for living annuity beneficiary nominations. It confirms that the decisive question is whether reliable proof exists that the policyholder nominated a beneficiary before death.
It also confirms that a broad power of attorney can authorise an agent to execute nomination instruments. Furthermore, an agent may nominate herself lawfully if the principal acts with full knowledge and consent. In addition, the judgment shows that misrepresentation claims will fail without clear proof of a false and wrongful representation that causes loss.
For insurers and intermediaries, the decision carries practical implications. It confirms that administrative formalities do not override substantive policy requirements. It also clarifies how to treat post-death processing of nominations.
Ultimately, the case highlights the importance of clear evidence of the policyholder’s intention. This is especially relevant when agents act under powers of attorney. As a result, the ruling provides valuable guidance for managing and avoiding beneficiary disputes in living annuities.
