Dear Claudienne,

I am a customer of Jamaica National General Insurance. On July 26, I sent the general manager a letter concerning the cancellation of my car insurance policy, but I have had no response.

My letter to JNGI stated the following:

“I have been a JNGI customer for the past six years, a very good customer, I must say.

No claim has ever been made against my policy since I have been with JNGI, not even a windshield claim. So I was alarmed when I was told in June, after I had made a payment on a financing agreement that I have with JN Finance, that the insurance policy had been cancelled. However, the payment was accepted before I was aware of the cancellation. I was of the opinion that the policy was reinstated after a payment of $20,000 was made on June 29, 2016, out of total outstanding to JN Finance of just over $35,000.

On July 25, 2016, I went to pay the balance of just over $15,000, and I was told by the CSR at the MegaMart office that the payment could not be accepted because the policy had been cancelled.

I have an agreement with JN Finance to finance my insurance premium to an amount of $75,755.24 which JN Finance should have paid over to JNGI, and they would in turn issue me with an insurance certificate.

I would then repay JN Finance an amount of $13,625.87 in equal instalments on the 26th day of each month for six months, beginning on January 26, 2016.

I have paid five instalments and one is outstanding and the policy has been cancelled. It should be noted that the insurance policy actually expires December 20, 2016, for which I have a valid insurance certificate from JNGI.

I was told in June that JN Finance acted as per premium Finance Agreement Terms and Conditions number seven, note D. I have never received any cancellation notice from JN Finance to say this action would be taken. JNGI is yet to show me the notice that was provided for me by JN Finance as per agreement.

There is a serious conflict of interest between JNGI and JN Finance that as a customer with both entities, I am being unfairly treated, on the grounds that JNGI has received full payments on my behalf from JN Finance and is still acting on JN Finance’s behalf and leaving me, the customer, in the cold.

I need answers. I find it unacceptable that JNGI is reacting to a third party at my behest.”

I would appreciate your help in this matter and I hope to get a favourable outcome.

FW

Dear FW,

When

Tell Claudienne spoke to the general manager of JNGI, he said that he had not seen your letter. Your letter was sent to the JN Finance address at 3 Barbados Avenue, New Kingston (Kingston 5) . The JNGI address is 9 King Street, downtown Kingston.

Your letter to the JNGI general manager included six questions and he has responded as follows:

“Dear FW

We refer to your letter dated July 26, 2016, received by JN General Insurance Company Limited (JNGI) via fax from the Jamaica Observeron August 16, 2016. Your letter concerns the cancellation of your motor vehicle insurance policy with JNGI following a default in the underlying premium finance contract. You have raised a number of questions to which I will now respond in turn.

1. On what grounds did JNGI cancel my policy?

On January 28, 2016, you entered into a Premium Finance Agreement for the payment of the insurance premium on your motor vehicle policy with JNGI. The parties to that contract were Jamaica National Building Society (JNBS), through its premium finance division, JN Finance; JNGI, the insurer; and you, the insured. Under the agreement, where the insured fails to pay any premium finance instalment, JNGI is contractually bound to act on cancellation instructions issued to it by JNBS. No payment was received for the month of May 2016. By letter dated June 14, 2016, JNBS instructed us to cancel your insurance policy as a result of arrears on the premium financing account, and following their repeated attempts to contact you (three unanswered telephone calls with voice messages not responded to), made good on the arrears. Acting on JNBS’ instructions, on June 30, 2016, JNGI issued a cancellation notice to you (by registered mail) to take effect on July 11, 2016.

2. Am I to believe that it is legal for JN Finance to make a phone call to JNGI and have my insurance policy cancelled, when the agreed sums of money were paid over to JNGI in January, six months earlier?

Clause 7 (d) of the Premium Finance Agreement to which JNGI is a party provides as follows:

“JNBS may, by notice, advise the Insurance Company (JNGI) that the Insured is in default under this Agreement, and request that the Insurer cancel the Policy, providing copies of such notice to the Insured and the Broker (if any).”

As earlier indicated, JNBS advised us by letter dated June 14, 2016 to cancel the insurance policy. At the start of the premium finance contract, JNBS paid over to JNGI the full annual premium under your policy. As you are aware, you are required to make the agreed monthly instalments to JNBS. If, however, the policy is cancelled mid-term, JNGI is required to return to JNBS any unused premiums under the policy after the effective date of the cancellation, as stipulated in the contract.

3. Would National Commercial Bank (NCB), Scotia Bank Jamaica (BNS), Courts Finance, Niche Finance or any other lending institution have the right to have JNGI cancel a JNGI customer’s insurance policy because they miss a payment at that lending institution?

JNGI would similarly act on instructions from any other premium finance company where the Premium Finance Agreement provides for the cancellation of the insurance policy in the event of a default in the payment of premium finance instalments. This is standard practice in the general insurance industry.

4. What will be the outcome of a claim being made against my policy before it expires on December 20, 2016, for which I am holding a valid Insurance Certificate?

Where a claim is made under a policy after JNGI has cancelled that policy, JNGI will not honour such a claim. It is for that reason that your Motor Insurance Policy and also the cancellation notice issued to you stipulate that any unexpired Certificate of Insurance or Cover Note must be returned to us, because, following a cancellation, they are no longer valid.

Where a claim is made under a policy after JNGI has cancelled that policy, JNGI will not honour such a claim. It is for that reason that your Motor Insurance Policy and also the cancellation notice issued to you stipulate that any unexpired Certificate of Insurance or Cover Note must be returned to us, because, following a cancellation, they are no longer valid.

5. Will JNGI not honour any claim made against my policy?

JNGI does not honour claims made against cancelled policies in the absence of special circumstances.

JNGI does not honour claims made against cancelled policies in the absence of special circumstances.

6. Will I be held responsible if any such claim is made against my policy?

Where a motor insurance policy has been cancelled, subject to liability, the insured is responsible for any loss or damage involving or arising from the use of the motor vehicle.Following our investigations, we are satisfied that JNGI acted appropriately in issuing cancellation instructions to you. Notwithstanding, in recognition of your long-standing relationship with JNGI, we are prepared to treat your insurance coverage as continuous, providing that you pay the outstanding premium finance amount of $15,581.49 (JNBS has agreed to waive the accrued interest) on or before August 19, 2016. If payment is not received by that date, we will have no option but to cancel your insurance policy in keeping with the cancellation notice sent to you.We trust that you will act expeditiously to settle the outstanding amount.”

Where a motor insurance policy has been cancelled, subject to liability, the insured is responsible for any loss or damage involving or arising from the use of the motor vehicle.

Following our investigations, we are satisfied that JNGI acted appropriately in issuing cancellation instructions to you. Notwithstanding, in recognition of your long-standing relationship with JNGI, we are prepared to treat your insurance coverage as continuous, providing that you pay the outstanding premium finance amount of $15,581.49 (JNBS has agreed to waive the accrued interest) on or before August 19, 2016. If payment is not received by that date, we will have no option but to cancel your insurance policy in keeping with the cancellation notice sent to you.

We trust that you will act expeditiously to settle the outstanding amount.”

Tell Claudienne notes that you informed JNGI that you could not make the payment on August 19. JNGI agreed to extend the date for payment of the $15, 581.49 to Thursday, August 25.

Good luck.

Have a problem with a store, utility, a company? Telephone 936-9436 or write to: Tell Claudienne c/o Sunday Finance, Jamaica Observer, 40­–42 1/2 Beechwood Avenue, Kingston 5, or e-mail: edwardsc@jamaicaobserver.com. Please include a contact phone number.