Insurance giant Discovery Life has taken legal action against Sunil Pranpath, a KwaZulu-Natal accountant, seeking to recover a staggering R16 million in benefits it paid to him under claims of permanent disability. The case, which has attracted significant attention, revolves around allegations of misrepresentation and fraud related to Pranpath’s claims for disability and income protection coverage.
Pranpath, who had multiple policies with Discovery Life, initially filed a claim in June 2023, citing orthopaedic injuries after being struck by a car while walking. Discovery accepted the claim and paid out the benefits. However, the situation took a turn when Pranpath later filed another claim under the same policies, this time citing mental health issues, specifically major depression and chronic pain, which he claimed rendered him permanently unable to perform his duties as an accountant.
Discovery Life approved and paid this second claim, which was lodged in February 2015 and settled in December 2016. As per the terms of the insurance policy, Pranpath’s claim required him to demonstrate a continued and substantial loss of income due to his disability. The insurance company periodically reviews such claims to ensure the policyholder remains eligible for ongoing benefits, as it is possible for an insured person to recover and return to work, thus no longer qualifying for disability benefits.
Discovery Life conducted a series of claim reviews with Pranpath, requiring him to complete detailed forms and questionnaires about his condition and ability to work. In these reviews, Pranpath repeatedly stated that he was totally unable to work as an accountant and had no plans to return to work in the foreseeable future.
However, an investigation by Discovery uncovered discrepancies between Pranpath’s statements and his actual activities. Through surveillance conducted in October 2019, the insurer discovered that Pranpath had been working as an accountant during normal working hours, contrary to his earlier claims. Additionally, the insurer discovered that Pranpath had continued to earn an income as an accountant between August 2019 and August 2020, despite representing himself as permanently disabled.
Pranpath also failed to provide key financial documents when requested, including his income tax assessments and bank statements for the period between 2012 and 2017. This further raised suspicions, leading Discovery Life to take legal action.
In a bid to obtain the full financial records and clarify the discrepancies, Discovery Life filed a case in the KwaZulu-Natal High Court in Durban, seeking to compel Pranpath to provide documents dating back to 2012. The requested documents included bank statements, tax returns, financial statements, and details of the corporate entities under which Pranpath operated his accounting business. Discovery also sought to determine the financial structure of Pranpath’s business, specifically his involvement with a sole proprietorship and three corporate entities.
Pranpath argued that the request for documents was unreasonable and costly. He claimed that some of the requested documents had already been provided under subpoena, while others did not exist or were irrelevant. However, the court was not convinced by his defense.
Acting Judge Anna Annandale ruled in favor of Discovery Life, stating that the documents were essential for the insurer to make an informed decision regarding Pranpath’s claims. The judge dismissed Pranpath’s argument about the costs of obtaining the documents, emphasizing that Discovery Life was entitled to the information needed to resolve the case.
“Even if certain documents ultimately turn out not to be relevant, that does not necessarily mean that the application was bad,” Judge Annandale remarked. The court ordered Pranpath to provide all the requested documents within 10 days, or face further legal consequences.
As the legal battle continues, Pranpath now faces the challenge of providing the requested documentation, which could determine whether he is entitled to the disability benefits or if Discovery Life will recover the funds it paid out. The case is a stark reminder of the potential legal consequences for those who attempt to defraud insurance companies.
