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Saturday, September 1, 2007
Growing up

Certain sections of the Children’s Act 38 of 2005 came into effect on 1st July 2007. The full Act will, however, only come into effect once the Children’s Amendment Bill is passed by Parliament and the regulations have been finalised.

Of relevance to the insurance industry is the section passed that effectively reduces the age of majority from 21 to 18. Section 17 provides that “a minor, whether male or female, becomes a major upon reaching 18 years old.” The significance of this is that minors can now enter into commercial contracts at eighteen without the assistance of their parents.
Section 52 of the Short Term Insurance Act, 1998 already recognises and provides for a minor who has attained the age of 18 years enter into or vary an insurance policy, without parental consent or the consent of a guardian — as if he or she had attained majority. Such persons may also: deal with a short-term policy; and may pay the premium due under the policy with money which he or she has earned or which is at his or her disposal. A policy benefit under the policy shall be provided to the minor who may deal with it as he or she thinks fit without the consent of his or her guardian, as if he or she had attained majority.
The impact of the new Act is that eighteen year olds now have locus standi, that is the legal capacity to sue and be sued in their own names, which previously was not the case.
Insurers, when dealing with for example personal injury claims for compensation for bodily injury by minors who have just turned major (eighteen) for incidents that took place prior to them turning eighteen, must be wary of the provisions of the Prescription Act.
Section 13 of the Act provides that “the completion of prescription is delayed in certain circumstances -
if …..
the creditor is a minor or insane or is …..from interrupting the running of prescription as contemplated in section (15)(1); or
(2) the relevant period of prescription would, but for the provisions of this subsection, be completed before or on, or within one year after, the day on which the relevant impediment referred to in paragraph (a), . . has ceased to exist, the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (1).”
Accordingly, once the minor turns eighteen he/she will have a year within which to institute action for the recovery of debt, calculated from the date he/she became a major.

Copyright © Insurance Times and Investments® Vol:20.8 1st September, 2007
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