05/03/2019
5-7 FEBRUARY 2017
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LEGALISATION OF CANNABIS
PIETER VAN ZYL Munich Re
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MARIJUANA / CANNABIS
Marijuana Grass Cannabis Hash Ganja Pot Dagga Weed
At least 1,200 slang terms
Marijuana – Spanish term – moving away due to illegal connection in USA - Cannabis
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AGENDA
Terminology and role of SA Courts
Background into the September 2018 ConCourt ruling
Global overview of legalization and insurance practices
South African overview and insurance
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LEGALISATION vs DECRIMINALISATION
Legalisation – making particular action legal
Decriminalisation – criminal penalties no longer in effect
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S.A. COURTS
High Courts may find legislation unconstitutional
Constitutional Court – only court that can confirm unconstitutional
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18 September 2018
Terminology and role of SA Courts
Background into the September 2018 ConCourt ruling
Global overview of legalization and insurance practices
South African overview and insurance
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CANNABIS CASES
Mario Oriani-Ambrosini ￫ Constitutional lawyer and member of IFP ￫ Stage IV cancer and received treatment (cannabis) in Italy ￫ Introduced a bill to Parliament for decriminalization of cannabis for medical use ￫ Bill was not accepted – died…
“Dagga Couple” – Kathleen Clarke and Julian Stobbs ￫ Stobbs trial in High Court, Pretoria ￫ Arguing case since 2013 to strike down all laws that ban sale, growth and use of dagga ￫ Trial still ongoing (adjourned and to resume in 2018) ￫ ConCourt agreed for them to join application as they have direct and substantial interest in the proceedings
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CANNABIS CASES
Gareth Prince’s story…
Prince v President Cape Law Society and Others - 2001 ￫ Law Society refused to register contract due to previous convictions for possession of cannabis ￫ Rastafarian – expressed intention to continue using cannabis ￫ Challenged constitutionality as it infringed on rights to freedom of religion, dignity, pursue profession of choice and not be subject to unfair discrimination ￫ High Court – prohibition does limit constitutional right but limitation justifiable under section 36 ￫ Referred to Supreme Court of Appeal (SCA) who dismissed the constitutional challenge ￫ Referred to ConCourt in 2002 who also dismissed the appeal
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ConCourt RULING
March 2017 – Western Cape High Court ￫ Sections of Drugs and Drug Trafficking Act, and ￫ Sections of Medicines and Related Substances Control Act ￫ Inconsistent with right to privacy entrenched in section 14 of the Constitution and therefore invalid ￫ Until Parliament made amendments, it will be deemed to be a defence to a charge under the above Acts
Parliament given 24 months to rectify constitutional defects
18 September 2018 - ConCourt upheld and validated the ruling of the High Court
Effectively, personal use of cannabis decriminalized
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GLOBAL OVERVIEW
Terminology and role of SA Courts
Background into the September 2018 ConCourt ruling
Global overview of legalization and insurance practices
South African overview and insurance
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GLOBAL OVERVIEW
Who are the biggest weed smokers in the world?
How do major countries control use and possession?
How do major global insurers deal with marijuana?
What unique opportunities arose due to decriminalization?
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BIGGEST WEED SMOKING COUNTRIES
20.00% 18.30% 18.00% 16.30% 16.00% 14.30% 14.00% 12.70% 11.83% 12.00% 11.10% 11.00% 10.90% 10.20% 10.00% 9.50%
8.00%
6.00%
4.00%
2.00%
0.00% Iceland USA Nigeria Canada Chile France New Bermuda Australia Zambia Zealand
Percentage of population between 15 – 64 years old
Netherlands only rated number 20 https://www.telegraph.co.uk/travel/maps-and-graphics/mapped-the-countries-that-smoke- the-most-cannabis/ 14
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CANNABIS AROUND THE WORLD
https://romneymanassa.wordpress.com/2016/04/10/map-cannabis-laws-around-the- world/
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GLOBAL OVERVIEW
Australia – medical marijuana legal for certain illnesses only
Insurance unlikely to deny cover due to recreational use
No facility / specific question to establish how marijuana is taken
Low risk activity in terms of adverse health outcomes
Airway disease seems to be most obvious risk factor
- Research is scant with mixed results
- Seems lower risk of lung cancer compared to tobacco
Non-disclosure?
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GLOBAL OVERVIEW
New Zealand – available for chronically or terminally ill patients
Some will treat as non-smoker while others consider applicant a
smoker, regardless of quantity
Marijuana smoking on its own will not make you ineligible for life
insurance
Most insurers will apply smoker rates at most
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GLOBAL OVERVIEW
UK – exploring medical use (CBD with low THC only) but recreational
use in no way on the horizon
Estimated 7.2% of adults between 16 – 59 smoked in 2017/2018
Occasional smokers – standard rates to small loading
Tobacco with marijuana – likely normal smokers rates
History of mental health – declined ￫ AKT1 Gene Variations – increase risk of psychosis ￫ Increase risk of schizophrenia
*Cannabidiol mainly in hemp plant
**Tetrahydrocannabinol – psychoactive compound in marijuana
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GLOBAL OVERVIEW
Legal in 10 states for recreational use
Legal in 33 states for medical use
https://www.businessinsider.com/legal-marijuana-states-2018-1?IR=T 19
USA LIFE INSURANCE
USA ￫ Significant reduction in violent crime in several states bordering Mexico ￫ Different underwriting practices, but generally look at: Recreational or medicinal use If medicinal, what is the ailment How used, e.g. smoked, vaporized, oil, eaten, etc. How often
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SOME USA UNDERWRITING 1
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SOME USA UNDERWRITING 2
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SOME USA UNDERWRITING
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USA LIFE INSURANCE - INNOVATIONS
Estimated cannabis market worth in USA (not just insurance) ￫ 2016 – USD 7 Billion ￫ 2025 – USD 146 Billion
CannaBOP ￫ Short term insurer ￫ Insures cannabis plants/factories against losses
MJ Insurance ￫ Agency shopping for best rates for cannabis users ￫ Cannabis smokers previously did not apply for life cover ￫ Little to no discrimination opens opportunities for new entrants into the market
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USA LIFE INSURANCE - INNOVATIONS
USA ￫ Hounds Labs Inc. – breathalyzer sensitive to THC ￫ Detect marijuana in breath but not accurate in THC levels
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GLOBAL OVERVIEW - CANADA
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GLOBAL OVERVIEW - CANADA
Marijuana Consumption - Canada
https://www.macleans.ca/wp-content/uploads/2018/04/cannabis-age.png 27
GLOBAL OVERVIEW - CANADA
Marijuana Consumption - Canada
https://www.macleans.ca/wp-content/uploads/2018/04/cannabis-products.png 28
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LEGALISATION AND INSURANCE
Canada ￫ Medicinal use legalized 2001 ￫ Federal Cannabis Act – 17 October 2018 ￫ UW moved marijuana use out of high-risk category ￫ Sun Life among first insurers to give marijuana smoking better rates than tobacco smoking ￫ Insurance broker, Lorne Marr, surveyed major insurance providers in Canada and majority adopted similar policy ￫ Experts agree that more research is required to make accurate assessment of health benefits and risks
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REGULATION - CANADA
Canada ￫ Regulation varies by province ￫ Rules regarding promotion, packaging and advertising ￫ Householders allowed to grow up to 4 plants, except Quebec & Manitoba
Intoxication / Legal Limit ￫ Blood most effective to determine THC levels ￫ Anything above 2ng/ml blood is excessive ￫ Oral fluid only tests presence of cannabis
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SOUTH AFRICA
Terminology and role of SA Courts
Background into the September 2018 ConCourt ruling
Global overview of legalization and insurance practices
South African overview and insurance
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SOUTH AFRICA - OVERVIEW
Did you know? ￫ Cannabis is not indigenous to southern Africa ￫ S.A. is the third largest producer of cannabis in the world (Human Science Research Council, Pretoria – 2017) ￫ SA – 3rd African country to “legalise” cannabis ￫ Who’s the other 2? Lesotho Zimbabwe Both issued licences for production for medical use only ￫ Numerous studies / sources of data but no consolidated report
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SOUTH AFRICA - OVERVIEW
United Nations Office on Drugs and Crime (2008)
Age Group 13 – 22 year old ￫ 12.7% used at least once ￫ 9.7% used in the past month
Age Group 15 – 64 year old Estimated annual users ￫ Lower income – 4% ￫ Higher income – 10.1%
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SOUTH AFRICAN INSURANCE
How will we address the decriminalization of marijuana?
Is there an opportunity in new product development?
Explore life cycles of policies
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PRODUCTS
Policy exclusion ￫ …under influence of a drug having a narcotic effect unless prescribed… ￫ How will one prove this? ￫ Same approach as for influence of alcohol
How many people previously did not apply as cover was usually declined?
How many cannabis users in a saturated SA market would now apply for life cover?
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APPLICATION
What needs to change on the application?
Add Marijuana/Cannabis use to tobacco question.
Elaborate on cannabis use? ￫ Quantity and frequency? ￫ In combination with other drugs? ￫ Mental illness? ￫ Method of consumption?
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UNDERWRITING
Cannabis disclosures are seen on policies already
Local underwriting manuals in line with international protocols
Light to moderate use – standard to small loading
Heavy use (>3 x week) – larger loadings, postpone or decline
Benefits more likely to attract large loadings or decline
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UNDERWRITING CHALLENGES
Classification of users by disclosure ￫ Experimenter ￫ Occasional user ￫ Regular / Frequent user
Profile of the user ￫ Age ￫ Background ￫ Education / Income ￫ Add classification of user
Will we see more non-disclosures or more disclosures? ￫ Routine tests? Cost? ￫ Develop more specific underwriting guidelines?
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CLAIMS
Which claims would be most affected?
“Asking for a friend…” What would happen if I smoked and involved in MVA?
Recreational users ￫ Prolonged absence from work ￫ Increase in accidental claims ￫ Schizophrenia and other mental illness
Medicinal use ￫ No real impact on claims ￫ Underlying condition determine validity – possible non-d?
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CONCLUSION
Like it or not, cannabis is here to stay
Although not fully legalised, many countries around the world has approved for medicinal use while others have fully embraced the cannabis revolution
Parliament to change legislation in 24 months from ConCourt ruling
Insurers did not wait for Parliament, but already started to incorporate cannabis questioning and application in products
UW ￫ Each insurer decide on best practice
Claims ￫ BAU – same approach as alcohol use ￫ IF intoxication / non-disclosure / misrepresentation – onus on insurer ￫ DO NOT look for unreasonable reasons to decline claims 40
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DON’T WATER THE PLANTS TOO MUCH YET…
￫ Until Parliament finalise legislation, I would recommend that we keep our herb garden smallish…
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THANK YOU
From myself and Mr Prince
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