Medical Schemes Amendment Act
This text announces the Medical Schemes Amendment Act, 2001 and says it was assented to and published.
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This text announces the Medical Schemes Amendment Act, 2001 and says it was assented to and published. This section amends the Medical Schemes Act by adding and revising several definitions, including beneficiary, broker, complaint, waiting periods, dependant, reinsurance contract, and reinsurer. Paragraph (a) of section 7 is replaced so it now says to protect the interests of beneficiaries at all times. The Council may exempt a medical scheme or other person from compliance with the Act in exceptional cases, on written application and subject to terms, conditions, and a period it तयines. This section amends section 19 of the principal Act by deleting subsection (3).
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December 2001 No. 22951
AI-assisted research summary: This text announces the Medical Schemes Amendment Act, 2001 and says it was assented to and published.
14 December 2001 No. 22951 THE PRESIDENCY No. 1378 14 December 2001 It is hereby notified that the Acting President has assented to the following Act, which is hereby published for general information:– No. 55 of 2001: Medical Schemes Amendment Act, 2001 AIDS HELPLINE: 0800-123-22 Prevention is the cure 2 No. 22951 GOVERNMENT GAZETTE. 14 DECEIMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 GENERAL EXPLANATORY NOTE: ] Words in bold type in square brackets indicate omissions from existing enactments. Words underlined with existing enactments. a solid line indicate insertions in (English text signed by the Acting President.) {Assented to 11 December 2001.) ACT To amend the Medical Schemes Act, 1998, so as to extend certain rights of members to their dependants; to broaden the definition of complaint; to explicitly prohibit discrimination on the basis of age; to further regulate the practice of reinsurance; to regulate the circumstances under which waiting periods may be applied; to improve the powers of the Council and the Registrar to act in the interests of beneficiaries; to regulate the marketing of entities doing the business of a medical scheme; to provide for more frequent submission of returns to the Registrar; to determine the circumstances under which inspections may be made; to further define the persons who may be appointed as auditors of medical schemes; to further define the persons who may serve as trustees of a medical scheme and to further clarify their duties; to define the persons who may serve as principal officers of a medical scheme; to limit the purposes for which medical schemes may compensate brokers and provide for the regulation of their professional conduct; to regulate the transfer of business of medical schemes to any person; to remove the requirement for staff of the Council to be members of the Government Employees Pension Fund; to amend the transitional provisions with regard to certain schemes; and to provide for incidental matters. B E IT ENACTED by the follows:-- Parliament of the Republic of South Africa, as Amendment of section 1 of Act 131 of 1998 - 1 Verify source ↗
Section 1 of the Medical Schlsmes Act, 1998 (hereinafter referred to as the principal
AI-assisted research summary: This section amends the Medical Schemes Act by adding and revising several definitions, including beneficiary, broker, complaint, waiting periods, dependant, reinsurance contract, and reinsurer.
1. Section 1 of the Medical Schlsmes Act, 1998 (hereinafter referred to as the principal Act), is hereby amended by the-- ( a ) insertion after the definition of “Appeal Board” of the following definition: “ ‘beneficiary’ means a member or a person admitted as a dependant of a member;”; ( b ) insertion after the definition of “board of trustees” of the following definition: ‘‘ ‘broker’ means a person whose business, or part thereof, entails providing a service or advice in respect of the introduction of prospective members to a medical scheme;”; (c) substitution for the definition of “complaint” of the following definition: “ ‘complaint’ means a complaint against any person required to be registered or accredited in terms of this Act, or any person whose professional activities are regulated by this Act, and alleging that such Derson has- 5 10 15 4 No. 22951 GAZETTE, GOVERNMENT 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 (a) acted, or failed to act, in contravention of this Act; or ( b ) acted improperly in relation to any matter which falls within the jurisdiction of the Council;”; (d) insertion after the definition of “complaint” of the following definition: a. period during which a ‘‘ ‘condition-specific waiting period’ means beneficiary is not entitled to claim benefits in respect of a condition for which medical advice, diagnosis, care or treatment was recommended or received within the twelve-month period ending on the date on which an application for membership was made;”; 5 (e) substitution in the definition of “dependant” for paragraph (b) of the 10 following paragraph: “(b) any other person who, under is recognised as a dependant of [such] a member [and is eligible for benefits under the rules of the medical scheme];”; the rules of a medical scheme, (fl insertion after the definition of “financial year” of the following definition: 15 ‘‘ ‘general waiting period’ means a period in which a beneficiary is not entitled to claim any benefits;”; (g) insertion after the definition of “Registrar” of the following definitions: ‘‘ ‘reinsurance contract’ means any contractual arrangement whereby some element of risk contained in the rules o f the medical scheme is 20 transferred to a reinsurer in return for some consideration; ‘reinsurer’ means an insurer- ( a ) registered as a long-term insurer in tenns Long-term Insurance Act, 1998 insurer is prohibited from engaging in the practice of reinsurance in 25 terms of section 10 of that Act; or of section 9 of the (Act No. 52 of 1998), unless that (b) registered as a short-term insurer in tenns of section 9 of the Short-term Insurance Act, 1998 (Act No. 53 of 1998), unless that insurer is prohibited from engaging in the practice of reinsurance in terms 10 of that Act;”. section of Amendment of section 7 of Act 131 of 1998 - 2 Verify source ↗
Section 7 of the principal Act is hereby amended by the substitution for paragraph
AI-assisted research summary: Paragraph (a) of section 7 is replaced so it now says to protect the interests of beneficiaries at all times.
2. Section 7 of the principal Act is hereby amended by the substitution for paragraph (a) of the following paragraph: “(a) protect the interests of the [members] beneficiaries lit all times;”. Amendment of section 8 of Act 131 of 1998 30 35 - 3 Verify source ↗
Section 8 of the principal Act is hereby amended by the substitution for paragraph
AI-assisted research summary: The Council may exempt a medical scheme or other person from compliance with the Act in exceptional cases, on written application and subject to terms, conditions, and a period it तयines.
3. Section 8 of the principal Act is hereby amended by the substitution for paragraph (h) of the following paragraph: “(h) exempt, in exceptional cases and subject to such terms and conditions and for such period as the Council may determine, a medical scheme or other person upon written application from complying with any provision of this Act;”. 40 Amendment of section 19 of Act 131 of 1998 - 4 Verify source ↗
Section 19 of the principal Act is hereby amended by the deletion of subsection (3).
AI-assisted research summary: This section amends section 19 of the principal Act by deleting subsection (3).
4. Section 19 of the principal Act is hereby amended by the deletion of subsection (3). Amendment of section 20 of Act 131 of 1998 - 5 Verify source ↗
Section 20 of the principal Act in hereby amended by the addition of the following
AI-assisted research summary: If a medical scheme wants to enter or amend a reinsurance contract, its board must send the Registrar the contract, an independent need assessment, and later address any issues raised before implementation.
5. Section 20 of the principal Act in hereby amended by the addition of the following subsections: (3) Where a medical scheme intends entering into any reinsurance contract, or effecting any amendment of such reinsurance contract, the board of trustees shall furnish to the Registrar- ( a ) a copy of any such reinsurance contract or amendment of such reinsurance contract; and (b) an evaluation of the need for the proposed reinsurance contract undertaken by a person with the necessary expertise to conduct such an evaluation, and who has no direct or indirect financial interest in the relevant reinsurance contract. 45 50 6 No. 22951 GAZETTE, GOVERNMENT 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 (4) The Registrar may in writing raise, within 30 days of having received any such reinsurance contract or amendment and evaluation, (my matter in respect of the terms of such contract or amendment, taking into account whether- ( a ) due consideration has been given by the medical scheme concerned to the need for reinsurance, based upon an assessment of the: financial risks to which that medical scheme is exposed; (b) the reinsurance contract is in the best interests of the lmembers of the medical 5 scheme concerned; and ( c ) there is conflict of interests between the parties to the reinsurance contract. ( 5 ) The board of trustees is obliged to address, to the satisfaction of the Registrar, 10 any matter raised amendment to any such contract; prior to the implementation of the reinsurance contract or (6) The board of trustees shall certify that a reinsurance contract or amendment submitted in terms of section 20(3) constitutes the entire agreement between the medical scheme and reinsurer with respect thereunder, and that there are no arrangements between the medical scheme and the reinsurer other than those expressed in the contract or amendment. bu,siness being reinsured to the (7) Failure to comply with sections 20(3), 20(5) and 20(6) shall result in such reinsurance contract or amendment being null and void. Act Insertion of section 21A 131 in of 1998 15 20 - 6 Verify source ↗
The following section is hereby inserted in the principal Act after section 21:
AI-assisted research summary: This section makes it an offence to market or advertise a business or medical scheme in a misleading way, and it also bars making medical-scheme admission conditional on buying another person’s product or service.
6. The following section is hereby inserted in the principal Act after section 21: “Marketing 21A. (1) It is an offence to market, advertise or in any other way promote the business of any person in a manner likely to create the impression that such person conducts, will conduct, or is entitled to conduct, the business of a medical scheme unless that person is registered as a medical scheme in terms of section 24(1) of this Act. 25 (2) The admission of a person as a member or dependant of a medical scheme may not be made directly or indirectly conditional upon that person purchasing or participating in any product, benefit or service provided by a 30 person other than the medical scheme in terms of its rules. (3) It is an offence to market, advertise or in any other way promote a the impression that medical scheme membership of such medical scheme purchasing or participating in any product, benefit or service provided by a 35 person other than the medical scheme in terms of its rules.”. is conditional upon an applicant likely to create in a manner Amendment of section 24 of Act 131 of 1998 - 7 Verify source ↗
Section 24 of the principal Act is hereby amended by the substitution in-
AI-assisted research summary: This section amends a medical-scheme provision so that the board of trustees and principal officer must be fit and proper, and the scheme must not unfairly discriminate.
7. Section 24 of the principal Act is hereby amended by the substitution in- (a) subsection (2) for paragraph (a) of the following paragraph: “ ( a ) [a member] members of the board of trustee:s [or] the principal 40 officer of the proposed medical scheme [is a] are fit and proper [person] persons to hold the [office] offices concymed;”; (b) subsection (2) for paragraph ( e ) of the following paragraph: “ ( e ) the medical scheme does not or will not unfairly discriminate directly or indirectly against any person on one or more arbitrary 45 grounds including race, origin, sexual orientation, pregnancy, disability and state of health; and”. gender, marital status, ethnic or social 8 No. 22951 GAZETTE, GOVERNMENT 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 Amendment of section 28 of Act 131 of 1998 - 8 Verify source ↗
Section 28 of the principal Act is hereby amended by the substitution for paragraph
AI-assisted research summary: A member may not claim or accept benefits from any medical scheme other than the scheme they belong to, including benefits for a dependant.
8. Section 28 of the principal Act is hereby amended by the substitution for paragraph (c) of the following paragraph: “(c) claim or accept benefits in respect of himself or herself or any dependant from any medical scheme other than the medical scheme of which he or she is a member [or a dependant].”. 5 Amendment of section 29 of Act 131 of 1998 - 9 Verify source ↗
Section 29 of the principal Act is hereby amended by the substitution in-
AI-assisted research summary: Section 29 is amended to allow certain medical-scheme membership and benefits matters to be prescribed, including minimum benefits, continued membership after retirement or termination, continued dependant membership after death, and waiting-period rules.
9. Section 29 of the principal Act is hereby amended by the substitution in- ( a ) subsection (1) for paragraph (0) of the following paragraph: “(0) The scope and level of minimum benefits that are to be available to 10 [members and dependants] beneficiaries as may be prescribed.”; (b) subsection (1) for paragraph (s) of the following paragraph: “(x) The continuation, subject to [the prescrilbed] &conditions may be prescribed, of the membership of a member, who retires from the service of his or her employer or whose employment is 15 terminated by his or her employer on account of age, ill-health or other disability and his or her dependants.”; (c) subsection (1) for paragraph (t) of the following paragraph: “(t) For continued membership of a member’s dependants, subject to conditions as may be prescribed, after the 20 [the prescribed] death of that member, until such dependant becomes a member of, as a dependant of a member of another medical or is admitted scheme.”; (d) subsection (3) for paragraph ( c ) of the following paragraph: (c) for the imposition of waiting periods [or new restrictions on 25 account of the state of health of any member who has been a member or a dependant of a member of another medical scheme for a continuous period of at least two years and whose membership has been terminated because of change of employ- ment and who applies for membership within three months after the termination of membership from the other medical scheme] other than as provided for in section 29(A).”. 30 Insertion of section 29A in Act 131 of 1998 - 10 Verify source ↗
The following section is hereby inserted in the principal Act after section 29:
AI-assisted research summary: Medical schemes may impose waiting periods in some cases, but several waiting-period limits and exceptions apply.
10. The following section is hereby inserted in the principal Act after section 29: periods “Waiting 29A. (1) A medical scheme may impose upcrn a person in respect of whom an application is made for membership or admission as a dependant, and who was not a beneficiary of a medical scheme for a period of at least 90 days preceding the date of application- (a) a general waiting period of up to three months; and (6) a condition-specific waiting period of up to l:! months. 35 40 (2) A medical scheme may impose upon any person in respect of whom an application is made for membership or admission as a dependant, and who was previously a beneficiary of a medical scheme for a continuous period of up to 24 months, terminating less than 90 days immediately prior to the date of application- ( a ) a condition-specific waiting period of up to 12 months, except in 45 respect of any treatment or diagnostic procedures covered within the prescribed minimum benefits; (b) in respect of any person contemplated in this subsection, where the 50 previous medical scheme had imposed a general or condition-specific waiting period, and such waiting period had not expired at the time of termination, a general or condition-specific waiting period for the unexpired duration of such waiting period imposed by the former medical scheme. 55 10 No. 22951 GOVERNMENT GAZETTE, 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 (3) A medical scheme may impose upon any person in respect of whom an application is made for membership or admission as a dependent, and who was previously a beneficiary of a medical scheme for a continuous period of more than 24 months, terminating less than 90 days immediately prior to the date of application, a general waiting period of up to three months, except diagnostic procedures covered within the prescribed minimum benefitis. in respect of any treatment or (4) A medical scheme may not impose a general or a condition-specific waiting period on a beneficiary who changes from one benefit option to another within the same medical scheme unless that beneficiary is subject to a waiting period on the current benefit option, in which case any remaining period may be applied. (5) A medical scheme may not impose a general or a condition-specific waiting period on a child-dependant born during the period of membership. (6) A medical scheme may not impose a general or condition-specific waiting period on a person in respect of whorn application is made for membership or admission as a dependant, and who was previously a beneficiary of a medical scheme, terminating less, than 90 days immediately prior to the date of application, where the transfer of membership is required as a result of- (a) change of employment; or ( b ) an employer changing or terminating of its employees, in which case such transfer shall occur at the beginning of the financial year, or reasonable notice must have been furnished to the medical scheme to which an application is made for such transfer to occur at the beginning of the financial year. the medical scheme (7) A medical scheme may require an applicant to provide the medical scheme with a medical report in respect of any proposed beneficiary only in respect of a condition for which medical advice, diagnosis, care or treatment was recommended or received within the 12 month period ending on the date on which an application for member:ship was made. (8) In respect of members who change medical schemes in terms of subsection (6), where the former medical scheme had imposed a general or condition-specific waiting period and such waiting period had not expired at the time of termination, the medical scheme to which the person has applied may impose a general or condition-specific waiting period for the unexpired duration of such waiting period imposed by the former medical scheme.”. 5 10 15 20 25 30 35 Amendment of section 30 of Act 131 of 1998 - 11 Verify source ↗
Section 30 of the principal Act is hereby amended by the substitution in subsection 40
AI-assisted research summary: This section amends another provision by replacing paragraph (a) in subsection 40(1) of section 30 of the principal Act.
11. Section 30 of the principal Act is hereby amended by the substitution in subsection 40 (1) for paragraph (a) of the following paragraph: (a) donations to any hospital, clinic, nursing home, maternity home, infirmary or of its [members] the interest of all or some home for aged persons in beneficiaries;”. Amendment of section 35 131 of Act of 1998 - 12 Verify source ↗
Section 35 of the principal Act is hereby amended by the substitution in-
AI-assisted research summary: This section amends section 35 of the principal Act, including wording about council approval, council directives, and when a person may act under other provisions of the Act.
12. Section 35 of the principal Act is hereby amended by the substitution in- (a) subsection (6) for the words following paragraph (d) of the following words: “without the prior approval of the-council s u b j e c t to such directives “without the prior approval of the-council s u b j e c t to such directives as the Council may issue.”; as the Council may issue.”; (b) subsection (1 2) for paragraph (b) of the following paragraph: (b) subsection (1 2) for paragraph (b) of the following paragraph: “ ( b ) if he or she is satisfied that it is necess&- to do s i in the interest of the [members] beneficiaries of the medical scheme, at the same time, or at any time thereafter, and notwithstanding any steps already taken by him or her under paragraph (a), act in terms of any other provision of this Act.”. 45 50 50 55 i 12 No. 22951 GOVERNMENT GAZETTE, 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 Amendment of section 36 of Act 131 of 1998 - 13 Verify source ↗
Section 36 of the principal Act is hereby amended by the-
AI-assisted research summary: This section amends section 36 of the principal Act, including a rule that an auditor’s appointment does not take effect unless the Registrar approves it and may impose conditions.
13. Section 36 of the principal Act is hereby amended by the- ( a ) substitution for subsection (2) of the following subsection: “(2) The appointment of an auditor[, other than the re-appointment that does not involve a break in the continuity of the appointment,] shall not take effect unless it has been approved by the Registrar, sub.ject to such conditions as he or she may deem fit.”; 5 (b) insertion in subsection ( 3 ) of the following paragraphs, the existing paragraphs ( b ) and ( c ) becoming paragraphs (d) and (ej, respectively: “(b) a person who is otherwise engaged contractor of the medical scheme; as an employee, officer or 10 fc) a person who is an employee, director, officer or contractor of the company, medical scheme’s administrator, or subsidiary, joint venture or associate of its administrator;”; of the holding subst:ction ( 6 ) of the ( c ) substitution for “(6) An auditor who in terms of this section furnishes a report in good faith shall not contravene a provision of a law or breach a provision of a code of professional conduct, to which he or she is subject [to].”. subsection: following 15 Amendment of section 37 of Act 131 of 1998 - 14 Verify source ↗
Section 37 of the principal Act is hereby amended by the addition of the following 20
AI-assisted research summary: The Registrar may require the board of trustees to prepare and provide financial statements quarterly, in a specified medium or form.
14. Section 37 of the principal Act is hereby amended by the addition of the following 20 subsection: “ ( 6 ) Notwithstanding anything to the contrary in this section, and without derogating from other powers conferred on the Registrar in terms of this Act, the Registrar may, on a quarterly basis, require the board of trustees to prepare and furnish to him or her financial statements, in any specified medium or form.”. 25 Amendment of section 41 of Act 131 of 1998 - 15 Verify source ↗
Section 41 of the principal Act is hereby amended by the substitution-
AI-assisted research summary: A medical scheme must give a beneficiary copies of listed documents on demand and on payment of any fee set by the scheme rules; a beneficiary may inspect those documents and make extracts without charge at the scheme’s registered office.
15. Section 41 of the principal Act is hereby amended by the substitution- ( a ) in subsection (1) for the words preceding paragraph (a) of the following words: “(1) A medical scheme shall deliver to a [member] beneficiary on 30 demand by such [member] beneficiary, and on payment of such fee as may be determined by the rules of the medical scheme, a copy of any of the following documents:” (b) for subsection (2) of the following subsection: “ ( 2 ) A [member] beneficiary shall be entitled to inspect, without 35 charge, at the registered office of a medical scheme of which he or she is to in subsection (1) and to make a member, the documents referred extracts therefrom.”. Amendment of section 43 of Act 131 of 1998 - 16 Verify source ↗
The following section is hereby substituted for section 43 of the principal Act:
AI-assisted research summary: This section substitutes a new section 43 of the principal Act, titled “Enquiries by Registrar.”
16. The following section is hereby substituted for section 43 of the principal Act: 40 “Enquiries by Registrar - 43 Verify source ↗
The Registrar may address enquiries to a medical scheme
AI-assisted research summary: The Registrar may ask a medical scheme questions about its business or transactions, and the scheme must reply in writing within 30 days unless the Registrar allows a longer period.
43. The Registrar may address enquiries to a medical scheme in relation to any matter connected with the business or transactions of the medical scheme, and the medical scheme shall reply in writing thereto within a period of 30 days as from the date on which the Registrar addressed the 45 enquiry to it, or within such [further period as the Registrar may, at the request of the medical scheme, allow] other period as the Registrar may specify.”. 14 No. 22951 GAZETTE, GOVERNMENT 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 Amendment of section 44 of Act 131 of 1998 - 17 Verify source ↗
Section 44 of the principal Act is hereby amended by the insertion of the following
AI-assisted research summary: The Registrar may order an inspection under this section in two situations: where it may reveal irregularity or non-compliance, or for routine monitoring of compliance.
17. Section 44 of the principal Act is hereby amended by the insertion of the following subsection, the existing subsections (4) to (10) becoming subsections ( 5 ) to (Il), respectively: “(4) The Registrar may order an inspection in terms of this section- 5 ( a ) if he or she is of the opinion that such an inspection will provide evidence of any irregularity or of non-compliance with this Act by any person; or (b) for purposes of routine monitoring of compliance with this Act by a medical scheme or anv other nerson.”. Amendment of section 48 of Act 131 of 1998 - 18 Verify source ↗
Section 48 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: A person aggrieved by a decision about settling a complaint or dispute may appeal that decision.
18. Section 48 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “(1) Any person who [may be] is aggrieved by any decision settlement of a complaint or dispute may appeal against such decision Council. ” . relating to the to the Amendment of section 51 of Act 131 of 1998 - 19 Verify source ↗
Section 5 1 of the principal Act is hereby amended by the substitution-
AI-assisted research summary: The Registrar may apply to the High Court for certain orders about a medical scheme, but only with the Council’s concurrence and if the Registrar thinks it is in beneficiaries’ interests or there are material irregularities.
19. Section 5 1 of the principal Act is hereby amended by the substitution- (a) for subsection (1) of the following subsection: “( 1) The Registrar may, with the concurrence of the Council, in regard to any medical scheme apply to the High Court for an order contemplated in paragraph (b), (c), (d) or ( e ) of subsection ( 5 ) if the Registrar is of the opinion that it is in the interest of [members] beneficiaries or because material irregularities have come to his or her notice.”. (b) in subsection (4) for paragraph (b) of the following paragraph: “(b) the Registrar may, if he or she is of the opinion that the application is contrary to the interest of the [ m e m b ~ ~ s ] beneficiaries of the medical scheme concerned, make application to join the application as a party and file ai3davits and other documents in opposition to the application.”. Amendment of section 52 of Act 131 of 1998 10 15 20 25 30 - 20 Verify source ↗
Section 52 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: The Registrar may apply to the High Court to join an application and oppose it, if satisfied it is contrary to the interests of the medical scheme’s beneficiaries.
20. Section 52 of the principal Act is hereby amended by the substitution in subsection (4) for paragraph (b) of the following paragraph: “(b) the Registrar may, if he or she is satisfied that the application is contrary to the interests of the [members] beneficiaries of the medical scheme concerned, make application to the High Court to join the application as a party and file 35 affidavits and other documents in opposition to the application.”. Amendment of section 53 of Act 131 of 1998 - 21 Verify source ↗
Section 53 of the principal Act is hereby amended by th’e substitution-
AI-assisted research summary: The Registrar may apply to wind up a medical scheme, but only with the Council’s concurrence, the High Court’s approval, and if it is in the beneficiaries’ interest.
21. Section 53 of the principal Act is hereby amended by th’e substitution- (a) for subsection (2) of the following subsection: “(2) The Registar may, with the concurrence of the Council and with 40 the approval of the High Court, make an application under section 346 of the Companies Act, 1973, for the winding-up of a medical scheme if he or she is satisfied that it is in the interest of the [members] beneficiaries of that medical scheme to do so.”. (b) in subsection (3) for paragraph (b) of the following paragraph: 45 “(b) in addition to any question whether it is just and equitable that a medical scheme should be wound up, there shall be considered also of the [members] the question whether beneficiaries of that medical scheme that it should be wound up;”. in the interests it is 16 No. 2295 1 GOVERNMENT GAZETTE, 14 DECEMBER 2001 Act No. 55,2001 MEDIC 4L SCHEMES AMENDMENT ACT, 2001 Amendment of section 56 of Act 131 of 1998 - 22 Verify source ↗
Section 56 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: The Registrar may apply to the High Court, with the Council’s concurrence, for a curator to manage a medical scheme if certain concerns exist.
22. Section 56 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “(1) The Registrar may, notwithstanding the provisions of section 52 and 53, if he or she is of the opinion that it is in the interest of [members] beneficiaries or that it is desirable to do so, because material irregularities have come to his or her notice, or because a medical scheme is not in sound financial condition or as a result of an inspection of the af€airs of a medical scheme, apply, with the concurrence of the Council, to the High Court, for the appointment of a curator to take control of and to manage the business of that medical scheme.”. 5 10 Amendment of section 57 of Act 131 of 1998 - 23 Verify source ↗
Section 57 of the principal Act is hereby amended by the-
AI-assisted research summary: This amendment bars certain people from serving as trustees or principal officer of a medical scheme and requires trustees to disclose payments or benefits to the Registrar each year in writing.
23. Section 57 of the principal Act is hereby amended by the- ( a ) substitution for subsection (3) of the following subsection: “(3) A person [who is a director or an employee of an administrator of a medical scheme] shall not be a member of the board of trustees of [such] a medical scheme, if that person is- ( a ) an employee, director, officer, consultant or contractor of the 15 company, subsidiary, joint venture or associate of that administra- tor; or (6) a broker.”; 20 (6) substitution in subsection (4) for paragraph cf) of the following paragraph: “Cfl take out and maintain an appropriate level of professional indem- nity insurance and fidelity guarantee insurance [from and up to such amount as the medical scheme’s auditor, with the concur- rence of the Registrar, may determine];”; 25 (c) substitution in subsection (6) for paragraph (a) of the following paragraph: “(a) take all reasonable steps to ensure that the interests of [members] beneficiariz in terms of the rules of the medical scheme and the provisions of t h s Act are protected at all times;”; (d) substitution in subsection (6) for paragraph (d) of the following paragraph: (d) “act with impartiality in respect of all [members] beneficiaries;”; ( e ) addition of the following subsections: “(7) A person shall not be a principal officer of a medical scheme if. that person is- (a) an employee, director, of the administrator of the medical scheme concerned, or of the holding company, subsidiary, joint venture or associate of that administra- tor; or officer, consultant or contractor (b) a broker. (8) The members of the Board of trustees shall disclose annually in writing to the Registrar any payment or considerations made to them in that particular year by the medical scheme.”. 30 35 40 Amendment of section 59 of Act 131 of 1998 - 24 Verify source ↗
Section 59 of the principal Act is hereby amended by the substitution for 45
AI-assisted research summary: A service supplier must give the relevant member an account or statement with prescribed details after rendering a service and an account.
24. Section 59 of the principal Act is hereby amended by the substitution for 45 subsection (1) of the following subsection: “( 1) A supplier of a senice who has rendered any service to a [member or to a dependant of such a member] beneficiary in terms of which an account has been rendered, shall, notwithstanding the provisions of any other law, furnish to the member concerned an account or statement reflecting such particulars as may be 50 prescribed.”. Amendment of section 63 of Act 131 of 1998 - 25 Verify source ↗
Section 63 of the principal Act is hereby amended by the substitution-
AI-assisted research summary: Section 63 is amended so that certain amalgamations or business transfers may only proceed in accordance with this section, and the change to subsection (7) refers to the interests of the majority of beneficiaries.
25. Section 63 of the principal Act is hereby amended by the substitution- ( a ) for subsection (1) of the following subsection: 18 No. 2295 1 GOVERNMENT GAZETTE, 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 200 1 “( 1) No transaction involving the amalgamation of the business of a medical scheme with any [other medical scheme] business of any other person (irrespective of whether that other person is or is not a medical scheme) or the transfer of any business from a medical scheme to any other medical scheme or the transfer of any business from any other person to such amalgamation or transfer is carried out in accordance with the provisions of this section.”; a medical scheme, shall be of any force, unless 5 ( b ) in subsection (7) for paragraph (a) of the following paragraph: “ ( a ) would not be detrimental to the interests of the majority of the 10 [members] beneficiaries of the medical scheme or medical schemes concerned; and”. Amendment of section 65 of Act 131 of 1998 - 26 Verify source ↗
Section 65 of the principal Act is hereby amended by the-
AI-assisted research summary: This amendment lets a medical scheme pay a broker for introducing or admitting a member, but only under the scheme’s rules and section 65. The Minister may set compensation limits and conditions, and the Council must accredit a person before compensation for these services can be paid.
26. Section 65 of the principal Act is hereby amended by the- (a) substitution for subsection (1) of the following subsection: “(1) A medical scheme may compensate [any person] a broker, [in cash or otherwise,] in accordance with its rules, for the introduction or admission of a member to that medical scheme.”; 15 (b) substitution for subsection (2) of the following wbsection: “(2) The Minister may prescribe the amount of the compensation 20 which, the category of [persons] brokers to ,whom, the conditions upon which, and any other circumstances under which, a medical scheme may compensate any [person] broker in terms of subsection (l).” ; (c) substitution for subsection (3) of the following subsection: “(3) No person shall be compensated for providing services relating to 25 the introduction or admission of a member to a medical scheme in terms of subsection (1) unless the Council has, [in a particular case or in general,] granted accreditation to such a person on payment of such fees and on submission of such information as m,ay be prescribed.”; (d) addition of the following subsections: 30 “ ( 5 ) A medical scheme may not directly or indirectly compensate a broker other than in terms of this section. (6) No person, other than a medical scheme, may directly or indirectly compensate a broker for the introduction or admission of members to a medical scheme.”. 35 Amendment of section 66 of Act 131 of 1998 - 27 Verify source ↗
Section 66 of the principal Act is hereby amended by the-
AI-assisted research summary: This section amends section 66 of the principal Act by deleting paragraph (f) and replacing wording so that a person is guilty of an offence and may be fined, imprisoned for up to five years, or both.
27. Section 66 of the principal Act is hereby amended by the- (a) deletion in subsection (1) of paragraph (f); (b) substitution in subsection (1) for the words following paragraph cf), of the words: following 40 “shall, subject to the provisions of subsection (2), be guilty of an offence, and liable on conviction to a fine or to implisonment for a period not exceeding five years or - to both a fine and imprisonment.”. Amendment of section 67 of Act 131 of 1998 - 28 Verify source ↗
Section 67 of the principal Act
AI-assisted research summary: This provision amends section 67 of the principal Act by changing rules on enrolment, open enrolment periods, premium penalties, managed health care requirements, broker conduct, late payment of benefits, and reporting contraventions.
28. Section 67 of the principal Act is hereby amended by the- (a) substitution in subsection (1) for paragraph (b) of the following paragraph: 45 “(b) the conditions subject to which any person who has terminated his or her membership of a medical scheme shall be enrolled as a [member or a dependant of a member] beneficiary of any other medical scheme;”; 50 ( b ) substitution in subsection (1) for paragraph ( I ) of the following paragraph: “ ( I ) [the waiting periods to be applied in the case of pre-existing sickness conditions,] open enrolment periods, [and] premium penalties within defined bands for persons joining only late in life and such appropriate;”; other measures against adverse selection as may be 55 20 No. 22951 GOVERNMENT GAZETTE, 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 (c) substitution in subsection (1) for paragraph (m) of the following paragraph: “(m) provisions associated with the manner of providing managed health care to [members] beneficiaries and requirements managed health care contracts; [and]”; for (d) insertion in subsection (1) of the following paragraphs after paragraph (m), the ~~ ~ 5 existing paragraph (n) becoming paragraph (4); “(n) the code of conduct of a broker, and the conditions under which of, a medical scheme, beneficiary or any other person; respect of the late payment of benefits owing to a member or a supplier of service, in contravention of section 59(2); ( p ) reporting of acts or omissions of any person in contravention of the provisions of this Act; and” Amendment of item 4 of Schedule 2 of Act 131 of 1998 15 - 29 Verify source ↗
Item 4 of Schedule 2 to the principal Act is hereby amended by the-
AI-assisted research summary: This amendment says certain medical schemes are treated as exempt from the Act until the Registrar registers them.
29. Item 4 of Schedule 2 to the principal Act is hereby amended by the- (a) substitution for subitem (2) of the following subitem: “(2) Any medical scheme which immediately prior to the commence- ment of this Act was established as a medicill scheme under [the Legal Succession to the South African Transport Services Act, 1989 (Act No. 9 of 1989). the Labour Relations Act, 1995 (Act No. 66 of 1995),] the South African Police Services Act, 19958 (Act No. 68 of 1995), and (Act No. 8 of 1959), shall be the Correctional Services Act, 1959 [deemed to be a medical scheme registered in terms of section 24(1) read with sections 26 and 321 exempt from the provisions of this Act until the Registrar registers that medical scheme in terms of section 24 of this Act;”; 20 25 (b) insertion of the following subitem, the existing subitems (3) to ( 5 ) becoming subitems (4) to (6), respectively: “(3) Any medical scheme which immediately prior to the commence- ment of this Act was established as a medical scheme under the Legal Succession to the South African Transport Services Act, 1989 (Act No. 9 of 1989), and the Labour Relations Act, 1995 (Act No. 66 of 1995), shall be deemed to be a medical scheme registered in terms of section 24(1) read with sections 26 and 32 of this Act.”. 30 35 Insertion of item 5 and 6 of Schedule 2 of Act 131 of 1998 - 30 Verify source ↗
The following items are hereby added to Schedule 2 to the principal Act:
AI-assisted research summary: This section adds items to Schedule 2 of the principal Act.
30. The following items are hereby added to Schedule 2 to the principal Act: “Reinsurance contracts - 5 Verify source ↗
A reinsurance contract or any amendment. thereof, which-
AI-assisted research summary: A qualifying reinsurance contract or amendment stays valid until its expiry date or for one year after commencement, whichever happens first.
5. A reinsurance contract or any amendment. thereof, which- ( a ) was lawfully entered into prior to the commencement of the Medical 40 Schemes Amendment Act, 2001; (b) was legally valid and enforceable at the date of commencement of the Medical Schemes Amendment Act, 2001, is deemed to be valid until its date of expiry as provided for in the contract, or for a period of one year from date of commencement of the Medical Schemes Amendment Act, 2001, whichever is the sooner. 45 Principal officers - 6 Verify source ↗
A person who, immediately prior to commencement of the Medical
AI-assisted research summary: Certain schemes that were already in contravention of section 57(7) before commencement are treated as complying with that section until 1 January 2004.
6. A person who, immediately prior to commencement of the Medical Schemes Amendment Act, 2001, was a scheme in contravention of section 57(7) of this Act, will be deemed to comply with that section for the period terminating on 1 Jai~uary 2004.”. principal officer of a medical 50 22 No. 22951 GAZETTE, GOVERNMENT 14 DECEMBER 2001 Act No. 55,2001 MEDICAL SCHEMES AMENDMENT ACT, 2001 Short title and commencement - 31 Verify source ↗
This Act is called the Medical Schemes Amendment Act, 2001, and comes into
AI-assisted research summary: This section says the Act is called the Medical Schemes Amendment Act, 2001, and it starts on a date the President fixes by proclamation in the Gazette.
31. This Act is called the Medical Schemes Amendment Act, 2001, and comes into operation on a date to be fixed by the President by proclamation in the Gazette.
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