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SOCIAL SERVICES SELECT COMMITTEE
6 November 2001
MEDICAL SCHEMES AMENDMENT BILL: FINALISATION
Chairperson: Ms L. Jacobus
Medical Schemes Amendment Bill [B80B-2001] [16/11 Note: The final version of the Bill is still not available at this link. It should be available latest on 21/11/01]
Medical Schemes Act
The Medical Schemes Bill was passed without further amendments to those proposed by the Portfolio Committee.
The Committee continued with formal deliberations on the bill. Ms Khoanane from the Department of Health assisted by Mr. Harrison from the Medical Schemes Council went through the Bill clause by clause explaining to members the purpose of the various provisions of the amended Bill.
Clause 5:Amendment of Section 20 of Act 131
Rev. Moatshe (ANC) asked how the reinsurance scheme would benefit members of a scheme.
Ms Khoanane replied that reinsurance was an essential component of the insurance scheme because it insures schemes against huge claims that would result from unbudgeted for catastrophic disasters.
Clause 6: Section 21A Amendment
Rev. Moatshe (ANC) enquired if there would be any schemes that would remain unregistered upon the implementation of the Act.
Mr. Harrison replied that the whole idea of imposing the registration requirement was to ensure that no scheme operates outside the Law. The section goes beyond registration and targets those schemes that market products that are of insurance nature when they are not registered to do so. He said further that subsection 2 and 3 of section 21A forbids conditional selling whereby schemes package insurance with strings attached to other non-insurance products.
Ms Vilakazi (IFP) asked if beneficiaries, especially those of extended families had a right to claim benefits.
Mr. Harrison replied that only a member is legally entitled to claim under the contract and that the dependant is not directly entitled to seek the same benefits. A dependant can only benefit under the claim.
Mr. Mkhaliphi (ANC) enquired if it was not necessary, in view of the differentiation between a dependant and a beneficiary to have a definition for a ‘principal member’ and a ‘member’.
Mr. Harrison replied that the term ‘principal member’ was a term of art and not of law. He explained that in law a member refers to a principal member. It was the discretion of the member to register those persons whom he feels should benefit under the insurance cover.
Ms Lubidla (ANC) asked who constitutes a dependant.
Mr. Harrison replied that the legislation has a very brief definition of who constitutes a dependant He said that it was deliberately left to the schemes to decide on who qualifies as a dependant since such a status had very serious financial implications.
He said that in an effort to avoid repetition the term ‘beneficiary’ is employed in the Act to refer to a member and a dependant collectively.
Clause 9: Section 29 Amendment
The Chair drew the attention of members to a technical error under section 29(3), which was overlooked by the Portfolio Committee. She said that consultations had taken place around the error and that the legal advisor from the department should be able to explain the position.
The legal advisor said that he had consulted the parliamentary legal office and had been advised that the technicality would be remedied administratively. He explained that what that meant was that the Committee should not vote on the issue but that it be left to the administrative machinery.
Clause 10:Section 29A Amendment
Dr. Nel (NNP) noted that the Act seems not to protect the industry from inter-scheme adverse selection and asked for the council’s views on the issue.
Mr. Harrison admitted that the problem is rather complex and that there is no simple solution about it. He, however, pointed out that this vexed issue has been greatly mitigated by legislation, which has endeavoured to limit the opportunity for people to engage in such malpractice.
He added that it was up to the schemes to build on the legislative machinery and redesign their product line so that the environment for such perverse behaviour is contained.
The Chair said that areas of weakness could only be measured after the implementation of the Bill. She added that the industry has the locus standi to make regular submissions to the minister whenever they felt that the law was not achieving the desired results.
Clause 15: Section 41 Amendment
The Chair once again drew the attention of the Committee to another technical error at section 41(a). She said that the position with regard to the error would be sorted out administratively as mentioned earlier by the legal advisor.
Clause 28: Section 67 Amendment
Rev. Moatshe (ANC) asked whether in view of this section the many complaints on delayed payment would be a thing of the past.
Mr. Harrison noted that it was the intention of the section to eradicate cases of delayed payment
The Chair said that members had voted clause by clause. The entire Bill was then put to the vote,.
All six parties present voted in favour of the amendments except the DP, which abstained.
The Chair then read the motion of desirability, which was duly passed by the committee. The Chair then read the report of the committee which in the main noted that the committee had considered the Bill and reports that the Bill be passed without amendments save for the amendments proposed by the portfolio committee.
The meeting was adjourned.
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