Medical aid schemes and legal aid societies will in future be regulated by Insurance and Pensions Commission to ensure the public is covered for medical treatment and hospitalisation promised, Finance and Economic Development Minister Mthuli Ncube said.
In his Transitional Stabilisation Programme, presented last Friday, Minister Ncube said while medical aid schemes and Legal Aid Societies carry out insurance business in terms of the Insurance legislation, the regulation and supervision of these entities, however, does not fall under the purview of Insurance and Pensions Commission (IPEC), the regulator of insurance businesses.
This lack of prudential supervision and regulation, Minister Ncube said, has the potential to compromise service delivery and protection of consumers of financial services provided by these institutions.
“Going forward, medical aid schemes and legal aid societies will be regulated by IPEC to ensure that the public is covered for medical treatment and hospitalisation that is promised,” he said.
While Medical Aid Societies are currently regulated by the Ministry of Health and Child Care as provided for under the Medical Services Act, IPEC has, however, been arguing that they should be under its regulation.
The Insurance regulator further argued that the country already has a legally binding commitment to ensure that the regulation of Medical Aid Societies is administered by insurance regulators in line with SADC’s regulatory framework for non-banking financial institutions (including insurance).
IPEC argued that the mooted Medical Aid Bill to create a separate medical aid regulatory body, as planned by the Ministry of Health and Child Care, “will set a dangerous precedent in which line ministries become free to form separate regulatory bodies for activities that can be supervised under other pre-existing Government agencies”.