CURE OR CURSE? REGULATIONS ON THE DEMARCATION BETWEEN HEALTH-INSURANCE POLICIES AND MEDICAL SCHEMES

In South Africa, private insurance policies are regulated by the Long-term Insurance Act and the Short-term Insurance Act. Medical schemes fall under the Medical Schemes Act (131 of 1998) and yet, despite the fact that there are three dedicated statutes that deal with the risks relating to ill health, it seems that the distinction between insurance products and medical-scheme benefits isnot so clear. On 2 March 2012 National Treasury published the proposed amendment of regulations made under section 72 of the LTIA and under section 70 of the STIA. These are jointly referred to as the “Demarcation Regulations”. This note provides an overview of these proposals against the background of the difference between insurance business and medical-schemes business. In addition, itinvestigates the policy principles that informed the Demarcation Regulations and comments on the impact of those on the insurance industry and on medical schemes