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Medical Schemes Act, 1998 (Act No. 131 of 1998)


Regulations in terms of the Medical Schemes Act

Chapter 7 : Conditions to be complied with by brokers

28. Compensation of brokers


1) No person may be compensated by a medical scheme in terms of section 65 for acting as a broker unless such person enters into a prior written agreement with the medical scheme concerned.


2) Subject to subregulation (3), the maximum amount payable to a broker by a medical scheme in respect of the introduction of a member to a medical scheme by that broker and the provision of ongoing service or advice to that member, shall not exceed —
a) R50, plus value added tax (VAT), per month, or such other monthly amount as the Minister shall determine annually in the Government Gazette, taking into consideration the rate of normal inflation: or
b) 3% plus value added tax (VAT) of the contributions payable in respect of that member,

whichever is the lesser.


3) A medical scheme may not differentiate the amount of compensation offered to brokers for the introduction of members to the scheme based upon the anticipated claims experience, age, health status or employment status of the members being introduced;


4) Subregulation (2) must not be construed to restrict a medical scheme from applying a sliding scale based on the size of the group being introduced provided that —
a) the maximum amount in respect of any member introduced as
b) a medical scheme may not pay a lesser amount for the specified in subregulation (2) is not exceeded; and introduction of individual members than the per capita amount payable in respect of introduction of members who form part of a group.


5) Payment by a medical scheme to a broker in terms of subregulation (2) shall be made on a monthly basis and upon receipt by the scheme of the relevant monthly contribution in respect of that member.


6) The ongoing payment by a medical scheme to a broker in terms of this regulation is conditional upon the broker —
a) continuing to meet service levels agreed to between the broker and the medical scheme in terms of the written agreement between them; and
b) receiving no other direct or indirect compensation in respect of broker services from any source, other than a possible direct payment to the broker of a negotiated professional fee from the member himself or herself (or the relevant employer, in the case of an employer group);


7) A medical scheme shall immediately discontinue payment to a broker in respect of services rendered to a particular member if the medical scheme receives notice from that member (or the relevant employer, in the case of an employer group), that the member or employer no longer requires the services of that broker.


8) A medical scheme may not compensate more than one broker at any time for broker services provided to a particular member.


9) Any person who has paid a broker compensation where there has been a material misrepresentation, or where the payment is made consequent to unlawful conduct by the broker, is entitled to the full return of all the money paid in consequence of such material misrepresentation or unlawful conduct.