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SCA erred on medical savings, ConCourt told

Publish date: 13 February 2017
Issue Number: 714
Diary: IBA Legalbrief Africa
Category: South Africa

The Supreme Court of Appeal incorrectly interpreted the Medical Schemes Act when it concluded that funds in a personal medical savings account could not be treated as both an asset and trust property of a member, Genesis Medical Scheme’s Advocate Schalk Burger told the Constitutional Court last week. A Business Day report notes lawyers for Genesis Medical Scheme and the Council for Medical Schemes battled it out over what should happen to the personal medical savings accounts of members if the scheme went insolvent. In 2016, the SCA ruled in favour of the council, saying medical aid schemes could not account for personal savings as part of their assets. If successful, Genesis’ appeal could see the savings of members being recorded as assets and open for creditors to access them in the event that the scheme went insolvent. Burger said the money should go to a pool of funds and all members would share it equally, which would help protect members without savings. Adv JJ Brett, representing the council, said the funds in each personal medical savings account were trust property belonging to that member and had to be included in Genesis’ balance sheet accompanied by specific disclosures as to their treatment on insolvency. ‘You cannot have a set of financials which reflect only a portion of assets and liabilities,’ Brett said. Judgment was reserved, notes the report.

Full Business Day report