| 1) |
A medical scheme must have assets of the kinds and categories specified in column 2 of Annexure B, the aggregate fair value of which, on any day, is not less than — |
| a) |
the aggregate of the aggregate fair value on that day of its liabilities; and |
| b) |
the minimum accumulated funds to be maintained in terms of Regulation 29, |
excluding accounts receivable and intangible assets.
| 2) |
The assets that a medical scheme is required in terms of subregulation (1) to have in the Republic, when expressed as a percentage of the aggregate fair value of the liabilities and the minimum accumulated funds to be maintained in terms of Regulation 29, must not exceed the percentage specified against it in column 3 of Annexure B. |
| 3) |
Subject to subregulation (3A), assets held in excess of the aggregate fair value of the liabilities and the minimum accumulated funds to be maintained in terms of Regulation 29 must be held in the kinds and categories specified in column 2 of Annexure B. |
| 3A) |
Assets referred to in subregulation (3) must be allocated according to the relevant percentages specified against them in column 3 of Annexure B, unless the medical scheme can provide the Registrar with a certified statement from a suitably qualified professional, who has no direct or indirect financial interest in the relevant transaction, that – |
| a) |
alternative percentages should apply to such assets; and |
| b) |
the medical scheme is in full compliance with subregulation (2), |
provided that the relevant percentages specified in column 3 of Annexure 6, corresponding to items 3, 4(b), 5(b), 6(b) and 7 of Annexure B, may not be exceeded.
| 4) |
In this Regulation and Annexure B— |
"convertible debenture" means a debenture which is convertible into equity shares of a company;
"fair value" in relation to —
| i) |
a credit balance, deposit or margin deposit, means the amount thereof; |
| ii) |
property, plant and equipment, means the difference between the cost and the total amount provided or written off for depreciation or reduction in value since the date of acquisition; |
| iii) |
an asset which is listed on a licensed stock exchange, means the selling price at which it was quoted on that stock exchange on the date at which the value is calculated; |
| iv) |
an asset which is a long-term policy, means the amount which would be payable to the policyholder upon the surrender of the policy on the date at which the value is calculated; |
| v) |
an asset referred to as a unit trust, means the price at which the unit would have been repurchased by the unit trust management company on the date at which the value is calculated, and, in the case of a property unit trust, the market value on the date at which the value is calculated, and, if it is listed on a stock exchange, the selling price at which it was quoted on that stock exchange on the date at which the value is calculated; |
| vi) |
a futures contract, means the mark-to-market value, as defined in the rules of SAFEX referred to in section 17 of the Financial Markets Control Act, 1989; |
| vii) |
an option contract, means the price at which it was quoted on a stock exchange on the date at which the value is calculated; |
| viii) |
deleted by the Regulation Gazette 7344, 2002, |
| ix) |
any other asset or liability, means the price at which the asset could be exchanged, or the liability settled, between knowledgeable, willing parties in an arm’s length transaction, as estimated by the medical scheme; |
"linked policy" means a long-term policy in relation to which the liabilities of the long-term insurer are linked liabilities as defined in the Long-term Insurance Act, 1998 (Act No. 52 of 1998);
"margin" in relation to a stock exchange, means the margin as defined in regulations issued or approved by the appropriate authority of the state in which the stock exchange. is situated or which is required by that stock exchange;
"margin deposit" means a margin with SAFEX and a stock exchange; "margin with SAFEX" means the margin as defined in the rules of SAFEX referred to in section 17 of the Financial Markets Control Act, 1989 (Act No 55 of 1989;
"property company" means a company—
| i) |
immovable property; or |
| ii) |
all of the shares in the company who’s principal business consists of the ownership of immovable property or which exercises control over a company who’s principal business consists of the ownership of immovable property; or |
| iii) |
a linked policy, to the extent that the policy benefits thereunder are determined by reference to the value of immovable property, |
constitutes in the aggregate, 50 per cent or more of the market value of its assets;
| b) |
which derives 50 per cent or more of its income, in the aggregate, from— |
| i) |
investments in immovable property; or |
| ii) |
Investments in another company which derives 50 per cent or more of its income from investments in immovable property; or |
| iii) |
a linked policy to the extent that the policy benefits thereunder are determined by reference to the value of immovable property; or |
| c) |
which exercises control over a company referred to in paragraphs (a) or(b); |
"regulated market" deleted by the Regulation Gazette 7344, 2002
"SAFEX" means the South African Futures Exchange;
"securities" include bills, bonds, debentures and debenture stock, loan stock, promissory notes, annuities, negotiable certificates of deposit and other financial instruments of whatever nature; and
"shares" include share stock.
| 5) |
[Sub-section (5) deleted by the Regulation Gazette 7344, 2002] |
| 6) |
For the purposes of calculating the fair value of assets there must be disregarded |
| a) |
any amount of premium, excluding a premium in respect of a reinsurance policy, which is due and payable; |
| b) |
an amount, excluding a premium in respect of a reinsurance policy, which remains unpaid after the expiry of a period of 12 months from the date on which it became due and payable; |
| c) |
an amount representing administrative, organisational or business extension expenses incurred directly or indirectly in the carrying on of the business of a medical scheme; |
| d) |
an amount representing a liability or a reinsurance contract in terms of which the medical scheme concerned is the policy holder; and |
| e) |
an asset to the extent to which such asset is encumbered. |
| 7) |
If the Registrar is satisfied that the value of an asset or liability, when calculated in accordance with subregulations (4), (5) and (6) does not reflect a fair value, he or she may direct the medical scheme to appoint another person, at the cost of the medical scheme, to place a fair value on that asset or liability, or the Registrar may direct the medical scheme to calculate the value in another manner which he or she determines and which will produce a fair value for that asset or liability. |
| 8) |
A medical scheme that for a period of 30 days fails to comply with subregulations (1) and (2) must notify the Registrar in writing of such failure, providing information relating to — |
| a) |
the nature and causes of the failure, and |
| b) |
the course of action being adopted to ensure compliance therewith. |
Copyright Act, 1978
