The latest CMS Circular 35 of 2022, proposes changes to the appointment of brokers by members and employer schemes which will have a profound effect on FSP’s appointed as advisors to employer groups.

In line with the provisions of section 7 (a) of the Medical Schemes Act 131 of 1998 (“MSA”) which places a legal responsibility on Council to always protect the interest of beneficiaries, the CMS proposes the following guidelines in relation to the appointment of brokers by employers on behalf of employees:

Where an employer chooses to appoint a broker on behalf of employees, the employer must appoint a minimum of 3 brokerages to allow employees the freedom to choose any of the appointed brokerages as and when the employee so wishes.

The employer must make use of an open, transparent, and competitive process to appoint brokers.

The appointment must be of a fixed reasonable period.

The industry has been afforded the opportunity to make submissions onto the CMS in regard to these proposals. We kindly recommend that you perhaps take this opportunity to make a submission on the CMS as to what you think of proposals, and why.

Please submit your comments/suggestions to Ms Florence Maphanga, at no later than 31 July 2022.