Towards the end of April 2021, Finance Minister Tito Mboweni published the Annual Policy Benefit Escalations regarding the Demarcation Regulations, regulated under section 72 of the Long-term Insurance Act and section 70 of the Short-term Insurance.
In a statement on 21 April 2021, the Treasury said the regulations specify which types of contracts are regulated under the Long-term Insurance Act (LTIA) and the Short-term Insurance Act (STIA) as health policies, and accident and health policies, respectively, and accordingly are excluded from the Medical Schemes Act.
“Regulation 7.2(2) of the Regulations provides that all amounts referred to in sub-regulation (1) escalate annually, from the effective date, by the consumer price index (CPI) annual inflation rate published by Statistics South Africa,” according to the statement.
The statement further mentioned that the escalation of the aforementioned policy benefits will take place each year for as long as Regulation 7.2(2) provides for automatic escalation. “National Treasury will going forward annually publish these amounts in order to maintain clarity on the escalated policy benefits following queries received from providers regarding what the current escalated policy benefits are.”
The following supporting Annexures will be updated annually – the adjustments are spelled out in the documents.:
Annexure A: Regulation 7.2(2) (LTIA) and Annexure B: Regulation 7.2(2) (STIA).
