Chairperson, the ANC, at its 52nd national conference, resolved that a developmental state like ours should maintain its strategic role in shaping the key sectors of the economy. It further acknowledged that the interventions by the state will differ, but we need to bear in mind that our strategic objective is to strategically intervene in these sectors to drive growth, development and transformation of our economy.
The Bill before the House is premised on an understanding that for us to deliver to the principle of a better life for all, we need to regulate the financial sector for the benefit of consumers, investors and society at large. Without a clear regulatory framework, the state loses large amounts of revenue, which can be used to better the lives of our people.
The Insurance Laws Amendment Bill proposes amendments to the Long-term Insurance Act, Acts 52 of 1998, and the Short-term Insurance Act, Act 53 of 1998. The proposed amendments are required in order to update existing legislation, close regulatory gaps identified in existing statutes and effect improvements to certain provisions. The primary objective of the Bill is to strengthen the legislative framework for a sound and well- regulated insurance services industry and to provide financial market stability to industry players as well as consumers.
In the insurance industry there are a number of problems with regard to persons rendering certain services on behalf of insurers. Here I am talking about administrators, funeral parlours and brokers. The problems are that agreements between insurers and the insured persons are not always concluded in writing and sometimes do not contain terms and conditions of these agreements. This impacts negatively on the lives of the poorest of the poor, while the industry on the other hand is multiplying its profits.
The other problem is that policyholders may not be aware of the name of the insurer who is liable, under the policy, for the benefits. Izikhathi eziningana siyezwa ukuthi abantu bakithi uma beyothenga ezitolo ngabe ngezefenisha noma izimoto, bazithola besayinda amaphepha omshwalense ngaphandle kokuthi banikezwe ithuba lokuzikhethela umshwalense abawuthandayo. (Translation of isiZulu paragraph follows.)
[In most cases we hear that when our people go to buy something in the shops, it could be a furniture shop or even a garage to buy a car, they find themselves signing insurance papers without being given a chance to choose the insurance that they like.]
The amendment to the binder agreement seeks to address all these problems and protect the consumer. Amendments to the Long-term Insurance Act regulations provide for a policy process by empowering the Minister of Finance to make regulations identifying a type or category of contract as a health policy and may prescribe matters relating to the design and marketing thereof.
It further proposes that when the Minister makes these regulations, he must have regard to the need to ensure the sustainability of the medical scheme; the need to ensure access to health care services; limitations on the liability undertaken by medical schemes; and the extent to which medical schemes are able or willing to provide certain services.
Certain products have been developed and are being offered by insurers, which could be considered to be the business of medical schemes. Examples of such products are: cover for medical costs incurred while travelling and other types of cover such as additional HIV cover or private ward cover. It is therefore necessary to provide for a framework to demarcate these products.
The amendments provide for a joint policy process between the Minister of Finance and the Minister of Health. The intention is to provide clarity through a policy resolution, rather than the current uncertainty that has led to legal disputes. I hope members are aware of the case between the Council for Medical Schemes and Guardrisk. The ANC supports the Bill. Thank you. [Applause.]