FINANCIAL SERVICES TRIBUNAL DECISION ON ITS JURISDICTION OVER DECISIONS BY THE REGISTRAR OF MEDICAL SCHEMES

By Deirdre Phillips Thursday, July 02, 2020
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On 1 July 2020, the Financial Service Tribunal (Tribunal) published its decision in Medihelp Medical Scheme v Registrar of Medical Schemes and another in relation to its jurisdiction to reconsider decisions by the Registrar of Medical Schemes (Registrar).

In short, the matter arose when the Council for Medical Schemes (CMS) instituted an investigation in relation to a medical scheme registered as such under the Medical Schemes Act, 131 of 1998 (MSA) and, within its mandate, the Registrar appointed an audit firm as inspector to conduct the investigation. The audit firm debited the CMS for the costs relating to the inspection and, in turn, the Registrar debited the medical scheme for the amount.

Dissatisfied about paying for the costs of the audit, the medical scheme filed an application for reconsideration under section 230, Chapter 15, of the Financial Sector Regulation Act 9 of 2017 (FSRA) with the Tribunal. The CMS and the Registrar disputed whether the Tribunal had jurisdiction over the matter and argued that the medical scheme had to exhaust its internal remedy by lodging an appeal with the CMS against the Registrar’s decision in terms of the MSA.

The FSRA and its structures do not generally apply to the CMS and its structures, except for section 129, Chapter 9, of the FSRA which deals with information gathering, supervisory on-site inspections and investigations.

The Tribunal had to pronounce on whether the Registrar’s decision requiring that the medical scheme pay the audit firm’s fees constituted ‘a decision by a financial sector regulator’. The Tribunal found that the only relevant decision that may be the subject of reconsideration before the Tribunal under Chapter 15 of the FSRA is one of a ‘financial sector regulator’, and that in terms of section 129 of the FSRA, the financial sector regulator would be the CMS and not the Registrar. The Tribunal found that the CMS is a financial sector regulator for purposes of Chapter 9 (information gathering, supervisory on-site inspections and investigations) and not for purposes of Chapter 15 of the FSRA.

The Tribunal found it unlikely that the Legislature intended that the Registrar could be subject to two administrative ‘appeals’ under different pieces of legislation (the MSA and the FSRA) while fulfilling the same function.