Circular 17 of 2022: Notice to Medical Schemes regarding annual general members’ meetings and trustee elections
1. Background
One of the functions of the Council for Medical Schemes (CMS) is to protect the interests of the beneficiaries at all times. To this end CMS is enjoined to monitor whether or not medical schemes comply with their rules and/ or the provisions of the Medical Schemes Act, 131 of 1998 (MSA) and/ or other legislation relating to medical schemes.
Section 29(1)(m) of the MSA determines that no medical scheme shall carry on any business unless provision is made in its rules regarding the manner of calling the annual general meeting (AGM) and special general meetings (SGM) of members, the quorum necessary for the transaction of business at such meetings and the manner of voting.
Section 32 of the MSA determines that “the rules of a medical scheme and any amendment thereof shall be binding on the medical scheme concerned, its members, officers and on any person who claims a benefit under the rules or whose claim is derived from a person claiming.”
In this regard, the CMS is preparing to monitor medical schemes’ AGMs and SGMs for 2022, fully cognisant of the prevailing COVID-19 restrictions.
2. Purpose
The CMS wishes to encourage medical schemes to comply with their scheme rules on holding AGMs and SGMs on or before a particular date.
Medical schemes are requested to notify the CMS in writing:
- of the dates on which they intend to hold their AGMs and/or SGMs; as well as
- the dates on which they intend to hold trustee elections, where applicable.
3. Virtual meetings
In May 2020, the CMS issued Circular 36 of 2020, which served to encourage medical schemes to consider applying for an exemption to convene virtual AGMs for the 2020 financial year given the uncertainty surrounding the lockdown restrictions and the fact that the risks associated with the pandemic were likely to remain for much longer than previously anticipated.
In March 2021, the CMS issued Circular 20 of 2021, encouraging all medical schemes previously granted exemptions from holding their AGMs to amend their rules and make provisions for holding virtual AGMs. It is therefore expected that medical schemes will comply with their rules and the prevailing COVID-19 regulations published in terms of the Disaster Management Act 57 of 2002 in holding their 2022 AGM and/or SGMs.
4. Exemption process for 2022
The lockdown regulations published in terms of the Disaster Management Act 57 of 2002 in March 2020 and as amended thereafter have had an adverse impact on medical schemes’ ability to comply with the requirement to convene their AGMs for 2020 and 2021, giving rise to exemptions from complying with scheme rules where necessary.
The CMS has resolved that merely referencing the lockdown regulations and/or gathering restrictions as the reason(s) for applying for an exemption to postpone the 2022 AGM will not suffice as a justifiable ground to postpone AGMs.
All medical schemes are duly requested to plan accordingly for the 2022 AGMs and, where necessary, provide CMS with exceptional concrete reasons for applying for exemption.
5. New Electronic submission process
5.1 All medical schemes must register a designated person as a Data Officer. The Data Officer will be the only person permitted to submit AGM submissions to the CMS AGM portal.
5.2 The designated person must register by completing this form: Data Officer Registration Form. The appointed person will be vetted internally before access is granted and provided with a username and password.
5.3 All accredited Data Officers are henceforth required to submit AGM information to the following SFTP site: https://ftp.medicalschemes.com/login, using the login credentials they received when they registered.
5.4 The submission folder has subfolders for the three (3) different submission deadlines.
6. Process for convening AGMs, SGMs and Trustee Elections
All medical schemes are duly requested to notify the CMS, in writing, of the date and venue of their AGMs and/or SGMs for the 2022 financial year. Where trustee elections will be held, schemes are also required to notify the CMS of the date and venue of such.
6.1 Information required by the CMS before the AGM/SGM/Election Process
6.1.1 All medical schemes must provide the CMS with written notice detailing their scheme meeting in terms of the rules and the date on which they intend to hold an AGM, SGM or trustee election meeting. The notification must be submitted to the CMS on or before 01 April 2022. The notice shall contain the following:
6.1.1.1 The date on which the meeting will be held;
6.1.1.2 The venue or geographical area in which the scheme intends to hold its meeting; and
6.1.1.3 Whether or not the scheme will be holding elections for the 2022 financial period.
6.1.2 All medical schemes are required to provide the CMS (20 days before AGM and /or SGM) with a full meeting pack. The meeting pack shall contain the following, amongst others:
6.1.2.1 The date, time and venue of the meeting and/or elections to be held;
6.1.2.2 The standard procedures that shall be followed by the medical scheme to convene and hold such a meeting and/or election as well as confirmation that the scheme’s procedures are consistent with the registered rules of the scheme;
6.1.2.3 The measures that the scheme intends to put in place to protect and secure the venue on the day of the meeting and/or elections;
6.1.2.4 A detailed budget on the estimated cost of the AGM and/or SGM and/or Elections. Including but not limited to:
• the cost of preparing and distributing the notice/meeting pack to members,
• the cost of the venue (including food and security),
• the travelling and accommodation costs (e.g., travelling cost for scheme officers),
• meeting attendance fees for scheme officers and/or service providers, and
• the costs associated with the elections process (if applicable).
6.2 Information required by the CMS after the AGM/SGM/Election Process
6.2.1 All medical schemes are requested to provide the Office with the following information within 30 days after the AGM/SGM/Trustee election meeting:
6.2.1.1 The Attendance register(s) and confirmation that the quorum (per the scheme’s rules) was achieved for the meeting.
6.2.1.2 A detailed report on the election process with the complete CVs of the elected persons within 30 days of the conclusion of the AGM or the SGM or the election process.
6.2.1.3 The actual cost of the AGM and/or SGM and/or Election Process within 30 days of the conclusion of the AGM or the SGM or the election process.
7. Submission Timelines
| SUBMISSION TIMELINE | ||
|
|
Task |
Due date |
| 1. | Submission of a written notice to the CMS pertaining to a date and geographical area in which the scheme intends to hold a scheme meeting. (see requirement on 6.1.1)
|
01 April 2022 |
| 2. | Submission of AGM, SGM or trustee election meeting pack to the CMS prior to convening the scheme meeting. (see requirement on 6.2.1) | 20 days before meeting is convened |
| 3. | Submission of Attendance register, Election report and actual expenditure of AGM/SGM or trustee meeting post the scheme meeting. (see requirement on 6.2.1)
|
30 days after meeting has been convened |
8. Communication
For any queries related to AGMs/SGMs/Trustee elections or any technical issues experienced with the portal, kindly e-mail agm@medicalschemes.co.za.
This Circular is effective on the date of release.
Download the circular here.