Circular 26 of 2024: Vetting of Board of Trustees and Officers

The Council for Medical Schemes (CMS) has reviewed the vetting questionnaire and declaration form that will assist schemes in vetting the Board of Trustees, Principal Officers, and other scheme officers going forward. Medical schemes are encouraged to incorporate CMS’ vetting questionnaire as part of their vetting process to ensure that the minimum requirements for vetting scheme officials are maintained.

Background

Section 57(1) of the Medical Schemes Act (131 of 1998) (MSA) requires that every medical scheme must have a Board of Trustees (BoT) consisting of persons who are fit and proper to manage the business contemplated by the medical scheme, in accordance with the applicable laws and rules of such medical scheme. Section 57(4) obligates the BoT of the medical scheme to appoint a Principal Officer who is also fit and proper to hold such office.

Similarly, committees constituted by the Board of Trustees are an extension of the board and therefore members of such committees are required to be vetted to ensure that they, too, are fit and proper in compliance with section 57 of the MSA.

The CMS issued Circulars 44 of 2016 and 49 of 2018, stating that it would embark on a joint exercise with medical schemes by vetting its officers (Trustees and Principal Officers) to determine their fit and proper status. Principal Officers were requested to furnish the CMS with details, completed documents, and signed copies of the vetting forms. These documents were submitted after the appointment or election of members to the Board.

As indicated in section 57(1) of the Act, the vetting of scheme officers is the sole responsibility of the Board of Trustees, and vetting should be conducted before a trustee is appointed or elected to determine whether a person is fit and proper prior to the person appointed to a position of trust.

Vetting questionnaire and declaration form

The CMS has reviewed the vetting questionnaire and declaration form to assist the schemes in vetting scheme officers going forward. Access it here. Medical schemes are encouraged to incorporate the CMS vetting questionnaire as part of the vetting process to ensure that the minimum requirements for vetting scheme officials are maintained. Schemes are also encouraged to follow additional guidelines and governance principles in their vetting process.

The CMS wishes to stress the importance of complying with the provisions of section 57 of the MSA, and an appeal is hereby made to all schemes to ensure that the scheme officers are thoroughly vetted. Trustees and Principal Officers of the medical schemes are required to furnish the CMS with outcomes of vetting i.e. vetting report and documents used in conducting the vetting.

Medical schemes shall, within 30 days following the prospective appointment or election of trustees and the appointment of the Principal Officer, furnish the CMS with the outcome of vetting and documents utilised in vetting such scheme officer(s), together with a completed signed vetting form(s). This will include the following submissions:

• Minutes of the appointment of trustees by the Board;
• Results of the trustees elected by members;
• Copy of CVs;
• Copy of criminal checks (not older than three months);
• Copy of credit verification information (not older than three months) ;
• Copy of CIPC director verification (not older than three months);
• Declarations on fitness and propriety, removal from previous positions of trust; and
• Disclosure of conflict of interest.

This Circular, effective from 16 May 2024, does not invalidate the content of Circulars 44 of 2016 and 49 of 2018, except that the CMS will no longer participate in vetting scheme officials, as this is the sole responsibility of the medical schemes as envisaged in section 57(1) of the MSA.

The submission of vetting documents or vetting reports must be in accordance with the requirements contained in Circular 27 of 2014, which outlines the information that schemes are required to submit to the CMS, or to the email cmsschemeupdates@medicalschemes.co.za.

Download the Circular here