Changes in the renewal process of the CMS

The Council for Medical Schemes (CMS) is a statutory body established by the Medical Schemes Act (131 of 1998). The body provides regulatory supervision of private health financing through medical schemes. The duties of the CMS include determining overall policy. The Council supervises a very big industry comprising more than 80 medical schemes registered in the country.

Background of the requirements of the CMS

The Medical Schemes Act 131 of 1998 provides in terms of section 65(1) that no person may act or offer to act as a broker unless the CMS has granted accreditation to such person.

Section 8(7) of the Financial Advisory and Intermediary Services Act, 2002, read together with section 6 of the Determination of Fit and Proper Requirements for Financial Services Providers, 2017, states that a person must be accredited as a broker or an apprentice broker in terms of regulation 28B of the Regulations which were issued in terms of section 67 of the Medical Schemes Act. It is only then that a person can qualify for authorisation as an FSP or appointment as a representative of an FSP or to remain authorised or appointed to render financial services in respect of the financial product known as; Health Service Benefits.

Accreditation and verification of qualifications 

Circular 49 of 2021 published by the CMS as well as Communication 6 of 2021 published by the FSCA has provided us with the necessary information that the CMS has, according to their mandate, decided to ensure that broker applicants comply with the qualification requirements for accreditation.

In terms of new applications or applications for renewal of accreditation, fit and proper requirements have to be complied with in order for accreditation to be granted by the CMS.  One of the essential fit and proper requirements is that a person should have a grade 12 certificate or an equivalent qualification. Before 2014, an affidavit confirming that a person has completed grade 12 education was sufficient. In 2014 however, the CMS decided that this is no longer sufficient and a process of verifying the qualifications was introduced for authentication purposes. The council started verifying qualifications with Managed Integrity Evaluation Verification Services (MIE). 

This has had an impact on renewals as applicants who wish to renew their accreditation are required, since 2014, to produce a copy of a grade 12 certificate or an equivalent qualification. As of 1 December 2021, the CMS is requiring that first-time applicants and applicants wishing to renew their accreditation, verify and pay for the verification of their qualifications with the verification agents prior to applying for accreditation. This process of verifying qualifications will be a once-off process and so, if an applicant's qualifications have been verified, he/she would not have to do it again. 

The verification report received from the verification agents will then have to be submitted together with the application form. If an applicant fails to include a verification report with their application, the application process will be delayed and the outcome of the application could be influenced. 

What if I do not have a grade 12 certificate or an equivalent qualification

If only a skills program was completed by applicants without a grade 12 certificate, an applicant may follow a formal exemption process whereby each application is reviewed on its own merits by the CMS. Thus, the exemption is not automatically provided to all applicants. The exemption is for a period of 2 years to allow applicants time to complete a formal qualification. The qualification does not have to be a grade 12 national certificate and therefore any certificate which is registered on the National Qualifications Framework as a level 4 or higher certificate, will be sufficient.