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SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Registrar of medical schemes wins back R33 million for members of Omnihealth

31 January 2007 The Registrar of Medical Schemes

The Registrar of Medical Schemes, T. Patrick Masobe, has today obtained an order from the Transvaal Provincial High Court granting his application to have the approximately R33 million personal medical savings account (PMSA) moneys owed to former Omnihealth members paid back to them.

The Registrar filed the application with the High Court following moves by Omnihealth liquidators, Lazarus Mpanana Ledwaba and Alta van Wyk to have the money retained as part of Omnihealth insolvent estate.

The liquidators argued that since Omnihealth failed to keep the money separate from other moneys of the scheme, the money was to be retained as part of the insolvent estate. The Registrar opposed this move as PMSA moneys constitutes trust money and does not form part of Omnihealth insolvent estate. Furthermore, the rules of Omni health medical scheme clearly stated that PMSA money belonged to members and should be either paid to the next scheme that also has the PMSA or paid in cash back to the members.

Judge J du Plessis found in favor of the Registrar and maintained that Omni health's rules, which serve as an agreement between the member and the scheme, stated that the balances in the PMSA shall at all times remain the property of the member.

The learned judge made the following order:
 
That the credit balances in the Omni health personal medical savings accounts constitute trust money per provisions of Protection of the Funds Act (Financial Institutions Act, Act 28 of 2001);
 
The liquidators of Omni health should pay to KwaZulu Natal Medical Scheme such portion of PMSA funds, including interest that has accrued, to Omni health members who joined KZN Medical Scheme;
 
The liquidators should pay such portion and interest to former members of Omnihealth who did not become members of KZN Medical Scheme. These payments have to be effected within 60 days of the issuing of the order; and
 
The liquidators were also ordered to pay the Registrar's costs, which shall include costs of two counsels.

Background:

Omnihealth was declared insolvent with no prospect of recovery and placed under liquidation on 29 November 2005. Two liquidators, Lazarus Mpanana Ledwaba and Alta van Wyk were appointed to handle the liquidation process. The scheme had PMSA balances amounting to R33 million that were owed to members. The Registrar ordered the liquidators to pay these amounts to members and their new scheme, a request that the liquidators refused as they elected to retain the money as part of the insolvent estate. It is at this point that the Registrar launched an application to the High Court in order to prevent the prejudice to ordinary members of Omni health.

 

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