Resolution Health Medical Scheme's "A" rating reaffirmed by Global Credit Rating

Resolution Health Medical Scheme has had its "A" rating reaffirmed by rating agency Global Credit Rating Co. which believes the schemes "favourable growth prospects bode well for improved membership diversification and economies of scale going forward."

Significantly, the scheme maintained its rating during a difficult period for the open medical scheme industry which had underwriting losses of R2 billion for the first nine months of 2006. The industry is continuing to struggle in a highly regulated and inflationary environment.

"We are naturally very happy that our rating has been reaffirmed and believe that this reflects how well our managed care interventions are working and the value for money options we deliver to our members," said Gerbrand Bothma, chairman of the board of trustees.

The scheme offers four options to members: Hospital Plan, Fundamental Plan, Progressive Plan and Prestige Plan.

While Resolution Health Medical Scheme posted its first operating loss in six year in 2006, this should be seen in terms of similar experiences across the industry. Global Credit Rating noted that the establishment of a risk committee, more comprehensive use of actuarial expertise and enhanced scale efficiencies should enable it to achieve a positive operating result in financial 2007.

As mentioned in the rating report, Resolution Health Medical Scheme has decided to expedite a decision on a claim against a distribution company in terms of services rendered. The matter has been referred to the courts. 

The scheme has initiated legal action against the company from which it is seeking the repayment of certain service fees on the grounds that the distribution contract is null and void. The defendant contests that the contract is not void and that the services were appropriately rendered.

The distribution company played an integral role in building the scheme from 192 to 46 000 members and over 110,000 beneficiaries since the schemes formation in 1998. Resolution Health Medical Scheme continues to be one of the fastest growing open medical schemes in South Africa.