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(With effect from 1 January 2010, unless otherwise stated)

1. NAME
The name of the Scheme is MEDSHIELD MEDICAL SCHEME, hereinafter referred to as the “Scheme”.
The abbreviated name of the Scheme is “MEDSHIELD”.

2. LEGAL PERSONA
The Scheme, in its own name, is a body corporate, capable of suing and of being sued and of doing or causing to be done all such things as may be necessary for or incidental to the exercise of its powers or the performance of its powers or its functions in terms of the Medical Schemes Act and regulations and these Rules.

3. REGISTERED OFFICE
The registered office of the Scheme is situated at 296 Kent Avenue, Ferndale, Randburg, but the Board may transfer such office to any other location in the Republic of South Africa, should circumstances so dictate.

4. DEFINITIONS
In these rules, a word or expression defined in the Medical Schemes Act, 1998, (Act No. 131 of 1998) and its Regulations bears the meaning thus assigned to it and, unless inconsistent with the context
(a) a word or expression in the masculine gender includes the feminine and vice versa; and
(b) a word in the singular number includes the plural, and vice versa.
The following expressions mean the following:
4.1. “Act” – the Medical schemes Act, 1998 (Act No. 131 of 1998), and the regulations framed there under;
4.2. “adult dependant” – any dependant who is not a child dependant;
4.3. “annual limit” – the maximum benefits to which a member and his registered dependants are entitled in terms of these rules, and shall be calculated annually to coincide with the financial year of the Scheme;
4.4. “approval” – prior written approval of the Board or its authorized representative;
4.5. “auditor – an auditor registered in terms of the Public Accountants’ and Auditors’ Act, 1991, (Act No. 80 of 1991);
4.6. “authorization” – prior authorization by or on behalf of the Scheme, upon application made by or on behalf of a beneficiary, for a case to be managed under the contracted managed health care programme or for any procedure, service or appliance to be supplied, as may be stipulated in the benefits set out in Annexure B and such authorization shall be deemed to authorize all procedures and services as may be necessary to complete treatment for the condition in question.
4.7. “beneficiary” – the member or a person registered as a dependant of a member in terms of these Rules;
4.8. “Board” – the Board of Trustees constituted to manage the Scheme in terms of the Act and these Rules;
4.9. “case” – the treatment of a sickness condition required on an admission of a beneficiary to a hospital or day clinic and for any ongoing treatment stipulated under the relevant managed health care programme;
4.10. “child” – a member’s natural child, or a stepchild or legally adopted child, or a child in the process of being adopted, or a child who has been placed by law in the custody of the member or his spouse or partner and who is financially dependent on the member and who is under the age of 21;
4.11. “condition specific waiting period” – means a period during which a beneficiary is not entitled to claim benefits in respect of a condition for which medical advice, diagnoses, care or treatment was recommended or received within the twelve-month period ending on the date on which an application for membership was made;
4.12. “continuation member” – a member who retains his membership of the Scheme in terms of rule 6.2 or a dependant who becomes a member of the Scheme in terms of rule 6.3;
4.13. “creditable coverage” – means any period in which a late joiner was:
4.13.1. a member or a dependant of a medical scheme;
4.13.2. a member or a dependant of an entity doing the business of a medical scheme which, at the time of his or her membership of such entity, was exempt from the provisions of the Act;
4.13.3. a uniformed employee of the South African National Defence Force, or a dependant of such employee, who received medical benefits from the South African National Defence Force; or
4.13.4. a member or a dependant of the Permanent Force Continuation Fund, but excluding any period of coverage as a dependant under the age of 21 years;
4.14. “contribution” – in relation to a member, the amount, exclusive of interest, paid by or in respect of the member and his registered dependants, if any, as membership fees, and shall include payments made into personal medical savings accounts;
4.15. “co-payment” – that percentage or portion of an admitted claim by a member, that the member concerned shall be required to pay;
4.16. “cost” – in relation to a benefit, the net or final amount payable in the ordinary course of business in respect of a relevant health service;
4.17. “dependant”
4.17.1. a member’s lawful spouse or partner ( being a person with whom the member has a committed relationship based on mutual dependency and shared household, irrespective of the gender of either party);
4.17.2. a member’s dependent child who is not a member or a registered dependant of a member of a medical Scheme;
4.17.3. the immediate family of a member in respect of whom the member is liable at law for family care and support and who is financially dependent on the member;
4.17.4. such other persons who are recognized by the Board as dependants for purposes of these rules; and
4.17.5. who are not members of, or registered dependants of a member of, a medical scheme.
4.18. “dependent” – in relation to a dependant other than the member’s spouse or partner, a dependant who is not in receipt of a regular remuneration of more than the maximum social pension per month and is financially dependent on the member or a child who, due to a mental or physical disability, is dependent upon the member;
4.19. “designated service provider” – a healthcare provider or group of providers selected by the Scheme as preferred providers to provide to the members diagnosis, treatment and care in respect of one or more of the prescribed minimum benefit conditions;
4.20. “domicilium citandi executandi” – the member’s chosen physical address at which notices in terms of rules 11 and 13 as well as legal process, or any action arising there from, may be validly delivered and served;
4.21. “emergency medical condition” – the sudden and, at the time, unexpected onset of a health condition that requires immediate medical or surgical treatment, where failure to provide medical or surgical treatment would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person’s life in serious jeopardy.
4.22. “employee” – a person in the employment of the employer;
4.23. “employer” – a company, closed corporation, firm or organisation which has members in its direct employ and has been admitted as an employer in terms of these Rules;
4.24. “general waiting period” – a period during which a beneficiary is not entitled to claim any benefits;
4.25. “global fee” – the consolidated fee charged for a range of specialist and other services rendered at one medical institution or hospital;
4.26. “late joiner” – means an applicant or the adult dependant of an applicant who, at the date of application for membership or admission as a dependant, as the case may be, is 35 years of age or older, but exclude any beneficiary who enjoyed coverage with one or more medical schemes as from a date preceding 1 April 2001, without a break in coverage exceeding three consecutive months since 1 April 2001.
4.27. “managed healthcare programme” – a health care delivery arrangement designed to monitor and to reduce unnecessary utilisation of services, to contain costs and to measure performance while providing accessible, quality and effective health care including the most effective and efficient utilisation of benefits available to each beneficiary and as referred to in paragraph 6 of Annexure D;
4.28. “medicine” – any medicine as defined by, and registered in terms of, the Medicines and Related Substances Control Act, 1965, (No 5 of 1965).
4.29. “medicine designated price” – the maximum reimbursable price for a medicine or group of medicines according to the medicine price list;
4.30. “medicine price list” – a list prepared by or for the contracted managed health care programme, and containing the maximum reimbursable price of specified generic medicines;
4.31. “member” – any person who is admitted as a member of the Scheme in terms of these rules;
4.32. “member family” – the member and all the registered dependants;
4.33. “National Health Reference Price List NHRPL” – the reference price list for health services published by the National Department of Health;
4.34. “negotiated fee” – a fee agreed to between the Scheme and Providers of any service in respect of the payment of relevant health services;
4.35. “negotiated professional charge” – a charge agreed to between the Scheme and dispensers and preferred providers in respect of the dispensing of registered medicines;
4.36. “preferred provider” – a provider of service or a group of providers of service contracted to the Scheme to deliver quality health care services and to participate in the managed health care process of members in respect of the payment of relevant healthcare services;
4.37. “prescribed minimum benefit condition” – a condition contemplated in the Diagnosis and Treatment Pairs listed in Annexure A of the Regulations to the Act or any emergency medical condition;
4.38. “prescribed minimum benefits” or PMB – the benefits contemplated in section 29(1)(o) of the Act and as duly prescribed by regulation from time to time;
4.39. “prescription” – all the medicine that a medical or dental practitioner or other person legally authorized to do so prescribes at one time for one person for the sickness condition under treatment;
4.40. “student” – any dependant who will be charged a child rate, who is over the age of 21 but not yet 25, who is furthering their education and is financially dependent on the principal member;
4.41. “Registrar” – the Registrar or Deputy Registrar/s of Medical Schemes appointed in terms of section 18 of the Act;
4.42. “services” – the relevant health services as defined in the Act, also abbreviated to “health services”;
4.43. “social pension” – the appropriate maximum basic social pension prescribed by regulations promulgated in terms of the Social Pensions Act, 1993, (Act No. 37 of 1993);
4.44. “spouse” – the person to whom the member is married in terms of any law or recognised custom.

5. OBJECTS
The objectives of the Scheme are to
5.1. undertake liability in respect of its members and their dependants;
5.2. make provision for the procurement of any relevant health service;
5.3. grant assistance in defraying expenditure incurred in connection with the rendering of any relevant health service; and
5.4. render a relevant health service, either by the Scheme itself, or by any supplier or group of suppliers of a service / s, or by any person in association with or in terms of an agreement with the Scheme;
5.5. in return for a contribution or premium.

6. MEMBERSHIP
6.1. Eligibility
Subject to Rule 8, membership is open to any person or group of persons.
6.2. Retirees
6.2.1. A member shall retain his membership of the Scheme with his registered dependants, if any, in the event of his retiring from the service of his employer or his employment being terminated by his employer on account of age, ill health or other disability.
6.2.2. The Scheme shall inform the member of his right to continue his membership and of the contribution payable from the date of retirement or termination of his employment. Unless such member informs the Board in writing of his desire to terminate his membership, he shall continue to be a member.
6.3. Dependants of deceased members
6.3.1. The dependants of a deceased member, who are registered with the Scheme as his dependants at the time of the member’s death, shall be entitled to continue membership of the Scheme without any new restrictions, limitations or waiting periods.
6.3.2. The Scheme shall inform the dependant of his right to membership and of the contributions payable in respect thereof. Unless such person informs the Board in writing of his intention not to become a member, he shall be admitted as a member of the Scheme.
6.3.3. Such dependant’s membership terminates if he becomes a member or dependant of a member of another medical scheme.
6.3.4. If a member dies and leaves a child who, at the date of the member’s death, was registered as a dependant, such child or in the case of
more than one child, the eldest eligible child will, if the guardian so wishes, be admitted as a member of the Scheme. In the case of more than one child the other child or children will be accepted as dependants.

7. REGISTRATION AND DE-REGISTRATION OF DEPENDANTS
7.1. Registration of dependants
7.1.1. A member may apply for the registration of his dependants at the time that he applies for membership in terms of rule 8.
7.1.2. A member whose marital status changes subsequent to joining the Scheme and who elects to register or withdraw dependants as a result of such change or who withdraws any other registered dependant, is required to notify the Scheme within 30 days thereof. Contributions at the amended rates shall be payable from the first day of the month following such registration or withdrawal. Benefit limits will be adjusted with effect from the first day of the month in which contributions are so made payable. Where a dependant is withdrawn, benefit limits will be adjusted to take account thereof with effect from the date of such withdrawal. Members who marry subsequent to joining the Scheme who fail to notify the Scheme in terms of this rule will not be entitled to any benefits in respect of their additional dependant/s until they have given the required notice and paid the applicable contribution.
7.1.3. A member who wishes to register a new-born or adopted child as the member’s registered dependant shall notify the Scheme within 60 days of the birth or adoption of a child, and shall apply to the Scheme to register the child as a dependant. Increased contributions shall be due as from the first day of the month following the birth or adoption. Benefits however shall be adjusted as from the date of birth or adoption;
7.1.4. In the event of any person becoming eligible for registration as a dependant other than in the circumstances set out in rules 7.1.1 to 7.1.3, the member may apply to the Scheme for the registration of
such person as a dependant, whereupon the provisions of rule 8 shall apply mutatis mutandis;
7.1.5. No registered dependant, except a child born during the period of membership, shall qualify for benefits until the member qualifies for benefits. Should a member elect not to register his eligible dependants, such dependants will upon future application for registration as dependants of the member be subject to the waiting periods stipulated in Annexure D.
7.2. De-registration of dependants
7.2.1. A member shall inform the Scheme within 30 days of the occurrence of any event that result in any one of his dependants no longer satisfying the conditions in terms of which he may be a dependant.
7.2.2. When a dependant ceases to be eligible to be a dependant, he shall be deemed no longer to be registered as such for the purpose of these rules nor entitled to receive any benefits, regardless of whether notice has been given in terms of these rules or otherwise.

8. TERMS AND CONDITIONS APPLICABLE TO MEMBERSHIP
8.1. Any person under the age of 21 years without full legal capacity may become a member with the consent of his parent or guardian.
8.2. No person may be a member of more than one medical scheme or claim or accept benefits in respect of himself or any of his dependants from any medical scheme in relation to which he is not a member or a dependant of a member, and no person may be a dependant:
8.2.1. of more than one member of a particular medical scheme; or
8.2.2. of members of different medical schemes.
8.3. Prospective members shall, prior to admission, complete and submit the application forms required by the Scheme, together with satisfactory evidence in respect of himself and his dependants, of age, income, state of health and of any prior membership or admission as dependant of any other medical scheme. The Scheme may require an applicant (at the Scheme’s cost) to provide it with a medical report on any proposed beneficiary in respect of a condition for which medical advice, diagnosis,
care or treatment was recommended or received within the twelve-month period ending on the date on which an application for membership was made, and may designate a provider to conduct such tests or examinations.
8.4. Waiting periods are stipulated in Paragraph 1 of Annexure D.
8.5. The registered dependants of a member shall be entitled to the same benefits as the member.
8.6. Every member shall, on admission to membership, receive a detailed summary of these rules, which shall include contributions, benefits, limitations, the member’s rights and obligations. Members and their dependants, and any person who claims any benefit under these rules or whose claim is derived from a person so claiming, are bound by these rules as amended from time to time.
8.7. A member may not cede, transfer, pledge or hypothecate or make over to any third party any claim, or part of a claim or any right to a benefit which he may have against the Scheme. The Scheme may withhold, suspend or discontinue the payment of a benefit to which a member is entitled under these rules, or any right in respect of such benefit or payment of such benefit to such member, if a member attempts to, or purports to, assign or transfer, or otherwise cede or pledge or hypothecate such benefit. These provisions shall be applicable mutatis mutandis to and in respect of dependants.
8.8. The Scheme shall not be obliged to re-establish, without a break in continuity, the membership of a member or dependant whose membership has been terminated in terms of rule 12.4 or 12.5.
8.9. Nothing in these rules shall be construed as altering in any way an employer’s right to terminate the service of an employee who is a member of the Scheme or affecting any agreement between the employer and the employee in regard to conditions of service.

9. TRANSFER OF EMPLOYER GROUPS FROM ANOTHER MEDICAL SCHEME
If the members of a medical scheme who are members of that scheme by virtue of their employment by a particular employer, terminate their membership of such scheme with the object of obtaining membership of the Scheme, the Board shall admit as a member, without a waiting period, any member of such first-mentioned scheme who is a continuation member by virtue of his past employment by the particular employer and admit any person who has been a registered dependant of such member, as a dependant.
10. MEMBERSHIP CARD AND CERTIFICATE OF MEMBERSHIP
10.1. Every member shall be furnished with a membership card, containing such particulars as may be prescribed. This card shall be exhibited to the supplier of a service on request. It remains the property of the Scheme and shall be returned to the Scheme on termination of membership or where otherwise required by the Board.
10.2. The utilisation of a membership card by any person other than the member or his registered dependants, with the knowledge or consent of the member or his dependants, is not permitted and is construed as an abuse of the privileges of membership of the Scheme.
10.3. On termination of membership or on de-registration of a dependant, the Scheme shall, within 30 days of such termination, furnish such person with a certificate of membership showing period and type of cover, and containing such particulars as may be prescribed.

11. CHANGE OF ADDRESS OF MEMBER
A member shall notify the Scheme within 30 days of any change of physical address and in particular his domicilium citandi et executandi address. The Scheme shall not be held liable if a member’s rights are prejudiced or forfeited as a result of the member neglecting to comply with the requirements of this rule. In the event that the member has elected to receive communications via email or facsimile, it is also the member’s responsibility to notify the Scheme of any changes to such addresses.

12. TERMINATION OF MEMBERSHIP
12.1. Resignation
12.1.1. A member who is required to be a member of the Scheme in terms of his conditions of employment, may not terminate his membership while he remains an employee without the prior written consent of his employer.
12.1.2. A member, who resigns from the service of his employer, shall, on the date of such termination, be eligible to continue as an individual member without re-applying or the imposition of any new restrictions that did not exist at the time of his resignation.
12.2. Voluntary termination of membership
Any member may resign from the Scheme on giving three month’s written notice. In a case where the written notice is received within the first seven days of a month the effective notice period will start within the month in which the written notice was received. The termination date will be the last calendar day of the third following month. In a case where the written notice is received after the first seven days of the month, the effective termination date will be the last calendar day of the third month.
12.3. Death
Membership of a member terminates on his death.
12.4. Failure to pay amounts due to the Scheme
The Board shall have the right to terminate the membership of a member whose contributions are in arrear more than the specified period or where the member fails to pay to the Scheme any amount due by the member to the Scheme in terms of these Rules.
12.5. Abuse of privileges, false claims, misrepresentation and non-disclosure of factual information
The Board may exclude from benefits or terminate the membership of a member or dependant where the Board finds such member or dependant guilty of abusing the benefits and privileges of the Scheme by presenting false claims or making a material misrepresentation or non-disclosure of factual information. In such event the member may be required by the Board to refund to the Scheme any sum which, but for the abuse of the
benefits or privileges of the Scheme, would not have been disbursed on his or a dependant’s behalf.

13. CONTRIBUTIONS
13.1. The total monthly contributions payable to the Scheme by or in respect of the member are as stipulated in Annexure A.
13.2. Contributions shall be paid to the Scheme in terms of the provisions of Annexure A. Where contributions or any other debt owing to the Scheme, have not been paid within 30 days of the due date, the Scheme shall have the right
13.2.1. to suspend all benefit payments which have accrued to such member during the period of default and
13.2.2. to give the member written notice at his domicilium citandi et executandi that if contributions or such other debts are not paid up to date within 14 days of the receipt of such notice, membership may be cancelled. A notice sent by prepaid registered post to the member at his domicilium citandi et executandi indicating the nature of the member’s liability and the outstanding amount shall be deemed to have been received by the member on the 7th day after the date of posting. In the event that the member fails to nominate a domicilium citandi et executandi, the member’s postal or residential address on his application form shall be deemed to be his chosen domicilium citandi et executandi.
13.3. In the event that payments are brought up to date, and provided membership has not been cancelled in accordance with rule 13.2.2 above, benefits shall be reinstated without any break in continuity subject to the right of the Scheme to levy a reasonable fee to cover any expenses associated with the default and to recover interest at the prime overdraft rate of the Scheme’s bankers. If such payments are not brought up to date, no benefits shall be due to the member from the date of default and if any such benefit was paid, it may be recovered by the Scheme.
13.4. No refund of any assets of the Scheme or any portion of a contribution shall be paid to any person where such member’s membership or cover in respect of any dependant terminates during the course of a month.
13.5. All adjustments in the rates of contribution arising from an increase or decrease in the number of dependants are to be implemented on the first day of the following month.

14. LIABILITIES OF EMPLOYER AND MEMBER
14.1. The liability of the employer towards the Scheme is limited to any amounts payable in terms of any agreement between the employer and the Scheme.
14.2. The liability of a member to the Scheme is limited to the amount of his unpaid contributions together with any sum disbursed by the Scheme on his behalf or on behalf of his dependants that has not been repaid to the Scheme.
14.3. In the event of a member ceasing to be a member, any amount still owing by such member is a debt due to the Scheme and recoverable by it.

15. CLAIMS PROCEDURE
15.1. Every claim submitted to the Scheme in respect of the rendering of a relevant health care service as contemplated in these rules, shall be accompanied by an account or statement as prescribed.
15.2. If an account, statement or claim is correct or where a corrected account, statement or claim is received, as the case may be, the Scheme shall, in addition to the payment contemplated in Section 59(2) of the Act, dispatch to the member a statement containing at least the following particulars
15.2.1. the name and the membership number of the member;
15.2.2. the name of the supplier of the service;
15.2.3. the final date of service rendered by the supplier of service on the account or statement which is covered by the payment;
15.2.4. the total amount charged for the service concerned; and
15.2.5. the amount of the benefit awarded for such service.
15.3. In order to qualify for benefits, any claim shall, unless otherwise arranged, be signed and certified as correct and shall be submitted to the Scheme not later than the last day of the fourth month following the month in which the service was rendered.
15.4. Where a member has paid an account, he shall, in support of his claim, submit a receipt.
15.5. Accounts for treatment of injuries or expenses recoverable from third parties, shall be supported by a statement setting out particulars of the circumstances in which the injury was sustained. Further requirements are set out in Annexure D.
15.6. Where the Scheme is of the opinion that an account, statement or claim is erroneous or unacceptable for payment, the Scheme shall notify the member or the health care provider, whichever is applicable, within 30 days after receipt thereof and state the reasons for such an opinion. The Scheme shall afford the member or provider the opportunity to resubmit such corrected account or statement to the Scheme within sixty days following the date on which it was returned for correction.

16. BENEFITS
16.1. Members are entitled to benefits during a financial year, as per Annexure B, and such benefits extend through the member to his registered dependants.
16.2. A member is entitled to change from one to another benefit option subject to the following conditions:
16.2.1. The change may be made only with effect from 1 January of any financial year. The Board may, in its absolute discretion permit a member to change to another benefit option on any other date.
16.2.2. Application to change from one benefit option to another shall be in writing and lodged with the principal officer by no later than 30 September prior to the year upon which it is intended the change shall take place; provided that the member has had at least 30 days prior notification of any intended changes in benefits or contributions for the next year.
16.3. The Scheme shall, where an account has been rendered, pay any benefit due to a member, either to that member or to the supplier of the relevant health service who rendered the account, within 30 days of receipt of the claim pertaining to such benefit.
16.4. Any benefit option in Annexure B covers the cost of services rendered in respect of the prescribed minimum benefits as set out further in Annexures B and D.
16.5. The Scheme shall exclude services from benefits as set out in Annexure C.
16.6. The benefit for any valid claim accepted by the Scheme in terms of these rules in respect of services provided outside the Republic of South Africa will be determined and paid in accordance with these Rules.

17. PAYMENT OF ACCOUNTS
17.1. Payment of accounts or reimbursement of claims is restricted to the net amount payable in respect of such benefit as set out in Annexure B and further to the maximum amount allowed in terms of the broadly applicable benefit limits (overall limits or limits fixed to cover several benefit categories) of which the specific benefit forms part.
17.2. The Scheme may, whether by agreement or not with any supplier of service, pay the benefit to which a member is entitled, directly to the supplier who rendered the service.
17.3. Where the Scheme has paid an account or portion of an account or any benefit to which a member is not entitled, whether payment is made to the member or to any supplier of service, the amount of any such overpayment is recoverable by the Scheme.
17.4. Notwithstanding the provisions of this rule, the Scheme has the right to pay any benefit directly to the member concerned and nothing in these Rules shall create or establish any liability or obligation to any supplier of service.
17.5. Any valid claim accepted by the Scheme in terms of these rules in respect of services provided outside the Republic of South Africa will be paid in the currency of the Republic of South Africa and in accordance with these Rules.

18. GOVERNANCE
18.1. The affairs of the Scheme shall be managed according to these Rules by a Board consisting of a minimum of eight persons and a maximum of eleven persons who are fit and proper to be trustees and of whom
18.1.1. 100% of the total number of Board members shall be elected by the members at Annual General Meetings from amongst the total membership, provided that if the Board comprises of an odd number of members, 50% shall mean half of the next higher even number;
18.1.2. The procedure for inviting nominations for employer representatives shall be as determined by the Board from time to time.
18.2. Subject to 18.3 below, a representative (either a member representative or an employer representative), shall hold office until the next annual general meeting following his election and shall thereupon retire, provided that such representative shall be eligible for re-election.
18.3. One third of the Trustees to retire each year, being those who have been longest in the office.(Where not divisible by three, the third shall be calculated on the next highest number divisible by three)
18.3.1. These retirees automatically stand for re-election, provided no such trustee serves more than 2 consecutive terms and no more than 3 terms.
18.3.2. If re-elected, a 3-year term commences. For new Trustees elected, a three year term commences from elected date.
18.3.3. If elected on the same day, Trustees can agree among themselves who will retire or by lot.
18.3.4. The ratio of Member Trustees and Employer nominated Trustees must be preserved.
18.4. A member of the Board may resign at any time by giving written notice to the Board of his intention not to remain a member of the Board. The Board shall fill the vacancy thus created for the remaining period for which the previous incumbent was elected.
18.5. Nominations to fill vacancies signed by the proposers and the candidates shall be sent to the principal officer not less than seven days before the date of the annual general meeting; provided that a member of the Board retiring in terms of rule 18.2 shall be deemed to have been nominated,
unless such member signifies to the Board that he does not wish to be considered for nomination.
18.6. The election of members of the Board shall be carried out by ballot of members present at the annual general meeting of the Scheme and shall be by a majority vote. The ballot shall be declared in favour of those nominees who receive the highest number of votes sufficient to fill the vacancies for representatives.
18.7. The Board shall have the right to fill any casual vacancy that may occur. A person so appointed shall retire at the first ensuing annual general meeting.
18.8. The following persons are not eligible to serve as members of the Board:
18.8.1. a person under the age of 21 years;
18.8.2. an employee, director, officer, consultant, or contractor of the administrator of the Scheme or the holding company, subsidiary, joint venture or associate of the administrator;
18.8.3. a broker;
18.8.4. the principal officer of the Scheme; and
18.8.5. the auditor of the Scheme.
18.9. A member of the Board shall have the right to nominate a member of the Scheme to act as his alternate on the Board, subject to the approval of the Board. The office of an alternate on the Board shall become vacant in the same manner as that of a member of the Board, in addition to which he shall cease to be an alternate if the member he represents ceases to be a member of the Board.
18.10. A member of the Board shall cease to hold office if
18.10.1. he becomes mentally ill or incapable of managing his affairs;
18.10.2. he is declared insolvent or has surrendered his estate for the benefit of his creditors;
18.10.3. he is convicted, whether in the Republic or elsewhere, of theft, fraud, forgery or uttering of a forged document or perjury;
18.10.4. he is removed by the Court from any office of trust on account of misconduct;
18.10.5. he is disqualified under any law from carrying on his profession;
18.10.6. he ceases to be an appointee of the Employer, or being a Board member elected by members of the Scheme, he ceases to be a member of the Scheme;
18.10.7. he absents himself from three consecutive meetings of the Board without the permission of the chairperson;
18.10.8. he is removed from office by the Council in terms of Section 46 of the Act.
18.11. The Board shall elect from its number the chairperson and vice-chairperson of the Scheme. Should the chairperson or vice-chairperson resign or cease to be a member of the Board or be removed from office on a vote of no confidence by the Board, the Board shall fill the vacancy thus created for the remaining period for which the previous incumbent was elected.
18.12. The Board shall meet at least twice yearly.
Three clear day’s notice of a Board meeting, unless otherwise agreed by the Board, shall be given to each member of the Board and such notice shall, as far as possible, contain a statement of the business to be transacted at such meeting. The non-receipt of any notice by any member shall not affect the proceedings at any meeting of the Board.
18.13. The chairperson may convene a special meeting of the Board should the necessity arise. Any three members of the Board may request the chairperson to convene a special meeting of the Board, provided the matters to be discussed at the meeting are clearly stated in the request. Upon receipt of the request the chairperson shall within seven days after such receipt convene a special meeting of the Board to deal with the matters stated therein. The provisions of rule 18.12 regarding notice shall apply.
18.14. In the absence of the chairperson and the vice-chairperson at a meeting of the Board, the Board members present shall elect one of their numbers to preside at that meeting.
18.15. 50% plus one of the Board shall constitute a quorum for a meeting of the Board.
18.16. Matters serving before the Board shall be decided by a majority vote and in the event of an equality of votes the chairperson of the meeting shall have a casting vote in addition to his deliberative vote.
18.17. Notwithstanding any vacancy on the Board, the continuing members thereof may act on its behalf; provided that if and so long as their number is reduced below that fixed for a quorum by the rules such members may act only for the purpose of increasing the number of members of the Board to that number or for summoning a general meeting of members but for no other purpose.
18.18. A resolution in writing signed by Board members or, if a Board member be not available, by his alternate, being not less than are sufficient to constitute a quorum, shall be as valid and effectual as if it had been passed at a meeting of the Board duly called and constituted; provided that one of the signatories shall be the chairperson, or in his absence the vice-chairperson. Any such resolution may consist of several documents in like form, each signed by one or more of the signatories contemplated in this rule.
18.19. The Board may invite up to two persons to assist it in its deliberations who need not be members of the Scheme. A person so invited may participate in the deliberations of the Board but shall have no vote.
18.20. Unless specifically authorised by the Board, members of the Board are not entitled to any remuneration, honorarium or any other fee in respect of services rendered in their capacity as members of the Board.

19. DUTIES OF BOARD TRUSTEES
19.1. The Board is responsible for the proper and sound management of the Scheme, in terms of these rules.
19.2. The Board shall act with due care, diligence, skill and in good faith.
19.3. Members of the Board shall avoid conflicts of interests, and shall declare any interest they may have in any particular matter serving before the Board.
19.4. The Board shall apply sound business principles and ensure the financial soundness of the Scheme.
19.5. The Board shall appoint a principal officer who is a fit and proper person to hold such office and may appoint any staff which in its opinion are required for the proper execution of the business of the Scheme, and shall determine the terms and conditions of service of the principal officer and of any person employed by the Scheme.
19.6. The chairperson shall preside over meetings of the Board and ensure due and proper conduct at meetings.
19.7. The Board shall cause to be kept such minutes, accounts, registers and records as are essential for the proper functioning of the Scheme.
19.8. The Board shall ensure that proper control systems are employed by and on behalf of the Scheme.
19.9. The Board shall ensure that adequate and appropriate information is communicated to the members regarding their rights, benefits, contributions and duties in terms of the rules.
19.10. The Board shall take all reasonable steps to ensure that contributions are paid timeously to the Scheme in accordance with the Act and the Rules.
19.11. The Board shall take out and maintain an appropriate level of professional indemnity insurance and fidelity guarantee insurance.
19.12. The Board shall obtain expert advice on legal, accounting and business matters as required, or on any other matter of which the members of the Board may lack sufficient expertise.
19.13. The Board shall ensure that the rules, operation and administration of the Scheme comply with the provisions of this Act and all other applicable laws.
19.14. The Board shall take all reasonable steps to protect the confidentiality of medical records concerning any member’s state of health.
19.15. The Board shall approve all valid disbursements but may delegate its authority to any members of the Board or any other persons nominated by the Board to effect disbursements on behalf of the Scheme.
19.16. The Board shall cause to be kept in safe custody, in a safe or strong room at the registered office of the Scheme or with any financial institution approved by the Board, any mortgage bond, title deed or other security
belonging to or held by the Scheme, except when in the temporary custody of another person for the purposes of the Scheme.
19.17. The Board shall make such provision as it deems desirable, and with due regard to normal practice and recommended guidelines pertaining to retention of documents, for the safe custody of the books, records, documents and other effects of the Scheme.
19.18. The Board shall disclose annually in writing to the Registrar, any payment or consideration made to them in that particular year by the Scheme.

20. POWERS OF THE BOARD
The Board has the power
20.1. to employ appropriate personnel or terminate the services of any employee of the Scheme;
20.2. to take all the necessary steps and to sign and execute all the necessary documents to ensure the due fulfilment of the Scheme’s obligations;
20.3. to appoint committees consisting of such Board members and other experts as it may deem appropriate;
20.4. to appoint a duly accredited administrator on such terms and conditions as it may determine, for the proper execution of the business of the Scheme. The terms and conditions of such appointment shall be contained in a written contract which complies with the requirements of the Act and the regulations;
20.5. to appoint, contract with and compensate any accredited broker for the introduction or admission of a member to the Scheme and for ongoing broker services subject to the provisions of the Act;
20.6. to contract with managed health care organisations subject to the provisions of the Act and the regulations;
20.7. to purchase movable and immovable property for the use of the Scheme or otherwise to sell it or any part of it subject to sound business practice and fair value principles;
20.8. to let or hire movable or immovable property;
20.9. to provide administrative services to other medical schemes;
20.10. in respect of any moneys not immediately required to meet current charges upon the Scheme and subject to the provisions of the Act, and in the manner determined by the Board, to invest or otherwise to deal with such moneys and to realise, re-invest or otherwise deal with such moneys and investments;
20.11. with the prior approval of the Council, to borrow money for the Scheme from the Scheme’s bankers against the security of the Scheme’s assets for the purpose of bridging a temporary shortage;
20.12. subject to the provisions of any law, to cause the Scheme, whether on its own or in association with any person, to establish or operate any pharmacy, hospital, clinic, maternity home, nursing home, infirmary, home for aged persons or any similar institution, in the interests of the members of the Scheme;
20.13. to donate to any hospital, clinic, nursing home, maternity home, infirmary or home for aged persons in the interests of all or any of the beneficiaries;
20.14. to grant repayable loans to members or to make ex gratia payments on behalf of members in order to assist such members to meet commitments in regard to any matter specified in Rule 5;
20.15. to contribute to any fund conducted for the benefit of the employees of the Scheme;
20.16. to reinsure obligations in terms of the benefits provided for in these Rules;
20.17. to authorise the principal officer and/or such members of the Board as it may determine from time to time, and upon such terms and conditions as the Board may determine, to sign any contract or other document binding or relating to the Scheme or any document authorising the performance of any act on behalf of the Scheme;
20.18. to authorise any of the members of the Board or any other persons nominated by the Board to effect disbursements on behalf of the Scheme;
20.19. to contribute to any association instituted for the furtherance, encouragement and co-ordination of medical schemes;
20.20. in general, to do anything, which it deems necessary or expedient to perform its functions in accordance with the provisions of the Act and these Rules.

21. DUTIES OF PRINCIPAL OFFICER AND STAFF
21.1. The staff of the Scheme shall ensure the confidentiality of all information regarding its members.
21.2. The Principal Officer is the executive officer of the Scheme and as such shall ensure that
21.2.1. the decisions and instructions of the Board are executed without unnecessary delay;
21.2.2. where necessary, there is proper and appropriate communication between the Scheme and those parties affected by the decisions and instructions of the Board;
21.2.3. the Board is kept sufficiently and timeously informed of the affairs of the Scheme which relate to the duties of the Board as stated in section 57(4) of the Act;
21.2.4. the Board is kept sufficiently and timeously informed concerning the affairs of the Scheme so as to enable the Board to comply with the provisions of section 57(6) of the Act;
21.2.5. no decisions concerning the affairs of the Scheme are taken without prior authorisation by the Board and that at all times the authority of the Board is observed in its governance of the Scheme.
21.2.6. all actions are in the best interest of members at all times.
21.3. The Principal Officer shall be the accounting officer of the Scheme charged with the collection of and accounting for all moneys received and payments authorised by and made on behalf of the Scheme.
21.4. The Principal Officer shall ensure that all of duties as are necessary for the proper execution of the business of the Scheme, are performed. The Principal Officer shall attend all meetings of the Board, and any other duly appointed committee where his / her attendance may be required, and ensure proper recording of the proceedings of all meetings.
21.5. The Principal Officer shall be responsible for the supervision of the staff employed by the Scheme unless the Board decides otherwise.
21.6. The Principal Officer shall keep full and proper records of all moneys received and expenses incurred by, and of all assets, liabilities and financial transactions of the Scheme.
21.7. The Principal Officer shall prepare annual financial statements and shall ensure compliance with all statutory requirements pertaining thereto.
21.8. The following persons are not eligible to be a Principal Officer:
21.8.1. an employee, director, officer, consultant or contractor of the administrator of the Scheme or of the holding company, subsidiary, joint venture or associate of that administrator; and / or
21.8.2. a Broker.
21.9. The provisions of rules 18.8.1 to 18.8.3 and 18.8.5 apply mutates mutandis to the Principal Officer.

22. INDEMNIFICATION AND FIDELITY GUARANTEE
22.1. The Board and any officer of the Scheme shall be indemnified by the Scheme against all proceedings, costs and expenses incurred by reason of any claim in connection with the Scheme, not arising from their gross negligence, dishonesty or fraud.
22.2. The Board shall ensure that the Scheme is insured against loss resulting from the dishonesty or fraud of any of its officers.

23. FINANCIAL YEAR OF THE SCHEME
The financial year of the Scheme extends from the first day of January to the 31st day of December of that year.

24. BANKING ACCOUNT
The Scheme shall establish and maintain a banking account under its direct control with a registered commercial bank. All moneys received shall be deposited to the credit of such account and all payments shall be made either by
electronic transfer, tape exchange or by cheque under the joint signature of not less than two persons duly authorised by the Board.

25. AUDITOR AND AUDIT COMMITTEE
25.1. An auditor (who must be approved by the Registrar in terms of Section 36 of the Act) shall be appointed by resolution at each annual general meeting, to hold office from the conclusion of that meeting to the conclusion of the next annual general meeting.
25.2. The following persons are not eligible to serve as auditor of the Scheme
25.2.1. a member of the Board;
25.2.2. an employee, officer or contractor of the Scheme;
25.2.3. an employee, director, officer or contractor of the Scheme’s administrator, or of the holding company, subsidiary, joint venture or associate of the administrator;
25.2.4. a person not engaged in public practice as an auditor;
25.2.5. a person who is disqualified from acting as an auditor in terms of the Companies Act, 1973.
25.3. Whenever for any reason an auditor vacates his office prior to the expiration of the period for which he has been appointed, the Board shall within 30 days appoint another auditor to fill the vacancy for the unexpired period.
25.4. If the members of the Scheme at a general meeting fail to appoint an auditor required to be appointed in terms of this rule, the Board shall within 30 days make such an appointment, and if it fails to do so, the Registrar may at any time do so.
25.5. The auditor of the Scheme at all times has a right of access to the books, records, accounts, documents and other effects of the Scheme, and is entitled to require from the Board and the other officers of the Scheme such information and explanations as he deems necessary for the performance of his duties.
25.6. The auditor shall report to the members of the Scheme on the accounts examined by him and on the financial statements laid before the Scheme in general meeting.
25.7. The Board shall appoint an audit committee in the prescribed manner.
26. GENERAL MEETINGS
26.1. Annual General Meeting
26.1.1. The Annual General Meeting of members shall be held not later than 30 June of each year at such time and place as the Board shall determine for the purpose of
26.1.1.1. receiving and adopting the annual financial statements together with the auditor’s report and the report of the Board as required by the Act;
26.1.1.2. conducting and noting the results of the election of member and employer representative members to the Board;
26.1.1.3. the appointment or reappointment of the auditor;
26.1.1.4. the election of a Disputes Committee, and
26.1.1.5. any other business of which due notice has been given.
26.1.2. The notice convening the annual general meeting containing the agenda, the abridged annual financial statements, the abridged auditor’s report and the abridged report of the Board shall be dispatched to all members, participating employers (on behalf of their employees), individuals and continuation members at least fourteen days before the date of the meeting.
26.1.3. The notice specified in 26.1.2 shall state that full annual financial statements, the auditors report and the report of the Board is available to be viewed in the Scheme website and the registered Scheme office.
26.1.4. In the case of the notice sent to members it shall be sent to the last address of such members known to the Scheme.
26.1.5. In the case of a member, participating employer, individual and continuation member request for full annual financial statements, the Principal Officer shall send such statements either by post or email
whichever is relevant to the last address of such member, employer, individual and continuation member known to the scheme.
26.1.6. The non-receipt of such notice by a member shall not invalidate the proceedings at such a meeting.
26.1.7. Fifteen members of the Scheme present in person shall form a quorum. If a quorum is not present after the lapse of 30 minutes from the time fixed for the commencement of the meeting, the meeting shall be adjourned to the same day and time of the next week and members then present shall constitute a quorum; provided that if the same day of the next week is a public holiday the meeting shall be adjourned to the first working day following the public holiday.
26.1.8. The financial statements and reports specified in rule 26.1.2 shall be laid before the meeting.
26.1.9. Notices of motions to be placed before the annual general meeting shall reach the principal officer not later than seven days prior to the date of the meeting.
26.2. Special General Meeting
26.2.1. The Board may call a special general meeting of members if it is deemed necessary.
26.2.2. On the requisition of at least 10 members of the Scheme, the Board shall cause a special general meeting to be called within 21 days of the deposit of the requisition. The requisition shall state the objects of the meeting and shall be signed by all the requestors and deposited at the registered office of the Scheme. Only those matters forming the objects of the meeting may be discussed.
26.2.3. The notice convening the meeting and containing the agenda shall be furnished to members at least 14 days before the date of the meeting. The notice shall also be sent to employers to enable it to be exhibited not less than 12 days before the date of the meeting in a conspicuous place in the premises of such employers, and in the case of continuation members it shall be sent to the last address of
such members known to the Scheme. The non-receipt of the notice shall not invalidate the proceedings of the meeting.
26.2.4. Fifteen members of the Scheme shall form a quorum. If a quorum is not present at a special general meeting called by the Board after the lapse of half-an-hour from the time fixed for the commencement of the meeting, the meeting shall be postponed until the same day and time of the next week and the members then present shall form a quorum; provided that if the same day of the week is a public holiday the meeting will be postponed till the first working day following the public holiday; provided further that if a quorum is not present at a special general meeting convened on the requisition of members after the lapse of half-an-hour from the time fixed for the commencement of the meeting, the meeting shall be regarded as cancelled.

27. VOTING AT MEETINGS
27.1. Every member who is present in person at a general meeting of the Scheme shall have the right to vote at that meeting, or can appoint another member as a proxy to attend, speak and vote on his behalf.
27.2. All proxies sent to members of the Scheme, together with the AGM invitation, will be in a form agreed by the Board.
27.3. The manner in appointing the proxy shall be in writing and must be the originally signed proxy received by the member acknowledging the appointment of another member as proxy.
27.4. The chairperson of the meeting shall determine whether voting shall be by ballot or by a show of hands; provided that where members are called upon to vote on any matter which affects the rates of contribution or the extent of benefits, the voting shall be by ballot at the meeting.
27.5. In the case of an equality of votes the Chairperson of the meeting shall, on both a show of hands and a poll, and if he is a member have a casting vote in addition to his deliberative vote.
27.6. A declaration by the Chairperson of the meeting that a motion has, on a show of hands or on a ballot been carried unanimously, or carried by a
particular majority, or lost, or not carried by a particular majority, shall be final and binding on all members.

28. COMPLAINTS AND DISPUTES
28.1. Members may lodge their complaints, in writing, to the Scheme. The Scheme or its administrator shall also provide a dedicated toll free telephone number which may be used for dealing with telephonic complaints.
28.2. All complaints received in writing shall be responded to by the Scheme in writing within 30 days of receipt thereof.
28.3. In the event of a dispute arising, a disputes committee of three members (which number shall constitute a quorum), who may not be Trustees, employees of the administrators or officers of the Scheme, shall be constituted by the Board from among experts in the field in which the dispute has arisen, provided one person shall be a legal expert and the members shall hold office until the settlement of the dispute.
28.4. Any dispute, arising between a member, prospective member, former member or a person claiming by virtue of such member and the Scheme, shall be referred by the principal officer to the disputes committee for adjudication.
28.5. On receipt of a request in terms of this rule, the principal officer shall convene a meeting of the disputes committee by giving not less than 14 days notice in writing to the complainant and all members of the disputes committee, stating the date, time and venue of the meeting and particulars of the dispute.
28.6. The Disputes Committee may determine the procedure to be followed.
28.7. The parties to any dispute have the right to be heard at the proceedings, either in person or through a representative.
28.8. An aggrieved person has the right to appeal to the Council against the decision of the disputes committee. Such appeal shall be in the form of an affidavit directed to Council and shall be furnished to the Registrar not later than three months after the date on which the decision concerned was made or such further period as the Council for good cause shown may
allow. The operation of any decision which is the subject of such appeal shall be suspended pending a decision by the Council.

29. TERMINATION OR DISSOLUTION
29.1. The Scheme may be dissolved by order of a competent court or by voluntary dissolution.
29.2. Members in general meeting may decide that the Scheme shall be dissolved, in which event the Board shall arrange for members to decide by ballot whether the Scheme shall be liquidated. Unless the majority of members decide that the Scheme shall continue, the Scheme shall be liquidated in terms of section 64 of the Act.
29.3. Pursuant to a decision by members taken in terms of rule 29.2 the principal officer shall, in consultation with the Registrar, furnish to every member a memorandum containing the reasons for the proposed dissolution and setting forth the proposed basis of distribution of the assets in the event of winding up, together with a ballot paper.
29.4. Every member shall be requested to return his ballot paper duly completed before a set date. If at least seventy five per cent of the members return their ballot papers duly completed and if the majority thereof is in favour of the dissolution of the Scheme, the Board shall ensure compliance therewith and appoint, in consultation with the Registrar, a competent person as liquidator.

30. AMALGAMATION AND TRANSFER OF BUSINESS
The Scheme may, subject to the provisions of section 63 of the Act, amalgamate with, transfer its assets and liabilities to, or take transfer of assets and liabilities of any other medical scheme.

31. RIGHT TO OBTAIN DOCUMENTS AND INSPECTION OF DOCUMENTS
31.1. Any beneficiary shall on request and on payment of a fee of R50 per copy, be supplied by the Scheme with a copy of the following documents:
31.1.1. the rules of the Scheme;
31.1.2. the latest audited annual financial statements, returns, Trustees’ reports and auditor’s report of the Scheme; or
31.1.3. the management accounts in respect of the Scheme.
31.2. A beneficiary is entitled to inspect free of charge at the registered office of the Scheme any document referred to in rule 31.1 and to make extracts there from.
31.3. This rule shall not be construed to restrict a person’s rights in terms of the Promotion of Access to Information Act, No 2 of 2000.

32. AMENDMENTS TO RULES
32.1. The Board is entitled to alter or rescind any Rule or Annexure or to make any additional Rule or Annexure.
32.2. No alteration, rescission or addition which affects the objects of the Scheme or which increases the rates of contribution or decreases the extent of benefits by more than twenty five per cent during any financial year, shall be valid unless it has been approved by a majority of members present in a general meeting or by ballot;
32.3. Members shall be notified of such amendments within 14 days after registration thereof. Should a member’s rights, obligations, contributions or benefits be amended, he shall be given 30 days advance notice of such change.
32.4. Notwithstanding the provisions of rule 32.1 above, the Board shall, on the request and to the satisfaction of the Registrar, amend any rule that is inconsistent with the provisions of the Act.
32.5. No alteration, rescission or addition shall be valid unless it has been approved and registered by the Registrar.