2024 Policy Benefit Escalations Announced for Demarcation Regulations

Pretoria, May 30, 2024 – The Minister of Finance has approved the publication of the 2024 annual Policy Benefit Escalations, in accordance with the Demarcation Regulations. These regulations, governed by section 72 of the Long-term Insurance Act, No. 52 of 1998 (LTIA) and section 70 of the Short-term Insurance Act, No. 53 of 1998 (STIA), outline the classification of certain health-related insurance contracts and their exclusion from the Medical Schemes Act, No. 131 of 1998 (MSA).

The Demarcation Regulations delineate which types of contracts fall under the purview of the LTIA and STIA, categorizing them as health policies and accident and health policies, respectively. This classification ensures that these contracts are not governed by the MSA but remain under the regulatory frameworks of the LTIA and STIA.

As stipulated in Regulation 7.2(2), all amounts referenced in sub-regulation (1) are subject to annual escalation based on the Consumer Price Index (CPI) inflation rate. For 2024, this rate has been set at 6.0 percent, as published by Statistics South Africa. This automatic escalation is designed to maintain the real value of policy benefits in line with inflationary trends.

The National Treasury is responsible for annually updating and publishing these escalated amounts to ensure transparency and clarity regarding policy benefits. This process will continue each year as long as Regulation 7.2(2) remains in effect.

The updated policy benefit amounts and supporting annexures are available on the websites of the National Treasury (www.treasury.gov.za) and the Financial Sector Conduct Authority (www.fsca.co.za). These resources provide comprehensive details on the escalated benefits, aiding stakeholders in staying informed about regulatory changes and their implications.

The publication of these escalations reflects the government’s commitment to maintaining the integrity and sustainability of health-related insurance policies, ensuring they keep pace with economic conditions and continue to serve the best interests of policyholders.