Short-Term Insurance Act, 1998 (Act No. 53 of 1998)RegulationsRegulations under the Short-term Insurance Act, 1998 (Act No. 53 of 1998)Part 7 : Contracts Identified as Accident and Health Policies under Section 70(2A)(a) of the Act7.3 Limitations applicable to category 1, 2 and 3 contracts |
Prohibition of policy benefits that fully or partially indemnifies against medical expenses under category 2
| (1) | A contract referred to in category 2 in the table under regulation 7.2(1) may not provide policy benefits that are fully or partially related to indemnifying the policyholder against medical expenses incurred in respect of a relevant health service. |
Underwritten on a group basis and non-discrimination
| (2) | A contract referred to in category 1, 2 and 3 in the table under Regulation 7.2(1) must— |
| (a) | be underwritten on a group basis; and |
| (b) | not discriminate against a policyholder or potential policyholder on the basis of race, age, gender, marital status, ethnic or social origin, sexual orientation, pregnancy, disability, state of health or any similar grounds. |
| (3) | An insurer may not refuse to enter into a contract referred to in category 1, 2 and 3 with a potential policyholder unless where that potential policyholder has previously committed a fraudulent act related to insurance. |
| (4) | Despite subregulation (2)(b), an insurer may in respect of contracts referred to in category 1, 2 and 3 in the table under Regulation 7.2(1) require a policyholder that enters into a contract after a specific age to pay a higher premium than a policyholder that entered into the contract at a younger age, provided that the same higher premium is payable by all policyholders entering into a product line after a specific age. |
Waiting periods
| (5) | Despite subregulation (2), a contract referred to in category 1, 2 and 3 in the table under Regulation 7.2(1) may provide for a— |
| (a) | general waiting period of up to 3 months; and |
| (b) | condition-specific waiting period of up to 12 months. |
| (6) | An insurer may not impose a condition-specific waiting period on a policyholder's accident and health policy if that policyholder, for at least 90 days before entering into that accident and health policy with the insurer, had an accident and health policy with materially similar benefits and had completed the condition-specific waiting period in respect of that accident and health policy. |
| (7) | Where the condition-specific waiting period of a policyholder under a previous accident and health policy referred to in subregulation (6) had not expired at the time that that policyholder enters into a new accident and health policy with materially similar benefits, the insurer may only impose a waiting period for a period equalling the unexpired part of the waiting period in respect of that previous policy. |
Variation of contracts
| (8) | For the purposes of this Part, the variation of a contract includes premium adjustments under a contract. |
| (9) | Despite subregulation (2), a contract referred to in category 1, 2 and 3 in the table under Regulation 7.2(1) may be varied as a result of the health or claims experience of all policies forming part of a product line but may not be varied as a result of the health or claims experience of an individual policyholder. |
Termination of contracts
| (10) | A contract referred to in category 1, 2 and 3 in the table under Regulation 7.2(1)may be terminated by an insurer only if— |
| (a) | the policyholder— |
| (i) | fails to pay (within the time allowed in the contract and subject to any legislative requirements) the premium under the contract; |
| (ii) | submitted fraudulent claims; or |
| (iii) | committed any fraudulent act; or |
| (b) | the insurer will no longer be offering a specific product line as part of its short-term insurance business and the insurer has given all of that product line policyholders 90-day notice before termination. |
| (11) | For the purposes of this Part, termination of a contract includes the non-renewal of a contract by an insurer. |
[Regulation 7.3 inserted by regulation 2 of Notice No. 1582 of 2016]