Thousands of health insurance policyholders could be affected by a regulatory move affecting Centriq Insurance Company and Dis-Chem Pharmacies after the Council for Medical Schemes (CMS) ruled that the branding of certain products breach the Medical Schemes Act.
The CMS found that Centriq’s decision to market its MyHealth Core and MyHealth Vital products under the Dis-Chem name amount to an unauthorised name change that required prior regulatory approval.
While white labelling is permitted under South Africa’s insurance framework, the regulator ruled that this arrangement fails to meet the required conditions.
Implications
Research firm Trade Intelligence said the CMS has the power to shut the partnership down if its rules are not followed, which could leave thousands of people without health insurance.
“Fingers crossed the matter can be resolved swiftly for the good of all stakeholders concerned,” it said.
The case is critical to Dis-Chem, whose strategy is increasingly centred on healthcare services rather than pure retail.
According to Moonstone, an integrated financial services information and support group, the dispute resurfaced over the December holiday period after the Appeals Board dismissed Centriq’s appeal against a CMS directive issued in 2024.
The directive ordered Centriq to cease its commercial arrangement with Dis-Chem, a decision the Appeals Board has now upheld.
The Appeals Board found that, from a consumer’s perspective, the products appear to be Dis-Chem offerings once the retailer’s name was added. Though the underlying benefits did not change, the board ruled that consumer perception is decisive and that Centriq should have notified the CMS and applied for approval before using the Dis-Chem branding.
Moonstone reported that the CMS has warned that non-compliance with exemption conditions could result in enforcement action, including administrative penalties or even the withdrawal of exemptions that allow insurers to operate outside the medical schemes framework.
Despite the ruling, the MyHealth products continue to be marketed through Dis-Chem’s health platform, though the Dis-Chem name has since been removed from the product titles.
Potential enforcement
Centriq has sought to reassure customers. Moonstone said Marika Mattheus, head of risk and compliance at Centriq, indicated that the insurer does not expect policyholders to be negatively affected and is continuing to engage with the regulator.
The CMS confirmed that Centriq’s response is under consideration and said further enforcement action remains possible, depending on the facts. It added that, in similar cases, steps are taken to ensure continuity of cover for policyholders if commercial arrangements are unwound.
The story will be updated with comment from Dis-Chem once received.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.