Firm banned from selling insurance

The Registrar of Medical Schemes, T Patrick Masobe, on Tuesday obtained an order in the Johannesburg High Court prohibiting Guardrisk from marketing and selling health insurance products.

The Council for Medical Schemes said in a news release Masobe claimed the products contravened the Medical Schemes Act.

The court found Guardrisk's Admedgap and Admedpulse health insurance products to be undertaking the business of a medical scheme without being lawfully registered to do so, the council said.

The argument brought before the Court by CMS was that Guardrisk was undertaking a business of a medical scheme if done in return for a premium or contribution but Guardrisk maintained that they were providing their insurance policies in terms of the Short Term Insurance Act.

This contention by Guardrisk was dismissed by the court.

"Judge Goldblatt also interdicted and restrained Guardrisk from directly or indirectly marketing, promoting, advertising and/or concluding any policies of insurance which offer benefits similar to those of Admedgap and Admedpulse."

Guardrisk was also ordered to terminate all existing policies within three months.

The three months would give policyholders an opportunity to seek and obtain other alternative health insurance cover.

Guardrisk was also ordered to pay the costs of the application including costs consequent upon the employment of two counsels.