A regulatory dispute could ensnare thousands of South African health insurance policyholders following a Council for Medical Schemes (CMS) finding that Dis-Chem’s branding breached the Medical Schemes Act.
The CMS ruled that Centriq Insurance Company’s decision to market its MyHealth Core and MyHealth Vital products under the Dis-Chem name amounted to an unauthorised name change. In the regulator’s view, that change required prior CMS approval.
The finding matters because these products sit in the grey space between health insurance and medical schemes. While South Africa’s insurance framework generally allows white labelling, the CMS ruled that the Centriq–Dis-Chem arrangement failed to meet the specific conditions required for compliant branding.
Research firm Trade Intelligence observed that the CMS retains the authority to terminate the partnership if the parties fail to comply with the rules. That outcome could leave thousands of people without health insurance. At least temporarily, the management of the unwind will dictate the outcome.
Dis-Chem Health Insurance Branding Dispute Returns After Appeal Dismissed
The matter resurfaced during the December holiday period. This followed the Appeals Board's dismissal of Centriq’s appeal against a 2024 CMS directive. That directive ordered Centriq to cease its commercial arrangement with Dis-Chem. In addition, the Appeals Board has now upheld the CMS position.
A key issue was consumer perception. The Appeals Board ruled that Dis-Chem’s branding led ordinary customers to believe the retailer provided the products. Even though the underlying benefits did not change, the board ruled that perception is decisive. Centriq should have notified CMS and obtained approval before using Dis-Chem branding on the products.
This is not a minor technicality. If a company presents an insurance product that resembles a medical scheme, regulators worry that consumers will misunderstand their purchase. Furthermore, they question how the company processes claims and which protections safeguard consumers.
Impact on Policyholders And Retail Health Strategies
Moonstone reported that the CMS has warned Centriq that non-compliance with exemption conditions could trigger enforcement action. Options include administrative penalties or even the withdrawal of exemptions that allow insurers to operate outside the medical schemes framework.
Dis-Chem has strategic exposure here. The retailer has been positioning itself as a broader healthcare services player, not only a pharmacy chain. Any forced unwind of a high-profile health insurance partnership would complicate that shift. Additionally, it could raise questions for other retailer-led healthcare offerings.
For now, Dis-Chem continues to market MyHealth products through its health platform, though it has removed its name from the product titles. This signals an attempt to reduce regulatory friction while discussions continue.
Centriq expects no negative impact on policyholders and continues to consult with the regulator regarding the matter. The CMS confirmed Centriq’s response is under consideration. It also stated that further enforcement action remains possible, depending on the facts. In similar situations, insurers typically take steps to protect the continuity of cover when unwinding commercial arrangements.
Read the Original Article (May require a subscription)