Optivest Health Services (Pty) Ltd v The Council for Medical Schemes and Others

Optivest Health Services (Pty) Ltd, an accredited medical schemes broker under the Medical Schemes Act 131 of 1998, was the subject of an investigation initiated by the Registrar of the Council for Medical Schemes following an anonymous tip-off from a former employee. The tip-off alleged that Optivest unlawfully charged service fees to medical scheme members, including so‑called "orphan" profiles where members continued to pay fees despite no longer belonging to a medical scheme. Acting on a report from its Compliance and Investigation Unit, the Registrar appointed Open Water Advanced Risk Solutions (Pty) Ltd in terms of s 44(4) of the Act, read with the Financial Sector Regulation Act 9 of 2017, to conduct an inspection without prior notice. Optivest initially cooperated but later withdrew cooperation and challenged the Council’s authority to investigate it as a broker. Optivest instituted review proceedings to set aside the decision to investigate, the appointment of Open Water, and the draft investigation report, alleging lack of statutory power, procedural unfairness, and irrationality.

The appeal was dismissed with costs, including the costs of two counsel.

This case clarifies the scope of the investigatory and inspection powers of the Council and Registrar of Medical Schemes, confirming that such powers extend to brokers accredited under the Medical Schemes Act and not only to medical schemes themselves. It reinforces the principle that regulatory inspections are investigative, may be conducted without prior notice, and are not subject to the complaint procedures in s 47. The judgment strengthens the regulatory framework aimed at protecting medical scheme members and the public interest.