not Finweek who comments on the R4.9m (112% hike) for the Bonitas principal officer. These comments were made by Monwabisi Gatsho, who heads up the CMS. Gantsho identifies the boards of Bonitas, Bestmed and Discovery in terms of remuneration issues.
Further on this issue, it could be argued that this rightly should come under significant scrutiny. R4.9m in curatorship and principal officer fees is high. Does the response from Bonitas suggest that members can expect to see these fees drop significantly in 2013/14? Bonitas referenced the Global Credit Ratings (GCR) report in its response, point-
B ing to the rating of the scheme, which is indeed positive. It should, however, be disclosed that Bonitas commissions this report.
GCR makes note of the fact that “The merger with Pro Sano (effective I January 2013) enhances Bonitas’ market position. In this regard, the scheme’s status as the second-largest entity in the open medical schemes has been cemented. The growth has also assisted the scheme in maintaining a favourable membership age profile. This notwithstanding, note is taken of the complexity of accurately pricing and managing the different membership profiles. The bedding down of the new risk pool in order to maintain the scheme’s internal risk management benchmarks represents a key measure of management’s strategic implementation capacity in the short term.”
GCR describes the liquidity ratios as “adequate” and the ability to manage risk assets is viewed as “relatively well managed”.
Finally, the issues around solvency, costs and benefits need to be scrutinised intensely, as GCR notes: “Further, Government’s longer-term objective to introduce an NHI framework in South Africa, to which the associated effect on the medical schemes industry remains uncertain, could negatively impact the rating.”
We believe that we have given Bonitas a fair opportunity to respond and look forward to robust debate going forward.