TRACEY DAVIES: The medical aid broker system is broken

In early January I was notified by the “Discovery Commission Team” that I had a new Discovery financial adviser on my medical aid policy. I immediately replied that this was a mistake — I had not appointed the financial adviser named in the letter, nor any other financial adviser.

A few days later I got another letter, thanking me for my e-mail and advising me of the name of my new “servicing financial adviser” — a different broker to the first one. Again, I responded that this was a mistake. I asked for an urgent explanation for why two unauthorised brokers had been linked to my policy in three days. It took 10 days to get a response. I was told that a broker appointment form had been submitted for my account.

I phoned Discovery and the consultant told me that he had a broker appointment form with my signature on it. He sent it to me, and while my ID number and medical aid number were correct, the form contained the wrong first names, and my signature had been forged. I was advised to report this to Discovery’s forensics team. It took three weeks and several follow-ups for the team to reply.

When I took out my policy 12 years ago, a broker was appointed to handle the initial registration process. I have absolutely no recollection of this person, and I never heard from her again.

However, Discovery advised that in the intervening 12 years my policy has been passed from broker to broker, when the current one retired or got ill or died. This transfer from one broker to another had always been without my consent and never with any notification to me. For some reason, the latest changes triggered a notification from Discovery, even though none of the previous ones had done so.

For 12 years, Discovery has been paying commission to people who purport to represent me but to whom I have never spoken and who have never so much as sent me an e-mail.

Discovery’s forensics investigator (who was very helpful) told me that he had received several similar complaints of forged signatures on broker appointment forms. The person responsible in my case — let’s call him RB — was debarred by the Financial Sector Conduct Authority in November 2024.

While appealing his debarment, RB had to hand over his clients to another broker, who required signed consent forms to take them over. RB simply forged these forms — and no-one at the new broker, or at Discovery, noticed anything amiss.

Medical aid brokers must be registered as financial service providers and accredited by the Council for Medical Schemes. The rationale for monthly commission payments is that they have an ongoing obligation to their clients: to ensure that medical aid cover is appropriate and cost-effective; to explain changes in coverage, products and rates; and to assist clients with submitting difficult claims and liaising with medical schemes on their behalf when claims are rejected.

Based on an informal survey of my friends and colleagues, only one person I spoke to could name their medical aid broker and point to instances where they had contacted them since they had taken out their original policy. A scan of online forums points to a similar picture.

It is a huge problem that the medical aid industry makes it so difficult to understand its products that professional help is required to do so. It is also likely a breach of many of the rules governing the conduct of financial service providers that brokers remain linked to policyholders and earn commission despite providing no ongoing service whatsoever. As for handing over entire “books” without the knowledge or consent of the policyholders (which appears to have happened at least three times in my case), this just beggars belief.

There are multiple obvious safeguards that appear to be lacking. At the very least, medical aid schemes should require direct client confirmation before processing any broker appointment; inform policyholders of the role that brokers must play; and require brokers to submit proof of services provided before commissions are paid. 

South African medical aid policyholders also deserve to know the extent to which broker commissions are contributing to stratospheric annual increases in premiums.

* Davies is executive director of Just Share