Changes in Gap Cover Legislation

December 18, 2021

Since 2012 there have been least two draft proposals and court actions over whether there is a need for “Gap Insurance “in South Africa and whether the country needs changes in gap cover legislation.

There are approximately over 2.24 million people in South Africa with health insurance products.The government is still a long way off implementing a National Health Insurance Scheme, and there is a definite need for some other cover particularly in the “middle-income bracket” for “Gap”” type insurance products.

Finally, on 23 December 2016, the government published new Demarcation Regulations governing Short and Long Term Insurance Policies with emphasis on Health Policies. These bring about changes in gap cover legislation in South Africa.

“Gap Insurance Products “name will change to “”Medical Expenses Shortfall Products “”.


  • Policyholders must still be members of a Medical Aid Scheme.
  • All new policies issued after 1st April 2017 must comply with the regulations.
  • Any existing policies taken out before 1st April have until January 2018 to change and comply.


Changes in Gap Cover Legislation

We highlight the three main changes in the regulations highlighted below:


  1. Waiting Periods
  • Refers to the waiting periods that Insurers will require policyholders to pay any premiums but not claim until either:
  • General Waiting period will now be three months for ALL new Policies.
  • Condition Specific Waiting Periods: If the policyholder receives treatment in any way medically for a particular condition over the last 12 months then a waiting period of 12 months from the commencement of the policy will apply.
  • However, if a new policyholder was previously a member of another insurance medical shortfall scheme for the previous 90 days and NOT had treatment for the specified condition then, NO waiting period will apply.


  1. Insurers must now underwrite these policies on a Group Basis ONLY.

The insurer may apply no discrimination in any way may. The only exception is that Insurers may charge higher premiums for higher age entries.

(Insurers are concerned that this point may result in a higher premium cost across the board.)


  1. A maximum limit

There is a maximum limit on the Medical Expenses Shortfall which in aggregate must not exceed R 150 000 per insured person per year.

More Changes in Gap Cover Legislation

Marketing Material for Medical Expenses shortfall schemes

  • The Health Department must approve the marketing material.
  • The words Hospitalisation and Medical must only be used if the marketer uses the words “Medical Expenses Shortfall “ in the wording.
  • Any marketing material must state Clearly that this insurance is NOT a Substitute for  a Medical Aid Scheme “


Brokers Fees:

Brokers may now charge fees of between 5-20 % according to the value of the premium. Maximum fee is 20%.

Termination of contract.

The rules covering termination have also been promulgated which protect both insurers and policyholders.

As mentioned earlier these changes will be phased in between April 2017 and the end of the year. It is. therefore, going to be important that policyholders keep in close contact with their insurers.

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All info was correct at time of publishing