A medical scheme is a non-profit organisation, governed by a board of trustees, and must be registered with the Council for Medical Schemes.
This means it does not have shareholders or pay dividends and that the Scheme's income can only ever be derived from member contributions and investment returns. The Scheme pools all members' contributions to fund members' claims, and any surplus funds are transferred, in accordance with regulations, to Scheme reserves for the security and benefit of members. A medical scheme therefore does not make any profits.
Schemes exist for their members as all funds are pooled and safeguarded, to be used to pay claims in accordance with the scheme's rules, and ensure that all members are equitably and fairly cared for (relative to their choice of benefit plan).
All medical schemes in South Africa operate in accordance with the Medical Schemes Act 131 of 1998, and are regulated by the Council for Medical Schemes.