Iron, Steel & Engineering sector to get new Compensation Insurer

2014-07-14 09:10

The Department of labour has announced its intention to transfer employers in Class 13, (Iron, Steel, Artificial Limbs, Galvanising, Garages, Metals Industries, etc.) or those with an old WCA number ending with 13xx, to the Rand Mutual Assurance by March 2015.

All new registered business falling in this class will also be transferred to RMA with immediate effect.

In its notice published in Government Gazette 37826 of 14 July, the Department of Labour (Compensation Fund)(SACF) announced that it is in the process of implementing its turnaround strategy and this arrangement will facilitate the successful conclusion of the strategy. The Compensation Fund remains responsible for overseeing the compliance of the licensee with all the requirements of the COID Act.

"The Rand Mutual Assurance Company Limited (Rand Mutual) was founded in 1894 by three mining companies on the Witwatersrand as a non-profit mutual assurance company with the purpose of administering workers’ compensation for mining industry employees injured in the course and scope of their employment.

RMA Life Assurance Company Limited (RMA Life) was established as a wholly owned subsidiary of Rand Mutual in 1990. The purpose of RMA Life was to manage the pension benefits payable to claimants and their beneficiaries.

With the implementation of legislation governing workers’ compensation, Rand Mutual was granted a right to continue to provide such compensation under license form the Minister of Labour. This license is currently granted in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA).

The RMA group also operates under both long and short term insurance licenses issued by the Financial services Board (FSB).

Rand Mutual provides insurance to employers in respect of their liability to employees in terms of COIDA. In addition to providing benefits similar to those offered by COIDA, Rand Mutual also offers to its members a variety of accident related insurance products including the Augmentation Policy, Commuting Journeys Policy, Riot and Mines Auxiliary Forces Policy.

Rand Mutual remains a mutual association which means that the policy holders are also the shareholders. Share holding is adjusted annually in arrears based on the amount of premium paid by shareholders in respect of the previous year. The employers are the policy holders and the beneficiaries are the employees and, in the case of fatalities, the dependants of the employees.

The business of Rand Mutual in essence, is the receipt, adjudication and administration of workers’ compensation claims and includes the payment of medical costs, once off disability payments and the ongoing payment of pensions in the case of severe disability and death."

Along with the DOL-run SACF, the only other compensation insurer is the Federal Employer's Mutual Assurance (FEM) established as a mutual insurer in 1936 and on the introduction of the Workmen's Compensation Act 1941 was granted a licence to continue to transact workmen's compensation insurance for the building industry. 

This is great news for employers as the SACF is not the best service provider when it comes to answering the telephone or responding to e-mail inquiries, and the age old battle of getting letters of good standing.

The medical profession can also air a sigh of relief with this announcement as the RMA would surely be quicker in processing medical claims.

Whether the DOL can claim credit for a "turnaround" remains an open debate. I do not see this as an improvement of service delivery by the SACF, but as a positive step in admitting their lack of ability to deliver a service and handing it over to professionals who can actually do the job properly.

What ever these changes would bring about, it could not have happened sooner.

The DOL also invites you to comment on the proposed plan by sending your concerns (hell no!!) or contributions to by the 31st of July 2014.

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