HARARE, July 23 (The Source) – Government has passed a new law that shields the country’s largest medical aid society from facing litigation from its creditors as it restructures the parastatal’s debt.
Premier Services Medical Aid Society (PSMAS), Zimbabwe’s largest medical aid society by subscription, is currently struggling with legacy issues. Government’s move protects PSMAS from being sued for no-payment of services or having its properties attached for such by creditors.
Last month, the state paid $40 million to PSMAS in outstanding contributions which also enabled it to pay off some service providers, but remains in arrears of over $25 million.
Despite the government payment, which also enabled PSMAS to clear its obligations to the tax authority, ZIMRA, it owes creditors nearly $40 million.
“These regulations may be cited as the Presidential Powers (Application of Cap 8:14 to Premier Service Medical Aid Society Regulations, 2015,” reads Statutory Instrument 77 of 2015 published last Friday.
“The State Liabilities Act [Chapter 8:14], applies with necessary changes to legal proceedings against Premier Service Medical Aid Society, a medical aid society registered under the Medical Services Act [Chapter 15:13], including the substitution of references therein to a minister by reference to the board.”
Last year, PSMAS was rocked by disclosures of astronomical compensation for top management, with its former chief executive Cuthbert Dube, who was forced to retire, earning a monthly salary amounting to over a quarter of a million dollars.
This triggered public outrage and government intervention given that most of the institution’s 800,000-plus members are state employees.