Discovery Health
(Registration Number: 1999/007789/06)
Share Code: DSY
ISIN Code : ZAE000022331
MONDAY JANUARY 14 2002
DISCOVERY HEALTH MEDICAL SCHEME IN STRONG POSITION
Discovery Health is engaged in further discussions with the Council for
Medical Schemes (the Council) to ensure that the Discovery Health Medical
Scheme meets the technical reserve requirements stipulated by statutory
regulations, without negatively impacting on the value proposition offered
to members.
Following an earlier agreement in principle, the decision by the Council in
December 2001 to reject Discovery Health's proposal to inject capital into
the Discovery Health Medical Scheme via a subordinated loan is
disappointing. However, Discovery is working closely with the Council - in
line with a request from the Registrar - to ensure that these technical
reserve requirements are satisfied by 31 December 2002.
The Discovery Health Medical Scheme is in fact in a unique position of
strength in a volatile industry where most medical schemes are grappling to
find solutions to capitalise their schemes:
- For the past three years it has received the highest possible rating for
its claims paying ability from independent credit rating company, Global
Credit Rating. This AA-rating was reconfirmed in November 2001.
- The Discovery Health Medical Scheme has secured a bank guarantee of R650m
for the medical scheme from FirstRand Bank, backed by a counter guarantee
from Discovery Health (Pty) Ltd. This guarantee provides added security as
it confirms the strength of the medical scheme, and demonstrates the
significant financial support and access to capital that the Discovery
Health Medical Scheme enjoys.
- 1.1 million lives are covered by the scheme, and this number continues to
grow month-on-month.
- Annual rate increases have been kept consistently below the industry
average, since inception in 1992.
- The scheme has access to the capital required to meet the statutory
reserve levels stipulated by the Medical Schemes Act, without needing to
increase member contributions or reduce benefits.
- Additional security is provided by the stated, public commitment and
backing provided to the scheme by Discovery Holdings and FirstRand, South
Africa's largest financial services institution.
The combination of these factors delivers a robust medical scheme that
offers Discovery Health members absolute protection against the significant
risks inherent in the environment, without burdening them with the
responsibility of medical scheme capitalisation. Discovery Holdings will
continue to be a leader in its industry, offering a range of innovative
products, and will continue to strive to create value for all its
stakeholders.
Contact: Shaun Matisonn, Principal Officer, Discovery Health Medical Scheme
Tel : 011 529 2865
Fax : 011 529 5503
Email : shaunm@discoveryhealth.co.za
Cell : 082 606 2865
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