Discovery Health Medical Scheme to appeal Registrar's decision

Discovery Health Limited.

The Discovery Health Medical Scheme (DHMS) has confirmed its intention to
appeal against the Registrar of Medical Schemes' decision not to register
the rule amendment that would give effect to the DHMS solution, ensuring
that the statutory reserve requirements are met in full - without members
paying more.

Says Shaun Matisonn, Principal Officer of the Discovery Health Medical
Scheme, "While the Registrar's decision is not entirely unexpected, we are
disappointed as the decision appears to have been made on the basis of
inaccuracies and misunderstandings. However, the Discovery Health Medical
Scheme is committed to taking the next step in the process in order to
ensure that our proposed solution is accepted. The facts are clear, the
solution ensures that members do not pay more, while benefits are

maintained, and the scheme meets the statutory reserve requirements.  We
have received expert opinion that this solution meets all the legal

requirements, and in fact, meets the requirements expressly stated by the
Registrar that members should fund these reserves."

Matisonn reiterated that the proposed solution met a number of key
objectives:

1.   Members don't pay more than their current contributions and their
benefits are maintained - the ultimate measure of fairness.

2.   The medical scheme receives an immediate capital injection that enables
it to meet the statutory reserve requirements - now and in the future.
3.   Services and benefits will be unaffected - Discovery will continue to
invest in the expertise and technology required to ensure that the scheme
maintains its leadership position.

4.   Discovery uses its strength to capitalise the scheme without burdening
members.

The next step in the process is an appeal to the Council for Medical Schemes
and thereafter, an independent appeal board would be constituted to hear the
case, with the final resort being the High Court of South Africa.

"We believe that we have a solution that is sustainable in the long term and
most importantly, is in the best interests of our members," says Matisonn.
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 from FirstRand Bank, backed by a counter guarantee from Discovery
Holdings. 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, since inception of the scheme in 1992, have been
kept consistently below the industry average.

*    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 reducing 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