Notice of the annual general meeting

22 June 2016 at 08:00

Malcor Medical Aid Scheme 16 Jersey Drive

Longmeadow Business Estate East Longmeadow Johannesburg

Notice of the Malcor Medical Aid Scheme Annual general meeting The Board of Trustees of the Malcor Medical Aid Scheme invites you to the annual general meeting of the Scheme. This meeting is open to all members and will be held on Wednesday, 22 June 2016 at 08:00 at the Malcor Medical Aid Scheme offices, 16 Jersey Drive, Longmeadow Business Estate East, Longmeadow, Johannesburg. Enclosed please find the papers for the meeting. We look forward to seeing you at the meeting. Kind regards, PETER DORFAN, PRINCIPAL OFFICER Malcor Medical Aid Scheme

ANNUAL GENERAL MEETING MALCOR MEDICAL AID SCHEME

Date: Time: Venue:

22 June 2016 08:00 – 09:00 16 Jersey Drive, Longmeadow Business Estate East, Longmeadow, Johannesburg

AGENDA

1 Constitution Chairman

1.1 1.2 1.3 1.4 1.5

Notice of meeting and welcome Present Apologies Confirmation of quorum Confirmation of motions submitted

2 Minutes of the previous meeting Chairman

2.1 Annual general meeting held on 24 June 2015

3 Annual financial statements Chairman

3.1 Annual financial statements for the year ending 31 December 2015

4 Appointment of the auditors Chairman

4.1 Harris, Dowden & Fontaine

5 Appointment of trustee Chairman

6 Submitted motions Chairman

6.1 To be announced

7 General Chairman

8 Closure Chairman

Any member who is entitled to attend and vote at a general meeting of the Malcor Medical Aid Scheme shall have the right to appoint a proxy, who must be a member of good standing with the Scheme, to vote in his stead. A proxy form is enclosed. Notices of motions to be placed before the annual general meeting must reach the principal officer, c/o Scheme, P O Box 1181, Parklands, 2121 or facsimile (011) 539 7208 by no later than 15 June 2016. Note: The Malcor Medical Aid Scheme annual financial statements for the year ended 31 December 2015 are available on the Scheme’s website or from the Malcor Medical Aid Scheme by calling 0860 100 698. Please log in to www.malcormedicalaid.co.za to obtain these documents. Alternatively, if you are an employee of the group, you may request a copy from your employer contact person. A limited number of copies of the annual financial statements will be made available at the annual general meeting. Attached:

Minutes of the annual general meeting held on 24 June 2015

Proxy form

ANNUAL GENERAL MEETING: MALCOR MEDICAL AID SCHEME MINUTES OF THE PRIOR MEETING

Date/ time: Tuesday, 24 June 2015 at 08:30

Venue: Malcor Medical Scheme Office, 16 Jersey Drive, Longmeadow Business Estate East, Longmeadow

Present - Members:

Mr Dick Roseveare Mr Bert Marais (via telecon) Mr Clinton Van Zitters Mr Frank Thayer Mr Geoff du Preez Mr Warren Gates Mr Dorcas Kulwa Mr Peter Dorfan Ms Alison Lowes Ms Naomi Buchna Ms Lizette Du Plessis Ms Sanet Engelbrecht Ms Cornelia Campher Ms Antoinette Matthyser Ms Esther Morgan Ms Monica Coetzee Mr Samuel Maakganoto Ms Desse Ivanova Mr Anthony Parker

Chairman

Present - Non-members:

Mr Stephen Johnston Ms Nicole Ford Ms Nadia Ferreira Ms Safiya Osman

Apologies: Mr Riaan Verster Ms Lynette James Mr Ivan O’Sullivan Mr Juandre Els

ITEMS MINUTED

1. CONSTITUTION ACTION

1.1. Notice of meeting and welcome The chairman, Mr Roseveare, opened the meeting at 08:30 and welcomed all attendees to the meeting. The chairman requested that the notice of the meeting be taken as read. This was unanimously agreed to. Proposed by Mr Dorfan and seconded by Ms Lowes.

1. CONSTITUTION ACTION

1.2. Present

The chairman confirmed the attendance.

1.3. Apologies

The chairman confirmed the apologies tendered.

1.4. Confirmation of quorum

The chairman confirmed that the necessary quorum of members was present in person and declared the meeting duly constituted.

1.5. Confirmation of motions submitted Motions had been submitted by one member and were presented under section 6 of the agenda.

2. MINUTES OF THE PREVIOUS MEETING ACTION

2.1. Annual general meeting held on 24 June 2014 The minutes of the twentieth annual general meeting (‘AGM’) of the Scheme held on 24 June 2014 were unanimously approved. Proposed by Mr Dorfan and seconded by Ms Lowes.

3. ANNUAL FINANCIAL STATEMENTS ACTION

3.1. Annual financial statements for the year ending 31 December 2014 The chairman noted that the annual financial statements of the Scheme for the year ended 31 December 2014, including the report of the trustees, had been available for inspection via the Scheme’s website and at the various pay points. The chairman asked if there were any questions relating to the annual financial statements. No questions were raised and the chairman therefore requested that they be formally adopted by the meeting. This was proposed by Mr Dorfan and seconded by Ms Lowes and unanimously approved.

4. APPOINTMENT OF THE AUDITORS ACTION

4.1. Harris, Dowden and Fontaine A recommendation was put forward that the current Scheme auditors, Harris Dowden & Fontaine, be retained to perform the 2015 audit, proposed by Mr Dorfan and seconded by Ms Lowes and unanimously approved.

Trustees

5. APPOINTMENT OF TRUSTEE ACTION

5.1. Juandre Els appointed to replace Neil Rubelli (retired) It was noted that the Board of Trustees (“BOT”) had recommended that the trustee vacancy caused by the resignation of Neil Rubelli be filled by the appointment of Juandre Els. At their meeting on 14 April 2015 the BOT approved this recommendation and formally appointed Juandre Els as a trustee of the Scheme with effect from 1 May 2015.

6. SUBMITTED MOTIONS ACTION

6.1. Motions Submitted

The chairman noted that Mr A M Parker, a member who was attending the meeting, had submitted thirteen motions for discussion at the meeting. Although the motions were nearly all framed as statements, the chairman concluded that the intent was to record that the Scheme was not complying with the statements and should be doing so. On this basis, using a PowerPoint presentation, he dealt with each motion as follows: 1. “The Board of Trustees complies with the law that a Trustee may not remain on the

Board for more than six years”.

The chairman noted that medical schemes in South Africa are required to comply with the following legislation:

Medical Schemes Act 131 of 1998 and

The Regulations distributed by the Council for Medical Schemes ("CMS")

Neither the Medical Schemes Act, nor the Regulations, places a limit on the trustees’ term of office. The Scheme rules (Rule 19, Governance) stipulate the following: 19.1 The affairs of the Scheme must be managed according to these rules by a Board consisting of at least five persons who are fit and proper to be trustees. 19.2 At least half of such trustees must be elected by members from amongst members to serve terms of office of three years each. The remaining trustees shall be appointed by the employer and shall serve terms of office of three years. 19.4 Retiring members of the Board are eligible for re-election.

The chairman noted that although the King III report recommended a director spent a maximum period of six years in office this was not applicable to medical schemes and the draft Medical Scheme Amendment Bill had not yet been promulgated into law and did not currently apply. Mr Parker expressed surprise at this information as he had understood the six year maximum term applied to trustees of medical schemes but accepted the explanation.

2. “The Board of Trustees has a nominations committee”

6. SUBMITTED MOTIONS ACTION

The chairman noted the Scheme rules (Rule 19, Governance) stipulate the following: 19.1 The affairs of the Scheme must be managed according to these rules by a Board consisting of at least five persons who are fit and proper to be trustees. 19.2 At least half of such trustees must be elected by members from amongst members to serve terms of office of three years each. The remaining trustees shall be appointed by the employer and shall serve terms of office of three years.

The chairman noted that neither the Scheme rules, nor the Act/Regulations stipulate that a nominations committee need be formed. He further noted that, without relinquishing the right of the employer to appoint trustees, with the exception of the appointment of individual trustees to fill interim vacancies arising between the three yearly election dates, it had been the recent practice of the BOT to leave the choice of all the trustees from those nominated for the position to the member election process. Mr Parker noted that there was not a clinically-skilled person elected as a trustee and as a result, he recommended that a nominations committee should be required to ensure that a clinically-skilled trustee was appointed. The chairman confirmed that all members of the Scheme had the authority to nominate whomever they wanted as a trustee and if they required a more medically qualified person as a trustee, they were welcome to nominate and then vote for that person. In conclusion, it was noted that the election of trustees would be left in the hands of the members as it had been in the past.

3. “The Board has a qualified medical person on the Board or access to independent

qualified medical persons so that the beneficiaries are properly represented.”

The chairman confirmed that the BOT had access to qualified medical personnel via the Administrator, Discovery Health (“DH”). DH's clinical panels refer cases, where appropriate, to the DH Clinical Policy Unit as well as to external medical panels and industry associations. Mr Parker advised that the previous medical advisor to the Scheme was unaware of certain medical terminology and stated that the BOT needed to have access to an independent medically-qualified professional who, if uncertain in any medical area, would conduct further investigations. The chairman advised that, in his experience, Sanlam Health's medical adviser had been very thorough in researching medical questions and cases brought to his attention by the Scheme. This was, however, now a historical issue. Mr Johnston further assured Mr Parker that the Scheme now had access to the DH clinical review panel which consisted of over 300 clinically qualified people as well as to various external review panels.

6. SUBMITTED MOTIONS ACTION

4. “The Chairman of the Board attend the full set of courses provided by the Medical

Council to familiarise him/her with the laws governing medical schemes.” The chairman is appointed by the trustees after being elected by members to the BOT or appointed by the employer. The chairman is therefore not required to attend different training that would be attended by any other trustee. The chairman confirmed that trustees have access to education sessions and forums held by the CMS. Trustees who attend such events report back to the BOT where appropriate. Furthermore, the BOT receives relevant industry-related information from the CMS (Circulars) and DH on a regular basis which covers the applicable legislation and industry trends and developments. These are included in each BOT pack and discussed under a specific agenda item.

Mr Johnson supported the statement made by the chairman and reiterated that trustees have access to, and make use of, the courses offered by the CMS and that DH provides the trustees with monthly regulatory environment updates. Mr Johnston also made mention of the DH trustee information sessions held several times a year. Mr Parker noted that he hoped the BOT would take full advantage of the resources and information made available to them in this regard,

5. “Senior executives of Malcor must attend the full set of courses provided by the Medical Council and attend continuing education courses.” The chairman noted that the Scheme is managed by trustees and not by senior executives. The chairman further advised, as noted under the previous heading, that trustees:-

have access to education sessions and forums arranged by the CMS. After attending such courses, the trustees report back to the BOT where appropriate; and

receive relevant industry-related information from the CMS (Circulars) and DH on a regular basis which covers the applicable legislation. These are included in each BOT pack and discussed under a specific agenda item.

Mr Parker was under the impression that the trustees had their own personal administrative assistant but after clarification, noted that the Scheme employed no such assistants directly but the trustees relied for such assistance on the staff of the Scheme's administrators and advisers.

6. “The Board has an independent complaints committee.”

6. SUBMITTED MOTIONS ACTION

Rule 29 of the Scheme rules stipulates that the Scheme shall manage disputes in a specific manner. 29.3 A disputes committee of three members, who may not be members of the Board, employees of the administrator of the Scheme or officers of the Scheme, must be appointed by the Board annually to serve a term of office of three years. At least one of such members shall be a person with legal expertise. The disputes committee is only convened in the event that a difference of opinion arises which cannot be resolved by the Scheme’s standard assessing and referral processes. Ms Ford further advised that the Scheme rules were very specific in their definition of a disputes committee and in their requirements as to who may serve on that committee. Thus the disputes committee must comprise of three members none of whom may be members of the BOT, employees of the administrators or officers of the Scheme. The disputes committee would thereby be independent of the Scheme. Mr Johnston added that a disputes committee would only be convened if all attempts to resolve the problem to the satisfaction of the member or provider by the Scheme's internal mechanisms had failed and a dispute was lodged with the Scheme. The disputes committee would only rule on whether the BOT had applied the rules of the Scheme or not and not on the merit of the Scheme's decision. The process is outlined in the Scheme's member guide and on the Scheme’s website. Mr Parker accepted this information and requested that he be sent a copy of this process. An alternative, and more common, method of disputes being resolved was for the member or provider who believed they had been incorrectly treated to lodge their complaint with the CMS who had permanent staff dedicated to the resolution of such complaints.

7. “The BOT must comply with the law that no clinical validation is allowed for treatment by a service provider on ordinary visits by beneficiaries.” The chairman noted that medical schemes in South Africa are required to comply with the following legislation:

Medical Schemes Act 131 of 1998 and

The Regulations

Regulation 5 specifies that diagnostic codes are required when claims are submitted. Regulation 5. Accounts by suppliers of services. The account or statement contemplated in section 59 (1) of the Act must contain the following—

6. SUBMITTED MOTIONS ACTION

( f ) the relevant diagnostic and such other item code numbers that relate to such relevant health service; The Scheme rules are registered with the CMS. The Scheme rules (Rule 16, Claims procedure) stipulate the following: 16.1 Every claim submitted to the Scheme in respect of the rendering of a relevant health service as contemplated in these rules, must be accompanied by an account of statement as prescribed, which shall contain the following: 16.1.6 the relevant diagnostic and such other item code numbers that relate to such relevant health service; Mr. Johnston noted that a diagnostic code is clinical validation of a claim and a requirement of law. It was agreed that all specific concerns Mr Parker had regarding diagnostic codes relating to his claims would be dealt with after completion of the formal agenda of the meeting had been completed by the Corporate Health Manager of DH, Ms Ferreira.

8. “The BOT ensure that Malcor does not allow a service provider’s treatment of a

beneficiary to be clinically invalidated without very good reason.” The chairman noted that in the event that a clinical review is required, the clinical review is conducted by the administrators to the Scheme by consulting with various clinical panels, both those employed by DH and those independent of it, , as well as by researching international best practice in the area in question. The clinical efficacy of the treatment as well as the cost-effectiveness of the treatment is taken into account. The overall impact to the Scheme is also considered. Cases requiring such review are reviewed on their individual merit. Service providers' treatments of beneficiaries were therefore not clinically invalidated without very good reason.

9. “The BOT ensure that Malcor is consistent in its application of cover provided by the Scheme. A change in administrators must not result in a reduction of benefits previously enjoyed by beneficiaries.” The chairman noted the Scheme rules prescribe the level of benefits members have access to, not DH. The Scheme rules are being applied in accordance with the manner in which they have been registered with the CMS. It was agreed that Ms Ferreira would assist Mr Parker with any specific issues he had in this regard after the formal agenda of the meeting had been completed.

N Ferreira

N Ferreira

6. SUBMITTED MOTIONS ACTION

10. “The BOT ensure that the names of the Medical Team and the Medical Advisors appear on any findings or reports that they are asked to submit.” The chairman noted that in terms of legislation, there is no legal requirement for the inclusion of medical provider details in respect of medical reporting. However, the member’s doctor may engage with the DH’s medical panel directly in the event that this is required. Mr Parker noted the avenue provided for such interaction.

11. “If prescriptions are given to a beneficiary for deficiencies that would be given for PMBs they should be covered by the Scheme.” The chairman noted that the legislation prescribes treatment and on-going care for 27 chronic conditions and 270 Diagnostic Treatment Pairs. This treatment and on-going care is defined in the Regulations and must comply with PMB algorithms and protocols. Not all care prescribed for PMBs is covered as PMB treatment. Mr Johnston noted the idea was not to refute treatment but if all PMB claims were fully covered, there would be a substantial increase in contributions resulting in the private healthcare system becoming unsustainable. It was therefore the responsibility of the Scheme to put these PMB baskets of care in place. It was noted that these baskets of care in respect of PMBs were aligned with the PMB treatment guidelines and algorithms. The challenge of medical schemes today was to provide members with access to appropriate care and treatment whilst, at the same time, controlling the mass influx of new technology, treatments and drugs that were flooding the market at exorbitant amounts, increasing costs significantly. Mr Parker noted he understood the point being made by Mr Johnston and would further discuss his individual case outside of the meeting.

12. “The Chairman of the BOT must report on the governance of the medical aspects of the Scheme at the AGM as well as financial governance. To provide evidence that the best interests of beneficiaries is their first consideration as required by the law.” The chairman noted Rule 27.1.2 of the Scheme rules prescribes that the notice of the AGM is to contain specified documents: - Agenda, the annual financial statements, auditor’s report and annual report These documents contain comprehensive information about governance and compliance and were furnished to members in the prescribed manner. Mr Parker noted the Scheme had complied with these requirements.

6. SUBMITTED MOTIONS ACTION

13. “The chairman of the BOT is to chair the AGM unless an apology is received and then his deputy must chair the AGM.” The chairman noted that legislation does not prescribe that the AGM be chaired by the chairman of the BOT. He further noted that the chairman of the BOT was unable to attend in person and as a result had requested that the Principal Officer chair the meeting on his behalf. Nevertheless, the chairman of the BOT was in attendance at the meeting via telecon. Mr Parker accepted the explanation.

7. GENERAL ACTION

7.1. General matters for discussion There were no further matters for discussion.

8. CLOSURE ACTION

There being no further business, the chairman thanked all present for their attendance and declared the meeting closed at 09:49.

Signed as a true record of proceedings. ________________________________ ______________________________ Chairman signature Date

Proxy form for the annual general meeting Malcor Medical Aid Scheme

Membership number:

I (name in block letters),

Of employer name

Of address

Being a principal member of the Malcor Medical Aid Scheme, hereby appoint:

1.

of or failing him/her

2.

of or failing him/her

3. the Chairman of the annual general meeting, as my proxy to vote for me on my behalf at the annual general meeting of the Scheme to be held on 22 June 2016 at 08:00.

Signed at _______________________________ on this __________ day of ________________ 2016. Signature: _______________________________ Assisted by me: (where applicable): ___________________________________ Important notes: 1. The person whose name is listed first on the proxy form and who is present at the annual general meeting

will be entitled to act as proxy to the exclusion of those whose names follow. 2. The completion and lodging of this form of proxy will not preclude the relevant member from attending the

annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such members wish to do so.

3. Forms of proxy must be lodged at, or posted to the principal officer c/o Eksteen Theron, the Malcor Medical Aid Scheme, Scheme, P O Box 1181, Parklands, 2121 or faxed to (011) 539-2708. Proxies to be received no later than 12h00 on 15 June 2016.