17 November 2009

Mr Kevin Creasey
Mainsail Financial Services
P O Box 43735
Fish Hoek
7974

Dear Kevin

National Media Provident Fund (Scheme: 7073)

Metropolitan Employee Benefits would like to advise that the review of the premium rate
effective 1 January 2010 has been completed.

The rate review was based on an analysis of the Fund’s claims experience, as well as factors
likely to have an impact on mortality and morbidity in future. The factors taken into account
include:
- Demographic changes in the membership structure
- Increased exposure to the AIDS pandemic
- Geographic spread of the membership
- The greater access to HIV/AIDS treatment

A recent analysis of the above scheme’s claims experiences has highlighted a significant
deterioration in the Group Life Assurance. (We have conducted a detailed analysis of the
overall experience of the Fund as well as an analysis of the death claim rates and notification
trends.) The death claim rates are unstable and on an upward trend. The average age at
death still shows a downward trend and at least, this could be a result of worsening Aids
mortality experience. For more discussion about the impact of Aids on the fund’s mortality,
please contact Nathea Nicolay at (021)917-3090.

Group Life Assurance

Excluding the four death claims that were incurred as a result of the fire outbreak at the
factory, the Group Life Assurance claims experience shows a steady increase in the claim
incidence rate over the last two periods running from 1 January 2008 to 30 September 2009.
The claims incidence per thousand lives has increased from 5 claims per annum to 15 claims
per annum, which is a 200% increase in two years. As a result, Metropolitan EB has suffered
a significant loss, with the ratio claims to premiums being 130% during the three year period
(running from 1 July 2006 to 28 February 2009). Further, we have noticed that the fund
experienced longer claims delays. During the last three quarters it took between 4 and 6
months for claims to be submitted to Metropolitan. Longer claims delay increases the
reserves for late notification (IBNR).

In terms of amounts, 26 death claims were incurred during the period 1 January 2008 to 30
September 2009 totalling to R 3 431 008. This does not include reserves for late notification
(IBNR) that we estimate it to total R 422 500. The total net premium for this period is only R 2
969 376, therefore the total expected loss suffered by Metropolitan is R 884 132.

In light of this experience, we feel the current Group Life Assurance premium rate is
insufficient to cover the expected future running costs of the scheme. We therefore regret to
inform you that we hereby give notice in terms of clause 12 of the policy contract of a
premium rate increase with effect from 1 January 2010.
We understand the fire outbreak that fund had to go through, in which at least 11 employees
died. We would like to assure the fund that we have factored it into our rate, so that the new
rate is not influenced negatively by the once off event. Although the ratio of claims to premium
was 130% on average the last two years, we are not increasing our rate by 30% but are
proposing a 12.5% increase. This increase as explained above is due to poor Aids mortality.

Revised rate that is effective 1 January 2010 is detailed in the table below:

Current rate Revised rate effective 1

January 2010
Group Life Assurance 3.34% 3.75%

The above rate excludes broker commission and is guaranteed for one year.

Should this data change in future (for example, there is an unexpected influx of claims in
respect of past periods), to the extent that it is material to the assessment of the rates, we
reserve the right to change the rates provided in this letter retrospectively from the effective
date of change.

Attached is a copy of the claims experience for your reference.

Please don’t hesitate to contact me if you have any questions regarding the above.

Yours sincerely

Vincent Nkwambi
Risk Solutions: Actuarial Services
Tel: (021) 940 6444
Fax: (021) 917 3574
E-mail: vnkwambi@metropolitan.co.za

Metropolitan Life Limited is an authorised Financial Services Provider

HEAD OFFICE OF THE INSURER

Name : Metropolitan Employee Benefits

Telephone : (021) 940 5768
Fax : (021) 940 5193

Physical Address : Parc Du Cap 5 Postal Address: PO Box 2212

Mispel Road Bellville
Bellville 7535
7530

QUERIES/COMPLAINTS

Should there be any queries or complaints that cannot be raised via the
above-mentioned Account Executive, one of the following telephone numbers
can be used :

Cape Town : (021) 940 5686

Johannesburg : (011) 761 4123

COMPLIANT OFFICER

Name : Nadia Kirsten

Telephone : (021) 940 3080

The Compliant Office will ensure that Metropolitan’s practices are in accordance with
the Policyholder Protection Rules.
STATUTORY NOTICE TO LONG-TERM INSURANCE POLICYHOLDERS
IMPORTANT – PLEASE READ CAREFULLY

DISCLOSURE AND OTHER LEGAL REQUIREMENTS

1. (This notice does not form part of the Insurance Contract)As a long-term insurance
policyholder, or prospective policyholder, you have the right to the following
information: The intermediary (insurance broker or representative) dealing with you
must at the earliest reasonable opportunity disclose:

(a) Name, physical and postal address and telephone number.

(b) Legal capacity: whether independent or representing an insurer or brokerage.
(c) Concise details of relevant experience.
(d) Insurance products that may be sold.
(e) Insurers whose products may be marketed.
(f) Indemnity cover held – Yes/No.
(g) Shareholdings in insurers if 10% or more.
(h) Name of insurers from which the intermediary received 30% or more of total
commission and remuneration during the past calendar year.

(The intermediary must be able to produce proof of contractual relationship with and
accreditation by the insurers concerned).

2. Your right to know the impact of the decision you elect to make:

(a) The intermediary or insurer dealing with you must inform you of:
o The premium you may be paying.
o The nature and extent of benefits you may receive.
(b) If the benefits are linked to the performance of certain assets:
o How much of the premium will go towards the benefit?
o To what portfolio will your benefits be linked?
(c) The possible impact of this purchase on your finances.
(d) The possible impact of this purchase on your other policies (affordability).
(e) The possible impact of this purchase on your investment portfolio
(affordability).
(f) The flexibility of changes you may make to the proposed contract.
(g) The contract terms of the product you intend to purchase.

(It is very important that you are quite sure that the product or transaction meets your
needs and that you feel you have all the information you need to make a decision.)

3. Your right when being advised to replace an existing policy.

You may not be advised to cancel a policy to enable you to purchase a new policy or
amend an existing policy, unless:
(a) The intermediary identifies the policy as a replacement policy.
(b) The implications of cancellation of the policy are disclosed to you such as:
o The influence on your benefits under the old policy.
 o The additional costs incurred with the replacement.
(a) The insurer which issued the original policy will contact you, you are advised to discuss the
matter with its representative.

4. Your right to be informed by the insurer.

The insurer will forward you documentation confirming policy details as discussed in
paragraph 2 of this Notice, which will also include:

(a) The name of the insurer.

(b) The product being purchased.
(c) The cost in Rands of the transaction and specifically:
(i) the loadings, if any;
(ii) the initial expense; and
(iii) the amount of commission and other remuneration being paid to the
intermediary.
(d) In the case of policies with an investment element, the ongoing expense and any other
fees or charges payable.

o The summary in terms of Section 48 of the Long-term Insurance Act, 1998.

o The contact number and address of the complaints and compliance officers of the insurer.

(The insurer may disclose the above information on a generic basis with additional
policyholder specific disclosure).

5. Your right to cancel the transaction

In most cases, you have a right to cancel a policy within 30 days after receipt of the
summary contemplated in Section 48 from the insurer. The same applies to certain
changes you may make to a policy. The insurer is obliged to confirm to you whether you
have this right and to explain how to exercise it. Please bear in mind that you may not
exercise if you have already claimed under the policy or if the event, which the policy
insures you against, has already happened. If the policy has an investment component,
you will carry any investment loss.

6. Serious warning

o It is very important that you are quite sure that the product or transaction meets your
needs and that you feel you have all the information you need before making a decision.
o It is recommended that you discuss with the intermediary or insurer the possible impact
of the proposed transaction on your finances, your other policies or your broader
investment portfolio. You should also ask for information about the flexibility of any
proposed policy.
o Where paper forms are required, it is advisable to sign them only once they are fully
completed. Feel free to make notes regarding verbal information, and to ask for written
confirmation or copies of documents.
o Remember that you may contact either the Long-term Insurance Ombudsman or the
registrar of Long-term Insurance, whose details are set out below, if you have any
concerns regarding a product sold to you or advice given to you.
7. Particulars of Long-term Insurance Ombudsman
PO Box 45007
CLAREMONT
7735
Tel: (021) 674 0330
Fax: (021) 674 0951

8. Particulars of Registrar of Long-term Insurance

Financial Services Board
PO Box 35655
MENLO PARK
0102
Tel: (012) 428 8000
Fax: (012) 347 0221

(You may be requested to sign a copy of this document)

Metropolitan Life Limited is an authorised Financial Services Provider.

ACCEPTANCE FORM

I/We, the undersigned, declare on behalf of ................................... (the employer/

Fund) that the last-mentioned decided on ...../...../..... (date) to accept this proposal for
insured employee benefits issued by Metropolitan.

I/ We agree to accept the benefits, premiums and terms and conditions set out in this
proposal.

Commencement Date : ...................................................

Signed at ................................. this........... day of .................20.....

.................................…....
On behalf of employer/ Fund

.........................................
Name (in block letters)

....................................……
Capacity

Witness: (Signature) : ...............................…

(Name in block letters) : ..................................

Metropolitan Life Limited is an authorised Financial Services Provider