A

ANS
National Supplementary Health Agency. It is the regulatory agency linked to the Ministry of Health responsible for the health sector in Brazil.

C

CADE
Conselho Administrativo de Defesa Econômica, Brazil’s antitrust agency.

CASH MEDICAL ACCOUNSTS
Corresponds to medical care expenses adjusted by (i) the provision for reimbursement of SUS, (ii) IBNR, and (iii) depreciation and amortization.

CASH MLR
Ratio of Cash Medical Accounts to total net revenue.

COPARTICIPATION
Percetage paid for each medical service in addition to the monthly payment.

D

DISALLOWANCE
Refers to the nonpayment by health plans of amounts related to the services, medications, materials or fees charged by providers (hospitals, clinics, laboratories and others) and autonomous healthcare professionals.

G

GNDI
Grupo Notredame Intermedica.

H

HMO
Health Maintenance Organization, which offers employers or groups a solution for all the healthcare needs of their employees or members at lower costs negotiated with specific doctors, hospitals and clinics. These specific providers must be used by the employee at the lower rates to be offered to the health insurance plan.

I

IGR
General complaints index. Its purpose is to present a behavior thermometer of the sector’s operators in attending to the problems pointed out by the members. It includes the average number of complaints from members received in the previous three months and classified up to the datas date of extraction. The index is based presented per 10,000 members.

IPO
Initial Public Offering.

IBNR
Provision for Events Incurred but Not Reported is a provision that is estimated actuarially to meet the payment of events incurred but not booked by the operator.

L

LOSS RATIO
Ratio of total expenses with medical services to total net revenue.

M

MINIMUM ADJUSTED EQUITY (PMA)
In order to operate in the healthcare market regulated by the ANS, the health plan operator must keep the adjusted shareholders’ equity for economic purposes as established by the ANS. Minimum adjusted equity is calculated as equity less non-current intangible assets, tax credits arising from fiscal losses, deferred sales expenses and prepaid expenses. Medical loss ratio: index that shows the relationship between healthcare expenses and total revenues from healthcare operations (effective payments).

N

NATIONAL ACCREDITATION ORGANIZATION
It is a non-governmental and non-profit entity that certifies health services quality in Brazil, focusing on patient safety.

P

PDA
Provision for doubtful accounts – Provisions recorded as expenses even though they have yet to be incurred. A provision is accrued when a company creates a reserve representing the expected loss of an asset or an estimated expense.

PPO
Preferred Provider Organization, which offers lower costs to billed members in their health insurance plans. Similar to an HMO, except that employees or members may choose the physician of their preference instead of being limited to HMO providers. A member may choose between a member and a provider that is not a member.

PROVISION FOR REMISSION
Refers to the contractual obligations arising from the remission of considerations/premiums related to the coverage of medical services.

PROVISION FOR SUS
Charges for the use of SUS by the members of the operator.

R

RESTRICTED CASH
Refers to the Company’s cash balance held with the ANS to cover technical provisions.

REQUIRED SOLVENCY
The greater of (a) 20% of considerations in the last 12 months or (b) 33% of the annual average of events in the last 36 months, multiplied by the percentage of deferral, in accordance with the curve provided by the ANS.

S

SOLVENCY MARGIN
At a pre-established price, it corresponds to the adjusted shareholders’ equity sufficiency to cover the greater oh the following amounts: (i) 20% of the revenues from the gross payments or (ii) 33% of the last 36 months events annual average.

SUS
Sistema Único de Saúde, Brazil’s public healthcare system, which was inspired by the British National Health Service.

U

UNEARNED PREMIUMS RESERVE
It is characterized by the accounting record of the charged by the operators to hedge contractual risk proportional to the days not yet elapsed within the monthly coverage period, to be appropriated as revenue only in the subsequent period when the term is actually incurred.