CORRECTION: S&P CORRECTS ENROLLMENT FIGURES FOR BCBS RELEASE.

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/27/98--Standard & Poor's today affirmed its double-'A'-minus counterparty credit and financial strength ratings on Blue Cross and Blue Shield of South Carolina. (In BW480 that ran Monday at 9:01 p.m. (PST)/12:01 a.m.(EST), the enrollment figures were incorrect. A corrected version of the press release follows.) -0-

S&P Affirms Blue Cross and Blue Shield of SC AA- Ratings

Standard & Poor's today affirmed its double-'A'-minus counterparty credit and financial strength ratings on Blue Cross and Blue Shield of South Carolina. The outlook is stable.

The ratings are based on the following major rating factors: -0-

--   Excellent managed-care capabilities: Blue Cross and Blue Shield
     of South Carolina controls approximately 35% of the private
     health insurance market in the state. The company offers a wide
     variety of managed-care products through its subsidiaries,
     Companion Healthcare Corp. and majority owned Preferred Health
     Systems Inc.
--   Solid enrollment growth: The plan's total enrollment has grown
     significantly during the past five years. Total enrollment as of
     June 1998 increased to 1,222,000 members up from 1,207,000
     members at year-end 1997, and 1,073,000 members in 1996. Much of
     the growth has come from the plan's HMO subsidiaries, whose
     membership has grown to 158,000 at year-end 1997.
--   Strong diversification strategy: The plan's corporate strategy
     has focused on developing its South Carolina business profile
     primarily, and then leveraging these core competencies to support
     growth by increasing scale and business capacity and diversifying
     the overall corporate revenue streams into related and unrelated
     lines of business, such as life and property/casualty insurance
     and technology. The company is the largest processor of TRICARE
     claims in the U.S. and the fifth-largest Medicare contractor to
     Health Care Financing Administration.
--   Excellent operating performance: The plan's financial performance
     has been excellent for the past five years. This is due to
     continued strong benefit management, excellent provider
     contracting, benefits derived from its strong market position,
     and the large proportion of expense-based business that
     contributes significantly to reducing overhead. Pretax income was
     $48.5 million in 1997 (consolidated basis), compared to $57.6
     million in 1996, and $46.0 million in 1995.
--   Strong capitalization: Capitalization has shown continued growth
     during the past five years and is currently at an excellent
     level. Total statutory capital was approximately $250.0 million
     as of June 30, 1998, up from $230.5 million in 1997, and $191.9
     million in 1996.
--   Good investments: The plan has good quality investments with
     adequate liquidity, but Standard & Poor's views its portfolio to
     be fairly aggressive based on the proportion of affiliate
     investments that represent 39% of total invested assets.

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OUTLOOK/EXPECTATIONS: STABLE

Standard & Poor's expects the plan to continue to have enrollment gains of 2% to 3% in 1998 through 1999. Additionally, Standard & Poor's expects the plan's consolidated pretax earnings to be $44 million to $48 million and capitalization to be 165%-175%. ---CreditWire.