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Sanlam spells out the facts on demutualisation LAST Wednesday, March 31, marked Sanlam's cut-off date for policyholder eligibility for free shares in terms of their demutualisation. In a media announcement this week, Sanlam spelt out what this means to policyholders. Policyholders with an eligible policy as at 23:59 on March 31 1998 will receive free shares. This is provided they do not lapse or surrender their policies in the period leading up to the vote on the demutualisation proposal. Policyholders who take out polices after the cut-off date will not be eligible for free shares. In the case of policies maturing after the cut-off date, policyholders will still be eligible to receive shares in respect of that policy. If a policy is ceded to a third party, the new owner will receive the free shares only if Sanlam had been notified of the cession by close of business on March 31 1998. A cession registered after this date will not entitle the new owner to shares. Where a policy ownership change is registered with Sanlam after the cut-off date, the free shares will be allocated to the registered owner of the policy at close of business on March 31 1998. In the case of pension or provident funds, the fund itself is the policyholder. Therefore the trustees of the fund will decide on the application of free shares. If a policy matured before March 31 1998, the policyholder will not be eligible for free shares in respect of that policy. Changes to policy terms and conditions in the period leading up to the vote may affect a policyholder's entitlement to free shares in respect of that policy. If a contractual claim under a policy arises after the cut-off date, the policy will still be taken into account with regard to the free share allocation. However, if a claim arose on or before this date, for example, and the assured in terms of the policy has died, the policy will not be taken into account with regard to the free share allocation. Holders of units in Sanlam's unit trusts, clients of Sanlam Health and other Sanlam subsidiaries will not qualify for free shares. In the media announcement, Marinus Daling, executive chairman, commented: "This marks the next stage in the demutualisation process. We believe that demutualisation offers clear benefits for eligible policyholders, namely the chance to receive free shares which, if retained, will give them the opportunity to benefit from the potential growth of the company." Sanlam is currently in the process of asking its 2-million policyholders to confirm policy and personal details in order to assist in the allocation of free shares. Policyholders should reply to Sanlam as soon as possible to speed up the process. Sanlam says it is unable, at this stage, to tell individual policyholders whether they are eligible to receive free shares. Details of eligibility will be fully set out in a circular to be sent out before the vote. The basis of allocation for free shares has not yet been decided, but details of the allocation will be disclosed. Another question which Sanlam says it is often asked by policyholders is how much their shares will be worth. Their answer is that the price per share will be determined by the stock market when Sanlam is listed and will be subject to stock market conditions at the time of listing. Sanlam points out that the value of the free shares will change over time (and may rise or fall). If you would like an issue explained relating to the demutualisation of the two assurers, write to us at Demutualisation Watch/ BT Money, PO Box 1746, Saxonwold, 2132, or send a fax to (011) 280 5225, or email to btimes@tml.co.za This weekly column aims to keep you informed on the latest happenings in the demutualisation process of both Sanlam and Old Mutual. The column will also cover educational issues. The two assurers offer help-line services to assist their policyholders with queries on demutualisation: Sanlam - 0800 60 33 55 Sanlam group benefits - 0800 60 33 66 Old Mutual - 0800 60 9000 Top of page | Home Page | News | BT Money | Survey | Companies | People | Appointments | World | Markets | Trends | Columns | News Maker | Money Guides | Labour Guides | Calculators | Search | Archive | E-Mail us |