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Metropolitan Holdings Ltd - Settlement between South African life industry and
the National Treasury
METROPOLITAN HOLDINGS LTD
(Incorporated in the Republic of South Africa)
Registration number: 2000/031756/06
ISIN: ZAE000050456
JSE Share Code: MET
NSX Share Code: MTD
("Metropolitan")
Settlement between South African life industry and the National Treasury
Following a number of rulings by the pension funds adjudicator, Vuyani Ngalwana,
against most of the major life insurers, the industry and treasury announced the
detail of a settlement on Monday, 12 December.
This brings an end to months of speculation and uncertainty amongst stakeholders
with regards to how the industry was going to react to increased pressure on its
lack of disclosure of costs relating to retirement annuity and endowment
products and penalties incurred when clients choose to terminate their policies
or reduced their monthly premiums.
The total amount that has been earmarked by the industry to compensate
policyholders is around R2.6 billion, of which Metropolitan"s share, to be
funded by shareholders, is of the order of R150 million to R165 million. The
overall embedded value effect is estimated to be around 4% of the most recently
reported value of in-force. It is anticipated that there may be an additional
administrative cost of up to R7.5 million relating to the implementation of
these proposals.
Says chief executive, Peter Doyle: " As a member of the Life Offices"
Association (LOA), I am extremely pleased that the different parties have come
to an agreement on this matter in the interests of all stakeholders. The long-
term insurance industry in SA remains the biggest mobiliser of personal savings
and the uncertainty caused during the past year has not been in the interest of
anyone."
Metropolitan remains committed to innovative and appropriate product design,
offering all its clients a realistic value proposition and with this in mind
cost containing initiatives remain an on-going priority throughout the group.
Once details relating to the agreement have been finalised and ratified more
specific information will be communicated to the affected policyholders.
ISSUED BY NICO OOSTHUIZEN
MANAGER: INVESTOR RELATIONS
METROPOLITAN HOLDINGS LIMITED
TEL 0219406111 OR 0832857092
DATE 12 DECEMBER 2005
QUERIES PETER DOYLE
GROUP CHIEF EXECUTIVE
METROPOLITAN HOLDINGS LIMITED
TEL 0219405681 OR 0828802690
WILHELM VAN ZYL
GROUP ACTUARY
METROPOLITAN HOLDINGS LIMITED
TEL 0219406637 OR 0825753841
Date: 12/12/2005 05:59:27 PM Produced by the JSE SENS Department
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