At a Special General Meeting held on 19th October 2016, shareholders of the Federated Employers Mutual Assurance Company (RF) Propriety Limited (FEM) approved a distribution of R1.035 Billion to qualifying policyholders in respect of a once-off special merit rebate, which was scheduled to be paid before the end of November 2016.
The purpose of the payment was to reduce the Company's accrued surplus and thereby align its capital position to board-approved long term strategic targets and to recognise and reward those policyholders who have made positive contributions due to their focus on health and safety.
Whereas annual merit rebates are determined based on policyholders underwriting results in each particular year, the special merit rebates were designed to recognise policyholders' contributions to the company's underwriting profits over the long-term. Consequently, the principles applied to determine policyholders' qualification for the special merit rebate and their individual allocations are similar to those used for the annual merit rebate calculations, but have been adapted to cater for the longer calculation period applicable and is directly related to health and safety performance.
Association Member MET Builders is a long serving FEM client and was one of the recipients of this special merit rebate. They were also the recipient of the FEM Platinum award in 2014 for the policyholder with the lowest accident frequency and loss ratio combined with the highest number of employees calculated as a factor, over a ten year period. As a result of their due diligence and their relentless commitment to Occupational Health and Safety, their rebate exceeded R900 000.
