Sanlam Puts Aside Money for Potential Surplus Funds Payout

Surplus funds to be payed out to Sanlam R600 million payout expected by Sanlam.

Industry analysts are eyeing a massive potential payout that Sanlam may need to make to the beneficiaries of two health insurance funds.

South Africa's largest insurer has reportedly put aside millions of rands in case it will need to settle claims by Topmed and Selfmed.

According to claims, Sanlam benefitted from and used surplus funds from these two health insurance funds during the 1990s.

As such, Sanlam is facing a potential payout of up to R600 million.

There are around 150,000 beneficiaries involves, spread over the two funds.

According to Siobhan McCarthy, speaking for Sanlam, the group has "adequately provided for settlement of the Topmed and Selfmed issue."

She said that the issue is "close to finalization".

No further details would be provided.

The Business Report has also commented that Sanlam may be facing further claims of up to R275 million after reportedly using funds and surplus money belonging to members of the Sentrachem Group Pension Fund.

Mc Carthy said that more details about this case would be posted when Sanlam releases its annual report in March, 2011.

In the past three months, Sanlam has been forced to pay up to R1 billion for its role in the use of surpluses for medical aid and retirement funds.

Last year, Sanlam reached a R333 million settlement with the curator of a further four funds - Picbel, Cortech and two Datakor retirement funds.

The group still faces a potential challenge by the FSB to an alleged immunity against prosecution issued by the National Prosecuting Authority for its role in stripping of the surpluses of retirement funds in the 1990s.