industry, reports Roger Crombie . Old Mutual has decided to follow the trend, resulting in a bonus pay-out to members when shares are publicly traded.

A small number of Bermuda residents will enjoy a windfall of at least 400 ($640) -- if local courts permit -- from a decision by the members of Old Mutual, a South African-based life insurer, to change its corporate structure.

As its name suggests, the insurer has until now been registered in South Africa as a `mutual', which is an organisation exclusively owned by those who use its services.

The decision by those members to seek a public quotation for the shares of what will be a new company (a process called `demutualisation') will result in the option for a bonus pay-out to the members when their shares are publicly traded.

Demutualisation is a hot topic in the insurance industry today. Mutuals are less able to raise capital on the international markets than publicly-quoted companies. Some of America's largest life insurers, who remain mutual companies, are considering demutualisation.

Some 99.5 percent of votes cast last Thursday by the members of Old Mutual were in favour of the move, with only 0.3 percent voting against.

Next Friday, a Bermuda Court will hear a petition on behalf of South African Mutual Life Assurance Society, the owner of Old Mutual Life Assurance Company (Bermuda) Ltd. to sanction the transfer of long-term business from the Society's branch in Bermuda to an exempted life insurance company incorporated in Bermuda as part of the process of change.

Mike Levett, chairman and CEO of Old Mutual, was in Bermuda last summer, in the company of the South African Ambassador to the United Nations, Franklin A.

Sonn.

Late last week, Mr. Levett said: "This (decision to demutualise) is a milestone in the history of Old Mutual. We are delighted that so many members took part and voted `yes'. We can now move forward with the implementation of our plans for the benefit of our members.'' A company spokesman said that the change would benefit "not only South African and British policyholders, but also members in Bermuda, Malawi, Namibia and Zimbabwe, subject to the approval of the courts in each country.'' He could not immediately say how many Bermuda residents would be affected, nor identify them to The Royal Gazette , but said he thought that "there were a few''.

The vote is being portrayed in South Africa as a "moment of economic empowerment''. The windfall payments will equate to more than a year's salary for a large proportion of the insurer's South Africa-based members.

In Namibia, the vote was described as having "the potential to become one of the most significant economic empowerment exercises ever in this country'' by Old Mutual Namibia's general manager Bertie van der Walt.

But the head of the Bank of Namibia's research department, Dr. Meshack Tijrongo, warned that a burst of consumer spending following demutualisation might jeopardise monetary control or squeeze out investment lending.

The new publicly-held company, Old Mutual plc, will be listed in London as well as Johannesburg. Shares are expected to begin trading towards the end of June, with the initial price estimated at around 11 to 14 rand, or about $2 at today's exchange rates.

The result of the ballot, announced at a special general meeting, culminated an 18-month programme of preparation.

The insurer has run operations in the UK since the early part of the century, owning Old Mutual International and Old Mutual Asset management in the UK.