HEALTH AND SAFETY GRANT

This year, the Board of FEM has approved, in principal, a once off Health and Safety grant to all policyholders who qualify (subject to certain conditions). This grant will be given in addition to the merit rebate paid in respect of a favourable loss ratio.

The conditions are as follows:

There must be a fully maintained active policy with FEM in June 2007.

The policy must have been with FEM for at least 2 years I.e. an actual wage figure for 2005 (01 March 2005 to 28 February 2006) must

have been declared on the 2006 return of earnings.

The payment of the 2007 total premium must have been made by no later than 30 June 2007.

The size of the grant will be based on a percentage of the premium of the policyholder as percentage of the total for the period being reviewed. This should equate to approximately 30% of 2005 actual premium, but this criteria is still under review and will be finalized in July.

The intention is to pay out this Health and Safety Grant in November 2007 if all the criteria have been finalized and approved by that time.

The purpose of the grant is to promote ongoing company management commitment to health and safety leadership and accountability. In addition, the grant will assist policyholders with poor safety records to initiate and enhance workplace health and safety strategies and practices.

FEM together with our policyholders need to develop new ways to establish and maintain an effective health and safety culture in a changing economy so that all employers take their responsibilities seriously, the workforce is fully involved and the risks are properly managed.

The staff and management of FEM strive to provide the most efficient and effective compensation service to our policyholders and their employees. Although the construction industry is booming and there is more work available than most companies could wish for, we urge you to not forget about health and safety.

No employee in our country should be dying for a job.