Free shares mania has broken again as Canada Life prepares for demutualisation. Some 54,000 people in the Republic qualify for shares with the average allocation expected to be between £1,746 and £2,583.

Allocation is determined using a two-part formula, according to Canada Life. First, a fixed allocation of 100 shares worth between £831 and £1,230 is granted to all policy-holders. This represents approximately 25 per cent of the total shares.

The second part of the formula is variable and based on a policy's premium size, total cash value and length of time held.

A quarter of the free shares is being allocated based on the size of the annual premium. The rest is allocated on the size of the policy multiplied by the length of time it has been held. Of the 54,000 who qualify for shares, 30,000 took out policies in the last 18 months. Since with-profits policies have nil cash value for two years, these "carpetbaggers" are expected to receive no more than the minimum 100 share allocation.

Less than a third of the 180,000 Canada Life policy-holders in the State qualified for free shares due to restrictive Canadian legislation.