Corporatisation Milestone Leading Up to Liquidation of NTUC Income Insurance Co-operative Limited (Co-op)

Corporatisation FAQs

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  • Over the years, the operating environment of the co-operative, NTUC Income Insurance Co-operative Limited (Co-op) had undergone significant shifts. These included a mature domestic market, evolving regulatory expectations and requirements, as well as increased competition from insurers with extensive distribution scale and access to growth channels and markets locally and regionally. The latter was further compounded by technology players entering the insurance sector and playing to customers’ increasing demand for more diverse and targeted products and digital-first solutions.
  • While the Co-op had been agile in responding to these market shifts, it aimed to achieve operational flexibility and access to more strategic growth options through corporatisation in order to compete on equal footing with other insurers in the market and be better placed to address future challenges and to serve customers better.
  • As part of the corporatisation process, NTUC Income Insurance Co-operative Limited (Co-op) changed its legal form from a co-operative to a corporate entity that is governed by the Companies Act and transferred its whole insurance business (including existing insurance products and policies) to the new corporate entity, Income Insurance Limited (Income).
  • The transfer to Income was confirmed by the General Division of the High Court of Singapore on 14 June 2022 and completed on 1 September 2022 via a ‘Scheme of Transfer’ under the Insurance Act of Singapore and other transfer agreements. The Co-op will be liquidated as soon as practicable.
  • The new corporate entity, Income Insurance Limited (Income), is committed to its purpose to empower all Singaporeans, including those who are underserved, to improve their financial well-being and will continue to explore ways to serve customers better. Income remains rooted to extend real care to people in Singapore via its insurance propositions and social causes just like how it was first set up in 1970 to offer insurance protection and to fulfil a genuine social gap in Singapore.
  • Corporatisation changes only the legal form of the co-operative, NTUC Income Insurance Co-operative Limited (Co-op) to a corporate entity that is governed by the Companies Act.
  • The new corporate entity, Income Insurance Limited (Income), is retaining the current Board and management team of the Co-op, who are continuing to steer and grow Income by leveraging its strong brand equity, purpose and business growth plans.
  • Income is also holding the same shareholding in subsidiaries that were previously held by the Co-op.
  • NTUC Enterprise (NE) continues to be the majority shareholder of Income, which remains a social enterprise under NE’s network of organisations.
  • All existing assets and liabilities, including insurance policies issued by the Co-op, and personal data collected by the latter, had been successfully transferred to Income via a ‘Scheme of Transfer’ under the Insurance Act of Singapore and other agreements entered between the co-operative and Income. All existing policy coverage, benefits and terms remain unchanged.
  • Customers can continue to tap on existing service branches, network of advisors, customer support and online portals to assist them on their insurance matters.

For Policyholders

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  • The corporatisation exercise has no impact on policyholders and there is no action required from policyholders.
  • The insurance policies issued by the co-operative, NTUC Income Insurance Co-operative Limited (Co-op) and personal data collected by the latter, had been successfully transferred to the new corporate entity, Income Insurance Limited (Income) via a ‘Scheme of Transfer’ under the Insurance Act 1966 and other agreements entered between the Co-op and Income. All existing policy coverage, benefits and terms remain unchanged.
  • For existing insurance policies, there is no need for Income to issue new contracts to policyholders and Income will not be doing so.
  • Policyholders can continue to tap on existing service branches, network of advisors, customer support and online portals to assist them on their insurance matters.
  • With corporatisation, policyholders can look forward to more accessible, competitive, and comprehensive solutions, including innovations that speak to today’s digital-first customers.
  • No, the corporatisation exercise will not affect the validity of insurance claims.
  • The new corporate entity, Income Insurance Limited (Income) now oversees the processing and payment of claims to policyholders if the claims are approved. Policyholders do not need to make a new claim submission to Income if they already made a prior submission to the Co-op, NTUC Income Insurance Co-operative Limited.
  • If you are currently paying premiums via GIRO, PayNow or credit card arrangements, you can continue to do so after corporatisation.
  • For premium payments by cheque, internet banking, AXS and new GIRO payment applications, please ensure that payments are made payable to the new corporate entity, Income Insurance Limited from 1 September 2022.
  • There is no change to the existing terms, benefits, and coverage of existing policies, including how they will be administered because of corporatisation.
  • Premium adjustment is independent of the corporatisation exercise. It stems from the need to keep pace with policyholders’ needs vis-a-vis the scope of the insurance coverage that the insurer offers, medical advancements, and its claims experience for the year. As such, policy premiums are adjusted from time to time to meet these objectives.
  • No, the policy renewal cycle does not change post corporatisation. Policyholders are not required to renew their policies outside of the renewal cycle because of the corporatisation exercise. Policy terms, benefits, and coverage do not change because of the corporatisation exercise.
  • For insurance policy beneficiaries, the new corporate entity, Income Insurance Limited will recognise valid nominations made in accordance with the requirements of Section 45 of the Co-operative Societies Act (CSA) and valid nominations made in accordance with requirements of Section 132 or 133 of the Insurance Act 1966, unless they have been revoked, or a new nomination has been made (under the Insurance Act 1966) prior to 1 September 2022.
  • It will not be necessary for life policyholders to take any action in respect of their existing nominations. All nominations which remain valid and are not revoked immediately prior to the 1 September 2022 will be transferred to, recognised by and binding on Income Insurance Limited on and from 1 September 2022.
  • Nevertheless, we encourage policyholders, who had made such nominations before 1 Sept 2009 (under the CSA) to refresh their nominations so that it is effective under the Insurance Act.
  • Policyholders may wish to refresh their nomination to include any changes in their personal circumstances or beneficiaries.
  • It is not necessary, as the reference to the insurance policies issued by the co-operative, NTUC Income Insurance Co-operative Limited (Co-op) is correct at the time when the will was made. All existing insurance policies had been successfully transferred from the Co-op to the new corporate entity, Income Insurance Limited as part of the corporatisation process.
  • New nominations are made either pursuant to Section 49L(2) (now renumbered as Section 132) of the Insurance Act or a revocable nomination under Section 49M(2) (now renumbered as Section 133) of the Insurance Act.

For Stakeholders/ Co-operative (Co-op) Members

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  • Existing institutional and ordinary members of the co-operative, NTUC Income Insurance Co-operative Limited (Co-op) who hold Co-op shares will receive shares of the new corporate entity, Income Insurance Limited (Income), on a one-for-one basis. All shareholders (whether institutional or ordinary members) will hold 1 vote for every Income share held.
  • Unlike Co-op shares, the value of Income shares is not capped at par value ($10/share).
  • Unlike Co-op shares, dividends paid from Income shares will not be subject to personal taxes.
  • Members who hold shares of the co-operative, NTUC Income Insurance Co-operative Limited (Co-op), can redeem all or part of their shares at the lower of par value of $10 per share or net asset value per share in accordance with the by-laws until 15 November 2022. The redemption of Co-op shares had ceased from 15 November 2022 and Co-op shareholders will receive Income shares on a one-for-one basis by the end of the first quarter of 2023.
  • The new corporate entity, Income Insurance Limited (Income), is a public non-listed company limited by shares.
  • As with all other public non-listed companies, shareholders of Income may transfer their shares to a willing transferee in accordance with the Companies Act and the constitution of Income.
  • Income shares may be bought and sold at a transaction price and on terms agreed between a willing transferor and willing transferee.
  • Shareholders may consult their own financial and legal advisors on the actions they may take with regards to the transfer of their shares.
  • In response to shareholders’ request to facilitate their ease of share transfer to a willing transferee, Income Insurance Limited is pursuing a share buyback programme so that its shareholders will have the opportunity to sell their shares to the company if they wish to support their liquidity needs.
  • The first share buyback exercise is targeted to take place by the third quarter of 2023, subject to applicable regulatory approvals. More details will be provided to shareholders when they receive their Income Insurance Limited shares.
  • The new corporate entity, Income Insurance Limited (Income), is a public non-listed company limited by shares.
  • Income shares are not publicly traded and therefore, are not pegged to market. In the absence of a market share price, there are several ways for shareholders to get an indicative value of their shares, including using Income’s Net Asset Value or NAV per share to get an indicative value of their shares.
  • The NAV per share is calculated as Net Assets / Number of Shares. Income’s NAV per share can be derived from the NAV per share of the co-operative, NTUC Income Insurance Co-operative Limited (Co-op). Shareholders may refer to the Co-op’s latest audited financial report - NTUC Income AR2021 - for the Net Assets and Number of Shares disclosed under the ‘Consolidated Statement of Financial Position’ and ‘Shareholding’ sections respectively.
  • The transaction price of Income shares is based on the agreement between the willing transferor and willing transferee.
  • After shareholders receive shares of the new corporate entity, Income Insurance Limited (Income), their co-operative shares will be cancelled.
  • Nomination of beneficiaries for Income shares is not required and Income shares shall be dealt with as part of the estate in accordance with the shareholder’s will or intestacy laws in the absence of a will.
  • Under Income’s co-operative by-laws, life policyholders who are at least 18 years old are ordinary members of the co-operative (Co-op), and they each have 1 vote in the Co-op. However, if such ordinary members of the Co-op do not hold Co-op shares, they will not hold shares or have voting rights in the new corporate entity, Income Insurance Limited (Income), as the Companies Act only permits shareholders of Income to have voting rights.
  • To thank all Co-op members for their trust and support for the past 52 years, a complimentary personal accident insurance policy for three years, from 1 September 2022 to 31 August 2025, had been extended to them.
  • The policy comes with a sum assured of $52,000 and it is payable upon accidental death or total permanent disability of the insured. More details are available at www.income.com.sg/pa-for-members.

On Liquidation

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The liquidators are professionals appointed by the Registrar of Co-operative Societies (under the Ministry of Culture, Community & Youth) for the winding up of NTUC Income Insurance Co-operative Limited (Co-op). The appointed liquidators are Mr Cameron Lindsay Duncan and Mr David Dong-Won Kim from KordaMentha Pte Ltd. Further details on the liquidators can be found in the following links:

https://kordamentha.com/people/cameron-duncan

https://kordamentha.com/people/david-kim

The liquidators’ role would involve the winding up of NTUC Income Insurance Co-operative Limited (Co-op), including administering the distribution of surplus assets of Co-op (as applicable).

The powers and duties of the liquidators are prescribed by the Co-operative Societies Act 1979.

Subject to relevant approvals, the issuance of Income Insurance Limited (Income) shares to all shareholders of NTUC Income Insurance Co-operative Limited (Co-op) is slated for the 1st quarter of 2023.

Shareholders of Co-op are expected to be issued with shares of Income via a distribution in specie of Income shares on a one-for-one basis. The Co-op shares will then be cancelled. This distribution will be facilitated by the liquidators during the liquidation process. The liquidators will inform all Co-op shareholders when Income shares are ready to be issued and will provide details on the logistics of the issuance at that time.

The liquidation of NTUC Income Insurance Co-operative Limited (Co-op) is expected to be completed after the distribution in specie of Income Insurance Limited shares. Thereafter, the liquidators will seek approval from the Registrar of Co-operative Societies for the Co-op to be dissolved. The Co-op is expected to be dissolved by the 2nd half of 2023.

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