Capital Reduction Announcement

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

For Policyholders

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  • 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 Insurance) via a ‘Scheme of Transfer’ under the Insurance Act 1966 and other agreements entered between the Co-op and Income Insurance. All existing policy coverage, benefits and terms remain unchanged.
  • For existing insurance policies, there is no need for Income Insurance to issue new contracts.
  • 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.
  • For insurance policy beneficiaries, the new corporate entity, Income Insurance Limited recognises 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nominations made in accordance with requirements of Section 132 or 133 of the Insurance Act 1966, unless they have been revoked, or a new nomination has been made (under the Insurance Act 1966) prior to 1 September 2022.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 is not 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 1 September 2022 have been 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 September 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 Shareholders

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  • Nomination of beneficiaries for Income Insurance shares is not required. Income Insurance 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.
  • The share certificates will be held in custody by Income Insurance’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. (Boardroom) by default. This aims to ease the administrative burden on shareholders in relation to the physical custody of share certificates and ensures that share certificates are securely stored.
  • Alternatively, shareholders have the option to make a request through Boardroom to receive and hold their physical share certificates personally.
  • Shareholders have to report the loss of the physical share certificates to Income Insurance’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. (Boardroom) and file a statutory declaration and an indemnity form. Upon notification of the loss of physical share certificates, Boardroom will cancel the lost share certificates. To obtain a replacement share certificate, shareholders must pay a fee of S$2 (before GST). The replacement share certificate will be issued upon payment and is subjected to approval by Income Insurance.
  • Shareholders can contact Boardroom via income@boardroomlimited.com or call +65 6536 5355, Monday to Friday between 8:30 a.m. to 5:30 p.m.
  • Income Insurance is a public non-listed company limited by shares.  
  • Shares of Income Insurance are held by shareholders and can be traded by a shareholder who is a willing seller and who agrees to transfer his/her shares to a willing buyer at a price and on terms that are agreed by both parties, subject to any restrictions on such transfer that are binding on the selling shareholder (for example, if such shareholder has pledged his or her shares in favour of a third party).  
  • Income Insurance is not offering any share purchase option currently. 
  • A shareholder who would like to purchase more shares can approach another shareholder who is a willing seller to explore purchasing additional shares at a price and on terms that are agreed by both parties.
  • Income Insurance is a public non-listed company limited by shares. Income Insurance shares are not publicly traded and in the absence of a market share price, there are several ways for shareholders to get an indicative value of their shares. They include referencing Income Insurance’s Net Asset Value or NAV per share to get an indicative value of their shares.
  • For the payment of stamp duty under share transfer, the buyer should reference to Income’s company level NAV per share (including Treasury Shares). As of 31 December 2022, this figure is $29.07 (unaudited).
  • This capital reduction is a one-off exercise to allay shareholders’ liquidity concerns given that share redemption is no longer an avenue for shareholders to access liquidity.
  • We explored various options and decided on a capital reduction as it is the most viable option that can be implemented relatively quickly.
  • Income Insurance is very strong financially and its capital adequacy ratio remains well above regulatory requirements. 
  • We are confident of our financial resilience and do not expect the one-off capital draw down to have any material impact on the company’s solvency position and capital adequacy level.
  • The one-off capital reduction is only possible because of the company’s strong capital position. 
  • The company does not expect the one-off capital draw down to have any material impact on its capital adequacy or solvency position which remains well above the minimum regulatory requirements post capital reduction.
  • The one-off 18-month long accounting period is due to the corporatisation exercise and serves to align the company’s financial period with the calendar year.
  • The decision on whether dividends will be paid, and if so, the amount of such dividends, would largely depend on the business performance of the insurance business and whether there are sufficient distributable profits and is independent of the corporatisation exercise. 
  • The 2022 business performance comprised the performance of NTUC Income Co-operative Limited, which operated from 1 January to 31 August 2022 and Income Insurance Limited, which operated from 1 September to 31 December 2022. 
  • For 2022, due to investment market volatilities that adversely impacted the industry at large, Income Insurance and NTUC Income both recorded unaudited net losses before tax and levy, mainly attributed to unrealised market fair value losses in the investment portfolio.
  • We prefer not to provide the specific unaudited financial no. as the company’s financial period has not closed. 
  • As companies and co-operatives in Singapore can only pay dividends out of profits or net surplus respectively, Income Insurance and NTUC Income have not declared and will not be declaring any dividend for 2022.
  • Income Insurance requires more time to assess practical options and operational requirements of share liquidity mechanisms, including but not limited to share buyback, as they hold varying regulatory and operational complexities.
  • The company aims to provide an update on share liquidity mechanisms by the end of 2023 and seeks shareholders’ patience and understanding on this front.
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