About the corporatisation exercise

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  • Over the years, Income’s operating environment has undergone significant shifts. These include 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 is further compounded by technology players entering the insurance sector and playing to customers’ increasing demand for more diverse and targeted products and solutions that are embedded in their digital-first lifestyles.
  • While Income has been agile in responding to these market shifts, it is looking to the proposed corporatisation exercise to achieve operational flexibility and access more strategic growth options to compete on an equal footing with other insurers in the market.
  • In turn, Income will be better placed to address not only current market shifts, but also future challenges to ensure long-term growth and its ability to serve customers better.
  • As a corporate entity, Income will have more operational flexibility and strategic growth options to ensure its long-term growth and ability to serve customers better.
  • Thus, the corporatisation exercise demonstrates Income’s foresight to be future-ready as it will be better placed to compete on an equal footing with other insurers in an evolving and increasingly challenging landscape.
  • Income will have more operational flexibility and strategic growth options as a corporate entity to scale its business and achieve competitive advantage to serve its customers and society better.
  • Income can also look to enhance its commitment to social innovation and causes given a stronger and more sustainable business and growth trajectory. Income will be committing $100 million over 10 years in support of sustainability causes that champion the low-income including education for youths and children in need, the elderly, and the environment.
  • The corporatisation exercise is expected to be completed by the second half of 2022, subject to regulatory approval and other customary closing conditions.
  • Income is committed to its purpose to empower all Singaporeans to improve their financial well-being, including those who are underserved in Singapore and will continue to explore ways to serve customers better. This purpose will remain a beacon for the new company.
  • The corporatisation exercise is aimed at accelerating Income’s business and growth plans. The exercise only changes Income’s legal form from a co-operative to a corporate entity and will not affect the business operationally.
  • Corporatisation changes only the legal form of Income. All existing assets and liabilities will be transferred to the new company via a ‘Scheme of Transfer’ under the Insurance Act and other agreements entered into between Income and the new company. The name of the new corporate entity governed by the Companies Act is Income Insurance Limited. The new company will continue to hold the same shareholding in subsidiaries that were previously held by the co-operative.
  • As part of the corporatisation exercise, NTUC Income Insurance Co-operative Limited will be liquidated in the second half of 2022.
  • NTUC Enterprise Co-operative Limited will remain the majority shareholder of the new company.
  • As part of the proposed corporatisation exercise, NTUC Income Insurance Co-operative Limited (co-op) has incorporated a wholly-owned new company (NewCo). The name of the NewCo is Income Insurance Limited.
  • All existing assets and liabilities of the co-op will be transferred to the NewCo via a ‘Scheme of Transfer’ under the Insurance Act and other agreements entered into between the co-op and NewCo.
  • A notice of intention will be published in the press to inform institutional and ordinary members of the co-op about the transfer of the insurance business by the co-op to the NewCo.
  • Upon completion of the transfer of the insurance business by the co-op to the NewCo, the co-op will be liquidated and shares in the NewCo held by the co-op will be distributed to co-op shareholders according to the number of co-op shares that they hold on a one-for-one basis. As such, co-op shareholders who hold co-op shares will hold shares of the NewCo and become its shareholders. E.g. if a shareholder holds 100 shares in co-op today, the shareholder will receive 100 shares in the NewCo post corporatisation.
  • The NewCo will be the new insurance operating entity post corporatisation.
  • For more information, please refer to https://www.income.com.sg/corporatisation. Income’s experienced customer service team remains unchanged. They can be contacted at +65 6788 1777 (8:30am to 6:30pm, Mondays to Fridays, excluding Public Holidays).

About the Extraordinary General Meeting (EGM) & Information Sessions

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  • The corporatisation exercise involves the transfer of the insurance business by the co-op to the NewCo and the liquidation of the co-op. Income wishes to seek approval from its members on these resolutions and is therefore holding an EGM to do so.
  • Income is organising an information session to provide more information about the corporatisation exercise and to address institutional and ordinary members’ queries so that they can make informed decisions ahead of the EGM. Details of the information session can be found on https://www.income.com.sg/corporatisation
  • The information session will be held virtually in view of the volatile pandemic situation to ensure the safety of all co-operative members. Members are encouraged to submit their questions at the registration site or to ask them ‘live’ at the information session.
  • Institutional members will receive information on how to register for the information session via email, while ordinary members can register at https://www.income.com.sg/corporatisation.
  • Members must also pre-register for the EGM at https://www.income.com.sg/corporatisation. Documents relevant to the EGM, such as details of the resolutions to be passed and proxy forms, will be made available to registered participants upon successful verification.
  • Registration for the information session and EGM must be done at least three days prior to the events.

Impact on Policyholders

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  • The corporatisation exercise will not affect the terms, benefits, and coverage of existing policies, nor how they will be administered.
  • All policies with Income remain effective and will be transferred automatically to the new company when the transfer of the insurance business by Income to the new company is completed in the second half of 2022. For existing policies, there is no need for the new company to issue new contracts to policyholders. There will be no action required from policyholders.
  • 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 insurance claims. All existing policies with Income will be transferred to the new company after the transfer of the insurance business by Income to the new company is completed and the new company will oversee the processing and payment of claims to policyholders if the claims are approved. Policyholders do not need to make a new claim submission to the new company if they have already made a prior submission to Income.
  • There will be no change to the existing terms, benefits, and coverage of existing policies, including how they will be administered because of the 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 Income offers, medical advancements, and Income’s claims experience for the year. As such, policy premiums are adjusted from time to time to meet these objectives.
  • Yes, the personal information of policyholders will remain secure with the new company.
  • The corporatisation exercise only changes the legal form of Income from a co-operative to a corporate entity that is governed by the Companies Act and does not affect the business operationally.
  • All personal data and consents that Income has obtained about policyholders, the insured and beneficiaries under existing policies with Income, as well as any other relevant persons (e.g. claimants), will be securely transferred to the new company to administer and service policyholders effectively.
  • No, the policy renewal cycle will 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 will not change because of the corporatisation exercise.
  • All policy premiums payable to Income after the completion of the transfer of the insurance business by Income to the new company are to be made payable to the new company. Any premium payments which NTUC Income Insurance Co-operative Limited receives after the transfer of the insurance business to the new company is completed will be transferred to the new company.

Impact on Shareholders/Co-operative (Co-op) Members

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  • Existing institutional and ordinary members of Income who hold co-operative (co-op) shares will receive NewCo shares on a one-for-one basis. All shareholders (whether institutional or ordinary members) will hold 1 vote for every NewCo share held.
  • Unlike the co-op, the NewCo will be able to distribute accumulated net surplus beyond the preceding financial year and dividends will not be subject to a statutory cap of 10% of paid-up share capital per year.
  • Shareholders of the NewCo need not be restricted to co-operatives and trade unions, and they can hold more than 20% of the share capital.
  • Unlike the co-op shares, the value of the NewCo shares will not be capped at par value ($10/share).
  • The NewCo will send by mail physical share certificates of the NewCo to shareholders and this is anticipated to take place in the second half of 2022.
  • Under Income’s by-laws, life policyholders 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 company as the Companies Act only permits shareholders to have voting rights.
  • To thank all co-op members for their trust and support towards Income for the past 52 years, Income will be offering them a Personal Accident policy with sum assured of S$52,000 for three years. Details of the policy and the benefits are below.

 

Group PA Policy Benefits Accidental Death and TPD only, over 3 years
Per pax Sum assured ($)
Accidental Death $52,000
Accidental TPD $52,000
Eligibility  Ordinary Members who qualify for Co-op membership in accordance with Co-op By-Laws
Coverage Term 3 years; starting from effective date 1 July 2022 (subjected to date of Corporatisation) 
  • The new company shares will be valued above the co-operative shares which are valued at par ($10/share).
  • Institutional and ordinary members of the co-operative (co-op) can vote for or against the resolutions relating to the corporatisation exercise ‘live’ at the Extraordinary General Meeting or via proxy (by submitting the proxy form).
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