NTUC Income's former boss has put his high-profile protest over bonus payments on hold, just three days before the insurer stages what had promised to be a fiery annual general meeting (AGM).

Mr Tan Kin Lian told The Straits Times yesterday that high-level talks with Income's management had convinced him to change tack.

Mr Tan, 60, had used his blog to ignite an online campaign demanding that Income halt moves to restructure bonus payouts for life policies.

The protest led to talks last week, including a May 22 meeting with the firm's management initiated by chief executive Tan Suee Chieh. That seemed to have cleared the air.

Mr Tan Kin Lian wrote on his blog yesterday that he was 'assured' by Income that it 'has the best interest of the policyholders in making this restructure'.

'It is also willing to find ways to address the concerns of the policyholders. I accept its position on this,' he said.

Income was equally keen to stress the air of harmony.

Mr Tan Suee Chieh told The Straits Times: 'I am glad to read a change in the tone and manner of his comments, which have become more conciliatory. I believe this comes with an increased appreciation of the issues behind the bonus structure.'

The change of tone signals a quieter AGM on Friday.

Mr Tan Kin Lian had aimed to use the venue to make his case. He intended to gather the signatures of 1,000 disgruntled policyholders and present a letter of protest at the meeting. But he has collected just 550 and is now unsure if he will attend the AGM.

He was angry over Income's plan to reshape bonus payouts, a move that would affect two Income policies he owned, as well as those of about 310,000 other policyholders.

Income plans to cut its annual bonus payouts on these policies from 2.3 per cent to 1.3 per cent of the sum assured. It will, in turn, assign more cash as special bonuses to be paid out at the time of death or when the policy is cashed out.

Mr Tan Kin Lian, who left Income last year after a 30-year career, said he still did not agree with the bonus cut, but he was willing to work with Income to find an 'amicable' solution.

Mr Tan Suee Chieh said he told his predecessor the restructuring would benefit Income and its policyholders in the long term.

He said the restructuring - a move he described as 'prudent' - would deliver 'better returns for policyholders, strengthening the life fund, and adhering to best actuarial practices'.

'The old structure was not sustainable because it was less likely to deliver the yields promised to policyholders,' he said.

'Second, under the restructured bonus, there is now a better chance to deliver increased yields. Finally, this new structure will reduce the likelihood of the bonus cuts we have witnessed in the past.'

This article was first published in The Straits Times on May 28, 2008

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