Guts and honour

Mr. Tan,

I have read the postings in your blog and news reports about your campaign to get NTUC Income to reverse its decision to cut policyholders' annual bonus.

Objectively, you are doing the right thing. I applaud you for doing it inspite of some criticisms that you are like Mahathir, i.e doing it out of bitterness. Far from it. Those who read your blog know that you have always been objective. When NTUC Income was doing the right things, you applauded the actions. You also recommended NTUC Income's products that were truly superior to products from other financial institutions. Now that NTUC Income is doing the wrong thing, it is only right that you speak. This is what I really call guts and honour.

The guts to speak up when things are not right. I see you in mould of ex-US President Jimmy Carter, somebody with conviction and honour. He don't care what President George Bush thinks as long as he knows that he is doing the right thing. He has the guts to speak to Kim Jong Il and the Hamas leaders even when the US Government boycotted these leaders.

NTUC Income's action is wrong for two reasons. Firstly, it cannot cut the annual bonus (which is guaranteed and vest in the policyholders) unilaterally of existing policies. It cannot just say that it will give a higher terminal (or special) bonus when this bonus is not guaranteed. If the funds are not doing well at the points when the policies mature or are surrendered, some policyholders may well get no terminal bonus.

NTUC Income cannot say these is what commercial insurers do. It is precisely because policyholders want a higher annual bonus that they bought from NTUC Income and not from the commercial companies.

Secondly, NTUC Income cannot say that they hold the money back because they will invest for policyholders and they might get higher returns at the end. As they say, "a bird in the hand is worth two in the bush". The higher return is dependent on various contingencies which may never materialise.

I take NTUC Income's action as a breach of promise to policyholders and in bad faith.

N