14 September 2006
I refer to your article entitled "Income's GM quits amid talk of tension with chief executive" (St Times, 12 Sep 2006).
The media release was prepared jointly by me and Stanley Jeremiah. Both parties had the opportunity to state our perspective of the important points relating to this event. It highlighted Mr Jeremiah's key contribution during the past eight months.
You have quoted two specific instances of a possible clash of views between Mr Jeremiah and me:
- feasibility of a new product suggested by Mr Jeremiah
- remuneration of agents and financial advisers
I wish to state the facts on these issues.
Mr Jeremiah did suggested a new term insurance product that has a wider definition of the permanent disability benefit. My concern was that the wider cover could cause confusion with the existing definition that was already applied to nearly 1 million policies issued previously. As this matter was not critical, we mutually agreed to shelve this proposed change.
NTUC Income has been paying a lower scale of commission (compared to the market) to our agents and insurance advisers for the past 36 years. This has allowed us to lower our premium rates and give better value to our policyholders. Our agents benefit from an increased volume of sales generated by our competitive products.
I confirm that Mr Jeremiah has not made any request to change our commission rates (except for a new term insurance product). If he did, it would still need to get the support of our appointed actuary and the general manager in charge of our sales. It would also require a re-pricing of our existing products to reflect the higher cost.
We have had some differences of views on a few issues, but these do not amount to a "clash". We bring out the facts and discuss the options. We try to narrow the diffences and come to a common position. We approach it in an open and transparent way.
We did also agree on many other issues.
I am sorry to lose the services of Mr Jeremiah, as I believe that he has qualities that are suitable for NTUC Income. I respect his wishes to seek a future career that is more compatible with his strengths and interest.
Tan Kin Lian
Chief Executive Officer
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