By Lorna Tan, Senior Correspondent

IT LOOKED like fireworks were almost certain but it turned out to be a tame affair for the 500 or so staff and policyholders who attended insurer NTUC Income's annual general meeting last night.

Former Income chief executive Tan Kin Lian had stated on his blog that he would nominate a person unconnected to Income's management for a board seat.

This person - who was never named on the blog - would be tasked with looking after the interests of policyholders.

But it all came to nothing. At the two-hour meeting at NTUC Centre at One Marina Boulevard, Mr Tan said the nominee had 'decided to withdraw'.

If the nominee had appeared, he could have contested the board position with Income chief executive officer Tan Suee Chieh.

CEO Tan was up for re-election as the director representing the interests of participating and ordinary members.

Income's by-laws permit two such directors. The other is Dr Audrey Chin, who was voted on to the board last year.

In his blog, Mr Tan Kin Lian had explained that he would not stand for the time being as he has other pressing matters to attend to. But he identified some key issues he felt needed addressing.

These include Income's expenses and bonus payouts - the same issues that he raised during last year's AGM and that have had regular airings in his blog.

He also laid out his strategy for the board election: 'I plan to nominate a person who is a qualified actuary, slightly younger than me, and is also a policyholder. He understands the key issues and will be able to speak for the interest of the policyholders.'

Mr Tan also encouraged Income policyholders to attend the AGM to support the nomination.

While the election showdown petered out, Mr Tan did question Income's decision to restructure its bonus payouts.

This was an initiative the insurer started last year and one that affected 310,000 policies. Income announced recently that it will extend the restructuring to a further 195,000 policies.

To offset the cut in annual bonus payouts, Income plans to increase special bonuses that are paid only at the time of death or when the policy is cashed out.

CEO Tan reiterated last night that the bonus restructuring is necessary to ensure that the cooperative is on a 'strong financial footing'.

'It requires a hard decision which is not popular but it is necessary for the future. I have always advanced the cause of the policyholders, not the shareholders,' he said.

The CEO also addressed Mr Tan's query on expenses. He said that management costs and selling expenses increased to $188 million last year from $168 million in 2007. They were just $128 million in 2006.

Yet total revenue premiums grew to $2.5 billion last year, from $2.3 billion in 2007 and $1.9 billion in 2006. This works out to total expense ratios of 6.8 per cent last year, 7.3 per cent in 2007 and 7.5 per cent in 2006.

'The increase in Income's total expense ratios is in tandem with the whole life industry,' said CEO Tan.

He also made a distinction between management and selling expenses. While management expenses have decreased in the last two years, selling expenses have grown due to new business sales.

This article was first published in The Straits Times.