Mr Tan Kin Lian, 60, is mounting an online protest over a move by the insurer to restructure bonus payouts for life policies sold after 1993.

He stepped down from the top job in February last year after a 30-year career - but he has not left quietly.

The former head honcho is livid over the planned changes, which affect two Income policies that he owns, along with those of an estimated 310,000 other policyholders.

In a nutshell, 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.

Instead, it will assign more as special bonuses that are paid only at the time of death or when the policy is cashed out.

Mr Tan summed up his feelings in a letter posted on his blog: 'We believe that this unilateral change by Income is to the detriment of the policyholders. It contravenes the 'reasonable expectation' of the policyholders.'

Yesterday, he told The Straits Times that he would like Income to offer policyholders the option to stay on the old bonus structure if they do not accept the change.

He aims to gather the signatures of other unhappy policyholders and present the letter of protest at Income's annual general meeting on May 30. His blog is at www.tankinlian.blogspot.com

Income plans to raise the special bonus from 25 per cent of accumulated bonuses to anywhere between 30 per cent and 120 per cent.

It says policyholder benefits are not affected by the revamp, as the combination of annual and special bonuses will give a return equal to what was intended in the past.

When contacted yesterday, Income's chief actuary, Mr Ken Ng, said: 'Any decrease in our annual bonus will be offset by the increase in special bonus to achieve the same yield.'

Income says that once annual bonuses are declared, they become guaranteed. To support this guarantee, Income needs to set aside reserves and invest in low-yield instruments such as bonds. This cuts Income's investment flexibility and the potential to invest in assets such as equities that could earn a higher return in the longer term.

Mr Ng said: 'While we aim to keep our yields in line with our past practice, we do not wish to build in annual bonuses which prevent flexibility. This strengthens the position of the life fund for the benefit of all.'

But Mr Tan and several other affected policyholders prefer to stay with the old bonus structure, as it is 'more transparent', and a higher proportion of the bonus will be vested each year.

The regulator, the Monetary Authority of Singapore (MAS), said bonus declarations and bonus restructuring are commercial decisions approved by the insurers' boards based on recommendations by their actuary.

However, insurers should satisfy themselves that the bonuses declared, including any bonus restructuring, are fair and equitable and that these are clearly communicated to policyholders, the MAS said.

lorna@sph.com.sg