Policyholders in the Funeral Assistance Benefit Fund or the Increasing Assurance Benefit Fund (‘Funds’), have previously been given opportunity to engage in the consultation process for conversion of the Funds. The conversion proposal was finalised after considering policyholder feedback received during the consultation process.
All policyholders were sent information on the changes to the conversion proposal and invited to attend their Lodge’s conversion meeting at which the final conversion proposal was discussed ahead of 2021 Movable Conference.
2021 Movable Conference
The remit for the 2021 Movable Conference involved:
- Implementing the conversion of the Funds to debt securities offered by the Society.
- Exiting the other insurance products (Sick Fund, Education Support Plan (‘ESP’), Funeral Plan, and Medical Insurance) provided by the Society
- Cancelling the Society’s insurer licence.
- Establishing a new Benevolent Benefit Fund and making a one-off capital appropriation of $10 million to that Fund.
The 2021 Movable Conference was held on 5 November 2021. At the Movable Conference, 92% of votes were in favour of proceeding with implementation of the final conversion proposal The implementation phase involves the Society taking the necessary steps to comply with statutory and regulatory requirements to carry out the actions bullet-pointed above. The Society expects to complete implementation by 31 May 2022.
- Convert the Funds to debt securities offered by the Society
By 31 May 2022 (or as soon as practicable after that date), the Society intends to provide all existing policyholders in the Funds with a product disclosure statement and other disclosure information relating to the conversion of their interests in the Funds into interests in debt securities. When providing that information the Society will also be in a position to confirm the final value of the debt securities each policyholder will receive on the conversion date.
- Exit the other insurance products (Sick Fund, ESP, Funeral Plan, and Medical Insurance) and cancel the Society’s insurer licence
The Medical Insurance benefits issued by the Society, are anticipated to be transferred to UniMed. This means that after the transfer, policyholders will need to liaise with and make claims to UniMed directly.
Sick Fund, ESP, and Funeral Plan policies will be ‘cashed-out’. Holders will be paid out an amount reviewed by the actuary by the conversion date. Once paid out, no further claims will be able to be made on those policies.
After this, the Society’s insurer licence will be cancelled and it will no longer be a registered insurer.
Establish and make a one-off capital appropriation of $10 million to a new Benevolent Benefit Fund
After the Society cancels its insurer licence, it will allocate a one-off capital distribution of a total of $10 million to a new Benevolent Fund for the benefit of policyholders of the Funds. The distribution amount will be based on the total years a policyholder has held a benefit in each Fund up to the conversion date. The newly established Benevolent Benefit Fund will be called the Society Members Benevolent Fund. Benefits to a member from the Benevolent Benefit Fund will be payable upon the member’s death.
‘Road blocks’ the Society may encounter
Implementing the conversion project is subject to statutory and regulatory requirements. The Society will comply with all applicable laws and regulations relating to the offer and issue of debt securities.
The regulator for the Society’s insurer licence and the process of cancelling the licence is the Reserve Bank of New Zealand. The regulator for the offer and issue of debt securities is the Financial Markets Authority. The Society will work with the Reserve Bank to exit the insurance products that are not being converted (Sick Fund, ESP, Funeral Plan, and Medical Insurance) as noted above. At the same time, the Society will work with the Financial Markets Authority to implement the conversion of the Funds to debt securities.
If the regulators require the Society to treat the other insurance products or the conversion of the Funds differently than as voted for at the 2021 Movable Conference, the Society will work with them for a resolution, endeavouring to the best of its ability to do so by the conversion date.
Members are encouraged to contact their Fraternal Administrator in the first instance if they have any questions on the implementation phase of the conversion project. Those who cannot reach their Fraternal Administrator, should contact Head Office.
Please note that we are not currently seeking any commitments to convert interests in the Funds, and no additional contributions are being sought in response to the final conversion proposal. No debt securities can currently be applied for or acquired from the Society. If interests in the Funds are converted, debt securities will be made available in accordance with the Financial Markets Conduct Act 2013.
Michael Ambrose, Chairman
Additional information PDFs – FAQs – December 2021, Conversion -Consultation Feedback – Results, Themes and Improvements