In June 2018 and November 2018, we sent all Whole of Life and Endowment policyholders (Policyholders) letters providing an update on a possible product restructure Foundation Life (NZ) Limited (Foundation Life) is considering in respect of its Whole of Life and Endowment policies. We also mentioned that any new product offer would be made to Policyholders under what is called a Scheme of Arrangement (Scheme).
A brief overview of the Scheme process is below. As mentioned in the November 2018 update letter, a detailed Scheme proposal will be presented to Policyholders before they are asked to vote on the Scheme. This is likely to be during the second quarter of 2019.
The proposed Scheme would be an arrangement between Foundation Life and its Policyholders under Part 15 of the Companies Act 1993. Foundation Life would need to obtain directions from the High Court on how a Scheme meeting is to be convened before the Scheme proposal can be presented to Policyholders for consideration, and their vote. Foundation Life has appointed an independent actuary to assess the Scheme before it is presented to Policyholders. The Scheme would need to be approved by Policyholders and the process would need to be approved by the High Court before it binds Foundation Life and the Policyholders. Once approved, the Scheme would bind all Policyholders, including those who voted against the Scheme or did not vote at all.