Singapore’s Minister for Transport and Second Minister for Finance, Chee Hong Tat, clarified that the Ministry of Culture, Community and Youth (MCCY) had addressed Income Insurance’s social mission and NTUC Enterprise’s rationale for the deal with Allianz.
Minister Chee stated that his focus would be on the regulatory perspective of the Monetary Authority of Singapore (MAS).
Former NTUC Income CEO Tan Suee Chieh raised corporate governance issues and expressed concern over the potential erosion of NTUC Income’s social mission in light of its sale to Allianz in an open letter to the Monetary Authority of Singapore (MAS).
Last month, Allianz had announced plans to acquire a 51% stake in Singapore’s Income Insurance in a deal valued at approximately SG$ 2.2 billion (EUR 1.5 billion).
The MAS assessment emphasized the regulator’s role in promoting a sound financial sector, focusing on insurer risk management and long-term policy protection.
When assessing a change in substantial shareholder, criteria like track record, financial soundness, and fitness are considered.
The minister confirmed that MAS was satisfied with Income’s board’s processes in managing conflicts of interest regarding the deal.
The chairman of Income Insurance Limited Ronald Ong recused himself from the board’s decision to appoint Morgan Stanley as the financial advisor for the Allianz acquisition deal.
This move was made to avoid any potential conflict of interest, as the chairman also holds a senior executive position at Morgan Stanley.
Minister Chee assured that fostering a competitive insurance market is key to ensuring affordable insurance options.
While Allianz is a large global insurer, its presence in Singapore’s retail and SME insurance is small, with no significant overlap with Income’s business.
The minister highlighted the competitiveness of Singapore’s insurance market, with over 50 insurers offering various products.
He noted that Income does not always offer the lowest prices compared to other insurers, using life insurance and Integrated Shield Plans as examples.
Addressing concerns about existing policyholders and employees, the minister stated that the deal, if approved, would not change existing insurance contract terms.
The regulator expects Income to fulfill its obligations, and Allianz has publicly committed to honouring existing policies.
MAS has regulations to ensure sufficient capital reserves, robust governance, and fair treatment of customers.
Participating policyholders are protected by restrictions on profit allocation to shareholders.
Regarding employees, while MAS doesn’t regulate employment decisions, it expects fair treatment and compliance with employment laws.
Minister Chee concluded,
“MAS encourages all insurers, both local and foreign, to continually innovate, adopt best practices and ensure robust risk management.
This will foster a competitive insurance market that offers choice, value and stability to protect the interests of policyholders.”
Featured image credit: Edited from Freepik
