Parliament has granted new powers to the Monetary Authority of Singapore (MAS) to block deals involving insurers tied to cooperatives.
This move follows Allianz Europe’s bid to become the majority shareholder of Income Insurance where concerns were raised over the structure of the transaction and its potential impact on the latter’s social mission.
The Insurance (Amendment) Bill, passed on 16 October 2024, allows MAS to seek input from the Ministry of Culture, Community and Youth (MCCY) before approving transactions involving insurers linked to cooperative societies.
The bill was introduced after Allianz’s attempt to acquire a 51% stake in Income Insurance for S$2.2 billion, following Income’s corporatisation in 2022.
The government expressed concerns about the structure of the deal, particularly the potential S$1.85 billion capital return to shareholders, raising questions about how Income’s S$2 billion surplus, carried over from corporatisation, would be used.
This lack of clarity sparked concerns about whether the deal would uphold Income’s social mission, a commitment made during its transition from a cooperative.
Minister for Transport and Second Minister for Finance, Chee Hong Tat, introduced the bill on behalf of Deputy Prime Minister Gan Kim Yong.
Although the government raised no objections to Allianz’s suitability, it emphasized the need to protect the social objectives of cooperative insurers like Income.
Under the new law, MAS must obtain ministerial approval before allowing such deals to proceed.
This is designed to ensure that broader public interest concerns are addressed, safeguarding the social mission of cooperative-linked insurers.
The bill also removes the right to appeal MAS decisions where approval is withheld, expediting decision-making given the urgency of the Allianz-Income transaction, which is still under active consideration by Income’s shareholders.
Both NTUC Enterprise, which owns Income, and Allianz expressed respect for the government’s position.
Allianz indicated that it would collaborate with stakeholders to consider the next steps for the transaction.