PUBLISHED ONOctober 17, 2024 4:20 AMByBhavya RawatThe Insurance Act was amended after Parliament passed a Bill on Wednesday (Oct 16).
The new amendment requires the Monetary Authority of Singapore (MAS) to seek the approval of the Ministry of Culture, Community and Youth (MCCY) for applications related to insurers that are co-operative societies (co-ops) or are linked to co-ops.
The bill was tabled and discussed on Wednesday, following the government's announcement on Monday that it halted the deal between Income and German insurance provider Allianz in its current form to safeguard public interest, although it remains open to a transaction that addresses its concerns.
As he presented the Bill for debate, MAS deputy chairman and Second Minister for Finance Chee Hong Tat said: "We are making the amendments on an urgent basis because the proposed transaction is under active consideration by Income's shareholders."
In a debate that lasted nearly four hours, 19 MPs raised questions and voiced concerns on various aspects of the Income-Allianz deal and the proposed bill.
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Workers Party MP Jamus Lim said it was troubling that there was no coordinated discussion between regulators MAS and MCCY on the proposed deal.
"There appears to have been multiple breakdowns of communication between different governmental entities in the exchange of pertinent information over the transaction," he said.
Lim also questioned if the civil service was "sufficiently siloed... that even for transactions of such prominence, no joint working group was convened to ensure sufficient information exchange in advance".
While the Bill addresses some of the issues arising from the initial review of the Income-Allianz deal, it raises other legal and procedural considerations, he added.
These considerations were later addressed by fellow WP MP He Ting Ru, who said that passing legislation that has or is seen to have a retrospective effect must not be taken lightly.
"I hope that the government can address... how this Bill and its passage may be perceived as harmful, retrospective and rushed legislation with its apparent negative impact on Singapore's reputation as a financial and corporate hub with certainty over its laws and regulations," she said.
All seven WP MPs present in Parliament abstained from voting on the Bill.
On the other hand, Progressive Singapore Party (PSP) NCMPs Leong Mun Wai and Hazel Poa expressed support for the Bill, if it'd stop the Income-Allianz deal from proceeding in its current form.
Acknowledging MCCY's and MAS' efforts in scrutinising the transaction and drawing up the Bill, Leong shared a gripe about previous discussions in Parliament regarding the proposed transaction.
"I accept that sometimes, because of market sensitive information, it may not be possible to publicly disclose the full details of a proposed transaction," he said. "But in this case, we are talking about information being shared within the government, between agencies."
He added: "Throughout this whole affair, it seems that every gatekeeper is concerned only about the part of the process owned by them, and no one is keeping an eye on the overall outcome in our system."
Highlighting how multiple Cabinet members held notable positions in Income's parent NTUC Enterprise, he asked: "Why does it seems like there was no coordination within the Cabinet on the exchange of important information relevant to the transaction before the August sitting, so the government could have a more informed view and...productive discussion?"
The capital reduction exercise in the proposed transaction "should have raised alarm bells in MAS", Leong noted.
"While we trust that MAS officers are highly professional and have conducted a thorough review of the deal from a prudential point of view, can the minister further explain why MAS does not have any further prudential concerns over the capital reduction plan, especially considering NTUC Enterprise's history of having to inject capital into Income over the years?"
He also described the deal as "an asset-stripping exercise in favour of the shareholders, especially NTUC Enterprise and Allianz".
In response to the questions posed by Lim and Leong, Chee said: "You made serious allegations regarding our public officers, regarding our agencies.
"I do not know why you have to take this approach, especially after...I clarified the facts on Monday. Why is it necessary...to still want to throw our public officers under the bus?"
MAS needed time to assess the capital reduction plan that it had received in mid-July, Chee noted, adding that it is unfair to expect the regulator to be aware of the exemption that MCCY had granted Income.
"It was only after we had a fuller understanding of the set of issues and after the Aug 6 Parliament sitting that the MAS team saw that there could be a connection to what MCCY was looking at," he said.
The minister hoped that the opposition MPs could give MAS officers "some credit", saying that the officers "were trying their very best to do their work. And when they saw that there was a link, they shared the information".
Leong's description of the Income-Allianz deal as "asset-stripping" was not a fair one, Chee added.
"I think Mr Leong deliberately chose that term. And this is not the first time I've heard Mr Leong make unkind remarks towards NTUC".
Income had entered the deal with "the right intent" and "acted on good faith" to strengthen Income's financial position, the minister explained.
Lim later clarified that he had referred to the information gap between MAS and MCCY regarding the deal as a "communication breakdown" and agreed to withdraw the statement.
Chee also expressed disappointment after the Workers' Party voiced that it would be abstaining from voting on the Bill.
During the debate, other MPs and NMPs sought clarifications on the Bill's impact on business confidence and Singapore's role as an international insurance hub, the likelihood of future government interventions as well as how transparency could be maintained to preserve trust in the system.
Despite their concerns, they voted in favour of the Bill.
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bhavya.rawat@asiaone.com
