Insurance (Amendment) Bill

Mr Deputy Speaker, in light of the emerging information on the Allianz-Income deal, the Workers' Party (WP) believes that it is a sound decision to withhold approval, at least in its current form. If the deal is bad for Singapore and its public interest, it should be blocked.

That said, I will make two key arguments. I shall begin by documenting a troubling sequence of events in the run-up to the public announcement on the Allianz-Income deal and its aftermath, involving what appears to be multiple sources of information failures within Government, and between the Government and the public. Next, I will offer some thoughts on guiding principles for how we may wish to proceed.

Let me begin by sketching out what appears to be a puzzling set of events that has been presented to us as an "information gap" between MAS and MCCY. I will explain why this is not merely a mild oversight in informational exchange, but a communication breakdown that may reveal some troubling pathologies with how the Government conveys information within itself and with the public.

First, it will be useful to understand just how much MAS knew about Allianz's capital extraction plan. Minister Edwin Tong explained on Monday that MAS had evaluated the offer on prudential grounds, consistent with its regulatory mandate and on that basis, it saw no reason for concern. But MAS' oversight functions extend beyond prudential regulation. Its mandate includes the supervision of domestic systemically important insurers (DSIIs), of which Income Insurance is one.

Besides capital requirements, which is of course central to macro prudential supervision, a holistic assessment, risk assessment, would also entail the evaluation of, and I quote, from the MAS' own published framework on risk assessments, "qualitative criteria such as brand value and strategic importance".

Did MAS not believe that a capital extraction plan, contrary to Income's historical mission, would not potentially contribute to elevated post-acquisition risk? After all, if there were to be a sudden exit of Income policy-holders resulting from the deal, surely this would give rise to undesirable financial instability. Could such a holistic assessment be completed in the brief period between mid-July and the time of the public announcement?

Second, on Monday, Minister Chee Hong Tat also indicated that MAS was: "not aware of MCCY's considerations when MCCY issued the section 88 exemption, and hence did not link the proposal from Allianz to the exemption that MCCY had provided earlier".

This begs the question of why this link was not made, given how the exemption is in the public records, and surely a S$2 billion surplus would be material to the sort of prudential considerations that MAS concerns itself with in its supervision.

Third, it was revealed on Monday that MAS had belatedly shared information with MCCY only in early August, after many Members of Parliament had raised questions related to the proposed transaction during the 6 August Sitting. Apparently, it was then that MAS recognised that there could be larger considerations beyond just prudential ones and hence, only then did the Government began the process of working together in a whole-of-Government manner.

I wonder if it is only me who finds it troubling that there was no coordinated discussion between the two major relevant regulators, MAS and MCCY, in advance of the proposed deal. Has our civil service become sufficiently siloed in their treatment of what falls under which agency or Ministry's purview that even for transactions of such prominence, no joint working group was convened to ensure sufficient information exchange in advance? Could we be assured that this is a one-off occurrence, or is this a canary in a coal mine that is telling us that we need to look more carefully at how well our Government departments exchange relevant data and information?

Fourth, in September, I had filed a Parliamentary Question asking if MAS had required a commitment from Allianz to provide a capital adequacy injection to grow Income Insurance Limited across its business lines, beyond the S$2.2 billion that Allianz would pay. At the time, I, like many others, were unaware of the proposed capital extraction plan.

Presumably, however, the Government was, but in the terse response received from Deputy Prime Minister Gan Kim Yong, it was only suggested that MAS would "assess Income Insurance's business strategy and capital management plan after Allianz submits its application to obtain effective control and be a substantial shareholder of Income".

No reference was made to the capital extraction plan, yet as shared by the Ministers on Monday, these concerns were already conveyed to MCCY by then. So, why was the same information not shared as a response to my Parliamentary Question? Perhaps more important, why was so much of the debate in the House two months ago and the constant refrain by NE itself so fixated on capital injections when in reality, Income was much more likely to be facing capital extraction?

Taken together, I am left to conclude that on the assumption that the Government was neither wilfully withholding information from one governmental agency to another, nor to a direct question posed by a Member of Parliament, then at the least, there appears to have been multiple breakdowns of communication between different governmental entities in the exchange of pertinent information over the transaction.

What should we expect now? Given the objection to the original deal, it is natural for us to ask what is next. I do not propose to be speculative given how we do not even have the contours of a potential revised deal.

But given how NE and Income Insurance have publicly stated that they will work closely with the relevant stakeholders to decide on next steps and how market motivations that led to the original deal indeed remain, it would not be a stretch to imagine that there will be a revised effort to raise capital for Income. What have we learned from public feedback over this episode?

For starters, it is clear that there is strong public sentiment that values the historical social objectives of Income Insurance. Notwithstanding how Income is already a corporate entity ultimately answerable to its shareholders, the boards of Income Insurance as well as NE do need to be more sensitive to how their stewardship should reflect the concerns of stakeholders as well and to render appropriate consideration to its social mission.

The need to be cognisant of social objectives notwithstanding, the minority shareholders of Income, many of whom are aged and have sought liquidity for years, should be allowed to exit with a fair value for their holdings.

If Allianz's capital injection cannot be obtained with an assurance that it will not excessively dilute Income's brand equity, perhaps we can look to other homegrown sources such as a syndicate of institutional investors or even to our Sovereign Wealth Funds such as Temasek as alternative sources of patient capital.

Furthermore, future transactions of such importance should, right at the outset, involve the establishment of a multi-Ministry task force with representatives from all the relevant bodies to ensure that the sorts of communication breakdowns that occurred this round do not recur. It is not difficult to see how, depending on the sector, not only MAS and MCCY but also the Ministry of Manpower, Ministry of Digital Development and Information and Ministry of Trade and Industry may be involved. Traditionally, such whole-of-Government efforts would be coordinated via the Prime Minister's Office. This may well be called for in future such transactions.

To this end, one is also left to wonder why the Significant Investments Review Act, or SIRA, was not triggered in this case, given Income's status as a DSII. The simplistic answer, of course, is simply that income does not fall within the existing gazetted list of designated entities under SIRA.

Indeed, what does appear on the list all seem to be related in some form or fashion with security and the military-industrial complex.

But given how we have six whole pillars for Total Defence in Singapore, including economic, social and digital, it seems somewhat inconsistent with our own characterisation of defence that systematically important financial institutions such as DBS or digital assets such as Singtel could be sold without similar protections.

Doing so may open the door to determining whether SIRA-style restrictions or other measures are necessary for future transactions of this nature, thereby ensuring that future transactions are evaluated not purely on a commercial basis but also for their broad alignment with Singapore's interests.

This will lend further credence to the transparency and predictability of our regulatory approach and will go some way toward restoring our nation's reputation as a reliable institutional partner. In the long run, this will benefit both local and foreign stakeholders in our financial sector.

Sir, the Bill is a good faith effort at redressing some of the problematic issues arising from the first pass of the Allianz-Income deal. If this were the reason alone, the WP would have no objection to the Bill, beyond clarifications to the points that I have raised. That said, the Bill does raise other legal and procedural considerations which I will leave my Sengkang colleague, He Ting Ru, to elaborate.

Mr Deputy Speaker, Sir, I rise in support of this Bill, in view of the information shared with the House on Monday. The Income-Allianz deal is one which has drawn a high level of public interest. The majority of Singaporean households have insurance policies with NTUC Income or Income Insurance.

Due to the nature and the valuation of this deal, one would expect close coordination among the relevant authorities, such as MCCY and MAS, at all stages during the process of evaluation. I hope that the whole-of-Government way of doing things will continue to be a mainstay and strength of the Singapore Civil Service.

I had raised this issue in Parliament two days ago and we had since have more clarity on how the MAS team had been assessing the deal on prudential grounds. I appreciate that MAS shared information, which they assessed to be relevant to MCCY. It is comforting to know that we continue to have good officers in MAS and even the Civil Service, who are alert and can pick out issues beyond their scope. However, could this information not have been shared earlier with the House when the topic was heavily debated in Parliament back in August?

This is a high-profile, cross-border deal. While I fully support the amendments in the interests of the public, would we be setting a precedent where investors need to factor in potentially unexpected changes to regulations?

On one hand, I am heartened that our Government is open to feedback even as it strives to balance different priorities and competing demands. On the other hand, we must uphold Singapore's reputation as an open, transparent and rules-based city which is pro-business and welcomes foreign investments.

I am heartened that the Government has confirmed that it will be open to new proposals if the concerns are addressed.

Finally, my last question. Would there be other businesses, which are organised as co-operatives, institutions of public charter or critical infrastructure operators, such as telecommunications companies, water desalination plants or oil refineries, which may require similar legislative amendments in order to prevent something similar from taking place?

Mr Deputy Speaker, passing legislation which has or is seen to have retrospective effect must not be taken lightly. This is especially so when it adversely affects the rights and interests of persons and has the potential to hurt Singapore's reputation for certainty, stability and predictability of our commercial laws.

It should not be taken lightly and the WP's position when the Constitution was amended a year ago as a precautionary measure, reflects our general concern over retrospective amendments.

In this case, while it is true that MAS’ approval of Allianz's proposed acquisition of 51% of Income remains pending, we note that the transaction had previously been signed and announced, albeit conditional upon receiving regulatory approval amongst others. It can thus be seen to be a live transaction.

Thus, I believe that there is a risk that the amendments proposed in this Bill, along with their urgent nature, would be seen to be retrospective by players in our corporate finance landscape.

For this, I specifically refer to clause 2 of the Bill which contains the proposed section 33A subsection 9 of the Act which states that, quote, this section also applies to a relevant application received by the authority before the commencement of the Insurance (Amendment) Act 2024 that is still pending as of that date.

Even if some were to argue that this Bill's acts do not fall within the realm of having retrospective effect, there is a second principle of legal and regulatory certainty in the context of Singapore's corporate finance landscape to consider. This was also alluded to by Members Liang Eng Hwa and Joan Pereira in their speeches.

Having worked on a number of highly complex multi-billion-dollar mergers and acquisitions, and structured finance transactions across multiple jurisdictions spanning the globe, I know how invaluable it is to have certainty. In such deals, there are many moving parts and a number of complicated regulatory regimes ranging from takeover codes, listing rules, merger control, catch all laws governing natural and national interests, and also financial rules for lawyers and other financial advisors to consider.

It is also why it is also standard practice for parties to engage with regulators early on in the preparatory process long before any public announcements are made so that parties can understand potential impediments to their transactions, assess the risk of a regulator blocking the transaction and to address these through their structuring of the transaction, including on occasion giving irrevocable and legally binding undertakings to do or not do certain things for a fixed time period post-completion.

This is also the case here in Singapore.

It is fair that we ask whether the amendments proposed in this Bill, especially under a Certificate of Urgency, which was last used during COVID-19, are in fact strictly necessary to provide the Government through MAS the legal power to block the Allianz’s acquisition of Income. After all, according to the offering circular, the long stop date was actually nine months after the announcement date, which would actually have taken us until sometime next year.

MAS' powers are contained in sections 26 and 27 of the Insurance Act 1966. These sections provide the MAS may approve an application to obtain effective control or become a substantial shareholder of a licensed insurance company if MAS is satisfied that: first, the applicant is a fit and proper person; and second, that having regard to the likely influence of the person, the licensed insurer concerned will or will continue to conduct its business prudently and comply with the provisions of this Act.

The Act also does not say that MAS cannot take into account other factors relevant to its mission, which would include the overall health of Singapore's financial sector as a whole, for example, including the provision of insurance services to the public, and whether the people's interests in having access to affordable and reliable insurance policies and products are served.

Additionally, I note that although Income is said to have a social mission, it is also clear that its mission is to provide insurance, which is most definitely a financial service. Thus, whether Income in whatever form it morphs into in the future conducts its financial services business in a manner that benefits the people of Singapore on the whole, is something that MAS can already take into account in considering whether to give approval under sections 26 and 27 of the existing Insurance Act.

Therefore, I hope that the Government can address legitimate concerns raised about how this Bill and its passage may be perceived as harmful retrospective legislation and rushed as legislation, with its attendant negative impact on our reputation as a financial and corporate hub with certainty over laws and regulations.

How specifically does the Government hope to address concerns that future parties may have about the risk that their live transactions may suddenly find themselves blocked by urgent retrospective legislation being passed in the middle of a live transaction after an announcement is made in accordance with applicable listing rules and takeover codes and is just pending regulatory approvals?

I would now like to turn to some questions arising from the proposed Allianz-Income transaction which provided impetus for this Bill. Some of the points will be matters that fall within the domain of MCCY, but I believe it is impossible to disentangle MCCY's role in this matter from MAS' role as the approving authority for the transaction. Indeed, the very purpose of the Bill is to enable MAS to consider the view of the MCCY Minister.

First, from the MCCY Minister's Statement, it is evident that one important consideration behind the Government's decision to block the transaction as currently structured, was based on representations that Income made at the time of its corporatisation as to why it should be allowed to keep a substantial surplus of some S$2 billion. Would the Government therefore clarify four points about this?

First, the retention of surplus due to legal form change. Given that Income was not being dissolved but merely changing its legal structure, would this fact alone have been sufficient for MCCY to grant Income's request to keep the surplus?

Second, the justification provided by Income. If the above reason was not sufficient, what specific representations did Income make to MCCY that justified allowing it to retain the surplus? Did Income detail any new business lines or initiatives it planned to pursue, that would require significant capital thereby justifying the need to keep the surplus?

Third, the link between surplus and social mission. Was there an understanding between MCCY and Income that retaining the S$2 billion surplus was tied to Income's commitment to its social mission? If so, could the Government provide more details on this agreement and how the surplus was intended to support that mission?

Fourth, future restrictions on returning surplus to shareholders. Can the Government clarify if its position is that because of the circumstances under which Income was originally allowed to keep the surplus, the company is now restricted indefinitely from returning any part of that surplus to its shareholders?

The philosophical question underlying these four specific questions is, what really is Income's social mission?

During Monday's Ministerial Statement, the MCCY Minister also referred to a lack of assurance that Income would preserve its social mission post completion should Allianz become its majority shareholder. Could the Government elaborate on this and articulate again what it sees as Income's social mission now and going forward into the future? After all, the landscape has changed dramatically since its founding over 50 years ago in 1970.

Specifically, would Income's social mission lie in the areas of life insurance policies, or whether other areas such as health insurance may be more important and the focus of a socially-oriented Income? It is important that this issue be viewed looking at the overall big picture.

We can point to Allianz's offer document, which mentions that it would continue to honour Income's participation in national-level insurance programmes, continuing its charity commitments, providing low-cost schemes to union members, pledging $100 million over 10 years from 2021 to promote social mobility and support the well-being of seniors, are worthy moves to be sure.

However, if we leave the question of what is its social mission unanswered, it risks presenting these specific and perhaps narrow matters as central, while missing the wider picture of how Income is fundamentally able to fulfil its social mission as an insurer.

To conclude, WP supports the Government's blocking of the proposed acquisition in its current form on public interest grounds based on publicly available information, especially given the concerns that my colleagues and I had raised in this Chamber in August.

Therefore, we will not be rejecting the Bill. However, we believe that the downsides to whether this Bill will be seen to be rushed and retrospective legislation-making, and this assault on legal and regulatory certainty that changing legislation in the middle of a major live transaction means that we would need to register our abstention on this Bill.

Mr Deputy Speaker, I declare my interest as a Labour Movement representative and a long-standing policy-holder of Income Insurance, a corporate under the governance of holding entity, NE. Like many Singaporeans of a certain vintage, Income is intertwined with memorable chapters of my life – when my parents first took out insurance savings plans for my sibling and me, when I took on travel insurance for my first trip overseas, and later, when I enrolled my parents and myself in Income’s Shield Plans after I started working.

To my fellow unionists and me, Income, together with the social enterprises under NE’s purview, are consistent partners that our unions and associations have counted on to reinforce NTUC’s social mission of helping workers to earn a better living and live a better life. I have assisted members who found their lives suddenly upended by severe injury or illness or in some cases, death. Because Income made members’ well-being its focus, I have counted on its insurances to provide much needed financial relief to members who were hit by these life catastrophes and as important, to communicate our care for our members and their families.

Fast-forward to July this year, Income Insurance announced its decision to form a partnership with global insurer, Allianz, to strengthen its finances and financial sustainability to serve the longer-term needs of its customers. Both Income and its holding entity, NE, have been consistent in communicating Income Insurance's steadfast commitment and responsibility towards delivering social good on a lasting basis while charting a durable path to financial sustainability through the proposed partnership with Allianz.

I note the developments which MAS had surfaced when it evaluated the proposed partnership between Income and Allianz, and that these developments had prompted the Government to recommend expanding the MAS’ diligence process to also include consultation with the Minister overseeing co-operatives.

The Insurance (Amendment) Bill would thus apply an expanded diligence process on applications to the MAS where the licensed insurer in the application falls under one of three categories: it is a co-operative; or it has acquired the principal business of a co-operative; or it has a substantial shareholder or effective controller which is a co-operative.

Specifically, the new section 33A in the Bill would empower the Minister to withhold approval of application from the above categories of licensed insurers on grounds of public interest. Section 33A also empowers the Minister to attach conditions to the approval and allows the Minister to add to, vary or revoke any of these conditions.

In this regard, I would like to seek clarification on three areas outlined under section 33A. First, could the Minister advise what is defined as “in the public interest” for the purposes of section 33A? Second, what type of conditions could the Minister attach to the approval and what are the considerations guiding how these conditions are determined? Third, under what circumstances would the Minister make changes to the conditions and on the same basis, under what circumstances could the licensed insurer apply for a review of the conditions?

Because insurance is most valuable when we are most vulnerable, I can appreciate and understand why the Government is seeking to apply both prudential and social perspectives to its evaluation of the proposed partnership between Income and Allianz.

The uncertainties felt by our unionists brought about by the halting of the deal are also understandable. My fellow unionists and I do understand and appreciate the reasons why the deal cannot proceed in its current form, as articulated by the Minister of MCCY. Income must find new ways to navigate the Bill, alongside existential challenges such as insuring an ageing base and expanding cover to include more complex and varied health conditions. As the saying goes, charity begins at home. It remains a fact that Income must do well in business to be in the position to do social good.

The Bill thus places the ball back in Income’s court, to consider the implications of the Bill in respect of Income's plans to chart a durable path to long-term financial viability.

In summary, the Bill presents an opportunity for Income and Allianz to articulate how the proposed partnership can do well and do good. Doing well translates to safeguarding the best interests of stakeholders, including policy-holders and shareholders, while doing good is about creating an impact footprint that is purposeful, meaningful and lasting in outcomes for workers and the social good. Mr Deputy Speaker, notwithstanding the clarifications sought, I support the Bill.

Deputy Speaker, Sir, the Progress Singapore Party (PSP) is heartened that the Government has intervened to stop the proposed deal to sell a majority stake in Income Insurance to Allianz. PSP had not been in favour of this deal. In July, Dr Tan Cheng Bock had written on his Facebook page asking for the reasons for breaking a promise. And in a Facebook post after the 6 August Sitting, my colleague, Mr Leong Mun Wai, had expressed his hope that the deal would be restructured.

While we support the decision to stop this deal, we have concerns about the act of amending the Insurance Act in a hurry in order to block it. This approach sets a somewhat unsettling precedent.

Sir, as far as possible, the Government should rely on existing laws when assessing deals for regulatory approval. This provides confidence to investors, here and abroad, that our regulatory framework is stable. Even though the Bill we are debating today is tightly scoped, the fact that we are amending the law today so that a specific pending acquisition application can be blocked may be unsettling to investors.

Under existing law, sections 26 and 27 of the Insurance Act 1966 require the approval of MAS for any application to obtain effective control or become a substantial shareholder of a licensed insurer. Some conditions were listed under which MAS may grant approval. As the words used in sections 26 and 27 is “may approve” and not “shall approve”, it appears to us MAS already has the discretion not to approve the application.

Can the Government clarify why it is necessary to amend the Insurance Act to stop this transaction instead of relying on existing provisions?

On 14 October, during clarification time after the Ministerial Statement on this issue, Members were assured that we would have time for further debate on the sale of Income Insurance during the Second Reading of the Insurance (Amendment) Bill. I shall now proceed to do that.

I had during that session raised the point that communications on the reasons for the sale of Income Insurance to Allianz had been misleading. Minister Edwin Tong disagreed and said there was no misleading.

Let me explain why I felt it had been misleading. In a joint statement from NE and Income Insurance dated 4 August 2024 to explain the need for the sale of Income Insurance, paragraphs 7 and 8 of the executive summary stated that, “In terms of NTUC Enterprise upholding Income Insurance’s social mission, capital resilience is necessary to provide affordable, inclusive insurance on a sustained basis...The circumstances between when Income Insurance was founded and today are vastly different. While the goal of providing affordable insurance remains, the competitive landscape has changed with more than 40 global, regional and local insurers vying for growth in a mature Singapore insurance market. This also makes strong and continuous capital resilience a pre-requisite for growth, which a social enterprise model alone cannot shoulder.”

Does this not create the perception that the sale is necessary due to the need of Income Insurance for more capital? How can we reconcile this statement with the fact that by the time this statement was issued on 4 August, an application had already been made to MAS in July to reduce capital by S$1.85 billion and distribute this amount to the shareholders? Would not this capital reduction reduce capital resilience?

At the Parliamentary Sitting on 6 August 2024, Minister of State Alvin Tan while answering Parliamentary Questions on this deal repeated the need for capital a few times. He said: “NTUC has explained the reasons for the deal with Allianz. Let me briefly reiterate the points that NTUC has made. The current situation for Income cannot be sustained and Income's capital buffers have repeatedly come under pressure.”

In response to Mr Liang Eng Hwa’s supplementary question, he again said: “I think if we take a step back, the reasons why Income has gone into this proposed deal is well laid out. There are realities on the ground – competitive, Government stepping in to provide that social assurance, as well as the capital requirements. The capital buffers, for example, were under pressure. So, that is the first principle.”

In response to Mr Leong Mun Wai’s supplementary question, he said: “Time is the best judge, but let me again put it out very clearly, that number one, Income’s capital buffers have been under pressure. There is no doubt about this.”

He also said: “Then, it also begs the question, could Income and NTUC Enterprise then have looked for other funding sources, which is the question on the ground. They have. In their statements, said that they have. They have looked at financial institutions and non-financial institutions, locally and foreign.”

All these statements contribute to the perception that the need for more capital is the number one reason for the sale of Income Insurance. However, the plan to reduce capital by S$1.85 billion totally contradicts this argument. MAS has assessed that even after this huge capital reduction, it is still meeting capital adequacy requirements.

Does this not show that the public and the Government have been misled? If Minister Edwin Tong still feels that there has been no misleading, I think we will have to agree to disagree and let the public form their own opinion.

If, however, the Government agrees that the communications have been misleading, I hope it will send a message that this is not acceptable by holding those responsible to account.

This episode has thrown up another issue of concern. The ties between NTUC and the PAP Government are very strong. In the past, many Secretary-Generals of NTUC are concurrently Cabinet Ministers. Minister of State Alvin Tan himself said so on 6 August, "many of us here are advisors to NTUC unions, we have worked very closely with them. I work very closely with my unions, Singapore Industrial and Services Employees' Union (SISEU). I work very closely with the co-ops under SNCF. I meet them very regularly."

This close relationship is a double-edged sword. While there are circumstances when this is an advantage, I believe this episode has reminded us to be careful lest the close relationship affect the Government in its regulatory role. Deputy Speaker, Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Deputy Speaker, PSP is relieved that the Government has blocked the acquisition of Income by Allianz. Right from the beginning, PSP has not been in favour of this deal.

However, we also have some reservations about amedning the Bill in a hurry in order to block the deal, because this sets an unsettling precedent. We believe that the Government should, as much as possible, use the existing provisions and laws to assess whether or not a transaction can be approved. Only then can both investors from Singapore and abroad have confidence in the stability of our regulatory framework.

In our view, sections 26 and 27 of the Insurance Act already gives the Monetary Authority of Singapore (MAS) sufficient discretion to reject this deal based on factors beyond financial prudence. Therefore, PSP hopes that the Government can provide a more detailed explanation of the necessairty of this Bill today.

(In English): In closing, PSP agrees with the Government that it would be in the public interest to stop the deal from proceeding in its current form. Therefore, despite our reservations about this urgent Bill, we will support this Bill if it is necessary to stop the deal.

Mr Deputy Speaker, Sir, thank you for allowing me to speak on the Insurance (Amendment) Bill.

This Bill is being proposed in light of the Income-Allianz deal which has raised important questions regarding public interest, corporate governance and the preservation of social missions within insurance entities, especially those transitioning from co-operative models.

I would like to commend the efforts of MAS and MCCY for their excellent collaboration. Their joint review of the Income-Allianz transaction, announced on 17 July, revealed concerns that went beyond a typical business deal. It cast doubts on whether Income, after being acquired by Allianz, could fulfil its social mission.

However, it is important to note that this deal is still only proposed. The door remains open for further negotiations, provided that any future proposal addresses the concerns raised by MCCY and MAS.

The events of the last few months have brought to light a few important issues, with the most important one being how we deal with our national treasures such as Income Insurance. In my view, control of such carefully nurtured national treasures should never be passed on to foreigners. The majority of the Board as well as the seat of the Chairman should always be in control of Singaporeans.

While such a strong view coming from someone like me who has spent over 30 years in international finance, where cross-border mergers are commonplace may surprise a few, my view is based on what I believe, that national treasures should be treated as what they are – national treasures – companies that, for generations to come, will provide world-class products and services to Singaporeans.

To be clear, I do not advocate such a Singapore First policy for companies that do not have a social mission to fulfil nor are they considered national treasures. My years in international finance have also taught me that the minor criticism we may face in the short term for a strong Singapore First policy will dissipate away quickly. Nor will such a strong, clear policy discourage foreign capital from buying controlling stakes in our companies that do not have a social mission to fulfil.

Many countries have allowed control of their national treasures to be sold to foreigners now regret it today. Just ask the many citizens and residents of New Zealand, where all the major banks are controlled by foreigners.

As I had mentioned during the debate in January this year on the Significant Investments Review Bill, perhaps the time has come for us to have a comprehensive all sector approach to review all large foreign investments in entities significant to the daily lives of most Singaporeans. Such a comprehensive all sector approach will make sure no important large deal slips through the cracks.

With the unique brand that it has, I fail to understand how Income Insurance does not have a larger market share and greater pricing power in our domestic market. Why has Income’s relevance in the insurance market just decrease over the years? That leads me to agree with the view expressed by many that Income Insurance clearly requires strengthening. But, in my view, such a strengthening exercise does not mean ceding control to foreigners.

Perhaps what is needed is a new Singaporean controlled Board of Directors with real talent, real experience and a real vision to come up with a coherent seven-year business plan to make Income Insurance a world-class company, operating profitably not only in Singapore but also in other countries in Asia, ex-Japan. There are plenty of providers of growth equity capital focused on the insurance business that would be willing to take a minority stake in Income Insurance if a coherent, realistic five-year business plan for growth and development would be presented to them. We have accomplished that in other sectors and I see no reason why we cannot accomplish the same for our insurance business.

This new Board should be given the complete authority as well as full responsibility for recruiting experienced talent from international insurers, who can help develop the right products and services and execute this five- to seven-year business plan that, while protecting Singaporeans first, can also develop a world-class insurance company headquartered in Singapore.

While I have shared my views on what I consider is the best strategy for Income Insurance, I would like to seek clarifications from the Minister on the Bill.

One, what kind of a deal with a new investor would satisfy the Government? Two, what guardrails would be established to ensure that Income will continue to meet its obligations to society? Three, how can we ensure that any future financial partner can contribute to the financial strength of Income while still preserving its social mission? Four, how can we ensure that any new financial investor in Income does not make a quick buck by selling out their stake in a very short period of time or taking a large dividend payment?

In conclusion, I believe the proposed Insurance (Amendment) Bill is a good step towards greater accountability. I also commend the Government, especially the Second Minister of Finance Chee Hong Tat for his strong leadership and moving quickly to bring this Bill for a vote to Parliament. This Bill will allow MAS to facilitate the right discussions while maintaining the highest standards of governance.

While we must remain an attractive and competitive market to attract global capital, we must do everything possible to protect the long-term interests of Singaporeans by continuing to careful nurture national treasures such as Income Insurance. Mr Deputy Speaker, Sir, notwithstanding my clarifications, this Bill has my full support.

Mr Deputy Speaker, Sir, I will first declare my interest as an independent director of a life insurance company registered and operating in Singapore. As my colleague Ms Hazel Poa has said PSP will support the Bill if it is necessary to block the Allianz-Income deal. For the sake of Singapore and the 1.7 million policy-holders of Income, it is important that we stop this deal in its current form.

After we discussed the deal in this House on 6 August, I expressed my hope that this deal will be restructured so that NE remains as the majority shareholder. I am personally very glad that the Government has listened to the concerns expressed by Mr Tommy Koh, the two former CEOs of Income, Mr Tan Suee Chieh and Mr Tan Kin Lian, and many Income policy-holders, and decided to block the deal. I would like to acknowledge the efforts put in by MCCY and MAS to scrutinise the transaction and come out with this Bill.

However, I am seriously concerned at the process by which we arrived at the conclusion to block the deal. We learned on Monday that MCCY had no prior knowledge of Allianz's offer for Income before it was publicly announced in July. Furthermore, it was only after the 6 August Parliamentary Sitting that MAS shared the terms of the proposed transaction and Income's capital reduction plan with MCCY. But why did MAS wait?

I accept that sometimes, because of market sensitive information, it may not be possible to publicly disclose the full details of a proposed transaction. But in this case, we are talking about information being shared within the Government, between agencies. All the agencies knew that this issue would be debated in August, because they received notice of our Parliamentary Questions. Why is this information that is highly relevant to the proposed transaction being gatekept at different agencies within the Government? 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, the buck stops with Cabinet. On a major financial transaction involving a national icon like Income that requires regulatory approval, it is Cabinet that must make a final decision. Why does it seem like there was no coordination within Cabinet on the exchange of important information relevant to the transaction before the August Sitting, so that the Government can take a more informed view and we could have had a more productive discussion in August?

On Monday, Minister Chee Hong Tat said that at the time, MAS was still doing technical assessments and did not surface the details of the transaction to the MAS Board before the 6 August Parliamentary Sitting. But Minister Chee Hong Tat and Minister of State Alvin Tan are both members of the MAS Board and would have been in a position to proactively question MAS officials for the full details of the transaction, which would have included the capital reduction plan before they answered questions in this House on 6 August. Why was this not done?

On 6 August, the officeholders rehashed again and again how Income's capital buffers have come under pressure. Minister of State Alvin Tan also emphasised how Allianz has committed to continue Income's pledge of S$100 million over 10 years from 2021, to provide social mobility among the lower income and support the well-being of seniors. But now we know that Income and Allianz had all along planned to return about S$1.85 billion in cash to its shareholders within the first three years of completing the transaction. So, were all these discussions on Income's social mission and capital buffers on 6 August meaningful?

With the knowledge of the capital extraction, we can see that this deal was essentially an asset-stripping exercise in favour of the shareholders, especially NE and Allianz, with little consideration for the social mission and the interest of the 1.7 million policy-holders. Had the deal gone through, NE would have relinquished control over Income while unlocking hundreds of millions of dollars from the capital reduction exercise.

In my view, this would have been another sad case of Singapore losing control over a key strategic company for cash, instead of maintaining these companies for our economic development and security.

Since the Global Financial Crisis, capital adequacy standards have been increased significantly. In my view a capital reduction exercise should have raised alarm bells in MAS even from a prudential standpoint, especially given that NE has had to put in capital injections of about up to S$630 million over the years. I was ever surprised to hear Minister Chee Hong Tat disclosed on Monday that based on the plans submitted, MAS did not have reason for concern as Income was projected to continue to meet regulatory capital requirements with a healthy margin even with a capital reduction.

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 NE's history of having to inject capital into Income over the years?

Sir, earlier, my colleague Ms Hazel Poa had provided her view on why she felt the communications of the reasons for the sale of Income to Allianz have been misleading. NE and Income Insurance need to come out to explain why they agreed to a capital reduction plan when both parties had in their joint statements on 4 August 2024 stated explicitly that capital resilience is necessary to provide affordable, inclusive insurance on a sustained basis.

Explanations are also needed from NTUC Secretary-General Ng Chee Meng for the joint statement he made with the President of NTUC on 5 August 2024 which said, "The NTUC Central Committee was briefed, and after full and serious consideration, the NTUC Central Committee decided to support NTUC Enterprise's consideration of the offer from Allianz". They added, "We believe the offer is good for Income, good for its policy holders and will enable us to fulfil our mission from a stronger position".

But now we know that the proposed transaction includes a capital reduction plan and MCCY, I quote, "is not confident that the proposed transaction would not affect the ability of the co-op movement as a whole or of Income itself to carry out its social mission".

So, when the NTUC Central Committee was briefed on the offer, were they briefed on the full details of the transaction, including the capital reduction plan? And if so, did the NTUC leaders believe in good faith that the offer would enable NTUC and Income to fulfil its social mission from a stronger position? And what were the reasons that led them to reach such a different conclusion from MCCY?

If the NTUC Central Committee did not know the full details, then why did NE and Income not brief them on the full details of the transaction? And if NE had agreed so easily to relinquish control of Income to Allianz with so little assurance about the ability of Income to carry out its social mission, it is arguably justifiable for policy-holders to be concerned whether in a future deal there will be safeguards to protect the surpluses in the policy funds accruing to the policy-holders.

Hence, contrary to what the NTUC leaders have represented to Singaporeans, we can say that this transaction is not good for Income, not good for its policy-holders and will not allow Income to continue to fulfil its social mission. The leaders of NTUC, NE and Income owe the public a more substantial explanation to this.

Finally, before the Ministerial Statement on Monday, did MAS and MCCY brief or explain to Allianz and Income that this deal is against our public interest? If yes, I would like to ask what was Allianz's response? Did Allianz offer to withdraw the current deal so that today we do not have to go through this debate?

Sir, we urge the Government to take lessons from this incident. We can do more to improve whole-of-Government coordination when making major decisions that impact areas governed by multiple agencies. The debate over the Income-Allianz deal this week has reminded me of another instance during this term of Government when we had to debate a Bill on the Certificate of Urgency in 2021 to restrict the use of TraceTogether and SafeEntry data to only serious crimes.

In June 2020, Minister Vivian Balakrishnan had assured the public that TraceTogether data will be used only for contact tracing. Then, in January 2021, another agency, the Ministry of Home Affairs revealed something different, that the police could access TraceTogether data under the Criminal Procedural Code. Then as it is now, the public has been left with the impression that our government agencies are siloed and coordination within the Government is poor. Or to put it simply, the left hand does not know what the right hand is doing.

It is the responsibility of Cabinet Ministers to ensure that they are apprised of all relevant and important information and to consider that fully before making decisions and making public pronouncements. We cannot fall into the trap of minding the process and missing out the outcome.

Deputy Speaker, Sir, PSP is raising all these questions with only one objective and that is so that we can ensure that our institutions and processes are always aligned and working well to protect the interests of Singapore and Singaporeans. We almost made a grave mistake here.

Fortunately, there is a silver lining in this whole saga. It has highlighted the important role played by Singaporeans in checking the decisions of our public institutions. In particular, we saw Singaporeans with expertise and social repute speaking out and helping the public understand complex issues. This has helped Parliamentarians, like myself, to voice out more effectively for Singaporeans. We hope that they will continue to do so. Majulah Singapura.

Mr Deputy Speaker, first, let me begin by thanking the Ministers Mr Edwin Tong and Mr Chee Hong Tat for their Ministerial Statements and clarifications that were delivered on Monday. I support this Bill on the basis that it serves the larger public interest of protecting Income's social mission. Notwithstanding my support, I have three brief clarifications that I hope the Minister will be able to address.

First, has the Minister considered the impact that the enactment of this legislation will have on business certainty and the regulatory environment in Singapore? When Income and Allianz BV entered into this deal, the present law that we are debating today was not in existence. The deal might well have been structured differently if it were. The Government has been courageous enough to take a step back and re-evaluate the situation, when new facts were revealed – this is something that is admirable – and it is important to acknowledge the relevance of this and the fact that this was done quickly when the Government realised that new information was in its hands.

However, we need to be careful that we are not inadvertently sending a message to the world at large, that it is possible for corporate deals to be suddenly overturned by the Government, for legislation to be rushed through and for carefully planned corporate negotiations to be disrupted.

And so, my first question is this, how would the Government propose to mitigate the impact of such conclusions being drawn by investors and businesses, both in Singapore and outside Singapore?

My second question is on the history of corporate deals being overturned or blocked by the Government and the enactment of legislation contemporaneously to effect this. Has this happened in the past, and if so, what are these instances? Are there any defining factors that the Government can share with us, on when the "public interest" is deemed to be significant enough for interventions like this? I think more detailed explanations here will go some way towards assuring businesses and the general public, that this is not something that Singapore does regularly or on a whim.

My third question has to do with the applications of sections 26 and 27 of the Insurance Act. Minister Chee Hong Tat explained on Monday, and earlier today as well, that on an application of sections 26 and 27 of the Insurance Act, MAS had reviewed the high-level submitted information from Allianz based on prudential grounds. This involved focusing on whether Allianz was fit and proper, looking at its financial strength and track record, and looking at the interests of Income's policy-holders to ensure that these would be safeguarded with a new, strong, substantial shareholder.

The requirement in sections 26(2)(b) and 27(3)(b) of the Insurance Act is that a licensed insurer should continue to "conduct its business prudently", and that MAS' approval may be given if the Authority is satisfied that conditions are met. I note the Minister's view that there is no explicit provision in the Insurance Act for MAS to consider non-prudential-related factors in assessing such applications.

Just based on the literal wording of the Act though, MAS' approval is not automatic even if the conditions in sections 26(2) and 27(3) are met. I wonder if it could also have been possible to take a more expansive view of the word "prudent", given Income's activities as a co-operative which provides financial services to the underserved and given the special circumstances behind its journey to corporatisation? Would the Minister be able to explain further MAS' understanding and interpretation of the term "conduct its business prudently", as it is set out in sections 26(2)(b) and 27(3)(b) of the Insurance Act?

I believe a more detailed explanation on the present limitations of the Insurance Act will help us in this House to understand why these new, very specific amendments are being debated today and why they are required on an urgent basis. Notwithstanding my clarifications, I support the Bill.

Mr Deputy Speaker, let me first declare that I work in a financial institution. Two months ago, at least in the eyes of the public, the proposed transaction at the centre of our debate today was defended quite robustly in Parliament.

Income's track record and the many assurances from Income and NE were repeatedly referenced, to justify that Income's social mission will continue to be fulfilled, even after a foreign company acquires a majority stake in it. On Monday, it therefore came as a surprise to many Singaporeans that the Government had intervened to stop the deal.

I note in MCCY's assessment, as articulated by Minister Edwin Tong, that one of the two key reasons why the deal was not approved in its current form, was because there were, and I quote, "no clear binding provisions or structural protections in the deal to ensure that Income's social mission will be discharged." It is now clear that the promises around Income's commitment to maintaining its social mission are not legally binding. In the absence of written or legally binding provisions, one cannot draw sufficient comfort or be reasonably confident that such assurances can be upheld, especially when the ownership structure becomes markedly different post-acquisition, and I agree.

The other key reason why the proposed transaction was blocked, pertains to the proposed capital extraction plan, a substantial amount of about S$1.85 billion over three years. To MCCY, this proposal materially changes the complexion of this transaction since the original intentions of the deal on the grounds of capital adequacy can no longer be defended. And I agree with this judgement as well.

I would therefore like to ask the Minister, were it not for the issue of capital extraction, would the Government still see fit to accept the assurances of Income and NE regarding its social mission in good faith? Or would the lack of clear, binding provisions or structural protections alone be sufficient grounds to merit the blocking of this deal? I hope the Minister could address this point with clarity and transparency, so that Singaporeans can better understand and fully appreciate the deliberations of the Government, especially when it concerns national assets to which Singaporeans have deep emotional ties. This is important in the context of this Bill, as the amendment introducing section 33(a) into the Insurance Act will now require the Minister's approval before the MAS may approve an application by a person to obtain effective control of or become a substantial shareholder of certain licensed insurers.

Sir, while the passing of this Bill runs the risk of appearing rushed, it will nonetheless enable the Government to uphold public interest in these pressing circumstances. Therefore, notwithstanding my clarification above, I support the Bill.

Mr Deputy Speaker, Sir, I rise to speak on the Insurance (Amendment) Bill 2024. While I understand the need for regulatory oversights, there are important clarifications I would like to raise.

First, Mr Deputy Speaker, Sir, this Bill introduces a new section that allows the Minister to approve or reject applications involving co-operative insurers based on what is considered "public interest". While this power can be necessary, it raises questions about accountability and transparency. What exactly does "public interest" mean in this context? Will there be clear guidelines to ensure decisions are made transparently and not subject to varying interpretations? Transparency is key when invoking public interest. How can we ensure that those affected have a clear understanding of the reasoning behind these decisions?

Mr Deputy Speaker, Sir, public interest must be more than just a catchphrase. It should come with clarity and accountability. Every decision should be transparent, especially when it directly impacts our people.

Second, Mr Deputy Speaker, Sir, I seek clarifications about the extent of the Minister's powers. The Bill grants the Minister authority to decide or veto sales or acquisitions. This raises a critical question: will there be a set of guiding principles for such decisions? Singaporeans deserve to know that decisions affecting them are made with their best interests in mind, free from undue influence. Clear guidelines can provide that assurance and help maintain trust in the decision-making process.

Third, Mr Deputy Speaker, Sir, we must consider the implications of this Bill for global insurers. How we wield these powers could send a strong message to international businesses. Will this Bill create uncertainty for global insurers looking to enter Singapore? How can we ensure that our regulatory environment remains predictable and welcoming for foreign investments? Singapore has built a strong reputation as a pro-business destination. Could this discretionary power be perceived as a barrier, making global insurers hesitant to invest here? Might it also discourage entities from collaborating with our co-operatives, fearing heightened Ministerial scrutiny?

We need to find a balance, one that protects our social objectives while preserving Singapore's status as a regional insurance hub. What assurances can we provide to international insurers that decisions will be made fairly and transparently? If we want to keep Singapore competitive, we cannot afford to close the door on international insurers.

Fourth, Mr Deputy Speaker, Sir, the Bill provides for an appeals process. But how exactly will this process function? Who will hear these appeals? Will it be the same Minister who initially rejected the application, or will there be an independent committee? For the appeal process to be truly fair, it must be impartial. If the same person makes the decision and hears the appeal, how can we be confident that justice will be served? An independent appeals process would instill greater confidence in those affected by these decisions.

In conclusion, Mr Deputy Speaker, Sir, this Bill is an important step in strengthening our insurance sector. But we must ensure that our approach is balanced and transparent. First, we need clear definitions of what "public interest" is to avoid ambiguity and ensure accountability. Second, we must establish guiding principles for the Minister's decision-making to ensure consistency and maintain public trust. Third, we need to strike the right balance between protecting our social interests and maintaining Singapore's attractiveness to global insurers. And fourth, we should implement an impartial appeals process to ensure that decisions are fair and inspire confidence.

I am also glad to see that it was reported that Allianz has agreed to consider revising its offer to Income after the current deal was prevented by the Singapore Government. This demonstrates a willingness to work within our regulatory framework. This also underscores a critical point: mutual respect between private companies and the Government is critical for maintaining a healthy business environment. It ensures that while we protect the interests of our people, we remain open to constructive dialogue with global investors.

Let us ensure that this Bill positions us for growth while safeguarding the interests of all stakeholders, both local and international. Let us keep the process clear, fair and consistent. This is not just about regulatory oversight. It is about protecting our reputation as a trusted financial hub and, most importantly, prioritising the well-being of Singaporeans.

Let us support the amendments with these considerations in mind, so that we can build a stronger, more resilient insurance sector. With this, I support the Bill.

Sir, first, may I commend MCCY and MAS for taking this step to intervene in the Allianz-Income deal on the grounds stated by Minister Edwin Tong in his Ministerial Statement on Monday. The Government has chosen to do the right thing despite it being inconvenient and potentially politically inexpedient.

I have closely read Minister Edwin Tong’s Statement and cross-referenced it with Minister Chee Hong Tat's and Minister of State Alvin Tan’s responses to Parliamentary Questions on the deal at the August Sitting. I set out the relevant facts as the basis for my questions later.

In his August speech, Minister of State Alvin Tan said: “NTUC has explained the reasons for the deal with Allianz. Let me briefly reiterate the points that NTUC has made. The current situation for Income cannot be sustained and Income’s capital buffers have repeatedly come under pressure. NTUC Enterprise has supported Income with capital injections and will continue to do so. But NTUC Enterprise cannot do this on its own. That is why Income sought to corporatise in 2022, so that it could consider more options to access more capital”. In other words, as far as Minister of State Alvin Tan and MCCY were aware at that point, the deal would have put in more capital so that Income would be able to continue to fulfil its social mission.

This is borne out in Minister Edwin Tong’s Statement. Minister Edwin Tong said: “MCCY had no prior knowledge of the proposed transaction before the public announcements. When we first saw the announcements, we accepted the intent of the transactions, which is to strengthen Income. We saw that Income would be engaged in a strategic partnership with a major reputable player in the industry. This would strengthen Income’s capital base and allow it to have more access to capital. This is consistent with the representation that Income had made to MCCY at the point of corporatisation.”

The Allianz-Income deal, however, in its filings with MAS, proposed instead to extract capital from Income, by way of reducing share capital and returning it to Income’s shareholders. Income’s shareholders, of which Allianz would be the majority amongst, would receive some S$1.85 billion. MCCY was alerted to Income and Allianz’s filings by MAS, because MAS had assessed after the August Sitting that it would be relevant to MCCY to look at the proposed reduction of share capital.

The above having been said, I note that in his August speech, Minister of State Alvin Tan had said: “It is still a proposed deal, yet to be approved”. I also note that Minister Chee Hong Tat and Minister of State Alvin Tan were speaking in different capacities and, in fact, on different points. Minister Chee Hong Tat speaking on MAS’ role as regulator and the criteria that MAS looks at in approving such a deal, and Minister of State Alvin Tan addressing concerns as to whether Income would be able to continue to serve its social mission after the deal. I further note that Minister Edwin Tong said in his Ministerial Statement that MCCY had continued to do its due diligence on the deal after the August Sitting. To my mind, this would naturally be so, since as Minister of State Alvin Tan had stated the deal had not yet been approved. It was precisely in this exercise that MCCY’s concerns were piqued.

I can understand the regulatory process. Minister Chee Hong Tat has emphasised that MAS looks at the prudential aspect of a deal. Regulators look at specific criteria that are set out by statute or regulations. It is simply not possible for regulators to look at all and sundry and everything under the sun when considering a specific application or filing before it. As Minister Edwin Tong pointed out, the viability of this particular deal went beyond prudential considerations alone. It is, therefore, commendable that MAS, having heard Minister of State Alvin Tan’s speech in August, realised that this could be an issue and shared the filings with MCCY.

Sir, keeping in mind that this exchange of information had occurred before approval had been granted, I do wonder whether this would present itself as a breakdown of the sharing of information, as had been previously suggested, or is it instead evidence of the sharing of information that has now allowed and enabled the Government to make the correct decision.

But this having been said, given the factual matrix that I have outlined above, and having had regard to Minister Chee Hong Tat's Statement earlier that parties had entered into the transaction in good faith, I still have a nagging feeling that someone was perhaps trying to pull the wool over the Government’s eyes and that it was lucky that this inconsistency was caught out and this deal blocked. In this regard, Sir, I have several questions.

First, has the Government ascertained, or will it be taking steps to ascertain how is it that Income could negotiate, agree and attempt to execute a deal with Allianz that included initiatives that would have resulted in share capital reduction, the opposite of its representations to MCCY at the time of corporatisation. This is not a private matter in a private company. It is a matter of public interest because, along with the corporatisation, the Minister for Culture, Community and Youth had also granted an exemption to Income under section 88 of the CSA. This allowed Income to carry over approximately S$2 billion of surplus to the new entity, instead of it being distributed to members and, importantly, the surplus being transferred to the CSLA, which is applied for the benefit of the co-op sector generally. This means that monies that ought to have gone to a public fund have been denied.

In this regard, I set out some questions that the Ministries should ask Income, and I would further suggest that Income's responses should be made public.

I note that the Chairman and CEO of Income at the time of corporatisation and at the time of the announcement of the proposed deal with Allianz were the same persons. How involved were they and the senior management of Income in, on the one hand, making representations to MCCY and, on the other, arranging the deal with Allianz? Did they not see the contradictions?

I note, in particular, that Income made the following representation to MCCY in June 2022 that: “We believe that, pursuant to corporatisation, the Co-op", that is, Income, "will be regarded to offer a more attractive proposition to investors and strategic partners. This would, in turn, allow Co-op to raise capital more easily and thereby grow and unlock value for existing and new shareholders and policy-holders and further its social mission through a sustainability agenda”.

In contrast, a joint statement issued by NE and Income on 4 August 2024 was of a different tenor. There was no mention of raising capital. As such, does this elicit that Income and NE were cognisant that the Income-Allianz deal did not live up to the commitments that Income had made to MCCY? Furthermore, did Income approach MCCY after Minister of State Alvin Tan’s speech to own up that the deal contradicted its original representations to MCCY?

As raised in the August Sitting, the Chairman of Income is also the Chairman of the deal’s financial advisor. Did the financial advisor point out to Income the potential conflict between the planned initiatives and Income’s representations to MCCY? Furthermore, was legal advice sought on the potential conflict, and did the legal advice point out this contradiction?

I also note that the NTUC President and Secretary-General issued a statement on 5 August 2024 stating, amongst other things, that: “In this fiercely competitive environment, it became plain that Income can only continue to fulfil its social mission if it has access to additional resources and the ability to scale”. So, this begs the question, whether Income had briefed the NTUC leadership of the proposed initiative to reduce share capital?

Second, Sir, given that Income’s move to corporatise which included the exemption under section 88 was premised on it finding it difficult to compete and to fulfil its social mission, I think it is important that the Government require Income to explain how it is going to leverage on its current corporate structure to do so, given that the Allianz deal may be off. So, Sir, I think that Income has quite a bit of explaining to do.

Finally, Sir, I note that Minister Edwin Tong said that the Government has made a decision to intervene. This does not appear to mean that the Government has actually blocked the deal. I ask this because there are news reports that the deal is already off. But the reason for today’s Bill is precisely because MAS does not have a basis to reject the deal for reasons other than prudential aspects.

I would just like to ask the Minister for clarity on the process. Would it be that, after the passing of this Bill, that the Income-Allianz deal would be subject to the Minister’s approval and that the Minister would then not approve? If this is the process, as had been raised by the hon Member Ms He Ting Ru earlier as well, would there be any issues of retroactive or retrospective application of the law, given that the filings were done prior to the enactment of the relevant statutory provisions? Sir, notwithstanding my clarifications, I support the Bill.

Mr Speaker, Sir, this urgent Bill was tabled two days ago to provide "clear statutory basis" for MCCY's concerns to be taken into account in the consideration of the Allianz-Income transaction.

One thing we should not miss is that I do not think there are many countries, if any, which can do what we have done in Singapore. First, for me and my various colleagues to be able to file Parliamentary Questions on an ongoing regulatory application during the 6 August 2024 Sitting and invite the Government to scrutinise the deal and ask for more information in the public interest. And two, for the Government to be open, transparent and adjust its stance based on the new information obtained.

But there are always two sides to the same coin, and I have some clarifications to raise as I am concerned about how this urgent Bill may be perceived by others outside of this House.

As we are well aware, the Allianz-Income proposed transaction is still under regulatory review. While Minister Edwin Tong has announced the Government's view that it would not be in the public interest for the transaction to proceed in its current form, the fact remains that the requisite MAS approval has not yet been given for the deal to proceed.

How do we ensure the Government's ability to enact laws to block commercial transactions do not negatively impact on local and foreign investors’ confidence in Singapore’s legal and business environment? Should such laws only operate prospectively, instead of retrospectively to affect commercial parties who could not have reasonably accounted for the change in laws? And I believe some other Members in this Chamber have actually raised those questions.

It is heartening that the fallout has been limited at least for this particular proposed deal. Allianz released a statement late on Monday that it will consider revisions to the proposed transaction structure, when it could have walked away altogether. May I ask the Minister whether and what steps have been taken to engage Allianz, as opposed to Income and NE? If no steps have been taken so far, is any engagement being planned?

As with any potential purchaser, Allianz would have incurred time and expense, alongside its legal and other advisors, to study and prepare for the deal before submitting the application to MAS for approval. It could only have done so on the basis of the prevailing laws, and these amendments in this Bill would not have been in its contemplation then.

Investor concern is not just on the buy-side; the uncertainty extends to the sell-side as well, where investors cannot be certain whether their investments will suddenly become illiquid or considerably less liquid as a result of subsequent Government intervention.

Sir, what message does this Bill send to prospective investors considering investments into Singapore? Will this Bill affect, for example, existing free trade agreements (FTA) on activities in the financial services sector, including the EU-Singapore FTA? Mr Deputy Speaker, Sir, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] Public interest. What exacerbates this concern is the lack of clarity around the basis that approval for a proposed transaction may be withheld. "Public interest" is one of those things where it is difficult to define, even though you probably know it when you see it. What we do know is that it is a lower bar than the "national security interests" protected under the Significant Investments Review Act (SIRA), when Minister of State Alvin Tan replied to me that Income’s "social purpose" is unlikely to meet the high bar to be protected under SIRA.

Given that the proposed new section 33A(3) specifically identifies consultation with the Minister responsible for the Co-operative Societies Act 1979, is "public interest" under that subsection only to be assessed from that Ministry's mission and objectives? That seems to cut against "whole-of-Government" approach that Minister Chee spoke about on Monday.

I am conscious that it is difficult, if not impossible, to set out an exhaustive definition of "public interest". However, given the use of the term across other legislation requiring Government approval for changes in control, such as the Transport Sector (Critical Firms) Act 2024, perhaps it would be more reassuring to foreign investors for there to be a one-stop summary of the various classes of target companies and the specific regulatory clearances that are required prior to investment. I hope the Government can consider that suggestion.

(In English): Existing powers. One issue that was also raised on Monday was whether the amendment in this Bill is necessary in light of the existing legislative powers. Sections 26 and 27 of the Insurance Act 1966 provide that the "MAS 'may' approve an application to take over or control substantial shareholdings in licensed insurers if the applicant meets the prudential requirements". The use of the word "may", instead of "shall", seems to suggest that there could be other considerations beyond the prudential requirements.

The explicit mention that MCCY's views should also be considered in this Bill could set a worrying precedent. What if, for a future transaction, public interest considerations of other Ministries become relevant? Would we have to separately legislate on an urgent basis again? Instead, reading sections 26 and 27 in the inclusive manner that I have suggested above, potentially allows new considerations from being taken into account at a whole-of-Government level.

Mr Deputy Speaker, this Bill should also not be for the purpose of ensuring information flows between different Government arms. Following the Allianz-Income episode, I am sure MAS is now aware of the potential interests that other Ministries or Government agencies might have in the regulatory applications that it processes.

Minister Chee Hong Tat explained that it did not occur to MAS to consult with MCCY, particularly on Income's previous exemption from section 88 of the CSA, before the Parliamentary Questions of 6 August 2024. This is understandable because it is not an issue that would arise in most applications made to MAS for approval, which would not relate to co-ops.

However, my question is whether any conditions were attached to the exemption for Income to carry over S$2 billion of accumulated surplus to its new corporate form. What were those conditions?

Instead of enacting the amendment in this proposed Bill, would MCCY not be able to exercise effective regulation by imposing relevant conditions in the exemption that was given, for example, that any subsequent change of ownership must be cleared with MCCY, or that the carried-over surplus of S$2 billion had to be returned to the CSLA if certain prescribed events occurred? On that note, can MCCY still vary the conditions of that exemption today?

In conclusion, Mr Deputy Speaker, ultimately, it is a strength that our Parliamentarians in Singapore can raise issues and have the Government table and pass legislation in less than three months. For this instance, it is even less than a week. But it is a power that we must exercise extremely sparingly, lest our legal and business environments are perceived to be uncertain and unpredictable.

Mr Deputy Speaker, notwithstanding the clarifications sought, I support the Bill and the Government’s decision to block the Allianz-Income deal in its current form.

Mr Deputy Speaker, I would like to declare that I am Advisor to the Singapore Insurance Employees' Union.

Mr Deputy Speaker, thank you for allowing me to join in the debate on the Insurance (Amendment) Bill. The proposed amendment will allow MAS to consider the views of the Minister charged with the responsibility for co-ops to withhold approval for an application to obtain effective control or to become a substantial shareholder of an insurer that is a co-op or linked to a co-op, if it is in the public interest to do so.

For the reasons set out in the Ministerial Statement by Minister Edwin Tong on 14 October 2024, I support the Government’s decision that it is not in the public interest for the Income-Allianz deal in its current form to proceed.

The amendment is required if Minister Edwin Tong, as Minister in charge of CSA, views on the deal are to be considered, as Income is not a co-op but a corporation. As a corporation, the approval for the deal rests with MAS under the Insurance Act.

There are a few points I wish to touch on in my speech. One is the effectiveness of the due process for review and approval of the deal, and that the interest of Singapore and Singaporeans is protected. Two, that the amendment proposed is targeted and scoped to address the co-op. This upholds the stability of Singapore as a key financial services hub, which includes insurance, a key asset class for businesses that invest in Singapore.

Let me now touch on due process. The hon Member Mr Saktiandi had also mentioned this, that the process that we are currently going through has allowed the decision to halt the deal and the fact that we are here today to debate and approve the amendments to the Insurance Act for MAS to consider the views of the Minister-in-charge of co-operatives, demonstrates that due process works and that it supports the making of sound and the right decisions.

I want to commend the work of the officers from both MAS and MCCY. There has been some questions on the silos. We have got to be fair to our officers. They are doing their work. I am glad that when they spot an important information that is required, they have the courage to speak up and bring it up; and the process allows for that. So, let us not put too much criticism on this process because it might instill an opposite behaviour. We need to protect this as well.

When Allianz announced the offer to buy 51% stake in Income in July this year, Members of Parliament, from both sides of the House, filed Parliamentary Questions. This allowed for clarifications, even as the relevant agencies, in this case MAS and MCCY, were reviewing the deal.

Work to assess the details of the deal and the due diligence on the deal by MAS and MCCY continued, even after the clarifications in Parliament. This has allowed Minister Edwin Tong to be appraised of the right information and, therefore, inform us that given the context of the exemption from section 88 of the CSA granted to Income when it was incorporated in 2023, there were concerns that these terms and the structure of the deal and the ability of Income to fulfil its social mission would be impacted.

Hence, the decision not to approve the deal in its current form and the Ministerial Statement made in Parliament on Monday this week, to inform Parliament of the decision. And it is the right decision.

Let me talk about the proposed amendments to the Insurance Act. Like many, I am also very concerned because Singapore is a recognised financial hub with many financial institutions operating in Singapore. Businesses invest in Singapore because of the confidence in Singapore and our regulatory process and the certainty and predictability of the environment.

The role that MAS plays in the supervision and the development of Singapore's financial services sector, providing stability for businesses. The life insurance market in Singapore and the insurance market, as a whole, is active and competitive with numerous players vying for market share. The industry is regulated by stringent requirements under the Insurance Act and regulatory capital requirements.

So, as this is an urgent Bill, it is appropriate that the proposed amendments are scoped and not broad-based so as not to impact the larger insurance market in Singapore or cause undue anxiety amongst insurers in an already regulated sector.

I support that the amendment is specific and applies only to a licensed insurer that is the subject of an application under sections 26 and 27 of the Insurance Act and where the licensed insurer is a co-operative or linked to a co-operative. This calibrated approach makes it clear on the reasons for taking such an approach and, therefore, to some extent will give some assurance to the business community.

As explained by Minister Edwin Tong in his Ministerial Statement and as shared by Minister Chee Hong Tat in his speech earlier, the Government recognises that insurance co-operatives are a special category of insurers with a social mission and the proposed amendments to the Insurance Act are necessary to allow MAS to consider the views of the Minister overseeing co-operatives and for the Minister-in-charge of MAS to withhold approval for the deal, if it is in the public interest to do so and for the reasons that Minister Edwin Tong had explained in his Ministerial Statement on Monday. So, I believe that the decision taken and the proposed amendment to the Insurance Act is a balanced one.

It is a balanced approach to preserve the unique role of co-operatives and their social mission in Singapore while staying open to the appropriate structures that will allow the strengthening of co-operatives or entities linked to co-operatives, to enable them to continue to meet its social mission in a sustainable manner.

I must say that co-operatives operate in a very unique way in Singapore and the very reason why we are taking the measures that we are taking today and we are here to debate this is because of their special nature and the recognition of that. So, I do believe that it is a calibrated approach and it is a balanced one. Mr Deputy Speaker, I support the Bill.

Mr Deputy Speaker, Sir, I would like to declare first, that I am serving as a labour Member of Parliament in NTUC. The genesis of today's Bill is because of the proposed transaction between Allianz and Income Insurance.

Specifically, today, it is about amending the Insurance Act to provide a clear statutory basis for MCCY's views to be considered in any approval under sections 26 and 27 of the Insurance Act in such applications related to insurance that are either co-operative or linked to a co-operative. Minister Edwin Tong, on Monday, has shared MCCY's concerns over the terms and the structure of the proposed transaction.

So, please allow me to take the House through the key considerations why NTUC supported the proposed deal and our commitment to the larger social mission.

Let me start by saying that Income is no ordinary insurer. It holds special significance for the Labour Movement as our first social enterprise. Income has played an important role in providing affordable insurance for workers and Singaporeans at large. When NE briefed the NTUC Central Committee (CC) about the proposal, it was, therefore, difficult for the unions to learn that NE was planning to sell a majority stake in Income to Allianz.

But we understood the challenges that Income faced. To do good, it must also do well. We knew this has become even harder amidst a more competitive and tightly-regulated insurance landscape. NE went into this deal to strengthen Income in the longer run and the NTUC CC agreed with the strategic intent and approached it in good faith.

I hear and understand from various Members in the House that there were many questions and points that were raised by Members but today's session is focused on the amendment Bill. There are questions that are posed to NTUC and, especially so, there are many questions that were posed to Income and NE. I will take these comments, questions back and, of course, to the relevant entities so that they can find a suitable occasion to address them.

But specific to a question that was raised by both Mr Leong Mun Wai as well as Mr Raj Joshua Thomas, I thought maybe I should address the question about whether the NTUC CC was informed of the capital reduction. First, let me just briefly explain the structure and the relationship between NTUC and NE. NTUC is a major shareholder of NE, which is the holding entity of the social enterprises, which includes Income.

In the prevailing governance model, NTUC, as a shareholder of NE, has delegated to NE Board to make decisions pertaining to all businesses and do not get involved in the day-to-day running. Specific to this transaction, NTUC CC was briefed by NE and Income on the strategic imperatives for the deal and did not highlight to CC, the capital reduction plan.

In fact, CC and myself only knew of this on Monday at the Ministerial Statement. As I am made aware now, from the clarifications with NE and Income, Income as a non-listed public company would have to comply with the legal responsibility of non-disclosure of commercially sensitive information on the Allianz plans post-acquisition, a point that Mr Leong Mun Wai also brought up, because as a non-listed public company, NTUC and Income are subject to the Singapore Code of Takeover and Mergers.

Let me talk about the social mission of Income, NE and NTUC. Income had also committed to its social mission, which included providing low-cost insurance schemes for union members and keeping premiums affordable for workers in the lower-income and the marginalised segment.

Income pledged $100 million over the next 10 years from 2021 to provide social mobility among the low-income and support the well-being of our seniors. I would add that the NTUC social mission goes beyond insurance.

Over the past 10 years, NTUC social enterprises, including Income, did much for the social good of Singapore through donating nearly $300 million to support the charitable works of NTUC Foundation, Bright Horizons Fund, Health for Life Fund, NTUC Education and Training Fund, NTUC-U Care Fund and Income Orange Aid.

The proceeds from this transaction would also enable NTUC and NE to continue doing good in other areas, such as in elder care, as our population ages, to continue our social mission as we have done for the last 50 years.

We appreciate that Minister for MCCY, in his Statement, acknowledged that Income, with NE's support, has grown through the years to serve Singaporeans' needs. He also mentioned that the Government understands and accepts the strategic purpose behind Income's corporatisation and the subsequent exercise to form a partnership with Allianz: to strengthen Income and to make it more financially viable in the longer term.

Minister Chee Hong Tat has also acknowledged that NTUC had acted in good faith and in the interests of workers and members. So, in fact, if you look at it, the Government and NTUC share the same strategic intent and broader objectives for Income and the co-operative movement.

But as far as the specifics of this transaction is concerned, there is now, perhaps, a difference in view, as Minister for MCCY has clearly laid out the concerns over circumstances behind Income's corporatisation and the Ministerial exemption given as well as the terms and structure of the proposed transaction.

NTUC has reviewed the matter and accepts the Government's considerations and decisions on the proposed transaction. We also support the Bill to amend the Insurance Act to provide a clear statutory basis to provide for MCCY's view to be considered in applications related to insurance that are either co-operative or related to co-operative. We note that the Government remains open to any arrangement that Income may wish to pursue, whether with Allianz or any other partners, so long as the concerns highlighted are fully addressed. Income has committed to study carefully, the implications of the Ministerial Statement by Minister for MCCY and the amendments of the Insurance Act and will work closely with the relevant stakeholders to decide on the next course of action.

From the outset, NTUC's objective was to build a stronger Income so that it can do well and it can do good. The Labour Movement, which includes NTUC and the enterprises, are united in our purpose and we will continue to do right by our people and what is necessary for the longer-term interest to serve workers and the people of Singapore. [Applause.]

Thank you, Mr Deputy Speaker. Sir, on Monday, I made a Ministerial Statement, raising a number of points and explanations, which I do not propose to go back into. This afternoon, there have been a number of contentions concerning various parties and suggestions as to who knows what and at what stage and which party.

Let me just be clear that I am not privy to any of Income or Allianz's thinking about the transaction or its deliberation and the views that they may have taken, in relation to or arising from the transaction. As I have explained on Monday, MCCY was given information, which it reviewed, looked at carefully and decided that it would not be in the public interest to allow this transaction to proceed.

Thereafter, we discussed and proposed for this Bill to take effect so that MAS and the Minister overseeing MAS would have the ability to take on board MCCY's views in relation to this particular transaction. So, I hope that makes it quite clear as to where I am coming from when I give my answers today.

There were also a number of Members who asked what happened behind the scenes, what steps were taken and whether or not some parties were approached.

Let me first start by saying that the decision to take this step was not one that was taken lightly. It was after very careful, deliberate consideration and even after that, it was decided that we ought to do this in as narrow a way as possible, as I had explained in Parliament on Monday. In addition, the Government decided to act after we came to this conclusion and to do it in as transparent and as forthright a manner as possible. Let me explain.

First, we decided to give a complete account of the basis of our objections and our views right here in Parliament. As I have explained, there are considerations because it is a live deal. There is price-sensitive information, market-sensitive information, but the moment we were aware as to what steps we were going to take, how we proposed to take them, we came here, made a Ministerial Statement and explained fully, and then tabled the Bill.

We have made it clear that the Government does not have concerns over Allianz's standing or suitability to acquire a majority stake in Income. Allianz is a major global insurance company and asset manager, and we acknowledge that it can bring financial strength and expertise to Income. Our objections were to the structuring of the transaction and some of the terms of the deal, as I had explained on Monday.

Second, we framed this Bill because we acknowledge that under the Insurance Act today, there is no provision explicitly which allows MAS to consider the views of MCCY in the case of an application relating to an insurer that is either a co-op or linked to a co-op. Therefore, we tabled the Bill, as I mentioned, narrowly to amend the Insurance Act to provide a clear statutory basis for MCCY's views to be taken into account.

Third, as I mentioned, the amendments are scoped specifically to only apply to a licensed insurer that is subject to an application under sections 26 and 27 of the Insurance Act and where the licensed insurer is a co-op, has acquired the business of a co-op, or as substantial shareholder or effective controller which is a co-op. We are not seeking broad powers that cover general insurance transactions or of a broad remit in nature.

Sir, we have chosen to act in this way because we feel that that is the most transparent and above-board manner. It will uphold rather than diminish Singapore's consistent reputation as a hub for business that is open, transparent and rules-based.

Mr Saktiandi asked whether and what steps have been taken to engage Allianz and if any engagement had been planned. Sir, MAS and MCCY, as I had explained, we sought to understand the plans and the proposed transactions. So, we obtained information, we studied them, and once we assessed and decided that it is not in the public interest to proceed with the deal, we thought it is better to take an open and transparent approach in the manner that I have outlined.

Mr Neil Parekh and Mr Mark Lee raised some questions around social mission. I think Mr Chua, in particular, has related his own experience. Sir, it is very broad and I think Mr Chua's speech does acknowledge that it is sometimes in the nature of the way in which social mission has to be carried out and it also has to evolve to match the aspirations and the needs of each generation.

So, by definition, there has got to be a level of flexibility, malleability, which allows the parties charged with their social mission to adjust and to take steps to adjust. In this case, parties would have heard from my Ministerial Statement that Income – and I think earlier on, Members heard Senior Minister of State Desmond Tan speak to that as well – had reiterated that it would discharge its social mission at the point of corporatisation and exemption and also at the point of this transaction.

Specifically, in the case of Income, it has over the years been very clear in seeking to expand its social mission such as providing for the needs of persons with disability, migrant workers, low-income workers. This is how it looks at its social mission portfolio and I am not saying that it may not change down the road. Depending on the needs of society, that may well need to change.

So, in some ways, you have got to give flexibility to the manner in which a social enterprise looks at its mission in the context of the industry that it is in and decides what specific products to raise. I think Ms He also asked whether one day it could become health insurance. I, as I said, I am not speaking for Income, but I would not see that it is so unconnected from its current life insurance business that it may well be covered. But it is something that I express no view on, save to say that I think we need to give some degree of flexibility and malleability to the concept.

I want to also say that the point of applying for exemption from section 88, a point I alluded to earlier, Income did emphasise that it continues to remain strongly committed to its social mission of providing affordable, accessible and sustainable insurance to the underserved communities. In relation to what Mr Chua said, what Mr Parekh said, that definition by Income itself gives you some indication as to how they see the social mission and how they see themselves discharging that social mission.

Whilst I am on the point about the exemption, Ms He raised a couple of points on the exemption and I would like to address them.

To recap, I had explained previously the circumstances in which Income, the co-op, proposed to convert its legal status from a co-op into a corporate status. There were advantages that it felt it could avail themselves of, such as, for instance, there were limitations on the extent to which dividends could be declared by a co-op and that itself made it less attractive for investors, for strategic partners to come in to work with Income. It also needed the ability to broaden its capital base. I think there are some debates about what we mean by capital buffers, capital resiliency. I will address that in a moment.

But what is important to bear in mind in relation to Ms He's question on representations and what was discussed in the context of the corporatisation and the exemption, Income said very clearly it wanted to do better in the insurance business. It emphasised that it would continue to do its social mission as before, based on a quote I read earlier, and that it would only change its legal form as far as its business was concerned.

What is also important to bear in mind in the context of the exemption is that section 88 applies, as I explained, in the context of a social co-op seeking to wind up its business, to cease its business, stop altogether and then after paying off its debts and accounting for other charges, it will have surplus or it may have surpluses, which then comes into the consolidated fund. That is the raison d'etre behind section 88.

In the context of Income, the co-operative, the raison d'etre, or purpose, is quite different. First, it was being liquidated and wound up, it was not ceasing its business. In fact, on the contrary, it was trying to do its business better in a corporate vehicle that would allow it to reach out to strategic partners, access capital and so on, to do its business better. It was fundamentally not winding up its business, not stopping. And therefore, on that basis, it needed to then say, I would also have these surpluses, which I had accumulated before, brought into the new entity. It was on that basis that we granted the exemption for the surpluses to also flow through into the new corporate entity.

Ms He also asked whether there is a link between surpluses and social mission. As I had explained earlier, I think we have to give a degree of flexibility to the entity charged with that social mission to decide how to apply it. In the context of Income, as it stood post-corporatisation, its majority shareholder was NE, also a co-operative. It also had a number of other smaller minority shareholders, amongst which were also co-operatives.

In that context, we left it to them to decide how you want to carry out your social mission, how you would deploy the surpluses. You may offer migrant workers insurance; you might offer mental wellness insurance and so on. It is something that I think we need to give them a broad remit over, given especially that they have converted into a corporate entity, a point that I made on Monday as well. You cannot, on the one hand, say you can corporatise, but on the other hand, you still have to behave as if you are a co-operative entity.

Sir, I hope that answers Ms He's questions around the surpluses and the link to the social mission. I would add, Sir, that it is not for me to say how Income ought to have structured its transactions with Allianz or with any other party.

What we do know is, in this present arrangement, for the reasons I have set out, which I will briefly summarise in a moment, we were not comfortable that after this transaction, given the context in which it was done, that Income would be able to carry on with its social mission. The reasons we came round to this view, if I may reiterate, were the capital reduction occurring so soon after the exemption, the amount that was involved, the fact that there was no arrangement within the terms of the present transaction which would safeguard or ring-fence the advancement of Income's social mission, nor were there any structural protections in the terms of the proposed transaction that would allow us to have comfort that its social mission would be protected. We were also not clear what other adjustments or changes Income might be able to make thereafter to its portfolio, whether it would serve this area of underserved in the insurance business, trim its portfolio, change it altogether or reduce. There were also no controls there.

So, cumulatively, these factors, taken in the context of this transaction, where Income would cede majority control, were the reasons why we felt in this case this was not acceptable.

As to what is acceptable, it is not for us to speculate, and if the parties, as they have indicated publicly, wish to re-evaluate, reconsider, we will consider that when they have structured any new arrangements.

Sir, finally, I want to address Ms Hazel Poa's speech. She makes the case that the 4 August 2024 statement by Income is misleading. I think the Member quoted the words "capital resilience" which I think it is paragraph 7 of the statement that she was reading from. Am I right?

Yes. Sir, the transaction is between two insurance companies and part of the arrangement following the transaction was a capital optimisation exercise. In the context of an insurance company, I think Members would understand that there is a need to maintain a capital adequacy ratio. The ratio is determined either by reference to the assets you have or the liabilities you carry. Either one of them can affect your capital adequacy ratio. And consequently, either one of them can affect your capital resiliency. If you increase capital, you can have a better capital adequacy ratio. Similarly, if you decrease your liabilities, you can also increase your capital resiliency and ratio.

On that basis, this arrangement allows for Income to reinsure part of its portfolio of risk. And the moment it is able to reinsure that portfolio of risk, it would not have to maintain that level of capital to meet the capital adequacy ratio.

So, in that context, even in the proposed plan for a capital reduction to take place, if you have a portion of the portfolio that has been reinsured and taken off your liability books, that will contribute towards a more healthy and positive capital adequacy ratio.

I do not have details and specifics of the numbers and the plans, but that is the principle on which this was done. That is why we are able to say, as I did on Monday, that after evaluating the capital optimisation plan, MAS was satisfied that despite the capital reduction taking place, Income, the new entity, would still be projected to meet all its capital adequacy ratios with a healthy margin. I hope that explains. And that is why on Monday I said this statement is not misleading.