The Singapore Government’s recent decision to block the Allianz-Income deal arose from an amendment to the Insurance Act initiated by Prime Minister Lawrence Wong and his Cabinet.
This move, preventing the deal’s progression in its current structure, was clarified in a Facebook post by Home Affairs and Law Minister K Shanmugam on 6 November, in response to former NTUC Income chief executive Tan Suee Chieh’s social media comments.
In October, the Government formally announced that it halted the deal between German insurer Allianz and local entity Income Insurance, citing concerns over its structure and potential impacts on Income’s capacity to maintain its social mission.
Parliament expedited amendments to the Insurance Act, allowing the Monetary Authority of Singapore (MAS) to consider input from the Ministry of Culture, Community and Youth (MCCY) in transactions involving cooperatives or related entities like Income.
Tan, who was publicly critical of the deal, revealed in his Facebook posts on 5 November that he had contacted MAS and NTUC without success after the deal was disclosed in July.
In August, he reached out to senior government officials, including Mr Shanmugam, who had previously served as his legal counsel at Prudential Singapore.
Tan’s recent posts, including another on 21 October, suggested that Mr Shanmugam’s involvement was instrumental in influencing internal discussions that ultimately led to blocking the deal.
However, Shanmugam clarified that his role was limited to relaying Tan’s views to relevant ministers.
He emphasised that Tan’s views did not fall within his jurisdiction, and he acted as a conduit for Tan’s opinions.
“I told Mr Tan that his views had been carefully considered, but the Government had a different view on most points,” he wrote. Despite differing opinions, the outcome ultimately aligned with Tan’s opposition.
Shanmugam addressed broader public perceptions regarding the Government’s handling of the Allianz-Income deal, refuting two main misunderstandings.
First, he clarified that the Government was not intent on proceeding with the deal and did not reverse its position solely due to public feedback. He explained that MCCY and most of the Government only learned of the deal when it was publicly disclosed in July.
As private entities, NTUC Enterprise (NE), which owns Income, and Allianz are legally barred from disclosing sensitive commercial details beyond regulatory requirements.
“Deals of such commercial sensitivities cannot be disclosed to third parties, except to the regulatory bodies – to do so would be illegal. In this case, both NE and Allianz respected and followed the law,” Shanmugam said.
Secondly, Shanmugam countered perceptions of poor coordination within the Government, given MCCY’s initial lack of awareness about MAS’s review of the deal.
He noted that it would be impractical for MAS to share details of every regulatory decision with all government entities, as doing so could compromise MAS’s duty of confidentiality and Singapore’s reputation as a commercial hub. He added, “It would breach MAS’ duty of confidentiality, undermine trust in Government, and damage Singapore’s reputation as an international commercial hub.”
Reaffirming the Government’s commitment to lawful, rigorous decision-making, Shanmugam noted that “the deal has been stopped, with full regard for the law and due process.” He praised the Government’s coordinated approach, stating, “That is how this Government functions: working within a framework of laws, coordinating closely across agencies, making decisions based on the full facts.”
Second Finance Minister Chee Hong Tat and Minister for Culture, Community, and Youth Edwin Tong, in parliamentary addresses on 16 October, emphasised that regulatory concerns, particularly around NTUC Income’s cooperative legacy, informed the decision to halt the deal.
Chee explained that MAS sought legislative changes to formally include MCCY’s perspective on cooperative-linked entities, stating, “This Bill is an exception due to its urgency, because the deal with Allianz is under consideration by shareholders.”
He assured that MAS’s priorities remained aligned with prudential standards, emphasising Singapore’s ongoing commitment to being a “pro-business” hub.
Minister Chee clarified that the decision to stop the deal stemmed from structural issues affecting Income’s social mission, not Allianz’s suitability as an acquirer.
“We have to consider the unique social mission of NTUC Income… This proposed amendment will allow the Minister-in-charge of MAS to consider the views of the Minister responsible for MCCY,” he stated.
Chee noted that the amendment was “tightly scoped” to apply only to cooperative-linked entities, to avoid broader impact on other industry players.
Tong echoed Chee’s position on MAS’s responsibilities and the need to preserve the social missions of cooperative-linked entities. “The proposed amendments are intended to address the unique situation involving NTUC Income, balancing investor confidence with our commitment to social purpose,” he commented.
In his remarks on 14 October, Tong elaborated on the Government’s intervention, citing concerns about a capital extraction clause, which had not been publicly shared when the deal was first announced.
Tong explained that MCCY had previously granted NTUC Income an exemption from surrendering its S$2 billion surplus funds under the Co-operative Societies Act in 2022 during its privatisation.
He highlighted that the proposed deal would have left NTUC Enterprise as a minority shareholder with limited board influence in the new entity, raising further concerns about Income’s social mission.
Tong stated, “We had known earlier that the proposed transaction would leave NE as the minority shareholder in the new entity, with a minority of board positions and no ability to nominate the Chairman of the new Income entity.”
“On their own, these factors would not have caused MCCY to object. However, taken together with the proposed capital extraction and the lack of structural protections to ensure Income’s social mission, cumulatively, they pose a risk that MCCY judges not to be acceptable.”
MCCY reportedly became aware of the capital extraction clause only after MAS shared this information following the August parliamentary session.
In the passing of the amendment bill, Chee explained the delay in communication, noting that “As the MAS team was still assessing the proposal, they did not surface this information to the MAS Board before the 6 August Parliament Sitting… After the 6 August sitting, MAS saw that Income’s planned capital optimisation and cash remittance could be relevant to MCCY’s views and shared it with MCCY.”
“The Government then reached a view that it was not in the public interest for the deal in its current form to proceed.”
