Income, Allianz must ensure insurance policies stay unchanged: Chee

Insurers must maintain sufficient capital reserves, treat customers fairly: Minister

- Kang Wan Chern and Toh Yong Chuan

The Monetary Authority of Singapore (MAS) will hold Income Insurance and Allianz to account in ensuring that there will be no change to the terms and conditions of existing insurance contracts, should the regulator approve Allianz's offer to acquire a controlling stake in Income.

"MAS expects Income to fulfil its obligations to all policyholders under the terms of its existing insurance contracts. Allianz has also publicly stated its intent for Income to do so. MAS will hold Income and Allianz to account to these commitments," said Second Finance Minister and MAS board member Chee Hong Tat in Parliament on Aug 6.

He added that MAS' regulations and guidance require insurers to maintain sufficient capital reserves and treat customers of participating policies fairly.

Participating policies allow policyholders to share in the profits of the participating fund.

"MAS protects the interests of policyholders by restricting the ratio of profits allocated to shareholders and the type of expenses insurers may charge to the participating fund," he said.

Mr Chee was responding to questions relating to Allianz's offer to acquire a 51 per cent stake in Income for $40.58 a share, which values a deal at $2.2 billion.

Should the deal go through, NTUC Enterprise (NE) will retain a substantial stake of up to 49 per cent in Income, depending on how minority shareholders tender their shares. NE now holds a 72.8 per cent stake in Income.

The deal is subject to MAS' approval.

Mr Chee said that in assessing the offer, which involves a change in substantial shareholder in a Singapore insurer, MAS will consider Allianz's track record, financial soundness, reputation, as well as fitness and propriety.