Speech on Second Reading of the Insurance (Amendment) Bill by NTUC DSG Desmond Tan and MP for Pasir Ris-Punggol GRC on 16 October 2024

Mr Speaker Sir,

I would like to declare first that I am serving as a Labour MP 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 (IA) to provide a clear statutory basis for MCCY’s views to be considered in any approval under sections 26 and 27 of the IA in such applications related to insurers that are either a co-op or linked to a co-op.

Minister MCCY on Monday had 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.

NTUC and NE acted in good faith

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 NTUC Enterprise, or NE, briefed the NTUC 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 Central Committee agreed with the strategic intent and approached it in good faith.

Now I hear and understand from various members in the House that there were many questions and points that were raised by MPs and today’s session is focused on the Amendment Bill. And their questions that are posed to NTUC, and especially so, there are many questions that are posed to Income and NTUC Enterprise. I will take these comments and questions back, of course, to the relevant entities, so 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 Thomas, I thought maybe I should address the question about whether the NTUC CC was informed of the capital reduction. But 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 include 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 Central Committee was briefed by NE and Income on the strategic imperatives for the deal and did not highlight to the Central Committee the capital reduction plan. In fact, the Central Committee and myself only knew of this on Monday at the Ministerial Statement and 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 Allianz’s plans post-acquisition - a point that Mr Leong Mun Wai also brought up. Because as a non-listed public company, Income is subject to the Singapore Code on Take-overs and Mergers.

Now let me talk about the social mission of Income, NTUC Enterprise 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 S$100 million over the next 10 years from 2021 to provide social mobility among the lower-income and support the well-being of our seniors.¹  

I would add that NTUC’s social mission goes beyond insurance. Over the past 10 years, NTUC’s social enterprises including Income did much for the social good of Singapore through donating nearly S$300 million to support the charitable works of FairPrice Foundation, Bright Horizons Fund, Health for Life Fund, NTUC Education and Training Fund, NTUC-U Care Fund, and Income OrangeAid.²

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

Support for Bill

We appreciate that Minister 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 has also acknowledged that NTUC has acted in good faith, and in the interests of workers and members. So infact if you look at it, the Government and NTUC share the same strategic intent and broader objectives for Income and the Co-op movement.

But as far as the specifics of this transaction is concerned, there is now perhaps a difference in view, as Minister 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 insurers that are either a co-op or related to a co-op. 

NTUC presses on to fulfil our Social Mission to serve workers and Singaporeans

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.³  

Income has committed to study carefully the implications of the Ministerial Statement by Minister MCCY and the amendments of the Insurance Act, and will work closely with 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 include NE and NTUC) 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.    

Thank you.