Chee Hong Tat on safeguarding customers’ interests in planned acquisition of Income Insurance by Allianz

The Monetary Authority of Singapore (MAS) had reviewed and was satisfied with the relevant processes Income’s board had put in place to address conflicts of interest in the appointment of its financial adviser on its proposed deal with Allianz Insurance and the decision to enter into the deal, said Second Minister for Finance Chee Hong Tat. Replying to Parliamentary questions on Tuesday (Aug 6), he said fostering a competitive insurance market with financially strong insurers is a key part of MAS’ approach to ensuring that insurers operate sustainably and serve the public well. A competitive market is the most effective way to meet the insurance needs of Singaporeans and facilitate access to affordable insurance options and good service over the longer term, he said. Mr Chee pointed out that there is no significant overlap between Income’s and Allianz’s overall Insurance business in Singapore. Hence, there is “no concern about adverse impact” of the proposed deal on competition in the sector, he said. Turning to the impact on Income’s existing policyholders and employees, Mr Chee said should the proposed deal be approved, there will be no change to the terms and conditions of existing insurance contracts. MAS expects Income to fulfil its obligations to all policyholders under the terms of its existing insurance contracts. Mr Chee noted that Allianz has publicly stated its intent for Income to continue to honour the terms of the existing policies underwritten by Income and ensure a seamless transition, with no impact to existing policyholders. MAS will hold Income and Allianz to account to these commitments, said Mr Chee. MAS has regulatory requirements and guidance in place for insurers to maintain sufficient capital reserves, put in place robust governance and risk management frameworks, and treat their customers fairly, he added. As for employees, MAS does not regulate the employment decisions of financial institutions. However, it expects all financial institutions, including Income, to treat their employees fairly and to fully comply with the Ministry of Manpower’s employment laws and guidelines. “MAS encourages all insurers, both local and foreign, to continually innovate, adopt best practices and ensure robust risk management. This will foster a competitive insurance market that offers choice, value and stability to protect the interests of policyholders,” said Mr Chee.