MAS sets on record its regulatory oversight in Allianz’s offer for Income Insurance

The Monetary Authority of Singapore (MAS) has on June 23 set on record matters related to its regulatory oversight during German insurer Allianz’s planned offer to buy a majority stake in homegrown Income Insurance in 2024.

In a late night release, the regulator outlined key events and points in response to former NTUC Income chief executive officer Tan Suee Chieh’s open letters on the proposed acquisition, which fell apart after Allianz withdrew its offer on Dec 16.

MAS’s reply comes ahead of Income’s annual general meeting, which is scheduled to take place on June 24 evening.

In July 2024, Allianz announced plans to buy a majority stake of at least 51 per cent in Income for $40.58 a share in a $2.2 billion cash deal.

The offer faced public backlash due to concerns that Income might shed its social mission of providing affordable insurance to Singaporeans. Then, majority shareholder NTUC Enterprise and Income had assured that affordable insurance would be maintained. 

Questions were later raised in Parliament about the deal’s impact on policyholders and the company’s social mission, with government officials stating that Allianz and Income would be held accountable for their commitments.

It was later revealed that Allianz had a capital reduction plan where Income would return $1.85 billion in cash to shareholders within three years. This drew concerns from the Government and the law was urgently amended to allow the deal to be blocked.

Mr Tan’s three open letters - of which two were published in August 2024, and one on April 28, 2025 - included questions about MAS’ regulatory oversight of the transaction.

The letters were addressed to the MAS and its chairman, Deputy Prime Minister Gan Kim Yong.

Mr Tan had also written to MAS on June 9, 2025, seeking a response and requesting a meeting with DPM Gan or a senior MAS representative.

Mr Tan was CEO of NTUC Income from 2007 to 2013 before becoming group CEO of NTUC Enterprise from 2013 to 2017.

MAS said on June 23 that Allianz and NTUC Enterprise had received its approval prior to Allianz making its pre-conditional voluntary cash general offer on July 17, 2024.

The approval was to allow the two entities “to enter into an agreement or arrangement to act together to acquire an interest of 5 per cent or more of Income’s voting shares”, as outlined in the Insurance Act.

It did not mean that MAS had approved the deal, said the regulator.

“The proposed transaction was subject to further regulatory approval from MAS for Allianz to obtain effective control and become a substantial shareholder of Income,” said MAS.

At this point, the regulatory approval process was not completed and would have taken a few months for MAS to complete its assessment, it added.

Mr Chee Hong Tat, who is MAS deputy chairman, had said in Parliament on Aug 6, 2024 that “the proposed deal was still subject to MAS’ regulatory approval” and there was “due process for this”.

MAS reiterated on June 23 that it had received Allianz’s preliminary business plan for Income in mid-July 2024.

This included a set of business and financial projections, which included a plan for capital efficiency and reduction.

“There was no application to MAS to approve the capital reduction plan, neither did MAS give any such approval. Any capital reduction would need separate and specific MAS approval,” said the regulator.

The capital reduction plan proved to be a sticking point in the proposed deal.

A key factor was the ministerial exemption that Income received when it was corporatised in 2022, which allowed it to carry over a surplus of about $2 billion. Otherwise, the money would have been returned to the Co-operative Societies Liquidation Account to benefit the sector at large.

While the MAS did not have prudential grounds for concern about the transaction after the Aug 6 parliament sitting, it had noted that the capital reduction plan could be relevant to Ministry of Culture, Community and Youth (MCCY), given Income’s previous status as a co-operative society.

After MAS shared the information with MCCY, the Government decided to amend the Insurance Act on an urgent basis to allow the approval of the deal to be withheld.

This paved the way for the MAS to consider the views of the MCCY in future applications related to insurers that are cooperatives or are linked to cooperatives.

During the Parliament sitting on Oct 14 when the legislative amendment was tabled, then-MCCY Minister Edwin Tong explained that “when we first saw the announcements, we accepted the intent of the transaction, which is to strengthen Income.”

He also stated that “the Government also does not have concerns over Allianz’s standing or suitability to acquire a majority stake in Income”.

However, MCCY found it “difficult to reconcile the proposed substantial capital reduction, soon after the transaction is completed, with Income’s representations to MCCY during the corporatisation exercise that it was aiming to build up capital resources and enhance its financial strength”.

MCCY was also “not satisfied that Income will be able to continue fulfilling its social mission after the proposed transaction.”

Mr Chee, who was then the Transport Minister and Second Minister for Finance, also made clear on Oct 16 that “there is no formal application yet by Allianz to obtain effective control and become a substantial shareholder of Income”.

MAS said on June 23 that before sharing the capital reduction plan with MCCY, the regulator “had not been aware of the representations that Income had made to MCCY when it was allowed to carry over $2 billion in surplus to the new corporatised entity”.

Allianz withdrew its offer in December, and the matter was raised by various members of alternative political parties during the recently-concluded General Election.

MAS said it will not agree to Mr Tan’s meeting request “given that the proposed transaction and amendments to the Insurance Act had been extensively debated in Parliament, and addressed again in this open reply”.

“Nevertheless, if Mr Tan has further feedback or information to share with us, we will duly consider them,” it added. 

Sequence of key events

2024

July 17: German insurer Allianz offers $40.58 a share to buy a stake of at least 51 per cent in Income Insurance in a $2.2 billion cash deal. 

NTUC Enterprise, which holds a 72.8 per cent stake, has given an irrevocable undertaking to accept the offer.

Mid-July: Allianz, Income and its parent NTUC Enterprise submit plans to the Monetary Authority of Singapore (MAS) around the time the offer was made. It includes details about Income returning $1.85 billion in cash to shareholders within the first three years after the deal wraps up. This was not publicly disclosed. 

July 25: NTUC Enterprise chairman Lim Boon Heng says that Income will continue to provide affordable insurance after the deal. The statement comes after some former executives and members of the public raised concerns about the insurer’s social mission.

July 27: Income issues a statement that its chairman Ronald Ong had recused himself when Morgan Stanley was appointed as the financial adviser for the deal, after questions were raised about it.

July 30: Mr Lim, Income chief executive Andrew Yeo and Income board’s lead independent director Joy Tan further clarify concerns over the deal in an interview with ST and in a separate joint statement. 

Aug 4: NTUC Enterprise and Income rebuts an open letter by former NTUC Income chief executive Tan Suee Chieh, in which he objected to the Allianz offer.

MCCY Minister Edwin Tong writes in a Facebook post that co-ops as social enterprises must be financially sustainable in order to better serve their members in a fast changing economic environment.

Aug 5: NTUC’s secretary-general Ng Chee Meng and president K Thanaletchimi say in a joint statement that the central committee was briefed on the deal, and outlined why Income needed to become more competitive.

Aug 6: The deal is debated in Parliament. The Ministry of Culture, Community and Youth (MCCY) is unaware of the post-transaction details at this time. 

After Aug 6: MCCY continues to do due diligence and enquire further into the proposed deal. MAS provides MCCY with further details, including Income’s capital optimisation plan as the regulator felt it could be relevant to the ministry’s views on the deal. MCCY had not seen this information earlier.

Oct 14: MCCY minister Edwin Tong tells Parliament that the Government will halt the deal in its current form on concerns over its structure and ability of Income to continue serving its social mission. A Bill to amend the Insurance Act is tabled on an urgent basis.

In a late statement, Allianz says it will consider revising the deal structure. Income and NTUC Enterprise say they will work closely with stakeholders on the next course of action.

Oct 16: NTUC Deputy Secretary-General Desmond Tan tells Parliament that NTUC’s central committee was unaware of the capital extraction plan and learnt of it on Oct 14. MPs debate the issue for nearly four hours, and vote to pass the Bill. 

Nov 14: Despite the government’s stance, Income and Allianz said in a bourse filing that discussions over the deal for a majority stake acquisition in the Singapore insurer were still ongoing. 

Dec 16: Allianz withdraws offer for Income in view of the legislative changes. 

NTUC Enterprise says it will take time to study how to address the Government’s concerns, and to consider all strategic options that can further strengthen Income Insurance’s financial resilience.

2025

April-May: Issue resurfaces during Singapore’s General Election.

June 9: Mr Ronald Ong will step down as Income’s chairman on Jun 24, 2025, while retaining his role at NTUC Enterprise. The search for a new chairman has begun.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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