Decision to amend Insurance Act to halt Allianz-Income deal made by PM with Cabinet: Shanmugam
Source: Straits Times
Article Date: 07 Nov 2024
Author: Goh Yan Han
He says decision to amend Insurance Act to halt deal made by PM Wong with Cabinet.
The ultimate decision to amend the Insurance Act – which would prevent the current form of the Allianz-Income deal from going through – was made by Prime Minister Lawrence Wong himself, together with the Cabinet.
Law and Home Affairs Minister K. Shanmugam clarified this in a Facebook post on Nov 6 after former NTUC Income chief executive Tan Suee Chieh, in his own Facebook post, said he had passed on his feedback on the proposed deal through Mr Shanmugam.
The Government announced in Parliament in October that the deal between German insurer Allianz and Income Insurance in its current form had been called off over concerns about the deal structure and the ability of the local insurer to continue its social mission.
It then rushed through an amendment to the Insurance Act to allow the approval of the deal to be withheld. This paved the way for the Monetary Authority of Singapore (MAS) to consider the views of the Ministry of Culture, Community and Youth (MCCY) in future applications related to insurers that are cooperatives or are linked to them.
In a Facebook post on Nov 6, Mr Tan said that when the deal first became public in July, he sought to engage MAS and NTUC, but neither responded to his private or public approaches. He had been publicly critical of the deal on social media since it was first made known.
By mid-August, he began reaching out to several senior government officials whom he had known personally through his career, said Mr Tan. Mr Shanmugam served as Prudential Singapore’s corporate lawyer when Mr Tan was then chief executive of the firm. Mr Shanmugam engaged with him several times over two months, allowing him to clarify his views, said Mr Tan.
He added that he sensed that Mr Shanmugam “played a pivotal role in the internal deliberations that ultimately led to halting the deal”.
Mr Shanmugam said on Nov 6 that Mr Tan had perhaps overestimated his role and influence.
“The deal, and (Mr Tan’s) views on the deal, do not fall within my purview. I was a conduit, sending his views on to the relevant ministers,” he said.
He added that he told Mr Tan that while his views had been carefully considered, the Government had a different view on most of the points he had made even as it came to the same decision that the deal cannot go through.
Mr Shanmugam also clarified two misperceptions relating to the halting of the deal that he had noted from wider discussions.
First, some have suggested that the Government was intent on proceeding with the deal, and changed its views only when there was public feedback.
Mr Shanmugam said those with this view assumed MCCY had known about the deal from the start, but this was not the case.
MCCY and most of the Government knew about it only when it was publicly announced in mid-July, he said.
This is because NTUC Enterprise (NE) – the parent company of Income – is a private company and Allianz is a listed company.
“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,” he added.
There was also no reversal of a decision as the deal had not been approved during the August or October parliamentary sessions, he said.
Second, some had said that the Government is not coordinated because MCCY did not know what MAS knew regarding the deal.
Mr Shanmugam said that it would not be practical for the Government as a whole to know everything about the deal when it was announced in July.
“What is MAS expected to do: to broadcast to all government agencies every deal, and approve only when all of them have given their agreement? That is an extreme and untenable position,” he said.
It would breach MAS’ duty of confidentiality, undermine trust in Government and damage Singapore’s reputation as an international commercial hub, he added.
The deal has been stopped, with full regard for the law and due process, he noted.
“That is how this Government functions: Working within a framework of laws. Coordinating closely across agencies. Making decisions based on the full facts,” said Mr Shanmugam.
“And when Singapore and Singaporeans’ interests are at stake, we take a clear position, even if hard decisions have to be made. We do not flinch. We do not abstain. We act in the interest of, and are fully accountable to, Singaporeans. This shows a system in good working order.”
Source: Straits Times © SPH Media Limited. Permission required for reproduction.
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