Singapore’s lawmakers have amended an Insurance Act, effectively halting Allianz’s proposed $1.7bn (S$2.24bn) acquisition of a majority stake in a local insurance company, Income Insurance.
This amendment requires the financial regulator to also obtain approval from the relevant government ministry for transactions involving insurers that are cooperatives or linked to cooperatives, stated Bloomberg.
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The legislative change follows the government’s declaration that the transaction with Income Insurance would not serve the public interest in its current state.
Concerns were raised about the insurer’s ability to continue its social aim as a cooperative post-acquisition.
Singapore Transport Minister and Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat said: “We are making the amendments on an urgent basis because the proposed transaction is under active consideration by Income’s shareholders.”
Chee emphasised that the government’s concerns were not with Allianz’s reputation but with the specifics of this transaction.
The new legislation grants the minister overseeing MAS the authority to block deals involving cooperative-run insurers.
The updated laws empower the MAS minister to reject applications involving insurers like Income if deemed in the public interest, without the option for appeal. Chee presented the urgent Bill, highlighting the active consideration of the transaction by Income’s shareholders.
In July this year, Allianz and Singapore’s Income Insurance announced discussions about a potential partnership.
Allianz’s plan to purchase at least a 51% stake in Income from NTUC Enterprise Co-operative has faced widespread criticism.
Income Insurance, which acquired the assets of Income Co-operative in 2022, is majorly owned by NTUC Enterprise with a 72.8% stake.
