Process through which Income Insurance Sought Exemption from Section 88 Exemption of Co-operative Societies Act
Ministry of Culture, Community and YouthSpeakers
Summary
This question concerns the process through which Income Insurance Limited obtained a Ministerial exemption from section 88 of the Co-operative Societies Act during its corporatisation. Member of Parliament Leong Mun Wai asked for details regarding this exemption and safeguards ensuring Income's compliance with its representations to build capital. Minister Edwin Tong Chun Fai explained that the exemption was granted based on representations to the Ministry to provide Income with operational flexibility and enhanced financial strength. He noted that the matter was extensively debated in Parliament and that Income remains under the regulatory oversight of the Monetary Authority of Singapore. Consequently, Income must obtain regulatory approval to reduce its share capital, transfer its business, or cancel its insurance licence.
Transcript
38 Mr Leong Mun Wai asked the Minister for Culture, Community and Youth (a) whether he can provide further details about the process through which Income Insurance Ltd sought an exemption from section 88 of the Co-operative Societies Act as part of its corporatisation; and (b) whether any safeguards were put in place to ensure that Income Insurance Ltd will comply with its representations to the Ministry during the corporatisation exercise that it was aiming to build up capital resources and enhance its financial strength.
Mr Edwin Tong Chun Fai: The corporatisation exercise of NTUC Income Insurance Co-operative Limited, now known as Income Insurance Limited (Income), including the circumstances in which a Ministerial exemption from section 88 of the Co-operative Societies Act (CSA) was granted, has been discussed extensively in Parliament in the course of a Ministerial Statement and a debate on an amendment Bill on 14 and 16 October 2024. Members can refer to the record of proceedings in the Hansard for the details. [Please refer to (a) "Pre-conditional Voluntary General Offer by Allianz for Income Insurance", Official Report, 14 October 2024, Vol 95, Issue 142, Ministerial Statements section; and (b) "Insurance (Amendment) Bill", Official Report, 16 October 2024, Vol 95, Issue 144, Second Reading Bills section.]
The corporatisation exercise as well as the Ministerial exemption from section 88 of the CSA was granted to Income following, and on the basis of, a series of discussions and representations made by Income to the Ministry of Culture, Community and Youth.
Corporatisation was intended, amongst other objectives, to give Income operational flexibility and a greater ability to build up a strong capital base. As a licensed insurer, Income continues to be subject to regulatory oversight. For instance, Income must obtain the Monetary Authority of Singapore's approval to cancel its insurance licence if it intends to cease its business, or transfer its business to another insurer, or reduce its share capital.