INCOME INSURANCE’s social mission will not change, according to Second Minister for Finance Chee Hong Tat in Parliament this Tuesday (6 Aug). “It will continue to look after the well-being, especially of the lower-income policyholders.”
Two low-cost insurance schemes for union members, NTUC GIFT and LUV, are proof of this social commitment. These schemes will remain in the future.
Other existing Income policyholders will also remain protected, said Minister Chee.
“As regulator, MAS [the Monetary Authority of Singapore] will look at the interests of the policyholders. And for the existing policyholders that have existing insurance contracts with Income, we will hold Income and Allianz to their commitments that they have both made to ensure that the terms and conditions of the existing insurance contracts will have no change,” said Minister Chee, who is also Deputy Chairman of the MAS.
Source: Chee Hong Tat / Facebook
Income was set up in the 1970s, for a vastly different Singapore. The PAP Government has strengthened our nation’s social support system. Public healthcare is heavily subsidised. The market for insurance is also vastly more competitive, with more options available to Singaporeans.
“Income has to operate in this new environment. In fact, the premiums for several of its schemes are not the cheapest in the market,” said Minister of State for Culture, Community and Youth Alvin Tan.
Income’s capital buffers have also repeatedly come under pressure. “NTUC Enterprise has supported Income with capital injections and will continue to do so,” added MOS Tan. “But NTUC Enterprise cannot do this on its own.”
Here, the Income-Allianz deal means access to more capital for Income. In turn, this means more competitive insurance plans for Singaporeans in the future — and help more families sleep more soundly.
PAP MPs speak up for Singaporeans
Source: Foo Mee Har / Facebook
Our MPs soon had questions on behalf of Singaporean policyholders as well as Singapore’s workers.
MP Foo Mee Har (Ayer Rajah GRC) asked how the deal would affect the jobs of Income’s 2000 staff.
“The assurance I want to give to the Member, and also to our workers, is that we expect Income and Allianz, we expect the entity to treat its workers fairly. And to comply fully with the MOM employment laws and guidelines,” said Minister Chee.
“If the workers are not treated fairly, that’s where MOM and NTUC will be able to come in and help to speak up for our workers. Just like what NTUC has done in previous cases. NTUC will step forward and fight for our workers, to give our workers a fair deal,” added Minister Chee.
Source: Yip Hon Weng / Facebook
MP Yip Hon Weng (Yio Chu Kang SMC) asked how the MAS would evaluate the social impact and financial inclusion outcomes of the potential deal. Income is a very well-established social enterprise, he noted.
“For MAS, our belief is that the best way to protect our policyholders, whether existing or future, is to have a competitive insurance industry. And insurers which are well run, which will then provide stability over the longer-term and offer choice, offer options and offer competitive rates to policyholders,” replied Minister Chee.
Doing well in order to do good
Source: Denise Phua / Facebook
A final exchange between MP Denise Phua (Jalan Besar GRC) and Minister Chee summed up the rationale behind the deal.
“FEs (financial entities] are difficult to run because they have to meet both financial and social bottom lines. So it’s even costlier to keep them around, you know, just for sentimental reasons. So I understand that,” said MP Phua, speaking from her extensive experience running charities and social enterprises across Singapore.
“This is also the Government’s belief: That in order for an entity to do good, it must first be able to do well. So that it can sustain doing good.” answered Minister Chee. “That philosophy, as Dr Goh Keng Swee articulated, still remains very true today.”
“One of the key objectives that NTUC wants to achieve, and NTUC Enterprises wants to achieve is exactly that. They are not moving away from their social mission,” added the Minister. “This is a better way of fulfilling that social mission, and this is a more effective way for them to do good if they are able to have a strong Income.”
