An offer by German insurer Allianz has led to concerns over Income’s social missions.
German insurer Allianz on July 17 offered to buy a 51 per cent stake in Income Insurance at a premium.
However, he asked: Can Income continue to discharge its obligations to policyholders in the long term if it is not a growing and thriving insurance enterprise? When asked what guarantee there is that Income will continue to serve its social missions with Allianz in the driver’s seat, Mr Lim said the emphasis on doing well so that Income can serve people may have created the impression that it is focused on profit maximisation.
He added that “doing well to do good is no longer the preserve of social enterprises and cooperatives only”, noting that commercial companies globally have been subscribing to such values as well. Some policyholders are worried that their health insurance premiums will go up if the deal is approved. But the fund raising became useless for CAR when the international accounting bodies classified cooperative members’ shares, which are redeemable, as a contingent liability, he said.
NE also requested the Ministry of Culture, Community and Youth to amend the Co-operative Societies Act to allow cooperatives to create a class of irredeemable shares. Irredeemable shares in an insurance cooperative can then be classified as Tier-1 capital, counting towards CAR.individual ordinary members so that they would not be in limbo, Mr Lim said they were not permitted to take out irredeemable shares.
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