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NTUC supports sale of Income Insurance to Allianz amid criticism and public outcry

NTUC supports the sale of a majority stake in Income Insurance to Allianz, emphasizing long-term sustainability and commitment to its social mission. NTUC assures that existing policies and charity commitments will be honored, aiming to enhance Income’s capabilities and future growth.

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The National Trades Union Congress (NTUC) has expressed its support for the sale of a majority stake in Income Insurance, formerly known as NTUC Income, to the German insurer Allianz.

The announcement — shared by NTUC Secretary General and former People’s Action Party Minister Ng Chee Meng, comes amid significant public outcry and criticism, including concerns raised by notable figures such as former NTUC Income CEO Mr Tan Suee Chieh and Ambassador-At-Large Dr Tommy Koh.

Commitment to Workers: NTUC

Since its inception in 1961, NTUC has claimed to be dedicated to protecting and uplifting workers’ lives and livelihoods.

In its statement, NTUC reaffirmed its commitment to workers, highlighting key initiatives such as the Progressive Wage Model and the Job Security Council, which it states have safeguarded wages and employment during challenging times like the COVID-19 pandemic.

NTUC emphasized that its mission to support workers remains at the core of its operations.

NTUC underscored the need for financial sustainability and capital adequacy for Income Insurance.

According to the statement, Income’s capital buffers have faced pressures from several financial crises, including the Asian Financial Crisis in 1997, SARS, and the Global Financial Crisis in 2009.

Despite significant injections of capital from NTUC Enterprise, including S$630 million between 2015 and 2020, NTUC noted that Income’s market share in the life insurance segment has declined to less than 10 per cent over the past decade.

Strategic Partnership with Allianz

Income’s corporatisation in 2022 was aimed at exploring strategic options for accessing capital. NTUC Enterprise decided that Allianz was the best fit due to its strong credentials and alignment of interests.

NTUC Enterprise’s choice was said to be driven by the need to ensure Income’s longevity and its ability to meet long-term commitments to policyholders. NTUC Enterprise claims that Allianz’s offer will help secure the financial future of Income.

Public Concerns and Criticisms

The NTUC Central Committee, which was briefed on the decision, acknowledged the concerns and emotional attachment of the public and union leaders to Income.

The statement reflected on Income’s historical role in providing insurance protection at affordable rates to the Pioneer Generation and the evolving needs of Singaporeans over the past 55 years. NTUC emphasized that Singaporeans now benefit from heavily subsidised public healthcare and comprehensive national insurance programmes like MediShield Life and CPF Life.

Following the announcement of the proposed sale, there has been significant backlash from the public, with netizens expressing scepticism and concern over the sale. Critics argue that the sale contradicts previous commitments and question the ability of a profit-driven multinational like Allianz to uphold Income’s original mission of providing affordable insurance.

One user commented, “This is not an excuse to sacrifice national interest,” while another questioned, “Why sell 51% and claim to still have the heart to ensure the new merger will continue to emphasize social causes?” The comments reflect a broader apprehension about the implications of the sale for NTUC Income’s mission and values.

Dilution of ordinary members’ shares

In particular, Mr Tan Suee Chieh, who served as CEO of NTUC Income from 2007 to 2013 and as Group CEO of NTUC Enterprise from 2013 to 2017, has raised significant criticisms about the deal. In a letter last Friday, Mr Tan urged the Monetary Authority of Singapore (MAS) to intervene in the potential transaction, highlighting several concerns.

Mr Tan pointed out that NTUC Enterprise obtained shares at a par value of S$10 each from 2015 to 2020, significantly below their true economic value.

This, according to him, resulted in the dilution of minority shareholders’ stakes. Specifically, he noted that NTUC Enterprise’s shareholding in NTUC Income increased from 30% in 2015 to 70% in 2020 due to these capital injections, significantly diluting the shares of ordinary members.

Mr Tan emphasized that NTUC Enterprise had committed not to redeem its shares to safeguard NTUC Income’s social mission.

This commitment was fundamental to NTUC Income allowing NTUC Enterprise to obtain shares at par value. He argued that the recent sale to Allianz contradicts this commitment, as NTUC Enterprise had assured both the public and him in writing that it would remain the majority shareholder to protect the social mission of NTUC Income.

Additionally, Mr Tan expressed doubts about Allianz’s ability to prioritize NTUC Income’s social mission over its profit motives. He questioned how Allianz, a commercial profit-making entity, would uphold the cooperative’s founding principles and social commitments.

Despite these criticisms, NTUC assured that its social mission remains unchanged.

It claims that NTUC Enterprise will retain a substantial stake in Income, while Allianz has committed to honouring existing policies, participating in national insurance programmes, and continuing charity commitments.

NTUC highlighted that Income’s long-term commitments to policyholders can only be met if it is sufficiently capitalised.

Mr Ng wrote in his Facebook post, “I fully appreciate the concerns and feelings shared by many about the proposed income deal with Allianz. We believe the offer is good for Income, good for its policyholders, and will enable us to fulfil our mission from a stronger position.”

However, despite all the assurances, there does not appear to be any legally binding agreement for this assurance to be upheld, just like how NTUC Enterprise renegaded from its earlier promise in 2022 to hold majority shares in NTUC Income after it is corporatised from a cooperative insurance.

 

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Redditors question support for PAP over perceived arrogance and authoritarian attitude

Despite Senior Minister Lee Hsien Loong’s warning that slimmer electoral margins would limit the government’s political space “to do the right things”, many Redditors questioned their support for the ruling PAP, criticising its perceived arrogance. They argued that SM Lee’s remarks show the party has ‘lost its ways’ and acts as if it alone can determine what is right. Others noted that the PAP’s supermajority allows for the passage of unfavourable policies without adequate scrutiny.

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In a recent speech, Senior Minister Lee Hsien Loong warned that “if electoral margins get slimmer, the government will have less political space to do the right things.”

Mr Lee, who served as Prime Minister for 20 years, highlighted the risks associated with increasingly competitive politics.

“It will become harder to disregard short-term considerations in decision-making. The political dynamics will become very different,” he stated during his speech at the Annual Public Service Leadership Ceremony 2024 on 17 September.

“Singaporeans must understand the dangers this creates, and so must the public service,” SM Lee stressed.

SM Lee pointed out that Singapore faces formidable internal and external challenges in the years ahead, with rising expectations and demands from citizens.

As growth becomes harder to achieve and politics becomes more fiercely contested, he warned, “Things can go wrong for Singapore too.”

He urged vigilance in preparing for an uncertain future, noting, “As the world changes, and as the generations change, we must do our best to renew our system – to ensure that it continues to work well for us, even as things change.”

Critique of PAP’s Arrogance and Disconnect from Singaporeans

The People’s Action Party (PAP) experienced a notable decline in its vote share during the 2020 General Election, securing 61.24% of the votes and winning 83 out of 93 seats, a drop from 69.9% in 2015.

A significant loss was in Sengkang GRC, where the PAP team, led by former Minister Ng Chee Meng, was defeated by the Workers’ Party (WP).

In discussions on Reddit, some users questioned why they should support the ruling PAP, criticising the party’s perceived arrogance.

They pointed out that SM Lee’s recent remarks illustrate that the party has strayed from effectively serving Singaporeans and seems to believe it has the sole authority to decide what is right.

Others highlighted that the PAP’s super-majority in Parliament enables the passage of unfavourable policies without sufficient scrutiny.

One comment acknowledged that while many older Singaporeans remain loyal to the PAP due to its past achievements, younger generations feel the party has failed to deliver similar results.

There is significant frustration that essentials like housing and the cost of living have become less affordable compared to previous generations.

The comment emphasised the importance of the 2011 election results, which they believe compelled the PAP to reassess its policies, especially concerning foreign labor and job security.

He suggested that to retain voter support, the PAP must continue to ensure a good material standard of living.

“Then, I ask you, vote PAP for what? They deserve to lose a supermajority. Or else why would they continue to deliver the same promises they delivered to our parents? What else would get a bunch of clueless bureaucrats to recognise their problems?”

Emphasising Government Accountability to the Public

Another Redditor argued that it is the government’s responsibility to be accountable to the people.

He further challenged SM Lee’s assertion about having less political space to do the right things, questioning his authority to define what is “right” for Singapore.

The comment criticised initiatives like the Founder’s Memorial and the NS Square, suggesting they may serve to boost the egos of a few rather than benefit the broader population. The Redditor also questioned the justification for GST hikes amid rising living costs.

“Policies should always be enacted to the benefit of the people, and it should always be the people who decide what is the best course of action for our country. No one should decide that other than us.”

The comment called for an end to narratives that present the PAP as the only party capable of rescuing Singapore from crises, stating that the country has moved past the existential challenges of its founding era and that innovative ideas can come from beyond a single political party.

Another comment echoed this sentiment, noting that by stating this, SM Lee seemingly expects Singaporeans to accept the PAP’s assumption that they—and by extension, the government and public service—will generally do the “right things.”

“What is conveniently overlooked is that the point of having elections is to have us examine for ourselves if we accept that very premise, and vote accordingly.”

A comment further argued that simply losing a supermajority does not equate to a lack of political space for the government to make the right decisions.

The Redditor express frustration with SM Lee’s rhetoric, suggesting that he is manipulating public perception to justify arbitrary changes to the constitution.

Concerns Over PAP’s Supermajority in Parliament

Another comment pointed out that the PAP’s supermajority in Parliament enables the passage of questionable and controversial policies, bypassing robust debate and discussion.

The comment highlighted the contentious constitutional amendments made in late 2016, which reserved the elected presidency for candidates from a specific racial group if no president from that group had served in the previous five terms.

A comment highlighted the contrast: in the past, the PAP enjoyed a wide electoral margin because citizens believed they governed effectively. Now, the PAP claims that without a substantial electoral margin, they cannot govern well.

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Fire at train depot causes second Circle Line disruption in two days

Circle Line services in Singapore were disrupted for the second time in two days after a fire broke out at Kim Chuan Depot on 18 September. The fire, which caused a power trip, was extinguished quickly, with normal services resuming shortly after.

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SINGAPORE: A fire at the Kim Chuan Depot on Wednesday (18 September) caused a brief disruption to Circle Line services, marking the second consecutive day of interruptions on the line.

The fire, which broke out around 8pm in one of the power system cubicles, resulted in a power trip that halted train services for approximately 15 minutes.

A netizen posted in the Facebook group Complaint Singapore, reporting the latest disruption.

According to SMRT, the transport operator, the incident caused several trains to stall, and lighting within the affected trains was briefly impacted.

Engineers at the depot quickly extinguished the fire, and the Singapore Civil Defence Force was activated to assist.

Power was restored by 8.10pm, and normal train services resumed five minutes later at around 8.15pm.

“We appreciate all commuters’ patience and apologise for the longer commutes over the past two evenings,” SMRT said in a statement posted on Facebook, explaining the swift restoration of services after the fire was contained.

In response to the incident on SMRT’s Facebook page, some commuters expressed frustration, noting that the disruptions were happening just before a planned fare increase.

Others raised concerns about the reliability and safety of train services.

Several also criticised SMRT for poor communication during the disruptions, highlighting issues with announcements and equipment at certain stations.

They urged the operator to make improvements before the fare hike takes effect.

The incident followed a major disruption the previous day, when a power fault at 5.50pm on 17 September halted Circle Line services for nearly two hours during the evening peak period.

Eleven trains were stalled inside tunnels for 15 minutes, leaving passengers without air-conditioning.

However, onboard batteries provided partial lighting and ventilation during the outage.

SMRT gradually resumed services, with normal operations restored by 7.40pm.

In a statement on Wednesday morning, SMRT said that staff worked through the night to diagnose the cause of Tuesday’s fault and ensure that all systems were fully operational.

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