Great Eastern denies approving SG$660 million contribution

Contribution to Malaysian insurance development fund has yet to be finalised, says group

Great Eastern denies approving SG$660 million contribution

Insurance News

By Gabriel Olano

Singapore-based insurer Great Eastern Holdings (GEH) has said that it has not yet given final approval to a proposed MYR2 billion (SG$660 million) contribution to satisfy foreign ownership requirements in Malaysia.

GEH is currently discussing with the Malaysian government options on how Great Eastern Life Assurance (Malaysia) Bhd (GELM) can meet the country’s foreign ownership requirements, the Singapore Business Review reported.

One of the options is GELM contributing to a special insurance development trust fund, possibly in the form of a B40 Health Protection Fund.

“The discussions on the options are on-going at this stage and details have yet to be finalised,” Great Eastern said. “Based on the options currently being considered, GEH believes there will not be a material impact on the earnings of GELM and GEH.”

The insurer’s pronouncement contradicts Malaysian finance minister Lim Guan Eng, who said on November 02 that Great Eastern will contribute MYR2 billion (SG$660 million) to the insurance development fund.

Initially, Great Eastern was planning to sell 30% of its stake in GELM in order to meet Malaysia’s 70% limit of foreign ownership in insurers. Several other insurers such as Prudential and Tokio Marine also looked for buyers in order to comply with the ruling, which was issued in 2009 but only enforced in 2017.

However, with a new government in power in Malaysia, its financial regulators are more open to negotiating individual arrangements with insurers and a review of the foreign ownership rules looks more likely.

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