Great Eastern secures exemption from M'sia foreign-ownership cap via contribution to health scheme

INSURER Great Eastern Holdings will contribute RM2 billion (S$657 million) to the Malaysian government's latest health insurance scheme for low-income groups - a contribution that, in turn, exempts it from meeting the country's limits on foreign ownership of an insurer.

Great Eastern, which is majority owned by Singapore's banking group OCBC, said on Thursday that it would contribute to the B40 National Protection Scheme in Malaysia. B40 is short for Bottom 40 per cent.

The scheme will be underwritten by Great Eastern Takaful Berhad. The scheme, which begin on Jan 1, provides coverage against 36 critical illnesses.

Without this exemption, Great Eastern would have been forced to sell up to 30 per cent interest of its Malaysian business to Malaysian entities in order to meet the regulatory cap.

Great Eastern said that the contribution was part of its "corporate social responsibility efforts, and in line with the objectives of the Malaysian authorities". 

"Great Eastern has opted for making a contribution to the B40 National Protection Scheme in satisfaction and in lieu of the local shareholding requirement imposed on Great Eastern Life Assurance (Malaysia) Berhad."

Shares of Great Eastern closed on Thursday at S$26.95, up 30 Singapore cents.