The Monetary Authority of Singapore (MAS) issues a consultation paper proposing a legislative framework for a new protected cell company (PCC) corporate structure, aimed at supporting the growth of alternative risk transfer solutions and deepening Singapore's role as a risk management hub. A PCC operates as a single legal entity comprising a central core and one or more separate cells. The assets and liabilities of each cell are legally segregated from those of other cells and the core, allowing multiple insurance solutions to be managed independently within a single PCC while the core provides centralised governance and oversight. MAS says this results in a more cost-effective and operationally efficient structure than the current requirement to establish individual legal entities, such as special purpose vehicles, to ringfence capital, assets and liabilities for each risk programme. The framework is designed to support three insurance use cases at the outset: captive insurance, insurance-linked securities (ILS) and sovereign risk pools. For captive insurance, MAS says companies can establish dedicated captives, managing multiple self-insuring programmes through separate cells within a common core, or participate in rent-a-captive solutions that use a segregated cell to run risk programmes within a shared captive facility provided by a service provider. MAS says this reduces setup and operating costs and increases the accessibility of captive solutions that would otherwise be commercially unviable, particularly for smaller firms. For ILS, insurers can tap the capital markets to secure additional risk-bearing capacity by issuing instruments through separate cells without establishing a new special purpose vehicle for each transaction, which MAS says enables faster execution, lowers issuance costs and makes smaller or bespoke transactions such as sidecars and collateralised reinsurance more viable. For sovereign risk pools, PCCs can support facilities that pool risks across multiple countries or participants, such as disaster risk financing initiatives. MAS positions the framework against a backdrop of rising and increasingly complex risk. It notes that Asia remains significantly underinsured, citing Swiss Re Institute figures that natural disasters caused about US$65 billion in economic losses across Asia in 2025, more than 90 per cent of which were uninsured. George Ong, regional director, captive and insurance, global risk consulting at Aon, welcomes the proposal, saying it "has the potential to be a major advancement for Singapore's insurance and risk-financing landscape, reinforcing the country's position as a leading insurance, reinsurance and alternative risk transfer hub in Asia". He says the framework "could broaden access to sophisticated risk-financing solutions by giving organisations a flexible, efficient pathway to captive insurance and insurance-linked securities (ILS) without the cost, complexity and governance burden of establishing a standalone legal entity". Ong says Aon expects demand from "small and mid-size corporates seeking a more cost-effective solution than a standalone captive, larger corporates that prefer to take incremental steps before operating a fully licensed insurance subsidiary, and ILS sponsors looking for a more efficient structure to support their capital strategies". He adds that a PCC framework "can offer a practical entry point for organisations exploring captive and alternative risk-financing strategies, particularly those not yet ready to establish a fully licensed captive insurer". He identifies the legal segregation of assets and liabilities between cells as a key strength, saying it "helps ensure that the risks and obligations of one cell do not affect the assets of another, creating clearer boundaries around capital and exposures". Ong also draws a parallel with Singapore's existing structure for investment funds, noting the proposal is "conceptually similar to Singapore's existing Variable Capital Company (VCC) structure" and that extending a comparable model to insurance "could further strengthen Singapore's attractiveness as a regional hub for risk management and insurance innovation". The consultation follows an announcement of the PCC framework by Gan Kim Yong, deputy prime minister and minister for trade and industry and chairman of MAS, at the Association of Banks in Singapore annual dinner on 25 June. The closing date for the consultation is 7 August.
