The Monetary Authority of Singapore (MAS) is proposing a new framework to help insurers separate insurance risk programmes under one legal entity.
The framework covers Protected Cell Companies, which are corporate structures made up of a central core and separate cells.
Each cell’s assets and liabilities would be legally ringfenced from the core and from other cells.
MAS is consulting on the proposal as Singapore looks to support alternative risk transfer tools such as captive insurance, insurance-linked securities and sovereign risk pools.
How Protected Cell Companies Work
Risk owners today often need to set up separate legal entities to ringfence each risk programme.
MAS noted that this can raise costs, reduce efficiency and make some structures harder to scale.
A Protected Cell Company would allow several insurance arrangements to sit within one company while keeping each cell legally separate.
MAS plans to limit the framework at the start to MAS-licensed entities carrying out the three insurance use cases.
Lowering the Cost of Risk Transfer
For captive insurance, companies could manage different self-insurance programmes through separate cells.
The structure could also support rent-a-captive arrangements, where firms use a cell within a shared captive facility instead of setting up their own captive insurer.
For insurance-linked securities, insurers could issue transactions through separate cells without creating a new special purpose vehicle for each deal.
MAS noted that this could lower issuance costs and make smaller or more customised transactions more viable.
Where the Framework Could Be Used
The framework could also support sovereign risk pools, including disaster risk financing arrangements involving several countries or participants.
MAS noted that Asia remains significantly underinsured.
Natural disasters caused about US$65 billion in economic losses across Asia in 2025, with more than 90% uninsured, according to Swiss Re Institute data cited in the consultation.
The consultation paper also covers asset and liability segregation, disclosures, funding, governance, conversions, insolvency, anti-money laundering requirements and tax treatment.
MAS plans to introduce the framework through a new Protected Cell Company Act and will consult later on draft legislation and related rules.
Interested parties can submit comments by 7 August 2026.
Featured image: Edited by Fintech News Singapore, based on image by zendaIA via Magnific