June 2026: Lawrence Wong, Singapore's Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (MAS), announced that Singapore will introduce a Protected Cell Company (PCC) framework covering captive insurance, insurance-linked securities (ILS) and sovereign risk pools.

July 2026 public consultation: MAS subsequently issued a consultation paper (reference P013-2026), proposing to allow multiple protected cells within a single legal entity, with the assets and liabilities of each cell legally segregated, while the core provides unified governance.

7 August 2026: the public consultation closed.

Implementation targeted for 2028: the framework is scheduled to take effect in 2028, with the primary goal of lowering the entry barrier for small and medium-sized enterprises (SMEs) into the captive market.

ILS grant scheme extended: MAS will continue to subsidise ILS issuance from 2026 to 2028, further reinforcing Singapore's position as Asia's risk transfer hub.

As of the end of 2025, Singapore had approximately 79 general captive insurers, 7 composite captive insurers and 1 life captive insurer. In 2024, total gross premiums written by Singapore captives reached about US$1.92 billion, of which property accounted for roughly 70.5%, liability and others about 19.1%, and marine cargo about 9.2%. Singapore remains one of the largest captive domiciles in Asia-Pacific, but growth in captive numbers has slowed markedly in recent years, and with Hong Kong and Malaysia — the other major Asian domiciles — catching up fast, Singapore is under noticeable pressure.

The proposed PCC is a single legal entity consisting of a "core" and a number of "protected cells":

Core — provides unified governance, management and administrative functions, and does not separately bear the liabilities of individual cells. Protected cells — each carries a different risk programme, with assets and liabilities statutorily segregated between cells. This means multiple captive programmes, ILS issuances or sovereign risk pool arrangements can operate within the same PCC without cross-contamination of assets and liabilities, while sharing the corporate governance and operating platform.

Initial scope of application. The MAS proposal initially targets three main uses, all of which must still be operated by MAS-licensed entities:

Captive insurance. Large corporates can house different captive programmes in separate cells of the same PCC; SMEs can also rent individual cells through "shared captive facilities" provided by service organisations, lowering the entry barrier.

Insurance-linked securities (ILS). Insurers and reinsurers can issue ILS through separate cells without setting up a standalone SPV for each transaction, helping to shorten preparation time and reduce issuance costs.

Sovereign risk pools. The structure can be used for cross-border or regional disaster risk financing arrangements, segregating different countries and different risk exposures within the same vehicle.

The PCC framework was proposed against three main background factors:

A wide protection gap in Asia: Asian economies are growing rapidly, but insurance penetration remains low, and complex risks such as natural disasters, supply chain disruption and geopolitics cannot be fully absorbed by traditional primary insurance and reinsurance alone.

High cost of existing structures: at present, companies seeking legal segregation of capital, assets and liabilities across different risk programmes typically need to establish separate legal entities or special purpose vehicles (SPVs), resulting in high setup costs, long lead times and heavy administrative burdens.

Consolidating the risk management hub: Singapore aims to integrate traditional primary insurance, reinsurance and alternative risk transfer instruments, strengthening its capacity to host captives, ILS and regional risk pools.

The protected cell captive structure is well established in Europe and the United States. In Asia it was first legislated and implemented in 2010 by Labuan IBFC (Labuan International Business and Financial Centre, Malaysia). Under the Labuan Companies Act, a PCC is a single legal entity within which multiple independent "cells" may be established. The law strictly segregates the assets and liabilities of each cell: creditors of one cell may only claim against that cell's assets and cannot reach the core company or other cells, achieving a clean separation of risks.

Malaysia continues to support PCC captives at the institutional level. Malaysia's Budget 2026 introduced the "MADANI Captive Insurance Scheme", which explicitly relies on captive structures including PCCs to provide risk financing support for national priority areas. The revised Guidelines on Captive Insurance Business issued by the Labuan Financial Services Authority took effect in 2024 and include facilitation measures such as an expedited cell establishment process (via a prior notification mechanism) to meet market demand.

Labuan PCCs are mainly used for: Labuan captive insurers assuming intra-group risks through independent cells; takaful captives arranged in line with Islamic finance principles; mutual funds segregating different fund strategies within a single entity; and Islamic mutual funds requiring fund segregation under the Islamic finance framework. To date, Labuan remains the only Asian domicile offering a PCC captive structure, which lowers the threshold and cost for SMEs and diversified groups to use captive tools. Data show that by the end of 2024 there were about 251 PCCs and similar segregated-cell structures worldwide, corresponding to roughly 3,753 cells; in Asia, Labuan was among the earlier jurisdictions to offer PCC registration, with about 31 cells at that time. This indicates that Labuan PCCs have been operating for many years, though the overall scale remains a niche, specialised market. As of 2025, Labuan's total number of captive insurers reached 69, including 14 protected cell companies (PCCs) operating 36 cells in aggregate. Of the 10 new captive market participants added in 2025, seven were PCC cells. Gross premiums of Labuan captives grew 7.2% year on year in 2025 to US$726 million, with PCCs benefiting from the overall market expansion as one of the available structures.

This shows there is clearly substantial market demand for the PCC captive model in Asia. MAS will adopt a phased consultation approach: the first paper mainly seeks views on policy principles, while the draft bill and detailed regulatory rules are expected to be consulted on further after feedback is consolidated.

The industry widely believes that the PCC framework will lower the entry barrier for SMEs into the captive market and make it more convenient for ILS sponsors to use cell structures for securities issuance.

Singapore was the first Asian country to enter the captive sector. As of the end of 2025 it hosted approximately 79 general captive insurers, 7 composite captive insurers and 1 life captive insurer, leading Asia in both captive numbers and premium volume. If implemented, the PCC framework could attract more companies that have not yet met the threshold for establishing a standalone captive.