SINGAPORE: The Monetary Authority of Singapore (MAS) on Tuesday (Jul 7) launched a public consultation on a new corporate structure for the insurance sector known as the protected cell company (PCC).

The proposal comes as businesses face increasingly complex risks, including climate change, geopolitical tensions and supply chain disruptions.

MAS said companies are looking beyond traditional insurance, seeking greater control and flexibility over how they finance, retain and transfer risks. 

It added that the framework would also strengthen Singapore's position as a regional insurance and risk management hub.

Subject to the legislative process, MAS is targeting implementation in 2028.

WHAT IS A PROTECTED CELL COMPANY?

A PCC is a single legal entity that can create multiple "cells", each with its own legally separate assets and liabilities.

This means if one cell suffers losses, creditors generally cannot claim against the assets held in another cell.

Currently, companies that want to segregate their risks often must establish separate legal entities, such as special purpose vehicles. Each new entity takes time and money to set up and administer.

A PCC provides legal segregation within a single company, making the structure simpler and potentially cheaper to operate.

WHY IS MAS PROPOSING THIS NOW?

MAS says businesses are facing risks that are becoming more difficult to predict and insure.

At the Association of Banks in Singapore's annual dinner in June, Deputy Prime Minister Gan Kim Yong said: "Risks today are more complex, more connected, and harder to price. A single disruption can cascade across multiple sectors and geographies."

"Asia remains significantly underinsured,” added Mr Gan, who is also Minister for Trade and Industry.

According to MAS, natural disasters caused about US$65 billion in economic losses across Asia in 2025, with more than 90 per cent of those losses uninsured.

WHO STANDS TO BENEFIT?

The proposal is not aimed at ordinary retail insurance policies. Instead, MAS has identified three main uses:

1. Captive insurance

Some large firms create their own insurance companies, known as captive insurers, to cover their own business risks instead of relying entirely on commercial insurers.

The PCC framework would allow smaller com...