Deepening Singapore's Role As A Risk Management Hub – Singapore's Proposed Protected Cell Company Structure

On 7 July 2026, the Monetary Authority of Singapore ("MAS") launched a consultation proposing to establish a legislative framework for a new corporate structure in Singapore – the Protected Cell Company ("PCC"). The initiative aims to strengthen Singapore's position as risk management hub and to support the growth of alternative risk transfer solutions. 

At present, risk owners in Singapore must set up individual legal entities in the form of special purpose vehicles in order to legally ringfence capital, assets and liabilities for each risk programme or coverage. MAS observes that the effort and costs to do so can deter the broader adoption of solutions that would support better risk management and protection.

The PCC structure is designed to lower the barrier to entry for participation in the alternative risk transfer market by permitting asset and liabilities to be segregated into individual Cells yet remain housed under a common platform and single entity (the PCC) and therefore provide a more cost-efficient, streamlined and flexible structuring option.

It is intended that the PCC structure will initially be limited to MAS-licensed entities carrying out the following insurance use cases:

1. captive insurance (including in particular rent-a-captive structures);
2. insurance-linked securities; and
3. sovereign risk pools. 

Structurally, the proposed PCC structure will be fairly similar to the existing variable capital company (VCC) structure in Singapore:

• Centralised governance: a PCC will comprise of a Core (responsible for central administrative functions) and one or more Cells (each of which will carry on insurance business);
• Legal personality: a PCC will be a single legal entity and neither the Core nor Cell will have its own legal personality;
• Segregation principle: assets and liabilities between each Cell and the Cell and the Core will be legally segregated, avoiding exposure to contagion risks across Cells;
• Disclosure requirements: a PCC must make appropriate disclosures in correspondence and agreements with third parties, including specifying and identifying the Cell or Core on behalf of which it is acting;
• Intra-PCC transactions permitted: transactions within the same PCC are proposed to be permitted, subject to certain principles including the preservation of the segregation principle and that the transaction is conducted at arm's length.
• Shareholding: MAS proposes to allow a PCC to issue shares and/or debentures on behalf of the core or a Cell, and MAS does not intend to restrict Cell Shares to non-voting shares only.
• Capital reduction, share buybacks and payment of dividends: MAS proposes to permit capital reductions, share buybacks and the payment of dividends, subject to certain conditions including any applicable requirements under the Insurance Act.
• Corporate governance aligned with existing legislation: MAS intends to establish corporate governance standards and requirements that are aligned with the Companies Act (including the requirement to have at least one director who is ordinarily resident in Singapore). Given that the PCC corporate structure will only be available to the specified MAS-licensed insurance use cases, relevant corporate governance requirements under the Insurance Act will also apply and will be consulted on at a later stage.
• AML/CFT requirements: Existing AML/CFT requirements set out under the relevant MAS Notices/guidelines applicable to insurers will apply to PCCs. However, MAS has also highlighted that the additional ownership layers inherent in PCC structures may require more effort to identify beneficial owners accurately and MAS will consider the additional beneficial ownership requirements or reporting, if any, that should be imposed on PCCs, which will be consulted on at a later stage.
• Taxation: MAS has proposed that taxation of a PCC structure will generally follow existing tax principles, taking into account that the PCC is treated as a single legal entity.

MAS has also proposed a statutory mechanism for the conversion of an existing company limited by shares (incorporated under the Companies Act) to a PCC, subject to the passing of a special resolution, notification of all creditors and directors' declarations. MAS also intends to provide a statutory conversion mechanism for the converse, i.e. allowing a PCC or its Cell(s) to convert into a company limited by shares under the Companies Act.

The consultation will close on 7 August 2026. MAS will consult on the proposed draft PCC Act, and policy proposals to be included in the subsidiary legislation under the new PCC Act or Insurance Act at a later stage. If you would like to discuss what the proposed PCC framework could mean for your business or risk management arrangements, our legal experts would be pleased to assist.