MAS Unveils List of ‘Too-Big-to-Fail’ Insurers, May Face Higher Cap Requirements

MAS Unveils List of ‘Too-Big-to-Fail’ Insurers, May Face Higher Cap Requirements

by September 25, 2023

The Monetary Authority of Singapore (MAS) will be imposing higher capital requirements on domestic systemically important insurers (D-SIIs) as part of its efforts to strengthen the resilience of the financial sector.

In a D-SII framework that will come into effect on 1 January 2024, MAS also shared the inaugural list of four D-SIIs namely AIA Singapore Private Limited, Income Insurance Limited, Prudential Assurance Company Singapore (Pte) Limited, and Great Eastern Life Assurance Company Limited.

Under the new framework, D-SIIs will be required to hold a 25% capital add-on, which will increase their Common Equity Tier 1 (CET1) and Tier 1 capital requirements. This add-on replaces the 25% high impact surcharge that was applicable to D-SIIs under the previous framework.

CET1 capital represents the highest quality capital which includes paid-up capital, retained earnings, insurance funds surpluses and more. Meanwhile, Tier 1 capital comprises CET1 capital and Additional Tier 1 capital instruments.

MAS said that the higher capital requirements will help to ensure timely and orderly restructuring or exit of an insurer if it fails, so as to minimise impact to the financial system and economy.

Hern Shin Ho

Ho Hern Shin

Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, said,

“Enhancing the D-SII framework is part of MAS’ continuous efforts to strengthen the resilience of Singapore’s financial sector.


It ensures that domestic systemically important insurers are subject to higher regulatory standards and closer supervision.”