MAS unveils insurer capital measures for infrastructure, securitisation investments in Singapore

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MAS unveils insurer capital measures

Highlights

MAS will allocate S$30 million from the Financial Sector Development Fund for an Infrastructure Capability Development Grant for Insurers, starting immediately.
Proposals include lower capital charges for rated infrastructure debt and qualifying securitisation tranches meeting specified credit, transparency, and portfolio diversification standards.
MAS plans to recognise more external credit assessment institutions and is collaborating on standardised disclosure templates and clearer assessment guidance to streamline insurer due diligence.

Grant support and capital rule changes

As reported by Monetary Authority of Singapore, citing the Monetary Authority of Singapore, the measures are intended to help insurers in Singapore originate, assess and manage long-term investments that better match their policy liabilities, while strengthening the city-state's infrastructure financing ecosystem.

MAS says it will set aside S$30 million under the Financial Sector Development Fund for an Infrastructure Capability Development Grant for Insurers. The scheme takes effect today and is designed to help defray the costs of building dedicated investment teams, upgrading staff skills, and using professional services to establish or expand infrastructure investment activities in Singapore.

The regulator is also consulting on a more risk-sensitive insurance capital framework for infrastructure and securitisation investments. Under the proposals, rated infrastructure debt meeting specified credit and qualifying standards would attract lower capital charges, while certain infrastructure equity and debt investments with risk-mitigating features, including long-term contractual revenues and limited demand risk exposure, would also qualify for more favourable treatment.

MAS adds that senior investment-grade securitisation tranches meeting criteria on simplicity, transparency and comparability, or specified conditions such as portfolio diversification and liquidity safeguards, would similarly receive lower capital charges. The consultation paper contains further details, and submissions close on 18 December 2026.

Implications for Singapore's insurance market

MAS says investments in infrastructure and other long-term assets, including those accessed through securitisation structures, can complement insurers' long-dated liabilities. The authority is taking what it describes as a more differentiated approach that reflects underlying risks while maintaining prudential standards and protecting policyholders.

The regulator also plans to recognise more external credit assessment institutions with relevant expertise in infrastructure and securitisation issuances. Institutions that meet the criteria set out in Appendix 4I of MAS Notice 133 can apply to MAS.

In parallel, MAS is working with the industry to make it easier for insurers to determine whether infrastructure investments meet the qualifying criteria for lower capital charges. That work includes standardised disclosure templates, clearer assessment guidance and fund-manager declarations, which MAS says should improve consistency of information and streamline insurers' due diligence.

In our earlier article, we examined Mario Draghi’s warning that fighting inflation and containing debt should not come at the expense of the structural investment needed for long-term growth. He argued central banks should keep rate paths no higher than necessary for price stability, because overly restrictive policy can raise the cost of capital and slow productivity-enhancing investment, while clear communication helps limit unnecessary tightening by narrowing the range of expected rate paths.

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