MAS unveils list of too-big-to-fail insurers, imposes higher capital requirements

The four initial insurers are to face a 25% capital add-on, boosting higher and lower supervisory intervention levels, CET1 and  Tier 1.

The Monetary Authority of Singapore (MAS) has released the inaugural list of domestic systemically important insurers (D-SIIs), whilst imposing a higher capital requirement.

The initial list includes four D-SIIs: AIA Singapore, Income Insurance, Prudential Assurance Company Singapore, and The Great Eastern Life Assurance Company.

Starting on 1 January 2024, this framework formalises and updates an existing one, assessing insurers based on size, interconnectedness, substitutability, and complexity.

Insurers deemed to have a significant impact on Singapore's financial system and the broader economy will be designated as D-SIIs. 

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They will be subject to additional supervisory measures, similar to those applied to domestic systemically important banks (D-SIBs). Namely, a 25% capital add-on, which replaces the previous 25% high-impact surcharge. Also, an enhanced recovery and resolution planning to ensure financial strength and minimize disruption in times of distress.

The four current D-SIIs are expected to meet these requirements with ample capital buffers. MAS is also working closely with them on recovery planning.

Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, emphasised that enhancing the D-SII framework is part of their ongoing efforts to fortify Singapore's financial sector by imposing stricter regulatory standards and closer supervision on domestic systemically important insurers.