ID 13/25 Response to Consultation Paper on Proposed Capital Treatment for Structured Products and Infrastructure Investments for Insurers
Executive Summary
The Monetary Authority of Singapore (MAS) issued Circular ID 13/25 on 28 October 2025, responding to feedback on its October 2024 consultation paper proposing enhancements to the RBC 2 capital treatment for insurers' investments in structured products and infrastructure assets. This matters because it finalizes revisions to MAS Notice 133, introducing differentiated risk charges to encourage infrastructure investments while maintaining prudential safeguards, with changes effective 31 March 2026. #
What Changed
- Structured Products: Removes the 50% risk charge option on full market value; recognizes credit ratings from external institutions for securitized asset tranches; applies 50% loading for rated debt-based assets, 300% for investment-grade non-debt-based, and 500% for non-investment-grade; classifies certain products as non-standard instruments. - Infrastructure Investments: Adopts Insurance Capital Standard (ICS)-aligned definitions (e.g., adding "Water utilities", "Waste management utilities", "Energy utilities"); refines qualifying criteria with amendments; extends treatment to infrastructure corporates (≥75% infrastructure revenue); introduces equity correlation factors for diversification; allows look-through for fund structures; reduces minimum period for unrated debt from 5 to 3 yea
What You Need To Do
- Review and update internal capital models, valuation policies, and investment portfolios for structured products and infrastructure assets to align with new risk charges and definitions
- Assess eligibility of current holdings against refined qualifying criteria (e
- Monitor MAS updates on the sustainable infrastructure pilot program and evaluate participation if applicable
- Conduct gap analysis on MAS Notice 133 revisions once finalized; test systems for equity correlation factors and reduced unrated debt periods
- Document compliance readiness and report to senior management/board ahead of 31 March 2026 effective date
Key Dates
Compliance Impact
Urgency: High – Insurers have ~13 months (effective 31 March 2026) to implement changes, but portfolio recalibrations, model validations, and potential capital impacts require immediate planning to avoid solvency shortfalls or missed investment opportunities in infrastructure. Non-compliance risks heightened supervisory scrutiny under RBC 2.
Summary
Informs insurers on the issuance of the Response to Consultation Paper on the proposed enhancements to the RBC 2 capital treatment for investment in structured products and infrastructure investments for insurers under RBC 2 framework.