ID 15/25 Update to Notice 133 and Notice FHC-N133 on Additional Criteria for Additional Tier 1 and Tier 2 Capital Instruments for Insurers
Executive Summary
MAS Circular ID 15/25 announces amendments to Notice 133 and Notice FHC-N133, introducing additional criteria for insurers to recognize capital instruments as Additional Tier 1 (AT1) or Tier 2 Capital under the RBC 2 framework. These changes enhance capital quality standards while restricting issuance to non-retail investors in Singapore, effective 1 January 2026, to strengthen insurer resilience and policyholder protection. #
What Changed
- Amendments add additional criteria for capital instruments to qualify as AT1 or Tier 2 Capital, aligning with international prudential standards under RBC 2 (Risk-Based Capital 2 framework). - Key condition: Instruments must be sold only to persons who are not retail investors in Singapore, prohibiting retail distribution to mitigate risks from less sophisticated investors. - Updates apply to valuation and capital requirements in Notice 133 (for licensed insurers) and Notice FHC-N133 (for Designated Financial Holding Companies). - Follows MAS review of consultation feedback, proceeding with proposed enhancements originally outlined in the March 2025 Consultation Paper. #
What You Need To Do
- Review and update capital instruments
- Implement distribution controls
- Update internal policies
- Board/ senior management oversight
- Download and reference full notices
Key Dates
Compliance Impact
Urgency: High – With effectiveness less than one month away (as of February 2026), non-compliance risks capital disqualification, regulatory capital shortfalls, enforcement actions, or RBC 2 breaches. Matters critically for capital-constrained insurers planning issuances, as it limits funding flexibility while elevating standards; proactive remediation is essential to avoid supervisory interventio
Who is Affected
Summary
Informs insurers on the amendments of Notice 133 and Notice FHC-N133 to include the additional criteria to recognise capital instruments issued by insurers as AT1 or Tier 2 Capital under the RBC 2 framework, subject to the condition that such capital instruments are sold only to persons who are not retail investors in Singapore from 1 January 2026.