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.
Suggested Considerations
- Review and update capital instruments: Assess existing and planned AT1/Tier 2 issuances against new criteria; amend terms if needed to qualify under RBC 2.
- Implement distribution controls: Establish processes to ensure instruments are sold exclusively to non-retail investors in Singapore (e.g., accredited investors, institutions); update investor eligibility checks, prospectuses, and distribution agreements.
- Update internal policies: Revise capital management, valuation, and reporting procedures per amended Notice 133/FHC-N133; integrate into RBC 2 calculations.
- Board/ senior management oversight: Document compliance gap analysis, remediation plans, and training for finance/treasury teams.
- Reporting: Monitor and report capital positions under RBC 2, notifying MAS of material changes.
- Download and reference full notices: https://www.mas.gov.sg/regulation/notices/notice-133 and https://www.mas.gov.sg/regulation/notices/notice-fhc-n133.
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
References
AI-generated analysis. May contain errors or omissions — verify with the original MAS source before acting. Full disclaimer.
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.