Singapore has quietly become one of the world’s more interesting places to issue a catastrophe bond, and from January 2026 the incentives behind that positioning have widened considerably. The Monetary Authority of Singapore (MAS) has refreshed and extended its Insurance-Linked Securities (ILS) Grant Scheme for the period January 2026 to end-2028, and in doing so has reopened the door to a much broader range of catastrophe bond and reinsurance transactions than the scheme supported over the past few years.
For directors and finance teams at insurers, reinsurers, asset managers and family offices considering a Singapore-domiciled special purpose reinsurance vehicle (SPRV), this is worth understanding properly. The grant materially reduces the upfront cost of issuance, MAS has published new compliance guidance specifically for SPRVs, and a live consultation on new ILS structures could reshape how collateralised reinsurance is done in Singapore over the next few years. This article sets out what changed, who qualifies, how the subsidy actually works, and where it sits alongside Singapore’s separate tax concessions for insurance securitisation vehicles.
What the ILS Grant Scheme actually does
The ILS Grant Scheme was first introduced in 2018 to help fund the upfront costs of issuing catastrophe bonds and other insurance-linked securities out of Singapore, things like arranger and legal fees, rating agency costs and other transaction expenses that make a first issuance expensive relative to its size. Between 2023 and the end of 2025, the scheme was tightened so that only transactions covering risks originating from the Asia-Pacific region, or sponsored by an Asia-Pacific entity, could qualify. That narrowing coincided with a slowdown in Singapore-domiciled cat bond issuance.
From January 2026, MAS has reversed that narrowing. The refreshed scheme now covers a wider range of transactions, including catastrophe bonds and other ILS arrangements covering risks originating outside the Asia-Pacific region, alongside continued and in some cases enhanced support for APAC-linked risks. The stated aim is to rebuild Singapore’s position as a regional hub for risk financing and alternative reinsurance capital, not just for APAC perils but for global catastrophe and specialty risk being structured through a Singapore vehicle.
Who can apply
Qualifying issuers under the scheme can be companies and financial institutions based onshore or offshore in Singapore, including multilateral organisations, provided the actual issuance is structured through an eligible Singapore-domiciled special purpose vehicle. In practice this usually means a Singapore SPRV that has itself been authorised by MAS, since an ILS transaction assuming insurance or reinsurance risk in Singapore requires the issuing vehicle to hold the relevant authorisation before it can accept premium and issue notes. We cover the mechanics of MAS authorisation and notification requirements for regulated entities more broadly in our MAS insurance broker and intermediary licensing FAQ, and the same discipline around eligibility, documentation and lead time applies to SPRV authorisation.
How much the grant is worth
The subsidy structure differs depending on the type of ILS instrument and, for property catastrophe bonds, the geography of the risk covered. Based on the terms MAS has published for the January 2026 to December 2028 period, the broad structure is as follows.
| Transaction type | Subsidy rate | Cap |
|---|---|---|
| Property catastrophe bond covering any proportion of Asia-Pacific risk | Up to 70% of upfront issuance costs | S$1,000,000 |
| Property catastrophe bond covering no Asia-Pacific risk | Up to 50% of upfront issuance costs | S$1,000,000 |
| Non-property catastrophe bonds (for example longevity, mortality, operational risk or cyber risk) | Up to 70% of upfront issuance costs | S$1,000,000 |
| New issuances of collateralised reinsurance and sidecar arrangements | Up to 70% of upfront issuance costs | S$500,000 |
This is a meaningful shift from the 2023 to 2025 terms, which effectively excluded non-APAC risk from property cat bond support altogether. It is also notable that non-property catastrophe bonds, covering perils such as longevity, mortality, operational risk and cyber risk, sit at the higher 70% subsidy rate regardless of where the underlying risk originates. For a sponsor comparing Singapore against Bermuda or the Cayman Islands as an issuance domicile, a subsidy of this size on legal, arranger and rating costs can be the difference that tips the decision.
Applicants should treat the published caps and percentages as the starting point for a conversation with MAS rather than an automatic entitlement. Actual grant approval depends on the specifics of the structure, the applicant’s engagement with MAS ahead of issuance, and the completeness of the application. Businesses used to Singapore’s SME productivity grants such as the Capability Transfer Programme or Partnerships for Capability Transformation will recognise the pattern: early engagement with the administering agency, before costs are committed, materially improves the odds of a smooth approval.
The new Compliance Toolkit for SPRVs
Alongside the refreshed grant, MAS has published a Compliance Toolkit for Approvals, Notifications and Other Regulatory Submissions to MAS for Special Purpose Reinsurance Vehicles, last revised 22 June 2026. This toolkit consolidates the approvals, notifications and periodic submissions an SPRV needs to make to MAS across its lifecycle, from initial authorisation through to ongoing returns, key appointment notifications and any subsequent variation of the vehicle’s licensed activities.
For a first-time sponsor, the toolkit is a genuinely useful map of what compliance obligations attach to an SPRV once it is up and running, separate from the one-off grant application itself. Since the launch of the MAS Financial Institutions Transactions Platform (MAS-Tx) for insurers, most of these regulatory applications, notifications and submissions are now expected to be filed through that platform rather than by paper or email, which is a practical point worth building into any project timeline for setting up a Singapore SPRV.
A live consultation that could reshape the structures on offer
Separately from the grant refresh, MAS opened a consultation in mid-2026 on new structures for insurance-linked securities in Singapore, including a proposed protected cell company (PCC) framework for collateralised reinsurance. A protected cell structure would allow a single legal entity to ring-fence the assets and liabilities of different reinsurance cells from one another, similar in concept to the segregated portfolio structures used in other reinsurance domiciles. We have written previously about how segregated structures work and where they are relevant in a Singapore context in What Is a Segregated Portfolio Company and When Might It Be Relevant to You?, and the logic underpinning a PCC for reinsurance cells is very similar: one vehicle, ring-fenced cells, each cell’s creditors limited to that cell’s own assets.
If adopted, a PCC framework would give sponsors of multiple smaller reinsurance or sidecar transactions a way to house them under one umbrella vehicle rather than incorporating a fresh SPRV for every deal, which should reduce set-up cost and timeline for repeat issuers. This is still at consultation stage, so nothing has been finalised, but it is a clear signal of where MAS wants Singapore’s ILS infrastructure to go over the current three-year grant period. Businesses evaluating a Singapore-domiciled fund or reinsurance structure more generally may also find our comparison of Singapore’s fund vehicles against other Asian domiciles useful; see Singapore VCC vs Cayman SPC (2026): The Fund Domicile Comparison for Asian Managers for the broader domicile-choice context, even though a Variable Capital Company and an SPRV are governed by different regulatory regimes.
How this sits alongside Singapore’s tax incentives for insurance securitisation
The ILS Grant Scheme is a grant, administered by MAS, that offsets upfront transaction costs. It should not be confused with Singapore’s separate, longer-standing tax incentive regime for insurance securitisation vehicles, which is administered by the Inland Revenue Authority of Singapore (IRAS) under the Income Tax Act 1947 and operates independently of the grant. Under that regime, an Approved Special Purpose Vehicle engaged in insurance securitisation can qualify for a concessionary tax rate on specified income derived from the securitisation arrangement, rather than being taxed at the prevailing corporate tax rate. Singapore has separately extended its Qualifying Debt Securities scheme, which gives concessionary tax treatment to income from qualifying debt securities including many ILS notes, and both the Approved SPV insurance-securitisation concession and the Qualifying Debt Securities scheme have now been extended through to 31 December 2028, aligning their runway with the refreshed grant scheme.
We were not able to confirm, from a current IRAS e-Tax guide, the specific section of the Income Tax Act 1947 or its subsidiary regulations under which the Approved SPV insurance-securitisation concession is granted, and we have deliberately not cited a section number here rather than risk stating one incorrectly. Sponsors and their tax advisers should confirm the applicable provision and current conditions directly with IRAS’s e-Tax guides or by approaching IRAS directly, as part of structuring any Singapore SPRV or ILS issuance, before relying on this concession in a transaction model.
What this means in practice for a sponsor evaluating Singapore
Put together, the picture for 2026 to 2028 is materially more favourable than it was over the previous three years. A sponsor bringing a non-APAC catastrophe bond, a longevity or cyber risk ILS, or a new collateralised reinsurance sidecar to market now has a genuine subsidy on offer for structuring it through Singapore, a dedicated compliance roadmap for the resulting SPRV, and the prospect of a lighter-weight protected cell structure for follow-on issuances if the current consultation results in new rules. Combined with the existing tax concessions for approved securitisation vehicles and qualifying debt securities, the total cost of issuing and running an ILS structure out of Singapore compares well against the more established cat bond domiciles.
None of this removes the need for careful structuring. Setting up and authorising an SPRV, applying for the grant, and keeping up with MAS’s notification and reporting obligations under the new Compliance Toolkit are all workstreams that need to be sequenced correctly and, in most cases, run in parallel with corporate secretarial and registered filing agent support for the vehicle itself.
If your organisation is evaluating a Singapore-domiciled catastrophe bond, sidecar or other collateralised reinsurance structure and needs support with the corporate secretarial, registered office and filing agent workstream that sits behind an SPRV, our Corp Sec team can walk through what is involved alongside your legal and tax advisers.
The Editorial Team, Raffles Corporate Services