WHO STANDS TO BENEFIT? The proposal is not aimed at ordinary retail insurance policies. Instead, MAS has identified three main uses: Captive insurance Some large firms create their own insurance companies, known as captive insurers, to cover their own business risks instead of relying entirely on commercial insurers. The PCC framework would allow smaller companies to participate through “rent-a-captive” arrangements, where they lease a protected cell instead of setting up an entire captive insurer. Mr Simon Goh, partner and head of law firm Rajah & Tann’s insurance and reinsurance practice, said this could help companies that “may not typically have the means or the resources or the economic justification to set up its own captive insurer”. Insurance-linked securities Insurance-linked securities allow insurers to transfer risks to investors through the capital markets. One example is catastrophe bonds, which transfer the financial risk of major disasters, such as earthquakes or hurricanes, to investors in return for potentially higher returns. Currently, each transaction usually requires a separate special purpose vehicle. Under a PCC, multiple transactions could instead be …