If you look at your Directors & Officers (D&O) or Professional Indemnity (PI) insurance policy wording, you might see that there is coverage for “fines and penalties”. However, if you are operating in Singapore under Monetary Authority of Singapore’s (MAS) watch, your policy will usually help with defence and investigation costs — but don’t expect it to pick up the actual fine or penalty.
Here’s why, and what that means for your D&O, PI and Investment Manager Insurance (IMI), especially if you are in the Fintech / Finance space, regulated by MAS.
MAS’s view: accountability first
MAS has made it clear that financial institutions should not rely on insurance (or indemnities) to soften the sting of regulatory penalties. The logic is simple: if managers know a policy will just pay their fine, it undermines accountability.
That doesn’t mean insurance is useless. In fact, most D&O and PI policies in Singapore are designed to cover:
- Legal fees for defence
- Costs of responding to MAS investigations
- Civil settlements or compensatory damages
But when it comes to fines and penalties, the policy will usually say “where insurable by law.” And under Singapore law and public policy, that’s a dead end for MAS-imposed penalties.
What’s never covered
It’s worth being crystal clear:
- Fraud, intentional, or reckless conduct: If a fine or penalty arises from this, insurers won’t pay.
- AML-related fines: Regardless of whether they stem from negligence, oversight, or something more serious, insurers treat AML penalties as completely uninsurable.
This means that while policy wording may dangle the phrase “civil fines and penalties where insurable by law,” in reality, the circumstances where a MAS fine could ever be paid are extremely limited. There may be a chance that if a fine arises from a more technical, less morally blameworthy breach (like late filings or a procedural lapse) , in theory, insurers might pay out the claim, depending on the policy wording.
How this works in practice
D&O Insurance
Covered:
- Defence costs when a director is investigated by MAS
- Crisis management or PR costs (if the policy includes it)
- Side A protection if the company itself can’t indemnify a director
Not Covered:
- MAS fines or civil penalties on individuals
- Fraud, intentional, or reckless misconduct (once proven)
- AML-related fines under any circumstances
Example:
A Fintech founder under investigation hires external counsel. Their D&O policy funds the legal bills — but when MAS later imposes a civil penalty (especially if it relates to AML or reckless conduct), that penalty is not reimbursed.
Take a look at our previous blog post that dives into the details of D&O insurance.
PI Insurance
Covered:
- Negligence and mis-selling claims from clients
- Compensatory settlements
Not Covered:
- Regulatory fines tied to fraud, recklessness, or intentional acts
- AML fines, no matter the reason
- Fines not directly linked to liability
Example:
A licensed fund manager makes an error in the marketing deck, stating that the fund’s strategy has a 5-year audited track record, but in reality, only 3 years are audited — the rest are internal projections. The client sues, and the PI policy pays the settlement. But when MAS fines the firm for breaching advertising or disclosure rules, that regulatory penalty is not be covered.
Have a read of our previous blog post on why you might want to take out a PI policy.
Investment Manager Insurance (IMI)
These policies combine D&O, PI, and Crime. You’ll often see wording that promises cover for “civil fines and penalties where insurable by law.” The catch is that in Singapore, that rarely stretches to MAS penalties.
Covered:
- Legal and advisory costs during MAS inspections
- Civil claims by investors (e.g., for negligent misstatement)
Not Covered:
- AML fines (always excluded)
- Fines arising from fraud, reckless acts, or intentional misconduct
Example:
A fund manager is required by MAS to maintain a minimum base capital of SGD 250,000 at all times. Due to a sudden redemption by a large investor, the firm’s capital buffer falls below the MAS minimum for 2 weeks before additional funds are injected. MAS identifies the breach during an inspection and issues a monetary penalty. The penalty arises purely from failing to meet a statutory requirement, not from an error or omission in professional services and hence the MAS fine is not covered by insurance. However, if investors sue the firm for losses they claim resulted from the firm’s undercapitalisation (e.g., inability to honour commitments), the defence costs and settlements for that lawsuit may be covered under the policy.
The takeaway for Singapore firms
- Defence and investigations: Covered.
- Compensatory civil claims: Covered.
- MAS fines and penalties: Generally not covered.
- Fraud, intentional or reckless conduct fines: Not covered.
- AML fines (of any kind): Never covered.
So when you see “civil fines and penalties” in your policy, read it with caution. In Singapore, the public policy stance and these carve-outs mean insurers almost never pay MAS fines.
Why the right broker matters
The difference between a frustrating claim and a smooth one often comes down to:
- How your policies are structured (D&O vs PI vs IMI)
- The exact trigger wording for investigation costs
- How claims are presented and allocated (defence vs penalty)
A trusted broker such as Anapi, who understands both local regulations and policy wordings can help you navigate this grey zone. We know where coverage can be extended, and where MAS’s accountability rules draw a hard line.
Final word
Don’t count on insurance to pay MAS fines. But do make sure your programme is set up to cover the real-world costs of investigations, defence, and civil claims — because that’s where the bills pile up fastest.
And if you’re not sure how your policy responds, that’s exactly the kind of conversation to have with your broker before MAS comes calling.
