The Corporate and Accounting Laws (Amendment) Act 2025, which took effect on 6 May 2026, introduced four substantive changes to Singapore's corporate governance framework. Three of them directly affect the personal exposure of individual directors.
First, the maximum fine for breaching director duties under Section 157 of the Companies Act has risen from S$5,000 to S$20,000. Second, serious breaches now carry imprisonment of up to 12 months as an additional sanction. Third, the list of offences that automatically disqualify an individual from acting as a Singapore company director has been expanded: a conviction for money laundering under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) now constitutes an automatic disqualification.
For most working directors, the first two changes are the most immediately relevant. For nominee directors and directors of companies with significant beneficial ownership complexity, the CDSA disqualification expansion is the material change to understand.
This post is about the insurance dimension of these changes. It does not constitute legal advice on the Act or its provisions. Directors should seek qualified legal advice on their specific obligations.
What do the new penalties look like?
The maximum fine for breaches of fundamental director duties under Section 157 of the Companies Act has risen from S$5,000 to S$20,000. Serious offences may attract both a fine and imprisonment of up to 12 months.
For nominee director register failures, including failing to maintain the Register of Nominee Directors or failing to file it with ACRA, fines of up to S$25,000 per violation apply under the Companies (Amendment) Regulations 2025.
A separate and distinct penalty regime applies to Corporate Service Providers (CSPs) under the Corporate Service Providers Act 2024: registered CSPs found in breach of AML/CFT obligations face fines of up to S$100,000 per violation. This penalty applies to the CSP as an entity, not to individual directors personally.
For individual directors, the expanded CDSA disqualification is the most significant structural change. A director convicted of a money laundering offence under the CDSA is now automatically disqualified from acting as a director of any Singapore company. This is in addition to existing disqualification grounds under Sections 148 and 149 of the Companies Act.
The duties themselves have not changed in substance. Directors are still required to act in the company's best interests, exercise reasonable diligence, avoid conflicts of interest, and ensure proper statutory filings. What has changed is the consequence of falling short.
Why does this matter more for SMEs than it appears?
In the SME setting, governance can quietly drift. A filing is missed, a related-party transaction is not properly documented, a conflict is not disclosed. These are not always the result of bad intent. They can reflect a small team operating under resource pressure, where the director is simultaneously the chief executive, the chief financial officer, and the person who answers the phone.
The CALA 2025 changes do not create new duties. They raise the price of existing duty failures. A director who previously might have received a S$5,000 fine for a Section 157 breach now faces a S$20,000 fine and the possibility of imprisonment. That is a qualitative change in personal exposure, not just a quantitative one.
For nominee directors specifically, the regulatory environment has tightened across two separate pieces of legislation: the Companies Act amendments raise the fine for duty breaches, and the Corporate Service Providers Act 2024 now requires that nominee director appointments be arranged through a registered CSP that has assessed the nominee as fit and proper. A person who acts as a nominee director for a company without being appointed through a registered CSP faces a fine of up to S$10,000.
What does D&O insurance address?
Directors and Officers (D&O) insurance covers the personal legal costs of directors and officers where claims are made against them in their capacity as decision-makers. The policy responds to the investigation and legal costs of a director defending themselves against a claim, including regulatory investigations, not only civil litigation.
For Singapore directors, the increased fine threshold under CALA 2025 reinforces the rationale for D&O cover at two points.
First, the cost of legal representation in connection with an ACRA investigation or enforcement action can be material, and those costs arise before any finding of liability. A director who receives a notice of investigation needs legal advice from day one of the process. The D&O policy covers those costs from the point of notification, not only after an outcome is determined.
Second, the CDSA disqualification expansion means that a director convicted of a money laundering offence faces a consequence that goes beyond a fine: automatic removal from all Singapore directorships. The legal costs of defending against proceedings that could lead to that outcome are significant, and the D&O policy addresses those costs at the individual director level.
One aspect of the D&O policy that is worth confirming in light of the CALA 2025 changes is whether the policy covers regulatory defence costs for proceedings before ACRA specifically, and whether the coverage extends to criminal defence costs where the proceedings involve an offence under the Companies Act or the CDSA. Policy wordings differ on these points, and confirming the coverage scope at the next renewal is worth doing.
The retroactive date and what it means in this context
D&O insurance is written on a claims-made basis. The policy that responds to a claim is the one in force when the claim is made or the investigation is notified, not the policy in force when the underlying conduct occurred.
For a director who has been in post for several years, the retroactive date on the current D&O policy determines how far back the coverage window extends. A policy with a retroactive date at inception covers only conduct from that point forward. Conduct that pre-dates the retroactive date is outside the coverage window even if a claim or investigation arises during the current policy period.
For Singapore SME directors who may not have held D&O cover continuously, or who are arranging cover for the first time following the CALA 2025 changes, the retroactive date is the most practically important element of the policy to discuss with an adviser.
What to confirm at the next renewal
For any Singapore director or company reviewing D&O cover in light of the CALA 2025 changes, three questions are worth confirming.
First, does the policy cover regulatory defence costs for proceedings before ACRA, including investigations under the Companies Act? Second, does the policy extend to proceedings involving criminal offences under the Companies Act or the CDSA, and if so, what are the conditions and limits that apply? Third, what is the retroactive date, and does it reflect the full period of the director's tenure in their current role?
You can read more about our D&O cover on the products page and about D&O in practice in our post on What Actually Happens When a D&O Claim is Made.
If you are a Singapore director or company secretary reviewing D&O coverage in light of the CALA 2025 changes, we would be glad to work through it with you.
This article provides general information only. It is not insurance or legal advice. The Corporate and Accounting Laws (Amendment) Act 2025 provisions referenced took effect on 6 May 2026, as announced by ACRA on 16 April 2026. The Corporate Service Providers Act 2024 took effect on 9 June 2025. Directors should seek qualified legal advice on their specific obligations under the Companies Act, the CDSA, and related legislation. Policy availability, terms, conditions, and exclusions vary by insurer and product, and cover is subject to the full policy wording. Please contact TZY CO for advice on your specific situation.