Luxembourg insurance market

fr

Commissariat aux Assurances (CAA)

The independent Luxembourg public authority responsible for prudential supervision of all insurance, reinsurance undertakings, pension funds, and insurance intermediaries operating in or from Luxembourg.

fr

Libre prestation de services (LPS)

EU-law right allowing a Luxembourg-licensed insurer to sell insurance products across the EEA without opening a local branch, following a simple CAA notification to the host-state regulator.

fr

Libre établissement

EU-law right allowing an insurer licensed in one member state to set up a permanent branch or subsidiary in another member state and conduct business there on an ongoing basis.

fr

Triangle de sécurité

Luxembourg-specific policyholder protection structure in which policyholder assets are held in segregated accounts at a CAA-approved custodian bank under a tripartite convention between the insurer, bank, and CAA.

fr

Fonds d'assurance spécialisé (FAS)

A bespoke internal investment vehicle within a Luxembourg unit-linked life policy, allowing sophisticated investors to define their own investment strategy and asset universe.

fr

Fonds interne dédié (FID)

An internal investment fund within a Luxembourg unit-linked contract, managed by a single appointed manager and held at a single custodian bank, tailored to one policyholder.

fr

Assurance responsabilité civile (RC)

Insurance covering the insured's legal liability to third parties for bodily injury or property damage caused by an accident or negligence.

fr

RC automobile (RCA)

Mandatory motor insurance covering damages caused to third parties by the insured vehicle; governed in Luxembourg by the law of 16 April 2003 as amended.

fr

Courtier d'assurances

An independent intermediary registered with the CAA who advises clients and places insurance contracts with multiple insurers, acting in the client's interest.

fr

Agent général d'assurances

An intermediary appointed by and representing one insurer (or group), distributing its products under an exclusive or semi-exclusive mandate, registered with the CAA.

fr

Bancassurance

Distribution model in which insurance products are sold through a bank's network of branches or employees, typically under a partnership or ownership link between the bank and an insurer.

fr

Provision technique

Actuarial reserve an insurer must hold on its balance sheet to cover expected future obligations to policyholders; a core element of Solvency II capital requirements.

fr

Solvabilité II

EU Directive 2009/138/CE establishing risk-based capital, governance, and reporting requirements for EU insurance and reinsurance undertakings; transposed in Luxembourg by the law of 7 December 2015.

fr

Contrat en unités de compte

A life insurance policy in which premiums are invested in selected investment funds; the policy value fluctuates with underlying asset performance and there is no capital guarantee.

fr

Preneur d'assurance

The natural or legal person who concludes an insurance contract with an insurer and is responsible for paying the premium, who may or may not be the insured person or beneficiary.

fr

Fonds d'Insolvabilité en Assurance Automobile (FIAA)

A Luxembourg public body created by the law of 29 March 2024 to compensate road accident victims resident in Luxembourg when the at-fault insurer is insolvent anywhere in the EU.

fr

Résolution extrajudiciaire des litiges (REL)

A free CAA mediation procedure enabling individual consumers to seek resolution of insurance disputes without court proceedings; governed by CAA Regulation 19/03 of 26 February 2019.

fr

Super-privilège

A Luxembourg statutory provision granting policyholders preferential creditor status over the segregated assets representing their technical reserves in the event of insurer insolvency.

How large is the Luxembourg insurance market?

In 2024 the Luxembourg insurance and reinsurance sector reached record premium levels across all segments. Total sector balance sheets hit EUR 380 billion. Non-life insurance premiums reached EUR 15.89 billion (international business), local non-life reached EUR 1.3 billion, and life insurance premiums (international LPS) reached EUR 26.6 billion — a 42.3% rise versus 2023. The sector employed 14,809 people.

Who regulates the insurance sector in Luxembourg?

The Commissariat aux Assurances (CAA), an independent public authority placed under the Minister of Finance, is the sole prudential and conduct supervisor for insurance undertakings, reinsurers, pension funds, and insurance intermediaries (agents, brokers) in Luxembourg. The CAA also handles out-of-court consumer complaint resolution.

What is the 'Triangle of Security' unique to Luxembourg?

The Triangle of Security is a Luxembourg-specific policyholder protection mechanism involving three independent parties: the life insurer, a CAA-approved custodian bank, and the CAA itself. Policyholder assets are held in segregated accounts at the custodian bank under a tripartite convention. The CAA can block these assets at any time to protect policyholders, providing a level of protection unique in Europe.

Can an insurer from another EU country sell insurance in Luxembourg without setting up a local entity?

Yes. Under EU Solvency II rules (transposed in the Luxembourg law of 7 December 2015), insurers licensed in any EU/EEA state can operate in Luxembourg under the Freedom to Provide Services (LPS) without a local entity. A simple notification between the home-country regulator and the CAA is sufficient. At year-end 2005 alone, 564 foreign companies were already authorised to operate in Luxembourg under LPS.

How do I file a complaint against my insurer in Luxembourg?

First, submit a written complaint to your insurer; they must respond within 2 months. If unsatisfied after 90 days, submit a written out-of-court resolution request to the CAA (11 rue Robert Stumper, L-2557 Luxembourg; caa@caa.lu) within one year of the initial complaint. You may also contact the ACA Insurance Ombudsman (mediateur@aca.lu) or take the matter to court.

Is there a mandatory motor third-party liability insurance requirement in Luxembourg?

Yes. All motor vehicles habitually stationed in Luxembourg must be covered by mandatory third-party liability (RC auto) insurance, governed by the law of 16 April 2003 as amended. The law of 29 March 2024 further transposed EU Directive 2021/2118, modernising coverage requirements and creating the FIAA to compensate victims when the at-fault insurer is insolvent.

What advantages does a Luxembourg life insurance contract offer over a domestic policy?

Key advantages include: (1) unique Triangle of Security policyholder protection, (2) fiscal neutrality — only the policyholder's country of residence tax rules apply, (3) multi-currency management, (4) access to a near-unlimited range of assets (FID and FAS funds), (5) EU portability — the contract follows the policyholder if they move to another EU country, and (6) no equivalent of France's Sapin 2 asset-freeze mechanism.

How many insurance and reinsurance companies are active in Luxembourg?

As of mid-2025 the CAA supervises 278 insurance and reinsurance undertakings established in Luxembourg, a stable figure compared to 277 at start of 2024. In addition, hundreds of foreign insurers are authorised to operate in Luxembourg under LPS or freedom of establishment without a full local entity.

What does DORA mean for Luxembourg insurers?

Since 17 January 2025, EU Regulation 2022/2554 (DORA) requires all Luxembourg-licensed insurers and reinsurers to implement formal ICT risk management frameworks, report major ICT incidents, conduct digital resilience tests, and manage third-party ICT service providers via detailed registers. The CAA supervises compliance and can impose sanctions of up to EUR 5 million.