{ "title": "Luxembourg: Financial Sector Assessment Program—Technical Note on Insurance Regulation and Supervision", "publication": "IMF Staff Country Reports, June 24, 2024", "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839", "canonical": "https://www.imf.org/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839", "overlayPath": "/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839/index.md", "summary": "This technical note analyzes the key aspects of the regulatory and supervisory regime for insurance companies in Luxembourg.", "sections": [ { "heading": "Scope and context", "content": "- Analysis part of the 2024 Financial Sector Assessment Program (FSAP).\n- Based on the regulatory framework in place and the supervisory practices employed as of October 2023.\n- Publication date: June 24, 2024.\n- Pages: 34. Volume: 2024. Issue: 184. Series: Country Report No. 2024/184.\n- DOI: https://doi.org/10.5089/9798400278846.002. ISBN: 9798400278846. ISSN: 1934-7685." }, { "heading": "Structure and recent developments of the insurance sector", "content": "- The Luxembourgish insurance sector is described as large, well developed, and highly interconnected with other insurance markets.\n- Interconnections arise through internationally active insurance groups and cross-border business.\n- The sector has grown substantially in size since the previous FSAP review." }, { "heading": "Main findings on regulation and supervision", "content": "- Key aspects of the regulatory and supervisory regime for insurance companies in Luxembourg were analyzed.\n- The FSAP identified the need to further strengthen the independence and internal governance of the Commissariat aux Assurances (CAA).\n- CAA staff has roughly doubled since the last FSAP, but staffing levels should be constantly reviewed in light of expanding tasks.\n- IT projects within the CAA are currently conducted largely in-house, indicating a need to strengthen IT governance." }, { "heading": "Governance and independence of the CAA — specific observations", "content": "- The authority’s independence could be further strengthened by:\n - Safeguarding the independence of its Board members.\n - Narrowing down in the Insurance Act the reasons on which the CAA’s Directorate could be dismissed.\n- The governance of the CAA would benefit from:\n - Setting up an internal audit function.\n - Strengthening IT governance given current in-house project execution." }, { "heading": "Policy recommendations", "content": "- Regularly review CAA staffing to ensure capacity keeps pace with expanding responsibilities.\n- Strengthen statutory and practical safeguards for Board independence.\n- Amend the Insurance Act to narrow the grounds for dismissal of the CAA’s Directorate.\n- Establish an internal audit function within the CAA.\n- Enhance IT governance frameworks and oversight for projects currently conducted largely in-house." }, { "heading": "Thematic coverage and keywords", "content": "- Subjects covered include Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Insurance, Insurance companies, Solvency.\n- Keywords used in the note include: Anti-money laundering and combating the financing of terrorism (AML/CFT), d.c, Financial Sector Assessment Program, G. Macroprudential supervision, Global, Insurance, Insurance companies, International Monetary Fund Washington, Solvency, solvency ASSESSMENT, solvency capital requirement, solvency coverage.\n\nInternational Monetary Fund — Luxembourg: Financial Sector Assessment Program—Technical Note on Insurance Regulation and Supervision (Country Report No. 2024/184).\n\n---\n\n Content in this bundle\n\n- 1luxea2024007\n - 1luxea2024007 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 1luxea2024007 (PDF){rel=\"external\" type=\"application/pdf\"}" } ], "bullets": [ "[Markdown version](/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839/index.md)", "[Structured JSON version](/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839/index.json)", "[Bundle manifest](/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839/bundle-manifest.json)", "Published: June 24, 2024", "Series: IMF Staff Country Reports", "DOI: https://doi.org/10.5089/9798400278846.002", "Analysis part of the 2024 Financial Sector Assessment Program (FSAP).", "Based on the regulatory framework in place and the supervisory practices employed as of October 2023.", "Publication date: June 24, 2024.", "Pages: 34. Volume: 2024. Issue: 184. Series: Country Report No. 2024/184.", "DOI: https://doi.org/10.5089/9798400278846.002. ISBN: 9798400278846. ISSN: 1934-7685.", "The Luxembourgish insurance sector is described as large, well developed, and highly interconnected with other insurance markets.", "Interconnections arise through internationally active insurance groups and cross-border business.", "The sector has grown substantially in size since the previous FSAP review.", "Key aspects of the regulatory and supervisory regime for insurance companies in Luxembourg were analyzed.", "The FSAP identified the need to further strengthen the independence and internal governance of the Commissariat aux Assurances (CAA).", "CAA staff has roughly doubled since the last FSAP, but staffing levels should be constantly reviewed in light of expanding tasks.", "IT projects within the CAA are currently conducted largely in-house, indicating a need to strengthen IT governance.", "The authority’s independence could be further strengthened by:", "The governance of the CAA would benefit from:", "Regularly review CAA staffing to ensure capacity keeps pace with expanding responsibilities.", "Strengthen statutory and practical safeguards for Board independence.", "Amend the Insurance Act to narrow the grounds for dismissal of the CAA’s Directorate.", "Establish an internal audit function within the CAA.", "Enhance IT governance frameworks and oversight for projects currently conducted largely in-house.", "Subjects covered include Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Insurance, Insurance companies, Solvency.", "Keywords used in the note include: Anti-money laundering and combating the financing of terrorism (AML/CFT), d.c, Financial Sector Assessment Program, G. 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