## Luxembourg: Financial Sector Assessment Program—Technical Note on Insurance Regulation and Supervision

_IMF Staff Country Reports, June 24, 2024_

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## Bibliographic details
- Published: June 24, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400278846.002

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### Scope and context
- 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.

### Structure and recent developments of the insurance sector
- 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.

### Main findings on regulation and supervision
- 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.

### Governance and independence of the CAA — specific observations
- The authority’s independence could be further strengthened by:
  - Safeguarding the independence of its Board members.
  - Narrowing down in the Insurance Act the reasons on which the CAA’s Directorate could be dismissed.
- The governance of the CAA would benefit from:
  - Setting up an internal audit function.
  - Strengthening IT governance given current in-house project execution.

### Policy recommendations
- 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.

### Thematic coverage and keywords
- 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. Macroprudential supervision, Global, Insurance, Insurance companies, International Monetary Fund Washington, Solvency, solvency ASSESSMENT, solvency capital requirement, solvency coverage.

*International Monetary Fund — Luxembourg: Financial Sector Assessment Program—Technical Note on Insurance Regulation and Supervision (Country Report No. 2024/184).*

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_Source: https://www.imf.org/en/publications/cr/issues/2024/06/24/luxembourg-financial-sector-assessment-program-technical-note-on-insurance-regulation-and-550839_