Safe investment in Luxembourg and wealth protection
With a strict legal framework focused on protecting assets invested in a policy, and recognised political and economic stability, Luxembourg offers life insurance policyholders an unparalleled level of protection of their wealth.
The protection of the policyholder’s wealth is based on several pillars:
- The Triangle of Security
- The Super Privilege
- The unseizability of wealth
- Luxembourg’s stability and reliability
Video transcript
Luxembourg life assurance
A financial instrument with manifold assets
#protection
The Triangle of Security
A unique policyholder protection regime
The insurer is obliged to deposit the assets related to the policyholder's life assurance policy with a custodian bank
Bank
• independent
• approved by the Commissariat aux Assurances (CAA)
The assets are deposited in an account separate from the insurer's own funds and the bank's assets
The CAA monitors and, if necessary, sanctions the insurer and the custodian bank
In the event of the insurer’s financial difficulties, the CAA may immediately freeze the accounts held with the custodian banks to prevent any transaction being performed contrary to the interests of the policyholders
The Super Privilege
An additional guarantee for policyholders
In the event of the insurer becoming insolvent, the Super Privilege guarantees that policyholders will be treated in priority over other creditors (including the state)
Creditor Creditor Policyholder Creditor Creditor
The assets entrusted to the custodian bank benefit from the Luxembourg unlimited deposit guarantee scheme*
* Excluding cash
Luxembourg life assurance
Tailor-made wealth management solutions
Disclaimer: the content of this communication does not constitue any offer or solicitation for the purchase of any life assurance product. OneLife does not warrant, represent or guarantee that the information contained within this communication is complete, accurate or up-to-date at the time of distribution. Neither is this information intended to constitute any form of legal, fiscal or investment advice and the information provided in this communication or any other pre-contractual document should therefore be used only conjuncture with appropriate professional advice obtained from a suitable qualified independent and professional source. January 2023
The Triangle of Security: optimal protection of assets
The Triangle of Security governs the custody of the assets invested by the policyholder in their life insurance policy. It is based on a triple mechanism.
- The insurer is legally obliged to entrust the assets linked to the policyholder’s life insurance policy to an independent custodian bank, approved by the Commissariat aux Assurances (CAA), the authority responsible for supervising insurance companies.
- The assets are deposited in an account separate from the insurer’s equity and the bank’s assets. This provision guarantees the policyholder optimal protection in the event of financial difficulties for the insurer and/or the bank.
- The CAA monitors the accounts of the insurer and the custodian bank in order to identify any difficulties as quickly as possible.
In addition, in the event of the insurer’s financial difficulties, the CAA has the power to freeze its accounts with the custodian banks immediately to prevent any transaction contrary to the interests of policyholders.
The Super Privilege and unlimited deposit guarantee, two additional security measures for policyholders
In addition to the Triangle of Security, the Luxembourg legislator has put in place additional protection for the policyholder’s assets: the Super Privilege. In the event of the insurer’s default, this mechanism guarantees the policyholders’ absolute priority over the insurer’s other creditors, including the State.
In addition, if the custodian bank encounters difficulties, the assets entrusted to it benefit from the Luxembourg unlimited deposit guarantee mechanism (excluding cash).
Video transcript
Luxembourg life assurance
A financial instrument with manifold assets
#protection
Unseizability of assets
held within the policy
The assets invested in a life assurance policy become the property of the insurer
The assets held in the policy benefit from the principle of unseizability by third parties*.
*Except in the case of tax fraud, criminal investigation or excessive premium with regard to the resources and/or assets of the policyholder
The assets are therefore protected until policy maturity or termination
The rights of the policyholder
Only the policyholder has the right to:
- Appoint and revoke the beneficiaries
- Pledge the policy
- Surrender the policy
Non-exhaustive list of rights
Luxembourg life assurance
Tailor-made wealth management solutions
Disclaimer: the content of this communication does not constitue any offer or solicitation for the purchase of any life assurance product. OneLife does not warrant, represent or guarantee that the information contained within this communication is complete, accurate or up-to-date at the time of distribution. Neither is this information intended to constitute any form of legal, fiscal or investment advice and the information provided in this communication or any other pre-contractual document should therefore be used only conjuncture with appropriate professional advice obtained from a suitable qualified independent and professional source. January 2023
Wealth unseizability: a key feature of life insurance investment
When the policyholder invests assets in life insurance, those assets become the property of the insurer. It cannot therefore be seized by the policyholder’s creditors, and remains protected until the expiry of the policy.
Only the policyholder has the right to:
- Pledge their policy
- Surrender their policy
- Designate or revoke the beneficiaries
No creditor has the power to force the policyholder to exercise these rights (except in the event of tax fraud, criminal investigation or obviously exaggerated premium with regard to their resources and/or assets).
Video transcript
Luxembourg life assurance
A financial instrument with manifold assets
#protection
Luxembourg's economic and financial stability
Luxembourg is one of the few countries in the world with a triple A rating*
*assigned by Standard & Poor’s, Fitch, Moody’s
Capacity for continuous innovation; Competitive economy; Sound public finances
An agile and renowned financial centre
The leading centre for investment funds in Europe and the no. 2 worldwide
First stock exchange dedicated to green finance (Luxembourg Green Exchange)
Global leader in international funds investing in China
National platform dedicated to Fintech
A diversified economy
An innovative financial centre: Sustainable Finance, Microfinance, Fintech, etc. but also a forward-looking country : Aerospace, Digital Services, Logistics, Health Technologies, Industrial Production,Etc.
Luxembourg life assurance
Tailor-made wealth management solutions
Disclaimer: the content of this communication does not constitue any offer or solicitation for the purchase of any life assurance product. OneLife does not warrant, represent or guarantee that the information contained within this communication is complete, accurate or up-to-date at the time of distribution. Neither is this information intended to constitute any form of legal, fiscal or investment advice and the information provided in this communication or any other pre-contractual document should therefore be used only conjuncture with appropriate professional advice obtained from a suitable qualified independent and professional source. January 2023
Luxembourg’s stability
The last, but not the least guarantee, offered by the Luxembourg system: the stability of the country, its economy and its institutions.
Economic and financial stability
The Grand Duchy of Luxembourg is one of the few countries in the world with a triple A rating. This is the result of solid public finances, a competitive economy and a permanent capacity for innovation.
Diversified economy
While the financial industry is important for Luxembourg, it is far from the only sector that the country can rely on for its development. Luxembourg companies are active in aerospace, digital services, logistics, healthcare technologies, industrial production ….
Reputable financial centre
For several decades Luxembourg has had a unique reputation as an international financial centre:
- It is the second largest investment fund centre in the world, and the first in Europe
- It has for years been the European centre of excellence for international wealth management and cross-border life insurance
- It saw the creation of the first stock exchange dedicated to green finance, the Luxembourg Green Exchange (LGX)
- It is the global leader in international funds investing in China
- It has a national platform dedicated to the development of Fintech
The Luxembourg government and financial sector players are aware of these strengths and work to maintain and strengthen Luxembourg’s position as a leading financial centre, open to internationalisation and focused on innovation.
