Amendment to the law on insurance contracts in relation to Brexit – Insurance


Luxembourg: Amendment to the law on insurance contracts in relation to Brexit

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The law of December 19, 20201 execution of the 2021 finance law introduced in the law on the insurance contract2 a new provision to guarantee the result of insurance policies taken out by British insurers after Brexit.

By amending article 2 of the law,3 the legislator has removed any doubt about the validity of insurance contracts in the event that:

  • an insurance company from the EEA or from a third country loses its authorization to carry out direct insurance operations in Luxembourg while retaining its authorization in its State of origin; and
  • a contract was validly issued or renewed by a company authorized to work in Luxembourg in freedom of establishment or in the freedom to provide services at the time of the conclusion or renewal of the contract.

Until then, in principle, any insurance contract covering risks located in Luxembourg concluded by an insurance company which is neither authorized nor authorized to carry out insurance operations in Luxembourg is null and void.

However, these contracts cannot be renewed or be the subject of any direct insurance transaction giving rise to the issuance of premiums after the loss of authorization. This is in accordance with the post-Brexit transitional regime established by the law of April 8, 2019,4 that the Insurance Commission (CAA) can exempt UK-based insurers from their approval requirement for up to 21 months from the date of Brexit with respect to contracts entered into or renewed before Brexit .

For new policy underwriting or renewals in Luxembourg, third country insurers – including UK licensed insurers – will need to consider a long-term regulatory and contractual framework, including with respect to establishing a branch of a third country or of an insurance company approved in Luxembourg and supervised by the CAA.5


1. Available here.

2. Law of July 27, 1997.

3. Available here.

4. For more information, please consult the “Luxembourg Brexit Bill for the Financial Sector”.

5. For more information, please consult the “Luxembourg Brexit Bill for the Financial Sector”.

This article originally appeared in the Insurance Newsletter of the International Law Office.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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