domicile

Luxembourg Captive Insurance: Regulations, Requirements & Providers

EU-regulated reinsurance captive domicile with an equalisation reserve.

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At a glance

Regulated by the Commissariat aux Assurances (CAA) under the Solvency II EU Directive and the modified law of 7 December 2015 on the insurance sector
Captives are licensed exclusively as reinsurance vehicles, reinsuring a fronting insurer that issues the underlying policy rather than writing direct business themselves
Minimum capital requirement of roughly €1.2 to €1.3 million for a reinsurance captive, well below the requirement for a non-captive reinsurer
Around 190 reinsurance companies licensed, making Luxembourg the largest reinsurance domicile in the European Union
A distinctive tax-deductible equalisation reserve lets a captive build reserves against future large or catastrophic losses

Full EU passporting and Solvency II equivalence, relevant for groups that want an EU-regulated vehicle
The equalisation reserve is a feature few other domiciles offer, and can materially affect a captive's tax position
A stable, multilingual financial centre in the heart of Europe with deep reinsurance-sector expertise
Became a common destination for UK-based reinsurance captives seeking an EU base after Brexit

Structured as reinsurance only, so it requires a fronting arrangement with a licensed direct insurer, adding a layer of cost and complexity
Full Solvency II governance applies, including actuarial, compliance, risk management, internal audit and AML key functions
The effective tax rate is materially higher than most Caribbean or many US onshore domiciles before the equalisation reserve is applied
Licensing typically takes around 90 business days once the application is complete — confirm current capital and tax figures with the CAA or a licensed manager

Each card shows how that provider relates to Luxembourg — headquartered here, an office here, or serving the domicile.

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