My Luxembourg life insurer is in trouble: what happens to my savings?

The assets representing the liabilities of a Luxembourg life insurer are deposited with a custodian bank. If the company's financial stability is called into question, the Insurance Commission (CAA) can freeze this deposit. In the liquidation proceedings of FWU Life Insurance Lux SA, each policyholder's claim is determined by the liquidator based on the net asset value of their contract, and the deadline for filing a claim with the liquidator is January 31, 2028. The CAA does not specify the amount recovered in its documents; this page does not specify it either.

Asset freezing and separation

The CAA's 2025-2026 annual report describes it as follows: the securities representing the insurer's liabilities are deposited with a custodian. This deposit can be frozen at the CAA's simple instruction if the company's financial stability is called into question. It "forms a separate asset pool for the benefit of policyholders.".

In its FAQ on FWU, the CAA states that in Luxembourg, policyholders' assets are separate from those of the insurance company. Its background note clarifies that the assets representing FWU's liabilities were deposited with custodian banks, under a tripartite deposit agreement, and kept separate from the insurer's own assets.

The privilege of the insured

According to the CAA's model deposit agreement, deposited assets are allocated by priority to the payment of insurance claims. Once recorded in the permanent inventory, this priority "takes precedence over all others".

The CAA FAQ on FWU uses the term "super-lien": both borrowers and beneficiaries benefit from it. Other CAA documents refer to it as "lien" or "privileged claim.".

Liquidation, step by step: what the CAA says about FWU

The CAA has published several documents on the liquidation of FWU Life Insurance Lux SA. Here is what they reveal.

Three clarifications from the CAA complete this picture:

• The treatment of insured persons does not depend on their country of residence, provided that the claim is declared within the prescribed time limits and conditions; ;
• the value of the representative assets is allocated by priority to the repayment of savings (note of 05/02/2025); ;
• The taxation of the reimbursement depends on the insured's country of tax residence.

The CAA document announcing the liquidation is dated 03/02/2025. The judgment, however, is dated 31/01/2025.

CAA documents to know

The CAA has published several dated documents on FWU. Here are the main ones:

• the press release on insolvency, dated 19/07/2024; ;
• the background information note, updated on 04/09/2024; ;
• the note «First clarifications following the liquidation», dated 05/02/2025; ;
• FAQ, dated 21/02/2025, updated on 18/06/2025.

What the lessee receives on their contract

For contracts issued from 01/02/2026 onwards, CAA Circular Letter 26/1 (point 3) requires that the general terms and conditions include the right for the policyholder of an investment fund-linked contract to receive, free of charge, an annual valuation of their contract. At any time, the valuation is subject to payment of an administrative fee. Contracts issued before this date remain governed by the investment rules in the contract annex (point 10); this page does not specify whether the same right is included therein.

What the device doesn't say

These rules govern the insurer's failure. They do not replace market risk.

• The amount recovered. The CAA does not disclose in these documents the final amount received by FWU savers. No figures are provided here.
• Investment risk. On a unit-linked contract, it is borne exclusively by the policyholder, and the insurer makes no commitment on any return (CAA circular letter 26/1, dated 01/02/2026).
• The dedicated fund. The policyholder only has the privilege common to all insured parties, and the assets are the property of the insurer (same circular, point 7.3.4).

Numerical example (fictitious profile)

Situation. A hypothetical investor holds €300,000 in a Luxembourg unit-linked contract. Their insurer is subject to proceedings following the public timetable of the FWU case. The €300,000 figure is hypothetical.

Issue. He thinks everything will be decided in a few days, or that all is lost. He doesn't know what dates to use as a reference point.

Strategy. Refer to the dates published by the CAA: blocking decision on 23/07/2024, liquidation judgment on 31/01/2025, deadline for filing a claim on 31/01/2028.

Result. 192 days elapse between the freezing of funds and the judgment. Between the judgment and the deadline for filing a claim, 1,095 days elapse, or 3 years. The portion of the €300,000 that would be recovered cannot be calculated: the Administrative Court of Appeal (CAA) does not provide this amount in the FWU case. These dates are specific to the FWU proceedings and are not applicable to any other procedure.

CALCULATION: 31/01/2025 − 23/07/2024 = 192 days; 31/01/2028 − 31/01/2025 = 1095 days. The amount of €300,000 is an assumption of the hypothetical profile.

What changes depending on your situation

• The type of contract. For a dedicated fund, the policyholder only has the privilege common to all insured parties.
• The nature of your assets. In a unit-linked contract, the investment risk is borne exclusively by the policyholder.
• Your country of tax residence. It determines the taxation of the reimbursement.
• The procedure in question. Reimbursement dates and rules are specific to each procedure.

These points are examined on a case-by-case basis. No result is guaranteed in advance.