Today Luxembourg is the heart of private banking, the largest center outside of the US for the management and administration of investment funds, and the capital of the pan-European cross-border life insurance industry. 

The location of an Assurance Company in Luxembourg provides key advantages to investors:


Tax-efficient environment

Interests, gains, dividends and capital gains relating to life insurance funds in Luxembourg are reinvested free of taxes. Moreover, certain withholding taxes can be refunded on the basis of the wide Double Taxation Treaties network (76). Although, the tax position of the clients will ultimately depend on the rules of their Country of residence, the tax-exempt status of Luxembourg life insurance funds provides a strong advantage.


Europe’s strongest investor protection regime

Luxembourg legislation provides complete protection to life insurance policy holders. The main strength of this investment protection regime is the requirement, by law, that all client assets must be held by an independent custodian bank appointed by the life insurance company and approved by the Luxembourg insurance regulator. This arrangement is known as “Triangle of Security”. The mentioned regime provides for the legal separation of the assets of the policy from the assets of the assurance company, meaning that the creditors of the company cannot seize the assets of the policy. Furthermore, the custodian bank is required to use the clients’ assets solely for the purposes of the investment and is bound by the regulator’s legal powers to protect policyholders’ interests. Luxembourg’s regulations adopt European directives.


Security triangle

Custodian Bank NN Life Luxembourg S.A. Commissariat aux Assurances (CAA) Adv Lux Image
NN Life Luxembourg S.A.
  • Authorized and supervised by the CAA
  • Deposits all policyholder assets with an independent Custodian Bank
  • Maintains a register of all assets («Permanent Inventory»), which it submits to the CAA on a quarterly basis
  • Maintains legal solvency margin at all times
  • Without exception, policyholder assets are held entirely separately from NN Life assets
  • Policyholders’ assets are protected in the event of NN Life failure
Commissariat aux Assurances (CAA)
  • Responsible for the supervision of the Luxembourg insurance industry
  • Approves the appointment of the Custodian Bank
  • Carries out regular monitoring of policyholder assets and how they are invested
  • Monitors insurance companies’ solvency
  • Power to issue orders to «freeze» bank accounts holding policyholder assets in custody
Custodian Bank
  • Entirely independent from NN Life
  • Client’s securities (e.g. investment funds, shares and bonds) are held in segregated accounts off the bank’s balance sheet
  • If the bank fails, these securities remain in segregated client accounts
  • Policyholders have preferential rights over the assets in the segregated accounts
  • Cash deposits are not segregated from the bank’s assets, and are potentially at risk. However, cash held in monetary funds is treated as securities which are protected
  • May delegate custody, but maintains full responsibility for the safekeeping of policyholder assets
  • In case of freezing order from the CAA, no activity is allowed on custody accounts unless prior CAA approval is received