Publication de la lettre circulaire 23/8 relative aux modalités d’introduction et de contenu du dossier de modification du plan d’activités pour les entreprises de réassurance

Circular Letter 23/8 provides guidance to Luxembourg insurance and reinsurance companies regarding the procedures for modifying their business plans.
The circular reminds companies of their obligation to notify the CAA of any significant changes to their activities or plans, as required by the amended law of 7 December 2015 on the insurance sector (Law on the insurance sector – LIS).
The circular explains that the acceptance of a new treaty by captive reinsurance companies can quickly lead to significant changes in terms of commitments or premiums received. However, strict criteria cannot easily be defined to determine what will be considered a significant modification, given the different types of risk and heterogeneity in the size of reinsurance captives.
Therefore, the circular aims to facilitate communication between companies and the CAA by structuring and streamlining the process of modifying business plans for two specific cases: (1) submission of a request for multiple relating to a new risk, and (2) submission of a request for multiple relating to an existing modified risk (excluding run-off). Any significant modification to a risk must be updated according to the article 12.2.c of the Grand-Ducal Regulation of 5 December 2007, which outlines the conditions for approval and exercise of reinsurance companies, as amended.
The circular therefore sets out a two-phase process for submitting modifications to the CAA:
In phase 1, when companies fall into either of the two cases mentioned above, they must submit the required information in the annex „Annexe_Phase1_LC 23-8.xlsx“, which is detailed in the circular. To facilitate understanding of the information to be provided, an illustration file entitled „Annexe_Phase1_LC 23-8_Illustration.xlsx“ is also attached. Companies are requested to attach the detail of the multiple calculations in Excel format to help the CAA assess the need for a complete modification of the business plan. If necessary, companies will be informed of the obligation to provide the information requested in phase 2. Otherwise, the CAA will directly analyze the request for multiples and specify that a phase 2 for administration of the file is not necessary. The CAA will inform the company of any further procedures.
In phase 2, if the CAA deems it necessary to submit a complete request for modification of the business plan following the analysis of the information requested in phase 1, the company will be asked to provide the information listed in the annex „Annexe_Phase2_LC 23-8.xlsx“. The circular explains that if CAA agents consider that the dossier is incomplete, the company will be informed of the deficiencies and will be required to provide additional information. The CAA will keep the company informed of any further developments or changes to the process.