CAPTIVES 261 captives and eight direct written captives
CAPTIVE PREMIUM total premium, including professional insurers, was €6.6bn in 2008
LEGISLATION amended law of 6 December 1991 on insurance sector
CAPTIVE TAX RATE 28.59% on a deferred basis FEES application €2,000; annual licence €4,000 for a reinsurer; €8,000+ for direct writer, depending on premium levels
REGULATOR Commissariat aux Assurances
Although Luxembourg concentrates on the reinsurance captive market, it remains a popular domicile because of its position within the EU. Those involved in the market highlight its “strict but flexible” regime and the “continuity of its regulator”. They point to the accessibility of the regulator and their ability to communicate easily. It is most popular with companies from European states other than the UK that want to maintain a captive within the EU.
Martine Hecq, special lines and captive vehicle manager for GDF SUEZ and also a director of GDF SUEZ RE, says her company has operated a captive in Luxembourg since 1991. It regularly reviews the choice of domicile but she says Luxembourg continues to stand out “because of the convenient location, the structure for services and also the consistency of the regulator”. She says: “Other domiciles do not offer sufficiently good reasons to override the advantages and the good relationships we have developed in Luxembourg. As a European company mostly in France and Belgium, GDF would logically domicile in Europe so long as it remains feasible. If it becomes too complicated, we would look outside Europe.”
GDF SUEZ is keeping a watch on Solvency II, and the company’s choice of domicile is a balance of cost, regulation and convenience: so far Luxembourg has won. Repsol insurance director Miguel Luque oversees captives in Bermuda and Luxembourg. He launched the Luxembourg operation in 1991 because of Repsol’s heavy focus in Spain. Like GDF, the advantage for Repsol lay in operating in a European country; they, too, are watching Solvency II developments closely. Luque says they participated in QIS4 and “so far so good; it appears Luxembourg serves us best”.