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A captive reinsurance company is a wholly owned legal entity established by an industrial, financial, commercial or governmental organisation or organisations to underwrite all, or a selection of the risks of that organisation and its affiliates.

Captives are used extensively throughout the world by major corporations to cover risks situated both at home and abroad. As the trade barriers throughout the world are lowered and companies become more internationally oriented, insurance buyers are taking a more global approach to risk financing and captives can play an integral role in the successful implementation of a global risk financing strategy.

Luxembourg is the leading European captive domicile and has developed an excellent reputation in attracting more than 250 industrial and financial groups since the law allowing their establishment was voted in 1984.

Captives are regulated by the Law of 6 December 1991 on the insurance sector, as amended, and by the Grand Ducal Regulation of 5 December 2007 concerning the conditions for authorisation and carrying on business for reinsurance companies, as amended. They are subject to regulatory control by the Commissariat aux Assurances (CAA).

Our brochure Luxembourg Captive Reinsurance Companies explains the advantages of creating a captive and the options available in Luxembourg.

Practical guide:
How to set up a reinsurance company