Circular Letter CAA 26/1 (effective 1 February 2026)
On 28 January 2026, the Commissariat aux Assurances (CAA) published the new Circular Letter 26/1, applicable from 1 February 2026 for contracts issued on or after that date.
Contracts and dedicated funds existing prior to 1st February 2026 remain governed by the investment rules set out in previous texts (95/3, 01/8, 08/1 or 15/3). An amendment may be made via an addendum if the new rules are to be incorporated.
This text constitutes a major revision of Circular Letter 15/3, which governs the investment rules applicable to Luxembourg life insurance contracts linked to investment funds, with a view to strengthening the competitiveness and attractiveness of Luxembourg life insurance, while maintaining a demanding framework of protection and governance.
The major changes in this new Circular Letter are as follows:
1. More flexible Internal Collective Funds (FICs)
FICs in categories A, B, C or D retain their collective nature, but now enjoy operational advantages similar to those of FIDs, in particular:
- no prior notification to the CAA,
- possibility of appointing a depositary outside the EEA.
The provisions of the new Circular Letter enable FIC A, B, C or D funds to become more attractive to a segment of clients that does not correspond to the retail target market of an FIC category N fund. This segment is looking for a more sophisticated product without requiring the level of customisation usually associated with traditional FID clients.
2. Direct investment in structured products
It is now possible to invest in certain structured products, which are treated as external funds. The Circular Letter distinguishes between:
- structured products with enhanced guarantees,
- structured products without enhanced guarantees.
3. Level playing field – enhanced competitive equality
The table in Appendix 2 sets the limits for the use of external funds, with increased flexibility:
- Possibility of applying higher investment limits when permitted by the legislation of an EEA country
- Requirement to document this possibility (legal texts or legal opinion from a reputable firm)
- Requirement to review this verification on a regular basis