The Luxembourg Supervisory Authority for the Insurance Sector (CAA) has confirmed that, as of Wednesday 22 January 2025, it has filed a petition for the dissolution and compulsory liquidation of FWU Life Insurance Lux SA with the district court of Luxembourg.
The insolvency saga began on 19 July 2024, when the CAA that FWU Life Insurance Lux SA no longer met the minimum capital requirement or solvency capital requirement. On the same day, FWU AG, the Germany-based parent company and sole shareholder of FWU Life Insurance Lux SA, filed for insolvency with the district court in Munich, citing over-indebtedness.
Under Luxembourg law, FWU Life Insurance Lux was required to implement a recovery plan within six months of the CAA’s findings--by 19 January 2025 at the latest. This plan to either restore its own funds to meet the solvency capital requirement or reduce its risk profile to ensure compliance.
However, according to the CAA’s on 22 January 2025, the six-month period “has not enabled [FWU Life Insurance Lux SA] to re-establish coverage of its insurance liabilities with eligible representative assets.” The commission thus concluded that the recovery plan had failed.
The CAA clarified that the failure of the recovery plan does not immediately impact the freeze on assets representing the technical provisions held with depository institutions, which remains in effect.
In a further clarification, the CAA on Monday 27 January, that FWU Life Insurance Lux SA’s inability to cover its insurance liabilities has prompted additional measures. Pending a decision from the district court of Luxembourg on compulsory liquidation, the insurance company has suspended the collection of policyholder premiums, effective immediately as of 23 January 2025.
In due time, policyholders and clients will be notified of the district court of Luxembourg’s decision regarding the CAA’s request for the dissolution and compulsory liquidation of FWU Luxembourg. The communication will outline the decision’s impact on policyholders and the steps they can take moving forward.
Paperjam contacted FWU Life Insurance Lux SA for a comment.