Insurance non-standard assets holding - The essentials

Luxembourg's insurance regulation permits a broad range of underlying investments in internal funds. These investments may manifest as unquoted/unlisted assets, depending on the overall investment strategy of the life insurance policy.

As investors in these specific and typically more complex assets, insurers encounter increased risks and challenges. These risks are not limited to valuation concerns but extend to legal, compliance, governance, and other policy management matters. These aspects need to be assessed and monitored continuously, especially for cross-border policies.

The imperative for comprehensive and streamlined processes and controls is heightened, and implementing a clear action plan to address these challenges should be considered a priority.

By the end of this course, participants will be able to:

• identify the main investment forms/vehicles for unlisted securities in insurance;
• understand the key regulations and circular letters applicable to investments (incl. CAA LC 15/3);
• gain a clear perspective on these assets under accounting and tax considerations;
• understand these holding impacts in terms of controls and governance.

1. Rationale for having unlisted securities in policies

• Financial perspective
• Tax perspective
• Asset management perspective

2. Definitions, concepts and valuation considerations

• The concept of value (definitions and context)
• Valuation methods
• Practical considerations

3. Accounting/financial analysis

• Insurer’s accounting perspective
• Key disclosure requirements for insurance and commercial companies
• Standalone versus consolidated accounts
• Illustration

4. Procedures and controls

• Structuring a comprehensive procedure and controls within the organisation
• Market benchmarking and pitfalls observed

This training is coordinated by Anthony Dault, Partner, and Mehdi Laghlam, Senior Manager at PwC Luxembourg.

Anthony is a partner specialised in insurance/reinsurance and international tax structure, and is actively involved in PwC Luxembourg Reinsurance and Insurance Group (RIG), including the insurance and reinsurance regulatory team. Anthony has more than 20 years of experience serving several multinationals, subsidiaries of European and US registered companies reporting under IFRS or Lux GAAP in the insurance and reinsurance sector.

In the past years, Anthony has been involved in the development of the PwC Luxembourg insurance regulatory practice, with a strong focus on cross-border distribution as well as regulatory licencing projects.

Mehdi is a senior manager in the Audit and Regulatory practice and has 8 years of experience in insurance/reinsurance. He leads the AML taskforce which provides technical support to audit teams and audit clients (AML audits, AML special reports, internal and external trainings focusing on AML updates such as AML Regulation 20/03).

Mehdi also has a strong experience with projects supporting clients on due diligences, critical assessments on key macro processes and control testing within Advisory.