The Commissariat aux Assurances (“CAA”) published on 28 January 2026 a new Circular Letter 26/1, which entered into force on 1 February 2026. This Circular Letter constitutes a revised version of Circular Letter 15/3, which represents the core regulatory framework governing investment rules applicable to unit-linked life insurance products. The main developments introduced by this new Circular Letter may be summarised as several major evolutions aimed at safeguarding the competitiveness of Luxembourg’s life insurance offering.
In addition to the existing offering designed for retail investors (Category N Collective Internal Funds) and for policyholders seeking highly personalised investment strategies (Dedicated Internal Funds – “DIFs”), the new framework allows for an enhanced use of Category A, B, C or D Collective Internal Funds (“CIFs A, B, C or D”).
While CIFs A, B, C or D retain their legal qualification and intrinsic characteristics as collective investment vehicles, they now benefit from certain operational advantages traditionally associated with DIFs, namely: the absence of prior notification to the CAA; and the possibility to appoint a depositary established outside the European Economic Area (pursuant to new Circular Letter 26/2).
Key takeaway: The provisions of the new Circular Letter enable CIFs A, B, C or D to better meet specific market needs and to become more attractive to a client segment that does not fall within the traditional retail investor profile of Category N CIFs. This segment seeks more sophisticated investment solutions, without requiring the high level of personalisation typical of DIF structures.
The new Circular Letter introduces the possibility of direct investment in structured products. A new Section 6 is dedicated to the rules governing such investments, in particular the distinction between structured products with enhanced capital protection and those without enhanced protection features.
Key takeaway: The opening of direct investment in structured products enables the Luxembourg insurance sector to remain competitive vis-à-vis product offerings available in other European jurisdictions, while maintaining an optimal level of policyholder protection.
The CAA reiterates its regulatory expectations concerning: the definition and governance of the target market; and the disclosure of potential yield reductions in Key Information Documents (“KIDs”).
Key takeaway: This clarification aims to ensure a harmonised application of regulatory requirements and to contribute to the long-term sustainability of the Luxembourg life insurance sector.
Through this new regulatory text, the CAA has also clarified a number of fundamental concepts. In particular, the definitions of UCITS, UCI and alternative investment funds have been amended in order to better align them with the terminology used by other financial sector stakeholders and to facilitate a more consistent interpretation.
Key takeaway: These clarifications seek to promote a unified understanding of key concepts shared across the different segments of the financial ecosystem.
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