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New options for authorized executives and key function holders

How can you combine your legal requirements with business travel and homeworking?

Authors: Michaël Cravatte

All insurance and reinsurance undertakings in the Grand Duchy of Luxembourg must have a central administration consisting of an administrative center and a decision-making center.

The administrative center requires, among other things, the accounts to be updated and made available in Luxembourg. Similarly, most of the professional activities of the members of the decision-making center – authorized executives and key function holders – must be carried out at the undertaking's headquarter in Luxembourg.

Unlike the personnel involved in the activities of the administrative center, the personnel involved in the decision-making center must frequently take part of business trips (often within their business group). The occurrence of these business trips can generally be managed in accordance with the principle of central administration in Luxembourg.

In recent years, these business trips have been supplemented by remote working days (according to the principle of homeworking), meaning that many (cross-border) workers are working remotely from a country other than the Grand Duchy of Luxembourg. The accumulation of these days spent working outside of Luxembourg, whether by choice or for visiting group entities, may conflict with the requirement to maintain the undertaking's central administration in Luxembourg.

In addition to the geographical absence of the people involved in the undertaking's decision-making center, the scale of the activities carried out by the insurance or reinsurance undertaking and the size of the group to which it belongs may require a strong involvement of the authorized executive.

Also, if under the principle of proportionality, the authorized executives combine their role with the responsibility of a key function apart from internal audit, for the Luxembourg entity, the authorized executives’ availability to effectively execute their functions can be further compromised.

The same applies to key functions, such as actuarial, compliance or risk management. Beyond their geographical absence, if the holders of a key function combine certain responsibilities, it can limit their availability for the effective exercise of their primary key function.

To address the risk of local unavailability and lack of time of authorized executives, this role can be shared among a committee of up to three authorized executives. However, key functions can only have one responsible person per function, and this responsibility cannot be delegated to a third party.

How can Deloitte assist you?


As a Professional of the Insurance Sector (PSA), Deloitte can help you mitigating the unavailability risks of key function holders on the territory of the Grand-Duchy of Luxembourg.

Insurance and reinsurance undertakings can form a specialized committee to appoint individuals from outside their undertakings as to key function holders. These appointed individuals must have an employment contract with a company holding a PSA license.

This would allow you and your people involved in the key functions within the undertaking to:

  • profit, without regulatory limitations (besides the tax and social aspects which are not covered here) from the use of homeworking and business travels while respecting the requirements set by the Commissariat aux Assurances (CAA) in terms of local central administration.
  • take advantage of the support of an entity holding the PSA license, since it is the sole condition required for externalizing the responsibility for a key function, and it allows unrestricted access to all relevant information by the mandated PSA without breaching Luxembourg’s professional secrecy.
  • benefit from the fact that the mandated persons responsible for key functions can perform the activities required by their duties without the undertaking needing to obtain prior consent from all its policyholders.
  • assign the responsibility for a key function to a PSA without having to notify the CAA, which allows for immediate effectiveness.

Finally, the functions discussed in this article call for specific skills, as well as proof of good repute, which Deloitte employees possess.

Following entry into force of the CAA Circular Letter 23/10 on 1 September 2023, if you do not opt for setting up your governance as proposed above, then you may have to reorganize the functions referred to in this article. In the latter case, Deloitte can assist you in setting up this work, namely:

  • Implementation of your internal procedures aimed at meeting the requirements of the CAA regarding the accepted electronic signature format instead of a handwritten signature,
  • Completion of a CAA declarative questionnaire concerning your internal organization methods and the technical characteristics relating to the use of the electronic signature, and
  • Application of your remote working arrangements for authorized executives and key function holders, such as homeworking agreements, records of attendance at headquarters and business trips abroad, aimed at proving your physical presence in Luxembourg.

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