Under Luxembourg law, an insurance intermediary (such as an insurance agency, or insurance broker) is defined as any “natural or legal person [...] who, for remuneration, takes up or pursues insurance distribution activities under the law of 7 December 2015 on the insurance sector, as amended (the LIS).”

Insurance and reinsurance companies and intermediaries in Luxembourg are authorized and supervised by the Commissariat aux Assurances (CAA). The CAA is the competent authority that can issue insurance intermediary licenses. In principle, the CAA requires that the MGA be an insurance intermediary (broker, insurance agency) or an ancillary insurance intermediary.

The CAA authorization process typically takes approximately 90 days from submission of a complete application.

Luxembourg has fully implemented the IDD, and intermediaries authorized by the CAA can exercise full EEA passporting rights under both the freedom of establishment and freedom of services regimes. Luxembourg’s position as a leading international financial center makes it a natural base for MGAs seeking to serve multiple European markets.

Luxembourg doesn’t currently operate a specific insurtech regulatory sandbox. However, the CAA and other Luxembourg financial regulators have demonstrated openness to innovation in financial services, and the broader Luxembourg fintech ecosystem provides a supportive environment for technologically innovative MGAs.

If the MGA is an insurance intermediary, the Luxembourg regulations require the insurance intermediary to notify the CAA of: (i) the names of the shareholders or members holding more than 10% of the share capital of the insurance intermediary and the amount of such holding; (ii) the names of the parties with close links (if any) to the insurance intermediary; and (iii) evidence that the shareholdings or close links don’t prevent the CAA from exercising its supervisory powers.

Luxembourg’s transposition of the IDD includes full product oversight and governance (POG) requirements. MGAs involved in product design or manufacturing must establish and maintain POG frameworks, including target market identification, product testing, and ongoing monitoring. The sponsor insurer may also play a role in the POG process.

MGAs, as agents, typically act for insurers and are entitled (through delegation of powers from insurers) to collect policyholders’ money and keep a portion of the premium, namely the gross of commissions and possible additional costs. Premium payments made in good faith by policyholders to “agents” are treated as having been made directly to insurers.

Luxembourg’s PII and capital requirements are aligned with the EIOPA guidance.

The “Sponsor” concept is Luxembourg’s most distinctive regulatory feature for MGAs and should be carefully considered at the planning stage. It creates a structured governance relationship between the MGA and its insurer partner that can provide regulatory comfort but also imposes obligations on both parties. Luxembourg’s established status as an international financial center, combined with full EEA passporting rights, makes it an attractive jurisdiction for sophisticated MGA operations.