A new framework for access to structured products
Since 1 February 2026, the Circular Letter 26-1 of the Insurance Commissariat (CAA) has replaced the LC 15/3 for unit-linked life insurance policies. Until now, a structured product could only be included in a policy through an internal fund. It can now be held directly in the policy.
The circular distinguishes between two cases. Structured products with capital guaranteed by a bank are available to all policyholders, with no limit on their proportion of the policy. Other products are reserved for wealth clients and remain unavailable to retail clients.
In return, the CAA is strengthening requirements for transparency, risk management and suitability for clients. It classifies structured products as highly complex and requires a negative target market to be defined: the list of client profiles to whom they must not be offered.
Greater complexity for the ecosystem
The circular places the insurance company at the centre of the framework. It is responsible for knowing the policyholder: their category, country of residence, declared wealth and the suitability of the product for their profile. This is its area of expertise, and this is where the regulator expects it to focus.
At the same time, direct holdings will expand insurers’ ranges of referenced structured products. Each product comes with its own issuer, remuneration agreement, maturity and cash flows. The management of upfront and recurring commissions remains largely manual today: calculation, reconciliation, invoicing, collection and payment. It is becoming a fully-fledged operational challenge, requiring reliable, traceable and scalable processes.
Fund Channel: a one-stop-shop approach
Since 2005, Fund Channel has made investment funds more accessible to life insurance companies through a one-stop-shop approach. The platform supports, in particular, the establishment of subscription agreements with asset management companies, the management of retrocession commissions, the provision of fund data, and all regulatory processes between the parties. It also provides greater visibility into assets under management and the commission collection cycle through a dedicated digital platform.
A dedicated solution for structured products and EMTNs
Fund Channel offers insurance companies a service for calculating, collecting and paying commissions related to structured products. The approach is the same as the one applied to investment funds for twenty years: a single collection, reconciliation and payment channel, regardless of the number of counterparties. This enables insurance companies, issuers and distributors to work through a single process rather than a fragmented chain.
Turning the regulatory opportunity into operational efficiency
LC 26-1 gives structured products a new role in Luxembourg life insurance. Fund Channel enables insurance companies to capture this opportunity while helping them manage the associated operational complexity without increasing their operational burden.
A single solution to simplify the management of commissions and flows associated with structured products across multiple markets.
This article provides an operational overview of LC 26-1 and does not constitute legal analysis or advice.
