Luxembourg insurance company goes bankrupt
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On 31 January 2025, the Luxembourg court of first instance ordered the liquidation of FWU Life Insurance Lux S.A., a subsidiary of the German insurance group FWU AG. This was a further blow to the holding company, which had run into financial problems and declared bankruptcy as early as July 2024.
The main reason for the liquidation was failure to meet minimum capital requirements. In July 2024, the company was granted a six-month grace period during which it had to submit a realistic recapitalisation plan. However, a financial solution could not be found, which led to the final shutdown of operations.
The Commissioner of Insurance (CAA) has announced that all assets of FWU Life Insurance Lux S.A. have been frozen as part of customer protection. This means that all payments to insured persons are temporarily suspended while the liquidation process is underway.
The regulator has assured that further clarifications on the judgement and further steps to resolve the situation will be published in the coming days.
At the moment, the insured cannot access their funds as the assets are blocked. It remains unclear whether clients will be fully compensated or will have to wait for long procedures related to liquidation and settlement of the company's financial liabilities.
The liquidation of FWU Life Insurance Lux S.A. emphasises the complexities of the insurance sector and the importance of meeting strict capital requirements. The company's clients will have to wait for clarification from the CAA, which should determine the fate of their policies and benefits.
