The Legal 500

NIRA, the Nuclear Industry Reinsurance Association, is behind the first mutual reinsurance company in Luxembourg. NIRA was advised by PricewaterhouseCoopers and the Wildgen law firm with regard to its establishment in Luxembourg.

The Luxembourg financial market offers a first-rate legal environment, renowned professional expertise and an ideal administrative infrastructure for the reinsurance sector.  With over 250 companies under the supervision of the Insurance Supervisory Authority ('CAA'), Luxembourg is proving to be the sector's location of choice within the European Union and one of the largest centres globally. 

It was therefore within this context that the members of NIRA, that gathers the largest players in the nuclear energy field, decided to establish NIRA in Luxembourg in the form of a mutual, characterised by the spirit of non-profitmaking risk-sharing to which its members were particularly attached.

Says Michel Bulach, a partner of Wildgen: "This is a first for Luxembourg . Despite a very favourable legal framework, no mutual reinsurance association had established itself in Luxembourg until now.  The advantage of such a structure is that Luxembourg law, which has a certain flexibility, allows the founding members of a mutual to benefit from the highest level of contractual freedom when fixing its operating rules in its Articles of Association. Furthermore, unlike other jurisdictions, Luxembourg law recognises in the mutual a legal personality distinct from that of its members and therefore offers greater safety in terms of limiting liability for its members. . It was a privilege to assist NIRA in this innovation in the Luxembourg market - it was the result of an effective and constructive collaboration based on the complementary expertise of Wildgen and PwC Luxembourg in this matter".  

Thierry Flamand, Partner at PwC Luxembourg, adds "Although the mutual reinsurance company is subject to the same Law of 6 December 1991 relating to the insurance sector, this type of structure had not, to date, been monitored by the Insurance Supervisory Authority. We therefore had to ensure the viability of the project from a regulatory and accounting point of view, while Wildgen managed the legal aspects. We prepared and submitted the NIRA file for approval.  PwC Luxembourg thus added further strings of expertise to a bow which was already very well strung in terms of insurance and reinsurance expertise."

Some time after it was launched, Danny Van Welkenhuyzen, Managing Director of NIRA, is convinced that the choice of Luxembourg for a mutual association governed by local law was a wise one: "Although NIRA is the first reinsurance mutual in Luxembourg, we are convinced that it will not be the last. We have been very satisfied with the ability to adapt to the specific features of this structure demonstrated by the stakeholders in the project - in terms of Market professionals, the Insurance Commission and the Trade and Companies Registry (RCS) alike.  The RCS was quick to adapt its administrative forms, in order to take into account the existence of the specific features of such companies. These constructive steps were decisive elements in the success of NIRA's establishment process and they demonstrate, if there was still a need to do so, the high levels of reactivity and competitiveness of the Luxembourg market in the field of insurance and reinsurance."

For more information please visit www.wildgen.lu