Inactivity in accounts, safe-deposit boxes and insurance contracts: a new era will now begin!

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Following a lengthy parliamentary process, the new law on inactive (bank) accounts, safe-deposit boxes and unclaimed insurance contracts (the “Law”) was published in the Luxembourg official gazette on 1st April 2022.

Apart from some helpful regulatory guidance provided by the CSSF in its circular 15/631, this topic has so far not been really dealt with by any sector specific legislation. Consequently, most (often complex) questions in this field had to be addressed using purely civil law components. Banks also faced sometimes practical difficulties in successfully completing a consignment procedure with the Caisse de Consignation managed by the Trésorie de l’Etat (a process, though not being mandatory, is however inevitable in order for a bank to be fully discharged from its custodian duties in relation to dormant assets).

The Law, which will enter into force on 1st June 2022, provides now for a completely new and rather prescriptive and stringent legal framework in this field, which applies not only to dormant accounts and safe-deposit boxes (for banks) but also to life insurance contracts in respect of which benefits remain unclaimed.

The Law will thus apply not only to Luxembourg based credit institutions (including Luxembourg branches of foreign institutions) but also to life insurance undertakings (including Luxembourg branches of foreign insurance undertakings) (the “Obliged Entities”).

The main pillars of the Law can be summarised as follows:


1. Prevention

As regards the first pillar, the Law aims thus at preventing as much as possible the emergence of an “inactive” status of these business relationships by subjecting Obliged Entities to a number of new obligations aiming at maintaining contact with their clients. The Law makes sure not only to define precisely the point of time when inactivity is deemed to start in relation to a bank account, a safe-deposit box or a life insurance contract but also when the status of “inactive” relationship has been reached.

Obliged Entities will have to take specific measures to avoid the inactivity from being reached (measures that will not only include contacting their clients (or their potential heirs) through a pre-set format but also, where admissible under the Law, conducting research in order to be able to contact them). The possibility of levying costs for the research process is now subject to quite restrictive conditions under the Law.

Where finally the inactive status cannot be avoided, Obliged Entities will have to attempt to yet again contact their clients or their heirs to warn them of the consequences attached to an inactive business relationship.

One should here pay particular attention to the fact that depending on the type of the concerned business relationship (i.e. bank account, safe-deposit box or life insurance contract) the relevant timelines to consider and measures to take will not necessarily be the same!

2. Consignment

As regards the mandatory consignment pillar, the Law has defined a maximum duration upon which Obliged Entities will have to initiate a consignment process with the Caisse de Consignation in relation to assets subject to an inactive business relationship (within predefined timelines) and in relation to which various mandatory information will have to be provided (see in particular annexes 1 and 2 of the Law). The Law also provides for a stringent conversion and liquidation process in relation thereto, once the consignment application is accepted by the Caisse de Consignation.

The relevant timelines to consider here again are not necessarily the same depending on the type of the concerned business relationship (i.e. bank account, safe-deposit box or life insurance contract).

A detailed process and procedure have been laid down in the Law to guide Obliged Entities in the consignment step. Finally, assets which could not be successfully consigned with the Caisse de Consignation will have to continue to be custodied by Obliged Entities, whereas perishable goods and unlawful assets (found upon forced opening of a safe-deposit box) will have to be destroyed or transferred to the competent authorities.

3. Restitution

As regards finally the last pillar, the Law also arranges for the creation of a centralised electronic register to facilitate searches of recorded assets by clients and beneficiaries (and their heirs) under a newly enacted information request process with the Caisse de Consignation (see annex 4 for the mandatory information and documentation to be provided) as well as for a dedicated restitution process and procedure under which assets duly consigned with Caisse de Consignation may be returned to any person with a vested right over such assets (see annex 5 for the mandatory information and documentation to be provided).


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The Commission de Surveillance du Secteur Financier (“CSSF”) as well as the Commissariat aux Assurances (“CAA”) have been entrusted with the task to ensure compliance by the Obliged Entities with the new prescriptive regime under the Law and they have also been provided with a number of supervisory and investigative powers to that effect.

In this context, it is worth pointing out that Obliged Entities will now be subject to yearly reporting requirements towards the CSSF in relation to inactive accounts and safe-deposit boxes or the CAA for inactive life insurance contracts as well as to the tax authorities.

Last but certainly not least, particular attention should be drawn to the fact that the Law has not only provided for administrative sanctions which can be imposed by the CSSF or the CAA for some specific violations of the Law (along with a possible “name and shame” process) but also to the fact that criminal sanctions can be imposed for a number of other violations of the provisions of the Law. 

Needless to say, the Law has also provided for a rather complex transitory regime in relation to existing business relationships of Obliged Entities where the inactivity period has already started before the entry into force of the Law. 

Read the new Law here_

If you require more information on the legal regime governing dormant accounts and safe-deposit boxes as well as lapsed life insurance contracts and how to implement the new requirements in practice, do not hesitate to contact us.

The Forensic Investigations team has also a dedicated service offering to assist with locating clients, heirs and beneficiaries. Feel free to reach out to our expert Stéphanie Lhomme_