Monaco has an importance as a financial centre, which is out of all proportion to its tiny size. With a total population of about 34,000 and a land area of only two square kilometres, it is the second smallest independent state in the world.

Constitutionally Monaco is a principality with a hereditary monarchy. In international relations it is very important to note that Monaco is not part of the European Union, although it has a customs union with France.

Monaco is famous for its high-class tourism and recreation, including gambling casinos and, of course, the annual Grand Prix. It also hosts 40 banks and a number of fund managers. The service sector and sophisticated commercial centres are important employers.

Important developments affecting Monaco’s financial reputation took place in 2009. The government announced that it would comply with the OECD tax convention, and signed the necessary agreements to exchange information on possible tax evasion cases. The OECD formally removed Monaco from its list of unco-operative tax havens.

Under a bilateral convention of 1963, French insurers and branches or subsidiaries of foreign insurers operating in France must be authorised to operate in Monaco by the French authorisation agency CEA (Comite des Enterprises d’Assurance). The finance department of Monaco’s ministry of state is regularly asked for authorisation directly by foreign insurers, but it cannot do this.

About 150 insurers have been authorised to do business in Monaco. They operate through about 40 intermediaries, either agents or brokers. These intermediaries are authorised in Monaco. Monaco intermediaries are allowed to handle French business, as are French intermediaries for Monaco business; but in both cases they must not actively market their services. Any insurance outside these arrangements would be considered as non-admitted and uninsured (the law is silent on whether it is actually allowed). Because Monaco is not an EU country, the EU freedom of services provisions do not apply.

The Monaco insurance market offers products catering for "ultra high net worth" individuals and international group companies. This includes cover for high value homes and luxury yachts, and sophisticated savings and pensions arrangements.

Axco’s Insurance Market Report on Monaco was published January 2010.