Swiss Life under US Department of Justice investigation over tax evasion role
Zurich-based Swiss Life is facing investigation by the US Department of Justice (DoJ) over its potential role in helping US citizens to avoid paying taxes.
Swiss Life said on Sept. 14 that it has been contacted by the American DoJ regarding its cross-border business with US clients and added that it is in dialogue with the DoJ.
The case is seen as linked to so-called insurance wrappers, life insurance policies into which the very wealthy place stocks, private equity holdings and other bankable assets, allowing them to lower their tax rate. Swiss Life has been a pioneer in these products. Observers believe that Swiss Life may face a three-digit million fine as a result of the investigation.
Swiss Life had, in December 2013, returned funds to hundreds of American clients who had invested in wrappers linked to bank accounts at Bank Frey, a Swiss private bank, according to a WSJ report.
Frey, a private bank, was one of 14 Swiss firms under formal US investigation for its dealings with US clients and untaxed assets.
Insurers in Switzerland have been expecting investigations by US officials over insurance wrappers.
Swiss Life said that, as of today, the portfolio with US clients of Swiss Life Liechtenstein and Swiss Life Singapore amounts in the aggregate to approx. CHF 250 million. All insurance contracts have been categorized and been reported pursuant to the FATCA legislation. In the past, the portfolio with US clients amounted to a maximum of approximately CHF 1 billion.
Swiss Life will use the opportunity for dialogue and explain its past cross-border business in cooperation with the US authorities.
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