* Possible bidder said contacted by Swiss Life about U.S.
* Certain insurance products under FATCA spotlight
By Martin de Sa'Pinto
ZURICH, March 28 Insurer Swiss Life is
looking to sell a specialist unit catering for U.S. clients and
is sounding out possible bidders, a company approached about a
The unit specialises in a form of life insurance that has a
cash value based on its investments and which is used because
clients can pick and choose what investments they are in.
But such policies, known as private placement life insurance
(PPLI), have become a worry for some insurers, as policies for
U.S. clients will be subject to the U.S. Foreign Account Tax
Compliance Act, or FATCA, an anti-tax dodging law being rolled
out around the world via inter-governmental agreements.
Insurer Crown Global said it had been approached about the
Swiss Life unit.
"We were asked if we were interested in exploring Swiss
Life's U.S. book," Crown Global director Perry Lerner said,
adding the firm was first approached by an intermediary and was
now in direct contact with the insurer.
Fellow Crown Global director Chris Calise said discussions
were still at a preliminary stage and the firm had not yet seen
Swiss Life's U.S. book.
Two Zurich-based industry sources said Swiss Life had been
considering its options for the business for several months.
Swiss Life declined comment on the matter.
The industry sources said the business had assets under
management of between $1 billion and $2 billion and contributed
a relatively small part of Swiss Life's overall premium income.
Personal insurance specialist Crown Global, which has
offices in Zurich, Cayman, Bermuda and Delaware, could double in
size if it buys the unit.
Swiss regulator FINMA said it had underlined the risks
associated with insurance products including PPLI, particularly
under FATCA, which the United States and Switzerland signed in
"These issues and any consequences for insurance company
clients are part of our ongoing supervision and will certainly
be discussed further in view of the imminent introduction of
FATCA," said FINMA spokesman Tobias Lux.
One of the industry sources said the FATCA rollout could be
a looming headache for some Swiss insurers.
"A lot of the policies do not meet criteria for life
insurance under U.S. law, so could be subject to heavy tax
liabilities," the source said, adding that companies were
worried policies could have been funded with undeclared money.
The source said most of the employees who had built Swiss
Life's U.S. book had long since left the insurer, while others
were worried about personal liability.
Several Swiss bank employees have been arrested or indicted
in the United States during a long-running tax dispute, and the
industry source said Swiss insurers who had served U.S. clients
were worried they could face the same fate.