The American Department of Justice (DOJ) has contacted Swiss Life regarding its cross-border business with US clients.
The company said, the portfolio with US clients of Swiss Life Liechtenstein and Swiss Life Singapore currently amounts to about CHF250m ($259.23m).
In the recent years, the US has tightened its grips on tax evasion, particularly on foreign financial institutions which hold assets of US citizens.
In 2013, the DOJ started the Swiss Bank Program, where the department listed several banks from Switzerland under the programme to resolve their potential criminal liabilities in the US. DOJ stated that it had a reason to believe that the banks had committed tax-related crimes, connected to its undeclared US related accounts.
Presently, the justice department is questioning the Swiss insurance companies for their role in tax crimes. Swiss Info magazine stated that the products offered by Swiss Life and its affiliates, which are called ‘insurance wrappers’ could have aroused suspicion.
These life insurance policies are wrapped around investment portfolio selected by its clients. And the portfolio is not tied to the client but to the policy and accumulates income at a favourable or perhaps even at zero tax rate until payment time.
Fi News Asia stated that Swiss Life could be the only insurer, which is presently being investigated by the justice department for the wrapper product and there are no lead cases to go by.
The company stated that it has categorised and reported all of its insurance contracts, after the Foreign Account Tax Compliance Act (FATCA) was passed.
In a press release it said: “Swiss Life will use the opportunity for dialogue and explain its past cross-border business in cooperation with the US authorities.”
Image: Swiss Life approached by US Department of Justice over tax evasion. Photo: Courtesy of Swiss Life Ltd.