Switzerland's largest insurance company Swiss Life has agreed to pay CHF70 million ($77.4 million) and enter a deferred prosecution agreement in the United States to resolve accusations it conspired to help wealthy Americans to avoid taxes.
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Reuters-swissinfo.ch/ds
The company will pay a $25.3 million fine plus $52.1 million in restitution and forfeiture to resolve a charge it conspired to defraud US tax authorities through its private placement life insurance business, Reuters news agency reported on Friday.
The three-year agreement concerns Swiss Life’s insurance wrapper business, a type of life insurance policy “wrapped” around an investment portfolio selected by a client. Taxpayers can place stocks, private equity holdings and other assets. The portfolio is not tied to the client but to the policy and accumulates income at a favourable or even zero tax rate until payout time.
Some regulators have expressed concern that wrappers open the door to tax avoidance.
The company’s general counsel accepted the agreement at a hearing in Manhattan. Swiss Life has said it set aside sufficient funds in 2020 to cover the settlement.
After years hounding Swiss banks over tax avoidance, US authorities are increasingly focused on insurance policies as a means to conceal assets. Swiss Life at its peak was responsible for over $1 billion in portfolios for American clients.
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