Swiss Life in Discussions With DOJ Over U.S. Clients

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Swiss Life Holding AG is in talks with the U.S. Justice Department over investments in products that provide tax advantages to U.S. clients and could face a fine similar to those paid by Swiss private banks.

The company’s portfolio of U.S. clients with Swiss Life Liechtenstein and Swiss Life Singapore amounts to about 250 million francs ($258 million), down from a maximum of about 1 billion francs, the company said in a statement Thursday.

“We would be surprised to see a big fine,” Vontobel analyst Stefan Schuermann said in a note. At worst, the company may face a penalty “clearly below” 100 million francs. Swiss Life shares fell as much as 2 percent and were down 1.7 percent to 337.50 francs at 12:32 p.m. in Zurich, under-performing a 0.5 percent decline in the STOXX Insurance 600 index.

“Swiss Life will use the opportunity for dialogue and explain its past cross-border business in cooperation with the U.S. authorities,” the company said. All its insurance contacts have been reported under the Foreign Account Tax Compliance Act, it said. A Swiss Life spokesman declined to comment beyond the statement.

Swiss banks including UBS Group AG and Julius Baer Group Ltd. have paid hundreds of millions of dollars in fines related to an investigation into the lenders helping U.S. citizens avoid paying taxes. Credit Suisse Group AG incurred the largest penalty, $2.6 billion, in 2014.

The investigation was widened to insurers and concerns a product known as insurance wrappers -- life policies where clients place assets to gain a lower tax rate, the Wall Street Journal reported in 2014. The Justice Department last year said it reached a $187 million settlement with Union Bancaire Privee of Geneva involving the product.

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