Senate Finance Committee Chair Ron Wyden (D-OR) said he is continuing his investigation into the use of private placement life insurance by the wealthiest Americans to avoid and evade taxes.
Wyden began the investigation with correspondence to Lombard International regarding private placement life insurance use and has followed with letters to Prudential Financial, Zurich Insurance Group, and the American Council of Life Insurers (ACLI).
Wyden has cited reports maintaining private placement life insurance policies are promoted as a tax shelter, in addition to a Department of Justice investigation raising concerns about the involvement of private placement life insurance policies in varied offshore tax evasion schemes.
“I am concerned that these insurance vehicles are being used, without a genuine insurance purpose, to invest in hedge funds and other investments while avoiding billions of dollars in federal taxes,” Wyden wrote. “According to public reports, the bare minimum required to invest in a PPLI policy is $2 million. However, experts indicate that it is much more common for investors to devote at least $5 million for the strategy to be worthwhile. By definition, these policies are only available to the wealthiest 1 percent of Americans and offer a myriad of tax advantages not available to most working Americans.”
Wyden cited a circumstance last April, maintaining Swiss Life, Switzerland’s largest insurance company, pleaded guilty to using PPLI policies and related investment accounts as insurance wrappers to aid U.S. taxpayers in concealing offshore assets ownership and evading paying taxes.