The group, which specialises in insurance-based wealth, estate and succession planning for high net worth individuals, families and institutions reported €4.6bn (£4.1bn, $5bn) of new business premium in Europe – its second-best results on record.

European assets under administration came in at €46.3bn, as at 31 December 2022.

Lombard attributed performance to “noteworthy contributions” from a number of core markets, including France, Italy, Sweden, Portugal and the UK.

Stuart Parkinson, group chief executive of Lombard International Group, said: “The company continues to build excellent momentum and presence in its sector. Crucially, our strong new business performance further highlights the success and importance of our long-term strategy.

“By continuing to invest in building a sustainable business while also forging strong partnerships that support our current and future clients across the geographies we serve, the business is primed for continued growth.

“In 2023, we remain focused on continuing to develop and grow our business. We will also continue to invest in upgrading our processes and systems, enhancing our digital infrastructure and related offerings. In a challenging macro-economic environment, partners and clients will continue to look for efficient wealth and succession planning solutions; and we will be there to support them.”

In the letters, Wyden said he believes PPLI policies are being used “as a tax shelter for the wealthiest Americans”.

He added that the US Senate is “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”.

PPLI is a multi-jurisdictional wealth planning tool available on a private placement basis to wealthy families and high net worth individuals. The product is based on life insurance and annuity policies that allow for tailored and internationally diversified investment strategies.

It is often also known as “private banking insurance” or “insurance wrapper”. PPLI presents a planning structure, just like trusts, companies, foundations and funds that allows an internationally diversified portfolio to be wrapped within the legal structure of a life insurance policy.

Investigation

Wyden’s letters are part of an investigation – which started with his first letter to Lombard International on 15 August 2022, followed by letters to Prudential Financial, Zurich Insurance Group and the ACLI on 21 September 2022.

He is investigating the use of PPLI policies and other loopholes exploited by the wealthiest 1% of Americans to avoid paying their fair share in taxes. Within the 21 September letters, he asked the three companies how they “may be assisting millionaires and billionaires minimise or eliminate taxes on investment income”.

Within the 21 September letter, Wyden asked around 10 questions on PPLI to the companies. The questions surrounded the scope of PPLI business and marketing of the products.

Wyden also asked the aggregate amount of business the carriers are doing in PPLI, how they calculate the value, how PPLI is marketed and the legal justification of claims, as well as other areas.

‘Fully comply’

International Adviser has contacted Prudential Financial, Zurich Insurance Group, Lombard International and the ACLI for a comment.

ACLI spokesperson Whit Corman said to IA: “We are reviewing Senator Wyden’s letter now. The fundamental purpose of life insurance is to protect families financially in the worst of times. Today, consumers have a choice of policies to meet their needs with cash-value life insurance being a key component to American families’ long-term financial security, along with home ownership and retirement savings.”

A spokesperson for Lombard International Group said the group and its member companies “fully comply with all applicable legal, regulatory and fiscal requirements in the jurisdictions where they conduct business”.

In August 2022, life assurance provider Lombard International Group agreed to sell its US and Bermuda business to alternative fixed income manager BroadRiver Asset Management and its affiliated entities.

Prudential Financial and Zurich Insurance Group did not reply in time for publication.

DoJ investigation

Wyden’s investigation follows a recent inquiry by the US department of justice about the involvement of PPLI policies in various offshore tax evasion schemes.

In May 2021, Swiss Life pleaded guilty to using PPLI policies and related investment accounts as “insurance wrappers” to help thousands of US taxpayers’ conceal their ownership of assets offshore and evade paying US taxes.

The firm said there will be no impact on clients’ policies as a result of the deal.

The transaction is subject to customary closing conditions, including regulatory approvals and is expected to complete by mid-2023. The financial terms of the deal were not disclosed.

Lombard International Group said it “will remain focused on growing its strong businesses in Europe, including serving the wealth hubs of Asia and Latin America via its European carriers”.

Stuart Parkinson, group chief executive of Lombard International, said: “BroadRiver is taking stewardship of an excellent asset with great future potential. This new investment will enable the US and Bermuda business to leverage its strong track record and focus on growing the business further. I am confident BroadRiver will be an excellent owner of Lombard International US.

“In Europe, as the largest provider of insurance-based wealth, estate and succession planning solutions, our sights remain set on further growth and continued market expansion. We are a leading, internationally diverse company with experienced wealth structuring specialists, subject matter and technical experts serving over 20 markets and speaking over 30 languages.

“At the forefront of sector innovation, driven by continued investments in digitalisation and connectivity with our partners, the business is well positioned to seize the market opportunities ahead.”

Background

This comes over a year after International Adviser reported that private equity firm Blackstone was looking to sell Lombard International.

Then in March 2021, New York-listed Kingswood Acquisition Corp was reportedly looking to merge with the wealth solutions provider.

Several months later, media reports said Italian prosecutors in Milan were investigating Luxembourg-headquartered Lombard International. At the time, Italian newspaper Il Sole 24 Ore, said that the firm was facing allegations of tax evasion and money laundering.

Irene Hy Chen has taken on the role of global head of ultra-high net worth solutions at the banking group, effective from 1 August 2022.

She will be based in Hong Kong and joins from Citibank, where she served as head of cross-asset solutions for Asia.

Strabens Hall

The advice firm has made four senior hires.

Philippa Armitage has joined as senior investment director, while Clare de Jersey-Lowney became a marketing executive after spending the last five years at SeventySeven Wealth Management as a marketing and events coordinator.

Additionally, Lea Binoff, head of investment solutions at Vestrata, has become on a non-executive director at the firm and Kate Atherton has joined the paraplanning and administration team.

Lombard International

The insurance group has named Gerhard Schuer as managing director of its newly established distribution entity in Germany, which is subject to regulatory approval.

He was previously at Lloyds Fonds, where he served as senior sales director for nearly three years.

JTC

The global fund and private client services provider has made two senior promotions.

Head of UAE Naro Zimmerman will take on the role of deputy head of Caribbean – private client services and relocate to the Cayman Islands from Dubai. He joined the company in 2020 as an associate director in Guernsey.

Alia Haskouri will take over as head of UAE, after joining the Dubai office in 2020.

Ocorian

The global fiduciary and funds services provider has recruited Don Ross as global head of investor services.

He joins from JP Morgan Fund Services, where he served as head of investor relations for Emea.

M&G

Guan Yi Low will become head of fixed income in Apac at the investment firm, as it gears up to build a fixed income investment team in the region.

She will join on 25 July 2022 from Eastspring Investments, where she held a similar position, and will be based in Singapore.

Lowes Financial Management

The UK-based financial advice firm has promoted Gershom Chan to head of financial planning, a newly created role.

He has been at the firm for four years working in several technical roles and then becoming a consultant.

LV=

The mutual insurer has appointed Simon Moore as chair, subject to customary approvals.

He will succeed interim chair Seamus Creedon, who will continue as non-executive director of the LV= board.

Moore brings 30 years’ experience in the UK life insurance and asset management sectors including stints at Lloyds Banking Group, Chase Manhattan Bank, ABN Amro, Barclays Bank and the Confederation of British Industry.

Mirabaud

The Swiss banking and financial group has expanded its wealth capabilities in the UK with a senior hire.

William Ladenburg takes on the role of director of private banking, based in London. He was previously at Credit Suisse, where he served in a similar position.

Copia Capital

The discretionary fund manager has named Craig Berry as sales manager for the north of England, a newly created role.

Based in Newcastle, he will work with advice firms in the north of England, Northern Ireland and Scotland.

Berry joins from Novia Financial, where he worked as regional sales manager focusing on Yorkshire and the north east.

According to judicial sources, the firm is facing allegations of tax evasion and money laundering, reports Italian newspaper Il Sole 24 Ore.

Italy’s tax police, Guardia di Finanza, allege that LIA failed to disclose income worth around €500m (£431m, $590m) to domestic tax authorities.

Additionally, prosecutors are looking into allegations that some of the money Lombard International’s customers invested in insurance policies was obtained illegally.

The judicial sources added that the probe into LIA is part of a wider investigation into other insurance companies following a similar crackdown on the Italian banking sector, which secured more than €300m in revenues for the country’s tax authorities.

A spokesperson for LIA said: “Lombard International Assurance fully complies with all applicable legal, regulatory and fiscal requirements in the jurisdictions where it conducts business.

“LIA works closely with and assists all relevant authorities. LIA operates a branch structure in Italy and complies with all local laws and regulations.”

International Adviser contacted the Guardia di Finanza, but did not receive a comment in time for publication.