(* the following description about Liechtenstein Asset Protection
Privilege is from publication of Alexander T. Skreiner - "The Advantages
of Liechtenstein Annuities and Life Insurance")
Quite generally, the topic of asset protection plays a very important role in the provident sector and is frequently the motivator for developing structured solutions for clients.
Life and annuity insurance policies in particular enjoy various levels of protection from access by third parties in almost all jurisdictions.
aspects are relevant here: Claims may be directed against the policy
holder or against the insurance company itself. Liechtenstein
assures a very high degree of asset protection in both cases.
As a rule, the asset protection privilege is initially considered
from the client’s perspective. To what extent is the value of the policy
secured when he or she is subject to litigation? This is where the
stipulations of Article 78 of the insurance contract law come into
effect: Its objectives and formulation are based on the relevant Swiss
regulations, and its provisions are significantly broader than
comparable regulations in other European countries, which often merely
offer preferential access rights to the beneficiaries. The Liechtenstein
rules stipulate that where the beneficiaries are close relatives
(spouses, children, and cohabiting partners are explicitly mentioned),
the policy is prohibited to access by third parties.
Second, however, this asset protection privilege is seen from the perspective of the insurance company. To what extent is the value of the policy secured when the company is subject to litigation? At this point, reference is made to the substantive supervision by the FMA and to the application of the stipulations of Article 59a of the law on the Supervision of Insurance Undertakings that also refers to Article 45 of the insolvency regulations. Accordingly, the assets in the cover stock are treated as a special estate that is used exclusively to satisfy insurance claims. Where providers offer the individual cover stock solutions outlined above (i.e., hold a specific securities deposit for each policy), this inevitably leads to segregated accounts (i.e., the policy holder is always paid specifically from the securities deposit or account that may be allocated to his or her policy). However, as the value of the policy results from the sum of these accounting facilities (securities deposit plus account), the cover will never be deficient.It is precisely thanks to this segregated deposit facility that the policy holder is also granted a transparency that is rare for insurance contracts. It allows him or her to trace exactly how the cover stock had been invested within the specified investment strategy as well as when any insurance, bank, and asset-management fees were paid.