South African institutions have a history of developing international investment policies in the form of endowments, stemming in part from an increasingly global client base. These are international insurance wrappers assisting policy holders with, amongst other things, inheritance tax and succession planning. One of the domiciles of choice for these policies is Guernsey.
"South African's number one priority when diversifying globally for the benefit of future generations is safety," said Cobus Kruger, Co-Author of The Practical Guide to Offshore Investments.
"Guernsey as a jurisdiction has earned trust over many decades and offers political stability, an independent judiciary, world-class legal framework and high-quality services providers."
Guernsey's history with South Africa spans decades, including significant experience in supporting South African asset managers with their global distribution needs, and in supporting South African families with their asset protection, investments and succession planning.
One way Guernsey can assist with these needs is through its plethora of international life insurer branches, offering tailor-made solutions to fit the needs of each individual client.
There is a great opportunity for new South African institutions to use Guernsey to house branches of their businesses with products or solutions that may include: life insurance, investment platforms, fund management companies, banking licenses, pension solutions and their own funds and trust companies.
Guernsey has been fortunate to have become the international life branch home for Ninety One Assurance, Momentum Metropolitan Life, Discovery Life, Peregrine Life and more recently Allan Gray Life.
Why Guernsey?
"Guernsey is regarded as a well-regulated jurisdiction and there are open communication channels between both jurisdictions' regulators," said Cobus.
"Service providers on island are well versed in the needs of South African clients and in many cases have appointed South Africans to manage operations and relationships.
"The regulatory framework and laws offer specific options that make setting up a fit for purpose operation in Guernsey relatively easy."
One particular strength of Guernsey is its Policyholder Protection requirements that call for at least 90% of the policyholders' liabilities to be held in a separate trust account, supported by a Guernsey-based trustee. All long-term insurers are subjected to a Standard Condition, and this layer of protection is enforced by Guernsey's "up to date, robust and pragmatic" regulator, the Guernsey Financial Services Commission.
Cobus added: "Policyholders diversifying globally are always concerned about risk, especially the risk of losing a hard-earned nest egg for the next generation. Guernsey's specific policyholder protection laws go a long way to provide comfort and are well understood by South African financial advisers."
Guernsey, which boasts over 50 years' experience as a respected international finance centre, is truly a one stop shop for international wealth solutions for South African financial services institutions. Guernsey is a secure and stable business environment and is whitelisted by the OECD. The relationship with Guernsey holds at least 20 years of history with South African business and boasts a high calibre of professionals to facilitate the setup of trusts, funds, life branches, banking licences and pensions.
The developing value of Guernsey Life Insurance
Given Guernsey's 20-year history of setting up Guernsey banks for South African institutions such as Investec and FNB, the further development of South African life companies is the logical next step to ensure that we house all financial services pillars for South African firms to be able to carry out private client international business. In many cases we are just adding another pillar to their value proposition.
