The company, which earlier this year, in its end-of-year results statement, made a point of mentioning its interest in going after the EU life insurance sector in 2013, said it developed the new STM Life Capital Bond Germany in response to requests from its adviser client base.
“In Europe at the moment, there are increasing regulatory pressures on [both] non-EU- and EU-based insurance providers that are not following the general good provisions,” said David Cameron, managing director of STM Life. The EU general good provisions are a feature of European Union insurance law which obliges cross-border insurers to meet a defined standard of generally good service in their dealings with customers.
“STM Life, which we launched in 2009, is in a good position to fill the gap being left by some of these departing insurers.”
STM said it has been working with tax experts and lawyers in Germany to develop its new Life Capital Bond, and as a result, that the product offers “significant tax advantages and wealth structuring opportunities” to both Germany-resident expatriates and German nationals.
These advantages include a tax-free roll up of gains, dividends and interest, “with the prospect of reduced taxation of the final policy proceeds after the applicant has reached age 62, and the policy has been in force for at least 12 years”, according to a statement the company issued to the London Stock Exchange.
The bond also offers investors a choice of underlying investments that STM notes are fully protected against any risk of default by the insurance company, as a result of Gibraltar’s protected cell company laws.
A 10% life insurance policy that takes effect from the first day that the policy is in force is also included.
STM said it is launching its new bond through seminars in Frankfurt and Munich, and will continue to roll it out across Germany. It has employed German speaking staff in its Gibraltar office to help handle inquiries.
In a separate announcement, the international advisory firm deVere Group, whose chief executive Nigel Green owns 20% of STM, said it would be offering the new STM product to its clients.