


                            INSURANCE ANNUITIES

               Swiss annuities minimize the risk posed by U. S.
          annuities.  They are heavily regulated, unlike in the
          U.S., to avoid any potential funding problem.  They
          denominate accounts in the strong Swiss franc, compared
          to the weakening dollar.  And the annuity payout is
          guaranteed.
               Swiss annuities are exempt from the 35%
          withholding tax imposed by Switzerland on bank account
          interest received by foreigners.  Annuities do not have
          to be reported to Swiss or U.S. tax authorities.  They
          are not a foreign financial account for the purpose of
          U.S. reporting requirements.
               A U.S. purchaser of an annuity is required to pay
          a 1% U.S. federal excise tax on the purchase of any
          policy from a foreign company.  This is much like the
          sales tax rule that says that if a person shops in a
          different state, with a lower sales tax than their home
          state, when they get home they are required to mail a
          check to their home state's sales tax department for
          the difference in sales tax rates.
               The federal excise tax form (IRS Form 720) does
          not ask for details of the policy bought or who it was
          bought from -- it merely asks for a calculation of 1%
          tax of any foreign policies purchased.  This is a one
          time tax at the time of purchase; it is not an ongoing
          tax.  It is the responsibility of the U. S. taxpayer,
          to report the Swiss annuity or other foreign insurance
          policy.  Swiss insurance companies do not report
          anything to any government agency, Swiss or American --
          not the initial purchase of the policy, nor the
          payments into it, nor interest and dividends earned.
               Earnings on annuities during the deferral period
          are not taxable in the U.S. until income is paid, or
          when they are liquidated, following exactly the same
          tax rules as for annuities issued by U.S. insurance
          companies.
               Swiss annuities can be placed in a U. S. tax-
          sheltered pension plans, such as IRA, Keogh, or
          corporate plans, or such a plan can be rolled over into
          a Swiss-annuity.  (To put a Swiss annuity in a U.S.
          pension plan, all that is required is a U.S. trustee,
          such as a bank or other institution, and that the
          annuity contract be held in the U.S. by that trustee.
          Many banks offer "self-directed" pension plans for a
          very small annual administration fee, and these plans
          can easily be used for this purpose.)
               Investment in Swiss annuities is on a "no load"
          basis, front-end or back-end.  The investments can be
          canceled at any time, without a loss of principal, and
          with all principal, interest and dividends payable if
          canceled after one year.  (If canceled in the first
          year, there is a small penalty of about 500 Swiss
          francs, plus loss of interest.)
               A new Swiss annuity product (first offered in
          1991), SWISS PLUS, brings together the benefits of
          Swiss bank accounts and Swiss deferred annuities,
          without the drawbacks -- presenting the best Swiss
          investment advantages for American investors.

               SWISS PLUS, is a convertible annuity account,
          offered only by Elvia Life of Geneva.  Elvia Life is a
          $2 billion strong company, serving 220,000 clients, of
          which 57% are living in Switzerland and 43% abroad.
          The account can be denominated in the Swiss franc, the
          U.S. dollar, the German mark, or the ECU, and the
          investor can switch at any time from one to another.
          Or an investor can diversify the account by investing
          in more than one currency, and still change the
          currency at any time during the accumulation period --
          up until beginning to receive income or withdrawing the
          capital.
               If you are not familiar with the ECU, it is the
          European Currency Unit, a new currency created in 1979.
          It is composed of a currency basket of 11 European
          currencies, and its value is calculated daily by the
          European Commission according to the changes in value
          of the underlying currencies.  The ECU is composed of a
          weighted mean of all member currencies of the European              Monetary System.  Since the ECU changes its balance to
          reflect changes in exchange rates and interest rates
          between these currencies, the ECU tends to limit
          exchange rate risk and interest rate risks.
               Although called an annuity, SWISS PLUS acts more
          like a savings account than a deferred annuity.  But it
          is operated under an insurance company's umbrella, so
          that it conforms to the IRS' definition of an annuity,
          and as such, compounds tax-free until it is liquidated
          or converted into an income annuity later on.
               SWISS PLUS accounts earn approximately the same
          return as long-term government bonds in the same
          currency the account is denominated in (European
          Community bonds in the case of the ECU), less a half-
          percent management fee.
               Interest and dividend income are guaranteed by a
          Swiss insurance company.  Swiss government regulations
          protect investors against either under-performance or
          overcharging.
               SWISS PLUS offers instant liquidity, a rarity in
          annuities.  All capital, plus all accumulated interest
          and dividends, can be freely accessible after the first
          year.  During the first year 100% of the principal is
          freely accessible, less a SFr 500 fee, and loss of the
          interest.  So if all funds are needed quickly, either
          for an emergency or for another investment, there is no
          "lock-in" period as there is with most American
          annuities.
               Upon maturity of the account, the investor can
          choose between a lump sum payout (paying capital gains
          tax on accumulated earnings only), rolling the funds
          into an income annuity (paying capital gains taxes only
          as future income payments are received, and then only
          on the portion representing accumulated earnings), or
          extend the scheduled term by giving notice in advance
          of the originally scheduled date (and continue to defer
          tax on accumulated earnings).

               According to Swiss law, insurance policies --
          including annuity contracts -- cannot be seized by
          creditors.  They also cannot be included in a Swiss
          bankruptcy procedure.  Even if an American court
          expressly orders the seizure of a Swiss annuity account
          or its inclusion in a bankruptcy estate, the account
          will not be seized by Swiss authorities, provided that
          it has been structured the right way.
               There are two requirements: A U. S. resident who
          buys a life insurance policy from a Swiss insurance
          company must designate his or her spouse or
          descendants, or a third party (if done so irrevocably)
          as beneficiaries.  Also, to avoid suspicion of making a
          fraudulent conveyance to avoid a specific judgment,
          under Swiss law, the person must have purchased the
          policy or designated the beneficiaries not less than
          six months before any bankruptcy decree or collection
          process.
               These laws are part of fundamental Swiss law.
          They were not created to make Switzerland an asset
          protection haven. In the Swiss annuity situation, the
          insurance policy is not being protected by the Swiss
          courts and government because of any especial concern
          for the American investor, but because the principle of
          protection of insurance policies is a fundamental part
          of Swiss law -- for the protection of the Swiss
          themselves.  Insurance is for the family, not something
          to be taken by creditors or other claimants.  No Swiss
          lawyer would even waste his time bringing such a case.

          Contact information
               The only way for North Americans to get
          information on Swiss annuities is to send a letter to a
          Swiss insurance broker. This is because very few
          transactions can be concluded directly with foreigners
          either with a Swiss insurance company or with regular
          Swiss insurance agents.
               When you contact a Swiss insurance broker, be sure
          to include, in addition to your name, address, and
          telephone number, your date of birth, marital status,
          citizenship, number of children and their ages, name of
          spouse, a clear definition of your financial objectives
          (possibly on what dollar amount you would like to
          invest), and whether the information is for a
          corporation or an individual, or both.
               One firm specializes in dealing with English
          speaking investors, and everybody in the firm speaks
          excellent English.  They are also familiar with U. S.
          laws affecting the purchase of Swiss annuities.
          Contact:  
               Mr. Jurg Lattmann 
               JML Swiss Investment Counsellors AG, Dept. 212
               Germaniastrasse 55 
               8033 Zurich
               Switzerland 
                  tel. (41-1) 363-2510 
                  fax: (41-1) 361-4074, attn: Dept. 212


