


                                 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
               receive), 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, 8031 Zurich,
               Switzerland; tel. (41-1) 363-2510, fax: (41-1) 361-074.


