Risk Management
Red Gate Elite team understands that risk management and safety are paramount for high net worth clients and are an important factor in making a decision to purchase life cover.
Red Gate Elite only uses regulated insurance carriers. Two of the major jurisdictions our carriers have chosen to base themselves in are Bermuda and Cayman Islands, which are the 3rd and 4th major global insurance centers after New York and London.
Bermuda has the largest number of captive insurance companies while Cayman Islands has the second largest number of captive insurance companies. Both countries are home to a number of top tier re-insurance carriers such as Ace Group and Hannover Re.
These countries are chosen as they offer highest level of regulatory safeguards whilst maintaining tax efficiency for their policyholders. Most importantly from a risk management perspective, both jurisdictions utilise segregated accounts, meaning that both the policy assets and life cover are legally separate from the balance sheet of the insurance policy issuer. In the event of a default of the issuing insurance company, the policy purchaser is legally protected against the creditors of the insurer, where the creditors can not touch the policy assets. Unlike a universal life (UL) policy, the policy purchaser takes no credit risk on the issuer of the policy.
Segregated Account Protection
Under Cayman Islands insurance legislation the account value of a Red Gate Elite policy is legally separated from every other issued policy’s assets. These assets are unavailable to the creditors of the insurance issuer should they go insolvent. This means that a policy purchaser does not take any credit risk on the issuer of the Red Gate policy.
Reinsurance Companies
The life cover on the variable universal life policy is provided by top tier global re-insurance companies. The issuer of the policy only retains a maximum of 250k USD on the life cover. As above, when this life cover is paid to the insurance company Cayman Insurance law protects the policy purchaser from the insurance company becoming insolvent and the life proceeds are passed to the policy purchaser’s estate.
Asset Management and Embedded Financing
Red Gate Elite outsources the asset management for both the Variable Universal Life and Investment Linked policies. The asset manager is recognized as a global leader in multi-manager allocation and has 126 billion USD assets under management. The bank that acts as financier to this portfolio is an S&P A-Rates European investment bank with a significant retail banking presence in Europe.
For example, the Red Gate Elite Variable Universal Life program outsources the asset management and financing for each policy from the issuing insurance carrier. The policy financing is provided via an innovative, cost effective vehicle, structured by an S&P A-rated investment bank, while an institutional class asset manager, with 128 Billion USD assets under management, has been appointed as the manager for the the Red Gate Elite VUL. This asset manager is recognized as one of the leading multi-manager allocators globally.
