Sun Life launches BMA-licensed Bermuda subsidiary for participating life

Sun Life has added a BMA-licensed wholly owned subsidiary to Bermuda to write participating life directly, alongside the branch it has run on the island for 30 years. Sun Life Bermuda Ltd, owned by Sun Life Assurance Company of Canada, takes the participating side of the business while the existing branch continues to support non-participating solutions. For high-net-worth buyers, participating coverage means permanent protection plus policyholder dividends drawn from the insurer's participating fund.

The first product out of the new company is a participating whole life solution co-developed with Sun Life Asset Management, and the fund behind it matters because policyholder dividends flow from its performance. Sun Life says the fund will draw on its in-house public and private market capabilities, with diversified exposure across private credit, infrastructure, real estate, fixed income and public equities; policyholder dividends come out of that fund's performance, which puts the outcome for buyers on a book of private credit and infrastructure alongside listed securities.

Sun Life says wealth creation is accelerating across Asia and the Middle East and that families want protection, accumulation and legacy planning inside a single structure. Sujoy Ghosh, chief executive officer of Sun Life Private Wealth, said high-net-worth families "increasingly need solutions that can support multiple objectives within a single structure," and that the new company widens what his unit can offer; Karim Gilani, global head of strategic solutions and partnerships at Sun Life Asset Management, tied the launch to combining the manager's investment capabilities with the private wealth unit's insurance expertise and distribution partnerships. Sun Life Private Wealth has operational presence in Dubai, Hong Kong and Singapore, and the company calls Bermuda "an important pillar" of that business, citing the island's regulatory framework, specialist expertise and capacity for highly customised policy structures.

Sun Life Bermuda Ltd writes directly to policyholders from a BMA-licensed balance sheet, with no US cession in the chain, which is why the NAIC's reciprocity work does not reach it. A memo our pages covered in September instructed the Life Risk-Based Capital Working Group to draft a capital charge for cessions outside reciprocal jurisdictions, aimed at the risk US insurers hand to offshore reinsurers. The private credit behind the participating fund does sit in the asset class the NAIC's $1.2 trillion letter to Senator Warren put under ratings and valuation review, though that letter's scope is ceded books. Whether the perimeter eventually reaches directly written offshore par business is open; for now the charge in draft lands on cessions.

The branch has three decades of non-participating business behind it; the participating book now has its own balance sheet and its own fund. The dividend scale that fund produces is what the private wealth unit's Dubai, Hong Kong and Singapore operations have to sell.