Argus Group is selling its private placement life business to Puerto Rico-headquartered Advantage Insurance Inc.

Financial terms of the deal have not be disclosed. The transaction is expected to be completed before the end of September.

The sale includes Argus International Life Bermuda Limited and its subsidiaries, Argus International Life Insurance Limited, and Bermuda Life Worldwide Limited.

Private placement life insurance, or PPLI, has been used as a wealth-preservation tool by the wealthy, according to a Bloomberg article last month.

“It’s a strategy that’s perfectly legal and has existed for decades,” Bloomberg reported. “While insurance funds are typically a way to protect assets from lawsuits, the main appeal of PPLIs is that they can help investors avoid taxes on capital gains, ordinary income and high-net-worth estates.”

Alison Hill, chief executive officer at the Argus Group, said: “The Argus Group made the business decision to reprioritise and focus on its core property and casualty and employee benefit businesses some time ago. We embarked on a search for the right purchaser for our private placement life insurance and annuity business.

“We are delighted to have found a suitable partner in Advantage Insurance and look forward to transitioning the private placement life business to them. Our shared business philosophy for service excellence, along with Advantage’s best-in-class practices and deep knowledge of the private placement life industry, gave us comfort that Advantage will provide our clients with the highest level of expertise, commitment and outstanding customer service that they expect and deserve.”

Advantage Insurance is a speciality private placement life insurance company. It has 400 clients and administrates more than $2 billion of insurance assets from its locations in San Juan, Cayman Islands, the UK and US.

Walter Keenan, CEO of Advantage Insurance, said: “We are pleased to be acquiring the companies that comprise Argus’ private placement life business and look forward to providing outstanding service to their policyowners. Advantage specialises in private placement life insurance and this acquisition demonstrates our commitment to the business. Argus’ clients can be confident in the quality of their new insurance provider, as Advantage is ideally positioned to assume this high-quality set of life insurance policies.”

The transaction is subject to receipt of all required regulatory approvals.