What does the custodian do in a PPLI structure?
In a PPLI structure, ownership, management and safekeeping sit with three different parties. The insurer holds legal title to the portfolio, the investment manager makes the decisions under a discretionary mandate, and the custodian holds the assets. The custody account is opened when the structure is issued and linked to the insurer's segregated account.
The custodian settles the trades the manager places, collects dividends and interest, and reports holdings and values to the insurer, which uses them for the policyholder's statements. The insurer approves the custodian, as it approves the manager. Insurers that accept digital assets hold them through regulated custodians they approve, on terms agreed at the outset. Where a premium is paid in specie, the assets move into the custody account in the insurer's name.
A custodian is the bank or trust company that holds the assets of a PPLI structure in safekeeping, in an account for the insurer's segregated account, and settles trades for the investment manager.
