The insurer LV= will be taken over by a company based offshore in Jersey if members agree to deal orchestrated by US private equity firm Bain Capital that would see it lose its historic mutual status. Bain has established a Jersey-based company called BCC Blake Bidco Ltd to carry out the takeover, according to correspondence between an independent expert and Gareth Thomas, a Labour MP and shadow minister of international trade. Companies in Jersey and other tax havens are regularly used by private equity firms to take advantage of their 0% corporate tax rate and lower disclosure requirements. It is understood that the new owner of LV= will file UK tax returns and be subject to UK tax. Thomas on Tuesday wrote to the Bain managing director overseeing the deal, Matt Popoli, to raise a series of concerns about the opaque structure. In the letter, seen by the Guardian, he asked if unidentified investors would fund the takeover and who would serve on the board of the new company. LV=, formerly known as Liverpool Victoria, was founded in 1843 to fund burial costs for Liverpool’s poor. In the following 178 years it grew to become one of the UK’s largest insurers, offering life insurance and pensions. It is also one of the last remaining large, open mutuals. LV= announced it was up for sale in June 2020, and in October 2020 it revealed exclusive talks with Bain. LV= argues that it needs external capital to invest in technology upgrades or face being squeezed out by bigger insurers. The proposed takeover – which must be backed by 75% of members – has proven controversial, with criticism from Thomas and some of LV=’s member-customers over what they see as relatively meagre compensation for the loss of mutual status. Bain has committed to keep LV=’s operations at Bournemouth, Exeter and Hitchin. Thomas said: “With all the justified frustration of members about the lack of openness of LV= bosses, it beggars belief that Bain are not explaining who is really behind their plans, where their money is coming from and crucially who will sit on the board of the new private company. “And their decision to base the new firm in Jersey calls into question whether they really intend to retain current levels of staff and all three offices. With half the voting period over why won’t Bain simply spell out who is funding their bid and who will really control it if the demutualisation goes ahead.” Bain’s takeover vehicle was incorporated in December 2020, according to Jersey company records. It is registered at Sir Walter Raleigh House in St Helier, Jersey, an address of Maples Group, a company specialising in offshore fund formation. The address appeared in the Paradise Papers, a trove of leaked documents from Appleby, another offshore law firm. A spokeswoman for Bain Capital said the company would consider the letter and respond in due course. She added that the letter contained unspecified “wrong and misleading assumptions”. LV= declined to comment.