Guggenheim policyholder protections 'model' for other annuity deals
Thursday, August 01, 2013 2:51 PM
Guggenheim Partners LLC shareholders on Wednesday won approval for a deal to buy a U.S. annuities business from Sun Life Financial Inc. after agreeing to policyholder protections sought by a New York regulator, Bloomberg reported.
The protections should serve as a model for similar acquisitions by other firms seeking to enter the annuity business, the agency's chief said.
Benjamin Lawsky, superintendent of the New York Department of Financial Services, is currently reviewing the proposed purchase of Aviva USA by Apollo Global Management LLC, which in December announced its plans to acquire the West Des Moines-based company. Iowa's insurance commissioner is also reviewing that deal and is expected to issue a ruling within the next two weeks.
For the Guggenheim deal, Lawsky's agency will require Delaware Life Holdings, a company created by Guggenheim that's making the purchase, to establish a $200 million trust account as a backstop to replenish capital if needed. Delaware Life must also obtain prior approval from the department for "material changes" to its operations.
"These policyholder protections can and should serve as a model set of guardrails for addressing the emerging trend of private-equity firms seeking to enter the annuity business," Lawsky said in a release.
Guggenheim Partners, a privately held investment firm, oversees more than $160 billion in assets for both individuals and institutions, including insurance companies. In 2011 a controlled affiliate of Guggenheim purchased EquiTrust Life Insurance Co., which specializes in the sale of fixed and indexed annuities, from FBL Financial Group Inc. in West Des Moines.