Iowa’s insurance commissioner today gave the green light for Apollo Global Management LLC and Athene Holding Ltd. to complete their acquisition of West Des Moines-based Aviva USA, subject to enhanced reserve requirements and heightened regulatory oversight.

The decision clears the way for the $1.55 billion deal, which this morning received approval from the New York Department of Financial Services. Aviva USA, which following the expected completion of the transaction will operate as Athene USA, employs approximately 1,400 people at its West Des Moines headquarters.  

In a press release, Iowa Insurance Commissioner Nick Gerhart outlined four conditions that Aviva Life and Annuity Co. and its subsidiaries must follow as Athene USA. Those conditions are in addition to a voluntary agreement by Athene to increase its policy reserves by an extra $150 million, as well as agreeing o submit to a capital and management agreement approved by the commissioner.

Gerhart’s decision follows an extensive financial and regulatory review of Athene and Apollo.

“We’re very pleased that we can expect to see this company continue its operations in Iowa under new ownership, while maintaining for the Division appropriate oversight of its activities going forward,” Gerhart said in a release. “This review of the proposed purchase has been a good process dealing with an important transaction.”

The additional requirements outlined by the division Thursday include:

1. The company will pay no ordinary or extraordinary dividends or other distributions to shareholders for five years, unless approved by the commissioner.

2. Any changes in the company’s plan of operations will require the prior approval of the commissioner after it submits a revised Plan of Operations and Financial Projections.

3. The company must report all affiliated agreements and investments that are both above and below the state's insurance holding company act reporting threshold of material transactions. 

4.  All non-variable deferred annuities containing guaranteed minimum death benefits or withdrawal benefits issued by the company subsequent to Dec. 31, 2013 will meet reserving standards of Actuarial Guideline 33.

Gerhart said in a release that “for the foreseeable future,” his division will require the use of that actuarial guideline, rather than another standard known as Actuarial Guideline 43, for any transaction involving non-variable deferred annuities containing guaranteed death benefits or withdrawal benefits.

Guideline 33 is generally more conservative in its approach to reserve requirements than Guideline 43, which Aviva has been using.