Sun Life Financial’s sale of its American annuity business to a division of privately held Guggenheim Partners might not close by the end of the second quarter as planned.
The sale still needs to be approved by the New York Department of Financial Services (DFS), which has recently undertaken a review of private investor groups as owners of annuity businesses.
“The risk that we’re concerned about at DFS is whether these private equity firms are more short-term-focused—when this is a business that’s all about the long haul,” said department superintendent Benjamin Lawsky in a speech earlier this year.
“And—because of their potential short-term focus—there is a risk that these companies may not be delivering the level of compliance and customer service that we’d expect of them, given the importance of this product to so many seniors on fixed incomes.”
The transaction has already received approval from a number of regulators, including the Delaware Department of Insurance and the Financial Industry Regulatory Authority.
In December, Sun Life agreed to sell the business to Guggenheim’s Delaware Life Holdings.
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