Sun Life Financial has received all regulatory approvals to sell its American annuity business to Guggenheim Partners’ Delaware Life Holdings division.
The New York Department of Financial Services (DFS) approved the deal on Wednesday after Guggeinheim agreed to an enhanced set of policyholder safeguards, which include the following:
- the annuity business’s risk-based capital levels will be maintained at an amount not less than 450%;
- a separate backstop trust account totalling US$200 million will be created to provide additional protections to policyholders above and beyond the heightened capital levels;
- any material changes to operations will require the prior written approval of the DFS; and
- the annunity business will file quarterly risk-based capital level reports to the DFS, rather than just the annual reports required under New York insurance law.
“These new protections will provide the needed security that retirees who purchased annuities deserve, while also allowing this transaction to move forward,” says the department’s superintendent, Benjamin Lawsky.
“Other non-traditional insurance industry investors asking us to approve similar transactions are going to have to step up and clear a high bar for protecting policyholders.”
The transaction, which was announced in December 2012, is expected to close on or before Aug. 2, 2013.
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