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As speculation continues to percolate regarding a prospective sale of Aviva Plc's Iowa-based life insurance and annuities franchise, another U.K.-headquartered insurance group has reaffirmed its desire to expand in the United States.
Legal & General Group Plc, the ultimate parent of Frederick, Md.-based Banner Life Insurance Co. and Garden City, N.Y.-based William Penn Life Insurance Co. of New York, on Sept. 25 announced a $200 million improvement in the capital position of its intermediate U.S. insurance holding company Legal & General America Inc.
That improvement is part of $390 million in total capital relief Legal & General America has achieved since December 2010, as it continues to execute a series of transactions to alleviate surplus strain associated with redundant term life reserves under the NAIC's Regulation XXX. The company described the $200 million capital boost as resulting from a "further replacement" of a XXX solution.
Legal & General attributed $90 million of relief to a December 2010 buyback at a discount of external debt associated with a XXX funding vehicle and its replacement with an internal reinsurance structure. Another $100 million of relief came in December 2011 and was also attributable to a further replacement of a XXX solution.
Banner Life reported in the notes to its 2011 audited financial statement a total reinsurance reserve credit taken of $3.19 billion. It obtained $323.5 million of outstanding surplus relief during the year attributable to a reinsurance agreement with First British Vermont Reinsurance Co. II, a downstream, Vermont captive subsidiary. The company reported having novated a reinsurance agreement with First British American Reinsurance Co....