New York Life has completed the acquisition, through reinsurance, of a net 60 percent interest in John Hancock Financial's closed block, comprised primarily of participating whole life insurance policies. The transaction, which initially was announced in December 2014, has received all necessary regulatory approvals.
The closed block of 1.3 million in-force policies with a face amount of more than $25 billion was established in connection with John Hancock's demutualization in 2000. Through reinsurance arrangements, New York Life has assumed $7 billion of statutory reserves. New York Life's NYL Investors, LLC, unit, which oversees the company's general account investments, manages approximately $12 billion in new assets as a result of the deal. With these additional assets, New York Life's general account assets now exceed $213 billion, a record high for the company.
John Hancock, the U.S. division of Manulife Financial Corporation, will continue to administer the closed block policies, including paying claims and dividends. Terms of the transaction were not disclosed.
New York Life Chairman and Chief Executive Officer Ted Mathas said, “The conclusion of this transaction brings New York Life a significant infusion of high quality, whole life insurance assets, which serves as a strategic complement to our large and stable block of participating whole life insurance policies protecting millions of American families. Our acquisition of these whole life policy assets underscores our strategic focus on, and commitment to, growing our life insurance business, the fundamental business of New York Life for the past 170 years.” Mr. Mathas noted that the company is interested in acquiring other blocks of high quality life insurance in the future.
Mr. Mathas continued, “Our company's ratings for financial strength are substantially driven by our ability to maintain a thriving block of participating whole life insurance business. Together with our surplus and asset valuation reserve, a cushion of safety that now stands at more than $22 billion, New York Life's financial strength is unsurpassed in the industry, as validated by the four major rating agencies. In fact, of the 800 life insurers operating in the United States today, New York Life is one of only two with the highest possible ratings for financial strength currently awarded by all four rating agencies.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].