Financial services and insurance firm Equitable Holdings has announced the completion of its reinsurance transaction with life and annuity insurer Global Atlantic.
The transaction involved Equitable’s principle operating subsidiary, Equitable Financial Life Insurance Company, and First Allmerica Financial Life Insurance Company, a Global Atlantic unit.
Under the terms of the deal, Equitable Financial will cede a 50% quota share on a combined coinsurance and modified coinsurance basis of pre-2009 Group Retirement VA contracts.
These are supported by approximately $4 billion of general account assets and $6 billion of separate account value which secures future cash flows by mitigating the remaining $1 billion of redundant reserves associated with New York’s Regulation 213.
The transaction is expected to result in a positive ceding commission of approximately $1.1 billion to Equitable Financial which the company will use to fund the remaining Reg. 213 redundant reserves, securing future cash flows.
It also includes policies with the highest guaranteed general account crediting rates of 3%.
“Equitable’s financial, risk and counterparty objectives aligned well with our ability to manage both spread and fee-based liabilities for an attractive, comprehensive solution,” said Manu Sareen, co-president and head of institutional markets for Global Atlantic, alongside the original announcement of the deal.
“We are excited to put our execution experience, strong balance sheet and risk management capabilities to work with another premier blue-chip provider of retirement products, extending our track record of providing best in class reinsurance solutions.”