Insurer Genworth Financial and China Oceanwide Holdings have announced the completion of internal reinsurance agreements and have again withdrawn and re-filed their joint voluntary notice with the U.S. Committee on Foreign Investment (CFIUS), to allow the committee more time to review the firms’ proposed transaction under their merger agreement.
A new 30 day review period, followed by a possible additional 45 day investigation period, will follow CFIUS’ acceptance of the refiled notice.
Tom McInerney, President and Chief Executive Officer (CEO) of Genworth Financial, said; “The Genworth Board is fully committed to closing the transaction because it is the best option for our shareholders.
“This transaction also achieves the best outcome for the policyholders of our insurance companies and other important stakeholders.
“In addition, Genworth believes this transaction provides significant benefits to Americans because it allows Genworth, the leader in long term care insurance in the U.S., to remain a viable and strengthened competitor in the long term care insurance industry.
“Medicaid is the largest payor of long term care costs and already allocates 30 percent of its budget to long term care. Medicaid long term care costs are set to dramatically increase over the next 30 years and a strong, competitive private long term care insurance industry is critical to helping ease the financial burden on the government and taxpayers.”
The firms said they would continue to actively engage in discussions with CFIUS but no assurances had been given so far that CFIUS would give approval for the transaction and additional regulatory approval would still be required from the U.S., China, and other international jurisdictions.
LU Zhiqiang, Chairman of China Oceanwide Group, added; “Developing a long term care insurance market is also important in China, where there are 231 million people over the age of 60.
“We are working with Genworth to complete this transaction so that we can strengthen Genworth’s financial position and the viability of its long term care business in the U.S. as well as bring Genworth’s expertise in long term care insurance to our country for the benefit of our aging population.”
Genworth also announced its recently received approval from the Delaware Department of Insurance and the Virginia Bureau of Insurance for the remaining internal reinsurance and recapture transactions required under the merger agreement.
These transactions came as a condition to Genworth Holding Company’s purchase of Genworth Life and Annuity Insurance from Genworth Life Insurance and were completed effectively from July 1st.
