Apollo agrees to policyholder protections in Athene-Aviva deal

Wed Aug 14, 2013 5:18pm EDT
 
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By Karen Freifeld

NEW YORK (Reuters) - Apollo Global Management has agreed to "enhanced" safeguards for policyholders as part of Athene Holding Ltd's planned purchase of the New York subsidiary of Aviva USA, New York's financial regulator said on Wednesday.

Athene Holding, a retirement savings provider, is funded by an affiliate of Apollo Global Management, an alternative investment manager.

The new policyholder protections include higher capital standards, greater disclosure and enhanced regulatory scrutiny, the superintendent of New York's Department of Financial Services said in a statement.

The safeguards are meant to address the emerging trend of private equity firms entering the annuity business, whose shorter-term business model than traditional insurers raises concerns, said Benjamin Lawsky, the New York superintendent.

Athene Holding plans a $1.55 billion purchase of the U.S. annuity business of Britain's Aviva Plc, whose U.S. operations are headquartered in Iowa.

Aviva's New York-based unit, which needs Lawsky's approval, represents less than 3 percent of Aviva's U.S. operations.

The Iowa's insurance division will decide later this week whether to approve Athene's acquisition of Aviva USA, Iowa insurance spokesman Tom Alger said. The state held a hearing on the transaction last month.

The New York regulator insisted on enhanced policyholder protections to approve the acquisition of Aviva Life and Annuity Company of New York, which is necessary for the overall deal to move forward, according to a person familiar with the matter.   Continued...