Foresters sells Foresters Life Insurance and Annuity CompanyBy The IJ Staff | October 17 2019 04:07PM
Foresters Financial announced Oct. 17 that it has entered into an agreement to sell Foresters Financial Holding Company, Inc. and its subsidiary Foresters Life Insurance and Annuity Company (FLIAC) to Nassau Financial Group, L.P., a subsidiary of Nassau Life Insurance Company.
Exiting asset management business
Foresters says that the sale “marks the final stage of Foresters strategy of exiting its North American Asset Management business, which commenced earlier this year with the sale of its asset management and broker dealer businesses.”
FLIAC is a New York domiciled provider of life insurance and annuity products with 112,000 policyholders throughout the US and $11.9 billion of life insurance in force and $2.5 billion in assets. The deal is expected to close in the first quarter 2020, subject to closing conditions including regulatory approval by the New York State Department of Financial Services.
“Following the sale of our US and Canadian asset management businesses earlier this year, this transaction is in step with our strategy of focusing on fixed life insurance in North America and continuing to grow as a purpose-driven international fraternal benefit society. We will continue to evolve our business by focusing on innovation, new product development and independent distribution to best serve our members,” stated Jim Boyle, President and Chief Executive Officer, Foresters Financial.
Credit ratings downgraded
Following the announcement of the sale, AM Best downgraded FLIAC’s Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to “a-“ from “a+”. AM Best also placed the ratings under review with negative implications.
“The rating downgrades reflect the fact that FLIAC no longer plays an important role in the insurance operations of The Independent Order of Foresters,” explained the ratings agency.”
Proceeds from the sale will be held by Foresters “for general corporate purposes, including to fund organic growth in Foresters Financial’s insurance operations in Canada and the United States,” added AM Best.