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January 15, 2004 at 07:00 PM
Jeff-Pilot To Acquire Canada Lifes U.S. Benefits Business
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Jefferson-Pilot Corp. has agreed to acquire most of the U.S. benefits business of The Canada Life Assurance Company from Great-West Lifeco Inc., Winnipeg, through a reinsurance arrangement.
Jefferson-Pilot has agreed to spend a total of $200 million to pay ceding commissions to Great-West and increase statutory surplus levels at the acquired operations.
Jefferson-Pilot executives are not saying how much of the $200 million they will spend on the ceding commissions and how much on surplus additions.
Jefferson-Pilot hopes to complete the deal by March 31.
“While this is a relatively modest-size acquisition for us, we think its a very attractive deal,” Jefferson-Pilot President Dennis Glass said during an analyst conference held to discuss the deal. “We define group insurance as one of our higher-growth-potential businesses.”
Great-West is selling the Canada Life U.S. group operations, which it acquired through its July 2003 acquisition of Canada Life, because it wants to put the capital from the sale in its own U.S. health and retirement services operations, according to Great-West Lifeco President William McCallum.
