NU Online News Service, July 7, 2004, 11:04 a.m. EDT
Annuity and Life Re (Holdings) Ltd., Hamilton, Bermuda, says it has agreed to settle a long-running dispute with Transamerica over a money-losing reinsurance treaty.[@@]
The settlement with Transamerica, which is a U.S. unit of AEGON N.V., The Hague, Netherlands, will resolve “all disputes relating to the current arbitration proceedings between the 2 parties,” Annuity and Life Re says in a statement.
Annuity and Life Re has agreed to make $8.7 million in payments due under its reinsurance treaty with Transamerica, and Transamerica has agreed to offset $5 million of the amount that Annuity and Life Re owed Transamerica in October 2003, Annuity and Life Re says.
In the future, Transamerica and Annuity and Life Re “will calculate monthly settlements under their reinsurance treaty in a manner [Annuity and Life Re] believes is consistent with the original terms of the treaty,” Annuity and Life Re says.
Annuity and Life Re “does not expect an adverse impact on its financial results as a result of the settlement,” the company says.
Investors formed Annuity and Life Re in the mid-1990s, when the stock market and the markets for life and annuity reinsurance were strong. The company later ran into trouble when a large annuity treaty that involved Transamerica and reinsurance arrangements with other companies failed to perform as Annuity and Life Re had hoped.