A giant life insurer is using an innovative arrangement to support the guarantees it is making to some purchasers of variable annuity contracts.

The insurer, MetLife Inc., New York, says it has arranged to transfer a large block of VA guaranteed minimum death benefit risk to Catalyst Re Ltd., a reinsurance company owned by an arm of Societe Generale, Paris.

MetLife previously had placed the GMDB risk under the management of its Exeter Reassurance Company Ltd. subsidiary, according to MetLife.

The transaction, which involves the transfer of VA guarantee risk to a non-traditional, bank-owned reinsurer, appears to be the first of its kind for the industry, MetLife says.

One feature of the arrangement will protect MetLife against severe stock market downturns, according to Societe Generale.

The arrangement can be used for all VA benefits, including guaranteed minimum income and withdrawal benefits, Societe Generale says.