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Hanover To Sell Run-Off Life Business

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Hanover Insurance Group Inc. says it will be disposing of a life insurance operation it began shutting down in 2002.

Hanover, Worcester, Mass., the old Allmerica Financial Corp., says it has agreed to sell First Allmerica Financial Life Insurance Company, a run-off life insurance business, to Commonwealth Annuity and Life Insurance Company, a unit of Goldman Sachs Group Inc., New York.

Hanover says it will be asking Massachusetts insurance regulators for permission to take $160 million from First Allmerica before completing the deal.

Total net proceeds from the deal would be about $220 million, but Hanover would report a $66 million net after-tax loss on the transaction, the company says.

In addition to Massachusetts insurance regulators, New Hampshire insurance regulators and other regulators must approve the deal, Hanover says.

Hanover says it hopes to invest the capital released by the transaction in its core property-casualty insurance business.