Golden State Mutual Life Insurance Company has entered into a letter of intent with IA American Life Insurance Company to transfer all of its in-force insurance policies to IA American.
The deal was arranged by the California Department of Insurance to protect policyholders of Golden State Mutual, Los Angeles, according California Insurance Commissioner Steve Poizner. Poizner put Golden State under the supervision of the commissioner’s Conservation and Liquidation Office in September after the company repeatedly reported operating losses.
Golden State Mutual, the largest minority-owned life insurance company in California, was placed into conservatorship when its surplus dropped below the minimum required by the state
“State law requires that we protect policyholders by taking over an insurer when its finances weaken to a point where further deterioration may lead to claims not being paid,” said Poizner.
He described IA American Life as “a highly-rated insurance company that has the finances to pay claims and whose offer could greatly benefit the creditors” of Golden Mutual.
IA American was established just weeks ago in Scottsdale, Ariz., as a subsidiary of Industrial Alliance Insurance and Financial Services Inc., Quebec City, Quebec.
Poizner said he selected IA American after considering bids from than 40 life insurers.
IA American Life Insurance Company is rated A- by insurance rating firm AM Best, Poizner noted, and was the only bidder that satisfied all key components of the DOI’s selection criteria, including whether the bidder seeks to acquire all of Golden State’s insurance business and had the experience and infrastructure to administer the types of business to be assumed from Golden State.