Prudential Financial Inc. (NYSE:PRU) has agreed to pay $615 million in cash to acquire the Hartford Financial Services Group (NYSE:HIG) individual life insurance business.
Prudential and Hartford said they hope to get the regulatory approvals they need to complete the deal by early 2013.
Prudential would end up reinsuring about 700,000 life policies that provide about $135 billion in coverage.
Prudential would get control over the $7 billion in assets and reserves backing the policies, and it would take over management of $5 billion in separate account assets.
“The benefits and provisions of The Hartford’s in-force life insurance contracts will remain unchanged, and The Hartford’s issuing companies will continue to be the named insurers,” Prudential said in a statement.
Prudential will collect the policy premiums, and it will be reponsible for paying claims and providing customer service and administration, Prudential said.
Jim Avery, the chief executive officer (CEO) of the Prudential individual life business, will retire when the transaction closes, and Kent Sluyter, the chief actuary, will take over as the CEO of the business, Prudential said.
Avery has been the unit CEO for 14 years. He delayed his retirement to help negotiate the Hartford life unit deal, Prudential said.
Sluyter, the incoming CEO, has been working for Prudential since 1981. He has a bachelor’s degree in mathematics from Lafayette College and holds the fellow of the Society of Actuaries and Chartered Life Underwriter professional designations.
Hartford announced in March that it would be selling its retirement plans, broker-dealer individual life businesses and focusing mainly on its property-casualty, group benefits and mutual funds businesses.