(Bloomberg) — Fidelity & Guaranty Life tumbled the most in 18 months after China’s Anbang Insurance Group Co. withdrew its request with the New York Department of Financial Services to buy the insurer, while saying it planned to refile later.
The regulator had reservations about Anbang’s ownership structure and how it would fund reserves for the U.S. insurer, according to people familiar with the decision, who asked not to be identified because the matter hasn’t been made public. Anbang has come under scrutiny by regulators in China, which planned to send inspectors to the firm and boost oversight, people familiar with the matter said this month.
FGL dropped 6 percent to $23.10 at 9:48 a.m. in New York, the worst performance in the 458-company Russell 2000 Financial Services Index. The stock has fallen 7.7 percent this year.
Anbang, which agreed in November to pay $1.6 billion to buy FGL, plans to refile with New York officials “in the near future,” Des Moines, Iowa-based FGL said Tuesday in a regulatory filing that didn’t say why the request was pulled. Anbang also will continue to seek regulatory approval from the Iowa Insurance Division, according to the filing.
“The parties are committed to securing the remaining regulatory approvals and seek to close the merger as expeditiously as possible,” FGL said in the filing.
FGL has about $25 billion in assets and is majority-owned by HRG Group Inc., the investment firm backed by Leucadia National Corp. Anbang has won approval for the takeover from the Committee on Foreign Investment in the United States.