LTCI Policyholders May Get Broader Guaranty Association ProtectionOfficials at the Delaware Department of Insurance say they’re still reviewing efforts by China Oceanwide Holdings Group Co. Ltd. to acquire Genworth Financial Inc.
Genworth has been a major provider of life insurance, annuities and stand-alone long-term care insurance (LTCI). Although the parent company is based in Richmond, Virginia, it needs approval for the deal from Delaware because a major subsidiary, Genworth Life Insurance Compan (GLIC), is based in Delaware. GLIC is an LTCI issuer.
Genworth has been trying to pump cash from China Oceanwide into GLIC, then separate GLIC from the rest of the company.
For Delaware, “the most significant issue remaining is an agreement on the valuation of the remaining companies if the life insurance company is separated from the long-term care company, as is presently proposed,” Delaware officials say in an update on the status of the closely watched deal.
(Related: Genworth Talks About May 2018)
“Genworth and [China Oceanwide] have stated that they will continue to work with the department to respond to its outstanding inquiries and information requests focused on Delaware’s separate statutory and regulatory requirements, including assuring that any proposed transaction is fair to GLIC’s policyholders and the public and that the surviving long-term care company is sufficiently solvent,” officials say.
“At this point, no timeframe can be estimated as to whether and when the department might make a final determination and, if appropriate, schedule a hearing,” officials say.
China Oceanwide has been trying to acquire Genworth since October 2016.
The companies need approvals from many agencies inside and outside the United States, including the Committee on Foreign Investment in the United States (CFIUS). CFIUS is a secretive agency that reviews international deals for national security concerns.
CFIUS seems to have raised questions about the possibility that China Oceanwide could get access to Genworth policyholders’ personal information, according to documents Genworth has filed with the U.S. Securities and Exchange Commission. Genworth has said that it and China Oceanwide are trying to arrange for a third party to handle the personal information and mitigate CFIUS officials’ concerns.
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