Genworth Financial Inc. and China Oceanwide Holdings Group Co. Ltd. say they have reached a preliminary agreement with New York state regulators over how much capital should be infused into a Genworth subsidiary in New York state.
The agreement should remove one of the remaining obstacles to efforts by China Oceanwide to acquire Genworth, Genworth and China Oceanwide said Monday.
The agreement in principle with New York calls for Genworth to contribute $100 million to the New York subsidiary once the China Oceanwide deal closes, Genworth and China Oceanwide said.
China Oceanwide, a Beijing-based real estate developer and financial services company, has been trying to acquire Genworth since October 2016.
Genworth Chief Executive Officer Thomas McInerney said in February, during a conference call Genworth held with securities analysts to go over fourth-quarter earnings, that one challenge was that Genworth and the New York State Department of Financial Services had different ideas about how much capital Genworth should put in Genworth Life Insurance Company of New York (GLICNY).
Genworth is a major mortgage insurance issuer, and it has been a major issuer of life insurance, annuities and long-term care insurance.
Genworth used GLICNY to write long-term care insurance and other products in New York state.
Genworth has said that, once it completes the China Oceanwide deal, it will put $175 million in Genworth Life and Annuity Insurance Company (GLAIC), another subsidiary, but that it does not intend to put any additional capital beyond the $175 million into GLAIC.
New York regulators approved China Oceanwide’s efforts to acquire Genworth, and GLICNY, once, but the transaction has been in progress so long that the original approval expired.
Genworth now needs to get New York regulators to reapprove the deal before it can go ahead with being acquired.