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F&G Acquires Big Stake in Indexed Universal Life Distributor: Deals

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What You Need to Know

  • F&G has been trying to diversify.
  • One of the new Integrity Marketing acquisitions is for a firm that serves 1,800 retirement plans and 17,500 participants.
  • A private equity firm is helping Guardian expand its group dental and group vision business.

Fidelity & Guaranty Life Insurance Co. has acquired a 30% stake in Freedom Equity Group — an independent marketing organization that focuses on the sale of index universal life (IUL) insurance and index annuities.

F&G says it’s acquiring the Arroyo Grande, California-based IMO in an effort to diversify by expanding sales of IUL policies to middle-income consumers.

The deal could mean that insurers are about to focus more heavily on the creation and distribution of cash-value life insurance.

IUL products could get a big sales boost if Congress ends up making significant changes to federal income tax rules, because, in the past, high-income and moderate-income families have used life insurance as a vehicle for managing exposure to income taxes.

F&G is a Des Moines, Iowa-based life and annuity issuer that’s now part of Fidelity National Financial, a title insurer. The company has been best known as a supplier of annuities.

F&G has already been distributing IUL policies through Freedom Equity Group. The company says it hopes the investment in the IMO will help it fuel IUL product sales growth.

Other F&G efforts at diversification include a move to enter the pension risk transfer market, by selling group annuities to employers that want to shed responsibility for defined benefit pension plans.

Other companies in the life, annuity and health sectors have also announced deals in the past few weeks.

Integrity Marketing Group

Integrity Marketing — a Dallas-based insurance marketing organization — has completed three new deals.

The biggest is for WealthFirm, a Norfolk, Nebraska-based company that began as an accounting firm in 1948.

The company formed WealthManagement LLC, a registered investment advisor, in 1997, and Retirement Plan Consultants LLC, a retirement planning firm, in 2008.

WealthFirm now serves 1,800 retirement plans with 17,500 plan participants, and it helps clients manage $3.5 billion in assets.

Nancy Brozek and Jared Faltys, the co-CEOs of WealthFirm, will become managing partners with Integrity Marketing.

Integrity Marketing has also acquired two life, health and annuity IMOs: Shields Brokerage, an Exeter, New Hampshire-based firm that was founded in 1981, and D&D Insurance, a Ferndale, Washington-based firm that was founded in 2005.

Integrity Marketing will be giving managing partner titles to Chris Shields in connection with the Shields Brokerage acquisition, and to Derek and Denise Barnes in connection with the D&D Insurance acquisition.

Integrity Marketing reports that it now has relationships with 420,000 independent agents. Those agents work with 9 million clients per year and generate $7 billion in new sales per year.

Guardian

Guardian Life has sold a minority stake in Avesis — a group dental, vision and hearing benefits subsidiary — to Cressey & Co. LP, a Chicago-based private equity firm.

Guardian acquired Avesis in 2016. The unit now 9.2 million enrollees in Medicaid plans, Medicare Advantage plans, Children’s Health Insurance Program plans and employer-sponsored benefit plans.

The Avesis unit has relationships with managed care organizations holding government contracts in 13 states.

Sean Slovenski, a veteran of Walmart and Humana, will become CEO of Avesis.

TailorMed

TailorMed Medical has raised $25 million in capital investors.

The New York-based firm has a system that can identify uninsured and underinsured patients and help match them with sources of support, such as government assistance programs and programs that help people with specific diseases.

The list of organizations contributing to the new round of funding includes an American Cancer Society investment fund.

Global Atlantic

Subsidiaries of Global Atlantic Financial Group — which is now controlled by KKR & Co. — have agreed to become the majority owner of eRESI Mortgage.

ERESI Mortgage is a 2-year-old company that that helps mortgage banking firms make and manage home loans that are not guaranteed by the big, government-backed mortgage guaranty organizations.

Global Atlantic and other life insurers have an interest in mortgage lending because they often invest in mortgages and mortgage-backed securities.

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