MetLife Completes Captive Merger
November 17, 2014 by Arthur D. Postal
WASHINGTON – MetLife announced today that it has completed a merger aimed at reducing the risk profile of its variable annuity (VA) business and bringing its offshore captive business to the U.S.
Under the new setup, MetLife subsidiaries MetLife Insurance Co. of Connecticut, MetLife Investors USA Insurance Co., MetLife Investors Insurance Co. and Exeter Reassurance Co. Ltd. have been merged. The captive business was formerly based in the Cayman Islands.
The merged company has been renamed MetLife Insurance Co. USA and is domiciled in Delaware. All necessary regulatory approvals have been received for these mergers, the insurer said in a statement.
All policy, contract, certificate or retained asset account terms, conditions or benefits remain unchanged as a result of the merger, MetLife said.
The decision to reduce the risk profile of its VA business was announced last May after Metlife came under pressure from federal and state regulators on the captives issue.
Steve Kandarian, MetLife CEO, announced the plans in a statement issued at MetLife’s annual Investment Day.
Benjamin Lawsky, superintendent of the New York Department of Financial Services, lauded MetLife’s decision at the time of the announcement. He said MetLife has “acted wisely in bringing this subsidiary back to the United States where it will be subject to stronger rules and oversight.”
Lawsky added that MetLife’s decision “represents a step in the right direction as we seek to address the risks created by the shadowy world of ‘captive’ reinsurance.”
The Federal Insurance Office has also raised the issue after its staff voiced concerns about insurance solvency and reserving. A federal advisory task force is looking at the issue as well.
Arthur D. Postal has covered regulatory and legislative issues for more than 30 years in Washington, D.C. He can be reached at arthur.postal@innfeedback.com.
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