RISKVUE ARCHIVE | RISK BITES

Summary Of Mergers, Acquisitions And Carrier Changes: 1999

By Ingrid Faro

Merger and acquisition activity in the insurance industry declined by 71% during the first half of 1999, compared to 1998, from $107.9 billion to $30.0 billion. (According to a study by the research firm Conning & Co., reported in the National Underwriter 9/13/99.) Although m&a activity continued at a slow pace through 1999, a new wave is expected in 2000 between the banking and the insurance industries due to the federal Financial Services Modernization Act, signed November 12, 1999, which had been sought by financial services firms for years.

• Acacia Mutual and Ameritas Mutual, both mutual holding companies, completed their merger January 1, 1999. The combined firm has over 200,000 policyholder/members and $765 million in equity capital. (National Underwriter, 1/18/99)
  
  
• Ace Ltd. of Bermuda will buy the international & domestic property and casualty businesses of CIGNA Corp. for about $3.45 billion in cash. CIGNA intends to focus on their core health-care and global employee-benefits operations. (Wall Street Journal, 1/6/99; FBO 1/16/99)
  
  
• Accord Health Plan, a small Chicago-area HMO, ceased operations by year-end 1999. They will keep their health insurance license to keep future options open. (Crain’s Chicago Business, page 2, 12/6/99)
  
  
• Aegon UK plc plans to buy the UK life business of Guardian Royal Exchange for $1.2 billion, which includes the pre-sale dividend of about $91.8 million. GRE is owned by Sun Life and Provincial Holdings, the AXA Group subsidiary. (National Underwriter, page 38, 8/16/99)
  
  
• Aegon USA is selling its P&C units to American Financial Group. (FBO, 1/16/99)
  
  
• Aegon NV agreed to buy Transamerica Corp. for $9.7 billion in cash and stock, and AEGON will assume $1.1 billion of Transamerica’s holding company debt. The deal is the second largest in the U.S. life insurance industry after the merger of SunAmerica and AIG (American International Group) and would make it the third largest U.S. life insurer in terms of assets and premium written. (Wall Street Journal, 2/19/99; FBO News-by-Fax, 2/21/99; National Underwriter, 2/22/99) AEGON also said that it would get entirely out of U.S. health and accident insurance within a year. Some of the companies on the block could include Bankers United Life Assurance, Monumental Life, Life Investors Ins. of America and PFL Life Ins. Co. (FBO NewsbyFax, 3/7/99)
  
  
• Aetna Inc. agreed to purchase Asistencia Medica Social Argentina, Argentina’s largest HMO, for about $100 million. Aetna owns health-care companies in Chile and Brazil and sells health insurance products in Mexico. (Wall Street Journal, 1/13/99)
  
  
• Aetna completed acquisition of Prudential HealthCare on 8/6/99, for approximately $1 billion, making Aetna the country’s largest managed care company, with more than 18 million members. The company also will be a leading provider of dental benefits, with approximately 16 million members. The U.S. Justice Department cleared the sale in June. The transition logo: “Prudential HealthCare, a member company of Aetna U.S. Healthcare.” (FBO NewsbyWire, 8/9/99; Modern Healthcare, page 4, 8/9/99)
  
  
• Allianz Life Ins Co of North America (Allianz Life) acquired all the outstanding shares that it did not already own of Life USA Holding, Inc, valued at $540 million. Allianz Life and Life USA will continue to exist as separate companies with unified management. (FBO NewsbyWire, 5/23/99 and 10/5/99)
  
  
• Allianz AG agreed to buy a 70% stake in Pimco Advisors Holdings LP, a US bond-fund specialist, for $3.3 billion. The combination will create one of the world’s 10 largest money managers. (Pimco has $250 billion in assets and Allianz has about $360 billion in assets based on 1998 year-end figures). However, the California DOI is holding up the deal by requiring Allianz to first release all the names of unpaid policyholders who were victims of the Holocaust during WWII, in response to recently passed state legislation. (Wall Street Journal, C1, 11/1/99; National Underwriter, page 19, 10/18/99 and page 3, 11/8/99)
  
  
• Allmerica Financial Corporation reached an agreement to acquire Advantage Insurance Network Inc. (AIN), a group of affiliated life insurance agencies/independent marketing organization, based in 22 major markets across the country, representing more than 4,000 insurance agents. Terms were not disclosed. (FBO NewsbyWire, 7/27/99)
  
  
• Allstate agreed to buy American Heritage Life Investment Corporation, the third-largest work-site marketer, for $900 million and assume $200 million in debt. AHLC will continue to do business under their current name. Under the merger agreement, AHLC shareholders would receive $32.25 for each American Heritage Life share, which puts a value on the deal of $1.1 billion. Transaction is subject to approval by the shareholders of American Heritage Life and requisite regulatory authorities. (FBO NewsbyWire, 7/11/99; National Underwriter, page 3, 7/19/99; Wall Street Journal, A4, 7/12/99)
  
  
• Allstate purchased the personal lines business from CNA for an estimated $250 to $320 million over six years. The new entity will be called CNA Personal Insurance, and will manage the business as a separate independent agent company. The new $1.7 billion company will continue to sell CNA personal lines products through the 3,800 independent agents licensed to sell CNA products. CNA will have an ongoing interest in the new company through a $75 million 10-year equity-linked note. CNA will have a special advisor to the board of CNA Personal Insurance and will receive a royalty fee for six years. (FBO NewsbyWire, 6/23/99; Wall Street Journal, B20 6/10/99, A4 7/12/99, and A38 10/4/99)
  
  
• Anthem purchased Blue Cross and Blue Shield of Colorado and Nevada for $215 million (originally valued at $165 million), with 475,000 members. The new name is Anthem Blue Cross and Blue Shield. As part of the transaction to for-profit status, the Caring for Colorado Foundation received $155 million from Anthem. (Modern Healthcare, 3/15/99; National Underwriter, 3/22/99; National Underwriter, 4/5/99; Modern Healthcare, 4/5/99; National Underwriter, page 50, 9/6/99; FBObyWire, 11/16/99; Modern Healthcare, page 48, 11/29/99)
  
  
• Anthem agreed to buy Blue Cross and Blue Shield of Maine for $120 million with 380,000 enrollees. Up to $100 million of the purchase price will be used to fund a new charitable foundation for Maine residents. (Modern Healthcare, page 12, 7/19/99 and page 24, 9/27/99)
  
  
• Anthem purchased Blue Cross and Blue Shield of New Hampshire for $120 million. $40 million will be used to pay off Blues’ debts and the remainder will go toward creating nonprofit charitable trust for health programs in NH. Anthem is looking for similar deals with other Blue Cross plans. (National Underwriter, 2/8/99; Modern Healthcare, 2/22/99; Modern Healthcare, page 40, 8/9/99)
  
  
• Assicurazioni Generali SpA of Italy, the third-largest insurer in Europe, agreed to buy Istituto Nazionale delle Assicurazioni SpA, which will strengthen their ability to better compete with Allianz in shopping overseas. (Wall Street Journal, A15, 11/5/99)
  
  
• Axa Group plans to pay as much as $1.97 billion to acquire control of Nippon Dantai, Japan’s 13th largest life insurer, by forming a newly created holding company called Axa Nichidan. (National Underwriter, page 38, 12/6/99; Wall Street Journal, A21, 11/30/99)
  
  
• Axa Group will acquire London-based Royal Guardian Exchange for $5.6 billion in cash and stock, making AXA Britain’s second largest health insurer and third largest P&C insurer and increasing Axa’s place in Ireland and Germany. (Wall Street Journal, 2/2/99; National Underwriter, 2/8/99)
  
  
• AXA China Region with its joint-venture partner, China Minmetals Group (AXA-Minmetals), received approval by Chinese authorities to begin life insurance operations in Shanghai. The company is 51% owned by AXA China and 49% by Minmetals. (National Underwriter, page 28, 6/7/99)
  
  
• Beyond Benefits PPO of California agreed to buy HealthStar PPO of Chicago for $10 million in cash and 5% of Beyond Benefits stock. (Modern Healthcare, page 40, 10/18/99)
  
  
• Blue Cross and Blue Shield of Texas (owned by Health Care Service Corp, which also owns Blue Cross and Blue Shield of Illinois) agreed to acquire most of Texas NYLCare operations from Aetna Inc’s Aetna U.S. Healthcare subsidiary for $500 million. Aetna would retain responsibility for 105,000 NYLCare Texas Medicare members through a reinsurance and administrative services agreement. Aetna’s sale was in compliance with Texas’ state and federal regulators to sell NYLCare of Texas to ease concerns about Aetna’s dominance in Texas. (National Underwriter, page 56, 9/27/99)
  
  
• Blue Cross and Blue Shield of Wisconsin has requested conversion to for-profit status. The Blues proposed turning over the proceeds of a stock sale worth about $250 million to forming a new not-for-profit foundation for the Medical College of Wisconsin and the University of Wisconsin to develop public health initiatives. (Modern Healthcare, page 4, 10/4/99)
  
  
• Ceres Group, Inc agreed to buy The Pyramid Life Ins Co from United Insurance Company of America, a subsidiary of Unitrin, Inc. Ceres Group will also provide specialty medical ins products to the agent distribution systems of selected Unitrin subsidiaries over three years.
  
  
• Chubb Corp. will acquire Executive Risk Inc. for about $810 million in stock, which will increase their presence in the commercial P&C marketplace. (Wall Street Journal, A4, 2/9/99)
  
  
• CIGNA Financial Services, CIGNA Corp.’s discount brokerage subsidiary, entered into an agreement with First National Bank of New England to provide the bank’s customers with investment products and services. (National Underwriter, 1/25/99)
  
  
• CIGNA Int’l, a unit of CIGNA Corp, signed a 10 year agreement with BC Card Co, Ltd to market and sell insurance in Korea. BC Card Co is a Korean financial services company currently selling life, health and accident insurance underwritten by CIGNA’s Korean unit. (National Underwriter, page 38, 11/15/99)
  
  
• ConnectiCare will take over most of Kaiser Permanente’s 50,000 enrollees in Connecticut, as part of Kaiser’s plans to exit Connecticut. The terms were not disclosed. Kaiser also Massachusetts, New York, North Carolina and Vermont. (Modern HealthCare, page 4, 10/11/99)
  
  
• Coventry Health Care purchased Camcare’s managed care subsidiary Carelink Health Plans for about $8 million in cash, and now claims to cover 74% of West Virginia’s population. (FBObyWire Digest, 10/5/99)
  
  
• Coventry Health Care’s subsidiary, Principal Health Care of the Carolina’s, Inc., completed acquisition of Kaiser Foundation Health Plan of North Carolina’s commercial membership, which doubles Coventry’s membership in the Charlotte market. Coventry Health Care, a managed health care company, operates health plans under the names Principal Health Care, HealthAmerica, HealthAssurance, HealthCare USA, Group Health Plan, Southern Health and Carelink. They provide a full range of managed care products and services to 1.4 million members in a broad cross section of employer and government-funded groups in 16 markets throughout the Midwest, Mid-Atlantic and Southeast United States. (FBObyWire, 11/1/99)
  
  
• Coventry Health Care agreed to buy Anthem’s West Virginia subsidiary, PrimeOne for undisclosed terms. (Modern Healthcare, page 4, 11/15/99)
  
  
• ERC Life, a life subsidiary of GE’s Employers Reinsurance Corp will assume the life and group reinsurance business of Phoenix Home Life Mutual Ins Co. Terms of the agreement were not disclosed. The addition of the Phoenix life reinsurance business with ERC Life’s existing businesses will make ERC the second largest life reinsurer in the United States, based on 1998 new business reinsured. (FBO NewsbyWire, 5/23/99)
  
  
• The Fidelity Group and the National Association of Business Owners and Professionals (NABOP), of Great Neck, New York, was issued a permanent cease-and-desist order from the Pennsylvania Insurance Department for soliciting business without a license. The Pennsylvania DOI reports that NABOP and Fidelity have more than $800,000 in unpaid claims and their state and another $7 million in outstanding claims in other states. Fidelity and NABOP formed a multiple-employer welfare arrangement (MEWA) in several states. MEWAs are subject to regulation by state insurance departments and the U.S. Department of Labor. Usually, a MEWA uses a third-party administrator, which pools the funds of many employers to self-fund accident and health benefits. (FBO NewsbyFax, 1/31/99)
  
  
• Fortis NV agreed to buy American Bankers Ins. Group for $2.6 billion. American Bankers specializes in credit-related insurance, and ends roller-coaster ride with Cedant’s attempt to buy them. (Wall Street Journal, A3, 3/8/99)
  
  
• GE Capital Corp. agreed to buy the leasing business of Japan Leasing Corp., an affiliate of the insolvent Long-Term Credit Bank of Japan. GE Capital bought $7 billion of assets and seeks to establish a bold presence in Asian financial services market. (Wall Street Journal, 1/5/99 & 1/25/99)
  
  
• GE Financial Assurance (the consumer investment and insurance arm of GE Capital, the subsidiary of General Electric) has merged some of its affiliate companies. Harvest Life merged into Life Insurance Co. of Virginia and was renamed GE Life and Annuity Assurance Co. Great Northern Insured Annuity Corp. merged into General Electric Capital Assurance Co. PHF Life Ins. Co. merged into Union Fidelity Ins. Co. (National Underwriter, 3/1/99)
  
  
• GE Financial Assurance agreed to purchase Phoenix’s Group Insurance, a worksite benefits business that serves small and medium size companies, subsidiary of Phoenix Home Life Mutual Insurance Company. Terms were not released. GE Financial Assurance will also acquire the operations of two Phoenix third party administrators and its West Coast dental health management operation. GE says its expects the deal to close near the end of March 2000. (FBObyWire, 12/9/99)
  
  
• General American Corp. (GenAmerican) planned to demutualize from a mutual holding company and go public. (FBO NewsbyFax, 1/31/99)
  
  
• Great-West Life & Annuity Ins Co will buy the group life and health of Allmerica Financial Corp of Massachusetts, which covers 400,000 medical members. (FBObyWire, 10/12/99; National Underwriter, page 50, 10/18/99)
  
  
• Great-West Life & Annuity Ins Co agreed to buy the group health and “Related Products Division” of General American Life Ins Co. The transaction covers over one million members and $1.9 billion of premium, compared to Great-West’s current 2.5 million members and $5 billion premium. GenAm members will have access to Great-West’s subsidiary, One Health Plan. (FBObyWire 11/23/99)
  
  
• Guardian Life Insurance Company of America entered into a merger agreement with Chicago-based First Commonwealth, Inc. Guardian will acquire all of the outstanding shares of First Commonwealth’s capital stock for $25.00 per share in cash, subject to regulatory approval. First Commonwealth covers about 680,000 members. The acquisition is expected to accelerate Guardian’s plans to extend its managed dental HMO business nationally. (FBO NewsbyWire, 5/23/99; Wall Street Journal, B2, 5/20/99)
  
  
• Harvard Pilgrim Health Care’s Rhode Island operation ceded control of the plan to the state’s Department of Business regulators, by falling below the state’s minimum capital requirement of $100,000. The 155,000 members will have to find other coverage (Modern HealthCare, page 4, 10/11/99; Modern HealthCare, page 60, 11/8/99)
  
  
• Health Care Service Corp (HCSC), parent of Blue Cross and Blue Shield plans of Texas and Illinois, paid $99.5 million in cash to buy Harris Methodist Health Plan of Arlington Texas. HCSC will also buy Texas Health Resources HMO. (Modern Healthcare, page 17, 4/19/99)
  
  
• Health Care Service Corp (HCSC), parent of Blue Cross and Blue Shield plans of Texas and Illinois, plans an alliance or combination with Blue Cross and Blue Shield of Missouri (RightChoice). HCSC has paid $6.6 million to buy 3.7% of the common stock and 0.5% voting power of RightChoice Managed Care, the Missouri Blue’s for-profit publicly traded subsidiary. (Modern Healthcare, page 58, 11/8/99; National Underwriter, page 30, 11/15/99)
  
  
• HUK-Coburg and Haftpflichtverband der Deutschen Industrie will merge to create Germany’s third largest private insurance group, in efforts to compete with Allianz. However the new company will be only one-fifth the size of market leader Allianz in terms of premiums. (Wall Street Journal, A21, 5/6/99)
  
  
• Humana assumed operational responsibility for the major PPO provider network that its small-group business uses effective August 1, 1999, Private Healthcare Systems (PHCS). The new provider network will be named ChoiceCare Network and will include more than 300,000 physicians and 2,500 hospitals in 46 states. (Humana, July 1999)
  
  
• Humana made an agreement with CUNA Mutual Group to become their “exclusive supplier of PPO and indemnity health and dental insurance products to CUNA Mutual’s credit union customers in 34 states” as well as Humana’s HMO and POS health and dental insurance products on a non-exclusive basis in markets they are available. (FBO NewsbyFax, 3/13/99)
  
  
• Humana will purchase the Memorial Sisters of Charity Health Network (MSCHN), a 131,000-member Houston-based health plan. MHHS and Christus Health are not-for-profit parent organizations of MSCHN. Terms of the agreement were not disclosed. (FBObyWire, 11/18/99)
  
  
• ING America Ins. Holdings will buy the United Life and Annuity unit along with Cyberlink Development and certain assets of PennCorp Financial Group. (FBO News-by-Fax, 3/7/99)
  
  
• Jefferson-Pilot Corp agreed to buy the Guarantee Life Cos for $411 million, half in cash and half in stock, to boost sales of life and disability insurance to employee groups. The addition of Guarantee Life’s $148 million in annual group life and disability premiums will more than double the size of Jefferson-Pilot’s group business. (FBObyWire Digest, 9/20/99)
  
  
• John Hancock Financial Services filed to sell about $2.04 billion of common stock in an IPO as part of the reorganization of John Hancock Mutual Life Ins Co from a mutual to a publicly traded stock company. Hancock needs the approval of the Massachusetts Commissioner of Insurance to continue with its planned IPO, worth about $2 billion, expected to launch in February. (Wall Street Journal, A6, 9/20/99; FBObyWire, 12/3/99)
  
  
• John Hancock Mutual Life bought Essex Corp., a third-party marketer, from Cedent Corp. Essex distributes mutual funds, annuities and life insurance through banks, and will remain independent in operations. (National Underwriter, 2/1/99)
  
  
• Liberty Int’l, subsidiary of Liberty Mutual Group, took their first steps into Southeast Asia by purchasing controlling interest in Citystate Insurance, a health, auto, home and commercial insurance provider that operates in Singapore, Hong Kong and the Philippines. (National Underwriter, page 38, 11/15/99)
  
  
• Life USA Holding acquired the assets of Pinnacle USA Inc, a national insurance and annuity marketing organization. (FBObyWire, 5/8/99)
  
  
• Lincoln National Life Ins. Co. created AnnuityNet.com as their marketing and direct distribution unit. AnnuityNet.com announced a “unique multi-year, multi-million dollar relationship with Quicken.com. (FBO News-by-Fax, 1/16/99)
  
  
• Manufacturers Life Insurance Company policyholders agreed to demutualize on July 29, 1999. The company hopes to offer its IPO this fall. Policyholders have the choice of taking cash, shares or a fifty-fifty combination, a feature that is so far unique to Canadian demutualizations. (FBO NewsbyWire, 7/30/99)
  
  
• Manulife Financial will pay about $700 million to buy the operations of financial troubled Daihyaku Mutual Life Ins. Co., a midsize Japanese life insurance company. (National Underwriter, 2/15/99)
  
  
• Massachusetts Mutual Life announced the formation of a Thrift Charter which will operate as a federal savings bank, called The MassMutual Trust Company, F.S.B. (FBObyWire, 11/19/99)
  
  
• MetLife will acquire GenAmerica, parent company of General American Life and its subsidiaries for approximately $1.2 billion in cash and $6 billion or so owed to institutional investors. GenAmerica Corporation is a holding company whose operations include General American Life Insurance Company, with approximately $29 billion in assets, Reinsurance Group of America, one of the largest reinsurers in North America, and Conning Corporation, a leader in managing assets and providing research for the insurance industry. The agreement is subject to approval by the Missouri DOI. MetLife intends on maintaining General American’s headquarters in St. Louis. (FBO NewsByWire Digest, 8/26/99; National Underwriter, page 1, 8/30/99; Wall Street Journal, B7, 8/27/99)
  
  
• Metropolitan Life acquired Lincoln National Life’s block of 68,000 individual disability income insurance business. MetLife will provide administrative services and indemnity reinsurance for Lincoln National’s inforce individual disability income insurance business. This business generates approximately $62 million in annual premium. In return, Lincoln National has transferred approximately $500 million in statutory reserves to MetLife. This transaction doubles MetLife’s individual disability income insurance business. (National Underwriter, page 3, 5/17/99; FBObyWire Digest, 11/13/99)
  
  
• MetLife agreed to buy the personal insurance business of St. Paul Cos for about $600 million, which would almost double the size of MetLife’s personal lines unit in RI. St. Paul Cos plan to focus on their business and professional insurance lines. (Wall Street Journal, B6, 7/13/99)
  
  
• Metropolitan Life Ins Co, the second-largest life insurer in the U.S., filed plans to demutualize and launch an initial public offering of shares worth up to $6.5 billion, which would make it the largest IPO in the U.S. (FBObyWire, 11/23/99)
  
  
• Mid-South Ins Co, a subsidiary of Trigon Healthcare, plans to exit the health insurance market as of April 30, 2000, affecting about 100,000 small group and individual members in rural North Carolina, South Carolina and Georgia. (FBObyWire, 10/12/99; National Underwriter, page 1, 11/29/99)
  
  
• MultiPlan, a national PPO based in New York, purchased Advantage Health PPO of Louisiana for an undisclosed amount. (Modern Healthcare, page 17, 4/19/99)
  
  
• National Bancshares Corp. of Texas and its subsidiary offered to buy PennCorp Financial Group for $1 a share in cash, which is 78% more than the insurer’s shares were worth yesterday. National Bancshares is a bank holding company with locations across Texas. The offer marks one of the first attempts by a bank to buy an insurance company following the enactment of the law to break down “Depression-era walls between banking, insurance and securities firms.” (FBObyWire, 11/24/99)
  
  
• New York Life Ins Co plans to buy Seguros Monterrey Aetna, SA of Mexico for $570 million, from owners Aetna Int’l and Grupo Financiero Bancomer, SA. NYL is “bullish on Mexico” with less than 2% of their population owning life insurance. Seguros sells life, health, accident and P&C. (National Underwriter, page 1, 12/13/99)
  
  
• North West Life Assurance Company of Canada, a subsidiary Industrial-Alliance, on June 1st 1999, assumed all insurance obligations and the business operations of Seaboard Life. The combined company is operating under the common name of The North West Life Assurance Company of Canada. The group, which has assets under management in excess of $12 billion, is currently the 7th largest life insurance organization in Canada. (FBO Digest, 8/27/99)
  
  
• PacifiCare of California agreed to buy Harris Methodist Health Plan, a money-losing managed-care plan with about 300,000 members in Texas. PacifiCare has developed plans making the acquisition profitable by the year 2001. Both companies declined to disclose the terms of the agreement. PacifiCare said it planned to buy back up to a quarter of its own stock, which has a market value of about $4 billion. (FBObyWire Digest, 11/13/99)
  
  
• PacifiCare of Colorado completed purchase of Antero Health Plans’38,000 enrollees, making PacifiCare the largest plan in Colorado. (Modern Healthcare, page 38, 9/13/99)
  
  
• Pacific Life Ins Co acquired a payout annuity block of business from Confederation Life (the U.S. branch of Canada’s insolvent Confederation Life Ins. Co. The block is valued at about $2 billion. This is the third block of business in rehabilitation awarded to Pacific Life.
  
  
• PM Group Life Ins. Co. applied to change its name to Pacific Life & Annuity Co. They are applying for authorization to do business under their new name in all states in which they do business. (PM Group, 1/99)
  
  
• Principal Financial Group agreed to buy Australian money-management and investment-banking assets of Bankers Trust Corp, from its parent, Deutsche Bank AG, for about $1.4 billion. Deutsche Bank will receive $788 million in surplus capital from BT Australia. (Wall Street Journal, A6, 6/18/99)
  
  
• Principal Health Care of the Carolinas, a subsidiary of Coventry Health Care, signed an agreement 7/27/99 to buy Kaiser Foundation Health Plan of North Carolina’s commercial membership in Charlotte, NC. Kaiser’s Charlotte operation currently has approximately 31,000 HMO and Point-of-Service (POS) members and generates approximately $53 million in annual revenue. Principal Health Care of North Carolina, with approximately 21,000 members, is expected to more than double its share of the Charlotte market as a result of this transaction. Terms of the transaction were not disclosed. Kaiser is also selling or closing HMOs in New York, Connecticut, Massachusetts and Vermont. (FBO NewsbyWire, 7/28/99; Modern Healthcare, page 32, 8/9/99; Wall Street Journal, B12, 6/21/99)
  
  
• Prudential Ins. Co. of America is opening a new subsidiary to sell life insurance to high-income residents of Argentina, Prudential Seguros, S.A. The 5-year investment cost is $50 million. The subsidiary Prudential opened in Brazil two years ago is doing better than originally expected. (National Underwriter, 3/8/99)
  
  
• Prudential Corp. PLC (Prudential of the U.K.) offered $3.09 billion for M&G Group, a British fund manager. (Wall Street Journal, A13, 3/12/99)
  
  
• ReliaStar Financial Corp agreed to acquire Pilgrim Capital Corporation, an asset management and mutual fund company, in a stock-and-cash transaction valued at $258 million. ReliaStar said this acquisition will give the company greater economies of scale in its mutual fund operation, resulting in lower unit costs and increased sales and profitability. (FBO NewsbyWire, 7/30/99)
  
  
• ReliaStar Financial Corp agreed to buy Financial Northeastern Companies (FNC), a broker/dealer and CD broker, for an undisclosed amount. (FBObyWire, 5/8/99)
  
  
• Blue Cross and Blue Shield of Missouri will convert to a completely for-profit company and merge into the health plan’s for-profit subsidiary, RightChoice. The not-for-profit assets will be used to form a healthcare foundation, which would receive $12.8 million and own 80% of the stock of RightChoice. (Modern Healthcare, page 14, 3/22/99)
  
  
• SAFECO Life & Investments plans to purchase the medical excess loss and group life of ING Medical Risk Solutions, the Atlanta-based division of ING Group, for $34.8 million. (PIIAI Association Brief, 11/1/99)
  
  
• Sierra Health Services completed purchase of a portion of Mutual of Omaha’s Texas business, effective June 1, 1999. Included in the sale was the HMO and POS membership of Exclusive Healthcare, Inc. (EHI), a Mutual of Omaha subsidiary in the Dallas/Fort Worth area, the affiliated PPO customers of United of Omaha Life Insurance Company (United of Omaha), another Mutual of Omaha affiliate. Sierra said the sale did not include Mutual of Omaha’s or United of Omaha’s individual policyholders or employers who offer a stand-alone PPO option in Texas. (FBO NewsbyWire, 5/26/99)
  
  
• Swiss Re Co plans to buy the property and casualty reinsurance business from Alleghany Corp for $725 million. (Wall Street Journal, B15, 12/7/99)
  
  
• Swiss Re Life & Health America agreed to buy Allied Life Financial Corp from Nationwide Mutual Ins Co. Allied Life had over 97,000 life and annuity policies plus long-term care sold through 9.500 independent agencies. (FBObyWire, 5/16/99)
  
  
• Swiss Re Life & Health, a division of Swiss Re Group, will buy all the stock of Royal & SunAlliance’s U.S. life companies: Royal Macabees Life Ins. Co. and Royal Life Ins. Co. of New York, from its parent company Royal & Sun Alliance Insurance Group plc, London. The deal is valued at $380 million and expected to close July 1999. Royal and SunAlliance U.S.A. will focus on their core P&C business. (FBO NewsbyFax, 3/7/99; FBO NewsbyWire, 7/30/99)
  
  
• Transamerica Re, of Transamerica and Aegon USA, will open offices in Argentina, Brazil, Mexico, Japan and Korea. Aegon bought Transamerica for $410.8 billion in July 1999. (National Underwriter, page 28, 11/1/99)
  
  
• Tufts Health Plan plans to discontinue operations to its 70,000 members in Maine as of 4/1/2000 due losses. Members must transition to other state carriers and cannot be refused. (FBObyWire, 10/5/99)
  
  
• Unum Corp and Provident Cos completed their merger into UnumProvident Corp on June 30, 1999. The stock pooling created the largest disability insurer in the world, with $8.5 billion in revenue, $6.2 billion in premium and $13 billion market value. (National Underwriter, page 3, 7/5/99)
  
  
• UnumProvident affiliate will reinsure New York Life’s in-force individual disability income block of business through a 100% indemnity modified coinsurance agreement and an administrative services agreement. New York Life agents currently market UnumProvident’s individual disability income products. (FBObyWire, 11/17/99)
  
  
• WellPoint Health Networks, which operates Blue Cross of California and UniCare, will acquire Cerulean Cos, the parent of Blue Cross and Blue Shield of Georgia, for $500 million. (Modern Healthcare, page 14, 3/22/99)
  
  
• WellPoint Health Networks, the parent company of UniCare Life & Health, agreed to acquire Rush Prudential Health Plans of Illinois for about $200 million. Rush Prudential has over 300,000 members and will make WellPoint the third-largest health insurer in Illinois. The transaction is expected to close first quarter 2000. Rush Prudential’s 10 Anchor medical offices are not part of the deal. (Crain’s Chicago Business, page 1, 11/22/99 and page 59, 12/13/99; Wall Street Journal, B9, 12/10/99; UniCare and WellPoint news release 12/9/99 and 12/10/99)
  
  
• Western and Southern Life Ins Co reported that it had signed a letter of intent to acquire Integrity Life Ins Co and National Integrity Life Ins Co, subsidiaries of the ailing ARM Financial Group of Kentucky. Integrity Life currently under administrative supervision by the Ohio Insurance Department. There are no assurances that a final agreement will be reached. (FBObyWire, 12/2/99)
  
  
• XL Capital Ltd. will buy NAC Re Corp. for about $1.14 billion in stock, which will create an avenue for XL to solicit U.S. business. NAC will keep its name. (Wall Street Journal, B10, 2/17/99)

Compiled by Ingrid Faro, President of Combined Employers Association and The Combined Group in Gurnee, Illinois. Ingrid is editor of The Forum of the Illinois State Association of Health Underwriters. She holds a Masters Degree in Associated Medical Sciences from the University of Illinois Medical Center. Ingrid can be reached at 847-975-7801 or ingrid@thecombinedgroup.com.

riskVue | The webzine for risk management professionals
February 2000