XL Life to reinsure US term life treaties
XL Life, the subsidiary of global re/insurance firm XL Group, has entered into a definitive agreement to reinsure a block of US term life treaties to a subsidiary of Reinsurance Group of America (RGA).
The transaction includes all US term life reinsurance policy reserves and cedes 80 percent of the remaining life reinsurance premiums that were not included in the company’s 2014 sale of its life reinsurance subsidiary, XL Life Reinsurance.
XL announced the run-off of its life reinsurance business in 2009.
“Over the past few years, through a series of strategic steps, we have made XL Catlin a stronger and more disciplined company focused on our core property and casualty operations,” said Mike McGavick, chief executive officer of XL.
“This transaction will remove the vast majority of risk associated with our remaining run-off life exposures and we’re pleased to make today’s announcement as just one more step taken toward delivering and creating increasing value for clients and shareholders.”
As of September 30, 2015, XL had total US generally accepted accounting principles (GAAP) policy benefit reserves relating to this block of business of approximately $258 million.
The company expects to record a net GAAP loss of approximately $34 million associated with the transaction.
