Tuesday, August 27, 2013

Insurance Commissioner Issues Conditional Approval of Athene Purchase of Aviva

August 15, 2013, DES MOINES, IOWA – Iowa Insurance Commissioner Nick Gerhart today approved the acquisition of Aviva Life and Annuity Company and subsidiaries (ALAC) by Athene/Apollo, subject to conditions.

A hearing regarding the form filing for the proposed sale was held on July 17, with Commissioner Gerhart presiding as the hearing officer. The Division has carefully proceeded with its analysis of the filing and other information from the hearing and elsewhere.  The result of this process is found in the Commissioner’s approval order and is conditional upon the following:

1.       ALAC will pay no ordinary or extraordinary dividends or other distributions to shareholders for five years, unless approved by the commissioner.

2.       Any changes in the company’s plan of operations will require the prior approval of the commissioner after it submits a revised Plan of Operations and Financial Projections.

3.       ALAC must submit to the commissioner a process acceptable to the commissioner all affiliated agreements and investments subject to 521A(5)(b) or (c) below the materiality threshold, providing the regulator with greater scrutiny of affiliated investments and agreements.

4.       All non-variable deferred annuities containing guaranteed minimum death benefits or withdrawal benefits issued by ALAC subsequent to December 31, 2013 will meet reserving standards of Actuarial Guideline 33.

These conditions are in addition to enhanced reserving measures voluntarily offered by Athene as part of its filing and submissions for the July 17 hearing.  Specifically, Athene will voluntarily increase policy reserves by an additional $150 million and the company will submit itself to a Capital Management Agreement for capital and surplus requirements under Iowa Code Chapter 521E as approved by the commissioner. Taken together, the voluntary increased reserving and the conditions described by the commissioner enhance greater scrutiny of consumer protection and long-term company viability.

Not just for this company, but for any company applying for the use of Actuarial Guideline 43 for non-variable deferred annuities containing guaranteed death benefits or withdrawal benefits, such an application will not be approved by the Insurance Division for the foreseeable future.  Instead, the Division will continue the use of the more traditional Actuarial Guideline 33 for such companies.

“We’re very pleased that we can expect to see this company continue its operations in Iowa under new ownership, while maintaining for the Division appropriate oversight of its activities going forward,” said Gerhart.  “This review of the proposed purchase has been a good process dealing with an important transaction.  Going forward, this company will now join Iowa’s other fine domestic companies in the same pattern of required financial filings and on-site examinations with which we have maintained Iowa’s record for insurance company solvency for decades.”


About the Iowa Insurance Division

The Iowa Insurance Division (IID) has general control, supervision and direction over all insurance and securities business transacted in the state, and enforces Iowa’s insurance and securities laws and regulations. The IID investigates consumer complaints and prosecutes companies, agents and brokers engaging in unfair trade practices. Consumers with insurance or securities-related questions or complaints may contact the IID toll free at 877-955-1212 or visit the Division on the web at www.iid.state.ia.us.