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JUNE
29 - JULY
5, 2009
BANKS’ BOLI ASSETS CLIMB TO $126.1 BILLION
Bank-owned life insurance (BOLI) assets held by U.S. bank holding
companies (BHCs) and U.S. stand-alone banks rose 5% in 2008 to $126.1
billion, up from $120.4 billion in 2007 as BHC holdings increased 5.2%
to $123.7 billion, enough to overcome a 5.3% slide in stand-alone bank
holdings to $2.38 billion, according to the Michael
White-Meyer-Chatfield BOLI Holdings Report.
Over 80% (81.2%) of large top-tier BHCs reported BOLI, while less
than 30% (28.6%) of stand-alone banks reported BOLI holdings, the report
shows.
The mean
of BOLI assets as a percent of total capital at U.S. BHCs slipped to
13.37%, down from 13.74% in 2007, with BHCs with over $10 billion in
assets recording the highest mean (18.8%).
The numbers meet federal regulators “prudent” assessment that
depository institutions’ BOLI assets (cash surrender values of life
insurance) not exceed 25% of total capital, i.e., Tier 1 capital or the
sum of Tier 1 capital and the allowance for loan and lease losses,
according to the Michael
White-Meyer-Chatfield BOLI Holdings Report.
For
more on the report, click here.
THE
HARTFORD ACQUIRES FEDERAL TRUST CORPORATION
Hartford, CT-based The
Hartford Financial Services Group has acquired Sanford, FL-based, $580.4
million-asset Federal Trust Corporation.
The $10 million cash deal includes Federal Trust Bank and its 11
branches in five Florida counties.
Federal Trust will continue to operate under the Federal Trust
name. The Hartford
Financial Services Group Chairman and CEO Ramani Ayer said, “The
acquisition represents the last significant step towards the closing of
our investment agreement with Treasury and by which The Hartford sold
$3.4 billion in preferred stock to the U.S. government under the
Troubled Asset Relief Program (TARP).”
PRUDENTIAL WILL SELL BACK
ITS STAKE IN WELLS FARGO ADVISORS TO WELLS FARGO
Newark, NJ-based Prudential Financial announced it will exercise its
“look-back” option and will sell its stake in Wells Fargo Advisors
to Wells Fargo. The cash,
stock or cash and stock price will be based on the appraised value of
the joint venture Prudential formed with Wachovia in 2003 and will not
include the value of the AG Edwards business, which Wachovia purchased
and merged into Wachovia Securities on January 1, 2008.
The appraised value will be based on the worth of the joint
venture on that date. Wells
Fargo acquired the securities brokerage when it purchased Wachovia
Corporation on December 31, 2008.
CONNING FORECASTS NET
STATUTORY OPERATING GAIN FOR INSURERS IN 2009
Life insurers achieved an estimated statutory net loss of $51
billion in 2008, as their surplus and Asset Valuation Reserve (AVR)
combined fell 13% to $273 billion, according to Hartford, CT-based
Conning Research and Consulting. The
firm forecasts that realized and unrealized capital losses will continue
to plague the life-annuity industry but expects insurers to show a net
statutory operating gain in 2009, as they adjust to changing regulations
and work to rebuild capital. Conning
projects that by 2011 consumer demand for estate planning, stable
investments and protection will drive premium growth.
By then, Conning Research Director Stephen Christiansen said,
“We project that surplus plus AVR will increase 23% to $337
billion.” To
access Conning’s “Life-Annuity Forecast & Analysis: Midyear
2009,” click here.
LINCOLN NATIONAL
VINDICATED: COURT UPHOLDS PATENT INFRINGEMENT RULING AGAINST AEGON
Philadelphia-based Lincoln National Life Insurance Company was
upheld by the Federal District Court in Iowa in its patent infringement
lawsuit against three AEGON U.S.A. companies: Transamerica Life
Insurance Co., Transamerica Financial Life Insurance Co., and Western
Reserve Life Assurance Co. of Ohio.
A jury had earlier (February 2009) decided that Lincoln
National’s patent for a computerized method for administering variable
annuity products that combined guaranteed minimum payment features with
systematic withdrawal programs was valid.
The Federal District Court agreed that the AEGON companies had
infringed on Lincoln National’s patent and that $13.1 million in
damages was appropriate. In
addition, the judge entered an injunction against the companies
enjoining them from using a computer to administer new or existing
riders in any infringing manner. The
AEGON USA companies have initiated an appeal to the Federal Circuit
Court of Appeals.
AIG TO SELL AIG UNIVERSAL
TO MEXICAN CONSORTIUM
New York City-based American International Group has agreed to sell
Mexico-based AIG Universal S.A. de C.V. SOFOME. N.R. (AIG Universal) and
Markcenter Services, S. de R.L. de C.V. to a consortium headed by Afirme
Grupo Financiero and Consorcio Villacero.
AIG Universal sells banking and insurance products to its 50,000
customers through a network of 50 branches across 12 states in central
and northern Mexico, BestWire reports.
AEGON
BUYS OUT FORMER PARTNER’S STAKE IN BT AEGON
The Hague, Netherlands-based
AEGON has paid €11 million ($15.5 million) to acquire Romania-based
Banca Transilvania’s 50% stake in BT AEGON, the Romanian pension
business the companies formed in 2008.
AEGON and Banca Transilvania have agreed to a partnership whereby
Banca Transilvania will continue to offer AEGON life insurance and
pension products to its more than one million customers through its 500
branches throughout Romania.
NATIONAL AUSTRALIA
BANK TO ACQUIRE BUSINESS LINES
FROM AVIVA AUSTRALIA HOLDINGS
Sydney, Australia-based,
National Australia Bank (NAB) has agreed to pay A$925 million (US $747.2
million) to acquire the investment platform and life, pension, and
health management business of Melbourne, Australia-based Aviva Australia
Holdings from London-based Aviva plc.
Aviva said that when the deal is completed in the third quarter,
pending regulatory approval, NAB will become the largest life insurer
and investment platform provider in Australia.
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