Salt Lake-based Beneficial Life Insurance Co. has signed a letter of intent to sell its wholly owned subsidiary, Continental Western Life Insurance Co. to the Mutual Group (U.S.) Inc., Brookfield, Wis.
The purchase is subject to regulatory approvals and completion of a final agreement. The transaction is expected to be completed within 90 days.Ken Evason, president and chief executive officer of the Mutual Group, said the acquisition gives his company several advantages. "We have been looking for additional distribution channels to bring our products to the public."
Evason said, "We saw in Continental Western an opportunity to expand our existing universal life insurance and annuity operations and increase our market penetration, since their products and distribution system complement our own."
Continental Western had total assets of $345 million and $4.8 billion worth of insurance in force on Dec. 31, 1993. It has an A rating from A.M. Best Co. and has had a steady growth and profitability in recent years, Evason said.
Jay Horrocks, Beneficial Life president and chief executive officer, said the transaction will benefit Beneficial and Continental Western policyholders. "This transaction permits Beneficial Life to consolidate its operations and refocus on further enhancing its quality products and services," he said.
"The Mutual Group also brings to Continental Western the same kind of strong financial backing and management expertise previously provided by Beneficial Life," Horrocks said. Beneficial Life has $1.4 billion in assets, $120 million capital and surplus and is rated A plus by A. M. Best.
The Mutual Group is the parent company of TMG Life Insurance Co., which is rated A plus by A.M. Best and has a claims-paying rating of AAA from Standard & Poors. It is licensed to do business in 48 states, has 120,000 individual life policies in force and more than $1 billion in assets.