Canada’s fourth-biggest insurer Industrial Alliance Insurance and Financial Services Inc. said Friday it has acquired the life insurance policies of California-based Golden State Mutual for US$11 million. The transaction was carried out through Quebec-based Industrial’s wholly owned U.S. subsidiary, IA American Life Insurance Co., based in Scottsdale, Arizona.
The Golden State block of business involves 120,000 life policies with a face amount of almost US$500 million. For the year ended Dec. 31, 2009, total premiums amounted to US$9 million and invested assets were US$70 million, according to Industrial Alliance’s news release on Friday.
“The acquisition, which will not bring additional goodwill to the balance sheet, is expected to generate a return on shareholders’ equity consistent with the company’s target guidance of 12 to 14 per cent,” the Quebec company said.
Golden State Mutual was formerly the largest minority owned life insurance company in California, providing traditional life insurance products to mid-market customers in 17 states. GSM was placed into conservation on Sept. 30, 2009, when its capital position dropped below California minimum law requirements.
Industrial Alliance employs more than 3,500 people and manages some C$60 billion (€45 bn) in assets, offers a wide range of life and health insurance products. It ranks behind Manulife Financial, Great-West Lifeco and Sun Life Financial among Canada’s largest life insurers. The company’s stock was up 89 cents at $31.95 at midday Friday on the Toronto Stock Exchange.
