In-force policies assumed under reinsurance agreement
QUEBEC CITY, Sept. 3 2010 – Industrial Alliance Insurance and Financial Services Inc. (“Industrial Alliance” or “the Company”) announces that it has completed today the acquisition of the in-force life policies of California-based Golden State Mutual (GSM). The transaction was carried out through the Company’s wholly-owned U.S. subsidiary IA American Life Insurance Company (“IA American”), based in Scottsdale, Arizona.
The GSM block of business, which was acquired for a ceding commission of approximately US$11 million, involves 120,000 life policies with a face amount of close to US$500 million. For the year ended December 31, 2009, total premiums amounted to US$9 million and invested assets were US$70 million. 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 12-14%. The Company’s pro forma solvency ratio of 215% at June 30th, 2010, reflecting the conclusion of the acquisition of American-Amicable on July, 20, 2010, remains unchanged.
Established in 1925, Golden State Mutual was the largest minority-owned life insurance company in California. It provided traditional life insurance products to mid-market customers in seventeen states. GSM was placed into conservation on September 30, 2009 when its capital position dropped below minimum thresholds required by the State of California.
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fourth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations in all regions of Canada, as well as in the United States. Industrial Alliance contributes to the financial wellbeing of over three million Canadians, employs more than 3,500 people and manages and administers over $60 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada. www.inalco.com