Equitable Holdings, Inc. announced that it has mitigated the remaining $1 billion of redundant reserves associated with New York’s Regulation 213 (“Reg. 213”). The Company’s principal operating subsidiary Equitable Financial Life Insurance Company (“EFLIC”) has entered into an agreement with Global Atlantic Financial Group subsidiary, First Allmerica Financial Life Insurance Company, to reinsure1 a 50% quota share of pre-2009 Group Retirement VA contracts supported by approximately $4 billion of general account assets and $6 billion of separate account value.
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The transaction completes a series of actions the Company has taken to mitigate redundant statutory reserves associated with Reg. 213 by year end 2022.
The details of the transaction are as follows:
- The transaction is expected to result in a positive ceding commission of approximately $1.1 billion to Equitable Financial which the company will use to fund the remaining Reg. 213 redundant reserves, securing future cash flows.
- The transaction predominantly includes our policies with the highest guaranteed general account crediting rates of 3%.
- The general account assets will be transferred upon the close of the transaction, which is expected in the second half of 2022. AB will continue to be the preferred investment manager of approximately half of the general account assets transferred.
- As a result of the transaction, there is a limited impact to Group Retirement operating earnings of $10-15 million earnings per annum.
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Goldman Sachs & Co. LLC is serving as sole financial advisor with Willkie Farr & Gallagher LLP acting as legal counsel to Equitable in connection with this transaction.
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