According to press reports Chilean financial services outfit Grupo Security has agreed to pay $128 million to buy the annuity arm from AIG's local subsidiary Seguros Interamericana.

Reuters has reported that Grupo Security has forged a deal to acquire Seguros’ annuity arm, Interamericana Rentas Seguros de Vida, as long as firm contracts have been written up by the end of January 2006.

Grupo Security, which operates in the banking, life insurance and investments sectors, said the purchase would enhance its 2006 earnings by 20%.

According to Reuters, Grupo Security plans to finance the buy with cash on hand, dividends from its affiliates, and through issuing new shares and long-term bonds.