Harbinger Group Inc. ("HGI", NYSE:HRG) today announced that Front Street Re (Cayman) Ltd., a wholly-owned subsidiary of HGI, has closed a reinsurance treaty with Bankers Life Insurance Company. Under the terms of the treaty, Bankers Life Insurance Company will cede approximately $160 million of its annuity business to Front Street Re.
The agreement, which has been approved by the State of Florida Office of Insurance Regulation, is retroactive to November 30, 2013, and is Front Street Re’s inaugural reinsurance transaction with a non-affiliated party.
Front Street Re will manage the assets supporting reserves in accordance with the internal investment policy of Bankers Life Insurance Company and applicable law.
"This is a compelling treaty for Bankers Life Insurance and Front Street Re," said John Tweedie, Chief Executive Officer of Front Street Re. "In an uncertain economy, we help companies reduce or diversify their risk profiles, and enable them to continue to thrive and provide the highest quality products to their customers. Our role is to add value and security, and we look forward to serving our newest client, Bankers Life Insurance."
"This treaty is another important step for Front Street Re in its growth as a provider of customized reinsurance solutions to the life insurance and fixed annuity industry," said Phil Gass, Managing Director of HGI. "During the year after its inaugural reinsurance treaty, Front Street Re has become an increasingly important component of HGI’s strong and growing financial services franchise. We see significant additional opportunities for Front Street Re to support the life insurance and fixed annuity industry for years to come."
Front Street Re received legal advice from Debevoise & Plimpton LLP.