Madison National Life Insurance Company has entered into an agreement to acquire a block of life insurance policies with approximately $65 million of life and annuity reserves.
Under the terms of the acquisition, Madison National Life will assume administration of the policies in the block beginning October 1, 2008. The block consists of approximately $34 million of older, traditional life reserves and $31 million of annuity reserves. The acquisition is scheduled to close and be effective on April 1, 2008.
Madison National Life has closed on the sale of its credit segment. According to the company, under statutory accounting principles, such sale will have the effect of increasing the company’s surplus. Under GAAP, the sale will result in a loss from discontinued operations, primarily due to the write-off of deferred acquisition costs related to the credit segment.
Roy Thung, CEO of Independence Holding Company, said: We are very pleased that Madison National Life has begun 2008 by shedding an unprofitable segment, redeploying capital to its acquisition group and signing an agreement to acquire a block of policies in a transaction that we expect will be accretive to earnings.