The Phoenix Companies (PNX) announced that it executed a previously disclosed intercompany reinsurance treaty between two of its subsidiaries, Phoenix Life Insurance Company (PLIC) and PHL Variable Insurance Company (PHL Variable), effective June 30, 2015, after receiving regulatory approval.
Phoenix also announced that it expects to de-stack its insurance company subsidiaries by July 31, 2015.
Under the reinsurance treaty, PLIC will retrocede to PHL Variable on a modified coinsurance basis, policy liabilities of a block of corporate-owned life insurance policies.
Phoenix confirmed that it expects the treaty to favorably impact statutory surplus and risk-based capital ratios for both subsidiaries and said it will provide more details on the impact with second quarter 2015 financial results.
As of result of discussions with its regulators related to this treaty, Phoenix expects to de-stack its insurance company subsidiaries. Management believes de-stacking will create a more streamlined regulatory structure.
PLIC is regulated by the New York State Department of Financial Services. It is currently the indirect parent of PHL Variable, American Phoenix Life and Reassurance Company and Phoenix Life and Annuity Company, which are regulated by the Connecticut Insurance Department.
Under the proposed structure, the three Connecticut-regulated entities will be direct subsidiaries of Phoenix.
The de-stacking is subject to approval by both New York and Connecticut regulators.
Further, Phoenix agreed it will not use any future dividends paid by PLIC to meet the operating needs of PHL Variable.
Phoenix’s estimated holding company cash and non-affiliated securities of $65 million at June 30, 2015 and other capital sources, such as dividends from other operating companies and external financing, are available and believed sufficient to meet PHL Variable’s currently anticipated capital needs.
Founded as a life insurance company in 1851, Phoenix offers products and services designed to meet financial needs in the middle income and mass affluent markets.
Its distribution subsidiary, Saybrus Partners offers solutions-based sales support to financial professionals and represents Phoenix’s products among key distributors, including independent marketing organizations and brokerage general agencies.