Presidential Life Corporation, an affiliate of the American Financial Group has acquired Great American Life Assurance (GALAC) for $7.04m in cash.

Great American Life Assurance’s $5.6m in statutory capital and surplus, comprises of cash, short-term investments, and bonds with minimal liabilities as policyholder obligations related to in-force contracts are fully reinsured, said the underwriter.

As per the acquisition agreement, the purchase price is subject to adjustment for the differential between final statutory capital and surplus at 30 June 2012 and $5.6m.

As part of this transaction GALAC will maintain licenses to write life and annuity business in more than 38 states in the District of Columbia.

Presidential Life Corporation, through its wholly owned subsidiary Presidential Life Insurance Company, offers fixed deferred and immediate annuities, life insurance and accident & health insurance products to financial service professionals and their clients.