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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 16, 2014 08:42 AM (EDT)
A.M. Best has commented that the ratings for Wilton Re Limited (Wilton Re) (Halifax, Canada) and its insurance subsidiaries remain unchanged following Wilton Re's recent announcement that it intends to acquire Aegon USA's Canadian operations, including Transamerica Life Canada and Canadian Premier Life Insurance Company from Aegon N.V.
This transaction will add to Wilton Re's geographical diversification by providing an in-force book of Canadian life business as well as a platform to expand into Canada's marketplace. Transamerica Life Canada and Canada Premier Life Insurance Company offer a range of life insurance, savings and investment products throughout Canada with a commitment to the middle market. Transamerica Life Canada also maintains a hedged block of run-off segregated fund policies with guaranteed benefit features. The stock acquisition is expected to close during the first quarter of 2015 with a CAD 600 million purchase price. The purchase will be funded through cash contributions by Wilton Re's ultimate parent, the Canada Pension Plan Investment Board (CPPIB).
Following the transaction, it is expected that Wilton Re and its insurance subsidiaries will remain adequately capitalized through capital support from the CPPIB. A.M. Best believes Wilton Re could face challenges given Transamerica Life Canada's earnings sensitivity to changes in Canadian interest rates, and equity markets. A.M. Best will continue to review the transaction's integration and structure effect, along with its impact on Wilton Re's operating results upon completion.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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