Equitable Holdings Mitigates Remaining Redundant Reserves Associated with New York’s Regulation 213 Through Proceeds of Reinsurance Transaction
August 31, 2022 by Equitable Holdings, Inc
NEW YORK–(BUSINESS WIRE)–Equitable Holdings, Inc. (the “Company”) (NYSE: EQH) announced today that it has mitigated the remaining $1 billion of redundant reserves associated with New York’s Regulation 213 (“Reg. 213”). The Company’s principal operating subsidiary Equitable Financial Life Insurance Company (“EFLIC”) has entered into an agreement with Global Atlantic Financial Group subsidiary, First Allmerica Financial Life Insurance Company, to reinsure1 a 50% quota share of pre-2009 Group Retirement VA contracts supported by approximately $4 billion of general account assets and $6 billion of separate account value.
The transaction completes a series of actions the Company has taken to mitigate redundant statutory reserves associated with Reg. 213 by year end 2022.
The details of the transaction are as follows:
- The transaction is expected to result in a positive ceding commission of approximately $1.1 billion to Equitable Financial which the company will use to fund the remaining Reg. 213 redundant reserves, securing future cash flows.
- The transaction predominantly includes our policies with the highest guaranteed general account crediting rates of 3%.
- The general account assets will be transferred upon the close of the transaction, which is expected in the second half of 2022. AB will continue to be the preferred investment manager of approximately half of the general account assets transferred.
- As a result of the transaction, there is a limited impact to Group Retirement operating earnings of $10-15 million earnings per annum.
Goldman Sachs & Co. LLC is serving as sole financial advisor with Willkie Farr & Gallagher LLP acting as legal counsel to Equitable in connection with this transaction.
About Equitable Holdings
Equitable Holdings, Inc. (NYSE: EQH) is a financial services holding company comprised of two complementary and well-established principal franchises, Equitable and AllianceBernstein. Founded in 1859, Equitable provides advice, protection and retirement strategies to individuals, families and small businesses. AllianceBernstein is a global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets. Equitable Holdings has approximately 12,000 employees and financial professionals, $754 billion in assets under management (as of 6/30/2022) and more than 5 million client relationships globally.
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1 Equitable Financial entered into an agreement with First Allmerica Financial Life Insurance Company, a wholly-owned subsidiary of Global Atlantic, pursuant to which Equitable Financial will cede a 50% quota share on a combined coinsurance and modified coinsurance basis.