Genworth Financial Inc. and Aetna have reached an agreement in the sale of Genworth’s Medicare supplement business and related blocks of in-force business. Aetna will purchase the business, which has more than 145,000 Medicare Supplement members, for $290 million. The transaction includes the sale of Continental Life Insurance Company of Brentwood, Tennessee and its subsidiary, American Continental Insurance Company. It also includes reinsurance agreements between certain Genworth life insurance subsidiaries and Aetna to transfer the Medicare supplement in-force business sold by these Genworth entities. Aetna expects to finance the acquisition with available resources.
Genworth expects the total capital resulting from this transaction within its life insurance companies that will be available for redeployment to be approximately $240 million. The company will record an after-tax gain of approximately $35 million related to the sale and anticipates that the transaction will close in the fourth quarter of 2011, subject to customary closing conditions and adjustments, as well as regulatory approvals. Existing Medicare supplement policies will remain in effect following the transaction, and policyholders will continue to have access to the full benefits of their policies.
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