Prudential Financial Inc. has reached a definitive agreement with The Hartford to acquire the company’s individual life insurance business through a reinsurance transaction. This comes just more than one month since Prudential emerged as the likely buyer for this particular piece of The Hartford's business divestments.

Prudential said it will pay $615 million in cash for $7 billion of general account investment assets and corresponding reserves, and rights and obligations with respect to approximately $5 billion in separate account assets and corresponding liabilities, based on statutory balance sheet values as of June 30, 2012. According to a press release, “The cash consideration consists primarily of a ceding commission to provide reinsurance for approximately 700,000 Hartford life insurance policies with face amount in force of approximately $135 billion.”

Subject to regulatory approvals and closing conditions, the deal could close in early 2013.

"The integration of Prudential’s Individual Life Insurance business and that of The Hartford will create an organization with greater scale, enhanced product offerings and expanded distribution expertise to meet the life insurance needs of Americans and their families,” said John Strangfeld, chairman and CEO, Prudential Financial. "The Hartford’s Individual Life Insurance business represents a unique opportunity for us to acquire a very high-quality life insurance business with talented people, complementary capabilities and financial performance consistent with our objectives."

Assuming the deal closes, Prudential’s Individual Life Insurance business would be among the top five largest individual life insurance companies in the United States based on new recurring premium sales. Prudential will have leadership positions in universal, term and variable life insurance, the company said.

According to a press release, “benefits and provisions of The Hartford's in-force life insurance contracts will remain unchanged, and The Hartford’s issuing companies will continue to be the named insurers. Prudential will receive premiums and will be responsible for paying claims and providing customer service and administration.”

Jim Avery, CEO of Prudential’s individual life insurance business, will retire upon completion of the deal, Kent Sluyter, currently VP and chief actuary, will replace him.

"Jim wanted to retire earlier this year, but he agreed to stay on at my request for an additional period to help ensure a smooth transition. He delayed his retirement once again when this acquisition opportunity arose," said Charles Lowrey, COO, Prudential’s U.S. Businesses. "Over the last 14 years, Jim has done an outstanding job of leading Prudential’s Individual Life Insurance business and has built a strong foundation for its future growth. We are fortunate to have a deep leadership bench, and Kent is ideally suited to build on this foundation as we integrate Prudential and The Hartford's Individual Life Insurance businesses after closing."

Sluyter has worked in actuarial, operations, systems, risk management and marketing for Prudential's Individual Life Insurance business since 1981. Prior to being chief actuary, he was responsible for the individual life insurance underwriting, claims and special investigations units. Sluyter is a Fellow of the Society of Actuaries (FSA) and a Chartered Life Underwriter (CLU). He holds a bachelor’s degree in mathematics from Lafayette College.

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