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Press Release

August 14, 2013

Contact: Matt Anderson, 212-709-1691


Apollo Agreement Follows Recent Guggenheim Agreement Setting Industry Standard

Benjamin M. Lawsky, Superintendent of Financial Services, today announced that a second major firm has agreed to an enhanced set of policyholder safeguards in an acquisition of an annuity company at the request of the New York State Department of Financial Services (DFS), which will help better protect retirees and others receiving annuity payments. Recently, DFS has highlighted a spike in private equity firms and other investment companies moving into the annuity business. This trend raised concerns since such firms typically have a more short-term oriented business model than traditional insurers, and the annuity business is focused on ensuring long-term security for policyholders.

Apollo Global Management LLC (Apollo) has agreed to put in place a set of heightened policyholder protections as part of Athene Holding Ltd.’s (Athene) planned acquisition of Aviva Life and Annuity Company of New York (Aviva New York).  (Athene Holding Ltd is affiliated with Apollo.) The policyholder protections Apollo agreed to implement include heightened capital standards; the establishment of a separate, additional “backstop” trust account dedicated to further safeguarding policyholder claims; enhanced regulatory scrutiny of investments, operations, dividends, and reinsurance; and other strengthened disclosure and transparency requirements.

Today’s announcement follows on the heels of Guggenheim Partners LLC agreeing to a similar set of protections last month as part of its planned acquisition of Sun Life Insurance and Annuity Company of New York.

Superintendent Lawsky said: “We’ve worked to build a new model for policyholder protections that will help address the emerging trend of private equity firms and other investment companies entering the annuity business. When it comes to these sorts of deals we need to ensure we are putting retirees who depend on these annuities first. We’re pleased that Apollo worked with us to reach a resolution that provides enhanced safeguards for policyholders so this transaction can proceed.”

The key heightened policyholder protections to which Apollo agreed include:

  • Heightened Capital Standards. Apollo has agreed that Athene will maintain Aviva New York’s Risk-Based Capital Levels (RBC Levels) at an amount not less than 450 percent. (Capital serves as a buffer that insurers use to absorb unexpected losses and financial shocks – better protecting policyholders.)
  • Backstop Trust Account. Apollo has agreed that Athene will establish a separate backstop trust account totaling approximately $35 million to provide additional protections to policyholders above and beyond the heightened capital levels. If Aviva New York’s RBC levels fall below 450 percent, the funds in the backstop trust account will be used to replenish (“top up”) Aviva New York’s RBC levels to at least 450 percent. The $35 million in the trust account will be held separately from other Aviva New York’s funds for seven years and dedicated to the sole purpose of protecting policyholders.
  • Enhanced Regulatory Scrutiny of Operations, Dividends, Investments, Reinsurance. Apollo has agreed that any material changes to Athene’s plans of operations of Aviva New York, including investments, dividends, or reinsurance transactions will require the prior written approval of DFS.
  • Stronger Disclosure and Transparency Requirements. Aviva New York will file quarterly RBC level reports to DFS – rather than just the annual reports required under New York Insurance Law. Additionally, the insurer will disclose to DFS necessary information concerning corporate structures, control persons, and other information regarding the operations of the company.


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