Aegon and Providian Insurance subsidiaries placed under review by A.M. Best Company following acquisition announcement.OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 30, 1996--Effective immediately, A.M. Best Co. has placed its ratings on the insurance subsidiaries of Aegon USA and Providian Corp. under review with developing implications. This action follows the announcement earlier today of Aegon NV's plan to acquire Providian's insurance operations. The Aegon subsidiaries affected are: Life Investors Insurance Company of America, International Life Investors Insurance Co., PFL 1. (language) PFL - A concurrent extension of ML by Holmstrom and Matthews, using CCS. ["PFL: A Functional Language for Parallel Programming", S. Holmstrom in Proc Declarative Language Workshop, London 1983]. 2. Life Insurance Co., Western Reserve Life Assurance Company of Ohio and Monumental Life Insurance Co.--which are rated "A+" (Superior)-- as well as AUSA AUSA Association of the United States Army AUSA Assistant United States Attorney AUSA Auckland University Students Association AUSA Aberdeen University Students' Association (UK) AUSA Allied United States of America Life Insurance Co., Inc. and Bankers United Life Assurance Co., which are rated "A" (Excellent). The Providian life insurance subsidiaries placed under review are Providian Life & Health Insurance Co., Commonwealth Life Insurance Co. and Peoples Security Life Insurance Co., which are rated "A+" (Superior); Veterans Life Insurance Co., Capital Security Life Insurance Co. and First Providian Life & Health Insurance Co., which are rated "A" (Excellent); and Academy Life Insurance Co. and Pension Life Insurance Co., which are rated "A-" (Excellent). A.M. Best also has placed the ratings of several property/casualty subsidiaries under review in connection with this transaction: Aegon's Monumental General Casualty Co., which is rated "A-" (Excellent), and Providian Auto & Home Insurance Co., Providian Fire Insurance Co. and Providian Property & Casualty Insurance Co.--all of which are rated "B++" (Very Good). The ratings will remain under review pending further discussions with the management of Aegon USA and Providian and the closing of the transaction, which is expected in mid-1997. The review will focus on the operational performance and the strategic role the insurance subsidiaries will serve under the Aegon USA organization, as well as the financing terms. In addition, A.M. Best will evaluate the potential for integration among the operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , the ability of Aegon USA to recognize expense savings and growth opportunities from the combined companies, and the impact these expected synergies will have on Aegon's financial flexibility. The transaction will involve a tax-free exchange tax-free exchange An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. of stock, whereby Providian shareholders will receive $2.6 billion of Aegon N.V. shares. Additionally, Aegon USA will assume Providian debt of $780 million and $100 million of monthly income preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , which brings the total value of the transaction to $3.5 billion. Baltimore, Md.-based Aegon USA is the U.S. arm of Aegon NV, an international financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. conglomerate conglomerate, in business conglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. based in the Hague, the Hague, The (hāg), Du. 's Gravenhage or Den Haag, Fr. La Haye, city (1994 pop. 445,279), administrative and governmental seat of the Kingdom of the Netherlands, capital of South Holland prov., W Netherlands, on the North Sea. Netherlands. Aegon NV is the Netherlands' second-largest insurer and one of the top 30 insurers worldwide. Its Aegon USA unit is the largest foreign-owned life insurer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Aegon USA specializes in the marketing of life and health insurance and asset accumulation products through a diverse distribution system that includes home service agents, independent agents, financial institutions and direct response through affinity groups A special interest group. This is a marketing term for a group of people with similar interests. . At year-end 1995, Aegon NV reported worldwide revenues of $13.07 billion, net income of $824 million and total assets of $93.9 billion. Providian Corp. is a leading provider of consumer financial services, with over $27 billion in assets. It markets life and health insurance, asset accumulation, and property/casualty products through its home services agents, direct response, financial planners Financial Planner A qualified investment professional who assists individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve these goals. , brokers and financial institutions. It also offers conventional banking products, credit cards and credit and home equity loans to consumers through its banking operations, which are not included in the acquisition agreement announced. Before the sale of insurance operations, Providian Bancorp will be spun off as an independent company to existing Providian shareholders. A.M. Best Company, established in 1899, is America's oldest and most widely recognized insurance rating and information source. CONTACT: A.M. Best Co. Jeffrey Dunsavage, 908/439-2200, ext. 5618 |
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