Allianz Life and Reinsurance Group of America Announce Large In-Force Reinsurance Transaction.Business Editors MINNEAPOLIS & ST. LOUIS--(BUSINESS WIRE)--Sept. 22, 2003 Allianz Life Insurance Company of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (Allianz Life) and Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Group of America, Incorporated (NYSE NYSE See: New York Stock Exchange :RGA RGA Reinsurance Group of America RGA Return Goods Authorization RGA Republican Governors Association RGA Residual Gas Analyzer RGA Royal Garrison Artillery RGA Restricted Growth Association (UK) RGA Rate Gyro Assembly ) announced today that they have entered into a definitive agreement whereby RGA will acquire through coinsurance A provision of an insurance policy that provides that the insurance company and the insured will apportion between them any loss covered by the policy according to a fixed percentage of the value for which the property, or the person, is insured. the traditional U.S. life reinsurance business of Allianz Life. In the transaction, RGA will pay Allianz Life a ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. commission of $310 million. The transaction is subject to regulatory approvals and is expected to close during the fourth quarter of 2003, with an effective date retroactive to July 1, 2003. Additionally, the two companies have agreed to pursue novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party of the business to RGA after the transaction is closed. A. Greig Woodring, President and Chief Executive Officer of RGA, commented, "We believe this transaction will be a significant win for RGA and its shareholders. It will further strengthen our position in the U.S. marketplace, adding approximately $240 billion of life reinsurance in force to our book of business. We expect this block of business to generate approximately $400 to $450 million in annual premiums. Based upon our estimate of the amount of capital needed to support this business, we expect the transaction to be accretive to earnings immediately. Our U.S. management team will be working diligently over the next six to 12 months to transition the policy information to RGA's systems. We will make this a smooth transition for the underlying ceding companies, many of which are already our customers." RGA intends to finance the transaction using several sources, including funds available under its current bank credit lines, funds generated by existing operations and its retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. arrangements. Additional support over the longer term could be provided by proceeds from future debt or equity offerings. Mark A. Zesbaugh, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Allianz Life of North America, commented, "We are pleased we have reached an agreement with RGA, a company that has superior financial strength as well as significant respect in the reinsurance industry. While our life reinsurance business has been a significant part of Allianz Life for 35 years and produced strong overall results, this transaction allows us to focus on our core markets. The combination of the $310 million ceding commission and the release of required capital will provide substantial funds to support Allianz Life's long-term growth strategy." Jan Carendi, President and CEO Allianz America, commented, "This transaction is consistent with the Allianz Group strategy and demonstrates our commitment to actively redeploy re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. our capital to our strategic markets." About Allianz Life Insurance Company of North America Allianz Life Insurance Company of North America (Allianz Life(R)) is a leading provider of fixed and variable annuities Variable annuities Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. and long term care products through independent distribution networks and financial institutions in the U.S. Allianz Life is also a major provider of health excess of loss services. Allianz Life headquarters are based in Minneapolis. Allianz Life is a company of the Allianz Group, one of the world's leading 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. providers. Allianz Group is represented in over 70 countries, with more than 60 million customers around the globe, and employs 180,000 people worldwide. About Reinsurance Group of America, Incorporated Reinsurance Group of America, Incorporated, through its subsidiaries, RGA Reinsurance Company and RGA Life Reinsurance Company of Canada, is among the largest providers of life reinsurance in North America. In addition to its North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. , Reinsurance Group of America, Incorporated has subsidiary companies or offices in Argentina, Australia, Barbados, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , India, Ireland, Japan, Mexico, South Africa, South Korea, Spain, Taiwan, and the United Kingdom. Worldwide, the company has approximately $841 billion of life reinsurance in force, and assets of $10.3 billion. MetLife, Inc. is the beneficial owner Beneficial Owner A person who enjoys the benefits of ownership even though title is in another name. Notes: For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial of approximately 59 percent of RGA's outstanding shares. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement of Reinsurance Group of America, Incorporated under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements relating to projections of the earnings, revenues, income or loss, future financial performance and growth potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in the following paragraphs as "we," "us" or "our"). The words "intend," "expect," "project," "estimate," "predict," "anticipate," "should," "believe," and other similar expressions also are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Numerous important factors could cause actual results and events to differ materially from those expressed or implied by forward-looking statements including, without limitation, (1) adverse changes in mortality, morbidity or claims experience, (2) changes in our financial strength and credit ratings or those of Metropolitan Life Insurance Company ("MetLife") or its subsidiaries, and the effect of such changes on our future results of operations and financial condition, (3) general economic conditions affecting the demand for insurance and reinsurance in our current and planned markets, (4) market or economic conditions that adversely affect our ability to make timely sales of investment securities, (5) changes in investment portfolio yields due to interest rate or credit quality changes, (6) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (7) adverse litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or arbitration results, (8) the stability of governments and economies in the markets in which we operate, (9) competitive factors and competitors' responses to our initiatives, (10) the success of our clients, (11) successful execution of our entry into new markets, (12) successful development and introduction of new products, (13) our ability to successfully integrate and operate reinsurance business that we acquire, (14) regulatory action that may be taken by state Departments of Insurance with respect to us, MetLife, or its subsidiaries, (15) changes in laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business, and (16) other risks and uncertainties described in this document and in our other filings with the Securities and Exchange Commission. Forward-looking statements should be evaluated together with the many risks and uncertainties that affect our business, including those mentioned in this document and described in the periodic reports we file with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made. We do not undertake any obligations to update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward- looking statements by these cautionary statements. |
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