Bank of America Corp., the biggest U.S. lender by assets, agreed to sell life insurance operations to Securian Financial Group Inc. after A.M Best said it may downgrade the business.
The deal for Balboa Life Insurance Co. and Balboa Life Insurance Co. of New York is expected to be completed on Oct. 1, St. Paul, Minnesota-based Securian said today in a statement that didn’t disclose terms. Bank of America was left with the life businesses after striking a $700 million deal in February to sell the Balboa unit that insures foreclosed properties to QBE Insurance Group Ltd.
Bank of America acquired insurance operations in 2008 with the purchase of home lender Countrywide Financial Corp. A.M. Best said Feb. 16 it may downgrade the life business because the parent company was unlikely to build the operations after the QBE deal.
“It’s not a business that we intend to keep,” Bank of America spokesman Jerry Dubrowski said in a Feb. 16 interview about Balboa Life.
Closely held Securian, founded in 1880, provides insurance and retirement-planning services.
“As providers exit the market, we view this as an opportunity to increase our presence,” Securian Executive Vice President Christopher Hilger said in the statement.