NEW YORK--The wholesale brokerage operations of BISYS Group Inc. will be combined with Crump Insurance Services Inc. under a deal in which Crump's owner, private equity firm JC Flowers & Co. L.L.C., will purchase BISYS' wholesale brokerage and retirement services operations for an estimated $650 million.

Under terms of a deal announced Wednesday, New York-based Citi will acquire and retain BISYS Group, which also provides outsourcing solutions for the financial services sector, for $1.45 billion in an all-cash transaction.

Simultaneously, Citi it will sell BISYS' Retirement and Insurance Services Division to New York-based Flowers, making the net cost of the transaction to Citi about $800 million.

Flowers plans to combine Crump's commercial insurance business with BISYS Commercial Insurance Services to achieve greater scale, Roseland, N.J.-based BISYS said in a statement.

In addition, Flowers' acquisition of BISYS' life insurance and retirement services business could create a leading integrated provider of wholesale insurance brokerage and retirement services solutions, according to BISYS.

According to BISYS' annual report, for the year ended June 30, the company's insurance services segment generated $246.8 million in revenues and $62 million in operating income. Its investment services unit segment generated $596.1 million in revenues and $71.6 million in operating earnings.

BISYS Commercial Insurance Services ranked No. 6 among wholesale insurance brokers, with $1.02 billion in 2005 wholesale premium volume, according to Business Insurance's 2006 ranking. It was just behind Crump, which had an estimated $1.25 billion in wholesale premium volume.

Flowers acquired Crump from New York-based Marsh & McLennan Cos. Inc. in September 2005 amid a spate of wholesaler divestitures from large retail brokerages. Investigations of brokerage compensation practices by state officials in 2004 and 2005 raised questions over whether a retail brokerage's ownership of wholesale operations creates conflicts of interest.

Among 401(k) administrators, BISYS ranked No. 3 as of June 30, 2006, with 1.7 million unbundled participants, according to BI.