Reinsurance group acquires life and health units

Nassau Reinsurance Group L.P. has announced that it will acquire White Plains, New York-based Universal American Corp.’s life and health insurance units for approximately $43 million.

Expected to close in early 2016, the deal consists of Universal American’s “traditional insurance” lines, including Medicare supplement, senior health insurance, specialty health insurance, long-term care insurance and life insurance products.

Under the terms of the deal, Nassau Re will assume control of Universal American subsidiaries Constitutional Life Insurance Co. and Pyramid Life Insurance Co., as well as portions of American Progressive Life & Health Insurance Co. of New York, according to a statement from the company released on Thursday.

In addition to the $43 million purchase price, New York-based Nassau Re said in its statement that it will fund $20 million in equity capital upon the close of the deal to support the transaction, as well as integration of Universal American’s operations.

“With stable profitability and predictable cash flow, we believe the traditional insurance business is an attractive asset for Nassau that will establish our onshore reinsurance platform, which we intend to grow through additional closed block reinsurance transactions,” Phillip Gass, Nassau Re’s chairman and CEO said in the company’s statement. “Further, with the injection of $20 million in new capital, we are bolstering the business’ financial strength to support its policyholders and allow for future growth opportunities.”

Following the close of the deal, Universal American’s traditional insurance business will become a wholly-owned subsidiary of Nassau Re. The company said it intends to retain the unit’s 30 current employees, as well as its current offices in Lake Mary, Florida.