BANKING/FINANCE

Pacific Mutual Life Insurance Co., which, as a mutual is owned by its policyholders, has formed its first stock subsidiary with an eye to raising more capital and working with other insurance companies in joint ventures.

All the stock in PM Group Life Insurance Co. is owned by Pacific Mutual, but shares could be offered to other companies that form joint ventures with PM Group to handle group insurance business, PM Group Chairman and Chief Executive G.W. Kimmerle said.

The arrangement is an outgrowth of a joint venture that Pacific Mutual started in January with Mutual of New York, he added.

Pacific Mutual and MONY merged their ailing group-health and group-life insurance operations into a Fountain Valley partnership. The group insurance business had been money-losing operations for both firms. The joint venture, which is expected to become fully operational next month, is expected to cut expenses and provide profits for the parent companies.

MONY, however, declined to join PM Group.

The idea behind the new stock company is to give Pacific Mutual “more flexibility” in raising capital, Kimmerle said. The company can enter into partnerships, set up subsidiaries or sell stock in itself to other carriers to do business together.