Ailing Mutual Benefit Sells Off Units to AMEV

Mutual Benefit Life Insurance Co., which was seized by New Jersey regulators last month, said Wednesday that it signed a letter of intent to sell its group life, accident and health insurance business to AMEV Holdings Inc. for as much as $500 million.

“We are very pleased to have taken this important first step in the rehabilitation of Mutual Benefit,” New Jersey Insurance Commissioner Samuel F. Fortunato and Mutual Benefit Chief Executive Stephen J. Carlotti said in a joint statement.

Mutual Benefit’s takeover by New Jersey officials in July amounted to the largest U.S. insurance company failure in history. The nation’s 18th-largest life insurer, with assets of more than $13 billion, had been beset by sagging real estate investments and a run by its policyholders.

AMEV Holdings is a U.S. holding company owned by N.V. AMEV of the Netherlands and Groupe AG in Belgium. Together, the companies have assets totaling $40 billion. AMEV Holdings owns nine specialty insurance and financial services companies and has shareholders’ equity of more than $600 million, Mutual Benefit said.

The transaction marks the second big European infusion of capital into a troubled U.S. insurer to surface recently. Earlier, Groupe AXA of France invested $1 billion in the Equitable Life Assurance Society of the United States.

Under terms of the transaction, AMEV would assume certain assets and liabilities of the businesses it is acquiring. Further details weren’t disclosed.