INSURANCE

Aetna to Sell Reinsurance Unit for $1.4 Billion: Hartford-based Aetna Life & Casualty said it signed an agreement to sell its American Re-Insurance Co. subsidiary to a new company formed by the New York investment banking firm of Kohlberg, Kravis, Roberts & Co. and American Re-Insurance management. The deal, subject to regulatory approval, calls for Aetna to receive $1.21 billion in cash at closing and another $20 million in cash in December. Aetna will also get $100 million in subordinated notes and $70 million of preferred stock, both to be issued by American Re Corp., the new holding company. Aetna will also receive $30 million of the new firm’s common stock. American Re is the third-largest U.S.-based reinsurance company.