Met Life in Talks to Buy General American

Metropolitan Life Insurance Co. is in talks to buy General American Life Insurance Co. for $1.2 billion, a transaction that would help Missouri’s largest life insurer repay customers seeking the return of as much as $6.8 billion, people familiar with the situation said. New York-based Met Life, the second-largest U.S. life insurer, would buy GenAmerica Corp., which controls St. Louis-based General American Life, the sources said. General American has sought a buyer for the last two weeks, after money market funds demanded repayment of short-term investments they had made with the insurer. Unable to meet the demands, General American sought protection from the Missouri Department of Insurance. Met Life would be getting an insurer with 300,000 customers holding life and health insurance policies, as well as retirement savings plans called annuities. General American in January announced plans to go public by the middle of next year. The company’s problems are rooted in its reliance on short-term investments known as funding agreements that are sold to money market funds and other institutions.