Equitable Holdings Picks Global Atlantic to Reinsure $10B in Group Annuity Value

New York state is using its own version of principles-based reserving, described in state Regulation 213, which was adopted in 2019.

Regulation 213 calls for insurers to perform the risk modeling and analyses at the heart of principles-based reserving, and also to use traditional formulas to set reserves for some types of annuities.

The Companies

Equitable Holdings prefers to use the name “Equitable Holdings” to refer to the parent company, which owns AllianceBernstein as well as Equitable Financial, and the name “Equitable” to refer to the life insurance operations.

The company as a whole was founded in 1859. It now has 5 million in client relationships and about $754 billion in assets under management.

It’s known for selling group annuities to school districts’ 403(b) defined contribution retirement plans. It recently agreed to pay $50 million to settle U.S. Securities and Exchange Commission allegations about misleading and incomplete fee information in quarterly account statements.

The company announced a $12 billion variable annuity reinsurance deal with Venerable, which has ties to Apollo Global Management’s Athene Holding life insurance affiliate, in 2020.

Equitable Holdings announced another annuity deal, with Swiss Re, in late 2021. The company has not said much about that deal but has reported that it produced about $1 billion in extra cash that Equitable Financial can use to meet the New York state reserving requirements.

Global Atlantic, the company providing the reinsurance, is an affiliate of KKR. It started up in 2004 and has gone on to reinsure about $75 billion in life and annuity assets.

“We are confident that, at the end of the year-end, we will be resolving this $1 billion in redundant reserves,” Raju said.

Pictured: Robin Raju. (Photo: Equitable)