Old Mutual plc (LSE:OML), an international diversified financial
services group headquartered in London, England, completed the
purchase today of Fidelity and Guaranty Life Insurance Company (F&G
Life), a Baltimore-based life
insurance, annuity and structured settlements company.
Old Mutual Completes Purchase of F&G Life
Old Mutual purchased F&G Life from The
St. Paul Companies (NYSE: SPC) for $635 million in cash and stock.
The deal, which was announced 26 April 2001, was concluded following
receipt of regulatory approval in Maryland and New York, where F&G
Life operates through its Thomas Jefferson Life subsidiary.
"The purchase of F&G Life provides Old
Mutual with a strong presence in the United States life insurance
market. It has an established brand with well-developed sales
channels, a diversified product portfolio and knowledge of the vast
U.S. market," said Guy Barker, chief executive of Old Mutual's U.S.
F&G Life joins a $234 billion
diversified financial services group with corporate goals for growth
and diversification. The acquisition will add considerable resources
to F&G Life, which it will use to expand product development,
technology, service and customer support of its sales channel and
"This union creates a strategic
alignment for F&G Life with Old Mutual that will translate into
substantial added benefit and value for our customers, agents,
employees and stockholders in the years ahead," said Harry N. Stout,
president of F&G Life.
Old Mutual's Chief Executive Officer
(designate), Jim Sutcliffe explained, "The U.S. market represents a
strategic priority for Old Mutual, primarily due to access to the
world's largest market for financial services, as well as
demographic trends that support long-term growth." Sutcliffe added,
"Building a quality life insurance platform is an important element
of Old Mutual's U.S. strategy to expand its operations and become
one of the world's largest life insurance providers."
IMPORTANT QUESTIONS AND INFORMATION FOR PROSPECTIVE BUYERS
As with the sale of any major
insurance purchase, it’s important to OM Financial Life Insurance
Company and OM Financial Life Insurance Company of New York (“the
Companies”) that you closely evaluate your financial needs and
options carefully. Whenever you enter into any contract such as an
annuity contract, you should thoroughly review the language, options
and benefits, your personal finances and tax deferral goals, college
funding, wealth accumulation, principal protection, retirement goals
and overall needs before entering into a contract.
1) Evaluate your financial needs and
You should first know what you want to achieve based upon your
financial needs. Determine what your current savings and investments
are and establish your retirement goals. Do you need income now or
are you in a position to allow your savings to grow? Do you want
that growth to be at a guaranteed rate of a savings vehicle such as
a fixed annuity contract or can you take the risk of a variable
annuity that is invested in stocks or bond funds?
2) Understand the language describing
There are different types of annuities which offer many options to
meet a variety of financial objectives. If you are unsure about the
type or terms used to describe an annuity, check with your insurance
producer, tax advisor, financial planner, broker, elder attorney or
someone who is familiar with your financial circumstances and goals.
Never agree to terms you don’t fully understand.
3) Familiarize yourself with the
different types of annuities offered by the Companies
Immediate Annuity- provides
Deferred Annuity- allows savings
to accumulate before payouts begin in the future.
Fixed Annuity- a deferred
annuity in which your money earns interest at a guaranteed rate.
Index Annuity- a deferred
annuity in which earnings accumulate at a rate based upon a formula
linked to one or more published equity-based indexes, such as
Standard and Poor’s 500 Composite Stock Price Index™.
Variable Annuity- a deferred
annuity in which your money is put in subaccounts that are invested
in stock and bond funds
OM Financial Life
Insurance Company, Baltimore, MD
4) If you are purchasing an index
annuity, ask about the current credited interest rate. How often
does it change? What are the minimum guaranteed rates? Are the
charge free withdrawal amounts sufficient to meet your income needs?
5) If you are purchasing an index
annuity, find out about the index, formula and current factors
applicable to the initial indexed interest period. How often is the
indexed interest credited? How may factors change in subsequent
periods? What is the level of minimum guaranteed values provided by
6) If you are purchasing a variable
annuity, find out the investment options currently available and
review the prospectus for each subaccount. A prospectus which is
required to be provided to potential buyers outlines the objectives
and level of risk, as well as the operating expenses and financial
statements. Charges differ with each annuity and company.
7) Ask if there are fees or charges for
partial withdrawal of funds or full surrender of your deferred
annuity contract. Find out how much the fees are and for how long
they apply. Often, after a time specified in the contract, these
fees are eliminated. Make sure
that you have
sufficient income to meet your needs so that you will not need to
incur full surrender charges or penalties for early withdrawals.
8) Ask if there is a guaranteed death
benefit. Some annuities include death benefits that may exceed the
account value; some do not. Know what benefit is guaranteed, how and
when it will be paid, and whether increased benefits may be
9) Ask how long the “free look” period
is. The free look period is the time in which you have the right to
review the contract and return it if you have made the wrong choice.
The Companies then will cancel the contract and depending upon your
state, refund your initial contribution or the market value of the
contract. Free looks usually last at least 10 days and up to 60 days
depending upon your state requirements. The free look rules vary
from state to state and not every state guarantees free look rights.
10) Evaluate the Companies issuing the
annuity. Only life insurance companies can issue annuities, although
they may be sold through financial institutions such as banks and
brokerage firms. Make sure the company issued issuing the annuity is
licensed in your state, reputable and financially strong. OM
Financial Life Insurance Company is licensed in all states
(excluding New York) and the District of Columbia. OM Financial Life
Insurance Company of New York is licensed only in the state of New
The Companies have an
A.M. Best Rating of A (Excellent) for financial strength and
operating performance. 3rd highest out of 15 ratings. OM Financial
Life Insurance Company and OM Financial Life Insurance Company of
New York want to make sure you have purchased an annuity product
that meets your financial situation and that you are satisfied.