What Companies Are Doing

Government Ownership In MetLife? Horrors!
Government ownership of stock in MetLife looms likely as the company winds up talks with the government-rescued American International Group to buy the AIG subsidiary, American Life Insurance Co. (Alico) for $15 billion. The sale was supposed to send these billions back to the taxpayers, but now it appears that AIG will get MetLife stock as part of the deal. Since the government (via the New York Federal Reserve) converted $9 billion of AIG debt into a preferred equity interest in Alico, part of the New York Fed’s Alico investment could be replaced with a stake in MetLife. Ah, the plot thickens...

Biggest Insurance Deal Ever Raises Eyebrows
In another chapter of the AIG saga, the company is selling its Asian insurance operation to the British insurance company Prudential PLC for $35.5 billion. This is the biggest insurance deal ever made and some observers say the $35.5 billion is $15 billion more than AIG’s Asian operation is worth as a stand-alone business. But it won’t help American taxpayers get their money back from AIG because to buy the Asian business, Prudential PLC is issuing shares to AIG. This upsets shareholders of the British Pru who will see the value of their shares diluted. Also unsettling is the impact Asia AIG might have on Pru PLC’s general fortunes. The culture clash could be huge.

Wants Annuities A Must For DC Plans
America’s largest private retirement provider, TIAA-CREF, says companies should be required to offer annuities as an option in so-called defined contribution plans like 401(k)s. Adding annuities would help savers hedge their bets against stock funds whose market exposure makes them more volatile, the company’s CEO, Roger Ferguson, told the news service, Reuters. Long the domain of insurers, annuity contracts specify a stream of future payments and often compete with mutual funds for retirement savings. Other mutual fund companies have also touted annuities, including Fidelity, which last fall struck a deal to sell annuities with MetLife.

Annuity Depot Now Offering Security Products
Annuity Depot, the fast-growing Long Island GA, is now offering Security Mutual Life’s complete line of life insurance products and financial services. These include single and flexible premium deferred annuities, single premium immediate annuities, universal life, whole life and level term products along with worksite marketing products.

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