HC2 Holdings unit Continental General Insurance completes LT care acquisition
HC2 Holdings (HCHC) announced that its insurance subsidiary, Continental General Insurance Company, has completed its acquisition of the long-term care insurance business KMG America Corporation from Humana (HUM). As of March 31, KMG's subsidiary, Kanawha Insurance Company, had approximately $150M in statutory surplus and approximately $160M of statutory total adjusted capital with approximately $2.4B of cash and invested assets. Under the terms of the Stock Purchase Agreement, Humana made an approximate $195M cash capital contribution to KMG's subsidiary Kanawha Insurance Company prior to closing.Post-close, CGIC will have cash and invested assets of approximately $3.8B, up from $1.5B prior to the transaction. Upon completion of the transaction, pro-forma statutory surplus for the combined entities is estimated to be between $155 - $175M and total adjusted capital is estimated at between $185 - $205M, subject to closing adjustments. "Completing the acquisition of Humana's long-term care insurance business marks another significant milestone in the growth of our insurance subsidiary and significantly increases the size of our insurance investment portfolio and more than doubles our total adjusted insurance capital base from approximately $85 million to the estimated $185 million to $205 million, providing incremental value to our shareholder base," said Philip Falcone, Chairman, President and Chief Executive Officer of HC2. "We believe this transaction validates our platform and positions us as the counterparty of choice for future LTC transactions."