Canada Life, a subsidiary of Great-West Lifeco, has acquired the assets and liabilities associated with Equitable Life's annuity business in the UK.
The transaction involves approximately 31,000 policies, having liabilities and supporting assets with an approximate value of around £875m ($1.34bn) on 31 December 2014. The terms of the deal were not disclosed.
The assets and liabilities were initially transferred via indemnity reinsurance effective 1 January. This will be followed by a formal transfer of assets and liabilities via a court sanctioned process that is expected to complete by the end of 2015.
According to Equitable Life, the run-off of its annuity book is considerably longer than its with-profits business. As with-profits policyholders provide the capital to support non-profit annuities, the Equitable Life board concluded that the long-term interests of all its policyholders were best served by transferring the annuity payment obligations to Canada Life.
The two companies have transferred annuity business before. In May 2006, Canada Life acquired £4.6bn of Equitable Life's non-profit annuity business, made up of around 130,000 UK pension policies.
"Great-West Lifeco continues to grow organically and through acquisitions in its target segments," said Paul Mahon, Great-West Lifeco president and CEO. "We continue to look for opportunities to grow our overall UK business, and in particular, to respond to the changes in pension legislation last April."
Canada Life has had a busy 2015 so far. Last month it purchased Legal & General International Ireland, a subsidiary of Legal & General Group based in Dublin that provides investment and tax planning solutions, primarily focused on the UK high net worth market (IAR, 11 February, L&G to sell offshore unit to Great-West Lifeco).