Currently, the life and annuity reserves of the Genworth life insurers are concentrated in GLAIC while the LTC reserves are recorded in GLIC and GLICNY.
Additionally, Fitch notes that GLIC, GLICNY and GLAIC are domiciled in separate states - Delaware, New York and Virginia, respectively.
and the receipt of at least USD200 mfrom the purchase by GLAIC
of the Genworth Holdings, Inc.
Delaware regulators have independent advisors who think GLAIC is worth more than that, based on a cash-flow analysis, McInerney said.
Genworth is working with Delaware officials to resolve the GLAIC valuation matter and can't tell analysts much about that, McInerney said.
Genworth has been trying to change the relationship of its GLIC and GLAIC units.
GLAIC is the unit that writes life insurance and annuity products.
Genworth has been trying to make GLAIC a sister of GLIC, rather than a daughter of GLIC.
If the life and annuity unit becomes a sister of the LTCI unit, rather than a daughter, that would "allow any future GLAIC dividends to be paid directly to the holding company," McInerney said.
Suspending sales of new life and annuity products will eliminate the need for the GLAIC unit to come up with the cash to pay up-front life and annuity commissions while improving the unit's statutory earnings, McInerney said.
-- If Fitch believes there is a decline in financial flexibility as the result of a failure to complete the proposed acquisition, GLAIC's rating could be downgraded.
--Successful un-stacking of GLAIC from GLIC ownership.