September 28, 1999
New York, NY

Scottish Annuity Close to Buying U.S. Reinsurer
Michael C. French, President & CEO

The Cayman Islands-based reinsurer, Scottish Annuity & Life Holdings Ltd., said it has received regulatory approval for its acquisition of Harbourton Reassurance Inc., Aurora, Colo., and expects to close on the transaction next month.

Michael C. French, president and chief executive officer of Scottish Annuity, reported the progress on the transaction during his presentation Tuesday at the Life Insurance Conference of CIBC World Markets, an event co-sponsored by A.M. Best Co.

When Scottish Annuity announced the acquisition plan in June, it said the price would depend on Harbourton's statutory value when the transaction closes. Harbourton has a closed-block of business, with reserves of about $90 million, statutory assets of about $136 million and capital of about $38 million as of March 31.

The acquisition of the annuity reinsurer will mark Scottish Annuity's expansion into the lucrative U.S. market.

"In the United States alone, there's an estimated 100,000 individuals who have a net worth of $10 million or more," French said Tuesday.

Scottish Annuity sells variable life insurance to high net-worth customers and long-term reinsurance for in-force blocks of annuity and life business, which currently is better suited for offshore transactions. Scottish Annuity said Harbourton would bring a good book of existing annuity reinsurance business and a way to pursue short-term annuity business in the United States.

"There's a growing demand for variable life products and growing opportunities for us internationally in the variable annunity business," French said.

He reported that the company had $15 million outstanding in variable policies as of June 30. That number has now swelled to $30 million to $35 million with face value, and should climb significantly by year's end, he said.

Scottish Annuity's stock trades as "SCOT" on the Nasdaq stock market It was selling at $9.8125 Wednesday afternoon.