Washington Court Backs Western United Life Sale

Washington State's Thurston County Superior Court approved the sale of Western United Life Assurance Company to Global Life Holdings LLC (Global Life) last Friday for a new projected purchase price of $55 million.

“I’m very pleased that we reached an agreement and that the court approved the sale,” said Washington Insurance Commissioner Mike Kreidler. “We have an increased purchase price that’s in the best interest of everyone involved and we avoid a potentially lengthy and expensive legal battle.”

Kreidler invited the involvement of the parent companies, Metropolitan Mortgage & Securities, Inc. (Met) and Western United Holding Company (WUHC) and said it strengthened what was already a good deal.

Global Life originally proposed purchasing Western United for capital and surplus which is estimated to be over $50 million at closing, but has agreed to kick-in an additional $2 million in cash and another $2 million from the future sale of specific real estate. The total amount of the sale will be based on an adjusted capital and surplus at the time of the closing.

“The willingness of Global Life to amend its purchase price demonstrates its goodwill toward the parent companies and the Spokane community,” said Kreidler. “That its business plan includes keeping Western United in Spokane and expanding its business is further good news.”

According to the sales agreement:

• All current, outstanding shares of common and preferred stock of Western United will be redeemed and new shares will be issued to Global Life.
• Cash and assets may go directly to Met and WUHC.
• Assets based on the value of capital and surplus at the date of the closing will be transferred to the creditors. The assets include $7 million in cash, $ 2 million from the future sale of a specific parcel of real estate, real estate valued at nearly $15 million, and approximately $31 million in reinsurance payments from Old Standard Life Insurance Company, a related company. Assets to be transferred are valued according to statutory accounting principles which may be less than Generally Accepted Accounting Principles (GAAP) or market value.

Kreidler was granted receivership of Western United in March 2004 in order to protect the company and its policyholders from the bankruptcy of its parent company, Met.