CT Insurance Commissioner Okays CIGNA, Pru Deal

March 26, 2004 (PLANSPONSOR.com) - Connecticut's insurance commissioner has given the green light for CIGNA to move forward with the $2.1 billion selloff of its retirement services business to Prudential Financial Inc.

Commissioner Susan Cogswell’s decision calls CIGNA’s  retirement business “an important part of the fabric of Connecticut” and cites Prudential’s commitments “related to the public interest of the state of Connecticut and the Hartford community.”   Further, the commissioner’s decision says the deal meets criteria required by state law including the fact that it will not “substantially lessen competition” in Connecticut or create prejudice against the interest of policyholders, according to a Hartford Courant report.

Among the commitments Prudential made to the community is a promise that the business would remain in  Hartford, “where there will continue to be a meaningful executive presence, and where significant operational activities will continue to be maintained.”   However, Prudential has previously announced plans to cut 25% of the Hartford jobs in the CIGNA retirement business over 12 to 18 months (See Pru Acquisition Will Cost CIGNA Jobs ).

The companies expect to complete the deal, which still needs other regulatory approvals, in the first half of this year.     Under terms of the agreement, CIGNA will shift the retirement business to CIGNA Life Insurance Co, which Prudential will acquire and rename as Prudential Retirement Insurance and Annuity Co.   First announced last November, (See  It’s Official: Pru Buys CIGNA Retirement ), CIGNA said it put the retirement business on the auction block after deciding to focus on its troubled health insurance operations.