Humana Inc. has completed the sale of the stock of wholly owned subsidiary KMG America Corp. to HC2 Holdings Inc. subsidiary Continental General Insurance Co.
KMG's subsidiary Kanawha Insurance Co. includes Humana's closed block of nonstrategic commercial long-term care insurance policies that serves approximately 29,300 policyholders.
As of March 31, Kanawha had about $150 million in statutory surplus and about $160 million of statutory total adjusted capital, with about $2.4 billion of cash and invested assets. Humana infused $195 million in cash capital to Kanawha prior to closing.
Post-close, Continental General will have cash and invested assets of approximately $3.8 billion, up from $1.5 billion prior to the deal. Upon completion, pro forma statutory surplus for the combined entities is estimated to be between $155 million and $175 million, and total adjusted capital is estimated at between $185 million and $205 million, subject to closing adjustments.
Goldman Sachs & Co. LLC acted as financial adviser and Locke Lord LLP served as legal adviser to Humana. Keefe Bruyette & Woods Inc. served as financial adviser and Drinker Biddle & Reath LLP was legal adviser to Continental General.