Not long after its CEO said it was close to selling its run-off variable annuity death benefit business, Cigna Corp. has reached an agreement with Berkshire Hathaway Life Insurance Co. to do just that. Under the deal announced late yesterday, Berkshire, part of Warren Buffet’s Berkshire Hathaway, Inc. group, will assume 100 percent of Cigna’s exposure to future variable annuity death benefits and guaranteed minimum income benefits (GMIB) up to $4 billion.
In a press statement, Cigna said that $4 billion far exceeds current projections of future variable annuity death benefit and GMIB claims. The chance of actual claims surpassing Berkshire’s coverage limit is “extremely remote,” according to the company. Transfer of the business was effective as of yesterday.