New York approves Guggenheim buy of Sun Life; potential model for private-equity annuity firm deals

Guggenheim Partners has agreed to "enhanced" protections in its purchase of Sun Life Insurance and Annuity Company to safeguard policy holders, paving the way for state approval of the deal, New York's top financial regulator said in a statement on Wednesday. The protections could serve as a model for private equity firms buying annuity companies in the future, adding layers of scrutiny in a bid to shield retirees and other long-term investors who typically buy annuities. Benjamin Lawsky, Superintendent of Financial Services, has previously pointed to worries about the recent trend of private equity firms acquiring annuity businesses. As recently as Tuesday, Lawsky said he was concerned about private equity firms' "short-term focus" in these purchases. A fixed annuity is an insurance contract that guarantees an investor a minimum monthly payment. The added protections by Guggenheim include heightened capital standards, a separate backstop trust account, enhanced regulatory