By Karen Freifeld
NEW YORK (Reuters) - The Iowa insurance commissioner approved Athene Holding Ltd's pending $1.55 billion purchase of British insurer Aviva Plc's
Aviva's U.S. operations are headquartered in Iowa, and approval from that state and New York were two regulatory hurdles for the deal, Apollo said in an August 8 earnings call.
Iowa Insurance Commissioner Nick Gerhart granted the approval to Athene Holding and Apollo Global Management
Iowa said Aviva cannot pay dividends or other distributions to shareholders for five years or make changes in its plan of operations unless approved by its insurance commissioner.
Aviva also must submit to greater scrutiny of affiliated investments and agreements, and its fixed annuities must meet certain reserve standards.
Jim Belardi, Athene's chief executive officer, said in a statement that the company would work closely with the state insurance division as the acquisition is completed.
On Wednesday, New York's Department of Financial Services said Apollo agreed to additional safeguards for policyholders as part of Athene's planned purchase of the New York unit of Aviva.
That deal, which still needs that state's approval, represents less than 3 percent of Aviva's U.S. operations.
New York's financial services regulator, Benjamin Lawsky, has expressed concern about private equity firms entering the annuity business. The insurance contracts typically guarantee monthly minimum payments to retirees.
Athene's acquisition of Aviva USA is expected to close early in the fourth quarter, according to the company.
Athene, a retirement savings provider, is funded by an affiliate of Apollo Global Management. Athene Holding's largest shareholder is AP Alternative Assets, a publicly traded vehicle
Apollo is the second major firm to agree to New York's enhanced demands. Guggenheim Partners last month agreed to similar protections as part of its planned purchase of Sun Life Insurance and Annuity Company.
(Additional reporting by Greg Roumeliotis; Editing by Dan Grebler)