Nassau Reinsurance Group Holdings Completes Acquisition of Traditional Insurance Business from Universal American

  • Business to Operate Under Nassau Re as Constitution Life
  • $20 Million of New Equity Capital to Support Future Growth

HARTFORD, Conn. & WHITE PLAINS, N.Y.–(BUSINESS WIRE)–Nassau Reinsurance Group Holdings, L.P. (“Nassau Re”) and Universal
American Corp. (NYSE:UAM) (“Universal American”) today announced the
successful completion of Nassau Re’s previously announced acquisition of
Universal American’s Traditional Insurance business.

The Traditional Insurance business consists of a closed block of
insurance products, including approximately 150,000 insurance policies
across Medicare supplement, life insurance, long-term care, disability
insurance and other specialty health policies. Under the terms of the
agreement, Nassau Re acquired all of the shares of Constitution Life
Insurance Company (“Constitution Life”) and The Pyramid Life Insurance
Company, as well as the Traditional Insurance business written by
American Progressive Life & Health Insurance Company of New York on a
100% coinsurance basis. Going forward, these businesses will operate
under the Constitution Life brand as a privately held, wholly owned
subsidiary of Nassau Re.

At closing, Nassau Re paid approximately $30.5 million in cash, which is
subject to post-closing price adjustments. As part of the transaction,
Nassau Re contributed more than $20 million of new equity capital at
closing to strengthen the businesses and support strategic growth
opportunities.

“This latest acquisition further rounds out Nassau Re’s suite of
capabilities, which now covers life insurance and annuity products, life
insurance sales and distribution, asset management, policyholder
administration, and onshore and offshore reinsurance capabilities,” said
Phillip J. Gass, Nassau Re’s Chairman and CEO.

“In addition to providing stable profitability and predictable cash
flows to the Nassau Re group, Constitution Life highlights our ability
to creatively structure a transaction in order to provide a full and
complete exit to Universal American for their non-strategic business
lines. With its new equity capital and additional unfunded capital
available to Nassau Re, this business is well-positioned to continue
pursuing select closed block reinsurance transactions of long tail
liabilities,” Mr. Gass said.

Richard A. Barasch, Chairman and CEO of Universal American, commented,
“Our core strength is our proven ability to partner with providers,
especially primary care physicians, to improve health outcomes while
reducing costs in the Medicare population. With the sale of our
Traditional Insurance business, we can better concentrate our efforts on
growing our Medicare Advantage and Medicare ACO businesses.”

Nassau Re also announced today that Leland C. Launer, Jr., a Managing
Director of Nassau Re, will also serve as President of Constitution
Life, based in Lake Mary, Florida. Mr. Launer most recently served as
CEO and President of Fidelity & Guaranty Life (NYSE:FGL).

The closing of this transaction follows the receipt of regulatory
approvals from the states of New York, Texas and Kansas and the Cayman
Islands Monetary Authority.

Debevoise & Plimpton LLP acted as legal advisor to Nassau Re, and Locke
Lord LLP acted as legal advisor to Universal American.

About Nassau Re

Nassau Re currently has assets exceeding $17 billion, and focuses on
building a franchise across the insurance value chain. Nassau Re’s
extensive experience as owner-operators of numerous insurance and
financial services businesses provides a competitive advantage in
building a unique platform over the long term. Subsidiaries currently
include The Phoenix Companies, Inc., Saybrus Partners, Inc., Nassau
Asset Management, LLC, Nassau Re (Cayman) Ltd. and Constitution Life
Insurance Company. Nassau Re was founded in 2015 with an initial capital
commitment of $750 million provided by Golden Gate Capital. For more
information, visit www.nsre.com.

About Universal American Corp.

Through its family of healthcare companies, Universal American provides
health benefits to people covered by Medicare. The company is dedicated
to working collaboratively with healthcare professionals, especially
primary care physicians, in order to improve the health and well-being
of those they serve while reducing healthcare costs. More information
about Universal American is available at www.universalamerican.com.

Contacts

Nassau Re
Alice S. Ericson, 860-403-5946
alice.ericson@phoenixwm.com
or
Universal
American Corp.

Adam Thackery, 914-597-2939
Chief
Financial Officer

or
Sard
Verbinnen & Co

Jenny Gore, 312-895-4700
David
Isaacs, 415-618-8750