BMO to buy AIG Canada

Good news! BMO (Bank of Montreal) is buying AIG’s Canadian life insurance operations. They picked it up for about $375 million. Full news here: Cnn Money

BMO will merge AIG’s operations with their own. And by ‘merge’ I mean if you work at AIG, you’d best get your resume sent over to Manulife tout-suite. The end result, they’ve bought the block of business but going forward AIG life insurance operations in Canada as an entity are gone.

The reason I say this is good news is that for existing policyholders this likely means business as usual - except now if you’re an existing AIG life insurance client your policies should basically be moved over to BMO for administration with no other changes (including changes to premiums and any other contractual provisions). In short, your life insurance policy should be just like it was before but now backed by BMO instead of AIG. That’s good news.

It’s also good news for those of us in the life insurance industry because it removes a source of uncertainty from the industry and shows once again that the business is stable.

Update: Here’s the link to the announcement from AIG.

Update 2: I also wanted to comment that this points to only good things about the Canadian life insurance industry.  Not only was AIG in Canada in good shape despite their parent company’s problems, but look how fast the company was snapped up by another insurer.  The regulators seem to be doing whatever they need to to ensure the industry is strong for consumers.