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Life and annuity insurer Global Atlantic Financial Group has entered into a $8.0 billion annuity reinsurance transaction with financial services company Ameriprise Financial.

The deal is comprised primarily of fixed-rate and income annuities alongside a smaller component of fixed index annuities, and was carried out through Global Atlantic subsidiaries Commonwealth Annuity and Life Insurance Company and First Allmerica Financial Life Insurance Company.

Under the agreement, Ameriprise will cede $8 billion in annuity reserves and retain administration of the policies.

The deal is expected to close in July 2021 and will generate approximately $700 million of excess capital for Ameriprise, whose subsidiary RiverSource Life will retain account administration and servicing of the policies following completion.

In addition, Global Atlantic said that its Ivy co-investment vehicle will invest alongside Commonwealth Annuity and First Allmerica.

“We are always happy to find new ways to help existing clients continue to meet their financial objectives,” said Manu Sareen, President of Global Atlantic’s Institutional business. “Our approach has always been to build long-term relationships. By truly knowing our clients and understanding their objectives, we can customize more meaningful solutions for their needs.”

“This transaction further advances our consistent strategy of serving the needs of our clients comprehensively, while driving growth through our lower-capital, fee-based businesses and freeing-up capital to generate shareholder value,” added Jim Cracchiolo, Chairman and CEO at Ameriprise Financial.

Credit Suisse acted as financial advisors and Debevoise & Plimpton LLP served as legal counsel to Global Atlantic in connection with this transaction.

And for Ameriprise, Goldman Sachs acted as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel.