Prudential Financial Inc. (NYSE:PRU) has agreed to pay $615million in cash to acquire the Hartford Financial Services Group(NYSE:HIG) individual life insurance business.

Prudential and Hartford saidthey hope to get the regulatory approvals they need to complete thedeal by early 2013.

Prudential would end up reinsuring about 700,000 life policiesthat provide about $135 billion in coverage.

Prudential would get control over the $7 billion in assets andreserves backing the policies, and it would take over management of$5 billion in separate account assets.

“The benefits and provisions of The Hartford's in-force lifeinsurance contracts will remain unchanged, and The Hartford'sissuing companies will continue to be the named insurers,”Prudential said in a statement.

Prudential will collect the policy premiums, and it will bereponsible for paying claims and providing customer service andadministration, Prudential said.

Jim Avery, the chief executive officer (CEO) of the Prudentialindividual life business, will retire when the transaction closes,and Kent Sluyter, the chief actuary, will take over as the CEO ofthe business, Prudential said.

Avery has been the unit CEO for 14 years. He delayed hisretirement to help negotiate the Hartford life unit deal,Prudential said.

Sluyter, the incoming CEO, has been working for Prudential since1981. He has a bachelor's degree in mathematics from LafayetteCollege and holds the fellow of the Society of Actuaries andChartered Life Underwriter professional designations.

Hartford announced in March that it would be sellingits retirementplans, broker-dealer individual lifebusinesses and focusing mainly on itsproperty-casualty, group benefits and mutual funds businesses.

The company recently agreed to sell the WoodburyFinancial Services Inc. broker-dealer arm toAmerican International Group (NYSE:AIG) and the retirement plansbusiness to Massachusetts Mutual Life InsuranceCompany.

The Prudential deal announcement “represents a significantmilestone in the execution of The Hartford's strategy to delivergreater value to shareholders,” Hartford Chairman Liam McGee saidin a statement. “In about six months, we have completed threeagreements, all executed at attractive valuations to strongfinancial institutions that have a strategic interest in thebusinesses.”

The Prudential deal and the other deals should help Hartfordincrease returns on equity, reduce the company's sensitivityto capital markets, cut capital costs and increase financialflexibility, McGee said.

Fitch Ratings said the Prudential deal should not have mucheffect on Hartford's equity but should increase net statutorycapital at Hartford Life by about $1.5 billion.

Fitch likes Hartford's ability to do the Prudential deal and theother big deals quickly and to get reasonable prices, the ratingagency said in a comment.

“A lengthy time horizon for a sale could have increaseduncertainty and impaired the market position of these businessesand potentially forced a distressed sale,” Fitch said. “Favorably,over the long term, management's decision to exit the more volatilevariable annuities (VA) and individual life businesses should helpto reduce risk by making the company less vulnerable to swings inperformance.”