Guardian Life Insurance Co., the $31.7 billion-asset mutual life insurer, says it plans to buy Berkshire Life Insurance Co. of Pittsfield, Mass.

The deal, announced this month by New York-based Guardian Life, would buttress the company's presence in the disability income market and let it expand into other markets by leveraging Berkshire's product development capability, said Dennis Manning, executive vice president for individual markets and group pensions at Guardian.

Because Guardian had been having difficulty building its disability distribution, and Berkshire Life has depth and strength in that area, the deal is considered "a good fit," according to Michael A. Cohen, assistant vice president of A.M. Best Co. in Oldwick, N.J.

Berkshire Life, at $1.5 billion of assets, is to function as a subsidiary of Guardian Life and run its disability business. Guardian is interested in developing bank-owned life insurance and corporate-owned life insurance with Berkshire as well, Mr. Manning said. It also wants to expand into private placement life insurance and group term carveout, a type of life insurance for top executives, he said.

In the past two years, Guardian has also been moving its marketplace profile from that of a captive distributor of life insurance products to that of a diversified provider of retail financial services. It distributes its equity products through independent broker-dealers and has just begun a pilot program in which general agents form their own links with banks to distribute Guardian products. However, Guardian has no direct wholesaling distribution arrangement with banks and does not plan to initiate any.

The deal would be Guardian's third this year: In January it bought Fiduciary Insurance Co. of America, a New York-licensed disability provider, and First Choice Dental Network, a dental PPO in Washington State.

The Berkshire deal is expected to be close by mid-2001.

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