The New York insurance unit of Aviva Plc was negotiating with state regulators. The regulators were pushing for more reserves tied to the agreed sale to Apollo Global Management LLC of Leon Black.

The New York Department of Financial also sought after the advance consent for alterations regarding the investment plan. This included matters about payments from the unit to the parent company. The information came from a person with knowledge of the talks.

The US$1.8 billion deal involved a unit in Iowa. The deal would face a court hearing with the government's insurance authorities tomorrow. New York communicated its Iowa counterparts, said the source.

Benjamin Lawsky, the DFS Superintendent, investigated transactions made by investment companies like Apollo to purchase insurers. Lawsky said that investment firms would tend to create financial wagers which put risks to policyholders.

"The risk that we're concerned about at DFS is whether these private equity-firms are more short-term focused, when this is a business that's all about the long haul," Lawsky stated in his speech delivered last April 18. "Their short-term focus may result in an incentive to increase investment risk and leverage."