Newport Beach’s Pacific Life Insurance Co. is buying a unit of Canada’s largest insurance company.

Pacific Life, the second-largest privately held company here, plans to buy the life retrocession business from Manulife Financial Corp., the company announced the Monday.

The retrocession business essentially insures copanies that specialize in reinsurance.

The sale will result in an after-tax gain of about $287 million for Manulife, according to the company.

Its portfolio of approximately $106 billion of individual life reinsurance stands to make Pacific Life the leader in North America for the segment, with approximately 41% market share, according to the company.

The transaction, subject to standard closing conditions and regulatory approvals, is expected to close in the current quarter.

Insurance companies purchase reinsurance as a way to manage their insurance risk.

Often, these reinsurers want to reinsure their insurance risk, which is done through retrocession agreements with another insurance company, called a retrocessionaire.

Pacific Life has been in the life retrocession business since 2002.

Nearly all of 90 employees in Manulife's retrocession division have been offered jobs with Pacific Life, the company said.

The operational centers for the business will remain in Toronto and Boston.

David Howell, chief executive off Pacific Life Re, a unit of Pacific Life, will oversee the new operations from London.

Pacific Life and its sister companies offer life insurance policies, investments and jet leases.

The company generates more than $5 billion annually in revenue, mostly from life insurance premiums and annuities.

Earlier this year Fountain Valley-based Kingston Technology Co., a maker of memory products for computers and consumer electronics, surpassed Pacific Life to become the largest privately held company in the county, according to Business Journal research.

Kingston saw 2010 revenue of $6.5 billion, up 59% from a year earlier after a slump in prices for memory chips gave way to a surge that boosted sales at the company.

Pacific Life has been offering life insurance since 1868, when it got its start in Sacramento. Former California governor, U.S. senator and Stanford University founder Leland Stanford was the company’s first president.

The insurer moved to Southern California in 1906 after the San Francisco earthquake demolished its headquarters.

In the 1970s, Pacific Life created Pacific Investment Management Co., which now manages more than $1 trillion in bond funds and other investments.

Pimco split off from Pacific Life in 1994.