UPDATE 1-Cigna to sell unit to New York Life Insurance in $6.3 bln deal

(Adds background on unit, CEO quote)

Dec 18 (Reuters) - Health insurer Cigna Corp said on Wednesday it had agreed to sell its disability insurance and accidental death coverage unit for company employees to New York Life Insurance Co for $6.3 billion.

The company said it expects to use the net proceeds of about $5.3 billion for share repurchases and repayment of debt in 2020 and raised its share repurchase authority by $3 billion to $4 billion.

"Cignas group life and disability business enhances our portfolio of strategic businesses," New York Life Chief Executive Officer Ted Mathas said.

The deal is expected to close in the third quarter of 2020, the companies said.

The unit, which also offers life and dismemberment coverage,

reported adjusted third-quarter revenue of $1.28 billion and has insured 15.4 million people.

(Reporting by Saumya Sibi Joseph and Trisha Roy in Bengaluru; Editing by Vinay Dwivedi)