Insurance group AMP has advised that the sale of its Australian and New Zealand wealth protection and mature businesses (AMP Life) to Resolution Life is highly unlikely to proceed.
According to AMP, the transaction is facing considerable uncertainty due to the challenges in meeting the condition precedent for Reserve Bank of New Zealand (RBNZ) approval. The firm detailed a notice by Resolution Life, which suggests RBNZ would not consider the firm’s change of control application unless it agreed to have separate, ringfenced assets held in New Zealand for the benefit of New Zealand policyholders, which is inconsistent with the current branch structure. As a result, Resolution Life does not expect RBNZ to approve an application that would satisfy the condition precedent.
AMP believes that this reflects RBNZ’s position and that addressing these requirements would adversely impact the commercial return of the sale for both AMP and Resolution Life.
“The failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP’s strategy,” AMP said. “Recognising that the transaction is unlikely to proceed in its current form, AMP is now working with Resolution Life to determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution.
“This will require the negotiation of new terms and is not certain,” it noted.
The insurer highlighted that the AMP Board will review any revised transaction to determine if it is in the best interests of policyholders, the company and its shareholders. Should the revised transaction fail to secure regulatory approval, AMP said it will retain AMP Life and manage it as a specialist life insurance and mature business.