Reliance Mutual Insurance Society is to be demutualised and its 200,000 policies and assets of £1.9bn bought by the Life Company Consolidation Group.
Under the proposed transaction it is expected that Reliance Mutual’s members will receive a one-off payment dependent on policy size to compensate for loss of membership rights.
Also, members with voting rights will also receive an additional fixed payment compensating them for the loss of their voting rights.
LCCG stated policyholders will benefit from enhanced security as a result of LCCG’s agreement to capitalise what will emerge as a new life company at a level which is materially in excess of Reliance Mutual’s current capital position.
With-profits policyholders will benefit from reduced exposure to ongoing operating expenses and the transfer of all liabilities relating to the Reliance Pension Scheme.
Two of Reliance Mutual’s non-executive directors will join the board of the new life company to provide continuity of oversight for all transferring policyholders.
LCCG is a specialist life assurance group, which is focussed both on the international life market and on the management of in-force policies.
The business is backed by funds managed by Oaktree Capital Management, which is listed on the New York Stock Exchange with a market capitalisation of $6bn and assets under management of $100bn.