AMP Life is the Australian and New Zealand wealth protection and mature businesses of AMP, an Australian financial services provider

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AMP signed a deal to sell AMP Life to Resolution Life. (Credit: AMP)

AMP is all set to wrap up the AUD3.3bn ($2.29bn) sale of AMP Life to Resolution Life by this month-end having secured all the regulatory approvals.

AMP Life is the Australian and New Zealand wealth protection and mature businesses of the Australian financial services provider.

The deal, which was announced in October 2018, cleared its major hurdle by getting the required approval for a revised arrangement from the Reserve Bank of New Zealand.

In July 2019, AMP said that the deal was unlikely to be closed due to the challenges in meeting a preceding condition needed to gain approval from New Zealand’s central bank. Originally, the transaction was anticipated to be closed in the second half of 2019.

The Reserve Bank of New Zealand said that it has been reviewing the proposed deal and has been in talks with the parties involved over the last 18 months to ensure that it met its requirements. The clearance from the central bank marks the last regulatory approval needed for the deal’s closure.

Resolution Life operates a specialist life insurance business, while AMP has been looking to quit the life insurance ownership business. The global insurance group took up the deal to expand its business beyond its traditional markets in Europe and the US.

Reserve Bank of New Zealand’s comments on the AMP Life transaction

Reserve Bank of New Zealand Deputy Governor and Financial Stability General Manager Geoff Bascand said: “Because AMP Life is a branch of an Australian business and intended to be in ‘run-off’ and not write new business, special arrangements were needed for the security of New Zealand policyholders.

“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency – one of the key risk considerations that we have been seeking to mitigate.”