Bank of America has agreed to sell the assets and liabilities of its Balboa insurance unit and affiliated entities to Australia's QBE Insurance Group for $700m in cash.

The sale is part of the US lender’s latest bid to shed businesses and other assets as it recovers from the financial crisis.

Under terms of the agreement, QBE will assume substantially all of the insurance liabilities of Balboa in exchange for QBE’s acquisition of an equivalent amount of cash and other assets through a reinsurance transaction with Balboa.

In addition, QBE will acquire certain other assets of the Balboa business and will extend ongoing employment to those associates supporting these businesses.

QBE and Bank of America also agreed to enter into long-term distribution agreements for lender-placed insurance and real estate owned programs and certain voluntary consumer insurance products.

Bank of America said that the transaction is expected to result in a one-time after-tax gain and benefit Bank of America’s Tier 1 common capital, including a reduction in goodwill and other intangibles.

The remaining net tangible equity of approximately $1.7bn of Balboa will be retained by Bank of America and is expected to be available for redeployment over the next two years as the Balboa insurance liabilities expire.

Balboa Insurance was acquired by the former Countrywide Financial Corporation in 1999. The transaction is subject to regulatory approvals and expected to be completed in mid-2011.