By Huw Jones
LONDON -Britain’s financial watchdog said on Tuesday it won’t stop insurer LV= from proceeding with the disputed sale of its pensions and life insurance business to U.S. private equity company Bain Capital.
LV=, founded in 1843 and formerly known as Liverpool Victoria, needs court approval to hold a members’ vote on the 530 million pounds ($728.86 million) sale, which would end its mutual status, meaning it would no longer be owned by the members.
“The Financial Conduct Authority has confirmed its non-objection to LV= taking forward its next steps towards asking its members for their views on demutualisation,” the regulator said in a statement.
“This decision follows extensive engagement with LV=, during which we challenged their proposals where necessary to ensure the fair treatment of their policyholders.”
A report by an All-Party Parliamentary Group of lawmakers said in April that it is very difficult for an LV= member to assess if demutualisation is in their best interests or not.
A demutualisation would damage diversity in financial services, and the LV= leadership has not been open and transparent about its intentions for the company, the report said.
The FCA said for the deal to go ahead it will need the backing of 75% of members who do vote.
“We have challenged LV= on their current and planned engagement and communications strategy with their policyholders and members, as an area of particular concern for us,” the watchdog said.
($1 = 0.7272 pounds)