The Overseas Investment Office (OIO) is advancing its review of the sale of Suncorp Group’s life insurance unit, Asteron Life, to Resolution Life, with a decision anticipated by early July.
In April, Suncorp announced the sale of Asteron Life to Resolution Life Australasia for NZ$410 million. Resolution Life will make an initial payment of NZ$250 million upon closing, with the remaining balance payable 18 months later, during which interest will accumulate.
Resolution Life Australasia, a segment of the global insurance firm Resolution Life, manages about NZ$30.4 billion in assets in Australia and New Zealand.
The transaction requires clearance from the OIO, the Commerce Commission, and the Reserve Bank of New Zealand (RBNZ).
The OIO, part of Toitū Te Whenua Land Information New Zealand (LINZ), has confirmed receiving the application from Resolution Life to acquire Asteron Life. The application is under active review, with a decision expected by early July.
“This is a significant business assets acquisition and the test required to be met is the investor test,” a LINZ spokesperson said, as reported by Interest.co.nz.
The investor test determines the suitability of investors to own or control sensitive assets in New Zealand and is critical in the assessment of consent applications.
The RBNZ confirmed its awareness of the proposed sale.
“The proposed sale is subject to RBNZ approval under the Insurance (Prudential Supervision) Act 2010. This requires the RBNZ to be satisfied that Asteron Life is eligible to hold a licence under the Act following the sale,” a spokeswoman told Interest.co.nz.
Being eligible involves maintaining a current financial strength credit rating, demonstrating prudent business practices, complying with regulations, maintaining minimum capital levels, and having robust risk management and governance structures.
The spokeswoman added that Resolution Life must also meet requirements related to incorporation and ownership structure, comply with relevant laws and regulations, and fulfill obligations under other relevant legislation.
Suncorp aims to finalise the sale within nine months, seeking all necessary regulatory approvals by January 2025.
Suncorp CEO Steve Johnston called the sale advantageous for stakeholders.
“We have simplified our portfolio in recent years under a strategy designed to align everyone at Suncorp around improving the way we deliver value for our Australian and New Zealand customers. We remain committed to the New Zealand general insurance market as part of our refocused group,” he said, as reported by Interest.co.nz.
In April, Asteron Life appointed a new chief underwriter amid its growth plans.
