AMP Limited has revealed that the transaction for the sale of AMP Life (the Australian and New Zealand wealth protection and mature businesses) to Resolution Life is “highly unlikely to proceed” in its current form (see: AMP New Zealand Sold).
It stated this is due to challenges in meeting the condition precedent for Reserve Bank of New Zealand (RBNZ) approval.
“This condition requires RBNZ approval of a change of control for AMP Life in a form consistent with the current branch structure (which exempts AMP Life from a number of New Zealand legislative requirements),” the company stated.
AMP stated that it was notified by Resolution Life on 13 July 2019, that:
- RBNZ would not consider Resolution Life’s change of control application unless it agreed to have separate, ringfenced assets held in New Zealand for the benefit of New Zealand policyholders, which is inconsistent with the current branch structure; and
- As a result, Resolution Life does not expect RBNZ to approve an application that would satisfy the condition precedent.
AMP believes that this reflects RBNZ’s position and that addressing these requirements would adversely impact the commercial return of the sale for both AMP and Resolution Life.
It noted the failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP’s strategy.
In response, AMP stated it is working with Resolution Life to determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution, which will require negotiation of new terms and is not certain.
The interests of policyholders, both in New Zealand and Australia, have been and will continue to be paramount, it stated.
AMP’s Board will review any revised transaction to determine if it is in the best interests of policyholders, the company and its shareholders.
AMP stated that if a revised transaction cannot be reached and be approved by RBNZ, then AMP will retain AMP Life and manage it as a specialist life insurance and mature business with a focus on policyholder outcomes, cost and capital efficiency.