Direct Line Life is a UK-based life insurance company and wholly-owned subsidiary of Direct Line Group. It became substantially closed to new business on 5 July 2011 and has been focusing on managing the existing portfolio in line with the run-off plan agreed at the time with the then FSA.
Prior to closure to new business, Direct Line Life predominantly offered non-linked products including mortgage life cover, fixed term life cover and over 50’s life cover to UK customers distributed under both its own brand and also in recent years, but before the closure to new business, on a white label basis.
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Direct Line Life is being acquired at an effective 74.7% of Chesnara directors’ estimate of the residual embedded value of £52.6 million as at 30 June 2013, adjusted to reflect a capital extraction of £23.0 million by the seller immediately at completion.
Chesnara said that the acquisition is subject to approval from the Prudential Regulation Authority (PRA).
Commenting on the acquisition, Chesnara CEO, Graham Kettleborough, said: "We are very pleased to have reached agreement to acquire a complementary UK business which we can integrate with our existing UK life book.
"Adding this portfolio to our existing book of business brings extra security, from increased size and concentrated governance, to both existing and the newly acquired policyholders," Kettleborough added.
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