Australia-based Freedom Insurance has decided to divest its policy administration business to an undisclosed service provider for A$5m ($3.6m).
The decision to dispose of the business follows a Royal Commission inquiry into the financial sector when the company was accused of using unethical practices, including dubious direct-sales tactics.
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After the Royal Commission inquiry, the company lost almost all of its stock market value in 2018, effectively destroying its business model.
Subsequently, the insurer axed a number of jobs and stopped outbound sales of certain insurance plans.
In November, Freedom chairman David Hancock stepped down and CEO Craig Orton quit in January after holding the job for just three months.
In February, Freedom shares were suspended from the Australian Securities Exchange after the company failed to provide material update about its financial condition.
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By GlobalDataIn a statement, Freedom also said that the company is planning to sell its Spectrum Wealth Management business.
Freedom said that it will use the proceeds from the sale of the policy administration business to pay creditors. It will also stop other insurance operations and meet required regulatory obligations.
In a statement, Freedom Insurance said: “For confidentiality reasons, Freedom is unable to disclose the identity of the Service Provider before it enters into the underlying agreements.”
