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Life insurer at centre of flotation speculation.

Europe's biggest mutual life insurer Standard Life is understood to be considering a pounds 4bn flotation on the stock market, it emerged yesterday.

The move, which would trigger windfalls for the society's 2.6 million policyholders, comes after it emerged the mutual was locked in talks with City regulator the Financial Services Authority over the interpretation of new "realistic" accounting measures.

The Edinburgh-based society has previously been a staunch defender of its mutual status. However, newspapers yesterday reported it was consulting its advisers at investment bank UBS over the move to raise cash by listing.

Other options understood to be under consideration include raising capital in the bond market, or demerging its North American Business Standard Life Canada or Standard Life Investments, which currently has around pounds 86.5bn under management.

Standard Life declined to comment on the speculation surrounding a possible demutualisation.

But a spokesman said: "The board's position has always been that Standard Life will continue with mutuality as long as we think it is the right thing for our with-profits policyholders.

"But the board isn't wedded to mutuality as some sort of mantra. If there were any reason with-profits policyholders would be better off with a different corporate structure, the board would look at that."

Last week it emerged that the group was involved in talks with the FSA over the interpretation of certain aspects of the new "realistic" regime which is being introduced for insurers from this year.

Press reports claimed the society would see its level of core capital more than halved once the new rules were implemented, potentially reducing the bonuses it paid to its with-profits policyholders.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Jan 12, 2004
Previous Article:Business Diary.
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