Colonial is set to buy GAN Life's 800-strong direct salesforce for an expected seven-figure sum.
The move comes two weeks after GAN Life was bought for £300m by the Life Assurance Holding Corporation, the vulture fund set up by Sir Mark Weinberg in 1994.
Last week, Money Marketing revealed that LAHC was in talks with a life office to sell the salesforce.
Colonial has a UK salesforce of 400 and £3.8bn of funds under management. It is one of a few life offices committed to expanding its direct-sales operation. It also laun ched into the IFA market last August.
Colonial, which is thought to have been a bidder in the race to buy GAN Life, failed to buy Albany Life last year.
Colonial refused to comment on a possible deal. LAHC and GAN Life were unavailable for comment.