Mutual LV= is proposing to change its status from a friendly society to a company limited by guarantee so it can make decisions more nimbly.
The announcement was made in annual results published today and will be subject to a vote among LV= members at a special general meeting on 22 May.
Currently, LV= is a friendly society is and therefore governed by the Friendly Societies Act.
LV= says many of that act’s provisions are out of date and the board believes it restricts its ability to manage the business effectively and in the best interest of members.
The proposed change to a company limited by guarantee would result in LV= being governed by the Companies Act rather than the Friendly Societies Act but will not change the company’s mutual status.
LV= group chief executive Richard Rowney says: “Our friendly society status has served us well for many years but the Friendly Societies Act is becoming outdated and restricts our opportunities for growth and future development.
“While our ethos remains the same, we need the right mutual structure in place to truly flourish moving forward.
“Converting to a company limited by guarantee provides the foundations from which to build on our heritage and strong brand to create a better mutual for the future, where being a member has more meaningful benefits.”
The results for the year to 31 December 2018 also notes tough conditions in a highly competitive market reduced sales and margins.
It says the fall in defined benefit to defined contribution transfers has reduced the sales of its pensions business.
They show new sales reduced for the life business by 13 per cent year-on-year from £1.7bn to £1.5bn on a present value of new business premiums basis.
Within pensions, sales were down by £306m or 23 per cent, with DB to DC transfers reducing from their peak at the end of 2017.
But the results also show annuity sales improved by £19m or 16 per cent and now total £137m while equity release performed strongly with sales up by £92m.
LV= group finance director Andy Parsons says: “During 2018 we focused on reducing our cost base to prepare for the future as an independent life and pensions business once we exit from the agreement to provide transitional support services to the general insurance business. This focus has resulted in a further £19m decrease in group operating costs. We will continue to exercise rigorous cost control in the future.”