This commentary follows the Sept. 21, 2017, announcement from Sovereign’s ultimate parent, Commonwealth Bank of Australia, that it will sell 100% of its life insurance business in Australia and New Zealand to AIA Group Limited (AIA) (Hong Kong). The sale agreement also includes a 20-year partnership with AIA for the provision of life insurance products to customers in Australia and New Zealand.

The transaction remains subject to regulatory approval and is expected to close in 2018. A.M. Best will continue to monitor the progress of the acquisition and evaluate developments for any impact on the ratings.

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