Around 90,000 Irish members of life assurer Standard Life could benefit from a probable flotation of the company.
The Edinburgh-based company said a proposal to demutualise would be put to a vote of its 2.6 million members at the annual general meeting in 2006. The proposal would need the backing of 75% of members.
The company also said that with-profits members who signed a three-year waiver before today will now be in line to benefit from demutualisation windfalls. But customers with mortgages, retail savings, mutual funds or healthcare products will not receive any benefits from the process. Standard Life has around 120,000 customers in Ireland.
The company also announced plans to slash around 1,000 jobs during the year and halted plans to launch a new business in France as new solvency rules and a declining market for its with-profits products force it to cut costs. The job cuts will not affect the Irish operations, which employ 240 people.
'While being a mutual has been a key part of Standard Life's success in the past, we now believe that raising further capital by way of demutualisation is likely to be in the best interests of the company and its policyholders,' chief executive Sandy Crombie said in a statement.
Mutual status meant the group was particularly hard hit by new funding rules being introduced by Britain's Financial Services Authority later this year.
The new reporting requirements require life insurers to hold higher reserves to cover policyholder guarantees and, as a mutual, Standard Life offered particularly generous pay-outs and could not go to the equity markets to raise cash.
The group shocked the life insurance sector last month when it said it had been forced to sell £7.5 billion worth of equities over a six-week period to reduce the amount of capital it needs to hold under the new rules.
Standard Life, which currently employs around 14,500 people, has also decided to close its defined benefit staff pension scheme to new entrants from November 16, 2004.
