Britain's Prudential Plc has agreed to pay $104 million per month if the deal to acquire the Asian unit of American International Group does not close by August 31 along with a termination fees of $231 million.

According to a filing with the U. S. Securities and Exchange Commission, Prudential has agreed to pay 0.4 percent, of the cash consideration outstanding per month from September 1 to American International Assurance incase the deal breaks down.

The Prudential is spending billions on acquiring AIA to become a big player in the Asian insurance market, but its rival Aviva shrugged off Prudential’s growth plans, saying it would focus on Europe rather than Asia.

Britain's second-largest insurer Aviva’s chief executive Andrew Moss has described Prudential’s planned takeover of AIA for $35.5 billion as "audacious".

Mr. Moss added that European insurance market would grow faster than Asian.

Troubled US insurer American International Group, which agreed to sell its Asian life insurance unit AIA to Prudential for $35.5 billion, benefited a lot for showing patience.

Earlier in 2008 also, AIG had put AIA for auction, but it rolled back its plans and decided to wait because it failed to find any suitable buyer as markets were down due to economic slump.

At that time AIG was getting nearly half of what Prudential is paying now for its Asian business.

US insurance giant American International Group has reportedly agreed to sell its Asian life insurance unit AIA to British insurer Prudential in a deal worth around $35.5 billion.

People familiar with the matter said that the deal had already been signed off by the Federal Reserve and Treasury Department.

Troubled AIG is selling off some of its assets to repay $182.3 billion in taxpayers’ money, which was pumped into the insurer by the Government to bail it out at the peak of financial crisis in 2008.

British insurer Prudential PLC is pursuing discussions to buy the Asian life-insurance operations of the American International Group, media reports suggested.

People familiar with the matter informed that the transaction could be valued at more than $25 billion and the British insurer could go for a share issue to fund the possible deal.

Prudential operates chiefly in the US, England and Asian countries such as China, Hong Kong, India, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Indonesia, Japan, Korea and the like.

Prudential's with-profits fund regained 18.7 per cent in 2009, three times more than Aviva's with-profits fund, which returned 6 per cent.

However, Aviva says Prudential's strong results has not filtered through to customers with a 10 year bond return of 4 per cent, contrasted with Aviva's 6.4 per cent payout last year.

The Pru's giant £61 billion with-profits fund grabbed up an 18.7 per cent return before tax supported by 30 per cent return in the FTSE all share index.

British insurer RSA announced on Thursday that it suffered a fall of 27 per cent in pre-tax profit in 2009, but added that it remained confident of delivering excellent results in future.

RSA said it pocketed a pre-tax profit of 554 million pounds, down from 759 million pounds in 2008.

Gross written premiums jumped from 7.27 billion pounds in 2008 to 7.74 billion pounds last year, while net written premiums climbed 4 per cent to 6.74 billion pounds.

Insurer Legal & General produced more than £650m of net cash from its UK business last year, beating estimates for about £50m. It increased UK net cash two times from what was generated in 2009, going ahead of its own fixed targets.

"Ongoing changes to product mix and design, cost reductions, favorable pricing conditions in the annuity market and substantial growth in assets under management have delivered results well ahead of expectations", said Chief Executive Tim Breedon.

Insurance giant Legal & General has reported an increase of 13 per cent in individual annuity sales over the previous year.

L&G said its individual annuity sales jumped to £98 million during 2009 as compared with £87 million in 2008.

Company’s gross new business from corporate pensions clients stood at £29 billion, up from £27.6 billion in the previous year.

However, individual pension sales slipped year-on-year 17 per cent to settle at £272 million over the previous year.

Health insurer WellPoint Inc. will eliminate 111 claims-processing jobs in Green Bay. The state Department of Workforce Development says that the job cuts are expected to begin in early April and be completed by the end of June.

The department will move the work to help the affected employees of the WellPoint subsidiary, Anthem Blue Cross/Blue Shield. WellPoint Inc. spokesman Scott Larrivee said that Wellpoint Inc. is moving the work to Indianapolis in an effort to lower overall administrative costs.

Indianapolis - Aetna Inc. officially reported that its fourth-quarter earnings for the past year plunged by 15% as the company continued to struggle with rapidly rising medical costs that effectively managed to hurt performance all throughout 2009.

On Friday, the Hartford, Conn. based health insurer revealed that medical costs, which are the company's largest expense, hiked by 14% to $6.1 Billion in the three months up-to December 31. The hurt through this, however, was somewhat offset by a 9% rise in premiums.

Edinburgh-based Standard Life has reported better-than-expected sales of insurance and pension products in 2009 and the insurer expects the momentum to continue in 2010.

Standard Life said its life and pension sales in 2009 stood at 14.7 billion pounds, beating market expectations by 1 billion pounds. However, the figure was 7 per cent down from 2008.

Standard Life has announced that ninety-seven per cent of its endowment policies would not pay off customers' loans, in a move that shocked investors.

However, Standard Life said the figure showed that a slightly better than last year’s figure of 98 per cent.

An individual who paid 50 pounds per month into a 25-year mortgage endowment would obtain a pay out of 26,869 pounds as compared with 31,066 pounds in the previous year, representing a decline of 13.5 per cent.

The giant pension provider Standard Life has been fined £2.45m by the Financial Services Authority for publishing deceitful information about one of its investment funds.

The City watchdog reveal the firm was found guilty of "serious systems and controls failings" that caused its investors receiving marketing material claiming its Pension Sterling Fund was a low- risk cash fund suitable for people who were approaching retirement.

A majority of Aviva’s 2.3 million with-profits customers will see their regular bonus rates frozen this year.

The Insurance giant said that the regular bonuses paid on unitized life and pension policies would remain at 2.75 per cent and 3.25 per cent respectively.

However, Aviva added that new business with-profits income rates would be slashed from 3.25 per cent to 2.5 per cent.

Bonuses on ex-CGNU policies have been hacked by 0.5 per cent with a view to bring payouts in line with the actual value of the fund.