GROWING life and pensions business Reliance Mutual is poised to add another 2,000 policyholders after agreeing to buy a smaller financial operation.

Troubled insurer Equitable Life is to sell its subsidiary University Life Assurance Society to Reliance Mutual Insurance Society for an undisclosed sum.

The move, part of a cost-cutting strategy by Equitable, is subject to approval by the Financial Services Authority.

Reliance Mutual, which employs around 80 people in The Great Hall, Mount Pleasant Road, Tunbridge Wells, specialises in small closed life funds. It has 250,000 policymakers and assets of more than a billion pounds.

Chief executive Mark Goodale said the proposed acquisition would not mean any more jobs in Tunbridge Wells.

Since 2003, it has acquired the business of Criterion Life, 23,500 policies from Family Assurance, 8,000 policies from Eurolife Assurance Company, and 11,000 policies through the acquisition of SEB Trygg Life (UK) Assurance Company.

"We’ve been working on operational efficiency which has enabled us to absorb these blocks of business without material changes to headcount," he said.

"We have a good track record integrating small and medium sized books of business from other organisations into our systems to benefit both our existing and new Reliance Mutual policyholders.

"We will endeavour to make this acquisition as seamless for every University Life policyholder as we can and look forward to welcoming them to Reliance Mutual.

"This transaction demonstrates we are able and willing to deal with both large and small organizations in transfers of business."

University Life was founded in 1826 and acquired by Equitable Life in 1919. It has been closed to new business for around 30 years but has £30 million of assets and 2,000 policyholders, mainly university staff.

They have been assured that the change of ownership will not affect their arrangements, with premium payments collected in the same way and pension and annuity payments paid out as usual.

Over the past few years, Equitable Life has faced numerous compensation claims and been accused of mis-selling products. It provoked fury among hundreds of thousands of policyholders disappointed by low returns.

Reliance Mutual was originally formed as a friendly society in 1911 and converted into a mutual insurance company in 1951.