NORWAY – Members of the NOK140bn (€17bn) mutually owned Norwegian life insurance and asset management firm KLP has rejected its board’s plan to convert into a public limited company.

Management had wanted the conversion due what it termed “changes in operating parameters and market conditions in recent years” which had put the mutual structure under pressure. It had said that conversion to a limited company would enable KLP to raise equity to finance growth.

The proposal at Kommunal Landspensjonskasse’s annual general meeting last week received 89 votes with 46 against – meaning the plan failed to win the required 2/3 majority. And a second proposal, for owners to convert equity into primary capital certificates, also failed.

It will now enter “close dialogue” with customers and owners about the way forward.

“KLP is a strong, solid and competitive company with good results,” chair Siri Austeng said after the vote.

“The company will continue as before, and the board and administration will comply with this decision. We note that there was a big majority among our owners in favour of one of the options, but it was not big enough.”

“The board will comply with the general meeting’s vote and will spend time in close dialogue with our customers and owners.

“First of all we must concentrate on what to do in future, namely continue running the company according to the present equity model.

“We will continue servicing our customers and acquiring new customers in a keenly competitive market. KLP is well prepared to face such competition.”

KLP made a profit of NOK3.2bn in 2004. It paid nearly NOK5.5bn in pensions and damages in the year.

Elsewhere, Svenska Handelsbanken said it has received regulatory approval to demutualise life insurer SPP, following a vote by policyholders last year.

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