Tower Ltd is selling most of its life insurance business to Fidelity Life in a transaction releasing about $187 million in capital back to Tower.
The deal follows last month's $79 million sale of Tower's investments business to Fisher Funds Management.
Tower said it will retain its participating book and other run-off life insurance assets which have an embedded value of $23 million.
Managing director Rob Flannagan said there's more to the sale than the fact that Guinness Peat Group, is in wind-up mode. GPG owns 33.63% of Tower.
Tower shares rose as much as 8 cents to $1.79 in trading on Friday morning.
Fidelity chief executive Milton Jennings said the effective cost to his company will be about $72 million and it will also take over Tower Life's liabilities.
Mr Jennings said details of how Fidelity will fund the acquisition are confidential at the moment as it works though getting the necessary approvals from the Reserve Bank.
Fidelity was founded in 1973 and has more than 100 shareholders and equity of more than $140 million.
Fidelity has a history of growing by acquisition - it bought the Lumley life book in 2004 and Farmers Mutual Life in 2007.