Ailing Equitable Life is in "serious discussions" about a sale of all or part of its business, chief executive Charles Thomson said yesterday.
But he stressed the company's financial position strengthened in 2005 and there is no hurry to do a deal and no announcement was imminent.
"We are willing sellers if a deal can be done but we are not forced sellers and we are strong enough to run off the with-profits fund," Mr Thomson said.
One possibility was a sale of the society's #7 billion annuities book which could be justified because it would remove a significant amount of risk from the balance sheet.
Mr Thomson added, however, that as a mutual, any move would have to be in the interests of policyholders, and any change would need to be
approved by them. Equitable Life, which was reporting its annual results for 2005, said it had continued to make progress during the year and was now more stable and secure than when it last reported.
It added that with careful management the society could operate securely as a closed with-profits fund in run-off, paying policyholders their benefits as they were due.
It said during the year its excess realistic assets, the key measure of its solvency, had grown to #669 million, up from #455 million at the end of 2004.
At the same time the value of policies members cashed in early had also reduced to #482 million, nearly half the #835 million that was surrendered last year.
Mr Thomson said: "We believe we made another significant step forward for Equitable. The society is once again more stable and secure than last time we reported. I believe we are nearly out of the woods."
The with-profits fund had returned 10.1 per cent during the year, and as a result it was paying bonuses of 4.5 per cent on with-profits pensions policies, up from 3.5 per cent last year, and 3.6 per cent on life policies compared with 2.8 per cent earlier.
Equitable also announced an interim bonus for this year of 3.5 per cent for pension policyholders and 2.8 per cent for life investments.
But it added that it was to resume collecting money from with-profits annuitants at a rate of 0.5 per cent of their policy over six years to cover their share of the cost of Guarantee Annuity Rate policyholders.
The value of most policies was reduced by five per cent after Equitable lost its legal battle in the House of Lords over the rights of its GAR policyholders in 2000, leaving it with a #1.5 billion liability.
But the group decided to collect the money from annuitants gradually, and after collecting two per cent it had suspended the payments for several years due to poor investment returns.
Equitable was plunged into difficulties after losing the House of Lords case, forcing it to close to new business and put itself up for sale.
The European Parliament recently opened an investigation into whether the Government failed in its role as regulator to protect policyholders.