Embattled insurance business Freedom Insurance Group is selling its policy administration business to an undisclosed service provider for $5 million, and was looking to exit all of its operating businesses after completion of the deal.
The move comes after the firm lost nearly all of its stock market value in 2018, after a Royal Commission inquiry into the financial sector accused it of wrongdoing including using questionable direct-sales tactics.
Freedom then slashed headcount, ceased outbound sales of certain products and announced a liquidity shortfall.
Freedom said in a statement on Monday it also intended to leave its Spectrum Wealth Management business after the sale.
Proceeds from the sale of the policy administration business will be used to pay creditors, cease remaining operations and meet remaining regulatory obligations, with any funds left over to be returned to shareholders.
Allowing for remediation to wronged customers, Freedom expects to receive payment of about $5 million for the deal.
"For confidentiality reasons, Freedom is unable to disclose the identity of the Service Provider before it enters into the underlying agreements," said Freedom Insurance in a statement.
Freedom shares have been suspended from trading since February.
