AMI Insurance and most of its 500,000 client list is to be sold, after the Commerce Commission granted clearance today.
The company is to be bought by the same Australian company that owns State Insurance and N.Z.I.
I.A.G New Zealand Ltd now has more than half of the national insurance market.
AMI had to be bailed out by the Government after facing financial ruin following the Canterbury earthquakes.
The company's earthquake liabilities will remain with the Government, but the rest will form a new business called AMI Newco.
I.A.G is part of the Insurance Australia Group of companies.