Regulators in Taiwan blocked the proposed $2.15 billion sale of AIG's (AIG) Taiwan life insurance business to a Hong Kong-based consortium.

AIG struck a deal in October to sell the Nan Shan unit to China Strategic Holdings and Primus Financial Holdings, the Financial Times reported. Regulators initially accepted the deal, then requested more information from the consortium, as well as assurance from Nan Shan.

Regulators were concerned that the consortium had political connections to Beijing.

"This case failed to obtain the permission or approval of the relevant authorities in charge," said Taiwan's vice-minister of economics, Hwang Jung-chiou.

Nan Shan is Taiwan's third-largest insurer, with 4 million policyholders and 37,000 employees.


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