Standard Life said the deal would be good for business
The insurance company Standard Life is offloading responsibility for more than half of its customers who are receiving annuities, or personal pensions.
It says the deal will make no difference to the people who will remain as Standard Life customers.
But £6.7bn worth of assets backing the policies have now been transferred to Canada Life International Reinsurance.
The advantage for Standard Life is that it is now free of any risk that these people might live longer than expected.
"It substantially reduces pure longevity risk while providing a significant increase to embedded value, a release of cash and a reduction in capital requirements," said Standard Life's chief executive, Sandy Crombie.
"It creates capacity to broaden our innovative product range and take advantage of the profitable opportunities available to us."
A spokesman for Standard Life said the nearly 300,000 customers whose policies were being transferred were those with UK individual annuities.
They are largely people who had invested in a Standard Life pension policy before it demutualised in 2006 and had taken out an annuity with the company on retirement.
The spokesman stressed that the transfer of assets, which are bonds and cash, was not an emergency measure, but simply to remove some risk from the business and give it a bit more freedom to expand in other areas.
"It's not that we have thought 'oh crickey, people are living longer'," he said.
'Two financial issues'
Such bulk deals have become increasingly common in the past few years in the insurance industry, with insurers either transferring chunks of their business to each other, or taking on responsibility for managing closed final-salary pension schemes.
The Standard Life deal is the biggest yet, dwarfing others such as Equitable Life transferring £4.6bn worth of assets to Canada Life in 2006.
Insurance expert Ned Cazalet explained that some firms were happy to take on this business to try to make a profit through managing the underlying assets.
"Annuity customers have two financial issues; backing them with the right investments and the crucial area of longevity," he said.
"People have different views on the sort of risks they want to take and some players are willing to take on this type of business," he added.