Friends Provident reported a 40% drop in first-quarter sales this year
Insurer Friends Provident has rejected a revised takeover offer from investor Resolution, dismissing aspects of the bid as "totally inappropriate".
It said the terms of the deal would benefit Resolution and not the shareholders of Friends.
The revised offer included a cash element and an indication that it would match this year's dividend income.
Last week, Friends knocked back Resolution's advances, but said it was open to the idea of joining forces.
It has still not closed the door on a deal with the investment firm.
"Friends Provident continues to see advantages in the consolidation of the UK life industry, but also believes that a consolidation of Friends Provident and Resolution can only be agreed on terms that are fair to both sets of shareholders and with a structure that complies with corporate best governance practice," it said.
Resolution said it was disappointed and "continues to consider its position".
Resolution - which floated in December - is the investment vehicle set up by insurance tycoon Clive Cowdery to buy under-performing financial services firms.
Mr Cowdery's first insurance company Resolution Plc agreed to merge with Friends in 2007, but the deal lapsed when Pearl Group took over Resolution.
Shares in British insurers have fallen sharply in the last year because of fears that falling markets could hit their capital reserves.