The Commonwealth Bank of Australia (CBA) has signed a joint cooperation agreement with insurer AIA to progress the sale of CommInsure Life, at a $150 million discount from its original price.

The bank decided to quarantine its efforts to sell its 37.5% interest in Chinese insurer BoCommLife from the rest of the agreement in order for it to proceed. Efforts to offload BoCommLife to Japanese insurer Mitsui Sumitomo has been dogged by delays from China’s banking regulator.

The $2.375 billion sale includes reinsurance arrangements, partnership milestone payments and a statutory asset transfer. CBA will receive about $500 million in cash and $250 million in other proceeds by the end of the first half of the 2020 financial year, and the other $1.625 million by the end of the 2020 financial year.

The reinsurance agreement with a leading global reinsurer will also net CBA a $200 million distribution. CBA will also receive four $50 million “milestone payments”, to reflect progress in the partnership. The first one will be received in the first quarter of the 2020 financial year.

The bank is also progressing a potential statutory asset transfer in parallel with the planned sale as an alternative approach. That transfer will take nine months to complete.

The CBA is working constructively with China’s regulator in relation to the regulatory approval process for BoCommLife, the bank says.

CBA was hoping to dispose of its various life insurance businesses by the end of the year. It is planning to sell its 80% interest in its Indonesian life business PT Commonwealth Life to FWD Group. CBA’s Indonesian arm will also enter into a 15-year distribution agreement with FWD.