November 30, 2010 / 5:03 PM / 9 years ago

UPDATE 1-Italy antitrust to end Intesa insurance probe-source

* Remedies include governance, commercial restrictions

* Proposals need insurance regulator decision

* Shares close down 1.8 pct, underperform sector

(Adds details, background, shares)

By Alberto Sisto

ROME, Nov 30 (Reuters) - Italy’s antitrust authority is expected to end a probe into Intesa Sanpaolo’s (ISP.MI) life insurance services after being satisfied with proposals made by the Italian bank, a source close to the matter said on Tuesday.

Intesa’s proposals include more restrictions on governance issues regarding insurer Generali (GASI.MI), which is a shareholder in the bank, and a commitment to sell only its own life insurance policies on its network, the source said.

The proposals still require the approval of insurance regulator Isvap before the probe can be closed, the source said. Isvap has 30 days to decide.

When the bank was formed in 2006 by the merger of Intesa with Sanpaolo, the competition watchdog imposed the sale of insurance unit Sud Polo Vita, a ban on the sale of Generali products, as well as governance restrictions.

Since then Intesa has unwound its insurance joint venture with Generali but the insurer, Italy’s biggest, is still a shareholder in the bank with a stake of nearly 5 percent.

In 2009, Intesa cleared plans to group into a single company its Intesa Vita, Eurizon, Centrovita and Sud Polo Vita insurance activities.

Intesa shares ended down 1.8 percent at 2.005 euros, twice the 0.9 percent fall in the STOXX Europe 600 bank index .SX7P.

Editing by Erica Billingham

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