Lloyds TSB has begun the process of selling its Abbey Life insurance business, after months of speculation. Lehman Brothers and Morgan Stanley have been hired to source buyers for the closed life insurer, and according to reports, the deadline for first-round bids passed last week.

Abbey Life was closed to new business in 2000, containing around £12bn of policy holder assets. The business, which is run as a stand-alone company, has been valued at around £1bn. Lloyds is expected to invest the proceeds gained from the sale into its retail banking unit, and it’s growing wholesale business.

Parties thought to have received sales prospectuses include Resolution, Swiss Re and Pearl Group. It has also been speculated that hedge funds Fortress Investments and Cerebus could be interested in the business, along with private equity group Blackstone.