Standard Life has been in talks with the FSA

The firm has been especially hard hit by new funding requirements.

Standard Life, which cut bonuses for policy-holders in January, said it had slashed its shareholdings from 59% of assets to 50%, in line with its peers.

Its surplus was " more than twice" the required margin, it said, adding that it was cautiously optimistic for its performance in 2004.

The firm acknowledged what it called the "turbulence of the past few weeks".

A strategic review of its business as a whole following the change of rules by the FInancial Services Authority is due to be delivered to its members in April.

Bonus cuts

The company, which is almost 180 years old, faced difficulties in the wake of the stock market decline from 2000 onwards.

Its reliance on equities meant its reserves fell sharply, putting payments to policy-holders at risk.

Through 2001 and 2002, Standard Life had stuck with shares on the basis that in the long term they would out-perform other investments.

Its �7.5bn equity sell-off to get its holding down to 50% of assets marks the end of that argument.

The firm's decision to cut bonuses on with-profits policies by 7% in January was the fifth in two years.