The news comes after a strategic review of Co-op’s life and savings business in which it said rising regulatory costs of offering financial advice were in part to blame for the decision.
A sale of Co-op’s life insurance subsidiary to Royal London would include the £15bn of assets in its Long Term Business Fund and The Co-operative Asset Management which manages the fund.
The bank has also announced plans for a seven year distribution partnership with Axa Wealth, which will see 82 branch-based advisers offer Axa’s investment, pension and life assurance products.
A further 325 Axa advisers will be based in Co-op branches.
Neville Richardson, chief executive at CFS, said: "We were faced with rising regulatory costs in a business which was increasingly becoming sub-scale.
"This move supports our strategy to focus our specific attention on our banking and general insurance areas, where we have a growing and strongly differentiated competitive position."
Co-op launched a strategic review of its life and savings business in October 2009, after its merger with Britannia in August 2009.
Co-op sold its IFA arm to Ashcourt Rowan Financial Planning September last year.
