Tong Yang Life Insurance Co., South Korea's fifth-largest insurer, said Tuesday that it will bid for LIG Insurance Co. as part of an effort to boost its presence in the country's insurance market.

LIG Group, a mid-sized business group, is seeking to sell a 20.9 percent stake in its non-life insurance unit as it struggles to secure cash to compensate investors for losses incurred from its 2011 financial fraud scandal.

The conglomerate said earlier it would sell its 12.5 million shares in LIG Insurance, a deal valued at some 500 billion won ($476 million).

"We are preparing for the takeover of LIG Insurance," Tong Yang Life President Koo Han-seo told reporters. He said Vogo Fund, its largest shareholder, is also positive about the takeover bid. Tong Yang Life was taken over by the local private fund in 2011.

Meritz Fire & Marine Insurance Co., and other insurers are reportedly vying to acquire LIG Insurance, which could reshape the country's insurance landscape.

LIG Insurance logged a net profit of 103.9 billion won in the April-September period on revenue of 5.66 trillion won.

Meanwhile, Tong Yang Life has offloaded all its shares in the troubled holding company, in an apparent bid to restore its failing credibility.

The life insurer sold its 4.25 million shares in Tongyang Inc., the de facto holding company of Tong Yang Group, in November.

The move came after the family-run conglomerate filed for court receivership of five of its affiliates, including Tongyang Leisure Co. and Tongyang International Inc., on Sept. 30 after failing to repay its maturing debts. (Yonhap News)