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The Equitable, the nation's third-largest life insurer, says it will convert from a mutual company to one owned by stockholders so that it has more options to bolster its troubled finances.

The Equitable, with more than $135 billion in assets, would become the largest insurer to take such a step, the company said Tuesday.

By converting from a mutual company owned by its policyholders to a stockholder company, the Equitable will be able to raise funds by selling shares to investors.

James Guenther, an insurance industry analyst at the Chicago investment firm Duff & Phelps, said that as a mutual company, the Equitable's options for raising additional funds are limited to selling forms of debt instruments such as bonds.

The Equitable suffers from declining values in its real estate investments, losses in its large portfolio of high-risk junk bonds and problems with its mortgage loans, analysts said.

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