HAMPSHIRE-based health plan provider HSA Group has merged with Manchester rival and fellow mutual HealthSure.

The deal, which is still subject to regulatory approval, follows hard on the heels of HSA's buy-up of Bristol's BCWA health plan provider earlier this year.

Once complete, the merger will see HSA, which employs more than 800 people at its Andover headquarters, swell to more than 1.3 million policyholders, covering 2.25 million people.

HealthSure was formed from a merger between the Manchester and Salford Hospital Saturday Fund and the Healthcare Insurance Alliance in 1999, but has origins dating back 130 years.

The deal was confirmed by the voting members of HealthSure at an extraordinary meeting in Manchester on Tuesday.

Under the terms of the agreement, HealthSure will become part of HSA Group, retaining its own brand identity and offices in Manchester.

The firm said there were no jobs at risk as a result of the agreement, which it claimed was "driven by the interests of policyholders, as well as corporate and intermediary customers in a changing health and insurance environment".

HealthSure's chief executive Richard Sear will also assume responsibility for HSA's other northern-based cash plan business, LHF Healthplan, based in Leeds. Mr Sear said: "As part of the larger group we remain true to our mutual principles, drawing on the strengths and additional resources the group can provide, while remaining free to respond to the needs of our customers."

HSA Group chief executive Des Benjamin said: "This is a step forward for the group toward our shared aims of providing best value health cover and other solutions for customers' health needs.

"This bringing together of two strong mutuals in a new larger organisation will allow more customers to benefit from our shared values, through our greater scale and efficiency."