UPDATE 1-Albania sells insurer for 25 mln euros to US firm

(Adds background and quotes about deal)

TIRANA, Dec 9 (Reuters) - American Reserve Life Insurance company has bought a 61 percent stake in the Albanian state-owned insurer INSIG for 25 million euros, the Albanian Finance Ministry announced on Tuesday.

INSIG, which was relaunched for sale in January last year after earlier attempts failed, attracted interest from 10 foreign investors.

"At the end of the process, the winning bid was presented by the U.S. company American Reserve Life Insurance, which offered a price of 25 million euros for the company," the ministry said in a statement.

"This completes a very successful privatisation for the goverment and constitutes a vote of confidence in the Albanian economy," the finance ministry added.

Albania said the sum was 2 million euros more than the top price estimated by auditors KPMG and 3.5 million euros more than the government had wanted.

"We are holding the final technical negotiations with the winning company, American Reserve Life Insurance, to end the process of INSIG's sale," the finance ministry said.

The World Bank's commercial lending arm, the International Finance Corporation, and the European Bank for Reconstruction and Development [EBRD.UL] each own 19.5 percent of INSIG, originally a monopoly but now controlling only 12 percent of the non-life insurance market.

With the approval of EBRD and IFC, BNP Paribas BNPP.BA consulted Albania on the sale, while it chose auditors KPMG to come up with an evaluation of INSIG to serve as a benchmark price before it was offered for sale. Heritage Guaranty Holdings owns American Reserve Life Inusrance, a Dallas-headquartered company that was set up in 1922. (Reporting by Benet Koleka, editing by Adam Tanner, editing by Will Waterman)