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China to allow insurers to invest in infrastructure
(Reuters)
Updated: 2006-02-18 15:06 China will issue regulations
allowing domestic insurers to invest in infrastructure projects, as part of a
broader drive to increase their investment options, the China Business Post
reported on Saturday.
The China Insurance Regulatory Commission (CIRC)
will issue the new rules next week, allowing insurers to invest no more than 15
percent of their total assets at the end of the previous year in infrastructure,
the newspaper said, citing CIRC officials.
The country's No. 3 insurer, China Pacific Life Insurance Co., will be chosen
as an experimental unit to invest via a trust company, it said.
Chinese insurers held over 1.52 trillion yuan ($189 billion) in assets at the
end of 2005, but they are mostly limited to investing in low-yielding government
bonds and savings accounts.
Annual returns from infrastructure projects, such as ports, highways and
railways, can be as high as 6.2 percent, compared with an average return of 4.2
percent for domestic insurers over the past five years, said the paper.
It said the choice of China Pacific for the pilot programme indicated the
regulator's intention to promote the company to float its share
overseas.
China Pacific, China Life Insurance and Ping An Insurance
(Group) are the country's three biggest life insurers.
The paper cited China Pacific Life President Wang Guoliang as saying it will
invest in highways, ports and oil storage facilities as well as infrastructure
projects in the country's northeast provinces.
In December, U.S. buyout firm Carlyle Group, one of the biggest foreign
investors in China, led a $410 million investment for a quarter of China
Pacific.
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