According to the Administration of Stock Investments by Insurance Institutional Investors Tentative Procedure (hereinafter referred to as “Tentative Procedure”),as the “insurance institutional investors”, qualified insurance companies and insurance asset management companies are entitled to invest in stocks. Insurance companies include the insurance group companies and the insurance holding company. The difference of qualification requirements for insurance companies and insurance asset management companies [1] is, if the insurance asset management companies satisfy article 5 of the Tentative Procedure, they can invest in stocks directly without CIRC’s approval and if the insurance companies satisfy article 7 of the Tentative Procedure and get approval from CIRC, they can invest in stocks directly as well.

For some medium and small sized insurance companies failing to get approval from CIRC for direct investment in stocks, if they satisfy article 6 of the Tentative Procedure, they can trust a qualified insurance asset management company to invest in stocks on behalf of them.

For the qualified insurance institutional investors, there are nine insurance asset management companies including PICC Asset Management, China Life Asset Management, Ping An Asset Management, China Re Asset Management, CPIC Asset Management, New China Asset Management, Tai Kang Asset Management, Hua Tai Asset Management and China Tai Ping Asset Management. Additionally, AIA China is a special one. As the branch of foreign insurance company, AIA China was approved by CIRC to establish an insurance funds use centre to invest in stocks directly. For qualified insurance companies approved by CIRC to invest in stocks directly, there are Union Life, An Bang Insurance, Chang Jiang Pension Insurance and Sunshine Insurance. These four insurance companies establish insurance funds use center to deal with the stock investment issues rather than by internal investment department. This insurance funds use center is regarded as interim for establishing their own insurance asset management companies.

[1] According to the Tentative Administrative Provision for Insurance Asset Management Companies, at least one of the shareholder or sponsor of the insurance asset management companies shall be insurance company or insurance holding (group) company.