Asia

Banks and insurers in China

China's fifth largest bank, the Bank of Communications, will launch an insurance company with head offices in Beijing and Shanghai. The company which will have a share capital of between US$60mn and US$100mn, will be the first insurer in China to be controlled by a bank and reflects the relaxation of the country's previously strict division between banks and insurance companies. Only a week previously, Ping Insurance, China's second largest life insurance company, was given permission to open a bank in Shanghai. According to its World Trade Organisation commitments, China is obligated to fully open its insurance market to foreign companies by the end of 2006. While some foreign companies such as AIG are allowed to operated wholly owned insurance operations in China, others are restricted to a maximum 49% shareholding.