US insurance group MetLife announced on Tuesday it had secured Chinese approval to operate a joint venture life insurance company in China.
MetLife, the largest life insurer in the United States, said approval had been granted by the China Insurance Regulatory Commission.
"At this point we are only allowed 50 percent of any operation," MetLife spokeswoman Christina Tso said.
"We have not decided on a partner."
MetLife, which currently only has representative offices in Beijing and in Shanghai, planned to sell individual insurance policies through agents on the ground, the spokeswoman said.
"We are excited to be entering China and to be participating in the future of the country's insurance industry," MetLife chairman and chief executive Robert Benmosche said in the statement.
Entry into China was a critical part of the company's international expansion plans, he said.
Obtaining a license in China built on a series of strategic entries internationally, the group said in a statement.
It noted the company's expansion into Chile earlier in the month and into India in August. Both were dynamic markets expected to enjoy growing demand for insurance.
"China is recognized by the international insurance industry as the largest potential market in the world," MetLife international operations president William Toppeta said.
"MetLife is optimistic about the growth potential of the country and looks forward to helping to develop the insurance market in China," he added.
MetLife said it could help the Chinese industry with its experience, financial strength and high ratings, as well as its technology and customer service.
Revenue at the group, which has policies with nine million individual US households, rose two percent to US$23.75 billion in the nine months to September 30 this year.
The announcement coincided with China's formal accession into the World Trade Organization under which Beijing agreed to allow greater foreign participation in its insurance market.
China said last month that under the terms of its WTO membership, insurers from abroad would be allowed to set up branches or joint ventures in China.
Reports in the official media said life insurers from abroad would be limited to a 50-percent stake in joint ventures and non-life insurers would be able to hold as much as 51 percent.
Both life and non-life insurers would be permitted to provide services in the cities of Shanghai, Guangzhou, Dalian, Shenzhen and Foshan upon WTO accession, the reports said.
And two years after entry, the businesses can expand to the cities of Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shenyang, Wuhan and Tianjin.
All geographical restrictions would be lifted three years after entry.
China would abolish restrictions on the number of licenses issued to foreign insurers following WTO entry, the Chinese press said.
(China Daily December 12, 2001)
