China Life Insurance Company Limited (China Life) will replace its existing insurance sales framework agreement with a new pact signed with China Life Property and Casualty Insurance Company Limited (CLP&C), following Board approval on 24 July 2026 and subject to shareholder consent under Shanghai Stock Exchange rules.
Key terms • Scope: China Life will continue to act as agent for CLP&C, marketing a broad spectrum of P&C policies—including automobile, property, engineering, liability and agricultural coverage—within authorised regions and collecting premiums on CLP&C’s behalf. • Agency fee: Calculated monthly as a percentage of premiums earned, the rate will reference fees charged by independent third-party agents and must comply with National Financial Regulatory Administration (NFRA) and Ministry of Finance guidelines. • Term: Effective 1 January 2027 through 31 December 2029, at which point the current agreement (expiring 7 March 2027) will terminate.
Historical transaction levels • FY 2024 agency fees: RMB 1.73 billion • FY 2025 agency fees: RMB 1.66 billion • 5 months to 31 May 2026: RMB 616 million
Proposed annual caps • FY 2027: RMB 2.43 billion • FY 2028: RMB 2.54 billion • FY 2029: RMB 2.65 billion
Cap formulation considered: (1) the historical fee trajectory; (2) CLP&C premium growth; (3) the 15%–24% contribution of China Life’s agency channel to CLP&C written premiums; (4) differentiated fee rates by product and region; and (5) a 25% buffer for regulatory uncertainty.
Connected-transaction status China Life’s controlling shareholder, China Life Insurance (Group) Company (CLIC), owns 68.37% of China Life and 60% of CLP&C, rendering CLP&C a connected person under Hong Kong Listing Rules. With percentage ratios above 0.1% but below 5%, the transaction requires announcement and annual review in Hong Kong, but no independent shareholder vote. However, because combined transactions with CLIC entities exceed 5% of China Life’s latest audited net assets, approval at China Life’s general meeting is mandatory under SSE Listing Rules.
Governance and pricing controls Branch-level fee proposals will undergo multi-layer reviews—business, legal and general-manager offices—before contracts are signed. The head-office Comprehensive Finance Department will monitor monthly balances and conduct annual comparability reviews to ensure terms remain no less favourable than those available from independent third parties. Six directors linked to CLIC or CLP&C abstained from the Board vote.
Strategic rationale The arrangement is expected to: 1. Generate stable agency fee income for China Life; 2. Deepen customer relationships and cross-sell potential; 3. Enhance service breadth, thereby reinforcing brand reputation.
The Board, including independent non-executive directors, considers the agreement fair, reasonable and in the interests of all shareholders.
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