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China Life Floats $3 Billion IPO

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NU Online News Service, Dec. 9, 2003, 5:22 p.m. EST – China Life Insurance Company Ltd., Beijing, is raising $3 billion by selling more than 153 million American depositary shares at a price of up to $18.80 each.[@@]

The company already has received about $12 billion in orders for the stock from institutional investors, but it has set aside one-fifth of the stock for individual investors, according to press reports.

China Life expects the American depositary shares to trade on the New York Stock Exchange under the symbol LFC. The company’s “H shares” will trade on the Hong Kong Stock Exchange under the code 2628.

China Life, which generated about 45% of China’s life sales in 2002 and manages the equivalent of $26 billion in assets, has filed a 242-page registration statement with the U.S. Securities and Exchange Commission. The registration statement and its appendices provide a long discussion of China’s insurance market as well as a detailed look at China Life.

The company is an offshoot of a state insurance company that the Chinese government formed in 1949. The government suspended the life operations from 1958 to 1982, then began reorganizing and restructuring the life operations in the mid-1990s.

China Life, a state-sponsored company, is now China Life’s sole shareholder. China Life will continue to own 75% of its shares after the IPO, and the company will contribute the net proceeds from the IPO to the Chinese national social security fund, China Life says.

Today, China Life has more than 44 million in individual and group life policies, annuity contracts and health insurance policies in force.

“We are undertaking a glorious cause, sowing the seed of love and boosting the well-being of the whole society,” China Life President Wang Xianzhang says in a statement about China Life on the company’s Web site. “It is a challenging and yet promising cause. We should all be proud of being part of it and remain faithful to it. We should also strive whole-heartedly and do our utmost for the blossoming of this cause.”

China Life sells individual life and annuity products through 650,000 exclusive agents in 8,000 field offices and through 78,000 outlets in commercial banks, post offices and savings cooperatives.

The company sells group life and annuity products through outside brokers and through 10,000 direct sales representatives in 4,000 branch offices.

A chart that compares China Life with its four biggest competitors shows that the next biggest Chinese life insurer, Ping An Insurance Company of China Ltd., Shanghai, accounts for only 24% of the country’s life, health and accident insurance premium revenue.

A copy of the registration statement is on the Web at