Draft regulations have been issued that would place a 25% cap on foreign investment in China's insurance companies, the Wall Street Journal reported. The proposed rules, which are similar to those already effective in the banking sector, indicate Beijing's wish to attract foreign strategic investors and overseas expertise while retaining overall control. Foreign investors must hold their stakes in domestic insurers for at least three years, with no single foreign investor permitted to own more than 20% of a local firm, excepting approved insurance holding companies and firms. Overseas players have typically entered the China market independently or through joint ventures, although two of the biggest domestic life insurance companies have foreign investors. HSBC has a 17% stake in Ping An Insurance while a consortium led by Carlyle Group and Prudential Financial owns 19.9% of China Pacific Insurance.
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