The Chinese government will start easing rules on foreign ownership in local insurance companies "in the near future" to allow foreign investors to take up to 51% of a joint equity life insurance company, anonymous sources told the Shanghai Securities News, as reported by China Daily May 16.

Currently, foreign partners are allowed to hold 50% of such a venture.

The amended rules will also reportedly simplify procedures and lower requirements for joint venture life insurance companies, and those solely funded by foreign parties, to establish branches in China, including autonomous regions.

Under current rules, insurance companies with a minimum registered capital of 200 million yuan need to raise this by at least 20 million yuan when it applies for the first time to set up a new branch outside its base.

The new rules will also require any foreign owned insurance company to have at least one insurance company as its major shareholder.

This shareholder will be barred from transferring its equities within five years, the sources said. It will also be required to ensure the company is adequately solvent by law before exiting from or paring down its stake in the Chinese market.

As of May 16, US$1 was equivalent to 6.37 Chinese yuan.