Form 6-K

China Life Insurance Company Limited

(Registrant)

/s/ Wan Feng

(Signature)

August 23, 2011

Name: Wan Feng

Title: President and Executive Director

EXHIBIT 99.1

Commission File Number 001-31914

CHINA LIFE INSURANCE COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(the “Company”)
(Stock Code: 2628)

ANNOUNCEMENT OF UNAUDITIED INTERIM RESULTS FOR THE SIX MONTHS
ENDED 30 JUNE 2011

CHAIRMAN’S STATEMENT

The first half of 2011 witnessed new challenges for the global economic recovery. The complexity of macro-economic situation of China and the changes of corresponding measures and policies also brought more uncertainties to the insurance industry, and the growth of life insurance business was under pressure. In the face of the complex economic environment and increasingly harsh market condition, the Company adhered to the development strategies of “transforming growth model, speeding up development, intensifying reforms, building solid foundation and conducting operations in compliance with laws”, and coped with difficulties positively. As a result, the Company maintained a steady growth in premiums and solidified its market position.

During the Reporting Period, the Company’s total revenues reached RMB227,466 million, a 5.6% increase year-on-year. As at the end of the Reporting Period, the Company’s total assets reached RMB1,546,891 million, a 9.7% increase from the end of 2010. The Company’s embedded value was RMB296,493 million. In the first half of 2011, the Company had a market share¹ of approximately 34.8%. Meanwhile, being affected simultaneously by various internal and external factors, during the Reporting Period, net profit attributable to equity holders of the Company was RMB12,964 million, a 28.1% decrease year-on-year, and earnings per share (basic and diluted) were RMB0.46, a 28.1% decrease year-on-year. Due to factors such as the fluctuation in capital market, the distribution of previous year’s cash dividends to equity holders and the business development of the Company, the Company’s solvency ratio decreased from 211.99% as at the end of 2010 to 164.21%.


¹		Calculated according to the premium data of life insurance companies released by China Insurance Regulatory Commission for the first half of 2011.

Commission File Number 001-31914

Review of the First Half of 2011

The Company strived to analyze the development trend of the life insurance market, grasped the market rhythm and achieved steady business growth. During the Reporting Period, the Company’s net premiums earned reached RMB194,849 million, a 6.1% increase year-on-year. Compared to the corresponding period in 2010, first year premiums decreased by 1.0%, first-year regular premiums increased by 10.8%, first-year regular premiums with 10 years or longer payment duration increased by 26.2%, and renewal premiums increased by 17.1%. The percentage of first-year regular premiums in first year premiums increased to 31.11% in the first half of 2011 from 27.82% in the corresponding period in 2010. The percentage of first-year regular premiums with 10 years or longer payment duration in first-year regular premiums increased to 30.85% in the first half of 2011 from 27.09% in the corresponding period in 2010. The percentage of accident insurance premiums in short-term insurance premiums increased to 57.53% in the first half of 2011 from 53.28% in the corresponding period in 2010. The percentage of renewal premiums in gross written premiums increased to 43.17% in the first half of 2011 from 39.23% in the corresponding period in 2010. New business value for the 6 months to 30 June 2011 reached RMB12,186 million, a 5.5% increase year-on-year. As at 30 June 2011, the number of in-force policies increased by 4.7% from the end of 2010, and the Policy Persistency Rate (14 months and 26 months)² reached 92.54% and 87.00%, respectively. Surrender Rate³ was 1.47%, a 0.17 percentage point increase from the corresponding period in 2010.

The Company actively responded to changes in the capital markets, optimized its investment portfolio, moderately increased allocation to negotiated deposits and long-term bonds and conducted equity investment with flexibility, thereby achieving satisfactory investment results. As at the end of the Reporting Period, the Company’s investment assets reached RMB1,454,453 million, a 8.8% increase from the end of 2010. The proportion of debt securities decreased from 45.51% as at the end of 2010 to 43.22%, while the proportion of equity securities decreased from 14.66% as at the end of 2010 to 13.38%. The proportion of term deposits increased from 33.05% as at the end of 2010 to 34.32%. During the Reporting Period, the Company’s gross investment yield was 4.50%⁴. In addition, the Company actively developed its capabilities in new investment channels and proactively sought for investment opportunities, and became the first to complete the filings relating to equity investment capability in the insurance industry.

The exclusive individual agent channel kept on improving its infrastructure and professional management level, continued to build a solid foundation for its sales team, made great effort in improving the structure of its sales team, took the initiative to eliminate unproductive individual agents and enhanced the quality and sales capability of the sales team as a whole. The bancassurance channel has actively responded to the macro- economic control and changes of industry regulatory policies, strengthened its efforts in product


²		The Persistency Rate for long-term individual policy is an important operating performance indicator for life insurance companies. It measures the ratio of in-force policies in a pool of policies after a certain period of time. It refers to the proportion of policies that are still effective during the designated month in the pool of policies whose issue date was 14 or 26 months ago.

³		The Surrender Rate = current surrender payment/(reserve of life insurance and long-term health insurance at the beginning of the period + current premium of life insurance and long-term health insurance).

⁴		Gross investment yield ={[(Investment income + Net realised gains/(losses) on financial assets + Net fair value gains/ (losses) through income - Business tax and extra charges for investment)/((Investment assets at the beginning of the period + Investment assets at the end of the period)/2)]/181}×365

Commission File Number 001-31914

innovation, enhanced channel cooperation and improved supports and services, thus maintaining a steady growth in the total premiums. The group insurance channel achieved a rapid growth in short-term accident insurance business and the proportion of the premiums increased gradually, and made a breakthrough in micro-credit insurance business. As at the end of the Reporting Period, the Company had approximately 662,000 exclusive individual agents and 14,900 direct sales representatives. The number of intermediary bancassurance outlets was 96,000, with 44,000 sales representatives in total.

The Company enhanced the efficiency of its business processing operations steadily by further optimizing its business management practices based on the centralized management at the provincial level. The Company improved its IT service, so as to provide strong back-up support and service guarantee to all sales channels. The Company also actively explored and promoted its telephone and on- line sales businesses.

China Life was a global insurance partner of the 2011 Xi’an International Horticultural Exposition. The Company successfully launched China Life Week and China Life Customer Day activities under the theme of “Hand in Hand with China Life, Making a Green and Energetic China”, and made great efforts to improve the quality of its customer service.

The Company actively carried out the benchmarking implementation and the internal control evaluation based on the “Implementation Manual for Internal Control Standards”, and improved the hierarchical and classified risk early-warning mechanism. In view of various hidden risks, the Company performed timely inspection activities such as special audits and supervisions, and seriously strengthened the rectification activities. The Company initiated the process of monitoring the sales risk of its branches and the credit assessment for its insurance agents.

CORPORATE GOVERNANCE

On 3 June 2011, Mr. Yang Chao tendered his resignation as the Chairman and executive director of the Company due to age. I was appointed as an executive director of the Company at the 2010 Annual General Meeting on the same day. At the thirteenth meeting of the third session of the Board of Directors of the Company, I was elected as the Chairman of the Company. Mr. Yang Chao was diligent and responsible during his term as the Chairman and executive director of the Company. He exerted himself to advance the establishment of the Company as a first-class international life insurance company, and gained praises from capital markets and the general public. The Board would like to express their gratitude to Mr. Yang Chao for his hard work and distinguished contribution to the Company.

CORPORATE SOCIAL RESPONSIBILITY

In addition to fulfilling responsibilities according to its insurance policies, the Company actively undertook its corporate social responsibilities. During the Reporting Period, the total amount of insurance benefits and claims reached RMB45.9 billion. The Company made great efforts to develop its rural micro-insurance business, the geographical coverage of which has been expanded to 24 provinces and municipalities, and the total number of people covered by micro-insurance products has reached 11.68 million. The New Village Cooperative Medical Insurance Scheme covered 14 provinces, 25 municipalities and 72 counties. The Basic Medical Insurance Program for Urban and Township Residents has been expanded to 11 provinces, 18 municipalities and 40 counties, covering more than 23.52 million residents.

Commission File Number 001-31914

The Company is actively involved in public welfare and charity work. While continuing to provide support for Wenchuan earthquake orphans through the China Life Foundation, the Company also provides monthly subsidies of RMB600 per person for 459 Yushu earthquake orphans and Zhouqu mudslide orphans. The total amount of sponsorship paid by the Company to the Civil Affairs Bureau of Qinghai Province and Zhouqu County of Gansu Province reached RMB5,577,000. The Company continued to promote the “China Life Orphan Support Plan”. Through the scheme under which one- on-one assistance is provided to orphans by China Life volunteers, supporting works for documentary of “Recording my family” for Wenchuan earthquake orphans, and the third session of “China Life Summer Camp”, the Company provided orphans from the Wenchuan, Yushu and Zhouqu disasters with long-term, continuous physical and spiritual support. The Company donated RMB1 million to Yunnan Zhaotong Charity Society and jointly initiated China Life Zhaotong Relief Fund which is aimed to help those who have sustained injuries in the course of acting heroically or suffered from serious diseases with great financial difficulties. The Company donated RMB1 million to “China Women’s Development Foundation-Special Fund for the Health of Chinese Women”, in order to provide women in impoverished areas with “Screening for Two Gynecological Cancers” and protection against serious diseases. At the 2010 Annual General Meeting, a resolution was passed which permits the Company to make continuous donations to the China Life Foundation.

OUTLOOK

In the second half of 2011, the Company will adapt to the changes of macro-economic situation and market environment. With the focus on the transformation of its growth models, the Company will strive to maintain a steady growth in the business volume and promote the cooperation between various channels so as to increase its business value. The Company will strengthen the allocation and management of assets and liabilities and take advantage of the development trend and any possible opportunities to increase its investment yield. It will also persist in the reform and innovation for the purpose of enhancing its professional management level. The Company will continue to operate its business in compliance with laws, improve its internal control management system and take strict precautions against operational risks. In addition, the Company will optimize its policy system, enhance the vitality of its local branches, solidify the foundation for its future development and strive to complete all assignments and tasks for the year, thus creating a good start for the “12th Five-Year Plan”.

I am honored to be appointed as the Chairman of the Board at the Annual General Meeting and the Board meeting and I am deeply mindful of the great responsibilities I will undertake. I would like to take this opportunity to express my sincere gratitude for the understanding, trust and support that have been given to the Company by all the shareholders, customers and the general public. We will continue to pursue a scientific development path with China Life’s distinct characteristics, and advance towards our goal of developing into a leading international life insurance company. We are greatly committed to offering excellent service to our customers and long-term, stable return to our shareholders by working concertedly and industriously, and continuing to build up the Company’s image as a reliable and responsible corporate citizen.

Commission File Number 001-31914

MANAGEMENT DISCUSSION AND ANALYSIS⁵

Analysis of Major Items of Consolidated Statement of Comprehensive Income

Total Revenues


	RMB million
	January to		January to
	June 2011		June 2010			Change

Net premiums earned		194,849		183,589			6.1	%
Individual life insurance business		186,846		175,504			6.5	%
Group life insurance business		298		281			6.0	%
Short-term insurance business		7,705		7,804			-1.3	%
Investment income		30,309		24,715			22.6	%
Net realised gains on financial assets		601		6,266			-90.4	%
Net fair value gains/(losses) through income		405		(369	)	not applicable
Other income		1,302		1,190			9.4	%


Total		227,466		215,391			5.6	%

Net Premiums Earned

	(1)		Individual Life Insurance Business

			During the Reporting Period, net premiums earned from individual life insurance business increased by 6.5% year-on-year. This was primarily due to an increase in the first-year regular premiums and renewal premiums.


⁵		Financial results of the Reporting Period are unaudited.

Commission File Number 001-31914

	(2)		Group Life Insurance Business

			During the Reporting Period, net premiums earned from group life insurance business increased by 6.0% year-on-year. This was primarily due to an increase in premiums from group term life insurance products.

	(3)		Short-term Insurance Business

			During the Reporting Period, net premiums earned from short-term insurance business decreased by 1.3% year-on-year. This was primarily due to an increase in the unearned premium reserves of short-term insurance business.

			Gross written premiums categorized by business:


	RMB million
	January to		January to
	June 2011		June 2010		Change

Individual Life Insurance Business		186,858		175,520		6.5	%
First-year business		102,472		103,486		-1.0	%
Single		70,498		74,624		-5.5	%
First-year regular		31,974		28,862		10.8	%
Renewal business		84,386		72,034		17.1	%
Group Life Insurance Business		299		283		5.7	%
First-year business		298		279		6.8	%
Single		297		278		6.8	%
First-year regular		1		1		—
Renewal business		1		4		-75.0	%
Short-term Insurance Business		8,333		7,811		6.7	%
Short-term accident insurance business		4,794		4,162		15.2	%
Short-term health insurance business		3,539		3,649		-3.0	%


Total		195,490		183,614		6.5	%

Commission File Number 001-31914

Gross written premiums categorized by channel:


	RMB million
	January to		January to
	June 2011		June 2010		Change

Individual Life Insurance Channel		92,012		83,644		10.0	%
First-year business of long-term insurance		22,787		18,727		21.7	%
Single		180		261		-31.0	%
First-year regular		22,607		18,466		22.4	%
Renewal business		69,164		64,878		6.6	%
Short-term insurance business		61		39		56.4	%
Group Life Insurance Channel		9,057		8,759		3.4	%
First-year business of long-term insurance		784		983		-20.2	%
Single		783		982		-20.3	%
First-year regular		1		1		—
Renewal business		1		4		-75.0	%
Short-term insurance business		8,272		7,772		6.4	%
Bancassurance Channel		94,421		91,211		3.5	%
First-year business of long-term insurance		79,199		84,055		-5.8	%
Single		69,832		73,659		-5.2	%
First-year regular		9,367		10,396		-9.9	%
Renewal business		15,222		7,156		112.7	%
Short-term insurance business		—		—		—


Total		195,490		183,614		6.5	%

Investment Income


	RMB million
	January to		January to
	June 2011		June 2010		Change

Investment income from securities at fair value through income		201		62		224.2	%
Investment income from available-for-sale securities		12,066		11,324		6.6	%
Investment income from held-to-maturity securities		5,303		5,184		2.3	%
Investment income from term deposits		11,573		7,375		56.9	%
Investment income from loans		1,120		696		60.9	%
Other investment income		46		74		-37.8	%


Total		30,309		24,715		22.6	%

Commission File Number 001-31914

	(1)		Investment Income from Securities at Fair Value through Income

			During the Reporting Period, investment income from securities at fair value through income increased by 224.2% year-on-year. This was primarily due to an increase in the volume of securities at fair value through income and interest income from debt securities at fair value through income.

	(2)		Investment Income from Available-for-Sale Securities

			During the Reporting Period, investment income from available-for-sale securities increased by 6.6% year-on-year. This was primarily due to an increase in interest income from available-for-sale debt securities resulting from the increase of interest rate.

	(3)		Investment Income from Held-to-Maturity Securities

			During the Reporting Period, investment income from held-to-maturity securities increased by 2.3% year-on-year. This was primarily due to an increase in interest income from held- to-maturity debt securities resulting from the increase of interest rate.

	(4)		Investment Income from Term Deposits

			During the Reporting Period, investment income from term deposits increased by 56.9% year-on-year. This was primarily due to the increased volume of deposits and an increase in the floating interest rates of deposits.

	(5)		Investment Income from Loans

			During the Reporting Period, investment income from loans increased by 60.9% year-on- year. This was primarily due to the increased volume of policy loans and debt investment plan.

Net Realised Gains on Financial Assets

During the Reporting Period, net realised gains on financial assets decreased by 90.4% year-on- year. This was primarily due to a decrease in income from the buy-sale price differential and an increase in the investment assets meeting the impairment losses recognition standard resulting from the fluctuation in the capital markets.

Net Fair Value Gains/(Losses) through Income

During the Reporting Period, the increase of net fair value gains/(losses) through income was primarily due to an increase in unrealized profits and income from the buy-sale price differential in trading of securities at fair value through income.

Commission File Number 001-31914

			Other Income

			During the Reporting Period, other income increased by 9.4% year-on-year. This was primarily due to an increase in income from commission fees income earned from China Life Property and Casualty Insurance Company Limited.

Benefits, Claims and Expenses


	RMB million
	January to		January to
	June 2011		June 2010		Change

Insurance benefits and claims		180,406		163,315		10.5	%
Individual life insurance business		176,242		158,760		11.0	%
Group life insurance business		252		265		-4.9	%
Short-term insurance business		3,912		4,290		-8.8	%
Investment contract benefits		965		1,062		-9.1	%
Policyholder dividends resulting from participation in profits		5,764		6,195		-7.0	%
Underwriting and policy acquisition costs		15,343		13,962		9.9	%
Administrative expenses		9,030		8,405		7.4	%
Other operating expenses		1,843		1,580		16.6	%
Statutory insurance fund contribution		357		339		5.3	%


Total		213,708		194,858		9.7	%

Insurance Benefits and Claims

(1)

Individual Life Insurance Business

During the Reporting Period, insurance benefits and claims attributable to individual life insurance business increased by 11.0% year-on-year. This was primarily due to an increase in maturity benefits.

(2)

Group Life Insurance Business

During the Reporting Period, insurance benefits and claims attributable to group life insurance business decreased by 4.9% year-on-year, maintaining a stable status.

Commission File Number 001-31914

(3)

Short-term Insurance Business

During the Reporting Period, insurance benefits and claims attributable to short-term insurance business decreased by 8.8% year-on-year. This was primarily due to the optimization of short-term insurance business structure and the enhancement of business quality control.

Investment Contract Benefits

During the Reporting Period, investment contract benefits decreased by 9.1% year-on-year. This was primarily due to a decrease in the payment of interests.

Policyholder Dividends Resulting from Participation in Profits

During the Reporting Period, policyholder dividends resulting from participation in profits decreased by 7.0% year-on-year. This was primarily due to a decrease in investment yield for participating products.

Underwriting and Policy Acquisition Costs

During the Reporting Period, underwriting and policy acquisition costs increased by 9.9% year- on-year. This was primarily due to business development.

Administrative Expenses

During the Reporting Period, administrative expenses increased by 7.4% year-on-year. This was primarily due to business development.

Other Operating Expenses

During the Reporting Period, other operating expenses increased by 16.6% year-on-year. This was primarily due to an increase in interest payment for accumulated dividends.

Commission File Number 001-31914

Profit before Income Tax


	RMB million
	January to		January to
	June 2011		June 2010		Change

Individual life insurance business		12,340		19,144		-35.5	%
Group life insurance business		268		210		27.6	%
Short-term insurance business		870		773		12.5	%
Other		1,449		1,476		-1.8	%


Total		14,927		21,603		-30.9	%

(1)

Individual Life Insurance Business

During the Reporting Period, profit before income tax of the Company in the individual life insurance business decreased by 35.5% year-on-year. This was primarily due to the influence imposed on individual life insurance segment from the decline of investment yield and increase in impairment losses caused by the fluctuation in the capital markets, and the increase of the traditional insurance contract liabilities caused by the downward slope of the “yield curve of reserve computation benchmark for insurance contracts” published on

“China Bond” website.

(2)

Group Life Insurance Business

During the Reporting Period, profit before income tax of the Company in the group life insurance business increased by 27.6% year-on-year. This was primarily due to favorable adjustment of group insurance business structure.

(3)

Short-term Insurance Business

During the Reporting Period, profit before income tax of the Company in the short- term insurance business increased by 12.5% year-on-year. This was primarily due to the optimization of short-term insurance business structure and a decrease in claims payments.

Commission File Number 001-31914

Income Tax

During the Reporting Period, income tax of the Company was RMB1,853 million, a 46.9% decrease year-on-year. This was primarily due to a decrease in taxable income. Our effective tax rate for the first half of 2011 was 12.41%.

Net Profit

During the Reporting Period, net profit attributable to equity holders of the Company was RMB12,964 million, a 28.1% decrease year-on-year. This was primarily due to the decline of investment yield and increase in impairment losses caused by the fluctuation in the capital markets, and the increase of the traditional insurance contract liabilities caused by the downward slope of the “yield curve of reserve computation benchmark for insurance contracts” published on “China Bond” website.

II.

Analysis of Major Financial Position Items

Major Assets


	RMB million
	As at 30		As at 31
	June 2011		December 2010		Change

Investment assets		1,454,453		1,336,245		8.8	%
Term deposits		499,125		441,585		13.0	%
Held-to-maturity securities		242,301		246,227		-1.6	%
Available-for-sale securities		567,957		548,121		3.6	%
Securities at fair value through income		13,093		9,762		34.1	%
Securities purchased under agreements to resell		538		—	not applicable
Cash and cash equivalents		79,531		47,854		66.2	%
Loans		45,755		36,543		25.2	%
Statutory deposits-restricted		6,153		6,153		—
Other assets		92,438		74,334		24.4	%


Total		1,546,891		1,410,579		9.7	%

Term Deposits

As at the end of the Reporting Period, term deposits increased by 13.0% from the end of 2010. This was primarily due to our increased efforts for investment in negotiated deposits.

Commission File Number 001-31914

Held-to-Maturity Securities

As at the end of the Reporting Period, held-to-maturity securities decreased by 1.6% from the end of 2010. This was primarily due to the maturity of some held-to-maturity debt securities.

Available-for-Sale Securities

As at the end of the Reporting Period, available-for-sale securities increased by 3.6% from the end of 2010. This was primarily due to an increase in the volume of available-for-sale securities.

Securities at Fair Value through Income

As at the end of the Reporting Period, securities at fair value through income increased by 34.1% from the end of 2010. This was primarily due to an increase in debt securities at fair value through income.

Cash and Cash Equivalents

As at the end of the Reporting Period, cash and cash equivalents increased by 66.2% from the end of 2010. This was primarily due to investment assets allocation and liquidity management needs.

Loans

As at the end of the Reporting Period, loans increased by 25.2% from the end of 2010. This was primarily due to an increase in the demand of policy loans and the volume of debt investment plan.

As at the end of the Reporting Period, our investment assets are categorized as below in terms of asset classes:


	RMB million
	As at 30					As at 31
	June 2011					December 2010
	Amount		Percentage			Amount		Percentage

Cash and cash equivalents		79,531		5.47	%		47,854		3.58	%
Term deposits		499,125		34.32	%		441,585		33.05	%
Bonds		628,724		43.22	%		608,192		45.51	%
Funds		91,886		6.32	%		96,329		7.21	%
Common stocks		102,738		7.06	%		99,580		7.45	%
Other investment forms		52,449		3.61	%		42,705		3.20	%


Total		1,454,453		100.00	%		1,336,245		100.00	%

Commission File Number 001-31914

Major Liabilities


	RMB million
	As at 30		As at 31
	June 2011		December 2010		Change

Insurance contracts		1,135,613		1,018,135		11.5	%
Investment contracts		70,480		70,171		0.4	%
Securities sold under agreements to repurchase		48,425		23,065		110.0	%
Policyholder dividends payable		49,735		52,828		-5.9	%
Annuity and other insurance balances payable		11,843		8,275		43.1	%
Deferred tax liabilities		7,764		11,776		-34.1	%
Other liabilities		24,187		15,854		52.6	%


Total		1,348,047		1,200,104		12.3	%

Insurance Contracts

As at the end of the Reporting Period, liabilities of insurance contracts increased by 11.5% from the end of 2010. This was primarily due to an increase in business volume and the accumulation of insurance liabilities. As at the balance sheet date, the Company’s reserves for insurance contracts satisfied the liability adequacy testing.

Investment Contracts

As at the end of the Reporting Period, account balance of insurance contracts increased by 0.4% from the end of 2010. This was primarily due to an increase in business volume.

Securities Sold under Agreements to Repurchase

As at the end of the Reporting Period, securities sold under agreements to repurchase increased by 110.0% from the end of 2010. This was primarily due to the investment assets allocation and liquidity management needs.

Policyholder Dividends Payable

As at the end of the Reporting Period, policyholder dividends payable decreased by 5.9% from the end of 2010. This was primarily due to a decrease in investment yield for participating products and the Company making payment for policy dividends.

Commission File Number 001-31914

Annuity and Other Insurance Balances Payable

As at the end of the Reporting Period, annuity and other insurance balances payable increased by 43.1% from the end of 2010. This was primarily due to an increase in business volume and the accumulation of insurance liabilities.

Deferred Tax Liabilities

As at the end of the Reporting Period, deferred tax liabilities decreased by 34.1% from the end of 2010. This was primarily due to the increase in the unrealized loss from available-for-sale securities that causes the changeover of deferred tax liabilities.

Equity Holders’ Equity

As at the end of the Reporting Period, equity holders’ equity was RMB197,051 million, a 5.6% decrease from the end of 2010. This decrease was primarily due to a decrease in the fair value of available-for-sale securities resulting from the fluctuation in the capital markets and the distribution of previous year’s cash dividends to equity holders.

III.

Analysis of Cash Flow

Liquidity Sources

Our principal cash inflows come from insurance premiums, deposits from investment contracts, proceeds from sales and maturity of financial assets, and investment income. The primary liquidity concerns with respect to these cash flows are the risk of early withdrawals by contract holders and policyholders, as well as the risks of default by debtors, interest rate changes and other market volatilities. We closely monitor and manage these risks.

Our cash and bank deposits can provide us with a source of liquidity to meet normal cash outflows. As at the end of the Reporting Period, the amount of cash and cash equivalents was RMB79,531 million. In addition, substantially all of our term deposits with banks allow us to withdraw funds on deposit, subject to a penalty interest charge. As at the end of the Reporting Period, the amount of term deposits was RMB499,125 million.

Our investment portfolio also provides us with a source of liquidity to meet unexpected cash outflows. As at the end of the Reporting Period, investments in debt securities had a fair value of RMB620,915 million, and investments in equity securities had a fair value of RMB194,627 million. We are also subject to market liquidity risk due to the large size of our investments in some of the markets in which we invest. In some circumstances, some of our holdings of our investment securities may be large enough to have an influence on the market value. These factors may limit our ability to sell these investments or sell them at an adequate price.

Commission File Number 001-31914

Liquidity Uses

Our principal cash outflows primarily relate to the liabilities associated with our various life insurance, annuity and accident and health insurance products, dividend and interest payments on our insurance policies and annuity contracts, operating expenses, income taxes and dividends that may be declared and paid to our equity holders. Cash outflows arising from our insurance activities primarily relate to benefit payments under these insurance products, as well as payments for policy surrenders, withdrawals and loans.

We believe that our sources of liquidity are sufficient to meet our current cash requirements.

Consolidated Cash Flows


	RMB million
	January to			January to
	June 2011			June 2010			Change

Net cash inflow from operating activities		90,103			104,365			-13.7	%
Net cash outflow from investment activities		(82,493	)		(78,376	)		5.3	%
Net cash inflow/(outflow) from financing activities		24,269			(17,405	)	not applicable
Foreign currency losses on cash and cash equivalents		(202	)		(63	)		220.6	%


Net increase of cash and cash equivalents		31,677			8,521			271.8	%

We have established a cash flow testing system, and conduct regular tests to monitor the cash inflows and outflows under various changing circumstances and adjust accordingly the asset portfolio to ensure sufficient sources of liquidity. During the Reporting Period, net cash inflow from operating activities decreased by 13.7% year-on-year. This was primarily due to an increase in maturity benefits. Net cash outflow from investment activities increased by 5.3% year-on-year. This was primarily due to the demand of investment management. The change of net cash inflow/(outflow) from financing activities was primarily due to the demand of liquidity management.

Commission File Number 001-31914

IV.

Solvency Ratio

The solvency ratio of an insurance company is a measure of capital adequacy, which is calculated by dividing the actual capital of the company (which is its admissible assets less admissible liabilities, determined in accordance with relevant rules) by the minimum capital it is required to meet. The following table shows our solvency ratio as at 30 June 2011:


	RMB million
	As at 30			As at 31
	June 2011			December 2010

Actual capital		104,553			123,769
Minimum capital		63,672			58,385
Solvency ratio		164.21	%		211.99	%

The decrease of our solvency ratio was primarily due to the fluctuation in the capital markets, the distribution of previous year’s cash dividends to equity holders and the business development of the Company.

Commission File Number 001-31914

INTERIM RESULTS⁶

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2011


			Unaudited
			For the six months
			ended 30 June
			2011			2010
	Note		*RMB million*			RMB million

REVENUES
Gross written premiums				195,490			183,614
Less: premiums ceded to reinsurers				(124	)		(90	)


Net written premiums				195,366			183,524
Net change in unearned premium reserves				(517	)		65


Net premiums earned				194,849			183,589


Investment income		1		30,309			24,715
Net realised gains on financial assets		2		601			6,266
Net fair value gains/(losses) through income		3		405			(369	)
Other income				1,302			1,190


Total revenues				227,466			215,391


BENEFITS, CLAIMS AND EXPENSES
Insurance benefits and claims expenses
Life insurance death and other benefits				(59,403	)		(36,482	)
Accident and health claims and claim adjustment expenses				(3,912	)		(4,290	)
Increase in insurance contracts liabilities				(117,091	)		(122,543	)
Investment contract benefits				(965	)		(1,062	)
Policyholder dividends resulting from participation in profits				(5,764	)		(6,195	)
Underwriting and policy acquisition costs				(15,343	)		(13,962	)
Administrative expenses				(9,030	)		(8,405	)
Other operating expenses				(1,843	)		(1,580	)
Statutory insurance fund contribution				(357	)		(339	)


Total benefits, claims and expenses				(213,708	)		(194,858	)


⁶		The “Group” refers to China Life Insurance Company Limited and its subsidiaries in this part.

Commission File Number 001-31914

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
For the six months ended 30 June 2011


			Unaudited
			For the six months
			ended 30 June
			2011			2010
	Note		*RMB million*			RMB million

Share of results of associates				1,169			1,070


Profit before income tax		4		14,927			21,603


Income tax		5		(1,853	)		(3,488	)


Net profit				13,074			18,115


Attributable to:
— equity holders of the Company				12,964			18,034
— non-controlling interests				110			81


Basic and diluted earnings per share		6	RMB	0.46		RMB	0.64


Other comprehensive income/(loss)
Fair value losses on available-for-sale securities				(19,541	)		(26,690	)
Amount transferred to net profit from other comprehensive income				(604	)		(6,264	)
Portion of fair value losses on available-for-sale securities allocated to participating policyholders				2,521			9,770
Share of other comprehensive loss of associates				(123	)		(208	)
Income tax relating to components of other comprehensive income				4,406			5,796


Other comprehensive loss for the period				(13,341	)		(17,596	)


Total comprehensive income/(loss) for the period				(267	)		519


Attributable to:
— equity holders of the Company				(353	)		452
— non-controlling interests				86			67

Commission File Number 001-31914

Note:

INVESTMENT INCOME


	For the six months ended 30 June
	2011		2010
	*RMB million*		RMB million

Debt securities		13,568		12,548
— held-to-maturity securities		5,303		5,184
— available-for-sale securities		8,101		7,329
— at fair value through income		164		35
Equity securities		4,002		4,022
— available-for-sale securities		3,965		3,995
— at fair value through income		37		27
Bank deposits		11,573		7,375
Loans		1,120		696
Securities purchased under agreements to resell		46		74


Total		30,309		24,715

For the six months ended 30 June 2011, included in investment income is interest income of RMB26,305 million (for the six months ended 30 June 2010: RMB 20,693 million) all interest is accrued using effective interest method.

The investment income from listed and unlisted debt and equity securities for the six months ended 30 June 2011 were RMB 3,344 million and RMB 14,228 million respectively (for the six months ended 30 June 2010: RMB 3,370 million and RMB 13,200 million).

NET REALISED GAINS ON FINANCIAL ASSETS


	For the six months ended 30 June
	2011			2010
	*RMB million*			RMB million

Debt securities
Net realised gains		417			436


Subtotal		417			436


Equity securities
Net realised gains		3,762			6,143
Impairment		(3,578	)		(313	)


Subtotal		184			5,830


Total		601			6,266

Net realised gains on financial assets are from available-for-sale securities.

Commission File Number 001-31914

During the six months ended 30 June 2011, the Group recognized impairment expense of RMB 3,578 million (for the six months ended 30 June 2010: RMB 313 million) of available-for-sale equity securities for which the Group determined that objective evidence of impairment existed.

NET FAIR VALUE GAINS/(LOSSES) THROUGH INCOME


	For the six months ended 30 June
	2011			2010
	*RMB million*			RMB million

Debt securities		(31	)		132
Equity securities		181			(686	)
Stock appreciation rights		255			185


Total		405			(369	)

4		PROFIT BEFORE INCOME TAX

		Profit before income tax is stated after charging the following:


	For the six months ended 30 June
	2011		2010
	*RMB million*		RMB million

Employee salary and welfare cost		3,202		2,966
Housing benefits		266		237
Contribution to the defined contribution pension plan		753		644
Depreciation and amortisation		946		872
Interest expenses on securities sold under the agreements to repurchase		143		68
Exchange loss		283		78

TAXATION

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax relate to the same fiscal authority.

(a)

The amount of taxation charged to the net profit represents:


	For the six months ended 30 June
	2011		2010
	*RMB million*		RMB million

Current taxation — Enterprise income tax		1,459		2,488
Deferred taxation		394		1,000


Taxation charges		1,853		3,488

Commission File Number 001-31914

(b)

The reconciliation between the Group’s effective tax rate and the statutory tax rate of 25% in the PRC (For the six months ended 30 June 2010: 25%) is as follows:


			For the six months ended 30 June
			2011			2010
			*RMB million*			RMB million

Profit before income tax				14,927			21,603

Tax computed at the statutory tax rate				3,732			5,401
Non-taxable income	(i	)		(2,058	)		(2,043	)
Additional tax liability from expenses not deductible for tax purposes	(i	)		155			122
Unused tax losses				24			8


Income taxes at effective tax rate				1,853			3,488


(i)		Non-taxable income mainly includes interest income from government bonds and fund. Expenses not deductible for tax purposes mainly include commission, brokerage and donation expenses that do not meet the criteria for deduction set by relevant tax regulations.

(c)

As at 30 June 2011, deferred income taxation was calculated in full on temporary differences under the liability method using a principal taxation rate of 25%. The movements in deferred tax assets and liabilities during the period are as follows:


Deferred tax	Insurance			Investment			Others			Total
	RMB million			RMB million			RMB million			RMB million
	(i)			(ii)			(iii)

As at 1 January 2010		(8,531	)		(8,482	)		653			(16,360	)
(Charged) to net profit		(536	)		(189	)		(276	)		(1,001	)
(Charged)/credited to other comprehensive income
— Available-for-sale securities		—			8,238			—			8,238
— Portion of fair value gains on available-for-sale securities allocated to participating policyholders		(2,442	)		—			—			(2,442	)

Subtotal
		(2,442	)		8,238			—			5,796


As at 30 June 2010		(11,509	)		(433	)		377			(11,565	)


As at 1 January 2011		(11,131	)		(1,502	)		857			(11,776	)
(Charged)/credited to net profit		(674	)		628			(348	)		(394	)
(Charged)/credited to other comprehensive income
— Available-for-sale securities		—			5,036			—			5,036
— Portion of fair value losses on available-for-sale securities allocated to participating policyholders		(630	)		—			—			(630	)

Subtotal
		(630	)		5,036			—			4,406


As at 30 June 2011		(12,435	)		4,162			509			(7,764	)

Commission File Number 001-31914


(i)		The deferred tax liability brought forward as at 1 January 2010 arising from the insurance category represented mainly the tax impact related to the change of long term insurance contracts liabilities at 31 December 2008 as a result of the first time adoption of IFRS in 2009. Change during the six months ended 30 June 2011 was mainly related to the temporary difference of short duration insurance contracts liabilities and policyholder dividend payables.

(ii)		The deferred tax arising from the investment category is mainly related to the temporary difference of unrealised gains/(losses) of available-for-sale securities and securities at fair value through income.

(iii)		The deferred tax arising from the other category is mainly related to the temporary difference of employee salary and welfare cost payables.

(d)

The analysis of deferred tax assets and deferred tax liabilities is as follows:


	As at			As at
	30 June 2011			31 December 2010
	*RMB million*			RMB million

Deferred tax assets:
— deferred tax assets to be recovered after more than 12 months		5,031			3,217
— deferred tax assets to be recovered within 12 months		659			617


Subtotal		5,690			3,834


Deferred tax liabilities:
— deferred tax liabilities to be settled after more than 12 months		(13,106	)		(15,262	)
— deferred tax liabilities to be settled within 12 months		(348	)		(348	)


Subtotal		(13,454	)		(15,610	)


Total net deferred income tax liabilities		(7,764	)		(11,776	)

EARNINGS PER SHARE

There is no difference between basic and diluted earnings per share. The basic and diluted earnings per share for the six months ended 30 June 2011 are based on the weighted average number of 28,264,705,000 ordinary shares (For the six months ended 30 June 2010: 28,264,705,000).

Commission File Number 001-31914

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2011


	Unaudited		Audited
	As at		As at
	30 June		31 December
	2011		2010
	*RMB million*		RMB million

ASSETS
Property, plant and equipment		19,282		18,946
Investments in associates		21,938		20,892
Held-to-maturity securities		242,301		246,227
Loans		45,755		36,543
Term deposits		499,125		441,585
Statutory deposits-restricted		6,153		6,153
Available-for-sale securities		567,957		548,121
Securities at fair value through income		13,093		9,762
Securities purchased under agreements to resell		538		—
Accrued investment income		23,730		18,193
Premiums receivable		13,466		7,274
Reinsurance assets		863		830
Other assets		13,159		8,199
Cash and cash equivalents		79,531		47,854


Total assets		1,546,891		1,410,579

Commission File Number 001-31914

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
As at 30 June 2011


	Unaudited		Audited
	As at		As at
	30 June		31 December
	2011		2010
	*RMB million*		RMB million

LIABILITIES AND EQUITY
Liabilities
Insurance contracts		1,135,613		1,018,135
Investment contracts		70,480		70,171
Securities sold under agreements to repurchase		48,425		23,065
Policyholder dividends payable		49,735		52,828
Annuity and other insurance balances payable		11,843		8,275
Premiums received in advance		1,710		1,880
Other liabilities		22,254		13,746
Deferred tax liabilities		7,764		11,776
Current income tax liabilities		13		34
Statutory insurance fund		210		194


Total liabilities		1,348,047		1,200,104


Equity
Share capital		28,265		28,265
Reserves		90,563		100,512
Retained earnings		78,223		79,933


Attributable to equity holders of the Company		197,051		208,710


Non-controlling interests		1,793		1,765


Total equity		198,844		210,475


Total liabilities and equity		1,546,891		1,410,579

Commission File Number 001-31914

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2011


	Unaudited
	Attributable to shareholders of the Company
						Retained			Non-controlling
		Share capital		Reserves			earnings			interests			Total
	RMB million		RMB million			RMB million			RMB million			RMB million

As at 1 January 2010		28,265		102,787			80,020			1,704			212,776

Net profit		—		—			18,034			81			18,115

Other comprehensive loss for the period		—		(17,582	)		—			(14	)		(17,596	)


Total comprehensive income/(loss)		—		(17,582	)		18,034			67			519


Transactions with owners
Appropriation to reserve		—		7,192			(7,192	)		—			—
Dividends paid		—		—			(19,785	)		—			(19,785	)
Dividends to non-controlling interests		—		—			—			(111	)		(111	)


Total transactions with owners		—		7,192			(26,977	)		(111	)		(19,896	)


As at 30 June 2010		28,265		92,397			71,077			1,660			193,399


As at 1 January 2011		28,265		100,512			79,933			1,765			210,475

Net profit		—		—			12,964			110			13,074

Other comprehensive loss for the period		—		(13,317	)		—			(24	)		(13,341	)


Total comprehensive income/(loss)		—		(13,317	)		12,964			86			(267	)


Transactions with owners
Appropriation to reserve		—		3,368			(3,368	)		—			—
Dividends paid		—		—			(11,306	)		—			(11,306	)
Dividends to non-controlling interests		—		—			—			(58	)		(58	)


Total transactions with owners		—		3,368			(14,674	)		(58	)		(11,364	)


As at 30 June 2011		28,265		90,563			78,223			1,793			198,844

Commission File Number 001-31914

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended 30 June 2011


	Unaudited
	For the six months
	ended 30 June
	2011			2010
	*RMB million*			RMB million

Net cash inflow from operating activities		90,103			104,365

Net cash outflow from investing activities		(82,493	)		(78,376	)

Net cash inflow/(outflow) from financing activities		24,269			(17,405	)


Foreign currency losses on cash and cash equivalents		(202	)		(63	)

Net increase in cash and cash equivalents		31,677			8,521


Cash and cash equivalents
Beginning of period		47,854			36,197


End of period		79,531			44,718


Analysis of balance of cash and cash equivalents
Cash at bank and in hand		71,124			37,908
Short-term bank deposits		8,407			6,810

Commission File Number 001-31914

SEGMENT INFORMATION

Operating segments

The Group operates in four operating segments:

	(i)		Individual life insurance business (Individual life)

			Individual life insurance business relates primarily to the sale of long-term life insurance contracts and universal life contracts which are mainly term life, whole life, endowment and annuity products, to individuals and assumed individual reinsurance contracts.

	(ii)		Group life insurance business (Group life)

			Group life insurance business relates primarily to the sale of long-term life insurance contracts and investment contracts, which are mainly term life, whole life and annuity products, to group entities.

	(iii)		Short-term insurance business (Short-term)

			Short-term insurance business relates primarily to the sale of short-term insurance contracts, which are mainly the short-term accident and health insurance contracts.

	(iv)		Corporate and other business (Corporate and other)

			Corporate and other business relates primarily to income and allocated cost of insurance agency business in respect of the provision of services to CLIC, share of results of associates, income and expenses of subsidiaries, unallocated income and expenditure of the Group.

Allocation basis of income and expenses

Investment income, net realised gains or losses on financial assets, net fair value gains or losses through income and foreign exchange losses within other operating expenses are allocated among segments in proportion to each respective segment’s average liabilities of insurance contracts and investment contracts at the beginning and end of the period. Administrative expenses and certain other operating expenses are allocated among segments in proportion to the unit cost of respective products in the different segments. Except for amounts arising from investment contracts which can be allocated to the corresponding segments above, other income and other operating expenses are presented in the “Corporate & Other” segment directly. Income tax is not allocated.

Allocation basis of assets and liabilities

Financial assets and securities sold under agreements to repurchase are allocated among segments in proportion to each respective segment’s average liabilities of insurance contracts and investment contracts at the beginning and end of the period. Insurance liabilities are presented under the respective segments. The remaining assets and liabilities are not allocated.

Commission File Number 001-31914


	For the six months ended 30 June 2011
	Individual			Group			Short-			Corporate
	life			life			term			& other			Elimination			Total
	*(RMB million)*

Revenues
Gross written premiums		186,858			299			8,333			—			—			195,490
— Term Life		949			233			—			—			—
— Whole Life		18,506			49			—			—			—
— Endowment		144,437			—			—			—			—
— Annuity		22,966			17			—			—			—
Net premiums earned		186,846			298			7,705			—			—			194,849
Investment income		28,398			1,476			247			188			—			30,309
Net realised gains/(losses) on financial assets		622			32			5			(58	)		—			601
Net fair value gains through income		376			20			3			6			—			405
Other income		217			78			—			1,355			(348	)		1,302
Including: inter-segment revenue		—			—			—			348			(348	)		—


Segment revenues		216,459			1,904			7,960			1,491			(348	)		227,466


Benefits, claims and expenses
Insurance benefits and claims
Life insurance death and other benefits		(59,222	)		(181	)		—			—			—			(59,403	)
Accident and health claims and claim adjustment expenses		—			—			(3,912	)		—			—			(3,912	)
Increase in insurance contracts liabilities		(117,020	)		(71	)		—			—			—			(117,091	)
Investment contract benefits		(917	)		(48	)		—			—			—			(965	)
Policyholder dividends resulting from participation in profits		(5,383	)		(381	)		—			—			—			(5,764	)
Underwriting and policy acquisition costs		(13,654	)		(40	)		(1,505	)		(144	)		—			(15,343	)
Administrative expenses		(6,637	)		(191	)		(1,307	)		(895	)		—			(9,030	)
Other operating expenses		(994	)		(716	)		(309	)		(172	)		348			(1,843	)
Including: Inter-segment expenses		(328	)		(17	)		(3	)		—			348			—

Statutory insurance fund contribution		(292	)		(8	)		(57	)		—			—			(357	)


Segment benefits, claims and expenses		(204,119	)		(1,636	)		(7,090	)		(1,211	)		348			(213,708	)


Share of results of associates		—			—			—			1,169			—			1,169


Segment results		12,340			268			870			1,449			—			14,927


Income tax																	(1,853	)


Net profit																	13,074


Unrealised losses from Available-for-sale securities included in equity holder’s equity		(12,485	)		(649	)		(109	)		(74	)		—			(13,317	)

Depreciation and amortisation		745			21			149			31			—			946

Commission File Number 001-31914


	For the six months ended 30 June 2010
	Individual			Group			Short-			Corporate
	life			life			term			& other			Elimination			Total
	(RMB million)

Revenues
Gross written premiums		175,520			283			7,811			—			—			183,614
— Term Life		778			196			—			—			—
— Whole Life		18,308			71			—			—			—
— Endowment		131,872			—			—			—			—
— Annuity		24,562			16			—			—			—
Net premiums earned		175,504			281			7,804			—			—			183,589
Investment income		22,976			1,410			232			97			—			24,715
Net realised gains on financial assets		5,814			357			59			36			—			6,266
Net fair value losses through income		(341	)		(21	)		(3	)		(4	)		—			(369	)
Other income		124			163			—			1,203			(300	)		1,190

Including: inter-segment revenue		—			—			—			300			(300	)		—


Segment revenues		204,077			2,190			8,092			1,332			(300	)		215,391


Benefits, claims and expenses
Insurance benefits and claims
Life insurance death and other benefits		(36,300	)		(182	)		—			—			—			(36,482	)
Accident and health claims and claim adjustment expenses		—			—			(4,290	)		—			—			(4,290	)
Increase in insurance contracts liabilities		(122,460	)		(83	)		—			—			—			(122,543	)
Investment contract benefits		(1,001	)		(61	)		—			—			—			(1,062	)
Policyholder dividends resulting from participation in profits		(5,728	)		(467	)		—			—			—			(6,195	)
Underwriting and policy acquisition costs		(12,578	)		(48	)		(1,266	)		(70	)		—			(13,962	)
Administrative expenses		(5,794	)		(342	)		(1,498	)		(771	)		—			(8,405	)
Other operating expenses		(755	)		(778	)		(262	)		(85	)		300			(1,580	)
Including: Inter-segment expenses		(280	)		(17	)		(3	)		—			300			—
Statutory insurance fund contribution		(317	)		(19	)		(3	)		—			—			(339	)


Segment benefits, claims and expenses		(184,933	)		(1,980	)		(7,319	)		(926	)		300			(194,858	)


Share of results of associates		—			—			—			1,070			—			1,070


Segment results		19,144			210			773			1,476			—			21,603


Income tax																	(3,488	)


Net profit																	18,115


Unrealised losses from Available-for-sale securities included in equity holder’s equity		(16,339	)		(1,003	)		(165	)		(75	)		—			(17,582	)

Depreciation and amortisation		652			39			161			20			—			872

Commission File Number 001-31914

EMBEDDED VALUE

Summary of Results

The embedded value as at 30 June 2011, and the value of one year’s sales for the 12 months to 30 June 2011, and their corresponding results in 2010 are shown below.

Table 1
Components of Embedded Value and Value of One Year’s Sales


	*RMB million*
	30 June			31 Dec
ITEM	2011			2010

A Adjusted Net Worth		125,829			144,655
B Value of In-Force Business before Cost of Solvency Margin		202,352			183,008
C Cost of Solvency Margin		(31,688	)		(29,564	)
D Value of In-Force Business after Cost of Solvency Margin (B+C)		170,664			153,444
E Embedded Value (A + D)		296,493			298,099
F Value of One Year’s Sales before Cost of Solvency Margin		24,437			23,726
G Cost of Solvency Margin		(3,931	)		(3,887	)
H Value of One Year’s Sales after Cost of Solvency Margin (F + G)		20,506			19,839


Note:		Taxable income is based on earnings calculated using solvency reserves.

The value of half year’s sales for the six months ended 30 June 2011 and for the corresponding period of last year:

Table 2
Components of Value of Half Year’s Sales


	*RMB million*
	30 June			30 June
ITEM	2011			2010

A Value of Half Year’s Sales before Cost of Solvency Margin		14,336			13,635
B Cost of Solvency Margin		(2,150	)		(2,087	)
C Value of Half Year’s Sales after Cost of Solvency Margin (A + B)		12,186			11,548


Note:	1)	Taxable income is based on earnings calculated using solvency reserves.

	2)	The value of half year’s sales is defined as the discounted value of the projected stream of future after-tax distributable profits for the half year’s sales in the six months immediately preceding the valuation date.

Commission File Number 001-31914

MOVEMENT ANALYSIS

The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period.

Table 3
Analysis of Embedded Value Movement in the First Half Year of 2011


ITEM	*RMB million*

A Embedded Value at Start of Year		298,099
B Expected Return on Embedded Value		13,687
C Value of New Business in the Period		12,186
D Operating Experience Variance		4,751
E Investment Experience Variance		(14,025	)
F Methodology, Model Changes		352
G Market Value Adjustment		(6,279	)
H Exchange Gains or Losses		(282	)
I Shareholder Dividend Distribution		(11,306	)
J Other		(690	)
K Embedded Value as at 30 June 2011 (sum A through J)		296,493


Notes:	1)	Numbers may not be additive due to rounding.

	2)	Items B through J are explained below:

	B	Reflects unwinding of the opening value of in-force business and value of new business sales in the first half year of 2011 plus the expected return on investments supporting the 2011 opening net worth.

	C	Value of new business sales in the first half year of 2011.

	D	Reflects the difference between actual experience in the first half year of 2011 (including lapse, mortality, morbidity, and expense etc.) and the assumptions.

	E	Compares actual with expected investment returns during the first half year of 2011.

	F	Reflects the effect of projection method and model enhancements.

	G	Change in the market value adjustment from the beginning of year 2011 to 30 June 2011, and other related adjustments.

	H	Reflect the gains or losses due to change in exchange rate.

	I	Reflects dividends distributed to shareholders during the year of 2011.

	J	Other miscellaneous items.

Commission File Number 001-31914

SENSITIVITY TESTING

Sensitivity testing was performed using a range of alternative assumptions. In each of the sensitivity tests, only the assumption referred to was changed, with all other assumptions remaining unchanged. The results are summarized below.

Table 4
Sensitivity Results

RMB million

VALUE OF

IN-FORCE BUSINESS

ONE YEAR'S SALES

AFTER COST OF

SOLVENCY MARGIN

Base case scenario

170,664

20,506

1. Risk discount rate of 11.5%

161,987

19,437

2. Risk discount rate of 10.5%

179,993

21,652

3. 10% increase in investment return

202,182

23,560

4. 10% decrease in investment return

139,589

17,586

5. 10% increase in expenses

168,137

18,665

6. 10% decrease in expenses

173,186

22,347

7. 10% increase in mortality rate for non-annuity products and 10% decrease in mortality rate for annuity products

168,937

20,440

8. 10% decrease in mortality rate for non-annuity products and 10% increase in mortality rate for annuity products

172,415

20,572

9. 10% increase in lapse rates

169,422

20,432

10. 10% decrease in lapse rates

171,950

20,574

11. 10% increase in morbidity rates

168,784

20,432

12. 10% decrease in morbidity rates

172,561

20,581

13. 10% increase in claim ratio of short term business

170,335

19,906

14. 10% decrease in claim ratio of short term business

170,992

21,106

15. Solvency margin at 150% of statutory minimum

155,557

18,507

16. Taxable income based on accounting profit in accordance to “the Provisions on the Accounting Treatment Related to Insurance Contracts”

169,278

20,817

Adjusted Net Worth

Base Case Scenario

125,829

17. Taxable income based on accounting profit in accordance to “the Provisions on the Accounting Treatment Related to Insurance Contracts”

118,032


Note:		Taxable income is based on earnings calculated using solvency reserves for Scenarios 1 to 15.

Commission File Number 001-31914

CORPORATE GOVERNANCE

In the first half of 2011, the Company adhered strictly to the regulatory requirements and listing rules of its listed jurisdictions, and adopted effective measures to improve the efficiency of the Board of Directors, strengthen the communication with its investors, standardize and upgrade the information disclosure system and workflow, and increase the transparency of its business operations so as to ensure that investors, especially small and medium-sized investors, have an equal access to the Company’s information.

For the Reporting Period, the Company complied with all the code provisions under the Code on Corporate Governance Practices as set out in Appendix 14 of the Rule Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

DIVIDEND

The Company will not declare an interim dividend for the Reporting Period.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S SECURITIES

For the Reporting Period, the Company and its subsidiaries have not purchased, sold or redeemed any of the Company’s listed securities.

COMPLIANCE WITH THE CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS AND SUPERVISORS OF THE COMPANY

The Board has established written guidelines on no less exacting terms than the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules (the “Model Code”) for directors and supervisors in respect of their dealings in the securities of the Company. After making specific inquiries to all the directors and supervisors of the Company, they have confirmed that they had complied with the Model Code and the Company’s own guidelines during the period from 1 January 2011 to 30 June 2011.

REVIEW OF ACCOUNTS

The Audit Committee together with external auditors engaged by the Company has reviewed the unaudited consolidated financial statements of the Company for the six months ended 30 June 2011.

Commission File Number 001-31914

PUBLICATION OF INTERIM REPORT

The Company’s interim report will be published on the Company’s website (http://www.e-chinalife.com) and the website of The Stock Exchange of Hong Kong Limited (http://www.hkexnews.hk) in due course.

This announcement is published in both English and Chinese languages. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

As at the date of this announcement, the Directors of the Company are as follows:


Executive Directors:		Mr. Yuan Li, Mr. Wan Feng, Mr. Lin Dairen, Ms. Liu Yingqi
Non-executive Directors:		Mr. Miao Jianmin, Mr. Shi Guoqing, Ms. Zhuang Zuojin
Independent Non-executive Directors:		Mr. Ma Yongwei, Mr. Sun Changji, Mr. Bruce Douglas Moore,
		Mr. Anthony Francis Neoh


		By Order of the Board of
		CHINA LIFE INSURANCE COMPANY LIMITED Yuan Li
		Chairman

Beijing, China, 23 August 2011


Exhibit		Description

	99.1	Announcement, dated August 23, 2011


Form 20-F þ		Form 40-F o


Yes o		No þ