REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
* |
U.S.GAAP ☐ | by the International Accounting Standards Board ☒ |
Other ☐ |
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2 |
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3 |
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Item 1. |
3 | |||||||
Item 2. |
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Item 3. |
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B. |
3 | |||||||
C. |
3 | |||||||
D. |
3 | |||||||
Item 4. |
24 | |||||||
A. |
24 | |||||||
B. |
27 | |||||||
C. |
68 | |||||||
D. |
70 | |||||||
Item 4A. |
70 | |||||||
Item 5. |
70 | |||||||
A. |
86 | |||||||
B. |
99 | |||||||
C. |
101 | |||||||
D. |
102 | |||||||
E. |
102 | |||||||
Item 6. |
102 | |||||||
A. |
102 | |||||||
B. |
108 | |||||||
C. |
110 | |||||||
D. |
111 | |||||||
E. |
112 | |||||||
Item 7. |
112 | |||||||
A. |
112 | |||||||
B. |
113 | |||||||
C. |
120 | |||||||
Item 8. |
120 | |||||||
A. |
120 | |||||||
B. |
122 | |||||||
C. |
122 | |||||||
Item 9. |
126 | |||||||
A. |
126 | |||||||
B. |
126 | |||||||
C. |
126 | |||||||
D. |
126 | |||||||
E. |
126 | |||||||
F. |
126 | |||||||
Item 10. |
126 | |||||||
A. |
126 | |||||||
B. |
126 | |||||||
C. |
139 | |||||||
D. |
139 | |||||||
E. |
140 |
F. |
147 | |||||||
G. |
147 | |||||||
H. |
147 | |||||||
I. |
147 | |||||||
Item 11. |
147 | |||||||
Item 12. |
156 | |||||||
A. |
156 | |||||||
B. |
156 | |||||||
C. |
156 | |||||||
D. |
156 | |||||||
157 |
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Item 13. |
157 | |||||||
Item 14. |
157 | |||||||
A. |
157 | |||||||
B. |
157 | |||||||
Item 15. |
157 | |||||||
Item 16A. |
158 | |||||||
Item 16B. |
158 | |||||||
Item 16C. |
158 | |||||||
Item 16D. |
159 | |||||||
Item 16E. |
159 | |||||||
Item 16F. |
159 | |||||||
Item 16G. |
160 | |||||||
Item 16H. |
162 | |||||||
Item 16I. |
162 | |||||||
162 |
||||||||
Item 17. |
162 | |||||||
Item 18. |
162 | |||||||
Item 19. |
162 |
• | future developments in the insurance industry in China; |
• | changes in interest rates and other economic and business conditions in China; |
• | the industry regulatory environment as well as the industry outlook generally; |
• | the amount and nature of, and potential for, future development of our business; |
• | the outcome of litigation and regulatory proceedings that we currently face or may face in the future; |
• | our business strategy and plan of operations; |
• | the prospective financial information regarding our business; |
• | our dividend policy; and |
• | information regarding our embedded value. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS. |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE. |
ITEM 3. |
KEY INFORMATION. |
• | Our investments are subject to risks. |
• | We are exposed to potential investment losses if there is an economic downturn in China. |
• | The PRC securities markets are still emerging markets, which may expose us to risks of loss from our investments there. |
• | Defaults on our debt investments or our investments in loans may materially and adversely affect our profitability. |
• | Investments in new investment channels may not lead to improvements in our rate of investment return or we may incur losses. |
• | We may incur foreign exchange and other losses for our investments denominated in foreign currencies. |
• | The COVID-19 pandemic could have a material adverse impact on our business. |
• | We are exposed to changes in interest rates. |
• | Our growth is dependent on our ability to attract and retain productive agents and key personnel. |
• | If we are unable to develop other distribution channels for our products, our growth may be materially and adversely affected. |
• | Misconduct of directors, senior management, employees and agents is difficult to detect and deter and could harm our reputation or lead to regulatory sanctions or litigation costs. |
• | Differences in future actual operating results from the assumptions used in pricing and establishing reserves for our insurance and annuity products may materially affect our earnings. |
• | Our risk management and internal reporting systems, policies and procedures may leave us exposed to unidentified or unanticipated risks. |
• | Current or future litigation, arbitration and regulatory proceedings could result in financial losses or harm our businesses. |
• | The embedded value information we present in this annual report is based on several assumptions and may vary significantly as those assumptions are changed. |
• | We are subject to stringent laws and contractual obligations related to data privacy and cybersecurity, and we may be exposed to risks related to our management of personal information and other data. |
• | A computer system failure, cyber-attacks or other security breaches may disrupt our business, damage our reputation and adversely affect our results of operations and financial condition. |
• | The auditors’ reports included in this annual report are prepared by relying on audit work which is not inspected by the PCAOB and, as such, investors may be deprived of the benefits of such inspection. |
• | The enactment of the Holding Foreign Companies Accountable Act may result in enhanced disclosure requirements for us and our delisting from the NYSE and deregistration from the SEC. |
• | We expect competition in the Chinese insurance industry to increase. |
• | Further development of regulations in China may impose additional costs or restrictions on our activities. |
• | Our ability to comply with minimum solvency requirements is affected by a number of factors, and our compliance may force us to raise additional capital, which could increase our financing costs or be dilutive to our existing investors, or to reduce our growth. |
• | CLIC has incurred substantial losses on the policies retained by it in the restructuring. If CLIC is unable to meet its obligations to its policyholders, it may seek to increase the level of dividends we pay, sell the China Life shares it owns or take other actions which may have a material adverse effect on the value of the shares our other existing investors own. |
• | The transfer of policies to us by CLIC and/or the separation of assets between CLIC and us may be subject to challenge. |
• | We do not hold exclusive rights to the trademarks in the “China Life” name (in English and Chinese), the “ball” logos and other business related slogans and logos, and CLIC, which owns these trademarks, may take actions that would impair the benefits we derive from their use. |
• | As our controlling shareholder, CLIC will be able to exert influence on our affairs and could cause us to make decisions or enter into transactions that may not be in your best interests. |
• | CLIC may direct business opportunities elsewhere. |
• | The PRC legal system has inherent uncertainties that could limit the legal protections available to you. |
• | Any actions by the Chinese government may cause us to make material changes to our operations and could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. |
• | Government control of currency conversion and the fluctuation of the Renminbi may materially and adversely affect our operations and financial results. |
• | engaging in misrepresentation or fraudulent activities when marketing or selling insurance policies or annuity contracts to customers; |
• | hiding unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses; |
• | not complying with our internal policies, including a director or senior officer’s non-compliance with our code of business conduct and ethics; or |
• | otherwise not complying with laws or our control policies or procedures. |
• | Property and casualty companies. non-life insurance products that they are currently selling to their existing and potential customers. We believe this will lead to greater competition in the accident and health insurance sectors. On December 30, 2006, we established a property and casualty company, CLPCIC, with CLIC. While this joint venture mainly focuses on property insurance business, it also develops short-term health insurance and accident business. Its operations may have a negative impact on sales of our short-term health insurance and accident products in the future. |
• | Mutual fund companies, commercial banks and other financial services providers. |
• | the extent of government involvement; |
• | its level of development; |
• | its growth rate; and |
• | its control of foreign exchange. |
ITEM 4. |
INFORMATION ON THE COMPANY |
• | CLIC transferred to us (1) all long-term insurance policies (policies having a term of more than one year from the date of issuance) issued on or after June 10, 1999, having policy terms approved by or filed with the CIRC on or after June 10, 1999 and either (i) recorded as a long-term insurance policy as of June 30, 2003 in an actuarial database attached to the restructuring agreement as an annex or (ii) having policy terms for group supplemental medical insurance (fund type), (2) stand-alone short-term policies (policies having a term of one year or less from the date of issuance) issued on or after June 10, 1999 and (3) all riders supplemental to the policies described in clauses (1) and (2) above, together with the applicable reinsurance contracts specified in an annex to the restructuring agreement. We refer to these policies in this annual report as the “transferred policies”. All other insurance policies were retained by CLIC. We refer to these policies as the “non-transferred policies”. We assumed all obligations and liabilities of CLIC under the transferred policies. CLIC continues to be responsible for its liabilities and obligations under the non-transferred policies following the effective date. |
• | Cash, specified investment assets and various other assets were also transferred to us. |
• | CLIC agreed not to, directly or indirectly through its subsidiaries and affiliates, participate, operate or engage in life, accident and health insurance businesses and any other business in China which may compete with our insurance business. CLIC also undertook (1) to refer to us any corporate business opportunity that falls within our business scope and which may directly or indirectly compete with our business and (2) to grant us a right of first refusal, on the same terms and conditions, to purchase any new business developed by CLIC. See “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions—Continuing Related Party Transactions with CLIC”. |
• | Substantially all of the management personnel and employees who were employed by CLIC in connection with the transferred assets and business were transferred to us. Some management and personnel remained with CLIC. |
• | CLIC retained the trademarks used in our business, including the “China Life” name in English and Chinese and the “ball” logos, and granted us and our branches a royalty-free license to use these trademarks. CLIC and its subsidiaries and affiliates will be entitled to use these trademarks, but CLIC may not license or transfer these trademarks to any other third parties. See “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions—Continuing Related Party Transactions with CLIC”. |
• | CLIC’s contracts with its agents and other intermediaries were transferred to us. |
• | We entered into various agreements under which we provide policy administration services to CLIC for the non-transferred policies, manage CLIC’s investment assets and lease office space from CLIC for our branch and field offices. See “Item 7. Major Shareholders and Related Party Transactions”. |
As of or for the year ended December 31, |
Compound annual growth rate |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
(2019-2021) |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
(in millions, except as otherwise indicated) |
||||||||||||||||||||
Gross written premiums |
446,562 | 480,593 | 481,311 | 75,528 | 3.82 | % | ||||||||||||||
Liabilities of insurance contracts |
2,385,407 | 2,767,642 | 3,180,931 | 499,157 | 15.48 | % | ||||||||||||||
Liabilities of investment contracts |
252,362 | 271,757 | 296,104 | 46,465 | 8.32 | % |
For the year ended December 31, |
Compound annual growth rate |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
(2019-2021) |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
(in millions, except as otherwise indicated) |
||||||||||||||||||||
Gross written premiums |
||||||||||||||||||||
Whole life and term life insurance |
64,196 | 76,421 | 72,424 | 11,365 | 6.22 | % | ||||||||||||||
Endowment |
113,950 | 109,275 | 97,791 | 15,346 | (7.36 | %) | ||||||||||||||
Annuities |
268,416 | 294,897 | 311,096 | 48,818 | 7.66 | % |
As of or for the year ended December 31, |
Compound annual growth rate |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
(2019-2021) |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
(in millions, except as otherwise indicated) |
||||||||||||||||||||
Gross written premiums |
105,581 | 115,089 | 120,609 | 18,926 | 6.88 | % | ||||||||||||||
Liabilities of insurance contracts |
158,800 | 195,487 | 228,899 | 35,919 | 20.06 | % | ||||||||||||||
Liabilities of investment contracts |
15,442 | 16,455 | 17,490 | 2,745 | 6.42 | % |
As of or for the year ended December 31, |
Compound annual growth rate |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
(2019-2021) |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
(in millions, except as otherwise indicated) |
||||||||||||||||||||
Gross written premiums |
14,943 | 16,583 | 16,407 | 2,575 | 4.78 | % | ||||||||||||||
Liabilities of insurance contracts |
8,529 | 10,096 | 10,069 | 1,580 | 8.65 | % |
• | for the individual insurance distribution channel, products including China Life Xinyu Jinsheng Endowment Insurance, China Life Xinyu Niannian Annuity Insurance, China Life Xinyu Zhenxiang Annuity Insurance, China Life Xinyu Zunxiang Annuity Insurance, China Life Fu Whole Life Critical Illness Insurance (Ceremony Edition, Type A) and China Life Fu Whole Life Critical Illness Insurance (Ceremony Edition, Type B); and |
• | for the bancassurance distribution channel, products including China Life Le Ying Yi Sheng Whole Life Insurance (Exclusive Edition), China Life Le Hui Bao Endowment Insurance and China Life Fu You Xiang Ban Endowment Insurance. |
As of December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Number of exclusive agents (approximately) |
1,613,000 | 1,378,000 | 820,000 | |||||||||
Number of field offices (approximately) |
16,000 | 16,000 | 15,000 |
• | improving the overall productivity of our exclusive agents by implementing our market segmentation sales approach, managing, supporting and incentivizing the exclusive agents through different levels, and providing standardized sales services to our customers; |
• | motivating our exclusive agents with an improved performance-based evaluation and income incentive scheme; |
• | building a more professional exclusive agent force by improving our education and training system and enhancing our training efforts; |
• | improving the quality of our exclusive agent force and reducing turnover by expanding our recruitment program, strengthening the cultivation, training and support to improve capabilities of our new exclusive agents, and enhancing the integration of training and technologies; |
• | improving the productivity of our exclusive agent force by strengthening professional operation and standardized management; and |
• | improving the capabilities of our exclusive agent force for customer service and self and team management by providing effective sales support, including establishing a customer service platform and improving and expanding the China Life E-Home sales support system. |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(in millions) |
||||||||||||||||
Exclusive agent force (1) |
484,517 | 511,044 | 509,489 | 79,950 | ||||||||||||
First-year business of long-term insurance |
96,237 | 99,838 | 82,514 | 12,948 | ||||||||||||
First-year regular |
95,957 | 99,555 | 82,254 | 12,907 | ||||||||||||
Single |
280 | 283 | 260 | 41 | ||||||||||||
Renewal business |
371,140 | 391,272 | 407,973 | 64,020 | ||||||||||||
Short-term insurance business |
17,140 | 19,934 | 19,002 | 2,982 | ||||||||||||
Group distribution channel |
28,846 | 28,872 | 29,162 | 4,577 | ||||||||||||
First-year business of long-term insurance |
3,018 | 2,040 | 1,846 | 290 | ||||||||||||
First-year regular |
968 | 110 | 44 | 7 | ||||||||||||
Single |
2,050 | 1,930 | 1,802 | 283 | ||||||||||||
Renewal business |
1,995 | 1,862 | 1,622 | 255 | ||||||||||||
Short-term insurance business |
23,833 | 24,970 | 25,694 | 4,032 | ||||||||||||
Bancassurance channel |
25,438 | 41,240 | 49,326 | 7,740 | ||||||||||||
First-year business of long-term insurance |
12,516 | 15,757 | 16,123 | 2,530 | ||||||||||||
First-year regular |
12,488 | 15,748 | 16,110 | 2,528 | ||||||||||||
Single |
28 | 9 | 13 | 2 | ||||||||||||
Renewal business |
12,516 | 25,109 | 32,792 | 5,146 | ||||||||||||
Short-term insurance business |
406 | 374 | 411 | 64 | ||||||||||||
Other distribution channels |
28,285 | 31,109 | 30,350 | 4,762 | ||||||||||||
First-year business of long-term insurance |
3 | 188 | 28 | 4 | ||||||||||||
First-year regular |
3 | 8 | 2 | 0.3 | ||||||||||||
Single |
— | 180 | 26 | 4 | ||||||||||||
Renewal business |
146 | 83 | 76 | 12 | ||||||||||||
Short-term insurance business |
28,136 | 30,838 | 30,246 | 4,746 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
567,086 |
612,265 |
618,327 |
97,029 |
||||||||||||
|
|
|
|
|
|
|
|
(1) |
Beginning in 2020, we adjusted the scope of premiums attributable to each distribution channel. The premiums for the year of 2019 have been restated to reflect the changes on a pro forma basis. |
• | In the life insurance market, Ping An Life, China Pacific Life, New China Life, Taiping Life and we collectively represented approximately 51.6% of total life insurance premiums in 2020. We primarily compete based on the nationwide reach of our sales network, our large distribution force and the level of services we provide, as well as our strong brand name. |
• | In the accident insurance market, Ping An Life, China Pacific Life, New China Life, Taiping Life and we collectively represented approximately 68.6% of total accident premiums in 2020. We primarily compete based on the nationwide reach of our sales network and the level of services we provide and our strong brand name, as well as our cooperative arrangements with other companies and institutions. |
• | In the health insurance market, Ping An Life, China Pacific Life, New China Life, Taiping Life and we collectively represented approximately 60.5% of total health premiums in 2020. We primarily compete based on the nationwide reach of our sales network, the level of services we provide, our extensive experience in medical insurance service and systems of policy review and claim management, as well as our strong brand name. |
Life premiums market share |
Accident premiums market share |
Health premiums market share |
Total premiums market share |
|||||||||||||
China Life |
21.6 | % | 26.6 | % | 17.1 | % | 20.8 | % | ||||||||
Ping An Life Insurance Company of China, Ltd. (1) |
14.8 | % | 27.0 | % | 19.1 | % | 16.1 | % | ||||||||
China Pacific Life Insurance Co., Ltd. |
6.4 | % | 7.8 | % | 9.0 | % | 7.1 | % | ||||||||
New China Life Insurance Co., Ltd |
4.3 | % | 3.4 | % | 9.0 | % | 5.4 | % | ||||||||
Taiping Life Insurance Co., Ltd . |
4.4 | % | 3.8 | % | 6.4 | % | 4.9 | % | ||||||||
Others (2) |
48.5 | % | 31.4 | % | 39.4 | % | 45.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
100 |
% |
100 |
% |
100 |
% |
100 |
% | ||||||||
|
|
|
|
|
|
|
|
(1) | For purposes of this annual report, the statistics for Ping An Life Insurance Company of China, Ltd. do not include those of Ping An Health Insurance Company of China, Ltd. and Ping An Annuity Insurance Company of China, Ltd. |
(2) | Others include: PICC Life Insurance Company Limited, PICC Health Insurance Company Limited, Taiping Pension Company Limited, Minsheng Life Insurance Co., Ltd., Ping An Annuity Insurance Company of China, Ltd., Ping An Health Insurance Company of China, Ltd., China United Life Insurance Co., Ltd., Sunshine Life Insurance Corporation Limited, Taikang Life Insurance Co., Ltd., Taikang Pension & Insurance Co., Ltd., Huatai Life Insurance Co., Ltd., Funde Sino Life Insurance Co., Ltd., Dajia Annuity Insurance Co., Ltd., Hexie Health Insurance Co., Ltd., Union Life Insurance Co., Ltd., Greatwall Life Insurance Co., Ltd., ABC Life Insurance Co., Ltd., Kunlun Health Insurance Co., Ltd., J.K. Life Insurance Corporation Limited, Sinatay Life Insurance Co., Ltd., Yingda Taihe Life Insurance Co., Ltd., Guohua Life Insurance Co., Ltd., Happy Life Insurance Co., Ltd., Aeon Life Insurance Company, Ltd., China Post Life Insurance Company Limited, Zhongrong Life Insurance Co., Ltd., Lian Life Insurance Company Limited, Sino-Conflux Insurance Company, Qian Hai Life Insurance Co., Ltd., Soochow Life Insurance Co., Ltd., Hong Kang Life Insurance Co., Ltd., Pearl River Life Insurance Co., Ltd., Chasingjixiang Life Insurance Company Limited., Bohai Life Insurance Co., Ltd., Guolian Insurance Co., Ltd., Shanghai Life Insurance Company Limited, Hengqin Life Insurance Co., Ltd., Fosun United Health Insurance Co., Ltd., Hetai Life Insurance Co., Ltd., Huagui Life Insurance Co., Ltd., Trust Mutual Life Insurance Company, Aixin Life Insurance Co., Ltd., China Merchants Life Insurance Company Limited, China Three Gorges Life Insurance Co., Ltd., Beijing Life Insurance Co., Ltd., GuoBao Life Insurance Co., Ltd., Ruihua Health Assurance Corporation, Haibao Life Insurance Co., Ltd., Guofu Life Insurance Co., Ltd., Manulife-Sinochem Life Insurance Co., Ltd., CCB Life Insurance Co., Ltd, Allianz China Life Insurance Co., Ltd., ICBC-AXA Assurance Co., Ltd., BOCOM MSIG Life Insurance Company Limited, Citic-Prudential Life Insurance Company Limited, Generali China Life Insurance Co., Ltd., Sun Life Everbright Life Insurance Co., Ltd., BOB-Cardif Life Insurance Co., Ltd., Founder Meiji Yasuda Life Insurance Co., Ltd., Aviva-COFCO Life Insurance Company Ltd., Aegon THTF Life Insurance Co., Ltd., CIGNA & CMB Life Insurance Company Limited, Great Wall Changsheng Life Insurance Co., Ltd., Heng An Standard Life Company Limited, Oldmutual-Guodian Life Insurance Co., Ltd., Sino-US United MetLife Insurance Company Limited, Cathay Lujiazui Life Insurance Company Limited, BOC–Samsung Life Insurance Company Limited, Sino-French Life Insurance Co., Ltd., Evergrand Life Assurance Co., Ltd., King Dragon Life Insurance Co., Ltd., HSBC Life Insurance Company Limited, Dingcheng Life Insurance Co., Ltd., Pramerica Fosun Life Insurance Co., Ltd., Sino-Korea Life Insurance Co., Ltd., ERGO China Life Insurance Co., Ltd. and AIA Life Insurance Company Limited. |
As of December 31, (1) |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Carrying value |
% of total |
Carrying value |
% of total |
Carrying value |
% of total |
|||||||||||||||||||
(RMB in millions, except as otherwise indicated) |
||||||||||||||||||||||||
Cash and cash equivalents |
53,339 | 1.5 | % | 56,655 | 1.4 | % | 60,440 | 1.3 | % | |||||||||||||||
Term deposits |
535,272 | 15.0 | % | 545,678 | 13.3 | % | 529,488 | 11.2 | % | |||||||||||||||
Statutory deposits—restricted |
6,333 | 0.2 | % | 6,333 | 0.2 | % | 6,333 | 0.1 | % | |||||||||||||||
Debt securities, held-to-maturity |
928,751 | 26.0 | % | 1,189,369 | 29.1 | % | 1,533,753 | 32.5 | % | |||||||||||||||
Debt securities, available-for-sale |
509,791 | 14.3 | % | 580,810 | 14.2 | % | 793,544 | 16.9 | % | |||||||||||||||
Debt securities, securities at fair value through profit or loss |
85,206 | 2.4 | % | 95,615 | 2.3 | % | 143,057 | 3.0 | % | |||||||||||||||
Debt securities |
1,523,748 | 42.7 | % | 1,865,794 | 45.6 | % | 2,470,354 | 52.4 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans |
608,920 | 17.0 | % | 658,535 | 16.1 | % | 666,087 | 14.1 | % | |||||||||||||||
Equity securities, available for sale |
549,166 | 15.4 | % | 634,793 | 15.5 | % | 635,743 | 13.4 | % | |||||||||||||||
Equity securities, securities at fair value through profit or loss |
56,402 | 1.6 | % | 65,955 | 1.6 | % | 63,714 | 1.4 | % | |||||||||||||||
Equity securities |
605,568 | 17.0 | % | 700,748 | 17.1 | % | 699,457 | 14.8 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivative financial assets |
428 | — | — | — | — | — | ||||||||||||||||||
Resale agreements |
4,467 | 0.1 | % | 7,947 | 0.2 | % | 12,915 | 0.3 | % | |||||||||||||||
Investment properties |
12,141 | 0.3 | % | 14,217 | 0.3 | % | 13,374 | 0.3 | % | |||||||||||||||
Investments in associates and joint ventures |
222,983 | 6.2 | % | 239,584 | 5.8 | % | 257,953 | 5.5 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total investment assets |
3,573,199 |
100.0 |
% |
4,095,491 |
100.0 |
% |
4,716,401 |
100.0 |
% | |||||||||||||||
|
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|
|
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|
|||||||||||||
Average investment assets balance |
3,338,632 | 3,834,345 | 4,405,946 |
* | (1): China Life Insurance Sales Company became a subsidiary of the Company in 2021 as a result of a business combination under common control. The financial data of previous years in this annual report have been restated. See Note 34(f) |
• | interest rate risk, relating to the market price and cash flow variability associated with changes in interest rates; |
• | credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest; |
• | market valuation risk, relating to the changes in market value for our investments, particularly our securities investment fund holdings and shares listed on the Chinese securities exchanges, which are denominated and traded in Renminbi; |
• | liquidity risk, relating to the lack of liquidity in many of the debt and equity securities markets we invest in, due to contractual restrictions on transfer or the size of our investments in relation to the overall market; and |
• | currency exchange risk, relating to the impact of changes in the value of the Renminbi against the U.S. dollar and other currencies on the value of our investments. |
As of or for the years ended December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Yield (1) |
Amount |
Yield (1) |
Amount |
Yield (1) |
Amount |
|||||||||||||||||||
(RMB in millions, except as otherwise indicated ) |
||||||||||||||||||||||||
Cash, cash equivalents, statutory deposits and term deposits: |
||||||||||||||||||||||||
Investment income |
4.4 | % | 26,695 | 4.3 | % | 25,860 | 4.3 | % | 25,949 | |||||||||||||||
Ending assets: cash and cash equivalents |
53,339 | 56,655 | 60,440 | |||||||||||||||||||||
Ending assets: statutory deposits—restricted |
6,333 | 6,333 | 6,333 | |||||||||||||||||||||
Ending assets: term deposits |
535,272 | 545,678 | 529,488 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Ending assets |
594,944 | 608,666 | 596,261 | |||||||||||||||||||||
Debt securities: |
||||||||||||||||||||||||
Investment income |
63,148 | 70,934 | 90,400 | |||||||||||||||||||||
Net realized gains on financial assets |
(35 | ) | 1,575 | (1,161 | ) | |||||||||||||||||||
Net fair value gains through profit or loss |
778 | (583 | ) | 1,069 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
4.4 | % | 63,891 | 4.2 | % | 71,926 | 4.2 | % | 90,308 | |||||||||||||||
Ending assets |
1,523,748 | 1,865,794 | 2,470,354 | |||||||||||||||||||||
Loans: |
||||||||||||||||||||||||
Investment income |
5.1 | % | 27,111 | 5.0 | % | 31,948 | 5.0 | % | 32,970 | |||||||||||||||
Ending assets |
608,920 | 658,535 | 666,087 | |||||||||||||||||||||
Equity securities: |
||||||||||||||||||||||||
Investment income |
22,804 | 24,983 | 28,718 | |||||||||||||||||||||
Net realized gains on financial assets |
1,866 | 13,008 | 21,505 | |||||||||||||||||||||
Net fair value gains through profit or loss |
18,279 | 22,997 | 3,470 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
8.3 | % | 42,949 | 9.3 | % | 60,988 | 7.7 | % | 53,693 | |||||||||||||||
Ending assets |
605,568 | 700,748 | 699,457 | |||||||||||||||||||||
Resale agreements: |
||||||||||||||||||||||||
Investment income |
2.2 | % | 161 | 12.4 | % | 772 | 3.4 | % | 350 | |||||||||||||||
Ending assets |
4,467 | 7,947 | 12,915 | |||||||||||||||||||||
Investments properties: |
||||||||||||||||||||||||
Income of investments properties |
0.3 | % | 31 | (0.4 | %) | (50 | ) | 0.4 | % | 55 | ||||||||||||||
Ending assets |
12,141 | 14,217 | 13,374 | |||||||||||||||||||||
Investments in associates and joint ventures: |
||||||||||||||||||||||||
Net gains on investments of associates and joint ventures |
3.8 | % | 8,011 | 3.3 | % | 7,666 | 4.2 | % | 10,328 | |||||||||||||||
Ending assets |
222,983 | 239,584 | 257,953 | |||||||||||||||||||||
Securities sold under agreements to repurchase: |
||||||||||||||||||||||||
Interest expense |
(1.5 | %) | (2,392 | ) | (1.3 | %) | (1,565 | ) | (1.9 | %) | (3,523 | ) | ||||||||||||
Ending liabilities |
118,088 | 122,249 | 239,446 | |||||||||||||||||||||
Total investments: |
||||||||||||||||||||||||
Investment income |
139,919 | 154,497 | 178,387 | |||||||||||||||||||||
Net realized gains on financial assets |
1,831 | 14,583 | 20,344 | |||||||||||||||||||||
Net fair value gains through profit or loss |
19,251 | 21,900 | 4,943 | |||||||||||||||||||||
Income of Investments properties |
31 | (50 | ) | 55 | ||||||||||||||||||||
Net gains on investments of associates and joint ventures |
8,011 | 7,666 | 10,328 | |||||||||||||||||||||
Interest expense of securities sold under agreements to repurchase |
(2,392 | ) | (1,565 | ) | (3,523 | ) | ||||||||||||||||||
Total |
5.24 | % | 166,651 | 5.30 | % | 197,031 | 4.98 | % | 210,534 |
As of or for the years ended December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Yield (1) |
Amount |
Yield (1) |
Amount |
Yield (1) |
Amount |
|||||||||||||||||||
Ending assets excluding securities sold under agreements to repurchase |
3,455,111 | 3,973,242 | 4,476,955 |
(1) | Yields for 2021, 2020 and 2019 are calculated by dividing the gross investment income for that year by the average of the ending balances of that year and the previous year. |
As of December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Amortized cost |
Amortized cost |
Amortized cost |
||||||||||
(RMB in millions) |
||||||||||||
Due in one year or less |
107,051 | 63,090 | 135,301 | |||||||||
Due after one year and through five years |
420,191 | 480,848 | 394,187 | |||||||||
Due after five years and through ten years |
8,030 | 1,740 | — | |||||||||
|
|
|
|
|
|
|||||||
Total term deposits |
535,272 |
545,678 |
529,488 |
|||||||||
|
|
|
|
|
|
As of December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Amortized cost |
Amortized cost |
Amortized cost |
||||||||||
(RMB in millions) |
||||||||||||
Industrial & Commercial Bank of China |
3,205 | 9,092 | 13,174 | |||||||||
Agriculture Bank of China |
49,089 | 61,060 | 47,523 | |||||||||
Bank of China |
40,000 | — | 60 | |||||||||
China Construction Bank |
5,200 | 3,500 | 5,070 | |||||||||
Bank of Communications |
135,950 | 131,150 | 131,688 | |||||||||
Other banks |
301,828 | 340,876 | 331,973 | |||||||||
|
|
|
|
|
|
|||||||
Total term deposits |
535,272 |
545,678 |
529,488 |
|||||||||
|
|
|
|
|
|
• | Chinese government bonds; |
• | government agency bonds (including local government bonds issued and repaid by the MOF as agent, central bank notes, financial bonds issued by Chinese state-owned policy banks and RMB-denominated bonds issued by international development institutions); |
• | corporate bonds (including financial bonds issued by commercial banks, corporate bonds, convertible corporate bonds, short-term financing bonds and medium-term notes); |
• | subordinated bonds and debt (including subordinated bonds issued by Chinese state-owned policy banks, subordinated bonds issued by commercial banks, subordinated debt with fixed terms issued by commercial banks and subordinated debt with fixed terms issued by insurance companies); and |
• | tier 2 capital bonds and perpetual capital bonds (including tier 2 capital bonds and perpetual capital bonds issued by Chinese state-owned policy banks, and tier 2 capital bonds and perpetual capital bonds issued by qualified commercial banks). |
As of December 31, |
||||||||||||||||||||||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost |
% of total |
Estimated fair value |
% of total |
Amortized cost |
% of total |
Estimated fair value |
% of total |
Amortized cost |
% of total |
Estimated fair value |
% of total |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
(RMB in millions) |
||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities, available-for-sale: |
||||||||||||||||||||||||||||||||||||||||||||||||
Government bonds |
22,500 | 1.5 | % | 23,758 | 1.5 | % | 48,542 | 2.6 | % | 49,256 | 2.6 | % | 55,110 | 2.3 | % | 58,561 | 2.3 | % | ||||||||||||||||||||||||||||||
Government agency bonds |
163,678 | 10.9 | % | 171,189 | 10.9 | % | 161,503 | 8.8 | % | 169,013 | 8.9 | % | 245,026 | 10.0 | % | 259,753 | 10.0 | % | ||||||||||||||||||||||||||||||
Corporate bonds |
145,033 | 9.6 | % | 148,455 | 9.5 | % | 133,133 | 7.2 | % | 136,025 | 7.2 | % | 197,856 | 8.1 | % | 203,147 | 7.9 | % | ||||||||||||||||||||||||||||||
Subordinated bonds/debt |
53,062 | 3.5 | % | 53,922 | 3.4 | % | 81,880 | 4.4 | % | 81,795 | 4.3 | % | 107,204 | 4.4 | % | 111,029 | 4.3 | % | ||||||||||||||||||||||||||||||
Others |
109,729 | 7.3 | % | 112,467 | 7.3 | % | 141,530 | 7.6 | % | 144,721 | 7.6 | % | 154,793 | 6.4 | % | 161,054 | 6.3 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total debt securities, available-for-sale |
494,002 |
32.8 |
% |
509,791 |
32.6 |
% |
566,588 |
30.6 |
% |
580,810 |
30.6 |
% |
759,989 |
31.2 |
% |
793,544 |
30.8 |
% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Debt securities, held to maturity |
||||||||||||||||||||||||||||||||||||||||||||||||
Government bonds |
215,928 | 14.3 | % | 228,198 | 14.6 | % | 265,198 | 14.3 | % | 275,770 | 14.5 | % | 349,370 | 14.3 | % | 382,413 | 14.9 | % | ||||||||||||||||||||||||||||||
Government agency bonds |
401,799 | 26.6 | % | 415,013 | 26.6 | % | 617,515 | 33.3 | % | 631,203 | 33.2 | % | 911,451 | 37.4 | % | 969,584 | 37.6 | % | ||||||||||||||||||||||||||||||
Corporate bonds |
198,322 | 13.2 | % | 206,793 | 13.2 | % | 201,988 | 10.9 | % | 209,873 | 11.0 | % | 209,627 | 8.6 | % | 219,793 | 8.5 | % | ||||||||||||||||||||||||||||||
Subordinated bonds/debt |
112,702 | 7.5 | % | 118,571 | 7.6 | % | 104,668 | 5.7 | % | 108,694 | 5.7 | % | 63,305 | 2.6 | % | 66,481 | 2.6 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total debt securities, held to maturity |
928,751 |
61.6 |
% |
968,575 |
62.0 |
% |
1,189,369 |
64.2 |
% |
1,225,540 |
64.4 |
% |
1,533,753 |
62.9 |
% |
1,638,271 |
63.6 |
% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Debt securities, securities at fair value through profit or loss |
||||||||||||||||||||||||||||||||||||||||||||||||
Government bonds |
41 | 0.0 | % | 41 | 0.0 | % | 1,640 | 0.1 | % | 1,638 | 0.1 | % | 1,378 | 0.1 | % | 1,393 | 0.1 | % | ||||||||||||||||||||||||||||||
Government agency bonds |
6,829 | 0.5 | % | 6,859 | 0.4 | % | 4,417 | 0.2 | % | 4,422 | 0.2 | % | 7,932 | 0.3 | % | 7,989 | 0.3 | % | ||||||||||||||||||||||||||||||
Corporate bonds |
76,395 | 5.0 | % | 77,215 | 4.9 | % | 86,776 | 4.8 | % | 86,803 | 4.6 | % | 90,241 | 3.7 | % | 90,425 | 3.5 | % | ||||||||||||||||||||||||||||||
Others |
1,083 | 0.1 | % | 1,091 | 0.1 | % | 2,668 | 0.1 | % | 2,752 | 0.1 | % | 43,120 | 1.8 | % | 43,250 | 1.7 | % | ||||||||||||||||||||||||||||||
Total debt securities, securities at fair value through profit or loss |
84,348 |
5.6 |
% |
85,206 |
5.4 |
% |
95,501 |
5.2 |
% |
95,615 |
5.0 |
% |
142,671 |
5.9 |
% |
143,057 |
5.6 |
% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total debt securities |
1,507,101 |
100.0 |
% |
1,563,572 |
100.0 |
% |
1,851,458 |
100.0 |
% |
1,901,965 |
100.0 |
% |
2,436,413 |
100.0 |
% |
2,574,872 |
100.0 |
% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Amortized cost |
Estimated fair value |
Amortized cost |
Estimated fair value |
Amortized cost |
Estimated fair value |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(RMB in millions) |
||||||||||||||||||||||||
Due in one year or less |
51,097 | 50,715 | 62,234 | 62,610 | 92,239 | 92,519 | ||||||||||||||||||
Due after one year and through five years |
279,248 | 288,711 | 269,005 | 276,399 | 321,987 | 332,568 | ||||||||||||||||||
Due after five years and through ten years |
457,940 | 478,297 | 468,612 | 485,178 | 467,064 | 491,974 | ||||||||||||||||||
Due after ten years |
634,468 | 660,643 | 956,106 | 982,163 | 1,412,452 | 1,514,754 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total debt securities, excluding those at fair value through profit or loss |
1,422,753 |
1,478,366 |
1,755,957 |
1,806,350 |
2,293,742 |
2,431,815 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Carrying value |
% of total |
Carrying value |
% of total |
Carrying value |
% of total |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(RMB in millions, except as otherwise indicated) |
||||||||||||||||||||||||
Open-end |
118,450 | 100.0 | % | 114,311 | 100.0 | % | 112,689 | 100 | % | |||||||||||||||
Closed-end |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
118,450 |
100.0 |
% |
114,311 |
100.0 |
% |
112,689 |
100 |
% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Carrying value |
Carrying value |
Carrying value |
||||||||||
|
|
|
|
|
|
|||||||
(RMB in millions, except as otherwise indicated) |
||||||||||||
China Life Property and Casualty Insurance Company Limited |
9,332 | 10,620 | 10,151 | |||||||||
China Guangfa Bank Co., Ltd. |
75,180 | 79,974 | 86,179 | |||||||||
Sinopec Sales Co., Ltd. |
10,232 | 10,361 | 10,052 | |||||||||
Sinopec Sichuan to East China Gas Pipeline Co., Ltd. |
21,433 | 20,676 | 21,438 | |||||||||
China Power Investment Nuclear Power Co., Ltd. |
8,607 | 8,802 | 9,274 | |||||||||
Qinghai Huanghe Hydropower Development Co., Ltd. |
9,007 | 9,732 | 10,404 |
• | Improvement of technology innovation abilities |
• | Improvement of intelligent service |
• | Improvement of digital ecosystem year-on-year |
Regulatory Percentage (1) | ||||||||
Asset Category |
Definition |
Specific Items Included |
Investment Regulatory Percentage |
Concentration Risk Regulatory Percentage | ||||
Current assets | Current assets refer to cash reserves, deposits payable on demand, and highly-liquid assets with shorter terms and less risk of changes in value that can be readily converted into a definite amount of cash. | Domestic items mainly include cash, current deposits, bank call deposits, insurance asset management products on the monetary market, and government bonds, quasi-government bonds and reverse repurchase agreements with residual maturities of one year or less. Overseas items mainly include bank current deposits, monetary market funds, overnight lending, commercial bills, bank bills, negotiable certificates of deposit, reverse repurchase agreements, short-term government bonds, government-backed bonds, bonds of international financial organizations, corporate bonds and convertible bonds with residual maturities of one year or less, as well as other tools or products recognized by the CBIRC in this category. | None. | The total outstanding investments by an insurance company in a single legal person (2) (3) |
Regulatory Percentage (1) | ||||||||
Asset Category |
Definition |
Specific Items Included |
Investment Regulatory Percentage |
Concentration Risk Regulatory Percentage | ||||
Fixed-income assets | Fixed-income assets refer to assets characterized by a definite maturity date and payments of interest and principal according to pre-determined interest rates and payment methods, as well as other assets whose main value is dependent on the changes in the value of the aforesaid assets. |
Domestic items mainly include term deposits, negotiated deposits, bond funds, fixed-income insurance asset management products, financial institution (company) bonds, non-financial institution (company) bonds and government bonds and quasi-government bonds with residual maturities of more than one year. Overseas items mainly include term deposits, structured deposits with bank guaranteed commitments, securities investment funds with fixed-income commitments, government bonds, government-backed bonds, bonds of international financial organizations, corporate bonds and convertible bonds with residual maturities of more than one year, as well as other tools or products recognized by the CBIRC in this category. |
None. | The book balance of investment by an insurance company in a single fixed-income asset (4) The total outstanding investment by an insurance company in a single legal person must not exceed 20% of the total assets of the insurance company as at the end of the last quarter (excluding, among others, investments in domestic central government bonds, quasi-government bonds and equity investments in insurance enterprises with proprietary funds). | ||||
Equity assets | Equity assets include both listed and unlisted equity assets. Listed equity assets refer to the ownership certificate representing the equity or other residual income rights of enterprises that are publicly listed and traded on stock exchanges or financial asset markets, as well as other assets whose main value depends on the changes in the value of the aforesaid assets. Unlisted equity assets refer to the equity or other residual income rights of enterprises that are established and registered but are not publicly listed on exchanges, as well as other assets whose main value depends on the changes in the value of the aforesaid assets. |
Domestic items of listed equity assets mainly include shares (5) , equity funds, hybrid funds and equity insurance asset management products. Overseas items of listed equity assets mainly include ordinary shares, preferred shares, global depositary receipts, American depositary receipts and equity securities investment funds, as well as other tools or products recognized by the CBIRC in this category.Domestic and overseas items of unlisted equity assets mainly include equities of unlisted companies, equity investment funds (including venture capital funds), asset backed securities, insurance private equity funds and other related financial products, as well as other tools or products recognized by the CBIRC in this category. |
The investment regulatory percentage will be determined according to the solvency adequacy ratio, asset and liability management capability, risk status and other indicators of an insurance company, ranging from 10% to 45% of the total assets of the insurance company as at the end of the last quarter. | The book balance of investments by an insurance company in a single equity asset must not exceed 5% (5) The total outstanding investments by an insurance company in a single legal person must not exceed 20% of the total assets of the insurance company as at the end of the last quarter (excluding, among others, investments in domestic central government bonds, quasi-government bonds, and equity investments in insurance enterprises with proprietary funds). The total number of shares of a single listed company invested by an insurance company shall not exceed 10% of total capital stock of the listed company. |
Regulatory Percentage (1) | ||||||||
Asset Category |
Definition |
Specific Items Included |
Investment Regulatory Percentage |
Concentration Risk Regulatory Percentage | ||||
Property assets | Property assets refer to purchased or invested land, structures and other land attachments, as well as other assets whose main value depends on the changes in the value of the aforesaid assets. | Domestic items mainly include real estate, infrastructure investment schemes, property investment schemes, property insurance asset management products and other property related financial products. Overseas items mainly include commercial properties, office properties and real estate investment trusts (REITs), as well as other tools or products recognized by the CBIRC in this category. | The total book balance of investments by an insurance company in property assets must not exceed 30% (5) The book balance of the properties purchased by an insurance company for its own use must not exceed 50% of the net assets of the insurance company as at the end of the last quarter. |
The book balance of investments by an insurance company in a single property asset must not exceed 5% of the total assets of the insurance company as at the end of the last quarter, excluding properties purchased for its own use. The total outstanding investments by an insurance company in a single legal person must not exceed 20% of the total assets of the insurance company as at the end of the last quarter (excluding, among others, investments in domestic central government bonds, quasi-government bonds and equity investments in insurance enterprises with proprietary funds). |
Regulatory Percentage (1) | ||||||||
Asset Category |
Definition |
Specific Items Included |
Investment Regulatory Percentage |
Concentration Risk Regulatory Percentage | ||||
Other financial assets | Other financial assets refer to other kinds of assets that are distinctively different from all the foregoing categories of assets, including in terms of risk-return characteristics, liquidity and other characteristics, and cannot be classified into any of the foregoing categories. | Domestic items mainly include financial products by commercial banks, asset-backed securities offered by banking financial institutions, trust schemes of collective funds offered by trust companies, special asset management schemes offered by securities companies, project asset-backed schemes offered by insurance asset management companies and other insurance asset management products. Overseas items mainly include structured deposits without bank guaranteed commitments, as well as other tools or products recognized by the CBIRC in this category. | The total book balance of investments by an insurance company in other financial assets must not exceed 25% of the total assets of the insurance company as at the end of the last quarter, provided that assets in aggregate not traded in the inter-bank market, stock exchanges and other trading markets approved by the State Council must not exceed 20% of the company’s total assets as at the end of the last quarter. | The book balance of investments by an insurance company in a single other financial asset must not exceed 5% of the total assets of the insurance company as at the end of the last quarter, excluding purchase of insurance asset management products within its group. The total outstanding investments by an insurance company in a single legal person must not exceed 20% of the total assets of the insurance company as at the end of the last quarter (excluding, among others, investments in domestic central government bonds, quasi-government bonds, and equity investments in insurance enterprises with proprietary funds). | ||||
Overseas investment | An insurance company is allowed to participate in overseas investments in 25 developed markets, 20 emerging markets and Macau in accordance with the relevant requirements of the CBIRC. | As referred to in the investable overseas items listed in each of the above asset categories. | The total outstanding overseas investments by an insurance company must not exceed 15% of the total assets of the insurance company as at the end of the last year. | The total outstanding investments by an insurance company in a single legal person must not exceed 20% of the total assets of the insurance company as at the end of the last quarter (excluding, among others, equity investments in insurance enterprises with proprietary funds). The balance of an insurance company’s investment in 20 investable emerging markets must not exceed 10% of its total assets as at the end of the last year. |
(1) | When calculating the regulatory percentages for each asset category, an insurance company is required to combine its domestic and overseas investments in assets of the category on a consolidated basis. |
(2) | A single legal person refers to a single fund-raising party with legal person status that establishes a direct creditor-debtor or shareholder relationship with an insurance company due to the latter’s investment therein. |
(3) | Total assets exclude the balance of the funds raised from bond repurchases and the amount of assets under independent accounts (including investment-linked life insurance products, variable annuity products, health care entrusted management products, pension insurance entrusted management products and investment-oriented non-life insurance products without pre-agreed returns). |
(4) | Single asset investments refer to the investments in a single specific item under any category of investment assets. Where an investment product is issued in several phases, the book balance of the investment in a single asset is the sum of the investments in each phase. |
(5) | The CBIRC classifies investments in stocks into three categories: (i) ordinary stock investment, which refers to investment in less than 20% of the total share capital of a listed company without control over the company, (ii) material stock investment, which refers to investment in 20% or more of the total share capital of a listed company without control over the company, and (iii) acquisition of a listed company, which refers to becoming the controlling shareholder or actual controller of a listed company or otherwise having control over a listed company. There is no regulatory restriction for ordinary stock investment that does not involve an acquisition in the secondary market of more than 5% of the share capital of a listed company. For ordinary stock investment that involves an acquisition in the secondary market of more than 5% of the share capital of a listed company, information disclosure and reporting after the investment are required. For a material stock investment, filing with the regulatory authorities after the investment is required. For acquisition of a listed company, prior regulatory approval is required. |
• | Liquidity monitoring. The total book balance of investments by an insurance company in current assets and government bonds and quasi-government bonds with residual maturities of one year or longer is lower than 5% of the total assets of the insurance company as at the end of the last quarter. |
• | Financing leverage monitoring. The total outstanding borrowings (including inter-industry lending and bond repurchases) of an insurance company exceed 20% of the total assets of the insurance company as at the end of the last quarter. |
• | Monitoring of different categories of assets. The total book balance of investments by an insurance company in domestic bonds with a long-term credit rating of AA or lower as rated by domestic credit rating agencies exceeds 10% of the total assets of the insurance company as at the end of the last quarter, or the total book balance of investments in equity assets exceeds 20% of the total assets of the insurance company as at the end of the last quarter, or the total book balance of investments in property assets exceeds 20% of the total assets of the insurance company as at the end of the last quarter, or the total book balance of investments in other financial assets exceeds 15% of the total assets of the insurance company as at the end of the last quarter, or the total book balance of outstanding overseas investments exceeds 10% of the total assets of the insurance company as at the end of the last quarter. |
• | The book balance of a single inter-group insurance asset management product purchased by an insurance company exceeds 5% of the total assets of such insurance company as at the end of the last quarter. |
• | Pillar I: quantitative capital requirements which aim to prevent quantifiable risks, and include quantifying capital requirements, criteria for assessment and recognition of actual assets and liabilities, capital classification, stress tests and regulatory measures to be imposed on the insurers which fail to meet the quantitative capital requirements. |
• | Pillar II: qualitative regulatory requirements which aim to prevent unquantifiable risks, and which include an integrated risk rating, requirements on assessment and management of risks by the insurers, and regulatory inspection and analysis and regulatory measures to be imposed on the insurers which fail to meet the qualitative regulatory requirements. |
• | Pillar III: market discipline mechanisms which aim to involve, through sufficient information disclosure systems and other means, market players including the public, customers, rating agencies and industry analysts by introducing mechanisms through which they will play an important role in the solvency supervision process. |
• | the core solvency adequacy ratio, which is calculated by dividing the core capital of an insurer by the minimum capital it is required to meet; |
• | the comprehensive solvency adequacy ratio, which is calculated by dividing the sum of core capital and supplementary capital of an insurer by the minimum capital it is required to meet; and |
• | an integrated risk rating, which is a comprehensive rating system that the CIRC uses to evaluate an insurer’s overall solvency based on both quantitative assessments on quantifiable risks in Pillar I and qualitative risk assessments on unquantifiable risks in Pillar II. |
• | Insurance risk, which includes life insurance risk and non-life insurance risk; |
• | Market risk, which includes interest rate risk, equity price risk, property price risk, overseas assets price risk and foreign exchange risk; and |
• | Credit risk, which includes spread risk and default risk. |
• | Operation risk; |
• | Reputation risk; |
• | Strategy risk; and |
• | Liquidity risk. |
• | Category A: an insurer’s solvency adequacy ratio meets the CIRC requirement, and its risk level is very low for the four unquantifiable risks; |
• | Category B: an insurer’s solvency adequacy ratio meets the CIRC requirement, and its risk level is low for the four unquantifiable risks; |
• | Category C: an insurer’s solvency adequacy ratio does not meet the CIRC requirement, or an insurer’s solvency adequacy ratio meets the CIRC requirement but its risk level is high for one or more of the four unquantifiable risks; or |
• | Category D: an insurer’s solvency adequacy ratio does not meet the CIRC requirement, or an insurer’s solvency adequacy ratio meets the CIRC requirement but its risk level is serious for one or more of the four unquantifiable risks. |
(1) | Wholly owned by CLIC |
(2) | Formerly known as China Life Asset Management (Hong Kong) Company Limited |
Name of Subsidiary |
Jurisdiction of Incorporation |
Proportion of Ownership Interest Owned by China Life | ||
中国人寿资产管理有限公司 |
||||
China Life Asset Management Company | The People’s Republic of China | 60% | ||
Limited | (directly) | |||
中国人寿富兰克林资产管理有限公司 |
50% (2) | |||
China Life Franklin Asset Management | Hong Kong | (indirectly through affiliate) | ||
Company Limited (1) |
||||
中国人寿养老保险股份有限公司 |
74.27% (3) | |||
China Life Pension Company Limited | The People’s Republic of China | (directly and indirectly through affiliate) | ||
国寿安保基金管理有限公司 |
||||
China Life AMP Asset Management Co., | The People’s Republic of China | 85.03% (4) | ||
Ltd. | (indirectly through affiliate) | |||
国寿财富管理有限公司 |
||||
China Life Wealth Management Company | The People’s Republic of China | 100% (5) | ||
Limited | (indirectly through affiliate) |
(1) | Formerly known as China Life Asset Management (Hong Kong) Company Limited. |
(2) | AMC, which is 60% owned by us, owns 50%. |
(3) | We own 70.74% and AMC, which is 60% owned by us, owns 3.53%. |
(4) | AMC, which is 60% owned by us, owns 85.03%. |
(5) | AMC, which is 60% owned by us, owns 48%, and China Life AMP, which is 85.03% owned by AMC, owns 52%. |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS. |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS. |
• | Life insurance non-participating life insurance and annuities to individuals and groups. |
• | Health insurance |
• | Accident insurance |
• | Life insurance |
• | Health insurance |
• | Accident insurance |
• | insurance premiums from the sale of life insurance policies and annuity contracts, including participating and non-participating policies and annuity contracts with life contingencies, as well as accident and health insurance products. Net premiums earned accounted for 74.10% of total revenues in 2021. |
• | investment income and net realized gains on financial assets, net fair value gains through profit or loss. Investment income and net realized gains on financial assets, net fair value gains through profit or loss accounted for 24.69% of total revenues in 2021. |
• | insurance benefits provided to our policyholders, accident and health claims and claim adjustment expenses; |
• | increase in insurance contracts liabilities; |
• | investment contract benefits; |
• | policyholder dividends resulting from participation in profits; |
• | underwriting and policy acquisition costs; and |
• | administrative and other expenses. |
• | our ability to design and distribute products and services and to introduce new products which gain market acceptance on a timely basis; |
• | our ability to price our insurance and investment products at levels that enable us to earn a margin over the costs of providing benefits and the expense of acquiring customers and administering those products; |
• | our returns on investment assets; |
• | our mortality and morbidity experience, which affects our insurance reserves; |
• | our lapse experience, which affects our ability to recover the cost of acquiring new business over the lives of the contracts; |
• | our cost of administering insurance contracts and providing customer services; |
• | our ability to manage liquidity, market and credit risk in our investment portfolio and to manage duration risk in our asset and policy portfolios through asset-liability management; and |
• | changes in regulations. |
Impairment |
For the year ended December 31, |
|||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(RMB in millions) |
US$ |
|||||||||||||||
Debt securities |
(3,749 | ) | 288 | (1,359 | ) | (213 | ) | |||||||||
Equity securities |
(2,638 | ) | (11,917 | ) | (21,362 | ) | (3,352 | ) | ||||||||
Associates and joint ventures |
(1,500 | ) | (707 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
(7,887 |
) |
(12,336 |
) |
(22,721 |
) |
(3,565 |
) | ||||||||
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Cost or amortized cost |
Estimated fair value |
Cost or amortized cost |
Estimated fair value |
Cost or amortized cost |
Estimated fair value |
|||||||||||||||||||
(RMB in millions) |
||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||
Government bonds |
22,500 | 23,758 | 48,542 | 49,256 | 55,110 | 58,561 | ||||||||||||||||||
Government agency bonds |
163,678 | 171,189 | 161,503 | 169,013 | 245,026 | 259,753 | ||||||||||||||||||
Corporate bonds |
145,033 | 148,455 | 133,133 | 136,025 | 197,856 | 203,147 | ||||||||||||||||||
Subordinated bonds/debt |
53,062 | 53,922 | 81,880 | 81,795 | 107,204 | 111,029 | ||||||||||||||||||
Other |
109,729 | 112,467 | 141,530 | 144,721 | 154,793 | 161,054 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
494,002 |
509,791 |
566,588 |
580,810 |
759,989 |
793,544 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity securities |
||||||||||||||||||||||||
Funds |
97,208 | 102,349 | 72,691 | 97,476 | 80,918 | 94,895 | ||||||||||||||||||
Common stocks |
217,564 | 236,323 | 278,512 | 301,249 | 258,239 | 256,441 | ||||||||||||||||||
Other |
195,360 | 210,494 | 214,059 | 236,068 | 261,136 | 284,407 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
510,132 |
549,166 |
565,262 |
634,793 |
600,293 |
635,743 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1,004,134 |
1,058,957 |
1,131,850 |
1,215,603 |
1,360,282 |
1,429,287 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021 |
0-6 months |
7-12 months |
More than 12 months |
Total |
||||||||||||
(RMB in millions) |
||||||||||||||||
Debt securities |
||||||||||||||||
Unrealized losses |
71 | — | 44 | 115 | ||||||||||||
Carrying amounts |
6,230 | — | 8,426 | 14,656 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
1.14 | % | — | 0.52 | % | 0.78 | % | |||||||||
Equity securities |
||||||||||||||||
Unrealized losses |
7,334 | 123 | 2,913 | 10,370 | ||||||||||||
Carrying amounts |
65,277 | 1,480 | 14,188 | 80,945 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
11.24 | % | 8.31 | % | 20.53 | % | 12.81 | % | ||||||||
Total |
||||||||||||||||
Total unrealized losses |
7,405 |
123 |
2,957 |
10,485 |
||||||||||||
Total carrying amounts |
71,507 |
1,480 |
22,614 |
95,601 |
||||||||||||
Unrealized losses as a percentage of carrying amounts |
10.36 |
% |
8.31 |
% |
13.08 |
% |
10.97 |
% |
As of December 31, 2020 |
0-6 months |
7-12 months |
More than 12 months |
Total |
||||||||||||
(RMB in millions) |
||||||||||||||||
Debt securities |
||||||||||||||||
Unrealized losses |
981 | 341 | 277 | 1,599 | ||||||||||||
Carrying amounts |
82,099 | 18,463 | 7,212 | 107,774 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
1.20 | % | 1.85 | % | 3.84 | % | 1.48 | % | ||||||||
Equity securities |
||||||||||||||||
Unrealized losses |
10,725 | 5,382 | 822 | 16,929 | ||||||||||||
Carrying amounts |
90,297 | 36,979 | 5,399 | 132,675 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
11.88 | % | 14.55 | % | 15.23 | % | 12.76 | % | ||||||||
Total |
||||||||||||||||
Total unrealized losses |
11,706 |
5,723 |
1,099 |
18,528 |
||||||||||||
Total carrying amounts |
172,396 |
55,442 |
12,611 |
240,449 |
||||||||||||
Unrealized losses as a percentage of carrying amounts |
6.79 |
% |
10.32 |
% |
8.71 |
% |
7.71 |
% |
As of December 31, 2019 |
0-6 months |
7-12 months |
More than 12 months |
Total |
||||||||||||
(RMB in millions) |
||||||||||||||||
Debt securities |
||||||||||||||||
Unrealized losses |
374 | 141 | 531 | 1,046 | ||||||||||||
Carrying amounts |
28,298 | 2,794 | 25,884 | 56,976 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
1.32 | % | 5.05 | % | 2.05 | % | 1.84 | % | ||||||||
Equity securities |
||||||||||||||||
Unrealized losses |
2,084 | 1,029 | 896 | 4,009 | ||||||||||||
Carrying amounts |
50,291 | 26,006 | 3,175 | 79,472 | ||||||||||||
Unrealized losses as a percentage of carrying amounts |
4.14 | % | 3.96 | % | 28.22 | % | 5.04 | % | ||||||||
Total |
||||||||||||||||
Total unrealized losses |
2,458 |
1,170 |
1,427 |
5,055 |
||||||||||||
Total carrying amounts |
78,589 |
28,800 |
29,059 |
136,448 |
||||||||||||
Unrealized losses as a percentage of carrying amounts |
3.13 |
% |
4.06 |
% |
4.91 |
% |
3.70 |
% |
• | significant financial difficulty of the issuer or debtor; |
• | a breach of contract, such as a default or delinquency in payments; |
• | it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganization; and |
• | the disappearance of an active market for that financial asset because of financial difficulties. |
• | the market price of the equity securities was more than 50% below their cost at the reporting date; |
• | the market price of the equity securities was more than 20% below their cost for a period of at least six months at the reporting date; and |
• | the market price of the equity securities was below their cost for a period of more than one year (including one year) at the reporting date. |
As of or for the year ended December 31, |
Compound annual growth rate |
|||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
(2019-2021) |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Life insurance business |
||||||||||||||||||||
Whole life and term life insurance: |
||||||||||||||||||||
Gross written premiums |
64,196 | 76,421 | 72,424 | 11,365 | 6.22 | % | ||||||||||||||
Endowment: |
||||||||||||||||||||
Gross written premiums |
113,950 | 109,275 | 97,791 | 15,346 | (7.36 | %) | ||||||||||||||
Annuities: |
||||||||||||||||||||
Gross written premiums |
268,416 | 294,897 | 311,096 | 48,818 | 7.66 | % | ||||||||||||||
Health insurance business (1) |
||||||||||||||||||||
Gross written insurance premiums |
105,581 | 115,089 | 120,609 | 18,926 | 6.88 | % | ||||||||||||||
Accident insurance business (2) |
||||||||||||||||||||
Gross written insurance premiums |
14,943 | 16,583 | 16,407 | 2,575 | 4.78 | % |
(1) | Including long-term and short-term health products. |
(2) | Including long-term and short-term accident products. |
• | The reasonable estimate for liability of long-term insurance contracts is the present value of reasonable estimates of future cash outflows less future cash inflows. The expected future cash inflows include cash inflows of future premiums arising from the undertaking of insurance obligations, with consideration of decrement mostly from death and surrenders. The expected future cash outflows are cash outflows incurred to fulfill contractual obligations, consisting of the following: |
(i) | Guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals, maturities and surrenders; |
(ii) | Additional non-guaranteed benefits, such as policyholder dividends; and |
(iii) | Reasonable expenses incurred to manage insurance contracts or to process claims, including maintenance expenses and claim settlement expenses. Future administration expenses are included in the maintenance expense. Expenses are determined based on expense analysis with consideration of future inflation and our expense management control. |
• | Margins have been taken into consideration while computing the reserves of insurance contracts, measured separately and recognized in net profit in each period over the life of the contracts. At the inception of the contracts, we do not recognize Day One gain, whereas on the other hand, Day One loss is recognized in profit immediately. |
• | We have considered the impact of time value on the reserve calculation for insurance contracts. |
• | For the insurance contracts of which future insurance benefits are affected by investment yields of corresponding investment portfolios, the discount rate assumption is based on expected investment returns of the asset portfolio backing these liabilities, considering the impact of time value on liabilities. In developing discount rate assumptions, we consider investment experience, current investment portfolio and trend of the relevant yield curve. The assumed discount rates reflect the future economic outlook as well as our investment strategy. The assumed discount rates with risk margin was 4.85% as at December 31, 2019, 2020 and 2021. |
• | The mortality and morbidity assumptions are based on the historical mortality and morbidity experience. The assumed mortality rates and morbidity rates vary by age of the insured and contract type. |
• | The expense assumptions are based on expected unit costs with the consideration of previous expenses study and future trends. Our expense assumptions are affected by certain factors, such as future inflation and market competition which bring uncertainty to these assumptions. We consider risk margin for expense assumptions based on the information obtained at the end of each reporting period. Components of expense assumptions include cost per policy and percentage of premium . per-policy expense. |
• | The lapse rates and other assumptions are affected by certain factors, such as the future macro economy, availability of financial substitutions and market competition, which bring uncertainty to lapse rates and other assumptions. The lapse rates and other assumptions are determined with reference to creditable past experience, current conditions, future expectations and other information. |
• | Insurance components; and |
• | Non-insurance components. |
• | significant financial difficulty of the issuer or debtor; |
• | a breach of contract, such as a default or delinquency in payments; |
• | it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganization; and |
• | the disappearance of an active market for that financial asset because of financial difficulties. |
• | the market price of the equity securities was more than 50% below their cost at the reporting date; |
• | the market price of the equity securities was more than 20% below their cost for a period of at least six months at the reporting date; and |
• | the market price of the equity securities was below their cost for a period of more than one year (including one year) at the reporting date. |
• | whether there has been any trades within past 30 days of the reporting date; |
• | the volume of the trades within this 30 day period; and |
• | the degree which the implied yields for a debt security for observed transactions differs from our understanding of the current relevant market rates and information. |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments | Interest Rate Benchmark Reform - Phase 2 | January 1, 2021 | ||
Amendments to IFRS 16 | Covid-19-Related |
April 1, 2021 |
• | Changes to contractual cash flows. When changing the basis for determining contractual cash flows for financial assets and liabilities (including lease liabilities), the reliefs have the effect that the changes that are required by an interest rate benchmark reform (that is, are necessary as a direct consequence of IBOR reform and are economically equivalent) will not result in an immediate gain or loss in the income statement. |
• | Hedge accounting. The hedge accounting reliefs will allow most IAS 39 or IFRS 9 hedge relationships that are directly affected by IBOR reform to continue. However, additional ineffectiveness might need to be recorded. |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
IFRS 9 | Financial Instruments | January 1, 2018 |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
Amendments to IFRS 3 | Update Reference to the Conceptual Framework |
January 1, 2022 | ||
Amendments to IAS 16 | Property, Plant and Equipment: Proceeds before intended use |
January 1, 2022 | ||
Amendments to IAS 37 | Onerous Contracts – Cost of Fulfilling a Contract |
January 1, 2022 | ||
Annual improvements | Annual Improvements to IFRS Standards 2018-2020 Cycle |
January 1, 2022 | ||
Amendments to IAS 1 | Classification of Liabilities as Current or Non-current |
January 1, 2023 | ||
IFRS 17 | Insurance Contracts |
January 1, 2023 | ||
Amendment to IAS 12 | Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
January 1, 2023 | ||
IFRS 10 and IAS 28 Amendments | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
No mandatory effective date yet determined but available for adoption |
• | The fulfilment cash flows, including the expected present value of future cash flows and explicit risk adjustment, are remeasured every reporting period; |
• | A contractual service margin representing the unearned profitability of the insurance contracts is recognised in profit or loss over the coverage period; |
• | Certain changes in the expected present value of future cash flows are adjusted against the contractual service margin and thereby recognised in profit or loss over the remaining coverage period; |
• | The effect of changes in discount rates will be reported in either profit or loss or OCI, determined by an accounting policy choice; |
• | Insurance revenue and insurance service expenses are recognized in the statement of comprehensive income based on the concept of services provided during the period; |
• | Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct investment components), are not presented in the statement of comprehensive income, but are recognised directly in the statement of financial position; |
• | Insurance services results are presented separately from the insurance finance income or expense; and |
• | Extensive disclosures are required to provide information on the recognised amounts from insurance contracts and the nature and extent of risks arising from these contracts. |
Total Revenues |
For the year ended December 31, |
|||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Net premiums earned |
604,666 | 611,251 | ||||||
Life insurance business |
479,600 | 480,214 | ||||||
Health insurance business |
109,091 | 114,549 | ||||||
Accident insurance business |
15,975 | 16,488 | ||||||
Investment income |
154,497 | 178,387 | ||||||
Investment income from securities at fair value through profit or loss |
4,280 | 4,991 | ||||||
Investment income from available-for-sale |
46,880 | 57,297 | ||||||
Investment income from held-to-maturity |
44,757 | 56,830 | ||||||
Investment income from bank deposits |
25,860 | 25,949 | ||||||
Investment income from loans |
31,948 | 32,970 | ||||||
Other investment income |
772 | 350 | ||||||
Net realized gains on financial assets |
14,583 | 20,344 | ||||||
Net fair value gains through profit or loss |
21,900 | 4,943 | ||||||
Other income |
9,403 | 10,005 | ||||||
|
|
|
|
|||||
Total |
805,049 |
824,930 |
||||||
|
|
|
|
Benefits, Claims and Expenses |
For the year ended December 31, |
|||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Insurance benefits and claims expenses |
||||||||
Life insurance death and other benefits |
113,609 | 121,354 | ||||||
Accident and health claims and claim adjustment expenses |
52,395 | 55,030 | ||||||
Increase in insurance contracts liabilities |
414,797 | 442,370 | ||||||
Investment contracts benefits |
9,846 | 10,628 | ||||||
Policyholder dividends resulting from participation in profits |
28,279 | 26,511 | ||||||
Underwriting and policy acquisition costs |
84,361 | 65,744 | ||||||
Finance costs |
3,747 | 5,598 | ||||||
Administrative expenses |
37,706 | 40,808 | ||||||
Statutory insurance fund contribution |
1,229 | 1,253 | ||||||
Other expenses |
12,270 | 15,467 | ||||||
|
|
|
|
|||||
Total |
758,239 |
784,763 |
||||||
|
|
|
|
|||||
Segment information of insurance benefits and claims expenses |
||||||||
Life insurance business |
490,994 | 527,863 | ||||||
Health insurance business |
82,146 | 83,688 | ||||||
Accident insurance business |
7,661 | 7,203 | ||||||
|
|
|
|
|||||
Total |
580,801 |
618,754 |
||||||
|
|
|
|
Profit |
For the year ended December 31, |
|||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Profit before income tax |
54,476 | 50,495 | ||||||
Life insurance business |
28,073 | 22,771 | ||||||
Health insurance business |
11,611 | 8,599 | ||||||
Accident insurance business |
572 | 1,682 | ||||||
Other businesses |
14,220 | 17,443 | ||||||
Income tax |
3,103 | (1,917 | ) | |||||
Net profit attributable to equity holders of the company |
50,257 | 50,921 |
Major Assets |
As of December 31, |
|||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Investment assets |
4,095,491 | 4,716,401 | ||||||
Term deposits |
545,678 | 529,488 | ||||||
Held-to-maturity |
1,189,369 | 1,533,753 | ||||||
Available-for-sale |
1,215,603 | 1,429,287 | ||||||
Securities at fair value through profit or loss |
161,570 | 206,771 | ||||||
Securities purchased under agreements to resell |
7,947 | 12,915 | ||||||
Cash and cash equivalents |
56,655 | 60,440 | ||||||
Loans |
658,535 | 666,087 | ||||||
Statutory deposits—restricted |
6,333 | 6,333 | ||||||
Investment properties |
14,217 | 13,374 | ||||||
Investment in associates and joint ventures |
239,584 | 257,953 | ||||||
Other assets |
156,975 | 174,684 | ||||||
|
|
|
|
|||||
Total |
4,252,466 |
4,891,085 |
||||||
|
|
|
|
Major Liabilities |
As of December 31, |
|||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Liabilities |
||||||||
Insurance contracts |
2,973,225 | 3,419,899 | ||||||
Investment contracts |
288,212 | 313,594 | ||||||
Securities sold under agreements to repurchase |
122,249 | 239,446 | ||||||
Policyholder dividends payable |
122,510 | 124,949 | ||||||
Annuity and other insurance balances payable |
55,031 | 56,818 | ||||||
Interest-bearing loans and borrowings |
19,556 | 18,686 | ||||||
Deferred tax liabilities |
15,286 | 7,481 | ||||||
Other liabilities |
199,460 | 223,554 | ||||||
|
|
|
|
|||||
Total |
3,795,529 |
4,404,427 |
||||||
|
|
|
|
Total Revenues |
For the year ended December 31, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Net premiums earned |
560,278 | 604,666 | ||||||
Life insurance business |
445,719 | 479,600 | ||||||
Health insurance business |
99,575 | 109,091 | ||||||
Accident insurance business |
14,984 | 15,975 | ||||||
Investment income |
139,919 | 154,497 | ||||||
Investment income from securities at fair value through profit or loss |
4,527 | 4,280 | ||||||
Investment income from available-for-sale |
43,196 | 46,880 | ||||||
Investment income from held-to-maturity |
38,229 | 44,757 | ||||||
Investment income from bank deposits |
26,695 | 25,860 | ||||||
Investment income from loans |
27,111 | 31,948 | ||||||
Other investment income |
161 | 772 |
Total Revenues |
For the year ended December 31, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Net realized gains on financial assets |
1,831 | 14,583 | ||||||
Net fair value gains through profit or loss |
19,251 | 21,900 | ||||||
Other income |
8,220 | 9,403 | ||||||
|
|
|
|
|||||
Total |
729,499 |
805,049 |
||||||
|
|
|
|
Benefits, Claims and Expenses |
For the year ended December 31, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Insurance benefits and claims expenses |
||||||||
Life insurance death and other benefits |
127,877 | 113,609 | ||||||
Accident and health claims and claim adjustment expenses |
50,783 | 52,395 | ||||||
Increase in insurance contracts liabilities |
330,807 | 414,797 | ||||||
Investment contracts benefits |
9,157 | 9,846 | ||||||
Policyholder dividends resulting from participation in profits |
22,375 | 28,279 | ||||||
Underwriting and policy acquisition costs |
81,396 | 84,361 | ||||||
Finance costs |
4,255 | 3,747 | ||||||
Administrative expenses |
40,283 | 37,706 | ||||||
Statutory insurance fund contribution |
1,163 | 1,229 | ||||||
Other expenses |
9,626 | 12,270 | ||||||
|
|
|
|
|||||
Total |
677,722 |
758,239 |
||||||
|
|
|
|
|||||
Segment information of insurance benefits and claims expenses |
||||||||
Life insurance business |
427,673 | 490,994 | ||||||
Health insurance business |
75,471 | 82,146 | ||||||
Accident insurance business |
6,323 | 7,661 | ||||||
|
|
|
|
|||||
Total |
509,467 |
580,801 |
||||||
|
|
|
|
For the year ended December 31, |
||||||||
Profit |
2019 |
2020 |
||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Profit before income tax |
59,788 | 54,476 | ||||||
Life insurance business |
42,418 | 28,073 | ||||||
Health insurance business |
5,875 | 11,611 | ||||||
Accident insurance business |
489 | 572 | ||||||
Other businesses |
11,006 | 14,220 | ||||||
Income tax |
781 | 3,103 | ||||||
Net profit attributable to equity holders of the company |
58,281 | 50,257 |
As of December 31, |
||||||||
Major Assets |
2019 |
2020 |
||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Investment assets |
3,573,199 | 4,095,491 | ||||||
Term deposits |
535,272 | 545,678 | ||||||
Held-to-maturity |
928,751 | 1,189,369 | ||||||
Available-for-sale |
1,058,957 | 1,215,603 | ||||||
Securities at fair value through profit or loss |
141,608 | 161,570 | ||||||
Derivative financial assets |
428 | — | ||||||
Securities purchased under agreements to resell |
4,467 | 7,947 | ||||||
Cash and cash equivalents |
53,339 | 56,655 | ||||||
Loans |
608,920 | 658,535 | ||||||
Statutory deposits—restricted |
6,333 | 6,333 | ||||||
Investment properties |
12,141 | 14,217 | ||||||
Investment in associates and joint ventures |
222,983 | 239,584 | ||||||
Other assets |
153,592 | 156,975 | ||||||
|
|
|
|
|||||
Total |
3,726,791 |
4,252,466 |
||||||
|
|
|
|
As of December 31, |
||||||||
Major Liabilities |
2019 |
2020 |
||||||
RMB |
RMB |
|||||||
(in millions) |
||||||||
Liabilities |
||||||||
Insurance contracts |
2,552,736 | 2,973,225 | ||||||
Investment contracts |
267,804 | 288,212 | ||||||
Securities sold under agreements to repurchase |
118,088 | 122,249 | ||||||
Policyholder dividends payable |
112,593 | 122,510 | ||||||
Annuity and other insurance balances payable |
51,019 | 55,031 | ||||||
Interest-bearing loans and borrowings |
20,045 | 19,556 | ||||||
Deferred tax liabilities |
10,330 | 15,286 | ||||||
Other liabilities |
184,817 | 199,460 | ||||||
|
|
|
|
|||||
Total |
3,317,432 |
3,795,529 |
||||||
|
|
|
|
As at December 31, 2019 |
As at December 31, 2020 |
As at December 31, 2021 |
||||||||||
Ratio of assets and liabilities |
89.02 | % | 89.25 | % | 90.05 | % |
As of December 31, 2019 |
As of December 31, 2020 |
As of December 31, 2021 |
||||||||||
|
|
|
|
|
|
|||||||
(RMB in millions, except percentage data) |
||||||||||||
Core capital |
952,030 | 1,031,947 | 1,020,756 | |||||||||
Actual capital |
987,067 | 1,066,939 | 1,055,768 | |||||||||
Minimum capital |
356,953 | 396,749 | 402,341 | |||||||||
Core solvency ratio |
266.71 | % | 260.10 | % | 253.70 | % | ||||||
Comprehensive solvency ratio |
276.53 | % | 268.92 | % | 262.41 | % |
Not later than 1 year |
Later than 1 year but not later than 3 years |
Later than 3 years but not later than 5 years |
Later than 5 years |
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As of December 31, 2021 |
(RMB in millions) |
|||||||||||||||||||
Securities sold under agreements to repurchase |
239,679 | — | — | — | 239,679 | |||||||||||||||
Bonds payable |
332 | 37,996 | — | — | 38,328 | |||||||||||||||
Annuity and other insurance balances payable |
56,818 | — | — | — | 56,818 | |||||||||||||||
Insurance contracts |
(111,912 | ) | (86,132 | ) | 202,368 | 5,990,882 | 5,995,206 | |||||||||||||
Investment contracts |
31,671 | (16,479 | ) | (94,302 | ) | 957,814 | 878,704 | |||||||||||||
Interest bearing loans and borrowings |
2,552 | 17,122 | — | — | 19,674 | |||||||||||||||
Lease liabilities |
1,093 | 1,067 | 203 | 29 | 2,392 | |||||||||||||||
Capital commitments |
6,388 | 15,688 | 6,136 | 68,086 | 96,298 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
226,621 |
(30,738 |
) |
114,405 |
7,016,811 |
7,327,099 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
• | holding all other variables constant, if mortality rates and morbidity rates were to increase or decrease from the current best estimate by 10%, pre-tax profit for the year would have been RMB39,459 million lower or RMB40,963 million higher, respectively. |
• | holding all other variables constant, if lapse rates were to increase or decrease from the current best estimate by 10%, pre-tax profit for the year would have been RMB399 million higher or RMB472 million lower, respectively. |
• | holding all other variables constant, if the discount rates were 50 basis points higher or lower than the current best estimate, pre-tax profit for the year would have been RMB130,439 million higher or RMB152,136 million lower, respectively. |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Name |
Date of Birth |
Position | ||
Bai Tao |
March 1963 | Chairman of the board of directors and executive director (his qualification is still subject to the approval of CBIRC) | ||
Su Hengxuan |
February 1963 | Executive director and president | ||
Li Mingguang |
July 1969 | Executive director, vice president, chief actuary and board secretary | ||
Huang Xiumei |
June 1967 | Executive director, vice president and person in charge of finance | ||
Yuan Changqing |
September 1961 | Non-executive director | ||
Wang Junhui |
July 1971 | Non-executive director | ||
Tang Xin |
September 1971 | Independent director | ||
Leung Oi-Sie Elsie |
April 1939 | Independent director | ||
Lam Chi Kuen |
April 1953 | Independent director | ||
Zhai Haitao |
January 1969 | Independent director | ||
Ruan Qi |
July 1966 | Vice president | ||
Zhan Zhong |
April 1968 | Vice president | ||
Yang Hong |
February 1967 | Vice president | ||
Zhao Guodong |
November 1967 | Assistant to the president | ||
Liu Yuejin |
April 1967 | Assistant to the president | ||
Zhang Di |
January 1968 | Assistant to the president and chief investment officer | ||
Xu Chongmiao |
October 1969 | Compliance officer | ||
Liu Fengji |
October 1969 | Person in charge of audit |
Name |
Date of Birth |
Position | ||
Jia Yuzeng |
June 1962 | Chairperson of the board of supervisors | ||
Niu Kailong |
September 1974 | Non-employee representative supervisor | ||
Cao Qingyang |
May 1963 | Employee representative supervisor | ||
Wang Xiaoqing |
October 1965 | Employee representative supervisor | ||
Lai Jun |
May 1964 | Employee representative supervisor |
Name |
Salaries/Fees |
Inducement Fees |
Other (1) Benefits |
Compensation for loss of office as director |
Total |
|||||||||||||||
RMB in ten thousands |
||||||||||||||||||||
Wang Bin (2) |
0 | — | 0 | — | 0 | |||||||||||||||
Su Hengxuan |
0 | — | 0 | — | 0 | |||||||||||||||
Li Mingguang |
125.30 | — | 25.80 | — | 151.10 | |||||||||||||||
Huang Xiumei (3) |
125.30 | — | 23.96 | — | 149.26 | |||||||||||||||
Yuan Changqing (4) |
0 | — | 0 | — | 0 | |||||||||||||||
Wang Junhui |
0 | — | 0 | — | 0 | |||||||||||||||
Liu Huimin (5) |
0 | — | 0 | — | 0 | |||||||||||||||
Yin Zhaojun (6) |
0 | — | 0 | — | 0 | |||||||||||||||
Chang Tso Tung Stephen (7) |
16.00 | — | 0 | — | 16.00 | |||||||||||||||
Robinson Drake Pike (8) |
30.00 | — | 0 | — | 30.00 | |||||||||||||||
Tang Xin |
37.00 | — | 0 | — | 37.00 | |||||||||||||||
Leung Oi-Sie Elsie |
36.00 | — | 0 | — | 36.00 | |||||||||||||||
Lam Chi Kuen (9) |
21.00 | — | 0 | — | 21.00 | |||||||||||||||
Zhai Haitao (10) |
7.00 | — | 0 | — | 7.00 | |||||||||||||||
Jia Yuzeng |
125.30 | — | 23.75 | — | 149.05 | |||||||||||||||
Han Bing (11) |
25.06 | — | 10.75 | — | 35.81 | |||||||||||||||
Niu Kailong (12) |
0 | — | 0 | — | 0 | |||||||||||||||
Cao Qingyang |
69.00 | — | 25.44 | — | 94.44 | |||||||||||||||
Wang Xiaoqing |
60.14 | — | 24.09 | — | 84.23 | |||||||||||||||
Lai Jun (13) |
11.29 | — | 4.09 | — | 15.38 | |||||||||||||||
Total |
688.39 |
— |
137.88 |
— |
826.27 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Include benefits-in-kind, |
(2) | Resigned as chairman of our board of directors and executive director on February 23, 2022 as Mr. Wang Bin is not able to perform his roles and duties as a director. |
(3) | Appointed as executive director on July 1, 2021. |
(4) | Elected to assume the roles and duties of chairman of our board of directors and legal representative during the period commencing from January 13, 2022 and ending on the effective date of the appointment of a new chairman of our board of directors. Mr. Bai Tao was appointed as executive director and chairman of our board of directors on April 27, 2022, but his qualification is still subject to the approval of CBIRC. |
(5) | Resigned as non-executive director on February 7, 2021. |
(6) | Resigned as non-executive director on January 15, 2021. |
(7) | Retired as independent director on June 28, 2021. |
(8) | Retired as independent director on October 13, 2021. |
(9) | Appointed as independent director on June 29, 2021. |
(10) | Appointed as independent director on October 14, 2021. |
(11) | Resigned as supervisor on October 18, 2021. |
(12) | Appointed as supervisor on October 14, 2021. |
(13) | Appointed as supervisor on October 14, 2021. |
Name |
Salaries/ Fees |
Inducement Fees |
Other (1) Benefits |
Compensation for loss of office as director |
Total |
|||||||||||||||
RMB in ten thousands |
||||||||||||||||||||
Ruan Qi |
125.30 | — | 23.75 | — | 149.05 | |||||||||||||||
Zhan Zhong |
125.30 | — | 23.75 | — | 149.05 | |||||||||||||||
Yang Hong |
125.30 | — | 23.79 | — | 149.09 | |||||||||||||||
Zhao Guodong |
65.00 | — | 23.80 | — | 88.80 | |||||||||||||||
Liu Yuejin (2) |
32.50 | — | 11.52 | — | 44.02 | |||||||||||||||
Zhang Di (3) |
0 | — | 0 | — | 0 | |||||||||||||||
Xu Chongmiao |
68.34 | — | 24.67 | — | 93.01 | |||||||||||||||
Yang Chuanyong (4) |
14.43 | — | 6.07 | — | 20.50 | |||||||||||||||
Liu Fengji (5) |
0 | — | 0 | — | 0 | |||||||||||||||
Total |
556.17 |
— |
137.35 |
— |
693.52 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Include benefits-in-kind, |
(2) | Appointed as assistant to the president in June 2021. |
(3) | Appointed as assistant to the president and chief investment officer in December 2021 and January 2022, respectively. |
(4) | Resigned as person in charge of audit in October 2021. |
(5) | Appointed as person in charge of audit in December 2021. |
As of December 31 |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Number of employees |
% of total |
Number of employees |
% of total |
Number of employees |
% of total |
|||||||||||||||||||
Management and administrative staff |
18,495 | 17.81 | % | 19,061 | 18.30 | % | 19,275 | 18.67 | % | |||||||||||||||
Financial and auditing staff |
4,911 | 4.73 | % | 5,412 | 5.20 | % | 4,696 | 4.55 | % | |||||||||||||||
Sales and sales management staff |
46,678 | 44.96 | % | 47,301 | 45.41 | % | 46,555 | 45.08 | % | |||||||||||||||
Insurance verification, claims processing and customer service staff |
25,622 | 24.68 | % | 24,430 | 23.45 | % | 23,829 | 23.08 | % | |||||||||||||||
Other professional and technical staff (1) |
4,749 | 4.57 | % | 4,212 | 4.05 | % | 5,134 | 4.97 | % | |||||||||||||||
Other |
3,371 | 3.25 | % | 3,744 | 3.59 | % | 3,773 | 3.65 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (2) |
103,826 | 100 | % | 104,160 | 100 | % | 103,262 | 100 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes actuaries, product development personnel, investment management personnel and information technology specialists. |
(2) | Includes employees of our subsidiaries. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS. |
Title of Class |
Identity of Person or Group |
Amount Owned |
Percentage of Class |
Percentage of Total Share Capital |
||||||||
A Shares | China Life Insurance (Group) Company | 19,323,530,000 (Long position) | 92.80 | % | 68.37 | % | ||||||
H Shares | BlackRock, Inc (1) |
460,385,724 (Long position) 5,493,000 (Short position) |
|
6.19 0.07 |
% % |
|
1.63 0.02 |
% % |
Note (1) |
BlackRock, Inc. was interested in a total of 460,385,724 H shares of the Company in accordance with the provisions of Part XV of the SFO. Of these shares, BlackRock Investment Management, LLC, BlackRock Financial Management, Inc., BlackRock Institutional Trust Company, National Association, BlackRock Fund Advisors, BlackRock Advisors, LLC, BlackRock Japan Co., Ltd., BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited, BlackRock Asset Management North Asia Limited, BlackRock (Netherlands) B.V., BlackRock Advisors (UK) Limited, BlackRock Asset Management Ireland Limited, BLACKROCK (Luxembourg) S.A., BlackRock Investment Management (UK) Limited, BlackRock Asset Management Deutschland AG, BlackRock Fund Managers Limited, BlackRock Life Limited, BlackRock (Singapore) Limited, BlackRock Asset Management Schweiz AG and Aperio Group, LLC were interested in 3,017,000 H shares, 6,416,000 H shares, 90,068,588 H shares, 178,066,000 H shares, 989,000 H shares, 44,561,937 H shares, 882,000 H shares, 3,834,000 H shares, 17,396,075 H shares, 15,750,921 H shares, 123,000 H shares, 59,777,242 H shares, 1,050,000 H shares, 13,908,019 H shares, 492,000 H shares, 15,386,113 H shares, 344,759 H shares, 1,557,000 H shares, 29,000 H shares and 6,737,070 H shares, respectively. All of these entities are either controlled or indirectly controlled subsidiaries of BlackRock, Inc. |
• | On February 20, 2021, we and CLPCIC entered into a new insurance sales framework agreement; |
• | On December 31, 2021, we and CLIC entered into a new policy management agreement; |
• | On December 27, 2021, we and IHC entered into a new asset management and operating service agreement; and |
• | On December 31, 2021, we and China Life Industrial entered into a property leasing agreement. |
1) | the transactions were entered into in the ordinary and usual course of our business; |
2) | the transactions were conducted on normal commercial terms; |
3) | the transactions were conducted in accordance with the agreements governing those transactions and on the terms that are fair and reasonable and in the interest of the shareholders; and |
4) | the amounts of the transactions had not exceeded the relevant annual caps as announced by us. |
ITEM 8. |
FINANCIAL INFORMATION. |
• | our results of operations and cash flows; |
• | our financial position; |
• | statutory solvency requirements as determined under CBIRC rules; |
• | our shareholders’ interests; |
• | general business conditions; |
• | our future prospects; |
• | statutory and regulatory restrictions on the payment of dividends by us; and |
• | other factors that our board of directors deems relevant. |
• | recovery of accumulated losses, if any; |
• | allocations to the statutory common reserve fund equivalent to 10% of our after-tax profits, as determined under PRC GAAP; |
• | allocations to the general risks reserve fund equivalent to 10% of our after-tax profits, as determined under PRC GAAP; and |
• | allocations to a discretionary common reserve fund as approved by the shareholders in a shareholders’ meeting. |
• | Net assets, defined as assets less corresponding policy liabilities and other liabilities valued; and |
• | Net-of-tax net-of-tax |
Components of Embedded Value and Value of One Year’s Sales |
RMB million |
|||||||||
ITEM |
December 31, 2021 |
December 31, 2020 |
||||||||
A |
Adjusted Net Worth | 674,317 |
568,587 | |||||||
B |
Value of In-Force Business before Cost of Required Capital |
593,137 |
565,797 | |||||||
C |
Cost of Required Capital | (64,446 |
) |
(62,244 | ) | |||||
D |
Value of In-Force Business after Cost of Required Capital (B + C) |
528,691 |
503,553 | |||||||
E |
Embedded Value (A + D) |
1,203,008 |
1,072,140 | |||||||
F |
Value of One Year’s Sales before Cost of Required Capital | 50,474 |
64,354 | |||||||
G |
Cost of Required Capital | (5,693 |
) |
(5,981 | ) | |||||
H |
Value of One Year’s Sales after Cost of Required Capital (F + G) |
44,780 |
58,373 | |||||||
Including: Value of One Year’s Sales of Individual Agent Business Sector | 42,945 |
57,669 |
December 31, 2021 |
December 31, 2020 | |||||||
By First Year Premium |
41.6 |
% |
47.9 | % | ||||
By Annual Premium Equivalent |
42.2 |
% |
48.1 | % |
Analysis of Embedded Value Movement in 2021 |
RMB million |
|||||
ITEM |
||||||
A |
Embedded Value at the Start of Year | 1,072,140 | ||||
B |
Expected Return on Embedded Value | 84,962 | ||||
C |
Value of New Business in the Period | 44,780 | ||||
D |
Operating Experience Variance | (6,392 | ) | |||
E |
Investment Experience Variance | (2,711 | ) | |||
F |
Methodology, Model and Assumption Changes | (7,614 | ) | |||
G |
Market Value and Other Adjustments | 38,575 | ||||
H |
Exchange Gains or Losses | (173 | ) | |||
I |
Shareholder Dividend Distribution and Capital Changes | (18,089 | ) | |||
J |
Others | (2,471 | ) | |||
K |
Embedded Value as at December 31, 2021 (sum A through J) |
1,203,008 |
Notes: | ||||||
1. Numbers may not be additive due to rounding. | ||||||
2. Items B through J are explained below: | ||||||
B | Reflects expected impact of covered business, and the expected return on investments supporting the 2021 opening net worth. | |||||
C | Value of one year’s sales for the 12 months ended 31 December 2021. | |||||
D | Reflects the difference between actual operating experience in 2021 (including mortality, morbidity, lapse, and expenses etc.) and the assumptions. | |||||
E | Compares actual with expected investment returns during 2021. | |||||
F | Reflects the effects of appraisal methodology and model enhancement, and assumption changes. | |||||
G | Change in the market value adjustment from the beginning of year 2021 to 31 December 2021 and other adjustments. | |||||
H | Reflects the gains or losses due to changes in exchange rate. | |||||
I | Reflects dividends distributed to shareholders during 2021. | |||||
J | Other miscellaneous items. |
Value of In-Force Business after Cost of Required Capital |
RMB million Value of One Year’s Sales after Cost of Required Capital |
|||||||||
Base case scenario |
528,691 | 44,780 | ||||||||
1. |
Risk discount rate +50bps | 504,849 | 42,688 | |||||||
2. |
Risk discount rate –50bps | 554,272 | 47,042 | |||||||
3. |
Investment return +50bps | 630,761 | 53,202 | |||||||
4. |
Investment return –50bps | 427,018 | 36,362 | |||||||
5. |
10% increase in expenses | 522,276 | 41,566 | |||||||
6. |
10% decrease in expenses | 535,107 | 47,995 | |||||||
7. |
10% increase in mortality rate for non-annuity products and 10% decrease in mortality rate for annuity products |
525,259 | 43,970 | |||||||
8. |
10% decrease in mortality rate for non-annuity products and 10% increase in mortality rate for annuity products |
532,101 | 45,594 | |||||||
9. |
10% increase in lapse rates | 528,559 | 43,925 | |||||||
10. |
10% decrease in lapse rates | 528,752 | 45,661 | |||||||
11. |
10% increase in morbidity rates | 520,500 | 42,717 | |||||||
12. |
10% decrease in morbidity rates | 537,058 | 46,853 | |||||||
13. |
Using 2020 EV appraisal assumptions | 527,279 | 44,273 | |||||||
14. |
Allowing for diversification in calculation of VIF | 574,225 | — |
• | a review of the methodology used to develop the embedded value and value of one year’s sales as at December 31, 2021, in accordance with the “CAA Standards of Actuarial Practice: Appraisal of Embedded Value”, issued by the China Association of Actuaries (“CAA”); |
• | a review of the economic and operating assumptions used to develop embedded value and value of one year’s sales as at December 31, 2021; and |
• | a review of China Life’s EV Results, including embedded value, value of one year’s sales, analysis of embedded value movement from December 31, 2020 to December 31, 2021, and the sensitivity results of value of in-force business and value of one year’s sales. |
• | The embedded value methodology used by China Life is in line with the “CAA Standards of Actuarial Practice: Appraisal of Embedded Value” issued by CAA. This method is commonly used by life and health insurance companies in China; |
• | The economic assumptions used by China Life have taken into account the current investment market conditions and the investment strategy of China Life; |
• | The operating assumptions used by China Life have taken into account the past experience and the expectation of future experience; and |
• | The embedded value results are consistent with its methodology and assumptions used. The overall result is reasonable. |
ITEM 9. |
THE OFFER AND LISTING. |
ITEM 10. |
ADDITIONAL INFORMATION. |
• | varying the rights of existing classes of shares; |
• | voting rights; |
• | our power to purchase our own shares; |
• | rights of minority shareholders; and |
• | liquidation procedures. |
• | recovery of accumulated losses, if any; |
• | allocations to the statutory common reserve fund equivalent to 10% of our after-tax profits; |
• | allocations to the general risks reserve fund equivalent to 10% of our after-tax profits, as determined under PRC GAAP; and |
• | allocations to a discretionary common reserve fund as approved by the shareholders in a shareholders’ meeting. |
• | where the number of directors is less than the number stipulated in the PRC company law or two-thirds of the number specified in our articles of association; |
• | where our unrecovered losses reach one-third of the total amount of our share capital; |
• | where shareholders, individually or jointly, holding 10% or more of our issued and outstanding voting shares so request in writing; |
• | whenever our board of directors deems necessary, or more than half of directors (including at least two independent directors) or our board of supervisors so requests; or |
• | any other event as maybe provided by applicable laws, rules, regulations or our articles of association. |
• | an increase or decrease in our share capital or the issuance of shares, warrants, debentures and other similar securities; |
• | our division, merger, dissolution or liquidation (shareholders who object to a proposed merger are entitled to demand that either we or the shareholders who approved the merger purchase their shares at a fair price); |
• | amendments to our articles of association; |
• | purchase or sale within any single year of any material assets exceeding 30% of our latest audited total assets; |
• | any equity-based incentive plan; |
• | removal of any independent director; and |
• | any other matters as provided under applicable laws or regulations or determined by a majority of shareholders at a general meeting to have a material impact on us and should be approved by two-thirds of the voting rights. |
• | is about the corporation, a shareholder or officer of the corporation, or the listed securities of the corporation or their derivatives; and |
• | is not generally known to the persons who are accustomed or would be likely to deal in the listed securities of the corporation but would if generally known to them be likely to materially affect the price of the listed securities. |
• | is in a position to elect more than one-half of the board of directors; |
• | has the power to exercise, or to control the exercise of, 30% or more of our voting rights; |
• | holds 30% or more of our issued and outstanding shares; or |
• | has de facto control of us in any other way. |
• | to relieve a director or supervisor from his or her duty to act honestly in our best interests; |
• | to approve the appropriation by a director or supervisor, for his or her own benefit or for the benefit of any other person, of our assets in any way, including without limitation opportunities which may be advantageous to us; or |
• | to approve the appropriation by a director or supervisor, for his or her own benefit or for the benefit of another person, of the individual rights of other shareholders, including without limitation rights to distributions and voting rights (except in accordance with a restructuring of our company which has been approved by the shareholders at a general meeting in accordance with our articles of association). |
• | to act honestly in our company’s best interests; |
• | not to exploit corporate assets for personal gains; and |
• | not to expropriate the rights of our shareholders. |
• | the retirement or non-retirement of directors under any age limit requirement; |
• | directors’ borrowing power; or |
• | number of shares required for directors’ qualification. |
• | convening shareholders’ meetings and reporting its work to shareholders at these meetings; |
• | implementing shareholders’ resolutions; |
• | determining the company’s business plans and investment proposals; |
• | formulating the company’s annual financial budgets and final accounts; |
• | formulating the company’s profit distribution plans and loss recovery plans; |
• | formulating proposals for the increase or decrease in the company’s registered capital and the issue of debentures; |
• | formulating major acquisition and disposal plans and plans for the merger, division or dissolution of the company; |
• | to the extent authorized by the shareholders’ meeting, deciding on such matters as external investments, purchase or sale of assets, assets pledge and connected transactions of the company; |
• | deciding on the company’s internal management structure and formulating its basic management system; and |
• | appointing or removing the company’s principal executive officers; appointing and removing other senior officers based on the recommendation of the principal executive officer and deciding on the remuneration of the senior officers. |
• | examining the company’s financial affairs; |
• | monitoring compliance with laws, regulations, the articles of association of the company and the shareholders resolutions by the directors and officers of the company; and suggesting removing the directors and officers who violate these laws and regulations; |
• | requiring corrective action from directors and officers whose actions are contrary to the interests of the company; |
• | examining the financial information, including financial statements, operation reports and plans for profit distribution, to be submitted by the board of directors to the shareholders’ meetings; and authorizing, in the company’s name, public certified accountants or licensed auditors to assist in the re-examination of such information, should any doubt arise in respect thereof; |
• | proposing the holding of extraordinary shareholders’ meetings; |
• | proposing new items to be inserted in the agenda of the shareholders’ meeting; |
• | bringing lawsuits against directors or members of senior management, if they violate laws, regulations or articles of association of the company; and |
• | exercising and performing other powers and functions provided for in the company’s articles of association. |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(RMB in millions, except as otherwise stated) |
||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Held-to-maturity available-for-sale |
||||||||||||||||||||||||||||||||
Fixed rate bonds in RMB |
128,772 | 59,603 | 63,889 | 87,647 | 117,530 | 1,668,106 | 2,125,547 |
2,231,364 | ||||||||||||||||||||||||
Average interest rate |
4.78 | % | 4.82 | % | 4.50 | % | 3.95 | % | 3.79 | % | 3.95 | % | 4.04 |
% |
||||||||||||||||||
in US$ |
4,695 | — | 39 | — | 36 | 57 | 4,827 |
4,837 | ||||||||||||||||||||||||
Average interest rate |
0.29 | % | — | 5.51 | % | — | 4.39 | % | 3.29 | % | 0.40 |
% |
||||||||||||||||||||
Variable rate bonds |
||||||||||||||||||||||||||||||||
in RMB |
2,543 | 9,512 | 3,060 | 2,219 | 8,070 | 10,465 | 35,869 |
34,560 | ||||||||||||||||||||||||
Average interest rate |
4.79 | % | 4.99 | % | 4.96 | % | 4.38 | % | 3.85 | % | 4.05 | % | 4.41 |
% |
||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in RMB |
127,516 | 178,287 | 164,700 | 38,100 | 13,100 | — | 521,703 |
521,703 | ||||||||||||||||||||||||
Average interest rate |
4.32 | % | 4.91 | % | 4.64 | % | 4.27 | % | 3.94 | % | — | 4.61 |
% |
|||||||||||||||||||
in US$ |
7,785 | — | — | — | — | — | 7,785 |
7,785 | ||||||||||||||||||||||||
Average interest rate |
0.95 | % | — | — | — | — | — | 0.95 |
% |
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase |
239,446 | — | — | — | — | — | 239,446 |
239,446 | ||||||||||||||||||||||||
Average interest rate |
0.14 | % | — | — | — | — | — | 0.14 |
% |
|||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | 2,366 | — | — | 2,366 |
2,366 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.57 | % | — | — | 2.57 |
% |
|||||||||||||||||||||||
in US$ |
— | — | — | 11,668 | — | — | 11,668 |
11,668 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.21 | % | — | — | 2.21 |
% |
|||||||||||||||||||||||
in Euro |
4,652 | — | — | — | — | — | 4,652 |
4,652 | ||||||||||||||||||||||||
Average interest rate |
2.65 | % | — | — | — | — | — | 2.65 |
% |
|||||||||||||||||||||||
Investment contracts |
3,322 | 1,800 | 1,579 | 1,343 | 1,414 | 304,136 | 313,594 |
299,727 | ||||||||||||||||||||||||
Average guaranteed interest rate |
2.00 | % | 2.28 | % | 1.90 | % | 2.13 | % | 2.09 | % | 2.41 | % | 2.40 |
% |
||||||||||||||||||
Long-term insurance contracts |
80,557 | 15,908 | 14,336 | 30,640 | 36,939 | 3,201,223 | 3,379,603 |
|||||||||||||||||||||||||
Average guaranteed interest rate |
2.73 | % | 2.50 | % | 2.54 | % | 3.12 | % | 3.29 | % | 2.87 | % | 2.87 |
% |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(RMB in millions, except as otherwise stated) |
||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Held-to-maturity available-for-sale |
||||||||||||||||||||||||||||||||
Fixed rate bonds |
||||||||||||||||||||||||||||||||
in RMB |
56,203 | 81,903 | 58,418 | 37,050 | 55,351 | 1,311,235 | 1,600,160 |
1,636,069 | ||||||||||||||||||||||||
Average interest rate |
3.05 | % | 3.28 | % | 3.61 | % | 3.42 | % | 3.28 | % | 3.78 | % | 3.70 |
% |
||||||||||||||||||
in US$ |
3,655 | — | 6 | 33 | 38 | 103 | 3,835 |
3,857 | ||||||||||||||||||||||||
Average interest rate |
0.60 | % | — | 5.97 | % | 5.63 | % | 5.22 | % | 4.82 | % | 0.81 |
% |
|||||||||||||||||||
Variable rate bonds |
||||||||||||||||||||||||||||||||
in RMB |
353 | 175 | 454 | 92 | 126 | 20,263 | 21,463 |
21,703 | ||||||||||||||||||||||||
Average interest rate |
3.35 | % | 3.13 | % | 3.89 | % | 3.87 | % | 4.51 | % | 4.08 | % | 4.05 |
% |
||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in RMB |
55,100 | 111,661 | 178,287 | 152,800 | 38,100 | 1,740 | 537,688 |
537,688 | ||||||||||||||||||||||||
Average interest rate |
3.74 | % | 4.47 | % | 4.90 | % | 4.69 | % | 4.27 | % | 4.60 | % | 4.59 |
% |
||||||||||||||||||
in US$ |
7,990 | — | — | — | — | — | 7,990 |
7,990 | ||||||||||||||||||||||||
Average interest rate |
2.06 | % | — | — | — | — | — | 2.06 |
% |
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase |
122,249 | — | — | — | — | — | 122,249 |
122,249 | ||||||||||||||||||||||||
Average interest rate |
0.93 | % | — | — | — | — | — | 0.93 |
% |
|||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | 2,444 | — | — | 2,444 |
2,444 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 3.08 | % | — | — | 3.08 |
% |
|||||||||||||||||||||||
in US$ |
— | — | — | 11,940 | — | — | 11,940 |
11,940 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.63 | % | — | — | 2.63 |
% |
|||||||||||||||||||||||
in Euro |
5,172 | — | — | — | — | — | 5,172 |
5,172 | ||||||||||||||||||||||||
Average interest rate |
1.17 | % | — | — | — | — | — | 1.17 |
% |
|||||||||||||||||||||||
Investment contracts |
3,430 | 1,041 | 1,500 | 1,598 | 1,296 | 279,347 | 288,212 |
276,521 | ||||||||||||||||||||||||
Average guaranteed interest rate |
1.97 | % | 2.26 | % | 2.27 | % | 1.89 | % | 2.13 | % | 2.41 | % | 2.39 |
% |
||||||||||||||||||
Long-term insurance contracts |
75,978 | 21,253 | 15,885 | 16,928 | 30,316 | 2,776,173 | 2,936,533 |
|||||||||||||||||||||||||
Average guaranteed interest rate |
2.71 | % | 2.51 | % | 2.50 | % | 2.52 | % | 3.12 | % | 2.81 | % | 2.81 |
% |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(RMB in millions, except as otherwise stated) |
||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Held-to-maturity available-for-sale |
||||||||||||||||||||||||||||||||
Fixed rate bonds |
||||||||||||||||||||||||||||||||
in RMB |
37,262 | 64,853 | 84,960 | 57,526 | 35,163 | 1,038,319 | 1,318,083 |
1,357,890 | ||||||||||||||||||||||||
Average interest rate |
4.82 | % | 4.37 | % | 4.62 | % | 4.91 | % | 5.03 | % | 4.29 | % | 4.38 |
% |
||||||||||||||||||
in US$ |
7,571 | 46 | — | 7 | 36 | 115 | 7,775 |
7,792 | ||||||||||||||||||||||||
Average interest rate |
2.36 | % | 5.50 | % | — | 5.97 | % | 5.44 | % | 4.53 | % | 2.43 |
% |
|||||||||||||||||||
Variable rate bonds |
||||||||||||||||||||||||||||||||
in RMB |
10 | — | — | — | — | 207 | 217 |
217 | ||||||||||||||||||||||||
Average interest rate |
2.78 | % | — | — | — | — | 4.54 | % | 4.46 |
% |
||||||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in RMB |
98,993 | 33,830 | 111,661 | 122,800 | 151,900 | 8,030 | 527,212 |
527,214 | ||||||||||||||||||||||||
Average interest rate |
4.95 | % | 3.90 | % | 4.47 | % | 5.31 | % | 4.69 | % | 4.33 | % | 4.78 |
% |
||||||||||||||||||
in US$ |
8,026 | — | — | — | — | — | 8,026 |
8,026 | ||||||||||||||||||||||||
Average interest rate |
3.21 | % | — | — | — | — | — | 3.21 |
% |
|||||||||||||||||||||||
in HK$ |
32 | — | — | — | — | — | 32 |
32 | ||||||||||||||||||||||||
Average interest rate |
2.57 | % | — | — | — | — | — | 2.57 |
% |
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase |
118,088 | — | — | — | — | — | 118,088 |
118,088 | ||||||||||||||||||||||||
Average interest rate |
1.51 | % | — | — | — | — | — | 1.51 |
% |
|||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | — | 2,515 | — | 2,515 |
2,515 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | 3.08 | % | — | 3.08 |
% |
|||||||||||||||||||||||
in US$ |
126 | — | — | — | 12,766 | — | 12,892 |
12,892 | ||||||||||||||||||||||||
Average interest rate |
2.70 | % | — | — | — | 3.18 | % | — | 3.18 |
% |
||||||||||||||||||||||
in Euro |
4,115 | 523 | — | — | — | — | 4,638 |
4,638 | ||||||||||||||||||||||||
Average interest rate |
3.25 | % | 2.50 | % | — | — | — | — | 3.16 |
% |
||||||||||||||||||||||
Investment contracts |
4,153 | 677 | 782 | 1,634 | 1,456 | 259,102 | 267,804 |
260,592 | ||||||||||||||||||||||||
Average guaranteed interest rate |
1.90 | % | 2.30 | % | 2.18 | % | 2.29 | % | 1.81 | % | 2.40 | % | 2.39 |
% |
||||||||||||||||||
Long-term insurance contracts |
69,839 | 23,490 | 20,951 | 17,419 | 16,689 | 2,372,943 | 2,521,331 |
|||||||||||||||||||||||||
Average guaranteed interest rate |
2.64 | % | 2.64 | % | 2.51 | % | 2.49 | % | 2.52 | % | 2.75 | % | 2.74 |
% |
As of December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Carrying amount |
Fair value |
Carrying amount |
Fair value |
Carrying amount |
Fair value |
|||||||||||||||||||
(RMB in millions) |
||||||||||||||||||||||||
Equity securities |
605,568 | 605,568 | 700,748 | 700,748 | 699,457 |
699,457 |
||||||||||||||||||
Securities at fair value through profit or loss |
56,402 | 56,402 | 65,955 | 65,955 | 63,714 |
63,714 |
||||||||||||||||||
Available-for-sale |
549,166 | 549,166 | 634,793 | 634,793 | 635,743 |
635,743 |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||||||||||
in US$ |
4,809 | 27 | 41 | 13 | 43 | 100 | 5,033 |
5,043 | ||||||||||||||||||||||||
Average interest rate |
0.29 | % | 3.23 | % | 5.26 | % | 3.22 | % | 3.86 | % | 3.32 | % | 0.44 |
% |
||||||||||||||||||
Other |
— | 56 | — | — | — | 34 | 90 |
90 | ||||||||||||||||||||||||
Average interest rate |
— | 0.26 | % | — | — | — | 0.50 | % | 0.35 |
% |
||||||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in US$ |
7,785 | — | — | — | — | — | 7, 785 |
7,785 | ||||||||||||||||||||||||
Average interest rate |
0.95 | % | — | — | — | — | — | 0.95 |
% |
|||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||
in US$ |
— | — | — | — | — | 1,292 | 1,292 |
1,363 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | 4.12 | % | 4.12 |
% |
|||||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||||||||||
in US$ |
1,920 | — | — | — | — | — | 1,920 |
1,920 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in HK$ |
198 | — | — | — | — | — | 198 |
198 | ||||||||||||||||||||||||
Average interest rate |
0.03 | % | — | — | — | — | — | 0.03 |
% |
|||||||||||||||||||||||
in British pound |
289 | — | — | — | — | — | 289 |
289 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in Euro |
56 | — | — | — | — | — | 56 |
56 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Other |
3 | — | — | — | — | — | 3 |
3 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | 2,366 | — | — | 2,366 |
2,366 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.57 | % | — | — | 2.57 |
% |
|||||||||||||||||||||||
in US$ |
— | — | — | 11,668 | — | — | 11,668 |
11,668 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.21 | % | — | — | 2.21 |
% |
|||||||||||||||||||||||
in Euro |
4,652 | — | — | — | — | — | 4,652 |
4,652 | ||||||||||||||||||||||||
Average interest rate |
2.65 | % | — | — | — | — | — | 2.65 |
% |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||||||||||
in US$ |
3,804 | — | 31 | 33 | 75 | 189 | 4,132 |
4,154 | ||||||||||||||||||||||||
Average interest rate |
0.58 | % | — | 4.67 | % | 5.63 | % | 4.12 | % | 4.44 | % | 0.89 |
% |
|||||||||||||||||||
Other |
— | 1 | — | — | 2 | 39 | 42 |
42 | ||||||||||||||||||||||||
Average interest rate |
— | 2.76 | % | — | — | 0.11 | % | 1.12 | % | 1.13 |
% |
|||||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in US$ |
7,990 | — | — | — | — | — | 7,990 |
7,990 | ||||||||||||||||||||||||
Average interest rate |
2.06 | % | — | — | — | — | — | 2.06 |
% |
|||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||
in US$ |
— | — | — | — | — | 1,445 | 1,445 |
1,586 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | 4.12 | % | 4.12 |
% |
|||||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||||||||||
in US$ |
598 | — | — | — | — | — | 598 |
598 | ||||||||||||||||||||||||
Average interest rate |
0.07 | % | — | — | — | — | — | 0.07 |
% |
|||||||||||||||||||||||
in HK$ |
1,297 | — | — | — | — | — | 1,297 |
1,297 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in British pound |
358 | — | — | — | — | — | 358 |
358 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in Euro |
140 | — | — | — | — | — | 140 |
140 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Other |
7 | — | — | — | — | — | 7 |
7 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | 2,444 | — | — | 2,444 |
2,444 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 3.08 | % | — | — | 3.08 |
% |
|||||||||||||||||||||||
in US$ |
— | — | — | 11,940 | — | — | 11,940 |
11,940 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | 2.63 | % | — | — | 2.63 |
% |
|||||||||||||||||||||||
in Euro |
5,172 | — | — | — | — | — | 5,172 |
5,172 | ||||||||||||||||||||||||
Average interest rate |
1.17 | % | — | — | — | — | — | 1.17 |
% |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
As of December 31, 2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Thereafter |
Total |
Fair value |
||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||||||||||
in US$ |
7,804 | 46 | 6 | 37 | 36 | 294 | 8,223 |
8,240 | ||||||||||||||||||||||||
Average interest rate |
2.29 | % | 5.50 | % | 0.12 | % | 3.75 | % | 5.44 | % | 3.67 | % | 2.38 |
% |
||||||||||||||||||
Other |
— | — | 1 | — | 3 | 55 | 59 |
59 | ||||||||||||||||||||||||
Average interest rate |
— | — | 2.69 | % | — | 0.27 | % | 0.77 | % | 0.77 |
% |
|||||||||||||||||||||
Term deposits |
||||||||||||||||||||||||||||||||
in US$ |
8,026 | — | — | — | — | — | 8,026 |
8,026 | ||||||||||||||||||||||||
Average interest rate |
3.21 | % | — | — | — | — | — | 3.21 |
% |
|||||||||||||||||||||||
in HK$ |
32 | — | — | — | — | — | 32 |
32 | ||||||||||||||||||||||||
Average interest rate |
2.57 | % | — | — | — | — | — | 2.57 |
% |
|||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||
in US$ |
— | — | — | — | — | 1,592 | 1,592 |
1,778 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | 4.12 | % | 4.12 |
% |
|||||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||||||||||
in US$ |
1,842 | — | — | — | — | — | 1,842 |
1,842 | ||||||||||||||||||||||||
Average interest rate |
0.05 | % | — | — | — | — | — | 0.05 |
% |
|||||||||||||||||||||||
in HK$ |
444 | — | — | — | — | — | 444 |
444 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in British pound |
406 | — | — | — | — | — | 406 |
406 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
in Euro |
20 | — | — | — | — | — | 20 |
20 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Other |
3 | — | — | — | — | — | 3 |
3 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Interest-bearing loans and other borrowings |
||||||||||||||||||||||||||||||||
in British pound |
— | — | — | — | 2,515 | — | 2,515 |
2,515 | ||||||||||||||||||||||||
Average interest rate |
— | — | — | — | 3.08 | % | — | 3.08 |
% |
|||||||||||||||||||||||
in US$ |
126 | — | — | — | 12,766 | — | 12,892 |
12,892 | ||||||||||||||||||||||||
Average interest rate |
2.70 | % | — | — | — | 3.18 | % | — | 3.18 |
% |
||||||||||||||||||||||
in Euro |
4,115 | 523 | — | — | — | — | 4,638 |
4,638 | ||||||||||||||||||||||||
Average interest rate |
3.25 | % | 2.50 | % | — | — | — | — | 3.16 |
% |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES. |
Category |
Depositary Actions |
Associated Fee | ||
(a) Depositing or substituting the underlying shares | Each person to whom ADRs are issued against deposits of shares, including deposits and issuances in respect of: share distributions, rights, merger exchange of securities or any other transaction or event or other distribution affecting the ADSs or the deposited securities | US$5.00 for each 100 ADSs (or portion thereof) evidenced by the new ADRs delivered | ||
(b) Receiving or distributing dividends | Distribution of dividends | US$0.02 or less per ADS | ||
(c) Selling or exercising rights | Distribution or sale of securities, the fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities | US$5.00 for each 100 ADSs (or portion thereof) | ||
(d) Withdrawing an underlying security | Acceptance of ADRs surrendered for withdrawal of deposited securities | US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs surrendered | ||
(e) Transferring, splitting or grouping receipts | Transfers, splitting, combining or grouping of depositary receipts | US$1.50 per ADS | ||
(f) Expenses of the depositary | Expenses incurred on behalf of ADR holders in connection with: compliance with foreign exchange control regulations or any law or regulation relating to foreign investment; the depositary’s or its custodian’s compliance with applicable law, rule or regulation; stock transfer or other taxes and other governmental charges; cable, telex, facsimile transmission and delivery; expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency); and any other charge payable by depositary or its agents. | Expenses payable at the sole discretion of the depositary by billing ADR holders or by deducting charges from one or more cash dividends or other cash distributions. |
Category of Expenses |
Amount Reimbursed from January 1, 2021 to April 8, 2022 |
|||
NYSE listing fees |
US$ | 145,000.00 | ||
Legal fees |
US$ | 2,830.00 | ||
Investor relations (1) |
US$ | 46,782.03 | ||
Broker reimbursements (2) |
US$ | 45,897.88 | ||
|
|
|||
Total |
US$ |
240,509.91 |
||
|
|
(1) |
Includes expenses related to announcement of results, ADR training programs, non-deal roadshows and investor relations activities. |
(2) |
Broker reimbursements are fees payable to Broadridge and other service providers for the distribution of hard copy material to beneficial ADR holders holding in the Depositary Trust Company. Corporate material includes information related to shareholders’ meetings and related voting instruction cards. These fees are SEC approved. |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES. |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS. |
ITEM 15. |
CONTROLS AND PROCEDURES. |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets and liabilities of the Company; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the applicable generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT. |
ITEM 16B. |
CODE OF ETHICS. |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Audit Fees (1) |
Audit-Related Fees |
Tax Fees |
All Other Fees (2) |
|||||||||||||
(RMB in millions) |
||||||||||||||||
2021 |
45 | 2 | — | 1 | ||||||||||||
2020 |
63 | — | — | 3 |
(1) | Audit fees include fees billed for professional services rendered for audits of the consolidated financial statements and review of interim financial statements of China Life and fees billed for performing agreed-upon procedures. On June 30, 2021, we appointed PricewaterhouseCoopers Zhong Tian LLP as our independent registered certified public accountant for the fiscal year of 2021, and approved not to re-appoint Ernst & Young Hua Ming LLP on the same day. PricewaterhouseCoopers Zhong Tian LLP provided services for audits of our consolidated financial statements for the fiscal year of 2021 and review of our interim financial statements for the six months ended June 30, 2021 and performing agreed-upon procedures. The fees for 2021 set forth in the table above are fees paid by us to PricewaterhouseCoopers Zhong Tian LLP for the fiscal year of 2021. |
(2) | All other fees include fees billed for advisory services which do not affect the independence of our principal accountants. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES. |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS. |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT. |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE. |
ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. |
ITEM 17. |
FINANCIAL STATEMENTS. |
ITEM 18. |
FINANCIAL STATEMENTS. |
ITEM 19. |
EXHIBITS. |
(1) | Incorporated by reference to the Registration Statement on Form F-1 (File No. 333-110615), filed with the Commission on December 9, 2003. |
(2) | Incorporated by reference to the Registration Statement on Form F-6 (File No. 333-164005), filed with the Commission on January 4, 2010. |
(3) | Incorporated by reference to the Post-Effective Amendment No. 1 to Form F-6 (File No. 333-164005), filed with the Commission on January 27, 2015. |
(4) | Incorporated by reference to the Post-Effective Amendment No. 2 to Form F-6 (File No. 333-164005), filed with the Commission on May 1, 2015. |
(5) | Incorporated by reference to the Annual Report on Form 20-F for the fiscal year ended December 31, 2004, filed with the Commission on May 27, 2005. |
(6) | Incorporated by reference to the Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the Commission on April 24, 2015. |
(7) | Incorporated by reference to the Annual Report on Form 20-F for the fiscal year ended December 31, 2018, filed with the Commission on April 24, 2019. |
(8) | Incorporated by reference to the Annual Report on Form 20-F for the fiscal year ended December 31, 2019, filed with the Commission on April 29, 2020. |
(9) | Incorporated by reference to the Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the Commission on April 29, 2021. |
China Life Insurance Company Limited | ||||
By: | /s/ Su Hengxuan | |||
Name: | Su Hengxuan | |||
Title: | President and Executive Director |
Pages |
||||
F2 – F6 |
||||
F7 |
||||
F8 – F9 |
||||
F10 – F11 |
||||
F12 |
||||
F13 – F14 |
||||
F15 – F109 |
Notes |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million (Restated Note 34 (f)(ii) ) |
||||||||||
ASSETS |
||||||||||||
Property, plant and equipment |
6 |
|||||||||||
Right-of-use |
7 |
|||||||||||
Investment properties |
8 |
|||||||||||
Investments in associates and joint ventures |
9 |
|||||||||||
Held-to-maturity |
10.1 |
|||||||||||
Loans |
10.2 |
|||||||||||
Term deposits |
10.3 |
|||||||||||
Statutory deposits - restricted |
10.4 |
|||||||||||
Available-for-sale |
10.5 |
|||||||||||
Securities at fair value through profit or loss |
10.6 |
|||||||||||
Securities purchased under agreements to resell |
10.7 |
|||||||||||
Accrued investment income |
10.8 |
|||||||||||
Premiums receivable |
12 |
|||||||||||
Reinsurance assets |
13 |
|||||||||||
Other assets |
14 |
|||||||||||
Deferred tax assets |
29 |
|||||||||||
Cash and cash equivalents |
||||||||||||
|
|
|
|
|||||||||
Total assets |
||||||||||||
|
|
|
|
Notes |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million (Restated Note 34(f) (ii) ) |
||||||||||
LIABILITIES AND EQUITY |
||||||||||||
Liabilities |
||||||||||||
Insurance contracts |
15 |
|||||||||||
Investment contracts |
16 |
|||||||||||
Policyholder dividends payable |
||||||||||||
Interest-bearing loans and borrowings |
17 |
|||||||||||
Lease liabilities |
||||||||||||
Bonds payable |
18 |
|||||||||||
Financial liabilities at fair value through profit or loss |
||||||||||||
Securities sold under agreements to repurchase |
19 |
|||||||||||
Annuity and other insurance balances payable |
||||||||||||
Premiums received in advance |
||||||||||||
Other liabilities |
20 |
|||||||||||
Deferred tax liabilities |
29 |
|||||||||||
Current income tax liabilities |
||||||||||||
Statutory insurance fund |
21 |
|||||||||||
|
|
|
|
|||||||||
Total liabilities |
||||||||||||
|
|
|
|
|||||||||
Equity |
||||||||||||
Share capital |
35 |
|||||||||||
Reserves |
36 |
|||||||||||
Retained earnings |
||||||||||||
|
|
|
|
|||||||||
Attributable to equity holders of the Company |
||||||||||||
|
|
|
|
|||||||||
Non-controlling interests |
||||||||||||
|
|
|
|
|||||||||
Total equity |
||||||||||||
|
|
|
|
|||||||||
Total liabilities and equity |
||||||||||||
|
|
|
|
Notes |
2021 RMB million |
2020 RMB million (Restated Note 34(f) (ii)) |
2019 RMB million (Restated Note 34(f) (ii) ) |
|||||||||||||
REVENUES |
||||||||||||||||
Gross written premiums |
5 |
|||||||||||||||
Less: premiums ceded to reinsurers |
5 |
( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|||||||||||
Net written premiums |
||||||||||||||||
Net change in unearned premium reserves |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net premiums earned |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Investment income |
22 |
|||||||||||||||
Net realised gains on financial assets |
23 |
|||||||||||||||
Net fair value gains through profit or loss |
24 |
|||||||||||||||
Other income |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total revenues |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
BENEFITS, CLAIMS AND EXPENSES |
||||||||||||||||
Insurance benefits and claims expenses |
||||||||||||||||
Life insurance death and other benefits |
25 |
( |
) | ( |
) | ( |
) | |||||||||
Accident and health claims and claim adjustment expenses |
25 |
( |
) | ( |
) | ( |
) | |||||||||
Increase in insurance contract liabilities |
25 |
( |
) | ( |
) | ( |
) | |||||||||
Investment contract benefits |
26 |
( |
) | ( |
) | ( |
) | |||||||||
Policyholder dividends resulting from participation in profits |
( |
) | ( |
) | ( |
) | ||||||||||
Underwriting and policy acquisition costs |
( |
) | ( |
) | ( |
) | ||||||||||
Finance costs |
27 |
( |
) | ( |
) | ( |
) | |||||||||
Administrative expenses |
( |
) | ( |
) | ( |
) | ||||||||||
Statutory insurance fund contribution |
21 |
( |
) | ( |
) | ( |
) | |||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
Total benefits, claims and expenses |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net gains on investments of associates and joint ventures |
9 |
|||||||||||||||
Including: share of profit of associates and joint ventures |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Profit before income tax |
28 |
|||||||||||||||
Income tax |
29 |
( |
) | ( |
) | |||||||||||
|
|
|
|
|
|
|||||||||||
Net profit |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Attributable to: |
||||||||||||||||
- Equity holders of the Company |
||||||||||||||||
- Non-controlling interests |
||||||||||||||||
Basic and diluted earnings per share |
30 |
RMB | RMB | RMB | ||||||||||||
|
|
|
|
|
|
Notes |
2021 RMB million |
2020 RMB million (Restated Note 34 (f)(ii)) |
2019 RMB million (Restated Note 34 (f)(ii) ) |
|||||||||||||
Other comprehensive income |
||||||||||||||||
Other comprehensive income that may be reclassified to profit or loss in subsequent periods: |
||||||||||||||||
Fair value gains on available-for-sale |
||||||||||||||||
Amount transferred to net profit from other comprehensive income |
( |
) | ( |
) | ( |
) | ||||||||||
Portion of fair value changes on available-for-sale |
( |
) | ( |
) | ( |
) | ||||||||||
Share of other comprehensive income of associates and joint ventures under the equity method |
||||||||||||||||
Exchange differences on translating foreign operations |
( |
) | ( |
) | ||||||||||||
Income tax relating to components of other comprehensive income |
29 | ( |
) | ( |
) | |||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income that may be reclassified to profit or loss in subsequent periods |
( |
) | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods: |
||||||||||||||||
Share of other comprehensive income of associates and joint ventures under the equity method |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income for the year, net of tax |
( |
) | ||||||||||||||
Total comprehensive income for the year, net of tax |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Attributable to: |
||||||||||||||||
- Equity holders of the Company |
||||||||||||||||
- Non-controlling interests |
Attributable to equity holders of the Company |
Non- controlling interests |
Total |
||||||||||||||||||||||
Share capital |
Other equity instruments |
Reserves |
Retained earnings |
|||||||||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
|||||||||||||||||||
(Note 35 ) |
(Note 36 ) |
|||||||||||||||||||||||
As at 1 January 2019 (Restated Note 34 (f)(ii) ) |
||||||||||||||||||||||||
Net profit |
— | — | — | |||||||||||||||||||||
Other comprehensive income |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Transactions with owners |
||||||||||||||||||||||||
Appropriation to reserves (Note 36 ) |
— | — | ( |
) | — | — | ||||||||||||||||||
Dividends paid (Note 32) |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Dividends to non-controlling interests |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Reserves to retained earnings (Note 36) |
— | — | ( |
) | — | — | ||||||||||||||||||
Others |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2019 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 1 January 2020 |
||||||||||||||||||||||||
Net profit |
— | — | — | |||||||||||||||||||||
Other comprehensive income |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Transactions with owners |
||||||||||||||||||||||||
Appropriation to reserves (Note 36) |
— | — | ( |
) | — | — | ||||||||||||||||||
Dividends paid (Note 32) |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Dividends to non-controlling interests |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Others |
— | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2020 |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 1 January 2021 |
— | |||||||||||||||||||||||
Net profit |
— | — | — | |||||||||||||||||||||
Other comprehensive income |
— | — | ( |
) | — | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
— | — | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Transactions with owners |
||||||||||||||||||||||||
Appropriation to reserves (Note 36) |
— | — | ( |
) | — | — | ||||||||||||||||||
Dividends paid (Note 32) |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Dividends to non-controlling interests |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Reserves to retained earnings (Note 36) |
— | — | ( |
) | — | — | ||||||||||||||||||
Others |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2021 |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020 | 2019 | |||||||||||
RMB million | RMB million | |||||||||||
2021 RMB million |
(Restated Note 34 (f)(ii) ) |
(Restated Note 34 (f)(ii) ) |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||
Profit before income tax |
||||||||||||
Adjustments for: |
||||||||||||
Investment income |
( |
) | ( |
) | ( |
) | ||||||
Net realised and unrealised gains on financial assets |
( |
) | ( |
) | ( |
) | ||||||
Insurance contracts |
||||||||||||
Depreciation and amortisation |
||||||||||||
Foreign exchange losses/(gains) |
( |
) | ( |
) | ||||||||
Net gains on investments of associates and joint ventures |
( |
) | ( |
) | ( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||||||
Increase/(decrease) in securities at fair value through profit or loss, net |
( |
) | ( |
) | ||||||||
Financial liabilities at fair value through profit or loss |
( |
) | ||||||||||
Receivables and payables |
||||||||||||
Income tax paid |
( |
) | ( |
) | ( |
) | ||||||
Interest received - securities at fair value through profit or loss |
||||||||||||
Dividends received - securities at fair value through profit or loss |
||||||||||||
Net cash inflow/(outflow) from operating activities |
||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||
Disposals and maturities: |
||||||||||||
Disposals of debt investments |
||||||||||||
Maturities of debt investments |
||||||||||||
Disposals of equity investments |
||||||||||||
Disposals of property, plant and equipment |
||||||||||||
Disposals of subsidiaries |
||||||||||||
Purchases: |
||||||||||||
Debt investments |
( |
) | ( |
) | ( |
) | ||||||
Equity investments and subsidiaries |
( |
) | ( |
) | ( |
) | ||||||
Property, plant and equipment |
( |
) | ( |
) | ( |
) | ||||||
Investments in associates and joint ventures |
( |
) | ( |
) |
( |
) | ||||||
Decrease/(Increase) in term deposits, net |
( |
) | ||||||||||
Increase/(decrease) in securities purchased under agreements to resell, net |
( |
) | ( |
) | ||||||||
Interest received |
||||||||||||
Dividends received |
||||||||||||
Increase in policy loans, net |
( |
) | ( |
) | ( |
) | ||||||
Cash received related to other investing activities |
— | — | ||||||||||
Net cash inflow/(outflow) from investing activities |
( |
) | ( |
) | ( |
) | ||||||
2020 | 2019 | |||||||||||
RMB million | RMB million | |||||||||||
2021 RMB million |
(Restated Note 34 (f)(ii) ) |
(Restated Note 34 (f)(ii) ) |
||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||
Increase in securities sold under agreements to |
( |
) | ||||||||||
Interest paid |
( |
) | ( |
) | ( |
) | ||||||
Repayment of borrowings |
— | ( |
) | ( |
) | |||||||
Dividends paid to equity holders of the Company |
( |
) | ( |
) | ( |
) | ||||||
Dividends paid to non-controlling interests |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from issue of bonds |
— | — | ||||||||||
Cash received from borrowings |
— | |||||||||||
Payment of lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
Cash paid for redemption of other equity instruments |
— | ( |
) | — | ||||||||
Capital injected into subsidiaries by non-controlling interests |
||||||||||||
Cash received related to other financing activities |
— | — | ||||||||||
Cash paid related to other financing activities |
( |
) | ( |
) | ( |
) | ||||||
Net cash inflow/(outflow) from financing activities |
( |
) | ( |
) | ||||||||
Foreign exchange gains/(losses) on cash and cash equivalents |
( |
) | ( |
) | ||||||||
Net increase in cash and cash equivalents |
||||||||||||
Cash and cash equivalents |
||||||||||||
Beginning of the year |
||||||||||||
End of the year |
||||||||||||
Analysis of balances of cash and cash equivalents |
||||||||||||
Cash at banks and in hand |
||||||||||||
Short-term bank deposits |
||||||||||||
1 |
ORGANISATION AND PRINCIPAL ACTIVITIES |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2.1 |
Basis of preparation |
2.1.1 |
New accounting standards and amendments adopted by the Group for the first time for the financial year beginning on 1 January 2021 |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments |
Interest Rate Benchmark Reform - Phase 2 |
1 January 2021 | ||
Amendments to IFRS 16 | Covid-19-Related Rent Concessions beyond 30 June 2021 |
1 April 2021 |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.1 |
Basis of preparation (continued) |
2.1.1 |
New accounting standards and amendments adopted by the Group for the first time for the financial year beginning on 1 January 2021 (continued) |
• | Changes to contractual cash flows. When changing the basis for determining contractual cash flows for financial assets and liabilities (including lease liabilities), the reliefs have the effect that the changes that are required by an interest rate benchmark reform (that is, are necessary as a direct consequence of IBOR reform and are economically equivalent) will not result in an immediate gain or loss in the income statement. |
• | Hedge accounting. The hedge accounting reliefs will allow most IAS 39 or IFRS 9 hedge relationships that are directly affected by IBOR reform to continue. However, additional ineffectiveness might need to be recorded. |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.1 |
Basis of preparation (continued) |
2.1.2 |
New accounting standards and amendments that are effective for the financial year ended 31 December 2021 but temporary exemption is applied by the Group |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
IFRS 9 |
Financial Instruments |
1 January 2018 |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.1 |
Basis of preparation (continued) |
2.1.3 |
New accounting standards and amendments that are not yet effective and have not been early adopted by the Group for the financial year beginning on 1 January 2021 |
Standards/Amendments |
Content |
Effective for annual periods beginning on or after | ||
Amendments to IFRS 3 | Update Reference to the Conceptual Framework |
1 January 2022 | ||
Amendments to IAS 16 | Property, Plant and Equipment: Proceeds before intended use |
1 January 2022 | ||
Amendments to IAS 37 | Onerous Contracts – Cost of Fulfilling a Contract |
1 January 2022 | ||
Annual improvements | Annual Improvements to IFRS Standards 2018-2020 Cycle |
1 January 2022 | ||
Amendments to IAS 1 | Classification of Liabilities as Current or Non-current |
1 January 2023 | ||
IFRS 17 | Insurance Contracts |
1 January 2023 | ||
Amendment to IAS 12 | Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
1 January 2023 | ||
IFRS 10 and IAS 28 Amendments |
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
No mandatory effective date yet determined but available for adoption |
• | The fulfilment cash flows including the expected present value of future cash flows and explicit risk adjustment, remeasured every reporting period; |
• | A contractual service margin represents the unearned profitability of the insurance contracts and is recognised in profit or loss over the coverage period; |
• | Certain changes in the expected present value of future cash flows are adjusted against the contractual service margin and thereby recognised in profit or loss over the remaining coverage period; |
• | The effect of changes in discount rates will be reported in either profit or loss or OCI, determined by an accounting policy choice; |
• | The recognition of insurance revenue and insurance service expenses in the statement of comprehensive income based on the concept of services provided during the period; |
• | Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct investment components) are not presented in the statement of comprehensive income, but are recognised directly in the statement of financial position; |
• | Insurance services results are presented separately from the insurance finance income or expense; |
• | Extensive disclosures to provide information on the recognised amounts from insurance contracts and the nature and extent of risks arising from these contracts. |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.1 |
Basis of preparation (continued) |
2.1.3 |
New accounting standards and amendments that are not yet effective and have not been early adopted by the Group for the financial year beginning on 1 January 2021 (continued) |
2.2 |
Consolidation |
• | power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); |
• | exposure, or rights, to variable returns from its involvement with the investee; and |
• | the ability to use its power over the investee to affect its returns. |
• | the contractual arrangement with the other vote holders of the investee; |
• | rights arising from other contractual arrangements; and |
• | the Group’s voting rights and potential voting rights. |
• | derecognises the assets (including goodwill) and liabilities of the subsidiary; |
• | derecognises the carrying amount of any non-controlling interests; |
• | derecognises the cumulative translation differences recorded in equity; |
• | recognises the fair value of the consideration received; |
• | recognises the fair value of any investment retained; |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.2 |
Consolidation (continued) |
• | recognises any surplus or deficit in profit or loss; and |
• | reclassifies the Group’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as if the Group had directly disposed of the related assets or liabilities. |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.3 |
Associates and joint ventures |
2.4 |
Segment reporting |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.5 |
Foreign currency translation |
2.6 |
Property, plant and equipment |
Estimated useful lives | ||
Buildings | ||
Office equipment, furniture and fixtures | ||
Motor vehicles | ||
Leasehold improvements | Over the shorter of the remaining term of the lease and the useful lives |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.7 |
Leases |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.7 |
Leases (continued) |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.8 |
Investment properties |
2.9 |
Financial assets |
2.9.a |
Classification |
(i) | Securities at fair value through profit or loss |
(ii) | Held-to-maturity |
(iii) | Loans and receivables |
(iv) | Available-for-sale |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.9 |
Financial assets (continued) |
2.9.b |
Recognition and measurement |
2.9.c |
Impairment of financial assets other than securities at fair value through profit or loss |
• | significant financial difficulty of the issuer or debtor; |
• | a breach of contract, such as a default or delinquency in payments; |
• | it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganisation; and |
• | the disappearance of an active market for that financial asset because of financial difficulties. |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.9 |
Financial assets (continued) |
2.9.c |
Impairment of financial assets other than securities at fair value through profit or loss (continued) |
• | the market price of the equity securities was more than 50% below their cost at the reporting date; |
• | the market price of the equity securities was more than 20% below their cost for a period of at least six months at the reporting date; and |
• | the market price of the equity securities was below their cost for a period of more than one year (including one year) at the reporting date. |
2.10 |
Fair value measurement |
• | in the principal market for the asset or liability, or |
• | in the absence of a principal market, in the most advantageous market for the asset or liability. |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.11 |
Cash and cash equivalents |
2.12 |
Insurance contracts and investment contracts |
2.12.1 |
Classification |
2.12.2 |
Insurance contracts |
2.12.2.a |
Recognition and measurement |
(i) | Short-term insurance contracts |
(ii) | Long-term insurance contracts |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.12 |
Insurance contracts and investment contracts (continued) |
2.12.2 |
Insurance contracts (continued) |
2.12.2.a |
Recognition and measurement (continued) |
(ii) | Long-term insurance contracts (continued) |
(a) | The reasonable estimate of liability for long-term insurance contracts is the present value of reasonable estimates of future cash outflows less future cash inflows. The expected future cash inflows include cash inflows of future premiums arising from the undertaking of insurance obligations, with consideration of decrement mostly from death and surrenders. The expected future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of the following: |
• | guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals, maturities and surrenders; |
• | additional non-guaranteed benefits, such as policyholder dividends; and |
• | reasonable expenses incurred to manage insurance contracts or to process claims, including maintenance expenses and claim settlement expenses. Future administration expenses are included in the maintenance expenses. Expenses are determined based on expense analysis with consideration of future inflation and the Group’s expense management control. |
(b) | Margin has been taken into consideration while computing the reserve of insurance contracts, measured separately and recognised in net profit in each period over the life of the contracts. At the inception of the contracts, the Group does not recognise Day 1 gain, whereas on the other hand, Day 1 loss is recognised in net profit immediately. |
(c) | The Group has considered the impact of time value on the reserve calculation for insurance contracts. |
(iii) | Universal life contracts and unit-linked contracts |
• | insurance components |
• | non-insurance components |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.12 |
Insurance contracts and investment contracts (continued) |
2.12.2 |
Insurance contracts (continued) |
2.12.2.b |
Liability adequacy test |
2.12.2.c |
Reinsurance contracts held |
2.12.3 |
Investment contracts |
2.12.4 |
DPF in long-term insurance contracts and investment contracts |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.13 |
Financial liabilities at fair value through profit or loss |
2.14 |
Securities sold under agreements to repurchase |
2.15 |
Bonds payable |
2.16 |
Derivative instruments |
2.17 |
Employee benefits |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.17 |
Employee benefits (continued) |
2.18 |
Share capital |
2.19 |
Other equity instruments |
2.20 |
Revenue recognition |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.21 |
Finance costs |
2.22 |
Current and deferred income taxation |
2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2.23 |
Provisions and contingencies |
2.24 |
Dividend distribution |
3 |
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS |
3.1 |
Estimates of future benefit payments and premiums arising from long-term insurance contracts |
3 |
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued) |
3.2 |
Financial instruments |
• | debt securities: fair values are generally based upon current bid prices. Where current bid prices are not readily available, fair values are estimated using either prices observed in recent transactions, values obtained from current bid prices of comparable investments or valuation techniques when the market is not active. |
• | equity securities: fair values are generally based upon current bid prices. Where current bid prices are not readily available, fair values are estimated using either prices observed in recent transactions or commonly used market pricing models. Equity securities, for which fair values cannot be measured reliably, are recognised at cost less impairment. |
• | securities purchased under agreements to resell, policy loans, term deposits, interest-bearing loans and borrowings, and securities sold under agreements to repurchase: the carrying amounts of these assets in the consolidated statement of financial position approximate fair value. |
• | fair values of other loans are obtained from valuation techniques. |
3.3 |
Impairment of investments in associates and joint ventures |
3.4 |
Income tax |
3 |
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued) |
3.5 |
Determination of control over investee |
4 |
RISK MANAGEMENT |
4.1 |
Insurance risk |
4.1.1 |
Types of insurance risks |
4.1.2 |
Concentration of insurance risks |
4 |
RISK MANAGEMENT (continued) |
4.1 |
Insurance risk (continued) |
4.1.2 |
Concentration of insurance risks (continued) |
For the year ended 31 December |
||||||||||||||||
2021 |
2020 | |||||||||||||||
Product name |
RMB million |
% |
RMB million | % | ||||||||||||
Premiums of long-term insurance contracts |
||||||||||||||||
Xin Xiang Zhi Zun Annuity (Celebration Version) (a) |
% | % | ||||||||||||||
Xin Xiang Jin Sheng Annuity (A Version)(b) |
% | % | ||||||||||||||
Xin Fu Ying Jia Annuity(c) |
% | % | ||||||||||||||
Kang Ning Whole Life(d) |
% | % | ||||||||||||||
Hong Ying Participating Endowment (e) |
% | % | ||||||||||||||
Others (f) |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Insurance benefits of long-term insurance contracts |
||||||||||||||||
Xin Xiang Zhi Zun Annuity (Celebration Version) (a) |
% | % | ||||||||||||||
Xin Xiang Jin Sheng Annuity (A Version)(b) |
% | % | ||||||||||||||
Xin Fu Ying Jia Annuity(c) |
% | % | ||||||||||||||
Kang Ning Whole Life(d) |
% | % | ||||||||||||||
Hong Ying Participating Endowment (e) |
% | % | ||||||||||||||
Others (f) |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
As at 31 December 2021 |
As at 31 December 2020 | |||||||||||||||
RMB million |
% |
RMB million | % | |||||||||||||
Liabilities of long-term insurance contracts |
||||||||||||||||
Xin Xiang Zhi Zun Annuity (Celebration Version) (a) |
% | % | ||||||||||||||
Xin Xiang Jin Sheng Annuity (A Version)(b) |
% | % | ||||||||||||||
Xin Fu Ying Jia Annuity(c) |
% | % | ||||||||||||||
Kang Ning Whole Life(d) |
% | % | ||||||||||||||
Hong Ying Participating Endowment (e) |
% | % | ||||||||||||||
Others (f) |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.1 |
Insurance risk (continued) |
4.1.2 |
Concentration of insurance risks (continued) |
(a) | 8-day-old |
(b) | 65-year-old . |
(c) | 70-year-old . |
4 |
RISK MANAGEMENT (continued) |
4.1 |
Insurance risk (continued) |
4.1.2 |
Concentration of insurance risks (continued) |
(d) | 70-year-old . |
(e) | 30-day-old |
(f) | Others consist of various long-term insurance contracts with no significant concentration. |
4.1.3 |
Sensitivity analysis |
4 |
RISK MANAGEMENT (continued) |
4.1 |
Insurance risk (continued) |
4.1.3 |
Sensitivity analysis (continued) |
Estimated claims expenses |
Short-term insurance contracts (accident year) |
|||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 |
Total |
|||||||||||||||||||
|
|
RMB Million | ||||||||||||||||||||||
Year end |
||||||||||||||||||||||||
1 year later |
||||||||||||||||||||||||
2 years later |
||||||||||||||||||||||||
3 years later |
||||||||||||||||||||||||
4 years later |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Estimated accumulated claims expenses |
||||||||||||||||||||||||
Accumulated claims expenses paid |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unpaid claims expenses |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.1 |
Insurance risk (continued) |
4.1.3 |
Sensitivity analysis (continued) |
Estimated claims expenses |
Short-term insurance contracts (accident year) |
|||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 |
Total |
|||||||||||||||||||
|
|
RMB Million | ||||||||||||||||||||||
Year end |
||||||||||||||||||||||||
1 year later |
||||||||||||||||||||||||
2 years later |
||||||||||||||||||||||||
3 years later |
||||||||||||||||||||||||
4 years later |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Estimated accumulated claims expenses |
||||||||||||||||||||||||
Accumulated claims expenses paid |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unpaid claims expenses |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
Financial risk |
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.1 |
Market risk |
(i) |
Interest rate risk |
(ii) |
Price risk |
(iii) |
Currency risk |
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.1 |
Market risk (continued) |
(iii) |
Currency risk (continued) |
As at 31 December 2021 |
US dollar |
HK dollar |
GB pound |
EUR |
Others |
Total |
||||||||||||||||||
Financial assets |
||||||||||||||||||||||||
Equity securities |
||||||||||||||||||||||||
- Available-for-sale |
— |
— |
— |
|||||||||||||||||||||
- Securities at fair value through profit or loss |
||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||
- Held-to-maturity |
— |
— |
— |
— |
||||||||||||||||||||
- Loans |
— |
— |
— |
— |
||||||||||||||||||||
- Available-for-sale |
— |
— |
— |
— |
||||||||||||||||||||
- Securities at fair value through profit or loss |
— |
|||||||||||||||||||||||
Term deposits |
— |
— |
— |
— |
||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial liabilities |
||||||||||||||||||||||||
Interest-bearing loans and other borrowings |
— |
— |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
— |
— |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As at 31 December 2020 |
US dollar |
HK dollar |
GB pound |
EUR |
Others |
Total |
||||||||||||||||||
Financial assets |
||||||||||||||||||||||||
Equity securities |
||||||||||||||||||||||||
- Available-for-sale |
— |
— |
— |
|||||||||||||||||||||
- Securities at fair value through profit or loss |
||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||
- Held-to-maturity |
— |
— |
— |
— |
||||||||||||||||||||
- Loans |
— |
— |
— |
— |
||||||||||||||||||||
- Available-for-sale |
— |
— |
— |
— |
||||||||||||||||||||
- Securities at fair value through profit or loss |
— |
|||||||||||||||||||||||
Term deposits |
— |
— |
— |
— |
||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial liabilities |
||||||||||||||||||||||||
Interest-bearing loans and other borrowings |
— |
— |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
— |
— |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.1 |
Market risk (continued) |
(iii) |
Currency risk (continued) |
4.2.2 |
Credit risk |
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.2 |
Credit risk (continued) |
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.3 |
Liquidity risk |
Contractual and expected cash flows (undiscounted) |
||||||||||||||||||||||||
As at 31 December 2021 |
Carrying value |
Without maturity |
Not later than 1 year |
Later than 1 year but not later than 3 years |
Later than 3 years but not later than 5 years |
Later than 5 years |
||||||||||||||||||
|
|
RMB Million | ||||||||||||||||||||||
Financial assets |
||||||||||||||||||||||||
Contractual cash inflows |
||||||||||||||||||||||||
Equity securities |
— | — | — | — | ||||||||||||||||||||
Debt securities |
— | |||||||||||||||||||||||
Loans |
— | |||||||||||||||||||||||
Term deposits |
— | — | ||||||||||||||||||||||
Statutory deposits - restricted |
— | — | ||||||||||||||||||||||
Securities purchased under agreements to resell |
— | — | — | |||||||||||||||||||||
Accrued investment income |
— | — | — | |||||||||||||||||||||
Premiums receivable |
— | — | — | — | ||||||||||||||||||||
Cash and cash equivalents |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial and insurance liabilities |
||||||||||||||||||||||||
Expected cash outflows |
||||||||||||||||||||||||
Insurance contracts |
— | ( |
) | ( |
) | |||||||||||||||||||
Investment contracts |
— | ( |
) | ( |
) | |||||||||||||||||||
Contractual cash outflows |
||||||||||||||||||||||||
Securities sold under agreements to repurchase |
— | ( |
) | — | — | — | ||||||||||||||||||
Financial liabilities at fair value through profit or loss |
( |
) | — | — | — | — | ||||||||||||||||||
Annuity and other insurance balances payable |
— | ( |
) | — | — | — | ||||||||||||||||||
Interest-bearing loans and other borrowings |
— | ( |
) | ( |
) | — | — | |||||||||||||||||
Bonds payable |
— | ( |
) | ( |
) | — | — | |||||||||||||||||
Lease liabilities |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.3 |
Liquidity risk (continued) |
Contractual and expected cash flows (undiscounted) |
||||||||||||||||||||||||
As at 31 December 2020 |
Carrying value |
Without maturity |
Not later than 1 year |
Later than 1 year but not later than 3 years |
Later than 3 years but not later than 5 years |
Later than 5 years |
||||||||||||||||||
|
|
RMB Million | ||||||||||||||||||||||
Financial assets |
||||||||||||||||||||||||
Contractual cash inflows |
||||||||||||||||||||||||
Equity securities |
— | — | — | — | ||||||||||||||||||||
Debt securities |
— | |||||||||||||||||||||||
Loans |
— | |||||||||||||||||||||||
Term deposits |
— | |||||||||||||||||||||||
Statutory deposits - restricted |
— | — | ||||||||||||||||||||||
Securities purchased under agreements to resell |
— | — | — | — | ||||||||||||||||||||
Accrued investment income |
— | — | ||||||||||||||||||||||
Premiums receivable |
— | — | — | — | ||||||||||||||||||||
Cash and cash equivalents |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial and insurance liabilities |
||||||||||||||||||||||||
Expected cash outflows |
||||||||||||||||||||||||
Insurance contracts |
— | ( |
) | ( |
) | |||||||||||||||||||
Investment contracts |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||
Contractual cash outflows |
||||||||||||||||||||||||
Securities sold under agreements to repurchase |
— | ( |
) | — | — | — | ||||||||||||||||||
Financial liabilities at fair value through profit or loss |
( |
) | — | — | — | — | ||||||||||||||||||
Annuity and other insurance balances payable |
— | ( |
) | — | — | — | ||||||||||||||||||
Interest-bearing loans and other borrowings |
— | ( |
) | ( |
) | ( |
) | — | ||||||||||||||||
Bonds payable |
— | ( |
) | ( |
) | ( |
) | — | ||||||||||||||||
Lease liabilities |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.2 |
Financial risk (continued) |
4.2.3 |
Liquidity risk (continued) |
4.2.4 |
Capital management |
As at 31 December 2021 |
As at 31 December 2020 | |||||||
RMB million |
RMB million | |||||||
Core capital |
||||||||
Actual capital |
||||||||
Minimum capital |
||||||||
Core solvency ratio |
% | % | ||||||
Comprehensive solvency ratio |
% | % |
(i) | Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and liquidity risk are very low; |
(ii) | Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and liquidity risk are low; |
(iii) | Category C: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or several risks in operation, strategy, reputation and liquidity are high; |
(iv) | Category D: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or several risks in operation, strategy, reputation and liquidity are severe. |
4 |
RISK MANAGEMENT (continued) |
4.3 |
Disclosures about interest in unconsolidated structured entities |
(i) |
The unconsolidated structured entities that the Group has interest in |
Unconsolidated structured entities |
||||||||||||||||
As at 31 December 2021 |
Size RMB Million |
Carrying amount of assets RMB Million |
Maximum exposure RMB Million |
Interest held by the Group |
||||||||||||
Funds managed by affiliated entities |
||||||||||||||||
Funds managed by third parties |
Note 1 | |||||||||||||||
Trust schemes managed by affiliated entities |
||||||||||||||||
Trust schemes managed by third parties |
Note 1 | |||||||||||||||
Debt investment schemes managed by affiliated entities |
||||||||||||||||
Debt investment schemes managed by third parties |
Note 1 | |||||||||||||||
Others managed by affiliated entities Note 2 |
||||||||||||||||
Others managed by third parties Note 2 |
Note 1 |
4 |
RISK MANAGEMENT (continued) |
4.3 |
Disclosures about interest in unconsolidated structured entities (continued) |
(i) |
The unconsolidated structured entities that the Group has interest in (continued) |
Unconsolidated structured entities | ||||||||||||||||
As at 31 December 2020 |
Size RMB Million |
Carrying amount of assets RMB Million |
Maximum exposure RMB Million |
Interest held by the Group |
||||||||||||
Funds managed by affiliated entities |
| |||||||||||||||
Funds managed by third parties |
Note 1 | |||||||||||||||
Trust schemes managed by affiliated entities |
||||||||||||||||
Trust schemes managed by third parties |
Note 1 | |||||||||||||||
Debt investment schemes managed by affiliated entities |
| |||||||||||||||
Debt investment schemes managed by third parties |
Note 1 | |||||||||||||||
Others managed by affiliated entities Note 2 |
| |||||||||||||||
Others managed by third parties Note 2 |
Note 1 |
Note 1: | Funds, trust schemes, debt investment schemes and others managed by third parties were sponsored by third party financial institutions and the information related to size of these structured entities were not publicly available. |
Note 2: | Others included wealth management products, special asset management schemes, and asset-backed plans, etc. |
(ii) |
The unconsolidated structured entities that the Group has sponsored but does not have interest in |
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy |
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy (continued) |
Fair value measurement using |
Total |
|||||||||||||||
Quoted prices in active markets |
Significant observable inputs |
Significant unobservable inputs |
||||||||||||||
Level 1 |
Level 2 |
Level 3 |
||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
|||||||||||||
Assets measured at fair value |
||||||||||||||||
Available-for-sale |
||||||||||||||||
- Equity securities |
||||||||||||||||
Funds |
— | — | ||||||||||||||
Common stocks |
— | |||||||||||||||
Preferred stocks |
— | — | ||||||||||||||
Wealth management products |
— | — | ||||||||||||||
Others |
||||||||||||||||
- Debt securities |
||||||||||||||||
Government bonds |
— | |||||||||||||||
Government agency bonds |
— | |||||||||||||||
Corporate bonds |
— | |||||||||||||||
Subordinated bonds |
— | |||||||||||||||
Others |
— | |||||||||||||||
Securities at fair value through profit or loss |
||||||||||||||||
- Equity securities |
||||||||||||||||
Funds |
— | |||||||||||||||
Common stocks |
— | |||||||||||||||
Others |
— | |||||||||||||||
- Debt securities |
||||||||||||||||
Government bonds |
— | |||||||||||||||
Government agency bonds |
— | |||||||||||||||
Corporate bonds |
||||||||||||||||
Others |
— | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities measured at fair value |
||||||||||||||||
Financial liabilities at fair value through profit or loss |
( |
) | — | — | ( |
) | ||||||||||
Investment contracts at fair value through profit or loss |
( |
) | — | — | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
( |
) |
— |
— |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy (continued) |
Available-for-sale securities |
Securities at fair value through profit or loss |
Total |
||||||||||||||
Debt securities |
Equity securities |
Debt securities |
||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
|||||||||||||
Opening balance |
||||||||||||||||
Purchases |
— | |||||||||||||||
Transfer into Level 3 |
— | — | ||||||||||||||
Total gains/(losses) recorded in other comprehensive income |
( |
) | — | |||||||||||||
Disposals or exercises |
— | ( |
) | — | ( |
) | ||||||||||
Maturity |
( |
) | — | — | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Closing balance |
||||||||||||||||
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy (continued) |
Fair value measurement using | Total | |||||||||||||||
Quoted prices in active markets |
Significant observable inputs |
Significant unobservable inputs |
||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
RMB million | RMB million | RMB million | RMB million | |||||||||||||
Assets measured at fair value |
||||||||||||||||
Available-for-sale |
||||||||||||||||
- Equity securities |
||||||||||||||||
Funds |
— | — | ||||||||||||||
Common stocks |
— | |||||||||||||||
Preferred stocks |
— | — | ||||||||||||||
Wealth management products |
— | — | ||||||||||||||
Others |
||||||||||||||||
- Debt securities |
||||||||||||||||
Government bonds |
— | |||||||||||||||
Government agency bonds |
— | |||||||||||||||
Corporate bonds |
— | |||||||||||||||
Subordinated bonds |
— | |||||||||||||||
Others |
— | |||||||||||||||
Securities at fair value through profit or loss |
||||||||||||||||
- Equity securities |
||||||||||||||||
Funds |
— | |||||||||||||||
Common stocks |
— | |||||||||||||||
Others |
— | |||||||||||||||
- Debt securities |
||||||||||||||||
Government bonds |
— | |||||||||||||||
Government agency bonds |
— | |||||||||||||||
Corporate bonds |
||||||||||||||||
Others |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities measured at fair value |
||||||||||||||||
Financial liabilities at fair value through profit or loss |
( |
) | — | — | ( |
) | ||||||||||
Investment contracts at fair value through profit or loss |
( |
) | — | — | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
( |
) |
— |
— |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy (continued) |
Available-for-sale securities |
Securities at fair value through profit or loss |
Derivative financial assets |
Total |
|||||||||||||||||
Debt securities |
Equity securities |
Debt securities |
||||||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
||||||||||||||||
Opening balance |
||||||||||||||||||||
Purchases |
— | — | ||||||||||||||||||
Total gains/(losses) recorded in profit or loss |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||
Total gains/(losses) recorded in other comprehensive income |
— | — | ||||||||||||||||||
Disposals or exercises |
— | ( |
) | — | ( |
) | ( |
) | ||||||||||||
Maturity |
( |
) | — | — | — | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Closing balance |
— | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
4 |
RISK MANAGEMENT (continued) |
4.4 |
Fair value hierarchy (continued) |
Fair value |
Valuation techniques |
Significant unobservable inputs |
Range |
Relationships between fair value and unobservable inputs | ||||||
Equity securities |
31 December 2021: 31 December 2020: |
31 December 2021: 31 December 2020: |
||||||||
31 December 2021: 31 December 2020: |
N/A | |||||||||
31 December 2021: 31 December 2020: |
31 December 2021: 31 December 2020: |
|||||||||
Debt securities |
31 December 2021: 31 December 2020: |
31 December 2021: 31 December 2020: |
5 |
SEGMENT INFORMATION |
5.1 |
Operating segments |
(i) |
Life insurance business (Life) |
(ii) |
Health insurance business (Health) |
(iii) |
Accident insurance business (Accident) |
(iv) |
Other businesses (Others) |
5.2 |
Allocation basis of income and expenses |
5 |
SEGMENT INFORMATION (continued) |
5.3 |
Allocation basis of assets and liabilities |
For the year ended 31 December 2021 |
||||||||||||||||||||||||
Life |
Health |
Accident |
Others |
Elimination |
Total |
|||||||||||||||||||
RMB million |
||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Gross written premiums |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
- Term life |
— | — | — | — | ||||||||||||||||||||
- Whole life |
— | — | — | — | ||||||||||||||||||||
- Endowment |
— | — | — | — | ||||||||||||||||||||
- Annuity |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
— | — | ||||||||||||||||||||||
Investment income |
— | |||||||||||||||||||||||
Net realised gains on financial assets |
— | |||||||||||||||||||||||
Net fair value gains through profit or loss |
— | |||||||||||||||||||||||
Other income |
— | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment revenue |
— | — | — | ( |
) | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenues |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Benefits, claims and expenses |
||||||||||||||||||||||||
Insurance benefits and claims expenses |
||||||||||||||||||||||||
Life insurance death and other benefits |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Accident and health claims and claim adjustment expenses |
— | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||
Increase in insurance contract liabilities |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Investment contract benefits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Policyholder dividends resulting from participation in profits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Underwriting and policy acquisition costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Finance costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Statutory insurance fund contribution |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment expenses |
( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment benefits, claims and expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net gains on investments of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: share of profit of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment results |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net profit |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Attributable to |
||||||||||||||||||||||||
- Equity holders of the Company |
||||||||||||||||||||||||
- Non-controlling interests |
||||||||||||||||||||||||
Other comprehensive income attributable to equity holders of the Company |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Depreciation and amortisation |
— |
5 |
SEGMENT INFORMATION (continued) |
As at 31 December 2021 |
||||||||||||||||||||||||
Life |
Health |
Accident |
Others |
Elimination |
Total |
|||||||||||||||||||
RMB million |
||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Financial assets |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment assets |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Property, plant and equipment |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Insurance contracts |
— | — | ||||||||||||||||||||||
Investment contracts |
— | — | — | |||||||||||||||||||||
Securities sold under agreements to repurchase |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment liabilities |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
5 |
SEGMENT INFORMATION (continued) |
For the year ended 31 December 2020 | ||||||||||||||||||||||||
Life | Health | Accident | Others | Elimination | Total | |||||||||||||||||||
RMB million | ||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Gross written premiums |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
- Term life |
— | — | — | — | ||||||||||||||||||||
- Whole life |
— | — | — | — | ||||||||||||||||||||
- Endowment |
— | — | — | — | ||||||||||||||||||||
- Annuity |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
— | — | ||||||||||||||||||||||
Investment income |
— | |||||||||||||||||||||||
Net realised gains on financial assets |
— | |||||||||||||||||||||||
Net fair value gains through profit or loss |
— | |||||||||||||||||||||||
Other income |
— | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment revenue |
— | — | — | ( |
) | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenues |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Benefits, claims and expenses |
||||||||||||||||||||||||
Insurance benefits and claims expenses |
||||||||||||||||||||||||
Life insurance death and other benefits |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Accident and health claims and claim adjustment expenses |
— | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||
Increase in insurance contract liabilities |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Investment contract benefits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Policyholder dividends resulting from participation in profits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Underwriting and policy acquisition costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Finance costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Statutory insurance fund contribution |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment expenses |
( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment benefits, claims and expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net gains on investments of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: share of profit of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment results |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax |
( |
) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net profit |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Attributable to |
||||||||||||||||||||||||
- Equity holders of the Company |
||||||||||||||||||||||||
- Non-controlling interests |
||||||||||||||||||||||||
Other comprehensive income attributable to equity holders of the Company |
— | |||||||||||||||||||||||
Depreciation and amortisation |
— |
5 |
SEGMENT INFORMATION (continued) |
As at 31 December 2020 | ||||||||||||||||||||||||
Life | Health | Accident | Others | Elimination | Total | |||||||||||||||||||
RMB million | ||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Financial assets |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment assets |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Property, plant and equipment |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Insurance contracts |
— | — | ||||||||||||||||||||||
Investment contracts |
— | — | — | |||||||||||||||||||||
Securities sold under agreements to repurchase |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment liabilities |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
5 |
SEGMENT INFORMATION (continued) |
For the year ended 31 December 2019 | ||||||||||||||||||||||||
Life | Health | Accident | Others | Elimination | Total | |||||||||||||||||||
RMB million | ||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Gross written premiums |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
- Term life |
— | — | — | — | ||||||||||||||||||||
- Whole life |
— | — | — | — | ||||||||||||||||||||
- Endowment |
— | — | — | — | ||||||||||||||||||||
- Annuity |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
— | — | ||||||||||||||||||||||
Investment income |
— | |||||||||||||||||||||||
Net realised gains on financial assets |
— | |||||||||||||||||||||||
Net fair value gains through profit or loss |
— | |||||||||||||||||||||||
Other income |
— | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment revenue |
— | — | — | ( |
) | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenues |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Benefits, claims and expenses |
||||||||||||||||||||||||
Insurance benefits and claims expenses |
||||||||||||||||||||||||
Life insurance death and other benefits |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Accident and health claims and claim adjustment expenses |
— | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||
Increase in insurance contract liabilities |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Investment contract benefits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Policyholder dividends resulting from participation in profits |
( |
) | ( |
) | — | — | — | ( |
) | |||||||||||||||
Underwriting and policy acquisition costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Finance costs |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Statutory insurance fund contribution |
( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: inter-segment expenses |
( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment benefits, claims and expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net gains on investments of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: share of profit of associates and joint ventures |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment results |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax |
( |
) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net profit |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Attributable to |
||||||||||||||||||||||||
- Equity holders of the Company |
||||||||||||||||||||||||
- Non-controlling interests |
||||||||||||||||||||||||
Other comprehensive income attributable to equity holders of the Company |
— | |||||||||||||||||||||||
Depreciation and amortisation |
— |
5 |
SEGMENT INFORMATION (continued) |
As at 31 December 2019 | ||||||||||||||||||||||||
Life | Health | Accident | Others | Elimination | Total | |||||||||||||||||||
RMB million | ||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Financial assets |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment assets |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Property, plant and equipment |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Insurance contracts |
— | — | ||||||||||||||||||||||
Investment contracts |
— | — | — | |||||||||||||||||||||
Securities sold under agreements to repurchase |
— | |||||||||||||||||||||||
Others |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment liabilities |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unallocated |
||||||||||||||||||||||||
Others |
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
||||||||||||||||||||||||
|
|
6 |
PROPERTY, PLANT AND EQUIPMENT |
Buildings |
Office equipment, furniture and fixtures |
Motor vehicles |
Assets under construction |
Leasehold improvements |
Total |
|||||||||||||||||||
RMB million |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
As at 1 January 2021 |
||||||||||||||||||||||||
Transfers upon completion |
— | — | ( |
) | ( |
) | ||||||||||||||||||
Additions |
— | |||||||||||||||||||||||
Transfers into investment properties |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2021 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||
As at 1 January 2021 |
( |
) |
( |
) |
( |
) |
— |
( |
) |
( |
) | |||||||||||||
Charge for the year |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
Disposals |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2021 |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Impairment |
||||||||||||||||||||||||
As at 1 January 2021 |
( |
) |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||
Charge for the year |
— | — | — | — | — | — | ||||||||||||||||||
Disposals |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2021 |
( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net book value |
||||||||||||||||||||||||
As at 1 January 2021 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2021 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
6 |
PROPERTY, PLANT AND EQUIPMENT (continued) |
Buildings | Office equipment, furniture and fixtures |
Motor vehicles |
Assets under construction |
Leasehold improvements |
Total | |||||||||||||||||||
RMB million | ||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
As at 1 January 2020 |
||||||||||||||||||||||||
Transfers upon completion |
— | ( |
) | ( |
) | |||||||||||||||||||
Additions |
— | |||||||||||||||||||||||
Transfers into investment properties |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2020 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||
As at 1 January 2020 |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
Charge for the year |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
Disposals |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2020 |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Impairment |
||||||||||||||||||||||||
As at 1 January 2020 |
( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||
Charge for the year |
— | — | — | — | — | — | ||||||||||||||||||
Disposals |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2020 |
( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net book value |
||||||||||||||||||||||||
As at 1 January 2020 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December 2020 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
7 |
LEASES |
(a) |
Right-of-use |
Buildings |
Others |
Total |
||||||||||
RMB million |
||||||||||||
Cost |
||||||||||||
As at 1 January 2021 |
||||||||||||
Additions |
||||||||||||
Deductions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
As at 31 December 2021 |
||||||||||||
|
|
|
|
|
|
|||||||
Accumulated depreciation |
||||||||||||
As at 1 January 2021 |
( |
) | ( |
) | ( |
) | ||||||
Charge for the year |
( |
) | ( |
) | ( |
) | ||||||
Deductions |
||||||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2021 |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Impairment |
||||||||||||
As at 1 January 2021 |
— |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2021 |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Net book value |
||||||||||||
As at 1 January 2021 |
||||||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2021 |
||||||||||||
|
|
|
|
|
|
7 |
LEASES (continued) |
(a) |
Right-of-use |
Buildings | Others | Total | ||||||||||
RMB million | ||||||||||||
Cost |
||||||||||||
As at 1 January 2020 |
||||||||||||
Additions |
||||||||||||
Deductions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
As at 31 December 2020 |
||||||||||||
|
|
|
|
|
|
|||||||
Accumulated depreciation |
||||||||||||
As at 1 January 2020 |
( |
) | ( |
) | ( |
) | ||||||
Charge for the year |
( |
) | ( |
) | ( |
) | ||||||
Deductions |
||||||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2020 |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Impairment |
||||||||||||
As at 1 January 2020 |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2020 |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Net book value |
||||||||||||
As at 1 January 2020 |
||||||||||||
|
|
|
|
|
|
|||||||
As at 31 December 2020 |
||||||||||||
|
|
|
|
|
|
(b) |
The amounts recognised in profit or loss in relation to leases are as follows: |
As at 31 | As at 31 | |||||||
31 December |
31 December 2020 | |||||||
RMB million | RMB million | |||||||
Interest on lease liabilities |
||||||||
Depreciation charge of right-of-use |
||||||||
Expense relating to short-term leases |
||||||||
Expense relating to leases of low-value assets(except for short-term lease liabilities) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
8 |
INVESTMENT PROPERTIES |
Buildings RMB million |
||||
Cost |
||||
As at 1 January 2021 |
||||
Additions |
( |
) | ||
|
|
|||
As at 31 December 2021 |
||||
|
|
|||
Accumulated depreciation |
||||
As at 1 January 2021 |
( |
) | ||
Additions |
( |
) | ||
|
|
|||
As at 31 December 2021 |
( |
) | ||
|
|
|||
Net book value |
||||
As at 1 January 2021 |
||||
|
|
|||
As at 31 December 2021 |
||||
|
|
|||
Fair value |
||||
As at 1 January 2021 |
||||
|
|
|||
As at 31 December 2021 |
||||
|
|
Buildings RMB million |
||||
Cost |
||||
As at 1 January 2020 |
||||
Additions |
||||
|
|
|||
As at 31 December 2020 |
||||
|
|
|||
Accumulated depreciation |
||||
As at 1 January 2020 |
( |
) | ||
Additions |
( |
) | ||
|
|
|||
As at 31 December 2020 |
( |
) | ||
|
|
|||
Net book value |
||||
As at 1 January 2020 |
||||
|
|
|||
As at 31 December 2020 |
||||
|
|
|||
Fair value |
||||
As at 1 January 2020 |
||||
|
|
|||
As at 31 December 2020 |
||||
|
|
8 |
INVESTMENT PROPERTIES (continued) |
9 |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES |
2021 RMB million |
2020 RMB million |
|||||||
As at 1 January |
||||||||
Change of the cost |
||||||||
Share of profit or loss |
||||||||
Declared dividends |
( |
) | ( |
) | ||||
Other equity movements |
||||||||
Impairment |
— | ( |
) | |||||
|
|
|
|
|||||
As at 31 December |
||||||||
|
|
|
|
9 |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Movement | ||||||||||||||||||||||||||||||||||||||||||
Accounting method |
Cost | As at 31 December 2020 |
Change of the cost |
Share of profit or loss |
Declared dividends |
Other equity movements |
Provision of impairment |
As at 31 December 2021 |
Percentage of equity interest |
Accumulated amount of impairment |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
RMB Million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RMB |
| ||||||||||
Associates |
||||||||||||||||||||||||||||||||||||||||||
China Guangfa Bank Co., Ltd. (“CGB”) (i) |
— | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||||
Sino-Ocean Group Holding Limited (“Sino-Ocean”) (ii) |
— | ( |
) | — | % | ( |
) | |||||||||||||||||||||||||||||||||||
China Life Property & Casualty Insurance Company Limited (“CLP&C”) |
— | ( |
) | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||
COFCO Futures Company Limited (“COFCO Futures”) |
— | ( |
) | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||
Sinopec Sichuan to East China Gas Pipeline Co., Ltd. (“Pipeline Company”) |
— | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||||
China United Network Communications Limited (“China Unicom”) (iii) |
— | ( |
) | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||
Others (iv) |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Subtotal |
( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Joint ventures |
||||||||||||||||||||||||||||||||||||||||||
Joy City Commercial Property Fund L.P. (“Joy City”) |
— | ( |
) | — | % | — | ||||||||||||||||||||||||||||||||||||
Mapleleaf Century Limited (“MCL”) |
— | ( |
) | — | — | % | — | |||||||||||||||||||||||||||||||||||
Others (iv) |
( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Subtotal |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
(i) | The 2020 final dividend of RMB |
(ii) | The 2020 final dividend of HKD 2021 . The Company received a cash dividend equivalent to RMB |
(iii) |
The 2020 final dividend of RMB |
(iv) |
The Group invested in real estate, industrial logistics assets and other industries through these enterprises. |
(v) |
There is no significant restriction for the Group to dispose of its other associates and joint ventures. |
9 |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Name |
Place of incorporation |
Percentage of equity interest held |
||||
Associates |
||||||
CGB |
% | |||||
Sino-Ocean |
% | |||||
CLP&C |
% | |||||
COFCO Futures |
% | |||||
Pipeline Company |
% | |||||
China Unicom |
% | |||||
Joint ventures |
||||||
Joy City |
% | |||||
MCL |
% |
Name |
Place of incorporation |
Percentage of equity interest held |
||||
Associates |
||||||
CGB |
% | |||||
Sino-Ocean |
% | |||||
CLP&C |
% | |||||
COFCO Futures |
% | |||||
Pipeline Company |
% | |||||
China Unicom |
% | |||||
Joint ventures |
||||||
Joy City |
% | |||||
MCL |
% |
9 |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
CGB |
Sino-Ocean |
CLP&C |
COFCO Futures |
Pipeline Company |
China Unicom |
Joy City |
MCL |
|||||||||||||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
|||||||||||||||||||||||||
Total assets |
||||||||||||||||||||||||||||||||
Total liabilities |
||||||||||||||||||||||||||||||||
Total equity |
||||||||||||||||||||||||||||||||
Total equity attributable to equity holders of the associates and joint ventures |
||||||||||||||||||||||||||||||||
Total adjustments (i) |
( |
) | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||
Total equity attributable to equity holders of the associates and joint ventures after adjustments |
||||||||||||||||||||||||||||||||
Proportion of the Group’s ownership |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Gross carrying value of the investments |
||||||||||||||||||||||||||||||||
Impairment |
— | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||
Net carrying value of the investments |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
||||||||||||||||||||||||||||||||
Net profit/(loss) |
||||||||||||||||||||||||||||||||
Other comprehensive income |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||
Total comprehensive income |
( |
) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
CGB | Sino-Ocean | CLP&C | COFCO Futures | Pipeline Company | China Unicom | Joy City | MCL | |||||||||||||||||||||||||
RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | |||||||||||||||||||||||||
Total assets |
||||||||||||||||||||||||||||||||
Total liabilities |
||||||||||||||||||||||||||||||||
Total equity |
||||||||||||||||||||||||||||||||
Total equity attributable to equity holders of the associates and joint ventures |
||||||||||||||||||||||||||||||||
Total adjustments (i) |
( |
) | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||
Total equity attributable to equity holders of the associates and joint ventures after adjustments |
||||||||||||||||||||||||||||||||
Proportion of the Group’s ownership |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Gross carrying value of the investments |
||||||||||||||||||||||||||||||||
Impairment |
— | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||
Net carrying value of the investments |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
||||||||||||||||||||||||||||||||
Net profit/(loss) |
||||||||||||||||||||||||||||||||
Other comprehensive income |
( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||||
Total comprehensive income |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) | Including adjustments for the difference of accounting policies, fair value and others. |
10 |
FINANCIAL ASSETS |
10.1 |
Held-to-maturity |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Debt securities |
||||||||
Government bonds |
||||||||
Government agency bonds |
||||||||
Corporate bonds |
||||||||
Subordinated bonds |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Debt securities |
||||||||
Listed in Mainland, PRC |
||||||||
Listed in Hong Kong, PRC |
||||||||
Listed overseas |
||||||||
Unlisted (i) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | Unlisted debt securities include those traded on the Chinese interbank market. |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
Debt securities - fair value hierarchy |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
||||||||||||||||||
Government bonds |
||||||||||||||||||||||||
Government agency bonds |
||||||||||||||||||||||||
Corporate bonds |
||||||||||||||||||||||||
Subordinated bonds |
— | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities - Contractual maturity schedule |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
||||||
Maturing: |
||||||||
Within one year |
|
|
|
|
|
|
|
|
After one year but within five years |
||||||||
After five years but within ten years |
||||||||
After ten years |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10 |
FINANCIAL ASSETS (continued) |
10.2 |
Loans |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Policy loans (i) |
||||||||
Other loans |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Impairment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net value |
||||||||
|
|
|
|
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Maturing: |
||||||||
Within one year |
||||||||
After one year but within five years |
||||||||
After five years but within ten years |
||||||||
After ten years |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Impairment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net value |
||||||||
|
|
|
|
(i) | As at 31 December 2021, maturities of policy loans were within 6 months (as at 31 December 2020: same). |
10.3 |
Term deposits |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Maturing: |
||||||||
Within one year |
||||||||
After one year but within five years |
||||||||
After five years but within ten years |
— | |||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10 |
FINANCIAL ASSETS (continued) |
10.4 |
Statutory deposits - restricted |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Contractual maturity schedule: |
||||||||
Within one year |
— | |||||||
After one year but within five years |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10.5 |
Available-for-sale |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Available-for-sale |
||||||||
Debt securities |
||||||||
Government bonds |
||||||||
Government agency bonds |
||||||||
Corporate bonds |
||||||||
Subordinated bonds |
||||||||
Others (i) |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Equity securities |
||||||||
Funds |
||||||||
Common stocks |
||||||||
Preferred stocks |
||||||||
Wealth management products |
||||||||
Others (i) |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Available-for-sale |
||||||||
Equity securities |
||||||||
Others (i) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | Other available-for-sale |
10 |
FINANCIAL ASSETS (continued) |
10.5 |
Available-for-sale |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Debt securities |
||||||||
Listed in Mainland, PRC |
||||||||
Unlisted |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Equity securities |
||||||||
Listed in Mainland, PRC |
||||||||
Listed in Hong Kong, PRC |
||||||||
Listed overseas |
||||||||
Unlisted |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
Debt securities - Contractual maturity schedule |
RMB million |
RMB million | ||||||
Maturing: |
||||||||
Within one year |
||||||||
After one year but within five years |
||||||||
After five years but within ten years |
||||||||
After ten years |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10 |
FINANCIAL ASSETS (continued) |
10.6 |
Securities at fair value through profit or loss |
As at 31December 2021 |
As at 31December 2020 |
|||||||
RMB million |
RMB million | |||||||
Debt securities |
||||||||
Government bonds |
||||||||
Government agency bonds |
||||||||
Corporate bonds |
||||||||
Others |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Equity securities |
||||||||
Funds |
||||||||
Common stocks |
||||||||
Others |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Debt securities |
||||||||
Listed in Mainland, PRC |
||||||||
Listed in Hong Kong, PRC |
||||||||
Listed overseas |
||||||||
Unlisted |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Equity securities |
||||||||
Listed in Mainland, PRC |
||||||||
Listed in Hong Kong, PRC |
||||||||
Listed overseas |
||||||||
Unlisted |
||||||||
Subtotal |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10 |
FINANCIAL ASSETS (continued) |
10.7 |
Securities purchased under agreements to resell |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Maturing: |
||||||||
Within 30 days |
||||||||
Above 30 days |
— | |||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10.8 |
Accrued investment income |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Bank deposits |
||||||||
Debt securities |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Current |
||||||||
Non-current |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
11 |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES |
Carrying value | Estimated fair value (i) | |||||||||||||||
As at 31 December 2021 |
As at 31 December 2020 |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||||||||
RMB million |
RMB million | RMB million |
RMB million | |||||||||||||
Held-to-maturity |
||||||||||||||||
Loans (iii) |
||||||||||||||||
Term deposits |
||||||||||||||||
Statutory deposits - restricted |
||||||||||||||||
Available-for-sale |
||||||||||||||||
Securities at fair value through profit or loss |
||||||||||||||||
Securities purchased under agreements to resell |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Investment contracts (iii) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Financial liabilities at fair value through profit or loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Securities sold under agreements to repurchase |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Bonds payable |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest-bearing loans and borrowings |
( |
) | ( |
) | ( |
) | ( |
) |
(i) | The estimates and judgements to determine the fair value of financial assets are described in Note 3.2. |
(ii) | The fair value of held-to-maturity |
(iii) | Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore, their fair value was classified as Level 1. |
12 |
PREMIUMS RECEIVABLE |
13 |
REINSURANCE ASSETS |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Long-term insurance contracts ceded (Note 15) | ||||||||
Due from reinsurance companies | ||||||||
Ceded unearned premiums (Note 15) | ||||||||
Claims recoverable from reinsurers (Note 15) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Current | ||||||||
Non-current |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
14 |
OTHER ASSETS |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Investments receivable and prepaid | ||||||||
Land use rights(i) | ||||||||
Disbursements | ||||||||
Automated policy loans | ||||||||
Tax prepaid | ||||||||
Due from related parties | ||||||||
Prepayments to constructors | ||||||||
Others | ||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Current | ||||||||
Non-current |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | The Group’s right-of-use right-of-use |
15 |
INSURANCE CONTRACTS |
(a) |
Process used to decide on assumptions |
(i) | For the insurance contracts of which future insurance benefits are affected by investment yields of the corresponding investment portfolios, the discount rate assumption is based on expected investment returns of the asset portfolio backing these liabilities, considering the impacts of time value on reserves. |
Discount rate assumptions |
||||
As at 31 December 2021 |
% | |||
As at 31 December 2020 |
% |
Discount rate assumptions |
||||
As at 31 December 2021 |
% | |||
As at 31 December 2020 |
% |
(ii) | The mortality and morbidity assumptions are based on the Group’s historical mortality and morbidity experience. The assumed mortality rates and morbidity rates vary with the age of the insured and contract type. |
15 |
INSURANCE CONTRACTS (continued) |
(a) |
Process used to decide on assumptions (continued) |
(iii) | Expense assumptions are based on expected unit costs with the consideration of previous expense studies and future trends. Expense assumptions are affected by certain factors such as future inflation and market competition which bring uncertainty to these assumptions. The Group determines expense assumptions based on information obtained at the end of each reporting period and risk margin. Components of expense assumptions include the cost per policy and percentage of premium as follows: |
Individual Life |
Group Life |
|||||||||||||||
RMB Per Policy |
% of Premium |
RMB Per Policy |
% of Premium |
|||||||||||||
As at 31 December 2021 |
% | % | ||||||||||||||
As at 31 December 2020 |
% | % |
(iv) | The lapse rates and other assumptions are affected by certain factors, such as future macro-economy, availability of financial substitutions, and market competition, which bring uncertainty to these assumptions. The lapse rates and other assumptions are determined with reference to creditable past experience, current conditions, future expectations and other information. |
(v) | The Group applies a consistent method to determine risk margin. The Group considers risk margin for the discount rate, mortality and morbidity and expense assumptions to compensate for the uncertain amount and timing of future cash flows. When determining risk margin, the Group considers historical experience, future expectations and other factors. The Group determines the risk margin level by itself as the regulations have not imposed any specific requirement on it. |
(b) |
Net liabilities of insurance contracts |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Gross |
||||||||
Long-term insurance contracts |
||||||||
Short-term insurance contracts |
||||||||
- Claims and claim adjustment expenses |
||||||||
- Unearned premiums |
||||||||
|
|
|
|
|||||
Total, gross |
||||||||
|
|
|
|
|||||
Recoverable from reinsurers |
||||||||
Long-term insurance contracts (Note 13) |
( |
) | ( |
) | ||||
Short-term insurance contracts |
||||||||
- Claims and claim adjustment expenses (Note 13) |
( |
) | ( |
) | ||||
- Unearned premiums (Note 13) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total, ceded |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net |
||||||||
Long-term insurance contracts |
||||||||
Short-term insurance contracts |
||||||||
- Claims and claim adjustment expenses |
||||||||
- Unearned premiums |
||||||||
|
|
|
|
|||||
Total, net |
||||||||
|
|
|
|
15 |
INSURANCE CONTRACTS (continued) |
(c) |
Movements in liabilities of short-term insurance contracts |
2021 RMB million |
2020 RMB million |
|||||||
Notified claims |
||||||||
Incurred but not reported |
||||||||
|
|
|
|
|||||
Total as at 1 January - Gross |
||||||||
|
|
|
|
|||||
Cash paid for claims settled |
||||||||
- Cash paid for current year claims |
( |
) | ( |
) | ||||
- Cash paid for prior year claims |
( |
) | ( |
) | ||||
Claims incurred |
||||||||
- Claims arising in current year |
||||||||
- Claims arising in prior years |
( |
) | ||||||
|
|
|
|
|||||
Total as at 31 December - Gross |
||||||||
|
|
|
|
|||||
Notified claims |
||||||||
Incurred but not reported |
||||||||
|
|
|
|
|||||
Total as at 31 December - Gross |
||||||||
|
|
|
|
2021 |
2020 | |||||||||||||||||||||||
RMB million |
RMB million | |||||||||||||||||||||||
Gross |
Ceded |
Net |
Gross | Ceded | Net | |||||||||||||||||||
As at 1 January |
( |
) |
( |
) | ||||||||||||||||||||
Increase |
( |
) | ( |
) | ||||||||||||||||||||
Release |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As at 31 December |
( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
15 |
INSURANCE CONTRACTS (continued) |
(d) |
Movements in liabilities of long-term insurance contracts |
2021 |
2020 | |||||||
RMB million |
RMB million | |||||||
As at 1 January |
||||||||
Premiums |
||||||||
Release of liabilities (i) |
( |
) | ( |
) | ||||
Accretion of interest |
||||||||
Change in assumptions |
||||||||
- Change in discount rates |
||||||||
- Change in other assumptions (ii) |
||||||||
Other movements |
( |
) | ||||||
|
|
|
|
|||||
As at 31 December |
||||||||
|
|
|
|
(i) | The release of liabilities mainly consists of release due to death or other benefits and related expenses, release of residual margin and change of reserves for claims and claim adjustment expenses. |
(ii) | For the year ended 31 December 2021, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain products, which increased insurance contract liabilities by RMB |
16 |
INVESTMENT CONTRACTS |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Investment contracts with DPF at amortised cost |
||||||||
Investment contracts without DPF |
||||||||
- At amortised cost |
||||||||
- At fair value through profit or loss |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
2021 |
2020 | |||||||
RMB million |
RMB million | |||||||
As at 1 January |
||||||||
Deposits received |
||||||||
Deposits withdrawn, payments on death and other benefits |
( |
) | ( |
) | ||||
Policy fees deducted from account balances |
( |
) | ( |
) | ||||
Interest credited |
||||||||
|
|
|
|
|||||
As at 31 December |
||||||||
|
|
|
|
17 |
INTEREST-BEARING LOANS AND BORROWINGS |
Maturity date |
Interest rate |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||||||||
Credit loans |
% | |||||||||||||||
Guaranteed loans |
% | |||||||||||||||
Guaranteed loans |
%(i) | |||||||||||||||
Guaranteed loans |
% | |||||||||||||||
Credit loans |
% | |||||||||||||||
Credit loans |
% | |||||||||||||||
Credit loans |
%(ii) | |||||||||||||||
|
|
|
|
|||||||||||||
Total |
||||||||||||||||
|
|
|
|
(i) | |
(ii) | |
18 |
BONDS PAYABLE |
Issue date | Maturity date | Interest rate p.a. | As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
||||||||||||
|
% | |||||||||||||||
|
|
|
|
|||||||||||||
Total |
|
|||||||||||||||
|
|
|
|
19 |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Interbank market |
||||||||
Stock exchange market |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Maturing: |
||||||||
Within 30 days |
||||||||
More than 30 days within 90 days |
||||||||
After 90 days |
— | |||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
20 |
OTHER LIABILITIES |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Payable to the third-party holders of consolidated structured entities |
||||||||
Interest payable to policyholders |
||||||||
Salary and welfare payable |
||||||||
Brokerage and commission payable |
||||||||
Payable to constructors |
||||||||
Agency deposits |
||||||||
Interest payable of debt instruments |
||||||||
Tax payable |
||||||||
Stock appreciation rights (Note 31 ) |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Current |
||||||||
Non-current |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
21 |
STATUTORY INSURANCE FUND |
22 |
INVESTMENT INCOME |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Debt securities |
||||||||||||
- held-to-maturity |
||||||||||||
- available-for-sale |
||||||||||||
- at fair value through profit or loss |
||||||||||||
Equity securities |
||||||||||||
- available-for-sale |
||||||||||||
- at fair value through profit or loss |
||||||||||||
Bank deposits |
||||||||||||
Loans |
||||||||||||
Securities purchased under agreements to resell |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
23 |
NET REALISED GAINS ON FINANCIAL ASSETS |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Debt securities |
||||||||||||
Realised gains (i) |
||||||||||||
Impairment (ii) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Equity securities |
||||||||||||
Realised gains (i) |
||||||||||||
Impairment (ii) |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Subtotal |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
23 |
NET REALISED GAINS ON FINANCIAL ASSETS (continued) |
(i) | Realised gains were generated mainly from available-for-sale |
(ii) | During the year ended 31 December 2021, the Group recognised an impairment charge of RMB available-for-sale million, 2019: RMB million on available-for-sale stock securities (2020: RMB million, 2019: RMB impairment charge on available-for-sale other equity securities (2020: RMB million, 2019: million on available-for-sale debt securities (2020: an impairment reversal of RMB million, 2019: an impairment charge of RMB million); an impairment charge of RMB million on loans (2020: an impairment reversal of RMB million, 2019: an impairment charge of RMB million, 2019: RMB |
24 |
NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Debt securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
Equity securities |
||||||||||||
Stock appreciation rights |
( |
) | ||||||||||
Financial liabilities at fair value through profit or loss |
( |
) | ( |
) | ||||||||
Derivative financial instruments |
— | ( |
) | |||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
25 |
INSURANCE BENEFITS AND CLAIMS EXPENSES |
Gross |
Ceded |
Net |
||||||||||
RMB million |
RMB million |
RMB million |
||||||||||
For the year ended 31 December 2021 |
||||||||||||
Life insurance death and other benefits |
( |
) | ||||||||||
Accident and health claims and claim adjustment expenses |
( |
) | ||||||||||
Increase in insurance contract liabilities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
For the year ended 31 December 2020 |
||||||||||||
Life insurance death and other benefits |
( |
) | ||||||||||
Accident and health claims and claim adjustment expenses |
( |
) | ||||||||||
Increase in insurance contract liabilities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
For the year ended 31 December 2019 |
||||||||||||
Life insurance death and other benefits |
( |
) | ||||||||||
Accident and health claims and claim adjustment expenses |
( |
) | ||||||||||
Increase in insurance contract liabilities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total |
( |
) | ||||||||||
|
|
|
|
|
|
26 |
INVESTMENT CONTRACT BENEFITS |
27 |
FINANCE COSTS |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Interest expenses for securities sold under agreements to repurchase |
||||||||||||
Interest expenses for bonds payable |
||||||||||||
Interest expenses for interest-bearing loans and borrowings |
||||||||||||
Interest on lease liabilities |
||||||||||||
Total |
||||||||||||
28 |
PROFIT BEFORE INCOME TAX |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Employee salaries and welfare costs |
||||||||||||
Housing benefits |
||||||||||||
Contribution to the defined contribution pension plan |
||||||||||||
Depreciation and amortisation |
||||||||||||
Foreign exchange gains |
( |
) | ( |
) | ||||||||
Remuneration in respect of audit services provided by auditors |
29 |
TAXATION |
(a) |
The amount of taxation charged to net profit represents: |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Current taxation - Enterprise income tax |
||||||||||||
Deferred taxation |
( |
) | ( |
) | ||||||||
Total tax charges |
( |
) | ||||||||||
(b) |
The reconciliation between the Group’s effective tax rate and the statutory tax rate of |
For the year ended 31 December |
||||||||||||
2021 |
2020 | 2019 | ||||||||||
RMB million |
RMB million | RMB million | ||||||||||
Profit before income tax |
||||||||||||
Tax computed at the statutory tax rate |
||||||||||||
Adjustment on current income tax of previous period |
( |
) | ( |
) | ( |
) | ||||||
Non-taxable income (i) |
( |
) | ( |
) | ( |
) | ||||||
Expenses not deductible for tax purposes (i) |
||||||||||||
Unused tax losses |
||||||||||||
Others |
( |
) | ||||||||||
Income tax at the effective tax rate |
( |
) | ||||||||||
29 |
TAXATION (continued) |
(b) |
The reconciliation between the Group’s effective tax rate and the statutory tax rate of |
(i) | Non-taxable income mainly includes interest income from government bonds, dividend income from applicable equity securities, etc. Expenses not deductible for tax purposes mainly include donations and other expenses that do not meet the criteria for deduction according to the relevant tax regulations. |
(c) |
As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows: |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Deferred tax assets |
||||||||
Deferred tax liabilities |
( |
) | ( |
) | ||||
Net deferred tax assets |
||||||||
Net deferred tax liabilities |
( |
) | ( |
) | ||||
Insurance RMB million |
Investments RMB million |
Others RMB million |
Total RMB million |
|||||||||||||
(i) | (ii) | (iii) | ||||||||||||||
As at 1 January 2020 |
( |
) | ( |
) | ||||||||||||
(Charged)/Credited to net profit |
( |
) | ||||||||||||||
(Charged)/Credited to other comprehensive income |
||||||||||||||||
- Available-for-sale |
— | ( |
) | — | ( |
) | ||||||||||
- Portion of fair value changes on available-for-sale |
— | — | ||||||||||||||
- Others |
— | ( |
) | — | ( |
) | ||||||||||
As at 31 December 2020 |
( |
) | ( |
) | ||||||||||||
As at 1 January 2021 |
( |
) | ( |
) | ||||||||||||
(Charged)/Credited to net profit |
||||||||||||||||
(Charged)/Credited to other comprehensive income |
||||||||||||||||
- Available-for-sale |
— | — | ||||||||||||||
- Portion of fair value changes on available-for-sale |
— | — | ||||||||||||||
- Others |
— | ( |
) | — | ( |
) | ||||||||||
As at 31 December 2021 |
( |
) | ( |
) | ||||||||||||
29 |
TAXATION (continued) |
(c) |
As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows (continued): |
(i) | The deferred tax liabilities arising from the insurance category are mainly related to the change of long-term insurance contract liabilities at 31 December 2008 as a result of the first time adoption of IFRSs in 2009 and the temporary differences of short-term insurance contract liabilities and policyholder dividends payable. |
(ii) | The deferred tax arising from the investments category is mainly related to the temporary differences of unrealised gains/(losses) on available-for-sale |
(iii) | The deferred tax arising from the others category is mainly related to the temporary differences of employee salaries and welfare costs payable. |
(d) |
The analysis of net deferred tax assets and deferred tax liabilities is as follows: |
As at 31 December 2021 RMB million |
As at 31 December 2020 RMB million |
|||||||
Deferred tax assets: |
||||||||
- deferred tax assets to be recovered after 12 months |
||||||||
- deferred tax assets to be recovered within 12 months |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
- deferred tax liabilities to be settled after 12 months |
( |
) | ( |
) | ||||
- deferred tax liabilities to be settled within 12 months |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Subtotal |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax liabilities |
( |
) | ( |
) | ||||
|
|
|
|
30 |
EARNINGS PER SHARE |
31 |
STOCK APPRECIATION RIGHTS |
32 |
DIVIDENDS |
33 |
DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 |
(a) |
The tables below present the fair value of the following groups and fair value changes for the years of major financial assets (i) under IFRS 9: |
For the year ended 31 December |
||||||||
2021 RMB million |
2020 RMB million |
|||||||
Held for trading financial assets |
||||||||
Financial assets that are managed and whose performance are evaluated on a fair value basis |
— | — | ||||||
Other financial assets |
||||||||
- Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”) |
||||||||
- Financial assets with contractual terms that do not give rise to SPPI |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
Fair value changes for the year ended 31 December |
||||||||
2021 RMB million |
2020 RMB million |
|||||||
|
|
|
|
|||||
Held for trading financial assets |
||||||||
Financial assets that are managed and whose performance are evaluated on a fair value basis |
— | — | ||||||
Other financial assets |
||||||||
-Financial assets with contractual terms that give rise to SPPI |
( |
) | ||||||
-Financial assets with contractual terms that do not give rise to SPPI |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale held-to-maturity |
|
33 |
DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued) |
(b) |
The table below presents the credit risk exposure (ii) for aforementioned financial assets with contractual terms that give rise to SPPI: |
Carrying amount (iii) |
||||||||
As at 31 December 2021 RMB Million |
As at 31 December 2020 RMB Million |
|||||||
Domestic |
||||||||
Rating not required (iv) |
||||||||
AAA |
||||||||
AA+ |
||||||||
AA |
||||||||
AA- |
||||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Overseas |
||||||||
A+ |
||||||||
A |
||||||||
A- |
||||||||
BBB+ |
||||||||
BBB- |
— | |||||||
Not rated |
— | |||||||
|
|
|
|
|||||
Subtotal |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(c) |
The table below presents financial assets without low credit risk for aforementioned financial assets with contractual terms that give rise to SPPI: |
As at 31 December 2021 |
||||||||
Carrying amount (iii) RMB Million |
Fair value RMB Million |
|||||||
Domestic |
||||||||
Overseas |
— | — | ||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As at 31 December 2020 | ||||||||
Carrying amount (iii) RMB Million |
Fair value RMB Million |
|||||||
Domestic |
||||||||
Overseas |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(ii) | Credit risk ratings for domestic assets are provided by domestic qualified external rating agencies and credit risk ratings for overseas assets are provided by overseas qualified external rating agencies. |
(iii) | For financial assets measured at amortised cost, the carrying amount before adjusting impairment allowance is disclosed here. |
(iv) | Mainly including government bonds and policy financial bonds. |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS |
(a) |
Related parties with control relationship |
Name |
Location of registration |
Principal business |
Relationship with the Company |
Nature of ownership |
Legal representative | |||||
(the change of registration with the department in charge of industrial and commercial administration is in progress) |
(b) |
Subsidiaries |
(c) |
Associates and joint ventures |
(d) |
Other related parties |
Significant related parties |
Relationship with the Company | |
China Life Real Estate Co., Limited (“CLRE”) | ||
China Life Insurance (Overseas) Company Limited (“CL Overseas”) |
||
China Life Investment Management Company Limited (Formerly known as “China Life Investment Holding Company Limited”)(“CLI”) | ||
China Life Ecommerce Company Limited (“CL Ecommerce”) | ||
China Life Healthcare Investment company limited (“CLHI”) | ||
China Life Enterprise Annuity Fund (“EAP”) |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(e) |
Registered capital of related parties with control relationship and changes during the year |
Name of related party |
As at 31 December 2020 million |
Increase million |
Decrease million |
As at 31 December 2021 million |
||||||||||||
CLIC |
RMB |
— | — | RMB |
||||||||||||
AMC |
RMB |
— | — | RMB |
||||||||||||
China Life Pension Company Limited (“Pension Company”) |
RMB |
— | — | RMB |
||||||||||||
China Life (Suzhou) Pension and Retirement Investment Company Limited (“Suzhou Pension Company”) |
RMB |
— | RMB |
|||||||||||||
CL AMP |
RMB |
— | — | RMB |
||||||||||||
CL Wealth |
RMB |
— | — | RMB |
||||||||||||
Shanghai Rui Chong Investment Co., Limited (“Rui Chong Company”) |
RMB |
— | RMB |
|||||||||||||
China Life (Beijing) Health Management Co., Limited (“CL Health”) |
RMB |
— | — | RMB |
||||||||||||
China Life Franklin (Shenzhen) Equity Investment Fund Management Co., Limited (“Franklin Shenzhen Company”) |
USD |
— | — | USD |
||||||||||||
Xi’an Shengyi Jingsheng Real Estate Co., Ltd. (“Shengyi Jingsheng”) |
RMB |
— | — | RMB |
||||||||||||
Dalian Hope Building Company Ltd. (“Hope Building”) |
RMB |
— | — | RMB |
(f) |
Percentages of holding of related parties with control relationship and changes during the year |
As at 31 December 2020 |
As at 31 December 2021 |
|||||||||||||||||||||||
Shareholder |
Amount million |
Percentage of holding |
Increase million |
Decrease million |
Amount million |
Percentage of holding |
||||||||||||||||||
CLIC |
RMB |
— |
— |
RMB |
As at 31 December 2020 |
As at 31 December 2021 |
|||||||||||||||||||||||
Subsidiaries |
Amount million |
Percentage of holding |
Increase million |
Decrease million |
Amount million |
Percentage of holding |
||||||||||||||||||
AMC |
RMB |
— |
— |
RMB |
||||||||||||||||||||
Pension Company |
RMB |
and indirectly |
— |
— |
RMB |
and indirectly |
||||||||||||||||||
China Life Franklin Asset Management Company Limited (“AMC HK”) |
HKD |
— |
— |
HKD |
||||||||||||||||||||
Suzhou Pension Company |
RMB |
— |
RMB |
|||||||||||||||||||||
CL AMP |
RMB |
— |
— |
RMB |
||||||||||||||||||||
CL Wealth |
RMB |
— |
— |
RMB |
||||||||||||||||||||
Golden Phoenix Tree Limited |
— |
— |
— |
— |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(f) |
Percentages of holding of related parties with control relationship and changes during the year (continued) |
Subsidiaries |
As at 31 December 2020 |
As at 31 December 2021 |
||||||||||||||||||||||
Amount million |
Percentage of holding |
Increase million |
Decrease million |
Amount million |
Percentage of holding |
|||||||||||||||||||
King Phoenix Tree Limited |
— | — | — | — | ||||||||||||||||||||
Rui Chong Company |
RMB |
— | RMB |
|||||||||||||||||||||
New Aldgate Limited |
RMB |
— | — | RMB |
||||||||||||||||||||
Glorious Fortune Forever Limited |
— | — | — | — | ||||||||||||||||||||
CL Hotel Investor, L.P. |
RMB |
— | RMB |
|||||||||||||||||||||
Golden Bamboo Limited |
RMB |
— | — | RMB |
||||||||||||||||||||
Sunny Bamboo Limited |
RMB |
— | — | RMB |
||||||||||||||||||||
Fortune Bamboo Limited |
RMB |
— | — | RMB |
||||||||||||||||||||
China Century Core Fund Limited |
USD |
— | — | USD |
||||||||||||||||||||
CL Health |
RMB |
— | — | RMB |
||||||||||||||||||||
Franklin Shenzhen Company |
USD |
— | — | USD |
||||||||||||||||||||
Guo Yang Guo Sheng |
RMB |
— | — | RMB |
||||||||||||||||||||
New Capital Wisdom Limited |
— | — | — | — | ||||||||||||||||||||
New Fortune Wisdom Limited |
— | — | — | — | ||||||||||||||||||||
Wisdom Forever Limited Partnership |
USD |
— | — | USD |
||||||||||||||||||||
Shanghai Yuan Shu Yuan Jiu Investment Management Partnership (Limited Partnership) (“Yuan Shu Yuan Jiu”) |
RMB |
— | — | RMB |
||||||||||||||||||||
Shanghai Yuan Shu Yuan Pin Investment Management Partnership (Limited Partnership) (“Yuan Shu Yuan Pin”) |
RMB |
— | — | RMB |
||||||||||||||||||||
Shanghai Wansheng Industry Partnership (Limited Partnership) (“Shanghai Wansheng”) |
RMB |
— | RMB |
|||||||||||||||||||||
Ningbo Meishan Bonded Port Area Bai Ning Investment Partnership (Limited Partnership) (“Bai Ning”) |
RMB |
— | — | RMB |
||||||||||||||||||||
Hope Building |
RMB |
— | — | RMB |
||||||||||||||||||||
Wuhu Yuanxiang Tianfu Investment Management Partnership (Limited Partnership) (“Yuanxiang Tianfu”) |
RMB |
— | RMB |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(f) |
Percentages of holding of related parties with control relationship and changes during the year (continued) |
As at 31 December 2020 |
As at 31 December 2021 |
|||||||||||||||||||||||
Subsidiaries |
Amount million |
Percentage of holding |
Increase million |
Decrease million |
Amount million |
Percentage of holding |
||||||||||||||||||
Wuhu Yuanxiang Tianyi Investment Management Partnership (Limited Partnership) (“Yuanxiang Tianyi”) |
RMB |
— | RMB |
|||||||||||||||||||||
Shengyi Jingsheng |
RMB |
— | RMB |
|||||||||||||||||||||
CBRE Global Investors U.S. Investments I, LLC (“CG Investments”) |
RMB |
— | RMB |
|||||||||||||||||||||
China Life Guangde(Tianjin) Equity Investment Fund Partnership (Limited Partnership) (“CL Guang De”) |
RMB |
— | RMB |
|||||||||||||||||||||
Beijing China Life Pension Industry Investment Fund (Limited Partnership) (“CL Pension Industry”) |
RMB |
— | RMB |
|||||||||||||||||||||
China Life Qihang Phase I (Tianjin) Equity Investment Fund Partnership (Limited Partnership) (“CL Qihang Fund l”) |
RMB |
RMB |
||||||||||||||||||||||
China Life Xing Wan (Tianjin) Enterprise Management Partnership (Limited Partnership) (“CL Xing wan”) (i) |
— | — | — | RMB |
||||||||||||||||||||
China Life Insurance Sales Company Limited (“CL Sales”)(ii) |
— | — | — | |||||||||||||||||||||
China Life (Hangzhou) Hotel Company Limited (“CL Hangzhou Hotel”)(i) |
— | — | — | RMB |
||||||||||||||||||||
China Life Jiayuan (Xiamen) Health Management Company Limited (“CL Jiayuan”)(i) |
— | — | — | RMB |
(i) | CL Xing Wan, CL Hangzhou Hotel and CL |
(ii) | For the year ended 31 December 2021, the Company injected capital of RMB CL Sales, a wholly owned subsidiary of CLIC, and acquired s of the Group were restated based on the financial statements as at 31 December 2021 obtained from the merged party on the date of combination. |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(g) |
Transactions with significant related parties |
For the year ended 31 December | ||||||||||||
Notes |
2021 RMB million |
2020 RMB million |
||||||||||
Transactions with CLIC and its subsidiaries |
||||||||||||
CLIC |
||||||||||||
Distribution of dividends from the Company and AMC to CLIC |
||||||||||||
Policy management fee received from CLIC |
(i ) (vii |
) | ||||||||||
Asset management fee received from CLIC |
(ii.a | ) | ||||||||||
CLP&C |
||||||||||||
Agency fee received from CLP&C |
(iii ) (vii |
) | ||||||||||
Dividend s from CLP&C (Note 9) |
||||||||||||
Rental and a service fee received from CLP&C |
||||||||||||
Asset management fee received from CLP&C |
|
|
(ii.c | ) | |
|
|
|
|
| ||
CLI |
||||||||||||
Payment of asset management fee to CLI |
(ii.d ) |
) | ||||||||||
Payment of real estate purchase to CLI |
||||||||||||
Property leasing expenses charged by CLI |
||||||||||||
CLHI |
||||||||||||
Payment of a operation management service fee to CLHI |
(vi | ) | ||||||||||
CL Overseas |
||||||||||||
Asset management fee received from CL Overseas |
(ii.b | ) | ||||||||||
Transactions with associates and joint ventures |
||||||||||||
CGB |
||||||||||||
Interest on deposits received from CGB |
||||||||||||
Dividend s from CGB (Note 9) |
||||||||||||
Commission expenses charged by CGB |
(iv | ) | ||||||||||
Rental fee received from CGB |
||||||||||||
Insurance premium received from CGB |
||||||||||||
Sino-Ocean |
||||||||||||
Dividend s from Sino-Ocean (Note 9) |
||||||||||||
Interest of corporate bonds received from Sino-Ocean |
||||||||||||
Transaction between other associates and joint ventures and the Group |
||||||||||||
Dividends from other associates and joint ventures (Note 9) |
||||||||||||
Transaction between EAP and the Group |
||||||||||||
Contribution to EAP |
||||||||||||
Transactions between other subsidiaries and the Company |
||||||||||||
Payment of an asset management fee |
||||||||||||
Payment of an asset management fee to AMC |
( ii.e) (vii |
) | ||||||||||
Payment of an asset management fee to AMC HK |
(ii.f | ) | ||||||||||
Dividends from subsidiaries |
||||||||||||
Dividends from AMC |
||||||||||||
Dividends from Pension Company |
— | |||||||||||
Dividends from other subsidiaries |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(g) |
Transactions with significant related parties |
Agency fee received |
||||||||||||
Agency fee received from Pension Company for entrusted sales of annuity funds and other businesses |
(v | ) | ||||||||||
Rental received |
||||||||||||
Rental received from Pension Company |
||||||||||||
Capital increase in subsidiaries |
||||||||||||
Capital contribution to China Life Qihang Fund I |
— | |||||||||||
Capital contribution to CL Pension Industry |
— | |||||||||||
Capital contribution to CG Investments |
— | |||||||||||
Capital contribution to CL Guang De |
||||||||||||
Capital contribution to CL Hotel Investors, L.P. |
||||||||||||
Capital contribution to Suzhou Pension Company |
||||||||||||
Capital contribution to Yuanxiang Tianfu |
— | |||||||||||
Capital contribution to Yuanxiang Tianyi |
— | |||||||||||
Capital contribution to Shanghai Wansheng |
||||||||||||
Capital reduction of subsidiaries |
||||||||||||
Capital reduction from Rui Chong |
|
|
|
|
|
|
|
|
|
— | | |
Transactions between the consolidated structured entities and the Company |
|
|
|
|
|
|
|
|
|
|
|
|
Distribution of profits from the consolidated structured entities to the Company |
(i) | On 26 December 2017, the Company and CLIC renewed a renewable insurance agency agreement, non-transferable policies. |
(ii.a) | In December 2018, CLIC renewed an asset management agreement with AMC, entrusting AMC to manage and make investments for its insurance funds. The agreement is non-standard products) at the beginning and the end of any given month by the rate of non-standard products are based on the contractual agreed rate, without paying for an extra management fee. At the end of each year, CLIC assessed the investment performance of the assets managed by AMC, compared the actual results against benchmark returns and made adjustment to the basic service fee. In July 2020, CLIC revised the asset management agreement with AMC, |
(ii.b) | In 2018, CL Overseas renewed an investment management agreement with AMC HK, |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(g) |
Transactions with significant related parties (continued) |
(ii.c) | On 10 February 2021, CLP&C renewed an agreement for the management of insurance funds with AMC, entrusting AMC to manage and make investments for its insurance funds, |
(ii.d) | On 31 December 2018, the Company and CLI renewed a management agreement of alternative investment of insurance funds, non-fixed-income projects, the management fee rate for invested projects was non-fixed-income projects based on the annual evaluation results on CLI’s performance. |
(ii.e) | On 28 December 2018, the Company and AMC renewed the agreement for the management of insurance funds, |
(ii.f) | On 31 December 2018, the Company and AMC HK renewed the management agreement of insurance funds investment, which is B-2 and entrusted assets account alike was |
(iii) | On 31 January 2018, the Company and CLP&C signed an insurance agency framework agreement, whereby CLP&C entrusted the Company to act as an agent to sell designated P&C insurance products in certain authorised jurisdictions. The agency fee was determined based on cost (tax included) plus a margin. The agreement is effective for |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(g) |
Transactions with significant related parties (continued) |
(iii) | CLP&C and CL Sales signed the Strategic Cooperation Agreement on 2 July 2019. According to the agreement, 2 CL Sales , as an agent of insurance products, provides intermediary services for CLP&C. |
(iv) | On 19 October 2018, the Company and CGB renewed an insurance agency agreement to distribute insurance products. All individual insurance products suitable for distribution through bancassurance channels are included in the agreement. CGB provides agency services, including the sale of insurance products, collecting premiums and paying benefits. The Company paid the agency commission by multiplying the net amount of total premiums received from the sale of each category individual insurance products after deducting the surrender premiums in the hesitation period, by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed based on arm’s length transactions. The commissions are payable on a monthly basis. On 22 August 2020, the Company and CGB renewed an insurance agency agreement to distribute insurance products, |
(v) | On 1 January 2019, the Company and Pension Company renewed an entrusted agency agreement for pension business acted by life business. The agreement is |
(vi) | On 25 November 2020, the Company and CLHI signed a new aged-care projects management service agreement, |
(vii) | These transactions constitute continuing connected transactions which are subject to reporting and announcement requirements but are exempt from independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company has complied with the disclosure requirements in accordance with Chapter 14A of the Listing Rules. |
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(h) |
Amounts due from/to significant related parties |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
The resulting balances due from and to significant related parties of the Group |
||||||||
Amount due from CLIC |
||||||||
Amount due from CL Overseas |
||||||||
Amount due from CLP&C |
||||||||
Amount due to CLP&C |
( |
) | ( |
) | ||||
Amount due from CLI |
||||||||
Amount due to CLI |
( |
) | ( |
) | ||||
Amount due from CLRE |
||||||||
Amount due to CLHI |
( |
) | ( |
) | ||||
Amount deposited with CGB |
||||||||
Wealth management products and other financial instruments of CGB |
||||||||
Amount due from CGB Note |
||||||||
Amount due to CGB |
( |
) | ( |
) | ||||
Corporate bonds of Sino-Ocean |
||||||||
Amount due from Sino-Ocean |
||||||||
Amount due from CL Ecommerce |
||||||||
Amount due to CL Ecommerce |
( |
) | ( |
) | ||||
The resulting balances due from and to subsidiaries of the Company |
||||||||
Amount due to AMC |
( |
) | ( |
) | ||||
Amount due to AMC HK |
( |
) | ( |
) | ||||
Amount due from Pension Company |
||||||||
Amount due to Pension Company |
( |
) | ( |
) | ||||
Amount due from Rui Chong Company |
(i) | Key management personnel compensation |
|
|
For the year ended 31 December | ||||||
2021 | 2020 | |||||||
RMB million | RMB million | |||||||
Salaries and other benefits |
||||||||
|
|
|
|
34 |
SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) |
(j) |
Transactions with state-owned enterprises |
35 |
SHARE CAPITAL |
As at 31 December 2021 |
As at 31 December 2020 | |||||||||||||||
No. of shares |
RMB million |
No. of shares | RMB million | |||||||||||||
Registered, authorised, issued and fully paid |
||||||||||||||||
Ordinary shares of RMB1 each |
||||||||||||||||
|
|
|
|
|
|
|
|
As at 31 December 2021 |
||||||||
No. of shares |
RMB million |
|||||||
Owned by CLIC (i) |
||||||||
Owned by other equity holders |
||||||||
|
|
|
|
|||||
Including: domestic listed |
||||||||
overseas listed (ii) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | All shares owned by CLIC are domestic listed shares. |
(ii) | Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange. |
36 |
RESERVES |
Share premium RMB million |
Other reserves RMB million |
Unrealised gains/ (losses) from available-for-sale securities RMB million |
Other comprehensive income reclassifiable to profit or loss under the equity method RMB million |
Statutory reserve fund RMB million |
Discretionary reserve fund RMB million |
General reserve RMB million |
Exchange differences on translating foreign operations RMB million |
Other comprehensive income non-reclassifiable to profit or loss under the equity method RMB million |
Total RMB million |
|||||||||||||||||||||||||||||||
|
|
|
|
(a) | (b) | (c) | |
|
|
|||||||||||||||||||||||||||||||
As at 1 January 2019 |
( |
) | ( |
) | — | |||||||||||||||||||||||||||||||||||
Other comprehensive income for the year |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
Appropriation to reserves |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income to retained earnings |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Others |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 December 2019 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 1 January 2020 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income for the year |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
Appropriation to reserves |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Others |
— | ( |
) | — | — | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 December 2020 |
( |
) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 1 January 2021 |
( |
) |
||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the year |
— | — | ( |
) | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
Appropriation to reserves |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income to retained earnings |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
Others |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 December 2021 |
( |
) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Pursuant to the relevant PRC laws, the Company appropriated million, 2019: RMB |
(b) | Approved at the Annual General Meeting in 30 June 2021, the Company appropriated RMB million, 2019: RMB |
(c) | Pursuant to “Financial Standards of Financial Enterprises - Implementation Guide” issued by the Ministry of Finance of the PRC on 30 March 2007, for the year ended 31 December 2021, the Company appropriated million, 2019: RMB RMB million, 2019: RMB |
37 |
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS |
Interest- bearing loans and borrowings |
Bonds payable |
Lease liabilities |
Securities sold under agreements to repurchase |
Other liability- payable to the third-party holders of consolidated structured entities |
Other liability- interest payable related to financing activities |
Total |
||||||||||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
||||||||||||||||||||||
At 1 January 2019 |
— | |||||||||||||||||||||||||||
Changes from financing cash flows |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Foreign exchange movement |
— | — | — | — | — | |||||||||||||||||||||||
Changes arising from losing control of consolidated structured entities |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
New leases |
— | — | — | — | — | |||||||||||||||||||||||
Interest expense |
— | — | — | |||||||||||||||||||||||||
Others |
— | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At 31 December 2019 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At 1 January 2020 |
||||||||||||||||||||||||||||
Changes from financing cash flows |
— | ( |
) | ( |
) | |||||||||||||||||||||||
Foreign exchange movement |
( |
) | — | — | — | — | — | ( |
) | |||||||||||||||||||
Changes arising from losing control of consolidated structured entities |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
New leases |
— | — | — | — | — | |||||||||||||||||||||||
Interest expense |
— | — | — | |||||||||||||||||||||||||
Others |
— | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At 31 December 2020 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37 |
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (continued) |
Interest- bearing loans and borrowings |
Bonds payable |
Lease liabilities |
Securities sold under agreements to repurchase |
Other liability- payable to the third-party holders of consolidated structured entities |
Other liability- interest payable related to financing activities |
Total |
||||||||||||||||||||||
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
RMB million |
||||||||||||||||||||||
At 1 January 2021 |
||||||||||||||||||||||||||||
Changes from financing cash flows |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Foreign exchange movement |
( |
) | — | — | — | — | — | ( |
) | |||||||||||||||||||
Changes arising from losing control of consolidated structured entities |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
New leases |
— | — | — | — | — | |||||||||||||||||||||||
Interest expense |
— | — | — | |||||||||||||||||||||||||
Others |
— | — | ( |
) | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At 31 December 2021 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38 |
PROVISIONS AND CONTINGENCIES |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Pending lawsuits |
||||||||
|
|
|
|
39 |
COMMITMENTS |
(a) |
Capital commitments |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Contracted, but not provided for |
||||||||
Investments |
||||||||
Property, plant and equipment |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(b) |
Operating lease commitments |
As at 31 December 2021 |
As at 31 December 2020 |
|||||||
RMB million |
RMB million | |||||||
Not later than one year |
||||||||
Later than one year but not later than five years |
||||||||
Later than five years |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
Exhibit 2.5
Description of rights of each class of securities registered under Section 12 of the Securities
Exchange Act of 1934 (the Exchange Act)
American Depositary Shares (ADSs), each representing five H Shares of par value RMB1.00 per share (the H Shares) of China Life Insurance Company Limited (we, our company, our, us, or the Company) are listed and traded on the New York Stock Exchange and, in connection with this listing (but not for trading), the H Shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of H Shares and (ii) ADS holders. Shares underlying the ADSs are held by Deutsche Bank Trust Company Americas, as depositary (the Depositary), and holders of ADSs will not be treated as holders of the shares.
Description of H Shares
The following are summaries of material provisions of our amended and restated articles of association and the applicable laws and regulations of the Peoples Republic of China (the PRC), insofar as they relate to the material terms of our H Shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire articles of association, which has been filed with the SEC as an exhibit to our annual report on Form 20-F for the financial year ended December 31, 2021 (the Form 20-F).
Type and Class of Securities (Item 9.A.5 of Form 20-F)
The Companys H Shares have a par value of RMB1.00 per share. The number of H Shares that have been issued and outstanding as of the last day of the financial year ended December 31, 2021 is set forth on the cover of the Form 20-F. The Companys H Shares may be held in either certificated or uncertificated form. Subject to the applicable securities laws, regulations and listing rules where the securities of the Company are listed, you may refer to Item 10.B. Additional Information Articles of Association Restrictions on Transferability and the Share Register for restrictions on share transfers.
Preemptive Rights (Item 9.A.3 of Form 20-F)
See Item 10. Additional InformationMemorandum and Articles of AssociationIncreases in Share Capital of the Form 20-F.
Limitations or Qualifications (Item 9.A.6 of Form 20-F)
See Item 8. Financial InformationConsolidated Financial Statements and other Financial InformationPolicy on Dividend Distributions, Item 10. Additional InformationMemorandum and Articles of Association and Item 12. Description of Securities Other than Equity SecuritiesAmerican Depositary Shares of the Form 20-F.
Other Rights (Item 9.A.7 of Form 20-F)
Not applicable.
Rights of the Shares (Item 10.B.3 of Form 20-F)
See Item 8. Financial InformationConsolidated Financial Statements and Other Financial InformationPolicy on Dividend Distributions and Item 10. Additional InformationMemorandum and Articles of Association of the Form 20-F.
Requirements for Amendments (Item 10.B.4 of Form 20-F)
See Item 10. Additional InformationMemorandum and Articles of AssociationVoting Rights and Shareholders Meetings of the Form 20-F.
1
Limitations on the Rights to Own Shares (Item 10.B.6 of Form 20-F)
See Item 10. Additional InformationExchange Controls and Item 12. Description of Securities Other than Equity SecuritiesAmerican Depositary Shares of the Form 20-F, as well as the disclosure below on American Depositary Shares as required by Items 12.D.1 and 12.D.2 of Form 20-F.
Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)
See Item 10. Additional InformationMemorandum and Articles of Association of the Form 20-F.
Ownership Threshold (Item 10.B.8 of Form 20-F)
There is no such provision in the Companys Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed. Shareholders will, however, be required to disclose shareholder ownership in according with the applicable securities laws, regulations and listing rules where the securities of the Company are listed. Please also see Item 10. Additional InformationMemorandum and Articles of AssociationRestrictions on Ownership of the Form 20-F, as well as the disclosure below on American Depositary Shares as required by Items 12.D.1 and 12.D.2 of Form 20-F.
Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)
See Item 10. Additional InformationMemorandum and Articles of AssociationCertain Differences Between PRC Company Law and Delaware Corporate Law and Item 16GCorporate Governance of the Form 20-F.
Changes in Capital (Item 10.B.10 of Form 20-F)
See Item 10. Additional InformationMemorandum and Articles of Association of the Form 20-F.
Debt Securities (Item 12.A of Form 20-F)
Not applicable.
Warrants and Rights (Item 12.B of Form 20-F)
Not applicable.
Other Securities (Item 12.C of Form 20-F)
Not applicable.
Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)
The Depositary issues the ADSs. Each ADS represents an ownership interest of five H Shares, deposited with the custodian, as agent of the Depositary, under the deposit agreement dated January 4, 2010 (as subsequently amended, the Deposit Agreement), among our company, the Depositary, and the holders of the American Depositary Receipts (ADRs) thereunder. Each ADS also represents any securities, cash or other property deposited with the Depositary, but which it has not distributed directly to you. In our description, references to ADRs include the statements you will receive which reflect your ownership of ADSs.
The Depositarys corporate trust office is located at 1 Columbus Circle, New York, NY 10019, United States of America. The principal executive office of the Depositary is located at 1 Columbus Circle, New York, NY 10019, United States of America.
You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the books of the Depositary, you are an ADS holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker or financial institution nominee, you must rely on the procedures of the broker or financial institution to assert the rights of an ADS holder described in this section. You should consult with your broker or financial institution to find out what those procedures are.
2
Because the Depositarys nominee will be the registered owner of the shares, you must rely on it to exercise the rights as a shareholder on your behalf. Your rights as an ADS holder as well as the rights and obligations of the Depositary and its agents are set out in the Deposit Agreement. By holding an ADR, you become party to the Deposit Agreement. The Deposit Agreement and the ADSs are governed by New York law. However, our obligations to the holders of our H Shares will continue to be governed by the laws of the PRC, which may be different from laws in the United States.
The following is a summary of the material terms of the Deposit Agreement. For more complete information, you should read the entire Deposit Agreement and the form of ADR which contains the terms of your ADSs. The Deposit Agreement (including the form of ADR) has been filed with the U.S. Securities and Exchange Commission (the SEC) as an exhibit to a Registration Statement on Form F-6 (File No. 333-164005) for our company.
Share Dividends and Other Distributions
How will you receive dividends and other distributions on the H Shares underlying your ADSs?
We may make various types of distributions with respect to our securities. The Depositary has agreed to the extent reasonably practicable and subject to certain other considerations, to pay to you the cash dividends or other distributions it or the custodian receives on H Shares or other deposited securities, after deducting its expenses and any applicable taxes. You will receive these distributions in proportion to the number of underlying H Shares that your ADSs represent.
Except as stated below, to the extent the Depositary is legally permitted, it will deliver distributions to ADS holders in proportion to their interests in the following manner:
Cash. The Depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) the distribution being impermissible or impracticable with respect to certain registered holders, and (iii) deduction of the Depositarys expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that the conversion may be made on a reasonable basis, (2) to the extent that it determines that the transfer may be made on a reasonable basis, transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine, (3) obtaining any approval or license of any governmental authority required for the conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time, and (4) making any sale by public or private means in any commercially reasonable manner.
H Shares. In the case of a distribution in H Shares, the Depositary will issue additional ADRs to evidence the number of ADSs representing these H Shares. Only whole ADSs will be issued. Any H Shares which would result in fractional ADSs will be sold, and the net proceeds will be distributed to the ADS holders entitled thereto.
Rights to receive additional H Shares. In the case of a distribution of rights to subscribe for additional H Shares or other rights, subject to the timely provision by us of evidence satisfactory to the Depositary that the Depositary may lawfully distribute such rights, the Depositary may arrange for ADS holders to instruct the Depositary as to the exercise of these rights. In the event we do not furnish such evidence, provided that the sale of such rights is practicable, the Depositary may sell these rights if practicable and distribute to you the net proceeds of such sale. However, in the event we do not furnish such evidence and the sale of such rights cannot practicably be accomplished by reason of non-transferability of such rights, limited markets therefor, their short duration or otherwise, the Depositary may allow such rights to lapse, in which case ADS holders will not receive anything.
3
We have no obligation to file a registration statement under the Securities Act of 1933 in order to make any rights available to ADS holders.
Other distributions. In the case of a distribution of securities or property other than those described above, the Depositary may either:
| distribute the securities or property in any manner it deems equitable and practicable; |
| to the extent the Depositary deems distribution of the securities or property not to be equitable and practicable, sell the securities or property, as applicable, and distribute any net proceeds in the same way it distributes cash; or |
| hold the distributed property in which case the ADSs will also represent the distributed property. |
Any U.S. dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices.
The Depositary may choose any practical method of distribution for any specific ADS holder, including the distribution of foreign currency, securities or property, or it may retain these items, without paying interest on or investing them, on behalf of the ADS holder as deposited securities.
The Depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders.
Deposit, Withdrawal and Cancellation
How does the Depositary issue ADSs?
The Depositary will issue ADSs if you or your broker deposits H Shares or evidence of rights to receive H shares with the custodian.
H Shares deposited with the custodian must be accompanied by specified documents, including instruments showing that the H Shares have been properly transferred or endorsed to the person on whose behalf the deposit is being made.
The custodian will hold all deposited H Shares for the account of the Depositary. ADS holders thus have no direct ownership interest in the H Shares and only have such rights as are contained in the Deposit Agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited H Shares. We refer to the deposited H Shares and any such additional items as deposited securities.
Upon each deposit of H Shares, receipt of related delivery documentation and compliance with other applicable provisions of the Deposit Agreement, including the payment of the fees and charges of the Depositary and any taxes or other fees or charges owing, the Depositary will issue an ADR or ADRs to or upon the order of the person entitled to the ADR evidencing the aggregate number of ADSs to which such person is entitled.
All of the ADSs issued will, unless specifically requested to the contrary, be part of The Depositary Trust Companys direct registration system utilized by the Depositary, pursuant to which the Depositary may record ownership of ADRs without the issuance of a certificate, and such ownership will be evidenced by periodic statements issued by the Depositary to the relevant holders, showing the number of ADSs registered in the holders name. An ADS holder can request that the ADSs not be held through the direct registration system and that certificated ADRs be issued.
4
How do ADS holders cancel an ADS and obtain deposited securities?
When you surrender your ADS pursuant to the terms and conditions of the Deposit Agreement, the Depositary will, upon payment of certain applicable fees, charges and taxes and upon receipt of proper instructions, deliver the underlying H Shares to an account designated by you maintained by us or an accredited intermediary, such as a bank, acting as a registrar for the deposited securities. At your risk, expense and request, the Depositary may deliver deposited securities at such other place as you may request.
Subject to any amendment of the General Instructions I.A.(1) of Form F-6, the Depositary may only restrict the withdrawal of deposited securities in connection with:
| temporary delays caused by closing our transfer books or those of the Depositary, or the deposit of H Shares in connection with voting at a shareholders meeting, or the payment of dividends; |
| the payment of fees, taxes and similar charges; or |
| compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities. |
Voting Rights
How do you vote?
After receipt from us a notice of a meeting or solicitation of consents or proxies of holders of H Shares or other deposited securities, the Depositary will distribute to the holders of ADSs a notice containing information in our notice and any solicitation materials and informing such holders that each holder of the record date set by the Depositary, subject to the provisions of applicable Hong Kong or PRC law, may instruct the Depositary as to the exercise of the voting pertaining to deposited securities represented by the relevant holders ADSs and the manner in which such instructions may be given, including the giving of a discretionary proxy to a person designated by us. For instructions to be valid, the Depositary must receive them on or before the date specified. The Depositary will try, as far as is practical, subject to the provisions of the underlying H Shares or other deposited securities, to vote or to have its agents vote the H Shares or other deposited securities as you instruct. The Depositary will only vote or attempt to vote as you instruct. The Depositary itself will not exercise any voting discretion. Furthermore, neither the Depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote.
Record Dates
The Depositary may, after consultation with us, fix record dates for the determination of the ADS holders who will be entitled:
| to receive a dividend, distribution or rights; or |
| to give instructions for the exercise of voting rights at a meeting of holders of H Shares or other deposited securities, |
all subject to the provisions of the Deposit Agreement.
Reports and Other Communications
Will you be able to view our reports?
The Depositary will make available for inspection by holders of the ADSs at the Depositarys office any written communications received from us, which are both (1) received by the custodian or its nominee as a holder of the deposited securities and (2) made generally available to the holders of the deposited securities. We will furnish these communications in English when so required by any rules or regulations of the SEC.
5
Additionally, if we make any written communications generally available to holders of our shares, including the Depositary or the custodian, and we request the Depositary to provide them to ADS holders, the Depositary will mail copies of them, or, at its option, summaries of them, to ADS holders.
Fees and Expenses
What fees and expenses will you be responsible for paying?
ADS holders will be charged a fee for each issuance of ADSs, including issuances resulting from distributions of shares, rights and other property, and for each surrender of ADSs in exchange for deposited securities. The fee in each case is US$5.00 for each 100 ADSs, or any portion thereof, issued or surrendered.
The following additional charges will be incurred by the ADS holders, by any party depositing or withdrawing shares or by any party surrendering ADRs or to whom ADRs are issued (including, without limitation, issuance pursuant to a share dividend or share split declared by us or an exchange of shares regarding the ADRs or the deposited securities or a distribution of ADRs), whichever is applicable:
| to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of $1.50 per ADR or ADRs for transfers of certificated ADRs made; |
| to the extent not prohibited by the rules of any stock exchange or interdealer quotation shares system upon which the ADSs are traded, a fee of $0.02 or less per ADS (or portion thereof) for any cash distribution; |
| a fee for the distribution of securities, such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of those securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the Depositary to those entitled thereto; |
| stock transfer or other taxes and other governmental charges; |
| cable, telex and facsimile transmission and delivery charges; |
| transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; |
| expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars; and |
| such fees and expenses as are incurred by the Depositary, including without limitation expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment, in delivery of deposited securities or otherwise in connection with the Depositarys or its custodians compliance with applicable law, rule or regulation. |
We will pay all other charges and expenses of the Depositary and any agent of the Depositary, except the custodian, under agreements from time to time between us and the Depositary. The fees described above may be amended from time to time.
6
Payment of Taxes
ADS holders must pay any tax or other governmental charge payable by the custodian or the Depositary on any ADS, deposited security or distribution. If an ADS holder owes any tax or other governmental charge, the Depositary may (1) deduct the amount of the tax or charge from any cash distributions, or (2) sell deposited securities and deduct the amount owing from the net proceeds of the sale. In either case the ADS holder remains liable for any shortfall. Additionally, if any tax or governmental charge is unpaid, the Depositary may also refuse to effect any registration, registration of transfer, split-up or combination of deposited securities or withdrawal of deposited securities, except under limited circumstances mandated by securities regulations. If any tax or governmental charge is required to be withheld on any non-cash distribution, the Depositary may sell the distributed property or securities to pay those taxes and distribute any remaining net proceeds to the ADS holders who are entitled to them.
Reclassifications, Recapitalizations and Mergers
If we take specified actions that affect the deposited securities, including (1) any change in par value, split-up, consolidation, cancellation or other reclassification of deposited securities, or (2) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all of our assets, then the Depositary may choose to:
| amend the form of ADR; |
| distribute additional or amended ADRs; |
| distribute cash, securities or other property it has received in connection with these actions; |
| sell any securities or property received and distribute the proceeds as cash; or |
| none of the above. |
If the Depositary does not choose any of the above options, any of the cash, securities or other property it receives will constitute part of the deposited securities, and each ADS will then represent a proportionate interest in that property.
Amendment and Termination
How may the Deposit Agreement be amended?
We may agree with the Depositary to amend the Deposit Agreement and the terms of the ADSs without your consent for any reason. You will be given a notice at least 30 days in advance of any amendment that imposes or increases any fees or charges (other than share transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that will otherwise prejudice any substantial existing right of ADS holders. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to consent and agree to the amendment and to be bound by the Deposit Agreement and the terms of the ADSs as amended. Any amendments or supplements which (i) are reasonably necessary (as agreed by us and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or H Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by holders, shall be deemed not to prejudice any substantial rights of holders. Notwithstanding the foregoing, an amendment can become effective before notice is given if this is necessary to ensure compliance with a new law, rule or regulation adopted by a governmental body.
No amendment will impair your right to surrender your ADSs and receive the deposited securities, except in order to comply with mandatory provisions of applicable law.
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How may the Deposit Agreement be terminated?
Upon the resignation or removal of the Depositary pursuant to the Deposit Agreement, the Depositary shall, at our written direction, terminate the Deposit Agreement by giving the ADSs holders at least 30 days prior notice. After termination, the Depositarys only responsibility will be (1) to deliver deposited securities to ADS holders who surrender their ADRs, and (2) to hold or sell distributions received on deposited securities. As soon as practicable after the expiration of six months from the termination date, the Depositary will sell the deposited securities which remain and hold the net proceeds of such sales as long as it may lawfully do so, without liability for interest, in trust for the pro rata benefit of ADS holders who have not surrendered their ADRs. After making the sale, the Depositary will have no obligations except to account for the proceeds and other cash. The Depositary will not be required to invest the proceeds or pay interest on them.
Limitations on Obligations and Liability to ADS Holders
Limits on our obligations and the obligations of the Depositary; limits on liability to ADR holders and holders of ADSs
Prior to the issue, registration, registration of transfer, split-up, combination, or cancellation of any ADRs or the delivery of any distribution in respect of the ADRs, the Depositary and its custodian may require you to pay, provide or deliver:
| payment of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register and (iii) any applicable fees and expenses described in the ADR; |
| the production of proof satisfactory to it of (i) the identity and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, payment of applicable taxes or governmental charges, or legal or beneficial ownership and the nature of such interest, information relating to the registration of the shares on the books maintained by or on our behalf for the transfer and registration of shares, and compliance with applicable law, regulations, provisions of or governing deposited securities and terms of the Deposit Agreement and the ADR, as it may deem necessary or proper; and |
| compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement. |
The Deposit Agreement expressly limits the obligations and liabilities of the Depositary, ourselves and our respective agents. Neither we nor the Depositary nor any such agent will be liable if:
| any present or future law, regulation of the United States, Hong Kong, the PRC or any other country, or of any governmental or regulatory authority or stock exchange, the provisions of or governing any deposited securities, act of God, war or other circumstance beyond its control shall prevent, delay or subject to any civil or criminal penalty any act which the Deposit Agreement or any ADR provides shall be done or performed by it; |
| it exercises or fails to exercise discretion authorized under the Deposit Agreement; |
| it performs its obligations without gross negligence or bad faith; |
| it takes any action or fails to take any action in reliance upon the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any registered holder of ADSs or any other person believed by it to be competent to give such advice or information; or |
| it relies upon on any documents it believes in good faith to be genuine and to have been properly executed. |
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Neither the Depositary nor its agents have any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense, including fees and disbursements of counsel, and liability is furnished as often as we require. The Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any registered holder or holders of ADSs, any ADSs or otherwise to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process of, banking, securities or other regulators.
The Depositary will not be responsible for failing to carry out instructions to vote the deposited securities or for the manner in which the deposited securities are voted or the effect of the vote. In no event shall the Depositary or any of its agents be liable for any indirect, special, punitive or consequential damages.
The Depositary may own and deal in deposited securities and in ADSs.
Disclosure of interests in ADSs
We may from time to time request you and other holders and beneficial owners of ADSs to provide information as to:
| the capacity in which you and other holders and beneficial owners own or owned ADSs; |
| the identity of any other persons then or previously interested in those ADSs; and |
| the nature of that interest and various other matters. |
You and other holders and beneficial owners will be subject to the provisions of the Hong Kong Securities and Futures Ordinance (the Ordinance) and any other legislation or regulations of Hong Kong from time to time in effect regarding the disclosure of interests in shares. For this purpose, interest has the meaning provided in the Ordinance. Under the Ordinance, you may have a duty to notify us and the Hong Kong Stock Exchange if you become aware that your interest in H Shares, including your interest in H Shares represented by ADSs, equals or exceeds 5% of long positions in our issued H share capital or 5% of long positions and 1% of short positions in our issued H share capital. You are also further required to notify us and the Hong Kong Stock Exchange of certain changes in your interest in the shares, or if you cease to have such interest or acquired more of our issued share capital. Under the Ordinance, we have certain rights and duties to make inquiries of persons whom we know or have reasonable cause to believe to be interested in our H Shares, including those represented by ADSs, concerning such persons interests in our H Shares. In the event that any person to whom we have made such inquiries fails to respond, or provides false information in response, such person may be subject to sanctions and criminal penalties.
The Depositary has agreed that it will use reasonable efforts to comply with our written instructions requesting that it forward any such requests for information relating to your interests to you. By holding an ADS or an interest in an ADS, you will be agreeing to comply with these requests.
Requirements for Depositary Actions
We, the Depositary or the custodian may refuse to:
| issue, register or transfer an ADR or ADRs; |
| effect a split-up or combination of ADRs; |
| deliver distributions on any such ADRs; or |
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| permit the withdrawal of deposited securities, unless the Deposit Agreement provides otherwise, |
| until the following conditions have been met: |
| the holder has paid all taxes, governmental charges and fees and expenses as required in the Deposit Agreement; |
| the holder has provided the Depositary with any information it may deem necessary or proper, including, without limitation, proof of identity and the genuineness of any signature; and |
| the holder has complied with such regulations as the Depositary may establish under the Deposit Agreement. |
The Depositary may also suspend the issuance of ADSs, the deposit of H Shares, the registration, transfer, split-up or combination of ADRs, or the withdrawal of deposited securities (unless the Deposit Agreement provides otherwise), if the register for ADRs or any deposited securities is closed or if we or the Depositary decides it is advisable to do so.
Books of Depositary
The Depositary or its agent will maintain a register for the registration, registration of transfer, combination and split-up of ADSs. You may inspect these records at our office during regular business hours, but solely for the purpose of communicating with other holders in the interest of business matters relating to the Deposit Agreement.
The Depositary will maintain facilities for the delivery and receipt of ADSs.
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Exhibit 4.3
English Translation
Policy Management Agreement
between
China Life Insurance (Group) Company
and
China Life Insurance Company Limited
Table of Contents
1. |
AUTHORIZATION | 1 | ||||||
2. |
BASIC PRINCIPLES | 2 | ||||||
3. |
SCOPE OF AGENCY | 4 | ||||||
4. |
ACCOUNT AND ACCOUNT MANAGEMENT | 5 | ||||||
5. |
DATA AND DOCUMENTATION | 6 | ||||||
6. |
INSPECTION, EXAMINATION AND REPORT | 7 | ||||||
7. |
INSURANCE AGENCY SERVICE FEES AND PAYMENTS THEREOF | 8 | ||||||
8. |
PAYMENT OF COMMISSIONS | 9 | ||||||
9. |
THIRD PARTY COSTS AND EXPENSES | 10 | ||||||
10. |
TAXATION | 10 | ||||||
11. |
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS | 10 | ||||||
12. |
TERM | 11 | ||||||
13. |
INDEMNIFICATION | 11 | ||||||
14. |
LIABILITY FOR BREACH | 12 | ||||||
15. |
TERMINATION | 12 | ||||||
16. |
FORCE MAJEURE | 13 | ||||||
17. |
CONFIDENTIALITY | 14 | ||||||
18. |
ASSIGNMENT | 14 | ||||||
19. |
NON-WAIVER | 14 | ||||||
20. |
NOTICES | 14 | ||||||
21. |
PERFORMANCE OF THIS AGREEMENT | 15 | ||||||
22. |
FURTHER ACTIONS | 15 | ||||||
23. |
GOVERNING LAW AND DISPUTES SETTLEMENT | 15 | ||||||
24. |
EFFECTIVENESS, VERSIONS AND MODIFICATIONS | 16 |
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This Policy Management Agreement (the Agreement), is entered into on December 31, 2021 in Beijing, Peoples Republic of China (PRC), by and between the following two parties:
(1) | China Life Insurance (Group) Company (Party A) Address: China Life Center, 17 Financial Street, Xicheng District, Beijing |
(2) | China Life Insurance Company Limited (Party B) Address: China Life Plaza, No. 16 Financial Street, Xicheng District, Beijing |
Whereas:
(1) | Party A is a wholly state-owned limited liability company duly organized and existing under the laws of the PRC. |
(2) | Party B is a joint stock life insurance company, exclusively and legally initiated and established by Party A, and duly exists under the laws of the PRC. |
(3) | Party A and Party B have entered into a Restructuring Agreement on September 30, 2003, pursuant to which Party A shall transfer to Party B certain Transferred Policies and Party A shall retain Non-transferred Policies (the Old Policies) as defined in such agreement. |
(4) | According to the Non-Competition and Priority Agreement signed by Party A and Party B, Party A undertakes that it will not, directly or indirectly, engage in, participate in or operate, within the territory of China (not including Hong Kong, Macau and Taiwan), any life, health or accident insurance business that may compete with the insurance business of Party B, and that Party A will authorize Party B to manage the business under Old Policies on its behalf (including the modification or renewal of riders in relation thereto). |
(5) | Both Parties are willing to make fair and reasonable arrangements for the management of the insurance business under Old Policies. |
Therefore, for purpose of setting forth rights and obligations of both Parties and regulating the policy management activities, after friendly negotiations, and on the basis of equality and mutual benefits, both parties agree as follows:
1. | Authorization |
1.1 | Authorized Matters |
According to the terms and conditions of this Agreement, Party A authorizes Party B as its agent to manage the insurance business under the Old Polices, and shall in return pay Party B service fees. Party B agrees to and accepts such authorization.
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1.2 | Purpose of Authorization |
Party B shall manage the insurance business under the Old Polices and perform its duties strictly according to the agreement between both Parties and applicable laws, regulations, and relevant rules and requirements of competent authorities and insurance regulatory authority, and, shall, as according to Party As requirement, with a target for equal management and equal service, assist Party A in ensuring the stable and healthy operation of the insurance business under the Old Polices and prevent and solve potential business risks.
2. | Basic Principles |
2.1 | Party B shall perform the duties of insurance agent in accordance with this Agreement, and any rights of policyholders under the Old Policies and any obligations, benefits, losses or risks of the insurer in regard to the Old Polices shall be undertaken by Party A. Party B shall undertake the management responsibilities and risks of the insurance business under the Old Polices as the agent. Unless otherwise agreed by both parties, Party B shall under no circumstances be liable to pay any benefits or claims, or to make any advances due in respect of any benefits or claims under the Old Polices. |
2.2 | Party B shall have a fiduciary duty to Party A, which shall require Party B to diligently perform its duties as agent so as to comply with relevant laws, regulations and rules of competent authorities and the insurance regulatory department. Party B shall diligently perform its duties as an agent and shall, within the scope of authorization, have discretion to conduct the authorized insurance business with the same experience, business. |
2.3 | Party A shall authorize Party B to conduct businesses within the scope of agency as required by its actual needs for business agency, and Party B may assign the authorization to its branches based on their business scale, management level and risk control capabilities. |
2.4 | Party B shall perform the obligations of the agent in accordance with the terms of the Old Policies, applicable laws, regulations, and relevant rules and requirements of competent authorities and insurance regulatory authority, and the relevant management system, rules, business standards and regulations as formulated (and modified from time to time) by Party A in accordance with applicable laws, regulations, and relevant rules and requirements of competent authorities and insurance regulatory authority. Party B shall, after consulting with Party A, implement the relevant management system, rules, business standards and regulations formulated (and modified from time to time) by Party A as according to the requirements of operation and management. The service standard for the agency business of Party B shall comply with relevant provisions of this Agreement as well as the original provisions under the Old Policies and shall also comply with external supervising standards. If any standards or requirements cannot be met, Party B shall inform Party A promptly and cooperate with Party A to report to appropriate regulating authorities. |
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2.5 | When performing the agency duties, Party B shall assume the responsibility of compliance monitoring for the agency businesses, observe compliance obligations in relation to, among others, anti-money laundering, solvency, taxation and finance, as well as other compliance obligations under applicable laws and regulations or as required by competent authorities and financial regulators, promptly monitor and actively deal with compliance risks in connection with the agency businesses to ensure that the agency businesses and relevant management work are compliant with appropriate requirements. In case of violation of compliance obligations and/or losses incurred by Party A, Party A shall have the right to seek liabilities against Party B, and Party B shall rectify the violation in a timely manner and compensate Party A for the losses. |
2.6 | Party B may employ the same resources of its own insurance business (e.g. personnel, offices, equipment, etc.) to manage the agency business, but Party B shall separately manage (excluding paper files), check the accounts of (including daily bookkeeping and monthly settlement), and conduct internal verification of its own insurance business and the agency business. |
2.7 | For purposes of this Agreement, Party B may hire, either directly or on behalf of Party As, external auditors, external actuaries, external attorneys and other external professional experts, provided that prior approval or consent has been obtained from Party A, and that the necessary delegation of authority has been made. |
2.8 | Neither Party B nor its branches shall conduct any publicizing or reporting in any occasions or on any media which are adverse to the agency business or Party A. |
2.9 | Party Bs own insurance business and the agency business shall use a unified set of insurance documents printed by Party B and the seals of Party B, but in conducting the agency business, Party B shall place special note at the appropriate place of related documents indicating that, The insurance business under this insurance policy is being conducted by China Life Insurance Company Limited on behalf of China Life Insurance (Group) Company, and the legal responsibilities under this insurance policy shall be borne by China Life Insurance (Group) Company. |
2.10 | Party A shall have the right to inspect, supervise and examine the Party Bs agency business. Party B shall provide cooperation to Party As inspection, supervision and examination of its agency business. |
2.11 | Party B shall provide the agency service under this Agreement in accordance with the standards provided herein, and shall establish adequate risk prevention and internal control systems as according to the characteristics of the agency business. |
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2.12 | Party B shall abide by any policies, rules, guidelines, standards and requirements in relation to the authorized insurance business which are made and amended from time to time by Party A according to applicable international and domestic laws and regulations as well as relevant rules and requirements of competent and regulating authorities, and collect, summarize, organize, provide and submit as an agent data, materials, information and reports in connection with the authorized insurance business according to relevant regulations and requirements in order to assist and cooperate with Party A to properly fulfill its obligations including but not limited to the information reporting obligations with respect to anti-money laundering and insurance business case. |
3. | Scope of Agency |
3.1 | Party A hereby authorizes Party B to manage on its behalf the following insurance business under Old Policies: |
(i) | Day-to-day insurance administration services: conservation, claim settlements, payment and premium collections, daily settlements, account verifications and preparation of business and financial reports; |
(ii) | Customer services: answering or handling inquiries or complaints from the policy holders, insured or beneficiaries of Old Policies; |
(iii) | Statistics and file management; |
(iv) | Invoice and receipt management; |
(v) | The reinstatement of Old Policies and the renewal of riders (the business thereby required to be underwritten shall be underwritten in accordance with Party As underwriting standards); |
(vi) | Reinsurance; and |
(vii) | The handling of disputes relating to Old Policies, including bringing or defending suits on behalf of Party A. |
3.2 | Party A hereby authorizes Party B to conduct separate account verifications and financial management in respect of the agency business in accordance with the accounting and financial management rules set forth in writing by Party A. Party B shall provide to Party A periodically, and according to requirements of competent authorities and regulatory authority and Party As requirements, accurate and complete accounting information, including internal management reports and supervisory reports, necessary to make internal decisions regarding the management of the business and external disclosures. |
3.3 | Party B shall set up separate accounting books to account for all agency business items, including income, expenditures, assets, liabilities and owners equity. All branches and offices under Party B at various levels shall set up independent accounting systems for the agency business. |
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3.4 | Party A hereby authorizes Party B to manage on its behalf the business and finance system applications supporting the Old Policies in order to satisfy the requirements of risk control, regulatory authority and management of Party A. Party B shall be responsible for the implementation based on Party As management policy and routine management opinion. |
3.5 | Party A hereby authorizes Party B to manage Party As products in accordance with requirements of insurance regulatory authority, and Party A shall provide Party B with relevant actuarial support. |
3.6 | Party B is authorized to conduct tax declarations of the business under Old Policies on Party As behalf, assist Party A in paying taxes, and perform the tax withholding and payment obligations in accordance with the state and local tax laws and regulations. |
4. | Account and Account Management |
4.1 | Party B shall open accounts for agency business in accordance with the Peoples Bank of Chinas relevant requirements on opening accounts. Party B shall maintain separate accounts for income and payments in respect of the agency of insurance business under Old Policies. Party B shall open, in its own name, agency business income and payment accounts with a bank approved by both Parties in accordance with the requirements of this Section 4.1. Party B shall strengthen the management of agency business income and payment accounts, and for any increases or decreases in such accounts, with units on the provincial level as a whole, a prior approval of Party A is required in case of increase in the total number of accounts as of the application, in which case the original account shall be closed and a new account shall be opened within six months thereafter , or Party B may proceed directly according to its own relevant regulations in case of no increase in the total number of accounts. |
4.2 | The headquarters of Party B may have accounts for both income and payments in relation to the agency business, and provincial branches of Party B shall separately open agency business income accounts and payment accounts exclusively for settlement of income and payments in regard to the agency business. |
4.3 |
(1) | The city-level branches of Party B shall open agency business income accounts to be used exclusively for the collection of premium payments in regard to the agency business, in accordance with the needs of agency business. Party Bs branches shall transfer the funds in relation to the agency business in a timely manner to the income account or the account for both income and payments of the headquarters of Party B in full, and shall then be transferred by Party Bs headquarters into the account designated by Party A by 4:00 p.m. Beijing time every day. |
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(2) | Unless otherwise provided in this Agreement, Party B shall not withdraw, dispatch, employ or pledge the premium payments in the agency business income account without permission, and shall not open other accounts to collect, deposit, hide, or retain in any other fashion premium payments collected in connection with the agency business. |
4.4 |
(1) | The city-level branches of Party B shall open payment accounts for the agency business in accordance with the needs of the agency business. |
(2) | Party A shall, based on the funding request of Party B, relevant forecasts and historical data, transfer to the payment account for the agency business at Party Bs headquarters the funds for payment of insurance claims and benefit amounts and other necessary costs and expenses for the current month under the Old Policies. Party Bs headquarters shall in a timely manner transfer such funds in full to the payment accounts of Party Bs provincial level, and Party Bs provincial branches shall transfer such funds to Party Bs city-level or county-level branches accordingly. |
(3) | Party B has the right to withdraw, dispatch and employ the funds in the payment account in accordance with this Agreement to satisfy payment obligations in regard to claims and benefit amounts, commissions and third party costs and expenses under the Old Policies. Unless otherwise provided in this Agreement, Party A shall not in any fashion interfere with or in any way withdraw, dispatch, employ or pledge such funds without permission. |
(4) | If Party Bs provincial branches finds that the balance of its account is insufficient or will become insufficient to meet the necessary payment needs of the current month, it shall submit to Party Bs headquarter as well as Party A an urgent funding request. Party A shall transfer the additional funds required for such month to the payment account of Party Bs headquarters within 5 business days after receiving such funding request. |
5. | Data and Documentation |
5.1 | Party A owns all data generated in connection with the agency business under this Agreement (including, but not limited to, business data, actuarial data and financial data) and all documentation relating to the agency business under this Agreement (including but not limited to paper documentation and electronic documentation) (collectively, the Agency Business Data and Documentation). It is Party As responsibility to keep original documentation or materials for insurance products developed and issued by the head office before execution of the Restructuring Agreement and it is Party Bs responsibility to keep original documentation or materials for insurance products developed and issued by local branches before execution of the Restructuring Agreement. Original documentation or materials shall include terms (agreements), rates, surrender value or cash value, calculation base, approval documents, documents issued for implementation and other relevant materials. |
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5.2 | During the term of this Agreement, Party B has the obligation to safely maintain and regularly update the Agency Business Data and Documentation, to keep it confidential, and to manage it with the same degree of diligence as it does for its own business data and documentation. However, Party B shall manage and store the Agency Business Data (including video data) and its own business data separately. If it is impossible to store physical forms of documentation separately, storage locations shall be marked in the documentation system. |
5.3 | Party B shall manage the business data, actuarial data and financial data of the agency business under this Agreement in accordance with the relevant data management rules formulated by Party A in writing and acknowledged by Party B, and shall separately process and transmit such business data and financial data in conformity with business processing, actuarial and finance processing systems acknowledged by Party A, and check the business data and financial data for consistency in accordance with regulatory requirements. |
5.4 | During the term of this Agreement, in accordance with the terms and conditions of this Agreement, Party A may use, reference and inspect Agency Business Data and Documentation, and Party B shall provide assistance and cooperation to Party A in respect thereto. In response to Party As reasonable request, Party B shall provide Party A with materials in connection with the agency business data or copies of relevant documentation. |
5.5 | Party B shall return data and documentation in connection with the agency business to Party A when this Agreement is terminated. |
6. | Inspection, Examination and Report |
6.1 | Without affecting or interfering with Party Bs normal business operations, Party A shall have the right to conduct on-site or off-site, and daily or annual inspections in order to determine whether Party Bs conduct of the agency business under this Agreement complies with the business standards, financial standards, rules and systems agreed upon by both Parties, and to test the accuracy of the related accounting information provided by Party B. Party B shall provide all reasonably necessary assistance and cooperation. Expenses incurred due to such inspections shall be borne by Party A. Party B shall promptly correct the problems as according to findings of the inspection and request of Party A. |
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6.2 | Party B shall promptly submit periodic report on agency business in accordance with regulatory requirements and Party As requests and temporary report on material matters occurring in daily operations. The contents of such reports shall include, but without limitation, product management of agency business, change of business and financial data, and the technical indications for the daily operation of agency business information systems. In case of changes in internal and external environments or conditions which directly affect the operation and management of authorized businesses, Party B shall report such changes and propose countermeasure to Party A in a timely manner. |
6.3 | When reporting data as required by Party A, Party B shall be responsible for reviewing the trueness, accuracy, completeness and consistency of reported data and statements so as to ensure smooth conduct of Party As work. |
6.4 | Within 90 days after the end of each calendar year, Party B shall prepare and submit to Party A an annual report concerning its insurance business agency, which shall include basic description of the business agency work, performance of the agency agreement, implementation of business regulations, supervision, inspection and corrections, as well as a work plan for the next year. |
6.5 | Party B shall, within 75 days after the end of each calendar year, provide to Party A information such as data and statements as according to Party As request to assist Party A in preparing year-end budget report, annual statistics report, annual financial report, annual inspection report and internal controls report. In particular, annual financial report, solvency report and other reports shall be submitted at the time required in annual final accounts notification. |
6.6 | Party B shall, after the end of each calendar year or according to regulatory and Party As requirements, provide to Party A information such as data and statements and to assist Party A in conducting liability assessment and preparing relevant reports. |
6.7 | Party B shall submit data of the business processing system and statistical reports as of December 31 of previous year to Party A before January 31of each year. Party A shall complete the audit in relation to the number of authorized businesses within twenty days after receipt of Party Bs written statistical report, and confirm the statistical results of the number in writing with Party B. In case of any problem, Party A shall promptly notify Party B and Party B shall correct such problems or give explanations in a timely manner. |
6.8 | For reinsurance businesses, Party B shall submit detailed schedules and bills of a previous quarter to Party A within forty-five days after the end of each quarter. Party A shall complete the audit within thirty days after receipt of such schedules and bills and send collection/payment notice to Party B, and then Party B will collect/pay money from or to reinsurance companies as required. |
7. | Insurance Agency Service Fees and Payments Thereof |
7.1 | The method of calculating service fees for any period shall be as follows: |
(i) | the number of policies in force as of the last day of relevant calculating period, multiplied by RMB14.00 (number of policies in force for a group insurance policy is equal to the number of individuals covered by such policy (not including individuals under lapsed or expired policies)); plus |
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(ii) | 2.5% of the actual premiums collected during such period. |
7.2 | Payment procedure for service fees: |
(i) | In every year, each period starting from January 1 and ending on December 31, shall be deemed to be a payment period. |
(ii) | Within 30 days after the end of a payment period, Party B shall consolidate all the information and determine the amount of service fees for such payment period in accordance with Section 7.1, and submit the related bill with detailed schedules to Party A. |
(iii) | Unless Party A provides, within 30 days after receiving such bills and detailed schedules, adequate evidence that the amount of such service fee is unreasonable, the service fee specified in such bills shall be paid into the account designated in writing by Party B within thirty days after Party A receives such bills and detailed schedules as well as special VAT invoices which contain correct invoice information. |
7.3 | Provisions on taxation for the service fees |
(i) | The service fees are VAT inclusive. Unless agreed in writing by the two parties, Party B will not otherwise collect any VAT or surcharges in addition to the contract price for the agency business; |
(ii) | Party B shall provide Party A with legal and valid VAT special invoices; |
(iii) | The two parties hereto shall perform their respective tax payment and withholding obligations resulting from this Agreement according to applicable tax laws. |
7.4 | The upper limit of annual transaction amount hereunder is RMB 491 million, and the upper limit of total transaction amount during the term hereof is RMB1.473 billion. |
8. | Payment of Commissions |
8.1 | Any direct commissions to insurance agents and any corresponding pension fees incurred in connection with premium collections for the renewal of Old Policies shall be borne and paid by Party A in accordance with the payment standards that were specified when such policies were issued. Except for such aforementioned direct commissions and relevant pension fees, all other supplementary commission expenses incurred in connection with such insurance agents (including, but not limited to, bonuses, social welfare expenses, training expenses, and allowances) shall be borne by Party B. |
8.2 | All of the aforementioned commissions borne by Party A shall be paid in accordance with the requirements of Section 4.4 of this Agreement. |
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9. | Third Party Costs and Expenses |
9.1 | Third party costs and expenses mean costs and expenses received by third parties, and arising in connection with Party Bs performance of its duties with respect to insurance agency under this Agreement and agreed by Party A, excluding service fees payable to Party B pursuant to Section 7 of this Agreement, commissions set forth in Section 8 and tax duties and related expenses set forth in Section 10. Such costs and expenses include, but are not limited to, fees for auditors, actuaries, external lawyers and other external professionals hired by Party B in its own name or in the name of Party A for purposes related to this Agreement, litigation costs and other reasonable expenses incurred by Party B to strengthen risk control and carry out equal services such as bank transfer, batch investigation and SMS notification for authorized businesses. |
9.2 | Third party costs and expenses shall be borne by Party A, and shall be paid in by Party B in accordance with the actual amount from the business settlement or payment account for the agency business. Under no circumstances shall Party B be obligated to pay, or to advance on behalf of Party A, such costs and expenses using its own funds. |
9.3 | Unless otherwise provided in this Agreement, Party A shall not be liable for any other expenses incurred in connection with the agency business. |
10. | Taxation |
10.1 | Party A shall be responsible for all tax obligations required to be borne by Party A as tax obligor or withholding obligor pursuant to tax laws and regulations. Party A shall bear and pay all expenses incurred in connection with such tax obligations. |
10.2 | If it is provided in tax laws and regulations that Party B may pay taxes or perform the tax payment or withholding obligations on Party As behalf, Party B shall directly perform such obligations; if it is provided that Party A shall pay taxes on aggregate basis, Party B shall provide all necessary assistance to Party A, including but not limited to assistance in the preparation of tax declaration forms, the preparation and provision of necessary files and documents as required to perform tax obligations. |
10.3 | Party B shall be liable for the payment of any taxes that are imposed on it in accordance with applicable tax laws and regulations. |
11. | Representations, Warranties and Undertakings |
Each Party to this Agreement makes the following representations, warranties and undertakings to the other Party:
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(i) | It has obtained adequate power and authority (including but not limited to the procurement of approvals, consents and permits from relevant regulatory authorities, and the internal authorization of the company) to sign this Agreement; |
(ii) | After this Agreement comes into effect in the manner set forth herein, it shall be binding on such Party, and will be enforceable against such Party in accordance with its terms; |
(iii) | All terms of this Agreement are in compliance with Articles of Association of such parties, and with the laws and regulations of China. |
12. | Term |
12.1 | This Agreement shall remain in effect until December 31, 2024. |
12.2 | During the effective term hereof, each party shall have the right to send a written notice of no less than 90 days to the other party for early termination of this Agreement. |
13. | Indemnification |
13.1 | Any claim, suit, loss, judgment, damages, fines or expenses (hereinafter collectively referred to as a Loss) sustained by Party B, its directors, officers, employees, agents or representatives (hereinafter collectively referred to as Indemnified Parties) in the performance of their duties under this Agreement, shall be fully indemnified by Party A. Party A shall hold each Indemnified Party harmless against any such Loss and/or liability, unless it is finally determined through legal or administrative procedures or consultations between Party A and Party B that such Loss and/or liability is caused due to the fault of such Indemnified Party. |
13.2 | Notwithstanding any other provision of this Agreement, Indemnified Parties shall not be responsible for any loss of Party A or any third party caused by any action or inaction, or by any erroneous decision, on the part of an Indemnity Party in discharging its obligations under this Agreement, unless it is finally determined through legal or administrative procedures or consultations between Party A and Party B that such loss was incurred due to the fault of such Indemnified Party. |
13.3 | If, based on the experiences, capabilities or qualifications of the Indemnified Parties, the losses described in the above two sections can or should be expected, the Indemnified Parties shall promptly notify Party A of the possibility of such losses and fulfill appropriate duties and obligations as agreed herein. Otherwise, the Indemnified Parties will not be indemnified according to this indemnity clause. |
13.4 | This indemnity clause shall survive the termination of this Agreement, regardless of the manner in which this Agreement is terminated. |
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14. | Liability for Breach |
14.1 | If Party A has not paid, or is incapable of paying, Party B the service fees in accordance with the terms of this Agreement, it shall pay a penalty of 0.021% of the amount due to Party B for each day that such amount is overdue, until the service fee is paid in full. Party B may deduct amounts payable by Party A from any cash dividends payable by Party B to Party A. |
14.2 | Notwithstanding the effect or implementation of the foregoing provision, if (i) Party A has not paid or is incapable of paying service fees in full to Party B as stipulated by this Agreement, and the amount due reaches RMB100,000,000 or more, or (ii) Party A has not transferred or is incapable of transferring adequate funds into Party Bs account as provided by this Agreement, as a result of which the claims, benefit amounts, commissions, and/or third party costs and expenses that are not timely paid by Party B reach RMB300,000,000 or more, Party B shall be entitled to send to Party A a written notice of rescission. Unless waived by Party B, this Agreement shall be rescinded upon the 30th day after such written notice is delivered to Party A. |
14.3 | Subject to the restrictions set forth in Section 13.2 of this Agreement, in case of any economic losses incurred by Party A resulting from Party Bs violation of this Agreement in dealing with the insurance agency business hereunder or due to Party Bs errors in connection with the agency business, Party A shall have the right to require Party B to compensate for its actual losses. |
15. | Termination |
15.1 |
(a) | This Agreement shall be terminated upon the occurrence of any of the following circumstances: |
(i) | The obligations under the Old Policies have been discharged; |
(ii) | With the approval of the CIRC, Party A legally transfers all Old Policies to a third party, and such third party undertakes to perform the insurers duties under the Old Policies, or authorizes any institution other than Party B to perform the insurer duties thereunder; |
(iii) | With the approval of each of Party B and CIRC, Party A authorizes any institution other than Party B to perform the insurer duties under the Old Policies; |
(iv) | The term of this Agreement expires; |
(v) | Party B effectively rescinds this Agreement pursuant to Section 14.2; |
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(vi) | Party A is unable to make payments, is declared bankrupt, enters into a liquidation procedure, is ordered to be dissolved, or is put into receivership. |
(b) | If Party A has legally transferred part of the Old Polices to a third party with the approval of the CIRC, and such third party performs the insurers obligations under such Old Polices or authorizes a third party other than Party B to perform the insurers obligations thereunder, such Old Policies shall not be subject to this Agreement starting from the date of transfer. |
15.2 | If this Agreement is terminated due to the foregoing Section (a) (ii), (iii), (iv), (v) or (vi), or if the holders of a certain number of Old Policies are adversely affected or incur losses due to the foregoing Section (b), Party A shall assume all related liabilities. However, Party B shall not be exempted from its liability under this Agreement. |
15.3 | If this Agreement is terminated pursuant to Section 15.1 (a) or certain Old Policies are transferred pursuant to Section 15.1 (b) and are therefore no longer subject to this Agreement, the obligations and responsibilities of Party A and Party B under this Agreement that had already arisen before such termination shall not be terminated or affected thereby. |
16. | Force Majeure |
16.1 | If a Party fails to perform in whole or in part its duties under this Agreement due to an event of force majeure, this performance shall be suspended in the affected period of force majeure. |
16.2 | The Party claiming that it has been affected by an event of force majeure shall inform the other Party of such event of force majeure in writing as soon as possible, and shall provide the other Party with appropriate evidence regarding the existence and duration of such event of force majeure within 15 days after the occurrence thereof. The Party claiming that the performance of its obligations under this Agreement is objectively impossible and impracticable due to such event of force majeure shall take all reasonable measures to eliminate or reduce any affect caused by such event of force majeure. |
16.3 | Upon of occurrence of any event of force majeure, both Parties shall immediately decide through friendly consultation with each other in respect of the performance of their obligations under this Agreement, and shall immediately resume the performance of their respective obligations hereunder upon the termination or elimination of such event of force majeure or its effect. |
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16.4 | Force majeure means the objective circumstances, occurring after this agreement becomes effective that cannot be reasonably controlled, predicted, avoided or overcome even if predicted, and which make the performance of the obligations under this Agreement in whole or in part objectively impossible or impracticable (including, but not limited to, circumstances when such obligations cannot be performed even after spending a reasonable amount of money). Such circumstances include but are not limited to floods, fires, droughts, wind, earthquakes, and other acts of God, strikes, riots, turmoil and wars (declared or not) and the acts or omissions of governmental authorities. |
17. | Confidentiality |
Unless otherwise provided by law or relevant regulatory authorities or in order to meet the legal disclosure requirements of information on Party B when it is to be listed or as a listed company, either Party shall not provide or disclose to any company, enterprise, organization or individual the business-related information or data of the other Party without the prior written approval of the other Party.
18. | Assignment |
Neither Party may assign any right or obligation under this Agreement without the prior written approval of the other Party.
19. | Non-Waiver |
Unless otherwise provided for by law, any delay or failure on the part of either Party hereto to exercise any right, power or privilege under this Agreement shall not operate as a waiver thereof, nor shall any partial exercise of any right, power or privilege preclude the exercise of any right, power or privilege in the future.
20. | Notices |
Any notice related to this Agreement shall be sent in writing, and shall be delivered in person or by fax or mail. If delivered in person, such notice shall be deemed delivered upon submission. If sent by fax, such notice shall be deemed delivered when the fax machine of the sending party indicates that the fax has been transmitted. If delivered by mail, such notice shall be deemed delivered on the third business day (statutory holidays excluded) following the day such notice was mailed. Notices shall become effective upon delivery.
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Addresses of the Parties are as following:
China Life Insurance (Group) Company | China Life Insurance Company Limited | |
Address: China Life Center, 17 Financial Street, Xicheng District, Beijing | Address: China Life Plaza, No. 16 Financial Street, Xicheng District, Beijing | |
Telephone: 010-66009999 Facsimile:010-66009301 |
Telephone: 010-63633333 Facsimile:010-66575722 |
If both Parties send out notices to each other by telephone or other means and mutually acknowledge such notices, such notices shall be effective notices.
21. | Performance of this Agreement |
21.1 | As Party B is a joint stock limited company listed on the Hong Kong Stock Exchange, the transactions under this Agreement shall constitute a connected transaction of Party B as described in the Hong Kong Stock Exchange Listing Rules (the Listing Rules). According to the Listing Rules, such transactions may be conducted only after obtaining a waiver from Hong Kong Stock Exchange or the approval of independent shareholders and/or in conformity with any other requirements concerning connected transactions under the Listing Rules. Therefore, the performance of the obligations set forth in this Agreement shall, to the extent that they relate to such connected transactions, be subject to the approval of the Hong Kong Stock Exchange and/or conditional on conforming to any other requirements concerning connected transactions under the Listing Rules in effect from time to time. Both Party A and Party B undertake to observe the relevant requirements of the Listing Rules. |
21.2 | If the Hong Kong Stock Exchange exemption contains additional conditions, the obligations set forth in this Agreement shall be performed in accordance with such additional conditions. Both Party A and Party B undertake to strictly observe such conditions. |
22. | Further Actions |
Both Parties shall take further actions and measures in order to fully and effectively perform this Agreement, including consultations with each other to set forth the execution plan or detailed rules of this Agreement in accordance with the principles set forth in this Agreement, and provided that such plan or rules shall not violate the terms hereof.
23. | Governing Law and Disputes Settlement |
23.1 | This Agreement shall be governed by, and interpreted and enforced in accordance with, the laws of China. |
23.2 | Any disputes arising from or related to this Agreement shall first be settled by the Parties through friendly consultations. If no resolution is reached within 30 days after the dispute occurs, either Party may submit such dispute to the China International Economic Trade Arbitration Commission for arbitration in accordance with its arbitration rules in effect when such dispute is submitted. The arbitration award shall be final and binding on both Parties. |
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24. | Effectiveness, Versions and Modifications |
24.1 | This Agreement shall come into effect as from January 1, 2022. |
24.2 | This Agreement is executed in four originals, with two originals to be kept by each Party. Each original shall have the same legal effect. |
24.3 | Any amendment to this Agreement shall be made only pursuant to a written agreement which is executed by the legal representative or its authorized representatives and is affixed with the official seal of each Party, and shall be approved by each Party after taking appropriate corporate actions. If such modification constitutes a material and significant change to this Agreement, it shall become effective upon the notification of and procurement from approval from the Hong Kong Stock Exchange and/or a shareholders meeting of Party B (if applicable) (subject to the listing rules in effect from time to time and requirements of the Hong Kong Stock Exchange then in effect). |
24.4 | If amendments to Chinese laws, regulations or relevant departmental rules would affect the performance of this Agreement, both Parties shall, based upon the object of this Agreement and the principles of equity and reasonableness, through friendly negotiations, timely modify the affected provisions in order to eliminate and lessen, to the extent possible, the impact caused by such amendments. |
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Party A:
China Life Insurance (Group) Company (Seal)
|
Party B:
China Life Insurance Company Limited (Seal) | |
Legal Representative/ Authorized Representative (Signature) |
Legal Representative/ Authorized Representative (Signature) |
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Exhibit 4.6
English Translation
Asset Management and Operating Service Agreement
between
China Life Insurance Company Limited
and
China Life Investment Management Company Limited
Table of Contents
1. |
DEFINITIONS AND INTERPRETATION | 1 | ||||
2. |
INVESTMENT MANAGEMENT OF ENTRUSTED ASSETS | 4 | ||||
3. |
ENTRUSTED OPERATIONS | 19 | ||||
4. |
INVESTMENT CAPS | 24 | ||||
5. |
INVESTMENT GUIDELINE | 24 | ||||
6. |
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES | 26 | ||||
7. |
PARTY AS RIGHTS AND OBLIGATIONS | 28 | ||||
8. |
PARTY BS RIGHTS AND OBLIGATIONS | 29 | ||||
9. |
RISK CONTROL | 33 | ||||
10. |
INSPECTION, SUPERVISION AND REVIEW | 34 | ||||
11. |
THIRD PARTY COST AND EXPENSE | 35 | ||||
12. |
CONFLICTS OF INTEREST AND PROHIBITED ACTIVITIES | 36 | ||||
13. |
CONFIDENTIALITY | 38 | ||||
14. |
BREACH OF CONTRACT AND INDEMNIFICATION | 39 | ||||
15. |
FORCE MAJEURE | 40 | ||||
16. |
TERMINATION | 40 | ||||
17. |
PERFORMANCE | 42 | ||||
18. |
NOTICES | 43 | ||||
19. |
ASSIGNMENT | 43 | ||||
20. |
SEVERABILITY | 44 | ||||
21. |
GOVERNING LAW AND DISPUTE RESOLUTION | 44 | ||||
22. |
EFFECTIVENESS, COUNTERPARTS AND OTHERS | 44 |
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This Asset Management and Operating Service Agreement (the Agreement) was entered into by and between the following two parties in Beijing on December 27, 2021 in accordance with applicable laws, regulations and rules:
| China Life Insurance Company Limited (Party A) |
Address: China Life Plaza, 16 Financial Street, Xicheng District, Beijing
| China Life Investment Management Company Limited (Party B) |
Address: Unit 1703, 17 (14)/F, 5 Jinghua South Street, Chaoyang District, Beijing
(Party A and Party B are hereinafter referred to, individually as a Party, and collectively the Parties.)
WHEREAS,
(1) | Party A is a duly organized and validly existing joint stock company engaged in life insurance business; |
(2) | Party B is a duly organized and validly existing insurance asset management company having the License of Insurance Asset Management Company issued by the CBIRC; Party B is a wholly-owned subsidiary of Party As controlling shareholder China Life Insurance (Group) Company. |
THEREFORE, based upon the principles of equality and mutual benefit and through friendly negotiations, the parties agree as follows:
1. | Definitions and Interpretation. |
1.1 | Regulators refers to organizations that perform supervision and regulation over insurance companies, insurance asset management company and use of insurance funds according to applicable laws and regulations, including but not limited to China Banking and Insurance Regulatory Commission (CBIRC), the Peoples Bank of China, State Administration of Foreign Exchange and State Administration of Taxation. |
1.2 | Alternative Investments refers to equity investment, investment in real estate investment and non-standard financial products and securitization financial products using insurance funds as permitted by the Regulators. |
1.3 | Equity refers to equity interests in a joint stock company or limited liability company that is duly organized and registered within or outside of the PRC and not publicly listed on any securities exchange. |
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1.4 | Real Estate refers to any land, building and any other structure attached to the land within or outside of the PRC. |
1.5 | Non-standard Financial Products refers to non-standard financial products invested with insurance funds as permitted by the Regulators, the underlying assets of which are non-financial securities assets as determined by Party B such as equity and real estate, including debt investment plans, equity investment plans, asset-backed plans, trust companies trust plans of assembled funds and debt to equity investment plans issued with Party B as the sponsor or a participant, as well as any other financial products invested with insurance funds as permitted by the Regulators and recognized by both parties. |
1.6 | Securitization Financial Products refers to any wealth management products of commercial banks, credit asset-backed securities of banking financial institutions and special assets management schemes of securities companies (and their subsidiaries), fund management companies and subsidiaries of a fund, which are permitted for investment using insurance funds by the Regulators, the investment targets of which are Equity and Real Estate and the underlying assets of which shall be determined by Party B, as well as any other financial products invested with insurance funds as permitted by the Regulators and recognized by both parties. |
1.7 | Equity/Real Estate Funds refers to any funds which have clear investment strategies and make portfolio investment, or equity or real estate funds which are established for the purpose of investing in specific underlying assets, including existing equity/real estate funds and new equity/real estate funds sponsored and established by Party Bs Subsidiary who acts as a general partner or a fund manager. |
1.8 | Existing Projects/Existing Entrusted Investment Assets refers to the Entrusted Investment Assets entrusted by Party A to Party B for investment management before the promulgation and implementation of the Notice on Matters Related to Optimizing the Supervision of Investment Management Capabilities of Insurance Institutions (Yin Bao Jian Fa [2020] No. 45 (hereinafter Document No. 45) which havent been exited as of the effective date hereof, including equity/real estate direct investments, equity/real estate funds, non-standard financial products and securitization financial products. |
1.9 | Newly Entrusted Investment Projects/Newly Entrusted Investment Assets refers to newly entrusted investment assets entrusted by Party A to Party B for investment management after the promulgation and implementation of Document No. 45, including non-standard financial products and securitization financial products. During the term hereof, if the Regulators explicitly allow an insurance asset manager to invest in equity/real estate funds as entrusted, with the consent of Party A, such funds can also be included in the scope of newly entrusted investment assets, and relevant rates and investment quotas will be negotiated by both parties at that time. |
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1.10 | Entrusted Investment Assets refers to existing entrusted investment assets and newly entrusted investment assets, including but not limited to investment funds transferred by Party A to the Fund Account from time to time in accordance with this Agreement, the assets formed by Party Bs entrusted investment and the income generated in the process of investment management of such assets, but excluding the funds transferred out of the Fund Account by Party A. |
1.11 | Entrusted Investment Management refers to the professional investment, operation and relevant management and services provided by Party B at its own discretion with respect to Party As investment of its insurance funds in the Entrusted Investment Assets such as Non-standard Financial Products and Securitization Financial Products within the scope of insurance fund investment delineated in the Insurance Law of the Peoples Republic of China (Insurance Law), other applicable laws and regulations and applicable rules of the Regulators, in accordance with this Agreement and in the name of Party A, and limited by the Investment Guideline formulated in written form and amended by Party A and as submitted to Party B in accordance with this Agreement. Such services shall include (without limitation) to project selection, due diligence, engagement of intermediaries, investment decision-making, negotiation and execution of agreements, investment closing, product management, daily management of fund accounts, subsequent management of investments and exits of investment projects. Subsequent management in relation to existing equity/real estate projects is subject to Section 2.6.2 hereof. |
1.12 | Entrusted Operation Assets refers to equity/real estate fund investment assets as a result of Party As investment decisions made at its own discretion for which Party B shall provide operational services as entrusted by Party A hereunder (for the avoidance of doubt, including equity/real estate funds for which Party A has signed subscription agreements before the effective date hereof). |
1.13 | Entrusted Operation refers to post-investment operation services provided by Party B for Party As investment in equity/real estate funds (including such funds invested by Party A before the effective date hereof) in accordance with relevant Chinese laws, administrative regulations and relevant regulations of the Regulators, including but not limited to assisting Party A in post-investment related reports and statements submission, risk management, regulatory inspection and accounting management, solvency management (including penetration management of non-underlying assets) and filing of related party transactions. |
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1.14 | Investment Guideline, or the Investment Management Guideline for the Entrustment of China Life Investment Management Company Limited by China Life Insurance Company Limited, refers to the written document formulated by Party A for the purpose of carrying out the entrusted investment business and operating services hereunder and amended by Party A from time to time as maybe required, defining the scope of investment, categories and proportions of the investment by Party B; setting forth the limitations on investment strategies, service requirements, risk control and performance evaluation methods; and providing, among other things, objectives of investment return. The Investment Guideline and this Agreement together shall constitute the entire transaction document between Party A and Party B with respect to the subject matter hereof. |
1.15 | Escrow Fund Account refers to the bank escrow account opened or designated by Party A in accordance with external regulatory rules and entrusted for management by Party B. Such Fund Account is used exclusively for the deposit of entrusted investment funds and entrusted operation funds hereunder and the settlement of entrusted investment businesses and entrusted operation businesses. |
1.16 | Custodian/Custodian Bank refers to the commercial bank qualified to keep custody of Party As entrusted investment assets and operation assets and having other qualifications required by the Regulators, which is designated by Party A to keep custody of the entrusted assets under this Agreement. |
1.17 | Party A Instructions refer to the instructions to transfer out funds and the Strategic Investment Decisions (Instructions) made by Party A to Party B in written with respect to matters relating to the investment and management of Party As entrusted investment assets and operation assets and which Party B is required to implement. Under urgent circumstances, Party A may make such instructions by phone, however, it shall provide written confirmation promptly after such circumstances have ended. |
1.18 | Subsidiary refers to any company over which Party B directly or indirectly controls. |
1.19 | SSE refers to Shanghai Stock Exchange. |
2. | Investment Management of Entrusted Assets. |
2.1 | Scope of Authorization. |
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2.1.1 | Party A shall entrust the entrusted assets to Party B for investment management, provided that Party A shall have the ownership of the entrusted assets and their investment gains. During the term of this Agreement, Party A shall retain the ownership of the entrusted assets and shall be entitled to investment gains of, and bear the investment losses of, the entrusted assets. However, Party B shall bear the losses incurred due to Party Bs action unauthorized under this Agreement and Investment Guideline without Party As consent or Party Bs failure to act according to Party A Instructions, Party A Notice and Party A Reminder. |
2.1.2 | The scope of investment management of entrusted assets is as set forth in Section 1.11. |
2.1.3 | Party A shall, within thirty (30) business days following the execution of this Agreement or at any other time mutually agreed by both parties, carry out such authorization procedures necessary to enable Party B to engage in project selection, due diligence, engagement of intermediaries, investment decision-making, negotiation and execution of related investment agreements, daily management of Fund Accounts, regulatory filing, closing, subsequent management (including operation and management of Real Estate) and exits of investment projects in relation to the investment management, for the purpose of this Agreement and within the scope of authorization by Party A; provided, however, that Party B may not engage in activities that may not be delegated from Party A to Party B in accordance with applicable laws, regulatory requirements and corporate governance of Party A. |
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The Parties agree and confirm that Party B may retain the services of attorneys, auditors, appraisers and other professionals in the name of Party B for the purpose of the entrusted investment management hereunder, and at the cost of Party B.
2.2 | Opening Fund Accounts. |
2.2.1 | Party A shall designate or open Fund Accounts at a commercial bank or commercial banks mutually agreed upon by the Parties in the name of Party A, based on product types (e.g., traditional insurance products, participating insurance products), and for the purposes of increasing or decreasing the amount of entrusted Investment Assets hereunder. |
2.2.2 | Party A shall authorize Party B to conduct day-to-day management of the Fund Account. Party B shall establish strict internal control system for fund management, and be responsible for the safety, compliance and orderly management of the Fund Account. |
(1) Party B shall be responsible for safekeeping and use of the reserved seals of the Fund Account;
(2) Party B shall directly issue instructions of fund transfer and settlement to Custodian Banks with which the Fund Accounts are opened.
(3) Party B shall not open a new Fund Account for the Alternative Investments or close an existing Fund Account unless a written consent has been obtained from Party A.
(4) In relation to Fund Accounts entrusted to Party B, all liabilities resulting from violation of laws and regulations of China and other countries concerned shall be borne by Party B.
2.2.3 | Party A may issue to Party B, in written form (including by emails, same below), fund transfer instructions with respect to the investment and management of the entrusted assets, and Party B shall be obligated to carry out such instructions. In the event of emergency, Party A may issue the instruction via telephone; provided, however, Party A shall confirm such instruction in written form immediately after the end of the emergency. In principle, Party B shall complete the transfer within one (1) working day after Party A issues an instruction. |
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2.3 | Independence of the Entrusted Assets. |
2.3.1 | Party B hereby covenants that entrusted assets shall be kept separate from the proprietary assets and other assets managed by Party B. Party B may not mix up the entrusted assets with the proprietary assets and other assets managed by Party B, and may not handle any entrusted assets for any purpose outside of those provided in this Agreement. |
2.3.2 | Rights and obligations arising out of Party Bs management, use and disposal of entrusted assets shall not be set off by rights and obligations arising out of the self-owned assets of Party B. Rights and obligations arising out of Party Bs management, use and disposal of entrusted assets shall not be set off by rights and obligations arising out of Party Bs management and use of the assets entrusted to it by others. |
2.3.3 | In the event that civil disputes arise between Party B and other companies, entities, individuals or any third party, Party B shall take reasonable actions to ensure entrusted assets will not be seized, frozen, or set off. Without Party As consent in writing, no security, mortgage or pledge shall be created on entrusted assets. |
2.3.4 | B shall not allow its creditors to enforce or take any measures against Party As entrusted investment assets against debts not arising from Party As entrusted investment assets. Party B shall take reasonable actions to ensure that such creditors will not exert rights on entrusted assets. |
2.3.5 | In the event that Party B is liquidated due to dissolution, cancelation, or declaration of bankruptcy under the law, entrusted assets shall not be listed as its bankruptcy assets. |
2.4 | Investment Decisions |
2.4.1 | As for entrusted investment management projects hereunder, Party B shall diligently perform its duties and conduct due diligence investigation on its own, engage in negotiation of agreements, analysis of investment value and risks, analysis of the legitimacy and compliance concerning the investment, engage in investment decision-making on its own and assume decision-making risks and responsibilities for compliance control. All decisions and acts of Party B shall not hinder or otherwise adversely affect the legal rights and the exercise thereof of Party A and shall not cause any risks to Party A caused by non-compliance with PRC laws, administrative regulations, rules of the CBIRC as well as the laws and regulations of countries concerned and regulatory rules for listed companies either in China or abroad. |
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2.4.2 | Under any regulatory rules, for any investment projects hereunder that constitute or may constitute a connected transaction of Party A, Party B shall, based on the list of related parties provided or updated by Party A from time to time and according to applicable laws, regulations, regulatory rules for listed companies and Party As company policies and rules, cooperate with Party A with respect to relevant corporate governance procedures and information disclosure matters such as review by board of directors and/or shareholders meeting, and Party B shall be responsible for the authenticity, accuracy, completeness and compliance of the information provided by Party B to Party A. Party A will determine whether an investment project constitutes a connected transaction of Party A based on the information provided by Party B and determine what decision making procedures will be taken based on the transaction amount. If it constitutes a connected transaction of Party A that requires review and disclosure, Party B shall not carry out the investment until it is approved by Party A; provided that, Party As prior approval is not required for connected transactions exempted from review and disclosure in the form of connected transactions as stipulated in the Measures for the Administration of Connected Transactions of Insurance Companies (Yin Bao Jian Fa [2019] No. 35) and/or its alternative rules, however, Party B shall ensure that the implementation of such transactions will not lead either party hereto to violate the amount and/or proportion restrictions of the CBIRC on connected transactions of insurance companies and other legal compliance requirements. |
2.4.3 | For avoidance of any doubt, Party A will be only responsible for reviewing whether an investment project constitutes a connected transaction of Party A, fair pricing of a connected transaction and fee structure, and will not make any judgment on investment decisions. If any investment project constituting a connected transaction needs to be submitted to Party As board of directors and/or shareholders meeting for review, Party A shall notify Party B in a timely manner, and in principle, Party B shall request Party A in writing at least twenty (20) business days before the meeting of board of directors to conduct relevant review procedures and prepare meeting materials for Party A, and both parties shall maintain good communication on the arrangement of Party As corporate governance meeting. Party A will carry out relevant procedures based on the project materials provided by Party B and Party B shall not be exempted from its responsibilities regarding the Entrusted Investment Management such as investment decision-making because of Party As conducting relevant procedures. If Party As related parties increase or change due to project investment, Party B shall notify Party A in writing as soon as possible and remind Party A to update its list of related parties. |
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2.5 | Execution of Investment Agreement and Payment of Investment Funds. |
2.5.1 | Within the scope of authorization set forth in Appendix 1 and Appendix 2 hereto, Party B is entitled to execute investment agreements for projects and other relevant documents on behalf of Party A. Party A doesnt need to go through a separate internal approval process. Within the scope of authorization, for matters that require signature of Party A as a result of state policies and regulatory requirements or other matters that require signature of Party A, Party B shall submit a written request to Party A for signing at least five (5) business days in advance, and Party A shall cooperate in a timely manner to complete relevant signing process. Unless otherwise agreed in Section 2.6.2 hereof, Party A will not conduct a substantive review over the documents to be signed and relevant matters, and Party B shall be responsible for the authenticity, accuracy, completeness and compliance of the documents to be signed, and while conducting signing application processes, Party B shall not be exempted from its responsibilities regarding the Entrusted Investment Management such as investment decision-making. |
2.5.2 | Party B shall specify in the executed investment agreements the payment terms, payment method and payment date for the investment funds and shall, after signing the investment agreements, examine whether the payment terms for the investment fund of the investment project have been satisfied in accordance with the investment agreements, decide the amount and time of the payment. Party B shall submit a formal transfer application to Party A prior to the payment of the investment funds, with transfer application and time requirements subject to relevant annual Investment Guidelines. Party A shall make payment of the investment funds according to the transfer application and transfer procedures from Party B and Party B shall fully validate the feasibility and compliance of the payment method and be responsible for the accuracy, timeliness and compliance of the payment of investment funds for the investment projects. |
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2.6 | Post- investment Management and Exit from Investment Projects. |
2.6.1 | For Investment Assets entrusted hereunder, Party A entrusts Party B to carry out an entire investment management process from initial investment to exiting from investment project, which includes, without limitation: |
(1) to carry out, in the name of Party A, change of business license, title registration and other matters that are the responsibilities of Party A under the investment agreements;
(2) to accept the delivery of investment portfolio in accordance with the investment agreements, to establish, in the name of Party A, project companies, special purpose vehicles (SPV), relevant partnership enterprises and other legal entities for the purpose of performing entrusted investment management (such entities are established for the sole purpose of project investment), to appoint directors, supervisors and senior officers of portfolio companies, and exercise all powers and rights of Party A under the investment agreements;
(3) to be responsible for project operation and management, including retention of professional service agencies for project operation and management based on the need of the project and making requests to Party A for transfer of the funds required by the project operation and management; for the operation and management of Real Estate, Party B may purchase operation and management services from its Subsidiaries. Operation and management of Real Estate include, among others, lease of property, property promotion plan and its execution, tenant services, engineering management such as renovation, daily operation and property management supervision, financial management, and documentary management.
(4) to attend shareholder meetings, board meetings and supervisor meetings, partner meetings and beneficiary meetings of portfolio companies on behalf of Party A, and to cast vote on relevant proposals. To handle disputes related to investment projects on behalf of Party A, including but not limited to litigation, arbitration and administrative penalties.
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(5) to be responsible for daily post-investment management services, including but not limited to assisting Party A in regulatory filing, risk management, accounting management, solvency management (including non-underlying asset penetration management), connected transaction management, emergency disposal, project post-investment valuation, stress test, etc.
(6) Party B shall be responsible for the exiting of a project (including but not limited to the selection of timing of exit and the way of income realization), the formulation, proposal, decision-making and specific implementation of solutions to major management matters.
2.6.2 | For existing investment equity/real estate projects entrusted by Party A to Party B for investment management before the promulgation and implementation of Document No. 45, according to this Agreement and the Investment guideline, Party B shall provide post-investment management services (including real estate operation management) to Party A, mainly including assisting Party A in regulatory filing, risk management, accounting management, solvency management (including non-underlying penetration management), connected transaction management, emergency disposal, post-investment valuation of a project, stress test, management of non-major post investment matters of relevant projects, proposal of exit plan, etc. Major post investment management matters of a project (including extension of investment period of existing direct investment projects, increase or decrease of investment scale outside an agreed scope, major reorganization and replacement of a project; transfer of shares held in an existing indirect investment project, transfer of shares from other partners, early dissolution of the partnership, extension of exit period beyond the contract, etc. (if necessary)) and exit of direct investment projects, Party B shall formulate solutions or exit plans for major issues and submit them to Party A for prior approval. Party A shall be solely responsible for obtaining relevant approvals; approved plans shall be implemented by Party B, and Party B shall be responsible for post-investment management service and compliance management. |
2.6.3 | In case of follow-up investments in an existing investment project, relevant work and procedures shall be conducted with reference to provisions on newly entrusted investment projects (including but not limited to Section 2.1, Section 2.4, Section 2.5 and this section) under this Agreement. |
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2.6.4 | In case of maintaining investment projects, as approved by Party A, Party B shall return investment gains generated during the process of investment management and already transferred to the Fund Account to account(s) designated by Party A within two (2) business days. |
2.6.5 | In case of exiting from investment projects, the Parties shall conduct relevant work and procedures with reference to the provisions on newly entrusted investment projects under this Agreement (including but not limited to Section 2.1, Section 2.4, Section 2.5 and this section). As approved by Party A, Party B shall return the project investment fund and investment gains to account(s) designated by Party A within two (2) business days, and notify Party A as required by it in a timely manner. |
2.6.6 | In case of exiting from investment projects, or selling equity interests in investment projects to Party As related parties, which constitutes a connected transaction of Party A or requires disclosure on such transaction, Parties shall conduct relevant work and procedures with reference to the provisions on investment projects under this Agreement (including but not limited to Section 2.1, Section 2.4, Section 2.5 and this section). |
2.7 | Reports. |
2.7.1 | Unless otherwise provided in this Agreement, Party B shall complete all regulatory filings of the investment projects concerning the entrusted assets such as submission for application, filing, reporting and registration by the time and in the form as required by the CBIRC and other Regulators for the Alternative Investments, and shall be responsible for compliance control and CBIRC required scoring process. If the relevant Regulator specifies that it is required to be handled by the entrusting party, or the relevant regulatory system does not support the entrusted party to handle the regulatory filing on its behalf, Party B shall, as required by Party A, try its best to assist Party A in preparing relevant filing materials, and assist Party A in handling the filing work (but the case that Party A handles regulatory filing by itself will not impair Party Bs compliance management responsibility according to this paragraph and the scoring responsibility required by the CBIRC). |
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2.7.2 | Party B shall monitor and maintain records of performance of this Agreement and connected transactions hereunder according to applicable rules of the place where Party A is listed and regulatory rules of the CBIRC and other regulators, and provide all information on connected transactions by the time and in the form as required by Party A to assist Party A to complete appropriate reporting and disclosure. |
2.7.3 | During the term of this Agreement, specific requirements for Party B to report information of Party As Entrusted Investment Assets (including but not limited to entrusted investment report, financial and risk management report, etc.) are subject to recently issued Investment Guidelines provided by Party A. |
2.7.4 | Party B shall, in accordance with external regulatory, disclosure and internal management requirements of Party A, prepare financial reports under both PRC accounting standards and accounting principles as required by the stock exchange on which Party A is listed, and provide other accounting information required by Party A. |
2.7.5 | Party B shall ensure that reports, statements, descriptions and information described under the foregoing Sections are true, complete, prompt, accurate and compliant. Reports provided by Party B shall fully reflect its professional ability and service quality, and fully reveal and reflect all kinds of risks faced by the Entrusted Investment Assets. |
2.7.6 | Party A shall have the ownership of the data and files generated by the operation and management of entrusted assets under this Agreement. Party A shall have the right to obtain all the information, such as business data, transaction data and financial condition, relating to entrusted assets and investments thereof. Party A shall have the right to read, inspect, duplicate accounting statements, related books, and vouchers of entrusted assets, and transaction records, computer data, agreements, resolutions and relevant management system of investment business, as well as documents and statements requested by Party A under this Agreement, and shall have the right to request Party B to make necessary explanations. If Party A requires in writing in advance, Party B shall submit the originals of such business data, transaction data, financial conditions and other materials to Party A in good conditions according to Party As requirements. |
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2.8 | Accounting Responsibility. |
2.8.1 | Party A, as the owner of the Entrusted Investment Assets, shall provide to Party B the accounting method and assets valuation method of the Entrusted Investment Assets under PRC Enterprise Accounting Principles and International Financial Reporting Standards. Valuation of the Entrusted Investment Assets shall be conducted in accordance with provisions of applicable laws and regulations and the valuation method issued by Party A. |
2.8.2 | Party B shall, in accordance with Party As requirements, conduct accounting and financial management of entrusted assets, and be responsible for the quality of the accounting work as well as its truthfulness, accuracy and compliance. Party B shall, in accordance with tax regulations and Party As requirements, continue to strengthen tax management, carefully conduct tax treatment, provide Party A with taxation advices and provide in a timely manner relevant reports, statements and other materials pursuant to requirements of the Regulators. |
2.8.3 | Party B shall obtain VAT special invoices for costs and expenses payable by Party A during the entrusted investment (except for costs and expenses incurred abroad). Party B shall review and verify such obtained VAT special invoices and make appropriate deductions, and provide information such as input tax data collection form on a monthly basis to ensure proper deductions of input tax for the Entrusted Investment Assets. |
2.8.4 | Party B shall be equipped with sufficient financial employees to satisfy the accounting management needs of the entrusted investment, and accept guidance and training of Party A in relation to financial matters. |
2.9 | Reconciliation. |
2.9.1 | Party B shall reconcile the Fund Accounts within ten (10) business days following the end of each calendar month. Party B must ensure current accounts with Party A and the Custodian Bank selected by Party A are clear and consistent. |
2.9.2 | Party B shall retain paper-based accounting files including but not limited to records, accounting documents, books and statements related to the investment management of entrusted assets in their entirety for no less than thirty (30) years, and accounting documents and general ledger data (including annual and monthly summary data) must be retained permanently. Party B shall be responsible for loss or destruction of any accounting documents. Party Bs responsibility for retention of accounting files will not be released by virtue of termination of the custody agreement, and Party B shall continue performing its responsibilities in relation to retention, enquiry and duplication of accounting files after termination of the custody agreement. |
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2.9.3 | The frequency and method of reconciliation with the Custodian Bank and Party A in relation to entrusted assets shall be compliant with the score requirement of CBIRCs C-ROSS IRR (Classified Regulation) in relation to financial management and operation risks and other requirements of the Regulators. |
2.10 | Investment Management Fee, Product Management Fee, Service Fee for Operation and Management of Real Estate and Performance Incentive Payment. |
2.10.1 | Pricing Principles. The Parties shall abide by fair general commercial terms in good faith and decide the price based on market principles. Party A shall pay the investment management fees, product management fee, service fee for operation and management of Real Estate and performance incentives to Party B according to this Agreement. |
2.10.2 | Calculation of Investment Management Fee. |
During the term hereof, Party A shall pay Party B an investment management service fee for existing projects, which is subject to the investment management service fee rates determined in the entrusted investment management agreement and the entrusted investment guidelines applicable at the time of relevant projects. For projects with disputes over the investment management service fee rates, both parties can otherwise enter into an agreement.
2.10.3 | Calculation of Product Management Fee |
During the term hereof, in principle, Party B will charge a product management fee (including the investment consulting fee charged by Party B as agreed in product specific contracts) and other fees for Newly Entrusted Investment Assets, and there will be no additional investment management service fee. The product management fee shall be set in reference to rates for similar financial products issued by a third party in the market and confirmed by both parties after considering the market environment and management method, and will be set forth in a specific contract, and shall not exceed 0.6% per annum (inclusive) and shall not be less favorable then the product management fee rate offered by Party B to any other purchasers for such a transaction. If 20% or more of the shares of such products are purchased by third parties in the market, Party A will pay the product management fee at the same rates.
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2.10.4 | Calculation of Service Fee for Operation and Management of Real Estate |
(1) | The Service Fee for Operation and Management of Real Estate refers to the operation and management service fee for Party Bs operation of underlying properties of existing real estate projects as entrusted by Party A. The fee includes annual basic management service fee and performance management incentive fee. |
(2) | The annual basic management service fee equals to 3%-6% of EBITDA of the year. EBITDA = net profit + income tax + fixed asset depreciation + intangible asset amortization + amortization of long-term deferred expenses + repayment interest. The specific rates of the annual basic management service fee will be listed in the annual investment guidelines after negotiation between both parties according to the market conditions, project operation stages and annual asset operation estimates. |
(3) | Performance incentive fee: Party B may pay performance incentive to Party Bs Subsidiary that actually provides operation services, and the incentive scheme shall be formulated by Party B at its discretion. For the avoidance of doubt, Party A shall not incur such performance incentive expenses with Party B or Party Bs Subsidiary. |
(4) | Commencement date for fee calculation: where properties are acquired through asset purchases, for constructions in progress, the completion acceptance filing date is the commencement date, and for completed projects, the title delivery date is the commencement date; where properties are acquired through equity transfer, the registration date for equity changes is the commencement date. |
2.10.5 | Calculation of Performance Incentive Payments |
(1) Performance share
For existing non-fixed return projects (investment projects with non-fixed return as the main purpose, which mainly rely on the value-added sale of the Entrusted Investment Assets to receive exit gains and have non-fixed return in the holding period), during the term hereof, Party A shall not only pay the investment management service fee according to Section 2.10.2 hereof, but also pay the performance share to Party B or its Subsidiary according to the internal rate of return (IRR) of the project at the time of project exit. In principle, Party A only pays the performance share to one entity (Party B or its Subsidiary), and the threshold value of the performance share is 8% in principle. The specific method of sharing is to withdraw a performance sharing portion at the time of project exit (when 8% < IRR ≤ 10%, 15% profit share will be withdrawn for the portion exceeding 8%; when IRR > 10%, 15% profit share will be withdrawn for the portion exceeding 8%; 20% profit share will be withdrawn for the portion exceeding 10%).
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For new non-fixed return projects (mainly equity investment plans), during the term hereof, Party A shall not only pay the product management fee according to Section 2.10.3 hereof, but also pay the performance share (the specific name of the fee shall be subject to the specific product contract) to Party B or its Subsidiary according to the projects internal rate of return (IRR) at the time of project exit. The specific sharing method shall refer to the standards in the preceding paragraph and be specifically agreed in the product contract at arms length.
(2) Floating management fee
According to the annual performance assessment results of Party B based on the Investment Guidelines, Party A shall pay Party B a floating management fee which is the floating management fee charging base multiplied by a floating percentage (the percentage ranges from negative 10% to positive 10%). When the management fee goes down, it shall be directly deducted from the investment management service fee paid by Party A to Party B.
Floating management fee charging base = current investment management service fee * charging factor; the charging factor shall not exceed 0.2. The floating management charging factor, calculation and payment method during the term hereof shall be listed in the Investment Guidelines.
2.10.6 | Payment of Investment Management Fee and Service Fee for Operation and Management of Real Estate |
(1) | In the event that Party B fails to diligently perform its responsibilities regarding compliance and control which causes relevant legal compliance issues to Party A, in addition to Party Bs liability for breach of contract and compensation for the direct losses, Party A is entitled to deduct the investment management fee as appropriate. |
(2) | The investment management fee and service fee for operation and management of Real Estate shall be settled each quarter. Party B shall, within five (5) days (postpone in case of public holidays) after the end of each quarter, send the soft copy of the list and calculation basis for the fee payable for the previous month to Party A. Party A shall review the report within ten (10) business days upon the receipt of such report, and shall notify Party B by phone or email after confirming the report. Party B shall provide Party A with the hard copy of the list and calculation basis for the fee payable for the previous month and issue legal and valid VAT special invoices recognized by Party A. |
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(3) | If Party A has disagreement over the aforementioned report, bills and breakdowns, it shall, within ten (10) working days after notifying Party B in writing, produce sufficient evidence showing that the amounts of the investment management fee and the service fee for operation and management of Real Estate are unreasonable. Both parties shall immediately negotiate on resolution of such disagreement, until the amount of the fee is determined. |
(4) | If Party A finds correct or has not presented any disagreement, it shall, within thirty (30) business days after receiving hard copy of the aforementioned report, the list and calculation basis of management fee and invoice, pay the management fee. |
2.10.7 | Payment of Product Management Fee |
The product management fee shall be charged by Party B according to the time, frequency and method agreed in a specific product contract.
2.10.8 | Payment of Performance Share |
During the term hereof, Party A shall pay within the time agreed in the Investment Guidelines or otherwise negotiated by both parties after approrpriate performance sharing standards are met.
2.10.9 | Payment of Floating Management Fee |
(1) | Within the term of this Agreement, in case a floating management fee is payable as agreed herein, the Parties shall, in accordance with Section 10.6 hereof, within ten (10) business days after the proposal for performance incentive fee/underperformance penalty is determined by Party A or other period agreed by the Parties, calculate the floating management fee pursuant to paragraph (2) of Section 2.10.5 hereof, and confirm the fee in writing. |
(2) | Party A shall, within ten (10) business days after a floating management fee is confirmed in accordance with paragraph (2) of Section 2.10.5 hereof in written form, pay the floating management fee as agreed by the Parties to the account(s) designated by Party B in writing. |
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3. | Entrusted Operations |
3.1 Scope of Service
For entrusted operation matters in relation to equity/real estate funds invested by Party A at its own discretion, Party B will only provide management services for daily operation matters as described herein, such as assisting Party A in submitting relevant post-investment reports and statements, risk management, regulatory inspection, accounting management, solvency management (including non-underlying asset penetration management) and connected transactions, and for material investment matters such as contract signing, capital contribution and payment, distribution and exit in relation to underlying projects of equity/real estate funds, as well as information disclosure under fund agreements, shall still be performed and managed by fund managers in accordance with relevant provisions of the fund agreements.
3.2 | Connected Transactions |
For connected transactions of Party A involved in the entrusted operations hereunder, Party A shall clarify applicable local listing rules and regulatory rules, requirements and standards of the CBIRC and other Regulators to Party B. Party B shall monitor and maintain a record in relation to the performance of this Agreement and connected transactions of equity/real estate funds hereunder according to the requirements of Party A, provide all information on connected transactions at the time and in the form as required by Party A, and assist Party A in completing reporting and disclosure.
3.3 | Reporting and Submission |
Party B shall, in accordance with Section 2.7 hereof, perform statistical analysis, preparation and submission of regular and irregular reports and statements related to the entrusted operations; if the Regulators or Party A have other preparation and submission requirements for the entrusted operations beyond the above provisions, Party B shall follow the instructions of Party A, and the specific requirements shall be subject to the current Investment Guideline provided by Party A.
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3.4 Party B shall, in accordance with external regulatory, disclosure and internal management requirements of Party A, prepare financial reports under both PRC accounting standards and accounting principles as required by the stock exchange on which Party A is listed, and provide other accounting information required by Party A.
3.5 Party A shall provide Party B with specific submission time, preparation requirements and standards for reports and statements, and Party B shall ensure the authenticity, accuracy, integrity, timeliness and compliance of the above reports, statements, descriptions and information.
3.6 Party A shall have the ownership of the data and files generated by the operation and management of entrusted assets under this Agreement. Party A shall have the right to obtain all the information, such as business data, transaction data and financial condition, relating to entrusted assets and investments thereof. Party A shall have the right to read, inspect, duplicate accounting statements, related books, and vouchers of entrusted assets, and transaction records, computer data, agreements, resolutions and relevant management system of investment business, as well as documents and statements requested by Party A under this Agreement, and shall have the right to request Party B to make necessary explanations. If Party A requires in writing in advance, Party B shall submit the originals of such business data, transaction data, financial conditions and other materials to Party A in good conditions according to Party As requirements.
3.7 | Accounting Responsibility. |
3.7.1 | Party A, as the owner of the Entrusted Operation Assets, shall provide to Party B the accounting method and assets valuation method of the Entrusted Investment Assets under PRC Enterprise Accounting Principles and International Financial Reporting Standards. Valuation of the Entrusted Investment Assets shall be conducted in accordance with provisions of applicable laws and regulations and the valuation method issued by Party A. |
3.7.2 | Party B shall, in accordance with Party As requirements, conduct accounting and financial management of entrusted assets, and be responsible for the quality of the accounting work as well as its truthfulness, accuracy and compliance. Party B shall, in accordance with tax regulations and Party As requirements, continue to strengthen tax management, carefully conduct tax treatment, provide Party A with taxation advices and provide in a timely manner relevant reports, statements and other materials pursuant to requirements of the Regulators. |
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3.7.3 | Party B shall obtain VAT special invoices for costs and expenses payable by Party A during the entrusted investment (except for costs and expenses incurred abroad). Party B shall review and verify such obtained VAT special invoices and make appropriate deductions, and provide information such as input tax data collection form on a monthly basis to ensure proper deductions of input tax for the Entrusted Investment Assets. |
3.7.4 | Party B shall be equipped with sufficient financial employees to satisfy the accounting management needs of the entrusted investment, and accept guidance and training of Party A in relation to financial matters. |
3.7.5 | Account opening and fund transfer |
(1) | Party A shall designate or open Fund Accounts at a commercial bank or commercial banks mutually agreed upon by the Parties, based on product types (e.g., traditional insurance products, participating insurance products), and for the purposes of increasing or decreasing the amount of Entrusted Investment Assets hereunder. The custodian bank of the custody fund account shall be designated by Party A, and the account shall be opened in the name of Party A. |
(2) | Party A shall authorize Party B to conduct day-to-day management of the Fund Account. Party B shall establish strict internal control system for fund management, and be responsible for the safety, compliance and orderly management of the Fund Account. |
a) | Party B shall be responsible for safekeeping and use of the reserved seals of the Fund Account; |
b) | Party B shall directly issue instructions of fund transfer and settlement to Custodian Banks with which the Fund Accounts are opened. |
c) | In relation to Fund Accounts entrusted to Party B, all liabilities resulting from violation of laws and regulations of China and other countries concerned shall be borne by Party B. |
(3) | Party A may issue to Party B, in written form (including by emails, same below), fund transfer instructions with respect to the investment and management of the entrusted assets, and Party B shall be obligated to carry out such instructions. In the event of emergency, Party A may issue the instruction via telephone; provided, however, Party A shall confirm such instruction in written form immediately after the end of the emergency. In principle, Party B shall complete the transfer within one (1) working day after Party A issues an instruction. |
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(4) | For payment matters in the entrusted operation business, the fund manager shall directly issue a payment notice to Party A in accordance with the provisions of the fund agreement. Party A will send payment instructions to Party B after the payment process is completed. Party B shall try its best to notify the custodian to transfer funds to the account agreed in the payment notice according to Party As payment instructions after Party As funds enter into such custody fund account. Dividends in the entrusted operation business shall be transferred by the fund manager to the custody fund account of Party A according to the fund agreement, and Party B shall notify the custodian to transfer the dividends back from the custody fund account to the capital contribution account of Party A. |
3.7.6 | Reconciliation. |
(1) | Party B shall reconcile the Fund Accounts within ten (10) business days following the end of each calendar month. Party B must ensure current accounts with Party A and the Custodian Bank selected by Party A are clear and consistent. |
(2) | Party B shall retain paper-based accounting files including but not limited to records, accounting documents, books and statements related to the investment management of entrusted assets in their entirety for no less than thirty (30) years, and accounting documents and general ledger data (including annual and monthly summary data) must be retained permanently. Party B shall be responsible for loss or destruction of any accounting documents. Party Bs responsibility for retention of accounting files will not be released by virtue of termination of the custody agreement, and Party B shall continue performing its responsibilities in relation to retention, enquiry and duplication of accounting files after termination of the custody agreement. |
(3) | The frequency and method of reconciliation with the Custodian Bank and Party A in relation to entrusted assets shall be compliant with the score requirement of CBIRCs C-ROSS IRR (Classified Regulation) in relation to financial management and operation risks and other requirements of the Regulators. |
3.8 | Entrusted Operation Fee |
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3.8.1 | The entrusted operation fee rate for equity/real estate funds is 0.02% per annum. The charging base of the entrusted operation fee is the paid-in balance of equity/real estate funds invested and decided by Party A after the effective date of this Agreement (for the avoidance of ambiguity, the paid-in balance does not include the investment amount recovered by Party A, the same below), which is denominated in RMB. |
When Party A and Party Bs Subsidiary who acts as the fund manager agree on the management fee for a new equity/real estate fund, Party A will fully consider the payment of the entrusted operation fee to Party B to ensure that the sum of the management fee for a new equity/real estate fund and the entrusted operation fee does not exceed the management fee for equity/real estate funds of the same type and the same management difficulty invested by Party A before the effectiveness of this Agreement.
3.8.2 | The entrusted operation fee shall be charged quarterly within the duration of the Entrusted Operation Assets. Current entrusted operation fee =Σ paid-in amount of a single entrusted operation asset in the current period x the entrusted operation fee rate of the single entrusted operation project x (the actual duration days of the entrusted operation project in the current period / the actual days of the current year). |
3.8.3 | Payment of Entrusted Operation Fee |
(1) | In the event that Party B fails to diligently perform its responsibilities regarding compliance and control which causes relevant legal compliance issues to Party A, in addition to Party Bs liability for breach of contract and compensation for the direct losses, Party A is entitled to deduct the investment management fee as appropriate. |
(2) | The investment management fee and service fee for operation and management of Real Estate shall be settled each quarter. Party B shall, within five (5) days (postpone in case of public holidays) after the end of each quarter, send the soft copy of the list and calculation basis for the fee payable for the previous month to Party A. Party A shall review the report within ten (10) business days upon the receipt of such report, and shall notify Party B by phone or email after confirming the report. Party B shall provide Party A with the hard copy of the list and calculation basis for the fee payable for the previous month and issue legal and valid VAT special invoices recognized by Party A. |
(3) | If Party A has disagreement over the aforementioned report, bills and breakdowns, it shall, within ten (10) working days after notifying Party B in writing, produce sufficient evidence showing that the amounts of the investment management fee and the service fee for operation and management of Real Estate are unreasonable. Both parties shall immediately negotiate on resolution of such disagreement, until the amount of the fee is determined. |
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(4) | If Party A finds correct or has not presented any disagreement, it shall, within thirty (30) working days after receiving hard copy of the aforementioned report, the list and calculation basis of management fee and invoice, pay the management fee. |
4. Investment | Caps |
In consideration of the current situation of the alternative investment management between the Parties, as well as the need in connection with the growth of Party As Alternative Investments business within the coming years and daily liquidity arrangements for the investment fund, both Parties reasonably expect and agree that during the term of this Agreement, the cap amounts for the funds entrusted to Party B for Alternative Investments by Party A and the remuneration to be received by Party B from Party A shall be as follows:
4.1 | The contractual amount of the Newly Entrusted Investment Assets to be entrusted by Party A to Party B pursuant to this Agreement for management in 2022 will not exceed RMB65 billion or its equivalent in foreign currency, the contractual amount to be entrusted in 2023 will not exceed RMB65 billion or its equivalent in foreign currency, and the contractual amount to be entrusted in 2024 will not exceed RMB65 billion or its equivalent in foreign currency. |
4.2 | The investment management fee, product management fee, service fee for operation and management of Real Estate, performance incentive fee (including floating management fee and performance share for projects with non-fixed return, the same below) and the entrusted operation fee payable to Party B pursuant to the Agreement will not exceed RMB2 billion or its equivalent in foreign currency in 2022, the investment management fee, product management fee, service fee for operation and management of Real Estate, performance incentive fee and the entrusted operation fee payable to Party B pursuant to the Agreement will not exceed RMB2 billion or its equivalent in foreign currency in 2023, and the investment management fee, product management fee, service fee for operation and management of Real Estate, performance incentive fee and the entrusted operation fee payable to Party B pursuant to the Agreement will not exceed RMB2 billion or its equivalent in foreign currency in 2024. |
5. Investment | Guideline. |
5.1 | Delivery of Investment Guideline. |
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Within the term of this Agreement, Party A shall formulate the Investment Guideline on a yearly basis and, within twenty (20) business days following the start of each year, provide to Party B in written the Investment Guideline. If Party A does not provide the Investment Guideline in a timely manner, the Investment Guideline most recently delivered by Party A shall apply to Party Bs management of entrusted assets and entrusted operation business. The Statement of Service Standards will be distributed together with the annual Investment Guideline.
5.2 | Amendment to Investment Guideline. |
5.2.1 | During the term of this Agreement, Party A may amend the Investment Guideline from time to time as it deems necessary and shall provide to Party B any such amendment. Party B shall, starting from the date on which it receives Party As notice on the amendment to Investment Guideline, conduct the investment operation in accordance with the amended Investment Guideline. |
5.2.2 | Party A shall consult with Party B for its professional opinion in formulating or revising the Investment Guideline in accordance with this Agreement, and Party B shall provide such opinion. |
5.3 | Changes to Investment Guideline. |
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5.3.1 | If Party B has disagreement over the amended Investment Guideline, it shall, within ten (10) working days after receiving the notice, notify Party A and state its reasons in written. Party A shall, within ten (10) working days after receiving Party Bs notice, give written response. During such disagreement period, Party B shall implement the original Investment Guideline; |
5.3.2 | If Party A decides to keep the amendment, Party B shall comply. If Party A withdraws the amendment, the original Investment Guideline shall apply. |
6. Representations | and Warranties of Both Parties. |
6.1 | Representations and Warranties of Both Parties. |
Each Party hereto shall make the following representations and warranties to the other Party that:
6.1.1 | It shall have the capacity and capability to execute and perform this Agreement, and shall have the full rights and authorization to execute this Agreement, including, without limitation, approvals, consents or permits from relevant government departments and regulatory authorities, as well as the internal corporate authorizations; and |
6.1.2 | Its execution and performance of this Agreement shall not be in conflict with its current articles of association, internal by-laws, or any other agreements, documents and obligations to which it is a party, and shall not be in violation of any current laws, regulations, rules, judgments, verdicts, administrative authorizations, orders or decisions applicable to both parties. |
6.2 | Party As Representations and Warranties. |
6.2.1 | It shall ensure that the Entrusted Investment Assets and the Entrusted Operation Assets are from legal sources and can be legally invested by Party B in accordance with relevant provisions and requirements of laws, regulations and regulatory authorities, and the Entrusted Operation Assets are the assets legally held by Party A. It shall ensure that Investment Guideline and investment instructions it provides to Party B under this Agreement shall comply with applicable laws and regulations as well as regulations and requirements of the CBIRC and other regulators; |
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6.2.2 | It shall bear any losses on the Entrusted Investment Assets, the Entrusted Operation Assets or other funds of Party A arising from the operational risks of other parties to the transactions, including, without limitation, the liquidation of relevant banks; However, losses incurred due to Party Bs willfulness or gross negligence shall be assumed by Party B; and |
6.2.3 | It shall acknowledge and agree that Party B shall not make undertakings or guarantees for the investment gains of the Entrusted Investment Assets and the Entrusted Operation Assets under this Agreement, and shall not undertake or guarantee that the Entrusted Investment Assets and the Entrusted Operation Assets shall not suffer losses, provided that Party B has fulfilled its duty as a good faith and reasonable manager in accordance with this Agreement. |
6.3 | Party Bs Representations and Warranties. |
6.3.1 | Within the term of this Agreement, it has all qualifications required for managing the Entrusted Investment Assets and the Entrusted Operation Assets of Party A, and it shall be equipped with experienced professionals appropriate for the scale and categories of the Entrusted Investment Assets and the Entrusted Operation Assets to be in charge of the investment and management of entrusted assets. |
6.3.2 | It shall have established sound internal risk controls, inspection and audit, financial management and personnel administration systems and ensure the effectiveness of internal controls; |
6.3.3 | It shall establish adequate and reliable catastrophe recovery system as soon as possible, and maintain the feasibility and effective implementation of the system. Such catastrophe recovery system shall be able to handle various risks, calamities and disasters, and ensure that it shall, after the occurrence of catastrophes, continue to perform such obligations as investment management, liquidation and settlement, and cash management within the time period as requested by Party A, and comply with the basic business requirements on the management of entrusted assets and entrusted operations; and |
6.3.4 | It shall not engage in activities prohibited by this Agreement and other activities prohibited by laws, regulations and regulatory authorities. |
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7. Party | As Rights and Obligations. |
7.1 | Party As Rights. |
7.1.1 | It shall have the ownership and relevant rights of entrusted assets and investment gains thereof; |
7.1.2 | It shall be entitled to the economic benefits that are supposed to belong to it due to Party Bs unfair treatment to the entrusted assets, Party Bs self-owned assets and other assets entrusted by a third party; |
7.1.3 | It shall have the right to supervise, inspect, examine and evaluate the investment of entrusted assets and entrusted operating services under this Agreement; |
7.1.4 | It shall have the right to give instruction on issues which may exist in respect of the operation and management of investment, entrusted operating services and investment services, liquidation and settlement, financial accounting, accounting valuation and risk controls by Party B, as well as service quality, and to advise on improvement; |
7.1.5 | It shall, within the duration of this Agreement, have the right to designate a third party Custodian as according to regulatory policies or business needs; |
7.1.6 | It shall have the right to send instructions, notices and reminders to Party B within the scope of this Agreement; |
7.1.7 | It shall have the right to replace investment manager in accordance with this Agreement; |
7.1.8 | Subject to regulatory requirements and Party Bs obligations to other entrusting parties, it may check the accounting system of Party B and request Party B to state the reasons for significant issues in writing; |
7.1.9 | Such other rights as provided herein; and |
7.1.10 | Such other rights as provided by laws and regulations. |
7.2 | Party As Obligations. |
7.2.1 | Party A shall, in accordance with this Agreement, pay fees for the management of entrusted assets, product management fee, service fee for the operation and management of Real Estate, performance incentive, entrusted operation fee and related payments and expenses in a timely manner, and such amounts are all VAT inclusive. Party B will not otherwise charge for any VAT and surcharges applicable to the business hereof in addition to the amounts set forth herein unless agreed in writing by both parties; |
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7.2.2 | Party B shall provide Party A with legal and valid VAT special invoices that are recognized by Party A for the investment management fees, product management fee, service fee for the operation and management of Real Estate, performance incentives and entrusted operation fee receivable hereunder. For losses of Party A in enterprise income tax caused by Party Bs failure to provide legal and valid certificates that are recognized by Party B, Party B agrees it will indemnify against such losses (or make corresponding deductions from settlement amounts). |
7.2.3 | It shall formulate and provide Investment Guideline in a timely fashion; |
7.2.4 | It shall provide to Party B periodically materials and data information regarding legal compliance as well as regulatory requirements on insurance companies issued by the CBIRC. It shall promptly consult with Party B in regard to any significant event that may affect cash flow, such as significant changes of insurance market, company products and adjustment to channel strategies. With respect to the transfer of relatively large-scale fund as requested by the debtor of entrusted assets, it shall, without impairing Party Bs rights hereunder, consult with and notify Party B in advance, and cooperate with Party B to lessen the effect of such transfer on investment of entrusted assets; |
7.2.5 | It shall, within the term of this Agreement, take any necessary actions to assist Party B in performing its obligations hereunder, including, without limitation, execution of necessary documents; |
7.2.6 | Such other obligations as provided herein; and |
7.2.7 | Such other obligations as provided by laws and regulations. |
8. Party | Bs Rights and Obligations. |
8.1 | Party Bs Rights. |
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8.1.1 | Unless otherwise provided by laws, regulations or this Agreement, subject to the terms and conditions hereof and the Investment Guideline, Party B shall have the right to conduct investment management and make investment instructions with respect to entrusted assets under this Agreement, without giving prior notice to Party A; |
8.1.2 | Carry out the entrusted operating services hereunder in accordance with applicable laws, regulations, relevant provisions of the Regulators and this Agreement. |
8.1.3 | It shall collect the investment management fees, product management fee, service fee for the operation and management of Real Estate, performance incentives and entrusted operation fee in accordance with this Agreement; |
8.1.4 | It shall have the right to give professional advice on the formulation and amendment of Investment Guideline; |
8.1.5 | It shall have the right to give professional advice on the choice and examination by Party A of third party independent Custodian; |
8.1.6 | Party B shall have the right hereunder to designate itself and/or an appropriate Subsidiary of Party B to carry out specific performances based on specific entrusted investment management matters, where Party B shall ensure that its Subsidiary will comply with the obligations and responsibilities of Party B hereunder. |
8.1.7 | Such other rights as provided herein; and |
8.1.8 | Such other rights as provided by laws and regulations. |
8.2 | Party Bs Obligations. |
8.2.1 | Party B shall ensure that its qualification to manage the Entrusted Investment Assets and the Entrusted Operation Assets remains current and valid during the term of this Agreement, and ensure that it always has the ability of credit risk management, the ability of product management under debt investment plans and the ability of product management under equity investment plans. It shall honestly, carefully and diligently manage the Entrusted Investment Assets and provide entrusted operating services, and shall ensure that the Entrusted Investment Assets of Party A and entrusted operating services of Party B comply with laws, administrative regulation, relevant CBIRC rules and other applicable regulations. In the event of any legal risks with respect to non-compliance with Chinese laws, administrative regulations, relevant CBIRC rules and other applicable regulations due to Party Bs intention or gross negligence, Party B shall take all measures to resolve such issues. If, as a result, there is any adverse effect caused to Party A, including suffering any economic losses or causing any administrative penalties and civil actions, Party B shall be responsible to compensate any direct losses suffered by Party A; |
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8.2.2 | Party B shall, in accordance with laws, regulations, regulatory requirements, this Agreement, Investment Guideline and Party As written instructions, conduct Entrusted Investment Management, provide entrusted operating services and respond effectively to Party A Notices and Party A Reminders in a timely fashion and take necessary actions to implement such notices and reminders. Party B shall take full consideration of the effect of tax when making an investment decision and shall fully assess the tax costs and tax risks when operating investment business. According to current tax laws and regulations, tax payment obligations (and withholding obligations) of the two parties arising hereunder shall be borne respectively by each Party; |
8.2.3 | Party B shall periodically provide to Party A the forecast of needs for fund expenses in relation to the Entrusted Investment Assets and the Entrusted Operation Assets and information that may be subject to significant change and shall communicate with Party A in a timely manner. With respect to relatively large-scale needs for fund expenses, Party B shall consult and notify Party A in advance and shall actively cooperate with Party A with respect to fund planning and cash flow management. |
8.2.4 | Party B shall, in accordance with this Agreement and the Investment Guideline, perform obligations such as special management, accounting responsibility, report obligation, risk control, file management, system management and other service obligations; |
8.2.5 | Party B shall actively assist and cooperate with Party A when Party A entrusts the independent custody of the Entrusted Investment Assets to third party. Both parties shall enter into written agreement additionally to provide for such matters as Party Bs obligations and work process in regard to the custody of assets; |
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8.2.6 | It shall cooperate with outside auditor consented to by Party A in the audit of entrusted assets; |
8.2.7 | It shall initiatively assist in the implementation of Party As investment management system and financial system, provide relevant data required by such implementation; |
8.2.8 | It shall cooperate with Party A in the inspection of the Entrusted Investment Assets and the Entrusted Operation Assets, and within a reasonable period, provide provisional data and material required by regulatory authorities and management of Party A; |
8.2.9 | It shall notify Party A promptly of any loss on the Entrusted Investment Assets, the Entrusted Operation Assets or funds of Party A as a result of operating risk of other party to the transaction, and shall have the right of recourse in the name of Party A or Party As investment manager or fiduciary in accordance with Party As authorization; |
8.2.10 | According to Basic Regulations on Corporate Internal Control (and the complementary Implementation Guidelines for Corporate Internal Control), Evaluation Guidelines for Corporate Internal Control and Audit Guidelines for Corporate Internal Control jointly issued by the Ministry of Finance, the China Securities Regulatory Commission (CSRC) and other regulatory authorities, and the United States Sarbanes Oxley Act, as a company controlled by Party A, Party B is obliged to conduct the evaluation of internal control and internal audit accepting external auditors. Party B shall be subject to the quality inspection of the annual internal control self evaluation by Party A, and report the results of such evaluation as requested by Party A; |
8.2.11 | Party B shall return the project investment fund and investment gains to account(s) designated by Party A within two (2) business days following exit from investment projects. |
8.2.12 | Party B shall share with Party A the outside research sources and communication opportunities with respect to the Entrusted Investment Assets and the Entrusted Operation Assets, and regularly provide Party A with training opportunities in relation to Alternative Investments either in China or abroad; |
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8.2.13 | Party B shall be solely responsible for the Entrusted Investment Management hereunder. In case of designation as described in Section 8.1.6, Party B shall and hereby warrants it will cause its Subsidiary to perform specific entrustment management matters according to the terms and conditions agreed herein. |
8.2.14 | Party B promises that if Party B or its Subsidiary has major system and process changes, major system failures, changes in the investment management personnel responsible for Party As entrusted investment management business or entrusted operation business (including but not limited to investment team personnel, risk control and compliance management personnel), Party B shall immediately notify Party A by telephone, e-mail, etc, and at the same time, make reasonable judgment and evaluation on the adverse impact of the above-mentioned emergencies or abnormalities on the performance of this Agreement, and provide relevant explanatory materials. Party A shall have the right to require Party B to solve any problems within a time limit or provide an emergency plan. |
8.2.15 | Such other obligations as provided herein; and |
8.2.16 | Such other obligations as provided by laws and regulations. |
9. | Risk Control. |
9.1 | Party B shall, in accordance with relevant rules and requirements of regulatory authorities, form risk management department and establish sound investment management system and risk control system, inspect and supervise the investment of entrusted assets and entrusted operating services. It shall inform Party A in a timely fashion of abnormalities or violations in the transactions of the entrusted assets and entrusted operating services. In case of designation as described in Section 8.1.6, such Subsidiary of Party B shall be covered by the aforesaid investment management system and risk control system, and Party B shall cause its Subsidiary to comply with such systems and Party Bs obligations hereunder. Party A may inspect the establishment and implementation of the investment management, entrusted operating services and risk control systems by Party B, and Party B shall give adequate cooperation for the risk management measures taken by Party A with regard to the Entrusted Investment Assets and the Entrusted Operation Assets. |
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9.2 | Party B shall formulate the Emergency Management Plan for Significant Unexpected Events of Insurance Asset Management (including emergency management plan for significant unexpected events of all Entrusted Investment Categories) in accordance with applicable provisions issued by the CBIRC and provide it to Party A for record. |
9.3 | Party B shall formulate, establish and continuously improve relevant rules and systems. In particular, Party B shall establish risk isolation mechanisms between the Entrusted Investment Assets, the Entrusted Operation Assets and the assets owned by Party B or entrusted by other parties. |
9.4 | Party A and Party B shall co-chair the risk control meetings, to discuss and reach resolutions on issues requiring special attention, sudden events and important information. If either Party deems it necessary to hold such risk control meetings on issues requiring special attention, sudden events and important information, it shall have the right to convene such meetings and the other Party shall be obligated to cooperate. |
10. | Inspection, Supervision and Review. |
10.1 | Party A may conduct on-site or off-site inspection and supervision of the management of the Entrusted Investment Assets and the Entrusted Operation Assets on a regular or non-regular basis, with inspection results linked to Party Bs assessment and evaluation, and Party B shall provide convenience and assistance therewith. |
10.2 | Party B shall cooperate with Party A in supervision and inspection by the Regulators in relation to the Entrusted Investment Assets and the Entrusted Operation Assets. Party B shall promptly notify Party A of the status of regulatory authorities inspection. |
10.3 | Party B shall assist the auditor personnel of Party A or engaged by Party A for the audit of entrusted assets in their work. |
10.4 | Party A may send representatives to Party B, who shall supervise and evaluate Party Bs performance of this Agreement and Investment Guideline on behalf of Party A. As long as Party B is not in violation of its confidentiality obligations to other entrusting parties, Party A may send a person to participate in Party Bs business meetings and business research related to matters in pre-investment stage of entrusted assets under this Agreement, and Party B shall give active cooperation. However, Party As representatives shall not interfere with normal investment management activities of Party B and Party B shall not be exempted from relevant responsibilities in connection with Entrusted Investment Management. |
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10.5 | Supervision by Custodian. Party B shall be subject to the supervision of its investment activities by the Custodian designated by Party A, and cooperate with the compliance inspection by Custodian, check with Custodian the status of entrusted assets in a timely fashion, provide relevant information and be responsible for the truthfulness and accuracy of such information. |
10.6 | Performance Review. Party A shall, within ninety (90) business days after the submission of the annual final account data to Party A by Party B, review and evaluate the investment status of the Entrusted Investment Assets for that year and related services provided by Party B in accordance with this Agreement, Investment Guideline and related rules on investment performance review, to determine the plan for payment of floating fee and notify Party B in writing. |
11. | Third Party Cost and Expense. |
11.1 | Third party cost and expense shall mean the cost and expense charged by a third party and incurred by Party B in performing the investment management and operating services under this Agreement, except for the investment management fee, product management fee, performance incentive fee, service fee for the operation and management of Real Estate and entrusted operation fee paid by Party A to Party B pursuant to Section 9 this Agreement. |
11.2 | The Parties agree and confirm that for the purpose of performing the entrusted investment management and operating services hereunder, third party cost and expenses as well as intermediary costs (including costs incurred as a result of retaining external lawyers, external auditors, external appraisers and other external professionals) for such entrusted investment management and operating services shall follow the principle of the retaining party shall pay the cost. |
11.3 | Party A shall be responsible for bank settlement expenses and such expenses shall be included in Party As cost. Bank settlement expenses refer to the bank expenses incurred for the transfer of funds from and to the Fund Accounts with which Party B manages entrusted funds of Party A as well as other account management fee and internet bank fee charged by banks. |
11.4 | Expenses such as fees for entrusted loan, fees for guarantee letter, trust channel fees and account escrow fees shall be included in investment costs. |
11.5 | For third party costs and expenses to be borne by Party A, Party B shall make a reasonable forecast during the investment decision process and notify in advance. Party A will not bear any third party cost and expense that is beyond such notified scope or that is increased due to Party Bs actual investment performance although within such notified scope. |
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12. | Conflicts of Interest and Prohibited Activities. |
12.1 | Party A hereby recognizes that, when Party B conducts investment management of entrusted assets and, at the same time, in regard to its own assets or the assets of any third party, conflicts of interest may arise in respect of (but not limited to) the distribution of resources, provision of services and allocation of investment opportunities. |
12.2 | When Party B determines in its professional judgment that there is an existing or possible conflict of interest, Party B shall notify Party A of such conflict of interest in a timely fashion. |
12.3 | Party B shall, in the principle of trust, fairness and reasonableness, take any necessary action or measure to deal with such conflicts of interest, to ensure that Party As legal interests are not damaged. |
12.4 | Party B shall not engage in any of the following activities: |
12.4.1 | Using the Entrusted Investment Assets and the Entrusted Operation Assets under this Agreement to pursue its own interest or the interest of any third party, in the event that Party B uses the Entrusted Investment Assets and the Entrusted Operation Assets to pursue its own interest or the interest of any third party, such interest so gained by Party B shall belong to the Entrusted Investment Assets and the Entrusted Operation Assets; |
12.4.2 | Without Party As prior written consent, transferring the right to manage the Entrusted Investment Assets or operate the Entrusted Operation Assets under this Agreement to any third party; |
12.4.3 | Without Party As prior written consent, lending the the Entrusted Investment Assets or any investment attributable to Party A or ownership documents or documents evidencing the rights to investments to any third party; |
12.4.4 | Without Party As prior written consent, conducting transaction between entrusted assets and its own assets or assets entrusted by it a third party; |
12.4.5 | Engaging in investment activities in the name of Party A using funds or assets not under the name of Party A, or engaging in investment activities in the name of others using funds or assets under the name of Party A; |
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12.4.6 | Treating entrusted assets unfairly, including putting the transactions of Party Bs own business or other entrusted assets in prior order to the transactions of entrusted assets, or putting the business of any third party who has interested relationship with Party B in prior order; |
12.4.7 | Giving preferential consideration or arrangement to Party Bs own business or other entrusted assets, or the business of any third party who has interested relationship with Party B with respect to the arrangement of professionals; |
12.4.8 | Not providing to the investment managers responsible for Entrusted Investment Management and Entrusted Operation the information and support of the same adequacy as the information and support provided to investment managers responsible for management of other entrusted assets with respect to information technology, accounting and financial management, the review, analysis, research and consulting of investment risk; |
12.4.9 | Misappropriation of entrusted assets; |
12.4.10 | Mixing the management of assets of Party A with assets of other entities; |
12.4.11 | Engaging in such investment as maybe resulting in Party As undertaking of unlimited liability or credit transactions using the Entrusted Investment Assets and the Entrusted Operation Assets; or |
12.4.12 | Other activities prohibited by laws, regulations, regulatory provisions or this Agreement. |
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13. | Confidentiality. |
13.1 | Party B shall keep confidential any information relating to Party A or its Entrusted Investment Assets and Entrusted Operation Assets made known to Party B in the execution and performance of this Agreement, and without Party As prior written consent, Party B shall not disclose such information to anyone. Party Bs confidentiality obligation hereunder shall survive the invalidity, release or termination of this Agreement. However, the following information may be exempted: information publicly available; information obtained by Party B from other party who, to Party Bs knowledge, has no confidentiality obligation to Party A; information obtained not in connection with the performance of this Agreement; information required to be disclosed under laws, regulations, government or court orders or arbitration bodys request, provided that Party B shall, to the extent permitted by law and feasible, notify Party A in advance and state in the disclosure that This is the commercial secret of the listed company and without the prior written consent of the listed company it shall not be disclosed to anyone, and if Party B is required to disclose to court or arbitration body any confidential information, it shall also advise such court or arbitration body of Party As rights hereunder; disclosure for compliance with any securities trading rules; and other information whose disclosure is consented to by Party A in writing in advance. In this case, the information to be disclosed by Party B shall only be disclosed to the extent required by laws, regulations, and government or court orders or arbitration tribunals. |
13.2 | With respect to any information relating to Party A or the Entrusted Investment Assets and the Entrusted Operation Assets as described above under Section 13.1, Party B may use such information only for the matters provided in the Agreement and not for any purpose other than the purpose of this Agreement. |
13.3 | Party A shall keep confidential any commercial information or investment technique of Party B made known to Party A during the performance of this Agreement. Unless otherwise provided by laws, regulations or this Agreement, it shall not disclose or use such information in any way without Party Bs prior written consent. Party As confidentiality obligation hereunder shall survive the invalidity, release or termination of this Agreement. However, the following information may be exempted: information publicly available; information obtained by Party A from other party who, to Party As knowledge, has no confidentiality obligation to Party B; information obtained not in connection with the performance of this Agreement; information required to be disclosed under laws, regulations, government or court orders or arbitration bodys request, provided that Party A shall, to the extent permitted by law and feasible, notify Party B in advance, and if Party A is required to disclose to court or arbitration body any confidential information, it shall also advise such court or arbitration body of Party Bs rights hereunder; disclosure for compliance with any securities trading rules; and other information whose disclosure is consented to by Party B in writing in advance. In this case, the information to be disclosed by Party B shall only be disclosed to the extent required by laws, regulations, and government or court orders or arbitration tribunals. |
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13.4 | The references to Party A and Party B under this Section shall include, without limitation, Party A, Party B, and the directors, supervisors, employees, agents or agency of Party A or Party B. |
14. | Breach of Contract and Indemnification. |
14.1 | Party As violation of its representations, warranties or other provisions hereunder shall constitute Party As breach of this Agreement. Party A shall indemnify Party B for direct losses suffered by Party B as a result of such breach. Party B shall be entitled to give Party A written notice to terminate this Agreement in the case of substantial losses caused by Party As breach. The Agreement shall be terminated on the thirtieth (30th) day following the receipt of such written notice by Party A, unless otherwise waived by Party B. |
14.2 | Violation by Party B (and Party Bs Subsidiary designated by Party B under Section 8.1.6 to perform the investment management hereunder) of Party Bs representations, warranties or other provisions hereunder and the written instructions given by Party A hereunder, shall constitute Party Bs breach of this Agreement, for which Party B shall promptly take remedy measures and be liable for compensating Party A for any direct losses incurred by Party A as a result of its breach. Party B shall indemnify Party A against substantial losses suffered by Party A as a result of such breach, and Party B shall not receive the investment management fee and the performance incentive fee (including floating management fee, performance fee for projects with non-fixed return) and entrusted operation fee for the current period if it has not made such indemnification or any unpaid portion of the above fees before making such indemnification . Party A shall be entitled to give Party B written notice to terminate this Agreement. The Agreement shall be terminated on the thirtieth (30th) day following the receipt of such written notice by Party B, unless otherwise waived by Party A. |
14.3 | In case of any loss on Party As Entrusted Investment Assets and Entrusted Operation Assets or bringing compliance risks to Party A due to failure of Party B (and Party Bs Subsidiary designated by Party B under Section 8.1.6 to perform the investment management hereunder) to fulfill the duty of care as a trustee such as willfulness, omission, negligence, error in operation, or flaws in provisions of agreements with a third party, system malfunction or employees fraud etc., Party B shall indemnify the direct loss resulting therefrom and assume appropriate civil liabilities. |
14.4 | In addition to bearing indemnification and civil liabilities in accordance with Sections 14.2 and 14.3 hereof, Party B shall establish relevant systems and measures for accountability internally. |
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14.5 | The indemnification liability and civil liability of any party prior to the termination of this Agreement shall survive the termination. |
15. | Force Majeure. |
15.1 | An event of force majeure refers to any circumstance that cannot be reasonably predicted, avoided and overcome. Such event cannot be reasonably controlled, predicted, or avoided even if predicted, and overcome by the affected Party, and occurs after the execution of this Agreement, which makes the performance of this Agreement in whole or in part impossible or impracticable as a matter of fact, including but not limited to any situation where performance is impossible without unreasonable expenditure, however, events which can be overcome by Party Bs catastrophe system shall be excluded. |
15.2 | If either Party fails to perform in whole or in part its duties under this Agreement due to an event of force majeure, the performance of such duties shall be suspended during the period of such event of force majeure. |
15.3 | A Party that claims that it has been affected by an event of force majeure shall notify the other Party of such event of force majeure in writing in the shortest period possible, and shall provide appropriate evidence of the existence and duration of such event of force majeure to the other Party within fifteen (15) days after its occurrence. A Party that claims that the performance of this Agreement is objectively impossible and impractical due to such event of force majeure shall take any reasonable measures to cure or lessen the effect caused by such event of force majeure. |
15.4 | When an event of force majeure occurs, both parties shall consult with each other regarding the performance of this Agreement. Once the event of force majeure or its effect ceases or is cured, both parties shall immediately resume the performance of their respective obligations hereunder. |
16. | Termination. |
16.1 | This Agreement shall be terminated upon occurrence of any of the following events: |
16.1.1 | One Partys breach of contract results in substantial loss of the other Party and the other Party requests to terminate this Agreement; |
16.1.2 | The term of the Agreement expires; |
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16.1.3 | Both parties agree to terminate this Agreement; |
16.1.4 | When it is required by the Regulators or laws and regulations of the jurisdiction of listing venue to rescind the investment entrusting relation; or |
16.1.5 | Any party becomes insolvent or becomes subject to bankruptcy, liquidation, compulsory dissolution or receivership. |
16.2 | In the event that one Party terminates this Agreement, this Agreement shall be terminated on the thirtieth (30th) day following the receipt by the other Party of the written notice to terminate. |
16.3 | Obligations upon Termination. |
16.3.1 | Upon the termination of this Agreement, Party A may notify Party B in writing to handle the Entrusted Investment Assets and the Entrusted Operation Assets following all the steps set forth in the notice. Party B shall, in accordance with Party As requirements, assist Party A handling the Entrusted Investment Assets and the Entrusted Operation Assets on an honest and fiduciary basis. |
16.3.2 | Upon the termination of this Agreement, unless otherwise explicitly instructed by Party A, Party B shall not conduct any investment or send any instructions in regard to the Entrusted Investment Assets and the Entrusted Operation Assets. |
16.4 | Upon the termination of this Agreement, all of the responsibilities and obligations of Party A and Party B shall be terminated, except the followings: |
16.4.1 | Party B shall deliver the records relating to Party A or the Entrusted Investment Assets and the Entrusted Operation Assets under this Agreement to Party A or Party As authorized representatives; |
16.4.2 | Party B shall cooperate with Party A to transfer the Entrusted Investment Assets and the Entrusted Operation Assets to the new investment manager of Party A forthwith, and shall, at the request of Party A, transfer relevant materials to such investment manager in a timely and orderly fashion, and cooperate with Party A to complete other transfer work. Also, Party B shall submit the report on the investment operation of the Entrusted Investment Assets. |
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16.5 | The termination of this Agreement shall not affect the rights of one Party over the other Party under laws, regulations or this Agreement, including, among other things, the claims to default, damages and compensation. |
17. | Performance. |
17.1 | The transactions under this Agreement regarding entrusted management of insurance funds between Party A and Party B shall constitute connected transactions of Party A as described by the listing rules. According to the listing rules, such transactions shall be conducted only after obtaining an exemption from the Hong Kong Stock Exchange (HKSE) or upon the approval by independent shareholders, or on the condition of conforming with any other provisions concerning connected transactions in the listing rules. Therefore, the performance of this Agreement related to such connected transactions shall be subject to the approval of the HKSE or compliance with any other stipulations concerning connected transactions in the listing rules. Both Party A and Party B agree to observe the relevant stipulations of the listing rules. |
The performance of this Agreement may cause Party A to carry out necessary procedures for approval and disclosure for complying with the Measures for the Administration of Related Transactions of Insurance Companies issued by the CBIRC, related listing rules of HKSE or Shanghai Stock Exchange (SSE) or other applicable regulatory rules. Party B shall be obliged to cooperate with Party A during the performance of such procedures. |
Party A will provide necessary informational materials and practice trainings to Party B as required by Party B, so as to facilitate Party Bs effort in managing entrusted assets to identify connected transactions of Party A. Such informational materials include, without limitations: a list of connected persons of Party A, types of connected transactions of Party A, exemption applications under different market rules, announcement (disclosure), capped amounts of connected transactions as approved by independent shareholders as well as contact persons for connected transactions and reporting processes for connected transactions.
17.2 | If the exemptions from the HKSE, SSE and CBIRC contain additional conditions, this Agreement shall be performed in accordance with such additional conditions. Both Party A and Party B agree to strictly observe such conditions. |
17.3 | Upon the effective date of the Agreement, both Parties shall take such further actions and measures as to fully and effectively perform this Agreement, including but not limited to determining the implementation plan or detailed measures in accordance with the principles provided herein and on the condition of not violating the provisions agreed upon herein. Within the authorization scope and the authorized cap amount decided by the Agreement and the Implementation Guidelines, Party A is not required to go through internal approval process unless otherwise required by outside regulation rules, Party As articles of association or other corporate governance documents. Party A shall simplify and facilitate relevant internal implementation process. |
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17.4 | Upon effectiveness of this Agreement, the two parties hereto may enter into separate performance agreements and related power of attorney based on their business needs. |
18. | Notices. |
All notices relating to the Agreement shall be in writing and shall be delivered by overnight courier, fax or mail. Notices sent by overnight courier shall be deemed delivered upon delivery. Notices sent by fax shall be deemed delivered upon successful transmission, provided that a fax confirmation report produced by the fax machine showing the successful transmission of the notice is provided by the sending party. Notices sent by mail shall be deemed delivered on the third (3rd) business day after it has been posted (if the last day is a Sunday, or statutory holiday, such day shall be the next business day). Any notice shall become effective upon delivery. |
The addresses of the parties for the delivery of notices are as follows: |
China Life Insurance Company Limited |
China Life Investment Management Company Limited | |
Address: China Life Plaza, 16 Financial Street, Xicheng District, Beijing Tel: 010-63633333 Fax: 010- |
Address: 12/F China Life Center, 17 Financial Street, Xicheng District, Beijing Tel: 010-66581000 Fax: 010- |
19. | Assignment. |
Without prior written consents of both parties, this Agreement shall not be assigned. However, a Party may assign this Agreement to its successors and this Agreement shall be binding on such successors. |
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20. | Severability. |
The invalidity, illegality or unenforceability of some provisions herein under applicable laws, regulations or certain special circumstances shall not affect the effectiveness, legality and implementation of other provisions herein. |
21. | Governing Law and Dispute Resolution. |
21.1 | This Agreement shall be governed by, and interpreted and construed in accordance with the laws of PRC. |
21.2 | Any disputes arising from this Agreement or the execution, effectiveness or interpretation hereof or related to this Agreement shall be settled by both parties through friendly negotiations. If such negotiation fails within sixty (60) days of the dispute, either Party may submit such dispute to the court of competent jurisdiction where Party A is located. |
21.3 | When dispute occurs or is under a lawsuit, other than the matter in dispute, each Party shall still be entitled to exercise its other rights hereunder and shall still perform its other obligations hereunder. |
22. | Effectiveness, Counterparts and Others. |
22.1 | After being approved by the independent shareholders at a shareholders meeting and duly executed by the two parties, this Agreement shall have a term of 2 years from January 1, 2022 to December 31, 2023. Unless either party sends a written notice to the other party not to renew this Agreement before the expiration of the term hereof or ninety (90) working days before the expiration of the renewal period, Party A and Party B agree to automatically renew this Agreement for one year without violating the listing rules of the venue where Party A is listed. |
22.2 | Any exhibit hereto shall be an integral part of this Agreement and constitute the entire agreement together with this Agreement, having the same legal effect as this Agreement, complied with by both parties. |
22.3 | This Agreement and exhibit hereto may be amended through negotiation between both parties. The amendment can only be made pursuant to a written agreement duly executed by legal representatives or authorized representatives of both parties and upon the approval of both parties through their respective corporate actions. If such amendment constitutes a material and significant change to this Agreement, it shall become effective only upon the notification of and procurement of approval from the HKSE and SSE, subject to the relevant provisions of the listing rules as in effect from time to time and the requirements of HKSE, and/or the shareholders general meeting of Party A, if applicable. |
44
22.4 | The two parties hereto agree that the Agreement shall be automatically renewed for one year if it is not in violation of the listing rules of the exchange where Party A is listed, unless either Party sends a written notice to the other Party stating its intent of not going to renew the Agreement before expiration of the term of the Agreement or at least ninety (90) business days before expiration of a renewal term. |
22.5 | Party B undertakes that, if, in entrusted investment and management agreements and/or entrusted operation agreements with insurance funds between Party B and other principals, such other principals are entitled to any preferential treatments or any treatments more favorable than those enjoyed by Party A, Party B shall offer the same treatments to Party A at the request of Party A. Party B shall notify Party A in writing within five (5) business days after its knowledge of the above favorable treatment. Upon Party As written request for the same favorable treatment, Party B shall agree and confirm such treatment in the form of supplementary agreement or memorandum. |
22.6 | This Agreement shall be executed in seven (7) counterparts, with two (2) held by each Party, one (1) filed with CBIRC, one (1) filed with SSE (if necessary), and one (1) filed with HKSE (if necessary). Each counterpart shall have the same legal effect. |
22.7 | Both parties shall solve the matters unaddressed herein through negotiation in accordance with applicable laws, regulations and regulatory requirements, and if necessary, may separately enter into supplementary agreement. Such supplementary agreement shall have the same legal effect as this Agreement. |
Appendixes:
1. Authorization and Entrustment Letter by China Life Insurance Company Limited
2. Power of Attorney from the Legal Representative of China Life Insurance Company Limited
45
(This is a signature page only.)
Party A: China Life Insurance Company Limited (Seal) |
Party B: China Life Investment Management Company Limited (Seal) | |
Legal Representative/ Authorized Representative (Signature) |
Legal Representative/ Authorized Representative (Signature) |
46
Appendix 1:
Authorization and Entrustment Letter by China Life Insurance Company Limited
To China Life Investment Management Company Limited,
According to the Asset Management and Operating Service Agreement between China Life Insurance Company Limited and China Life Investment Management Company Limited (the Asset Management and Operating Service Agreement), you are hereby authorized to use our insurance funds to engage in investment and operations in a professional manner and provide relevant management and administrative services for the Entrusted Investment Assets within the scope of authorization according to the Asset Management and Operating Service Agreement and the Investment Guideline. You are hereby authorized to use the seal of China Life Investment Management Company Limited for completing transaction related formalities and executing relevant legal documents within the scope of authorization according to the Asset Management and Operating Service Agreement and the Investment Guideline. In particular, you are authorized to:
1. | Carry out investment project screening, negotiation, due diligence and retention of intermediaries in relation to the Entrusted Investment Assets; |
2. | Negotiate or discuss with counterparties, sign and execute investment agreements and related transaction documents; |
3. | Establish project companies, special purpose vehicles (SPV), partnerships and other innovative legal entities in our name for the purpose of entrusted investment; |
4. | Perform our obligations under investment agreements and related transaction documents and exercise or enjoy powers and rights thereunder; |
5. | Complete external filing procedures in relation to the Entrusted Investment Assets; |
6. | Complete closing procedures in relation to the Entrusted Investment Assets, including but not limited to changes in industrial and commercial registration and property registration, receive investment targets, and appoint directors, supervisors and officers to the invested companies; |
7. | Carry out subsequent management work in relation to the Entrusted Investment Assets, including but not limited to engaging development and construction consulting agencies, operation and management companies and audit and evaluation firms; |
8. | Handle matters in relation to project exits in relation to the Entrusted Investment Assets; |
This authorization shall remain valid until December 31, 2024.
China Life Insurance Company Limited (Seal) Legal representative: (signature) Date: January 1, 2022 |
47
Appendix 2.
Power of Attorney from the Legal Representative of China Life Insurance Company Limited
To China Life Investment Management Company Limited,
This is to authorize Mr. Zhang Fengming to deal with matters in relation to investment of the Entrusted Investment Assets within the scopes set forth in the Asset Management and Operating Service Agreement between China Life Insurance Company Limited and China Life Investment Management Company Limited and the Investment Guideline for China Life Investment Management Company Limited, and complete transaction related procedures and execute appropriate legal documents on behalf of us.
This power of attorney shall remain valid until December 31, 2024.
China Life Insurance Company Limited (Seal) Legal representative: (Signature) Date: January 1, 2022 |
48
Exhibit 4.8
English Translation
Property Leasing Agreement
between
China Life Industrial Investment Company Limited
and
China Life Insurance Company Limited
Table of Contents
1. |
Conditions Precedent |
1 | ||||
2. |
Scope of the Lease |
2 | ||||
3. |
Term |
2 | ||||
4. |
Rent |
3 | ||||
5. |
Rights and Obligations of Both Parties |
4 | ||||
6. |
Amendment and Termination |
7 | ||||
7. |
Liability for Breach of Contract and Damages |
7 | ||||
8. |
Representations and Warranties |
7 | ||||
9. |
Force Majeure |
9 | ||||
10. |
Miscellaneous |
9 | ||||
11. |
Communications |
10 | ||||
12. |
Governing Law and Dispute Resolution |
11 | ||||
13. |
Supplementary Provisions |
11 |
Appendix I: Schedule of Properties Leased to Party B by Party A
This property leasing agreement (the Agreement) was entered into on December 31, 2021 by and between the following two parties in Beijing, the Peoples Republic of China (PRC or China).
Party A: China Life Industrial Investment Company Limited
Address: 14/F, PANA Tower, 128 Zhichun Road, Haidian District, Beijing
Legal representative: Fang Haiyan
Party B: China Life Insurance Company Limited
Address: Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing
Legal Representative: Wang Bin
Whereas:
i. | Party A is a duly organized and validly existing solely state-owned company; |
ii. | Party B is a duly organized and validly existing joint stock limited insurance company; |
Party B has signed a property leasing agreement with China Life Investment Holding Company Limited in 2020 (the Original Agreement), which will expire on December 31, 2021. Based on the Original Agreement, Party A and Party B wish to make proper adjustments and fair, reasonable arrangements with respect to Party As leasing of its self-owned property to Party B, in accordance with the actual leasing status and market conditions. This Agreement is the master agreement setting forth terms and conditions in relation to the property leasing between Party A and Party B. Party A and Party Bs branches will otherwise enter into specific agreements with respect to matters such as payment of rents and invoicing. Party A shall issue invoices to Party Bs branches based on actual payments of rents. In case of special circumstances, Party A and Party B shall negotiate and enter into an agreement in writing.
This Agreement is made based on mutual benefits of and through friendly consultations by Party A and Party B in accordance with the Law on Urban Real Estate of the PRC, the Contract Law of the PRC and other applicable laws and regulations.
1. | Conditions Precedent |
1.1 | Party A owns all of the properties listed in Appendix I hereto (hereinafter referred to as Party As Properties or the Properties). |
1.2 | Party A agrees to lease Party As Properties to Party B and Party B agrees to rent Party As Properties according to the terms and conditions of this Agreement for Party Bs use as offices. |
1
2. | Scope of the Lease |
2.1 | Party As Properties include 735 properties, with a total constructions area of 278,059.74 square meters. Please refer to Appendix I, an integral part of this Agreement, for details. |
2.2 | The Properties shall be deemed to have been handed over to Party B by January 1, 2022. The property covered in the Original Agreement shall be under good state meeting Party Bs requirements and Party A undertakes the newly added property in this Agreement is under good state satisfied Party Bs requirements at the hand-over time. |
2.3 | Party A and Party B hereby agree that both Parties may request to narrow the scope of rent for the next year according to their respective business requirements with a written notice to the other party before November 30 of each year. The two parties shall, according to request of the other party for narrowing of the scope of rent, reduce sites of the property hereunder and adjust the rent hereunder accordingly. |
2.4 | The two parties hereby agree that both parties may raise request to expand the scope of rent for the next year with a written notice to the other party before November 30 of each year. Provided that the two parties reach an agreement for expansion of the scope of rent before December 31 of the current year, they shall add sites of the property hereunder and adjust the rent hereunder accordingly. |
2.5 | The two parties hereby agree that Party B may raise request to narrow the scope of rent for that year with a written notice to Party A with one month in advance. Rent for the returned property till the month when Party B removes out shall be paid. |
3. | Term |
3.1 | Unless otherwise regulated by listing rules of the jurisdiction where Party B is listed (Listing Rules), the term of this Agreement shall be from January 1, 2022 to December 31, 2022. |
3.2 | Unless otherwise stipulated in this Agreement or with prior written consent of the other party, neither party may terminate this Agreement or rent any of the Properties at an earlier time than stipulated herein. |
2
4. | Rent |
4.1 | The rent for the Properties shall be determined through the intermediary selected by both Parties by reference to the market price. For properties the price of which is difficult to be compared with market price, the rent shall be determined by adding a reasonable profit of 5% to the cost of Party A (including amortization of the original coat or depreciation, maintenance expenses, taxes and surcharges, etc.). Party A shall bear all the taxes arising from leasing out of the properties owned by Party A. |
4.2 | According to Clause 4.1 of this Agreement, it is estimated that Party B shall pay total rent of RMB 41,551,728.75 to Party A each year. The final rent amount shall be determined according to Clauses 2.3, 2.4 and 2.5 of this Agreement. The rent agreed herein is VAT inclusive. Among the total rent, RMB 39,573,075.00 is the tax exclusive rent, and RMB 1,978,653.75 is the VAT amount. During the performance of the Agreement, in case of adjustment of the VAT policy by the governments finance and taxation department, the VAT amount shall be determined according to the adjusted tax rate, with the tax exclusive rent remaining unchanged and the VAT-inclusive rent to be re-determined by the two parties based on the tax exclusive rent and the adjusted VAT amount. Unless agreed by both parties in writing, Party A will not otherwise collect any VAT or surcharges applicable to the business in addition to the contract price. The two parties hereto shall perform their respective tax payment and withholding obligations resulting from this Agreement according to applicable tax laws. |
4.3 | Party A and Party B may, in writing, adjust the rent amount for next year in the last month of every year during the term of this Agreement based on the scope and method for rent calculation as set forth in Clause 4.1, and the increase or decrease in the number of leased properties. |
4.4 | During the term of this Agreement, the rent amount stipulated in this Agreement shall be paid by Party B to Party A bi-annually prior to July 31, 2022 and January 31, 2023 (Payment Date). The rent amount payable each time shall be half of the total rent amount for the whole year. In the event the Payment Date is not a business day, the rent amount shall be paid on the last business day prior to the Payment Date. Payment of the rent amount will be carried out by Party A and Party Bs branches. |
4.5 | Calculation method for the rent amount Party B shall pay each time: |
The rent payable by Party B to Party A each time = sum of the rent for all sites of property rented from Party A for the payable term. And the rent for each site of property = the total rent for such site for that year multiplied by 1/2.
3
4.6 | Party A shall provide Party Bs branches with legal and valid VAT special invoices that are recognized by Party Bs branches. For losses of Party B or Party Bs branches in VAT offset or enterprise income tax caused by Party As failure to provide recognized legal and valid VAT special invoices, Party A agrees it will indemnify against such losses (or make corresponding deductions from the rent payment). Party A shall provide Party B with valid and legal invoices no later than 15 working days before the Payment Date. |
4.7 | The payable rent shall be paid by Party Bs branches to an account designated by Party A. |
5. | Rights and Obligations of Both Parties |
5.1 | Party A, as the lessor of the Properties, shall be entitled to: |
1) | receive rent according to this Agreement; |
2) | other rights regulated in this Agreement. |
5.2 | Party A, as the lessor of the Properties, shall assume the following obligations: |
1) | Unless otherwise stipulated in this Agreement, Party A guarantees that it has the power to rent out the Properties according to this Agreement. |
2) | Party A undertakes to take all necessary actions to ensure the compliance of the Properties and the lease of the Properties with related regulations. Party A guarantees and undertakes to pay compensation in full amount within 30 days after receiving Party Bs written request for compensations for any losses caused by Party As failure to fulfill the above undertakings. |
3) | Party A shall bear all the property tax, VAT and surcharges, stamp tax, land-using tax and all the other taxes payable according to tax laws and regulations arising from leasing property to Party B. |
4) | During the term of this Agreement, in the event that Party A intends to transfer its ownership of the Properties to a third party, it shall notify Party B of such intention in writing. Party B has the preemptive right to purchase the Properties under the same conditions. Party Bs failure to confirm in writing within 30 days upon receipt of Party As notification to exercise the preemptive right shall be deemed a waiver of such right. In the event that Party B waives such preemptive right, Party A may transfer ownership of the Properties to a third party under the same conditions. However, the transfer shall take effect provided that the third party, as lessor of the Properties, shall be bound by this Agreement. |
4
5) | In case Party A transfers the Properties rented by Party B under this Agreement to a third party after January 1, 2022, if Party B has invested decoration and improvement expenses during the lease period (including the lease period of previous years) and such decoration and improvement expenses have not been fully amortized when the Properties are transferred, Party A shall compensate Party B for the book loss of such decoration and improvement expenses. The book loss of decoration and improvement expenses for the Properties transferred in 2022 shall be settled by Party A to Party B by the end of March of the next year of the transfer. |
In 2022, the total amount of unamortized decoration and improvement expenses when Party As Properties are transferred is estimated to be RMB 23,744,020.45. The above amounts are for reference only, and the specific amounts shall be determined based on actual disposal and relevant renovation data.
6) | Unless otherwise agreed by both Parties, during the term of this Agreement, Party A shall not, partly or in whole, take back the Properties early, or terminate this Agreement early. |
7) | Party A shall provide necessary assistance for reasonable requests of Party B related to using of the properties Party B rents according to this Agreement. |
5.3 | Party B, as the lessee hereunder, shall be entitled to: |
1) | occupy and use the Properties according to this Agreement; |
2) | carry out non-structural decoration and reconstruction of the Properties at its own cost according to its business requirement without violating related laws, regulations and commitments in this Agreement. Such decoration and reconstructions shall not bring adverse effect on the value of Party As Properties and/or Party As rights; |
3) | sublet the Properties, partly or in whole, with prior written consent of Party A; Party B shall not sublet Party As Properties hereunder to a third party. With the prior written consent of Party A, Party B may return the whole or part of the area of Party As Properties hereunder and deduct the corresponding rent, and Party B may, as entrusted by Party A, lease the returned area to a third party on behalf of Party A and pay any rent received therewith to Party A. |
5
4) | require decrease of the number of sites of the Properties according to its business situations with a written notice to Party A with one month in advance; |
5) | notwithstanding the above, if any of the Properties is damaged not due to the fault of Party B, Party B may demand termination of the rental of the damaged property by giving written notice to Party A. Party A shall confirm the damage within 30 days after receiving such notice. If Party A fails to confirm within the limited time, Party A will be deemed to have accepted Party Bs demand. Thereafter, the relation between the two parties concerning rental of the damaged property is terminated. Party B does not need to pay the rent for the damaged property from the date of such damage. After Party A completes repair of the damaged property, the two parties may, with consent of Party B, resume the rental relationship in respect of the repaired property according to the terms of this Agreement from the date agreed by both parties; |
6) | the preemptive right under the same conditions if Party A intends to sell the Properties. |
7) | During the term of this Agreement, if Party A transfers the ownership of Party As Properties under this Agreement to a third party, Party B shall have the right to require Party A to make compensation for the remaining book value of improvement expenses by the end of March of the next year after the ownership transfer if there is any improvement expenses for such properties that have not yet been fully depreciated. |
5.4 | Party B, as the lessee hereunder, shall assume the following obligations: |
1) | to pay rent according to this Agreement; |
2) | to be liable for maintenances (excluding structural repairs) of the Properties during the rental term, except when a third party or owner of the building shall bear such liabilities according to agreement between Party A and such third party; |
3) | to bear fees for water, electricity, heating, repair and other expenses for using the Properties during the rent term; |
4) | to pay compensations for losses to a third party due to decoration and reconstruction during the rent term; |
5) | to manage and use the Properties in proper manners and pay compensations for losses such as damage or destruction of the Properties caused by its improper management or usage; |
6
6) | to return the Properties to Party A immediately upon the expiry of the rental term or termination of this Agreement. |
6. | Amendment and Termination |
This Agreement shall terminate under the following conditions:
1) | The term of this Agreement expires; |
2) | The two parties reach an agreement to terminate this Agreement during the term; |
3) | As required by verdict, judgment or decision of laws, regulations, judicial court or arbitral organization to terminate this Agreement; |
4) | As required by any other stipulations in this Agreement. |
7. | Liability for Breach of Contract and Damages |
7.1 | In case of breach of any clause of this Agreement, the breaching party shall compensate the other party for direct and indirect economic losses caused by its breaching behaviors. |
7.2 | For the property for which Party A has not obtained legal license temporarily, but which Party A permits Party B to use and undertakes to exert its greatest efforts to complete related transactions, with respect to losses arising from claims for compensation of any third party for Party Bs using of such property, Party A undertakes to make confirmation within 10 days after Party Bs written requirement and compensate Party B in full amount within 30 days after the confirmation. If there is controversy about the compensation amount between Party A and Party B, a third party shall be hired to evaluate and confirm such compensation amount. And the final amount shall be determined by confirmation of such third party. |
8. | Representations and Warranties |
8.1 | Representations and warranties of Party A |
1) | Party A is a legally established and validly existing enterprise solely owned by the state. It possesses independent juridical person qualifications and holds valid legal business license as a corporation. Party A has the legal right to own, rent and operate its property and to sign and fulfill this Agreement. |
7
2) | Party A always undertakes business activities in a legal manner and has never taken any activities beyond the business scope as legally regulated. |
3) | Party A has obtained all governmental approvals (if required) and completed all internal authorization procedures for signing this Agreement. The person who signs this Agreement is the effective authorized representative of Party A and this Agreement, once signed, constitutes obligations Party A is obligatory to bear. |
4) | Party A does not breach any laws or regulations or any other agreements Party A signs or Articles of Association of Party A by signing this Agreement or fulfilling its obligations hereunder. |
5) | Party A is obligatory to take further necessary actions, including signing other related agreements, contracts or documents, to ensure realization of the purpose and stipulations of this Agreement. |
8.2 | Representations and warranties of Party B |
1) | Party B is a legally established and validly existing stock limited company. It possesses independent juridical person qualifications and holds valid legal business license as a corporation. Party B has the legal right to own, rent and operate its property and to sign and fulfill this Agreement. |
2) | Party B always undertakes business activities in a legal manner and has never taken any activities beyond the business scope as legally regulated. |
3) | Party B has completed all internal authorization procedures for signing this Agreement. The person who signs this Agreement is the effective authorized representative of Party B and this Agreement, once signed, constitutes obligations Party B is obligatory to bear. |
4) | Party B does not breach any laws or regulations or any other agreements Party B signs or Articles of Association of Party B by signing this Agreement or fulfilling its obligations hereunder. |
8
9. | Force Majeure |
9.1 | Should either party be prevented from performing its obligations hereunder, partly or wholly, by any force majeure event (Force majeure means any event that happens after this Agreement is executed but that is beyond control of or is not predictable by the affected party, or is unavoidable or unconquerable for the affected party even it has been predicted, and that causes implementation of this Agreement, partly or wholly, to become impossible or unpractical objectively, including but not limited to flood, fire, drought, typhoon, earthquake and other natural disasters, traffic accident, strike, turmoil, riot and war (whether with declaration or not) and other actions or inactions of governmental departments.) , performance of the affected obligations shall be suspended during the term of such force majeure event. |
9.2 | The party claiming to have been affected by any force majeure event shall notify the other party of the force majeure event with a written form as soon as possible and shall provide proper evidence of such force majeure event and of its lasting time to the other party within 15 days after occurrence of such force majeure event through personal express delivery or registered air mail. The party claiming performance of obligations hereunder becomes impossible or unpractical objectively due to force majeure event has the liabilities to exert its greatest efforts to eliminate or reduce effect of such force majeure event. |
9.3 | In case of force majeure event, the two parties shall immediately decide how to perform this Agreement through friendly consultations. After termination of such force majeure event or elimination of its effect, both parties shall immediately continue to perform their respective obligations hereunder. |
10. | Miscellaneous |
10.1 | Unless otherwise stipulated in this Agreement, neither party may transfer its rights or obligations hereunder, partly or wholly, without written consent of the other party. |
10.2 | This Agreement and its appendices constitute the entire agreement between the parties on all issues to which this Agreement relates. The contents of this Agreement and its appendices supersede all previous written or oral agreements, commitments, understandings and communications. |
10.3 | Any provision of this Agreement that becomes illegal, invalid or unenforceable shall not be prejudicial against the validity and enforceability of the other provisions of this Agreement. |
10.4 | Any modifications of this Agreement, which constitute any material or significant changes of this Agreement, shall be reviewed and undergo appropriate approval procedures again according to relevant provisions of applicable laws and regulations, and shall become valid only after notification to or with consent or approval of CIRC, Hong Kong Stock Exchange (HKSE), Shanghai Stock Exchange (SSE) and/or consent or approval of the board of director and the shareholders meeting of Party B (if applicable) (according to the applicable requirements of CIRC, HKSE and SSE). |
9
10.5 | Unless otherwise stipulated, failure or delay to fulfill any rights, power or privilege hereunder by either party shall not be deemed waiver of such rights, power or privilege. And performance of such rights, power or privilege separately or partly shall not repulse performance of any other rights, power or privilege. |
10.6 | The appendices of this Agreement constitute inevitable part of this Agreement, have the same effect with this Agreement and are deemed as terms in this Agreement. |
11. | Communications |
All notices or communications by either party according to this Agreement shall be in written form in Chinese and sent to the address of the other party stipulated as follows or fax to the number designated by the other party. The date for the notice to be effectively delivered shall be determined according to the following conditions:
1) | on the date of delivery in case of personal express delivery; |
2) | in case of registered mail, the 7th day after the postage is paid (the date on the postmark). (If this day is Sunday or a legal holiday, it shall be delayed to the next working day.) |
3) | in case of fax, at the time the fax is sent provided that the sending party shall furnish the printed report of the fax machine indicating that the fax has been successfully sent. |
The addresses and fax numbers of the two parties are as follows:
Party A: China Life Industrial Investment Company Limited
Address: PANA Tower, 128 Zhichun Road, Haidian District, Beijing
Tel: 010-6252 8899
Fax: 010-6262 8892
Party B: China Life Insurance Company Limited
Address: Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing
Tel: 010-6363 3333
Fax: 010-6657 5722
In case of any change in the above-listed addresses or fax numbers by either party, such changes shall be notified to the other party as soon as possible according to stipulations in this clause.
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12. | Governing Law and Dispute Resolution |
12.1 | This Agreement shall be construed in accordance with and be governed by the laws of the Peoples Republic of China. |
12.2 | Any dispute arising out of or in connection with this Agreement shall be settled by consultations between the two parties. Either Party can file a suit to the court at the place where Party B is located if a dispute cannot be settled by consultations. |
13. | Supplementary Provisions |
13.1 | This Agreement is written in Chinese. |
13.2 | This Agreement shall take effect only after signing by authorized representatives by both parties with the company seals of the two parties. |
13.3 | Since Party B is a listed company on the HKSE and Shanghai Stock Exchange (SSE), the transaction stipulated in this Agreement constitutes a related transaction under applicable regulatory provisions in the insurance industry and the Listing Rules, therefore, obtaining approvals from CIRC, HKSE and SSE and/or observing applicable regulatory provisions and the Listing Rules on related transactions are preconditions for performing related stipulations in this Agreement to such deal. The two parties undertake to abide by such applicable regulatory provisions and the Listing Rules. |
13.4 | If exemption is conditional under the Listing Rules, this Agreement shall proceed according to the attached conditions and the two parties undertake to strictly abide by such conditions. |
13.5 | If exemption of the concerned transaction from HKSE or SSE is withdrawn, revoked or becomes invalid, and the concerned deal fails to conform to related regulations on interrelated deals under the Listing Rules, the performance of the terms and conditions in this Agreement related to this deal shall be terminated. |
13.6 | If performance of the terms and conditions in this Agreement related to all deals is terminated according to the above Clause 13.5, this Agreement shall be terminated. |
13.7 | During the term of this Agreement, if the retained assets hereunder are stripped or disposed of as a whole, this Agreement will be automatically terminated after written confirmation by Party A and Party B. |
11
13.8 | This Agreement is made in 3 copies that possess the same legal effect, each party holding one copy and the other one copy shall be submitted to file with real estate administrative authority. |
Party A:
China Life Industrial Investment Company Limited
<Chop>
Legal Representative or Authorized Representative (signature): |
Party B:
China Life Insurance Company Limited
<Chop>
Legal Representative or Authorized Representative (signature): |
12
Appendix I
Schedule of Properties Leased to Party B by Party A
No. |
Region |
Total Properties | Total Area (Square meter) |
2022 Total Rent (Yuan/Year) | ||||
1 |
Anhui | 8 | 6,275.91 | 983,487. 84 | ||||
2 |
Beijing | 1 | 3,004.31 | 1,217,196. 00 | ||||
3 |
Dalian | 0 | 0.00 | 0. 00 | ||||
4 |
Fujian | 52 | 9,755. 23 | 1,438,841. 61 | ||||
5 |
Gansu | 95 | 20,649. 60 | 1,189,000. 28 | ||||
6 |
Guangdong | 116 | 38,264. 11 | 8,497,034. 28 | ||||
7 |
Guangxi | 14 | 8,499. 20 | 1,183,468.96 | ||||
8 |
Guizhou | 4 | 2,082. 16 | 449,331.08 | ||||
9 |
Hainan | 0 | 0. 00 | 0.00 | ||||
10 |
Hebei | 4 | 2,755.01 | 509,622. 65 | ||||
11 |
Henan | 35 | 21,221.85 | 4,247,960. 72 | ||||
12 |
Heilongjiang | 21 | 5,730. 55 | 752,341. 85 | ||||
13 |
Hubei | 39 | 8,936. 40 | 342,695. 02 | ||||
14 |
Hunan | 19 | 5,413. 36 | 186,859. 25 | ||||
15 |
Jilin | 3 | 2,889. 63 | 332,542. 78 | ||||
16 |
Jiangsu | 28 | 17,420.41 | 2,531,802. 33 | ||||
17 |
Jiangxi | 25 | 7,956.41 | 759,111.08 | ||||
18 |
Liaoning | 5 | 4,932. 93 | 890,517. 04 | ||||
19 |
Inner Mongolia | 0 | 0. 00 | 0. 00 | ||||
20 |
Ningbo | 7 | 1,950.91 | 262,149. 30 | ||||
21 |
Ningxia | 2 | 222. 30 | 7,921.06 | ||||
22 |
Qingdao | 0 | 0. 00 | 0. 00 | ||||
23 |
Qinghai | 1 | 595. 10 | 93,401. 00 | ||||
24 |
Xiamen | 0 | 0. 00 | 0. 00 | ||||
25 |
Shandong | 5 | 7,851.08 | 2,163,525. 39 | ||||
26 |
Shanxi | 14 | 14,643. 96 | 420,227. 72 | ||||
27 |
Shaanxi | 64 | 13,899.92 | 773,598. 20 | ||||
28 |
Shenzhen | 1 | 810.00 | 467,127. 00 | ||||
29 |
Shanghai | 0 | 0.00 | 0. 00 | ||||
30 |
Sichuan | 43 | 15,276.42 | 955,686. 32 | ||||
31 |
Tianjin | 2 | 6,987. 40 | 4,318,962. 52 | ||||
32 |
Xinjiang | 5 | 1,403. 13 | 102,892. 20 | ||||
33 |
Yunnan | 101 | 36,684. 34 | 4,234,735. 67 | ||||
34 |
Zhejiang | 15 | 8,869.91 | 1,910,465. 75 | ||||
35 |
Chongqing | 6 | 3,078.21 | 329,223. 87 | ||||
|
|
| ||||||
Total |
735 | 278,059. 74 | 41,551,728. 75 | |||||
|
|
|
13
Statistical Table of Rents for Properties Leased to China Life Insurance Company Limited by China Life Industrial Investment Company Limited in 2022
# |
Branch office |
Overall | Properties of More Than 500 m2 | Properties of Less Than 500 m2 | ||||||||||||||||
Sites | Area (m2) | Total Rent (Yuan/Year) |
Sites | Area (m2) | Assessed Rent (Yuan/Year) |
Sites | Area (m2) | Formula-based Rent (Yuan/ Year) | ||||||||||||
1 |
Anhui | 8 | 6,275.91 | 983,487.84 | 3 | 5,553.24 | 950,900.00 | 5 | 722.67 | 32,587.84 | ||||||||||
2 |
Beijing | 1 | 3,004.31 | 1,217,196.00 | 1 | 3,004.31 | 1,217,196.00 | |||||||||||||
3 |
Dalian | 0 | 0.00 | 0.00 | ||||||||||||||||
4 |
Fujian | 52 | 9,755.23 | 1,438,841.61 | 9 | 5,064.76 | 1,240,684.00 | 43 | 4,690.47 | 198,157.61 | ||||||||||
5 |
Gansu | 95 | 20,649.60 | 1,189,000.28 | 8 | 6,235.02 | 856,004.00 | 87 | 14,414.58 | 332,996.28 | ||||||||||
6 |
Guangdong | 116 | 38,264.11 | 8,497,034.28 | 16 | 23,578.87 | 7,790,858.00 | 100 | 14,685.24 | 706,176.28 | ||||||||||
7 |
Guangxi | 14 | 8,499.20 | 1,183,468.96 | 6 | 6,412.01 | 1,042,655.00 | 8 | 2,087.19 | 140,813.96 | ||||||||||
8 |
Guizhou | 4 | 2,082.16 | 449,331.08 | 1 | 1,142.20 | 421,072.00 | 3 | 939.96 | 28,259.08 | ||||||||||
9 |
Hainan | 0 | 0.00 | 0.00 | ||||||||||||||||
10 |
Hebei | 4 | 2,755.01 | 509,622.65 | 2 | 2,159.77 | 495,016.00 | 2 | 595.24 | 14,606.65 | ||||||||||
11 |
Henan | 35 | 21,221.85 | 4,247,960.72 | 9 | 16,495.48 | 4,046,400.00 | 26 | 4,726.37 | 201,560.72 | ||||||||||
12 |
Heilongjiang | 21 | 5,730.55 | 752,341.85 | 2 | 2,728.48 | 533,219.00 | 19 | 3,002.07 | 219,122.85 | ||||||||||
13 |
Hubei | 39 | 8,936.40 | 342,695.02 | 12 | 3,556.52 | 226,557.00 | 27 | 5,379.88 | 116,138.02 | ||||||||||
14 |
Hunan | 19 | 5,413.36 | 186,859.25 | 4 | 1,400.80 | 79,123.00 | 15 | 4,012.56 | 107,736.25 | ||||||||||
15 |
Jilin | 3 | 2,889.63 | 332,542.78 | 2 | 2,689.63 | 330,458.00 | 1 | 200.00 | 2,084.78 | ||||||||||
16 |
Jiangsu | 28 | 17,420.41 | 2,531,802.33 | 7 | 13,493.98 | 2,409,224.00 | 21 | 3,926.43 | 122,578.33 | ||||||||||
17 |
Jiangxi | 25 | 7,956.41 | 759,111.08 | 6 | 4,118.68 | 682,869.00 | 19 | 3,837.73 | 76,242.08 | ||||||||||
18 |
Liaoning | 5 | 4,932.93 | 890,517.04 | 3 | 4,324.78 | 825,256.00 | 2 | 608.15 | 65,261.04 | ||||||||||
19 |
Inner Mongolia | 0 | 0.00 | 0.00 | ||||||||||||||||
20 |
Ningbo | 7 | 1,950.91 | 262,149.30 | 1 | 800.00 | 96,360.00 | 6 | 1,150.91 | 165,789.30 | ||||||||||
21 |
Ningxia | 2 | 222.30 | 7,921.06 | 2 | 222.30 | 7,921.06 | |||||||||||||
22 |
Qingdao | 0 | 0.00 | 0.00 | ||||||||||||||||
23 |
Qinghai | 1 | 595.10 | 93,401.00 | 1 | 595.10 | 93,401.00 | |||||||||||||
24 |
Xiamen | 0 | 0.00 | 0.00 | ||||||||||||||||
25 |
Shandong | 5 | 7,851.08 | 2,163,525.39 | 4 | 7,754.97 | 2,150,590.00 | 1 | 96.11 | 12,935.39 | ||||||||||
26 |
Shanxi | 14 | 14,643.96 | 420,227.72 | 8 | 14,227.96 | 407,056.00 | 6 | 416.00 | 13,171.72 | ||||||||||
27 |
Shaanxi | 64 | 13,899.92 | 773,598.20 | 4 | 4,064.13 | 434,394.00 | 60 | 9,835.79 | 339,204.20 | ||||||||||
28 |
Shenzhen | 1 | 810.00 | 467,127.00 | 1 | 810.00 | 467,127.00 | |||||||||||||
29 |
Shanghai | 0 | 0.00 | 0.00 | ||||||||||||||||
30 |
Sichuan | 43 | 15,276.42 | 955,686.32 | 9 | 7,370.06 | 756,910.00 | 34 | 7,906.36 | 198,776.32 | ||||||||||
31 |
Tianjin | 2 | 6,987.40 | 4,318,962.52 | 1 | 6,524.40 | 4,286,531.00 | 1 | 463.00 | 32,431.52 | ||||||||||
32 |
Xinjiang | 5 | 1,403.13 | 102,892.20 | 1 | 654.21 | 78,800.00 | 4 | 748.92 | 24,092.20 | ||||||||||
33 |
Yunnan | 101 | 36,684.34 | 4,234,735.67 | 27 | 21,815.83 | 3,525,468.00 | 74 | 14,868.51 | 709,267.67 | ||||||||||
34 |
Zhejiang | 15 | 8,869.91 | 1,910,465.75 | 10 | 8,193.64 | 1,835,386.00 | 5 | 676.27 | 75,079.75 | ||||||||||
35 |
Chongqing | 6 | 3,078.21 | 329,223.87 | 2 | 2,738.21 | 294,537.00 | 4 | 340.00 | 34,686.87 | ||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||
Total |
735 | 278,059.74 | 41,551,728.75 | 160 | 177,507.04 | 37,574,051.00 | 575 | 100,552.71 | 3,977,677.75 | |||||||||||
|
|
|
|
|
|
|
|
|
14
Exhibit 8.1
List of Significant Subsidiaries of the Registrant
Name of Subsidiary |
Jurisdiction of Incorporation |
Proportion of Ownership Interest Owned by China Life | ||
中国人寿资产管理有限公司 China Life Asset Management Company Limited |
The Peoples Republic of China | 60% (directly) | ||
中国人寿富兰克林资产管理有限公司 China Life Franklin Asset Management Company Limited (1) |
Hong Kong | 50%(2) (indirectly through affiliate) | ||
中国人寿养老保险股份有限公司 China Life Pension Company Limited |
The Peoples Republic of China | 74.27%(3) (directly and indirectly through affiliate) | ||
国寿安保基金管理有限公司 China Life AMP Asset Management Co., Ltd. |
The Peoples Republic of China | 85.03%(4) (indirectly through affiliate) | ||
国寿财富管理有限公司 China Life Wealth Management Company Limited |
The Peoples Republic of China | 100%(5) (indirectly through affiliate) |
(1) | Formerly known as China Life Asset Management (Hong Kong) Company Limited. |
(2) | AMC, which is 60% owned by us, owns 50%. |
(3) | We own 70.74% and AMC, which is 60% owned by us, owns 3.53%. |
(4) | AMC, which is 60% owned by us, owns 85.03%. |
(5) | AMC, which is 60% owned by us, owns 48%, and China Life AMP, which is 85.03% owned by AMC, owns 52%. |
Exhibit 12.1
CERTIFICATION
I, Su Hengxuan, certify that:
1. I have reviewed this annual report on Form 20-F of China Life Insurance Company Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: April 29, 2022 | By: | /s/ Su Hengxuan | ||||
Name: | Su Hengxuan | |||||
Title: | President and Executive Director |
Exhibit 12.2
CERTIFICATION
I, Huang Xiumei, certify that:
1. I have reviewed this annual report on Form 20-F of China Life Insurance Company Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: April 29, 2022 | By: | /s/ Huang Xiumei | ||||
Name: | Huang Xiumei | |||||
Title: | Person in Charge of Finance |
Exhibit 13.1
CERTIFICATION
Pursuant to 18 United States Code § 1350
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
The undersigned hereby certify that the Annual Report on Form 20-F for the fiscal year ended December 31, 2021 of China Life Insurance Company Limited (the Company) filed with the Securities and Exchange Commission on the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 29, 2022 | By: | /s/ Su Hengxuan | ||||
Name: | Su Hengxuan | |||||
Title: | President and Executive Director | |||||
Date: April 29, 2022 | By: | /s/ Huang Xiumei | ||||
Name: | Huang Xiumei | |||||
Title: | Person in Charge of Finance |
Exhibit 15.1
29 April 2022
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Ladies and Gentlemen:
We have read Item 16F of the Annual Report on Form 20-F dated 29 April 2022, of China Life Insurance Company Limited and are in agreement with the statements contained in the first to the fifth paragraphs with reference to us therein. We have no basis to agree or disagree with other statements of the registrant contained therein.
/s/ Ernst & Young Hua Ming LLP.
Beijing, the Peoples Republic of China
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