China’s Guohua Life Approved to Raise Capital

Guohua Life Insurance Co. was cleared to increase its capital to 1 billion yuan (US$147 million). The company said the additional capital injection can provide a foundation to ensure its sustainable development.

Guohua Life was established in November 2007 with headquarters in Shanghai. Its original registered capital was 300 million yuan.

Following the capital increase, Shenzhen-listed Hubei Biocuse Pharmaceutical Co. Ltd will hold 200 million shares, or a 20% stake in Guohua Life, becoming the largest shareholder of the insurer, said the China Insurance Regulatory Commission in a statement.

Other shareholders of Guohua Life include three Shanghai-based companies, each of which will hold a 19% stake in the insurer. The remaining stake will be divided into 13.5% and 9.5% shares and will be held by two Hainan-based companies, noted the CIRC.

In June, the regulator approved Guohua Life to establish a new branch in northern China's Liaoning province. The life insurer has branches in Shanghai, Beijing, Zhejiang, Shandong, Guangzhou, Hebei and Jiangsu.

From January to May 2010, Guohua Life generated total original premium income of more than 2.26 billion yuan, according to the CIRC.

(By Rebecca Ng, Hong Kong news editor: [email protected])