Small market share

It has not been smooth sailing for foreign insurers in China, despite low market penetration at 3 percent of gross domestic product, and a growing middle-class.

Insurers including Aviva Plc and Prudential have been in China for decades, but their collective market share is still below 10 percent as a result of ownership curbs and limited awareness about insurance.

The total market share of foreign life insurers in China was just 6.97 percent last year, while the same was 1.96 percent for foreign property and casualty insurance companies, according to Guotai Junan Securities.

"For foreign life insurers, that's mainly caused by the conflicts between Chinese and foreign shareholders over management styles, and a slow buildup of branches," the brokerage said in a report in May.

While a 1 percentage point rise in the equity ownership would not have a big impact on the balance sheets of the global insurers, winning management control would help drive the business and facilitate decisions on expansion, industry sources said.

The regulator is likely to make it easier for foreign-owned joint ventures to expand into new provinces, moving away from its current practice of rationing of new branch opening applications, the people said.