BEIJING, June 2 -- Regulators have approved the country's top life insurer, China Life, and smaller Taikang Life to buy foreign exchange within a given quota, paving the way for them to invest in overseas markets, domestic media said Thursday.

    The State Administration of Foreign Exchange (SAFE) recently allowed the two insurers to buy some foreign currencies using their own yuan-denominated capital for the designated purpose of investing on overseas capital markets, the Shanghai Securities News reported.

    In April, domestic insurers and banks were given the nod to invest in overseas capital markets through the Qualified Domestic Institutional Investor (QDII) program. Regulators said they would set a quota for each qualified institution that plans to invest overseas.

    Ping An Insurance, the mainland's No. 2 life insurer, had previously been approved to invest in overseas markets by using its own foreign exchange-denominated capital.

    Taikang Life, the country's No. 5 life insurer, has converted some of its yuan-denominated capital into foreign currencies within a given quota and is preparing for overseas investments soon, the newspaper said, citing an unidentified official at the China Insurance Regulatory Commission.

    It did not give the amount of the quota.

    China's foreign exchange reserves have soared in recent years as the central bank, trying to hold down the value of the yuan, has bought dollars generated by China's trade surplus and foreign investment inflows.

    The reserves hit a record US$875.1 billion in the first quarter this year.

    (Source: Shenzhen Daily/Agencies)