BEIJING, June 5 -- The government will let six insurance firms invest US$600 million in Bank of China Ltd.'s Hong Kong listed shares as it slowly opens the door for domestic insurers to invest abroad, domestic media reported Saturday.

    Domestic media reported earlier last week that top life insurer, China Life Insurance Co. Ltd., and smaller Taikang Life would be given quotas to invest overseas, without providing more specifics.

    The two, along with China Pacific Insurance (Group) Co., Ping An Insurance (Group) Co. of China Ltd. and the State parents of China Life and PICC Property and Casualty Co., will be given quotas to invest a collective US$600 million in newly listed Bank of China shares.

    The six will make the investment under the fledgling Qualified Domestic Institutional Investor (QDII) program, designed to give mainland financial institutions and other institutional investors more options to improve returns and hedge risk.

    New rules governing overseas investments by the insurance industry will be released around August or September, domestic media reported, citing the unnamed source.

    In April, domestic insurers and banks received the official nod to invest in overseas capital markets through the QDII program.

    Ping An, the nation's second-biggest life insurer, had previously been given the green light to invest in overseas markets using its own foreign exchange-denominated capital.

    The mainland's foreign exchange reserves have soared in recent years as the central bank has bought dollars generated by the mainland's trade surplus and foreign investment inflows.

(Source: Shenzhen Daily/Agencies)