The Company is a life insurance company established in Beijing, China on 30 June 2003 according to the
Company Law and the Insurance Law of the People’s Republic of China. The Company was successfully listed
on the New York Stock Exchange, the Hong Kong Stock Exchange and the Shanghai Stock Exchange on 17 and
18 December 2003, and 9 January 2007, respectively. The Company’s registered capital is RMB28,264,705,000.
The Company is a leading life insurance company in China and possesses an extensive distribution network
comprising exclusive agents, direct sales representatives, and dedicated and non-dedicated agencies. The
Company is one of the largest institutional investors in China, and becomes one of the largest insurance
asset management companies in China through its controlling shareholding in China Life Asset Management
Company Limited. The Company also has controlling shareholding in China Life Pension Company Limited.
Our products and services include individual life insurance, group life insurance, and accident and health
insurance. The Company is a leading provider of individual and group life insurance, annuity products and
accident and health insurance in China. As at 31 December 2019, the Company had approximately 303 million
long-term individual and group life insurance policies, annuity contracts, and long-term health insurance
policies in force. We also provide both individual and group accident and short-term health insurance policies
and services.
CONTENTS
01
Core Competitiveness
Honors and Awards
Business Highlights
Financial Summary
PrEludE
4
5
7
8
02
ChairmaN’S
STaTEmENT
Chairman’s Statement
12
05
SigNifiCaNT
EvENTS
06
COrPOraTE
gOvErNaNCE
Material Litigations or
Arbitrations
Major Connected Transactions
Material Contracts and Their
Performance
Undertakings
Restriction on Major Assets
Targeted Poverty Alleviation
Others
41
41
52
53
53
53
53
Report of the Board of
Directors
Report of the Board of
Supervisors
Changes in Ordinary Shares
and Shareholders Information
Directors, Supervisors, Senior
Management and Employees
Report of Corporate
Governance
56
64
67
71
86
04
EmbEddEd
valuE
Embedded Value
35
03
maNagEmENT
diSCuSSiON
aNd aNalySiS
Review of Business Operations
in 2019
Business Analysis
Analysis of Specific Items
Technological Empowerment
and Operations and Services
Performance of the Corporate
Social Responsibility
Future Prospect
18
21
29
32
34
34
0707
fiNaNCial
rEPOrT
08
OThEr
iNfOrmaTiON
Basic Information of the
Company
Index of Information
Disclosure Announcements
Definitions and Material
Risk Alert
258
261
264
Independent Auditor’s Report 120
Consolidated Statement of
Financial Position
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
Notes to the Consolidated
Financial Statements
127
129
131
132
134
Long history
and excellent
brand
The predecessor of the Company, one of the first batch of enterprises to underwrite
insurance business in China, was approved by the Chinese Government for establishment
in October 1949, when the People’s Republic of China was founded. After the restructuring
and reorganization, the Company was successively listed home and abroad, becoming the
first financial insurance enterprise in China triple-listed on the Shanghai Stock Exchange, the
Hong Kong Stock Exchange and the New York Stock Exchange. Since its establishment, the
Company has played the role of an explorer and pioneer in China’s life insurance industry,
and has committed to creating a world-class financial insurance brand. Through long-term and
continuous brand building, China Life has become one of the famous and strong brands in the
world with growing brand value and influence. As at the end of 2019, the brand of China Life
has been selected as one of the “World’s 500 Most Influential Brands” published by World
Brand Lab for thirteen consecutive years, ranking 132nd in 2019, and was again ranked 5th on
the 2019 (the 16th session) “China’s 500 Most Valuable Brands” list published by World Brand
Lab.
Prominent
principal
business and
sound financial
strength
The Company sticks to its principal business, further explores the huge potentials of the
life insurance market, and maintains its leading position in China’s life insurance market. In
2017, the Company’s gross written premiums exceeded RMB500,000 million, achieving a
new record high. Through the long-term development and accumulation, China Life has solid
financial strength comparable to world-class enterprises in the world. As at 31 December 2019,
the Company’s total assets amounted to RMB3,726,734 million, leading the life insurance
industry in China. As one of the largest institutional investors in China, the Company becomes
one of the largest insurance asset management companies in China through its controlling
shareholding in China Life Asset Management Company Limited. As at the end of 2019, the
total market capitalization of the Company was USD124,913 million.
Well-
established
network
and leading
technologies
The Company has a sound institutional and services network, with its business outlets
and services counters covering both urban and rural areas. As at the end of the Reporting
Period, the number of sales force from all channels of the Company was 1.848 million, which
forms a unique and powerful distribution and services network in China and through which,
the Company becomes the life insurance service provider within the reach of customers.
Moreover, the Company implemented the “Technology-driven China Life” development
strategy in great depth by adhering to the leading concept of technological innovation, so as
to cultivate its first-class operational management, risk control and customer services. The
Company strives to establish a customer services system equipped with mobile, intelligent
and social features, and leverages technologies to provide convenient insurance services to
the public.
Profound and
extensive
customer base
The Company has an extensive customer base. As at 31 December 2019, the Company
had approximately 303 million long-term individual and group life insurance policies, annuity
contracts and long-term health insurance policies in force, offering insurance services for more
than 500 million customers.
During the long course of its development, the Company has accumulated a wealth of
experience in operation and management and has a stable and professional management team
that is well versed in the art of management in China’s life insurance market. The Company’s
core management team and key personnel comprise those who have in-depth knowledge and
understanding of the life insurance market in China, including members of the Company’s
senior management, experienced underwriting personnel, insurance actuaries and investment
managers. During the Reporting Period, there was no movement of these personnel which
might have a material impact on the Company.
Professional
and stable
core team
4
CORE COMPETITIVENESSChina Life Insurance Company Limited•2019 Annual Report•Prelude Forbes
“2019 forbes global 2000”, ranking 105 th
21st Century Business Herald
“Assessment and Selection of
the Competitiveness of Asian
Financial Enterprises in the
21st Century”
“2019 best life insurance Company in asia”
Financial Times
“Gold Medal List of Chinese
Financial Institution”
“golden dragon award
– 2019 best listed insurance Company”
National Business Daily
“2019 Assessment and
Selection of Golden Tripod
Award in China”
“golden Tripod award in China
– 2019 Excellent life insurance Company”
Securities Times
“ark Prize for insurance Company with
high-quality development in 2019”
“ark Prize for Targeted
Poverty alleviation of the PrC
insurance industry in 2019”
Sina Finance
“2019 Assessment and
Selection by Sina Gold Kirin of
the Insurance Industry”
“best brand Personal
insurance Company
of the year”
5
HONORS AND AWARDSChina Life Insurance Company Limited•2019 Annual Report•Prelude Shanghai Securities News
“‘Golden Wealth Management’
for the Year of 2019”
“annual insurance
Protection brand Top award
of golden Wealth
management in 2019”
People’s Daily Online
“2019 Assessment and
Selection of Craftsmanship
Award of the People’s Choice”
“2019 People’s Craftsmanship
Service award”
Jointly published by China.org.cn
and Insurance Today
“2019 Assessment and
Selection of ‘China Tripod’
in the Insurance Industry”
Hexun.com
The “17th Financial Annual
Champion Awards”
“annual best insurance brand”
“influential insurance Company of the year”
Data Center Dynamics
“Asia Pacific Award”
China life hybrid Cloud (
) being
awarded by data Center dynamics (dCd)
the “annual hybrid iT Project award” for
the asia Pacific region in 2019
國壽混合雲
E-learning Center (
by the association for Talent development (aTd)
the “Excellence in Practice award”
) being awarded
易學堂
Association for Talent
Development (ATD)
“Excellence in Practice Award”
6
China Life Insurance Company Limited•2019 Annual Report•Prelude Gross written premiums
567,086
million
a year-on-year
increase of
5.8%
Net profit attributable to equity
holders of the Company
58,287
million
a year-on-year
increase of
411.5%
Embedded value
942,087
million
an increase of
18.5%
from the end of 2018
Value of one year’s sales
Gross investment income
58,698
million
a year-on-year
increase of
18.6%
169,043
million
a year-on-year
increase of
77.7%
Gross investment yield
Comprehensive investment yield
Comprehensive solvency ratio
5.24%
7.28%
a year-on-year
increase of
195
BPs
a year-on-year
increase of
418
BPs
an increase of
276.53%
25.97
from the end of 2018
percentage
points
10
First-year regular premiums
with a payment duration of
ten years or longer
59,168
million
a year-on-year
increase of
42.1%
Percentage of premiums
from designated protection-oriented
products in first-year regular
premiums
a year-on-year
increase of
8.6
percentage
points
7
BUSINESS HIGHLIGHTSChina Life Insurance Company Limited•2019 Annual Report•Prelude majOr fiNaNCial daTa aNd iNdiCaTOrS fOr ThE PaST fivE yEarS
major financial data 1
for the year ended
Total revenues
Net premiums earned
Benefits, claims and expenses
Insurance benefits and claims
expenses
Profit before income tax
Net profit attributable to equity
under international financial reporting Standards (ifrS)
2019
2018
Change
2017
2016
2015
RMB million
729,474
560,278
677,690
627,419
532,023
621,243
16.3%
5.3%
9.1%
643,355
506,910
608,827
540,781
426,230
522,794
507,449
362,301
463,492
509,467
59,795
479,219
13,921
6.3%
329.5%
466,043
41,671
407,045
23,842
352,219
45,931
holders of the Company
58,287
11,395
411.5%
32,253
19,127
34,699
Net profit attributable to ordinary
share holders of the Company
Net cash inflow/(outflow) from
57,893
11,011
425.8%
31,873
18,741
34,514
operating activities
286,032
147,552
93.9%
200,990
89,098
(18,811)
as at 31 december
Total assets
Investment assets2
Total liabilities
Total equity holders’ equity
Per share (rmb)
Earnings per share (basic and diluted)3
Equity holders’ equity per share3
Ordinary share holders’ equity per
3,726,734
3,573,154
3,317,392
403,764
3,254,403
3,104,014
2,931,113
318,371
14.5% 2,897,591
15.1% 2,753,124
13.2% 2,572,281
320,933
26.8%
2,696,951
2,573,049
2,389,303
303,621
2,448,315
2,334,814
2,122,101
322,492
2.05
14.28
0.39
11.26
425.8%
26.8%
1.13
11.35
0.66
10.74
1.22
11.41
share3
14.01
10.99
27.5%
11.08
10.47
11.13
Net cash inflow/(outflow) from
operating activities per share3
major financial ratios
Weighted average ROE (%)
16.47
3.54
10.12
5.22
93.9%
7.11
3.15
(0.67)
10.49
6.16
11.56
88.77
88.59
86.68
5.16
4.69
6.42
increase
of 12.93
percentage
points
decrease
of 1.05
percentage
points
increase
of 1.95
percentage
points
Ratio of assets and liabilities4 (%)
89.02
90.07
Gross investment yield5 (%)
5.24
3.29
8
FINANCIAL SUMMARYChina Life Insurance Company Limited•2019 Annual Report•Prelude
Notes:
1. Net profit refers to net profit attributable to equity holders of the Company, while equity holders’ equity refers to equity attributable to equity holders of
the Company.
2.
Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities + Held-to-maturity
securities + Term deposits + Derivative Financial Assets + Securities purchased under agreements to resell + Loans + Statutory deposits-restricted +
Investment properties + Investments in associates and joint ventures
3.
In calculating the percentage change of the “Earnings per share (basic and diluted)”, “Equity holders’ equity per share”, “Ordinary share holders’ equity
per share” and “Net cash inflow/(outflow) from operating activities per share”, the tail differences of the basic figures have been taken into account.
4. Ratio of assets and liabilities = Total liabilities/Total assets
5. Gross investment yield = (Gross investment income – Interest paid for securities sold under agreements to repurchase)/((Investment assets at the
end of the previous year – Securities sold under agreements to repurchase at the end of the previous year – Derivative financial liabilities at the end of
the previous year + Investment assets at the end of the period – Securities sold under agreements to repurchase at the end of the period – Derivative
financial liabilities at the end of the period)/2)
9
China Life Insurance Company Limited•2019 Annual Report•Prelude majOr iTEmS Of ThE CONSOlidaTEd fiNaNCial STaTEmENTS aNd ThE rEaSONS fOr ChaNgE
RMB million
major items of the
Consolidated Statement
of financial Position
as at
31 december
2019
As at
31 December
2018
Change Main Reasons for Change
Term deposits
Held-to-maturity securities
535,260
928,751
559,341
-4.3% Due to the maturity of term deposits
806,717
15.1% An increase in the allocation of
government bonds
Available-for-sale securities
1,058,957
870,533
21.6% An increase in the allocation of stocks in
available-for-sale securities
Securities at fair value
through profit or loss
141,608
138,717
2.1% An increase in the fair value of stocks in
securities at fair value through profit or
loss
Securities purchased under
4,467
9,905
-54.9% The needs for liquidity management
agreements to resell
Cash and cash equivalents
53,306
50,809
4.9% The needs for liquidity management
Loans
608,920
450,251
35.2% An increase in policy loans and
certificates of deposit
Investment properties
12,141
9,747
24.6% New investments in investment
properties
Investments in associates
222,983
201,661
10.6% An increase in investments in associates
and joint ventures
Deferred tax assets
128
1,257
-89.8% Affected by an increase in the fair value of
and joint ventures
Insurance contracts
2,552,736
2,216,031
available-for-sale securities
15.2% The accumulation of insurance liabilities
from new policies and renewals
Investment contracts
267,804
255,434
4.8% An increase in the scale of universal
insurance accounts
Securities sold under
118,088
192,141
-38.5% The needs for liquidity management
agreements to repurchase
Annuity and other insurance
51,019
49,465
3.1% –
balances payable
Interest-bearing loans and
20,045
20,150
-0.5% –
other borrowingsNote
Bonds payable
Deferred tax liabilities
34,990
10,330
–
–
N/A
N/A
Issuance of capital supplemental bonds
during the Reporting Period
Affected by an increase in the fair value of
available-for-sale securities
Equity holders’ equity
403,764
318,371
26.8% Due to the combined impact of total
comprehensive income and profit
distribution during the Reporting Period
Note:
Interest-bearing loans and other borrowings include a three-year bank loan of EUR67 million with a maturity date on 18 January 2021, a five-year bank
loan of GBP275 million with a maturity date on 25 June 2024, a five-year bank loan of USD860 million with a maturity date on 16 September 2024,
and a six-month bank loan of EUR127 million with a maturity date on 11 January 2020 which is automatically renewed upon maturity pursuant to the
terms of the agreement. All the above are fixed rate loans. A five-year bank loan of USD970 million with a maturity date on 27 September 2024, a
three-year loan of EUR400 million with a maturity date on 6 December 2020, and a one-year bank loan of USD18 million with a maturity date on 6
November 2020, which are floating rate loans.
10
China Life Insurance Company Limited•2019 Annual Report•Prelude
for the year ended 31 december
major items of the
Consolidated Statement
of Comprehensive income
2019
2018
Change Main Reasons for Change
RMB million
Net premiums earned
Life insurance business
560,278
445,719
532,023
5.3% –
436,863
2.0% Due to the steady growth of life insurance
Health insurance business
99,575
80,279
business
24.0% The expansion of health insurance
business by the Company
Accident insurance
business
14,984
14,881
0.7% –
Investment income
139,919
125,167
Net realised gains on
financial assets
1,831
(19,591)
Net fair value gains through
19,251
(18,278)
11.8% An increase in interest income from fixed-
maturity investments and dividends from
stocks
N/A
N/A
An increase in spread income of stocks
and funds in available-for-sale securities
An increase in spread income and fair
value of stocks in securities at fair value
through profit or loss
8,011
7,745
3.4% An increase in profits of certain
associates
profit or loss
Share of net profit of
associates and joint
ventures
Other income
8,195
8,098
1.2% –
Insurance benefits and
509,467
479,219
6.3% Due to a combined impact of the growth
claims expenses
of insurance business and a decrease
in maturities payments and surrender
payments
Investment contract benefits
Policyholder dividends
resulting from participation
in profits
9,157
22,375
9,332
-1.9% –
19,646
13.9% An increase in investment yield from the
participating accounts
Underwriting and policy
81,396
62,705
29.8% An increase in commissions of regular
acquisition costs
business due to the growth of the
Company’s business and the optimization
of its business structure
Finance costs
4,255
4,116
3.4% An increase in interest paid for bonds
payables
Administrative expenses
40,275
37,486
7.4% The growth of business
Income tax
781
1,985
-60.7% The impact from the new policy on pre-tax
deduction of underwriting and policy
acquisition costs
Net profit attributable to
equity holders of the
Company
58,287
11,395
411.5% Due to an increase in gross investment
income and the impact from the
new policy on pre-tax deduction of
underwriting and policy acquisition costs
11
China Life Insurance Company Limited•2019 Annual Report•Prelude
The year of 2019 marked the 70th anniversary1 of the founding of China life, and also
the beginning of “China life revitalization”. in this inspiring springtime, i, on behalf
of the Company’s board of directors (the “board”), hereby report to shareholders and
the public on the Company’s operating results for the year of 2019. 2019 was a truly
remarkable year for us, when the external environment was complicated and ever-
changing, and the insurance industry saw accelerated transformation. in the face of new
development and consumption trends, the Company has always kept pace with the
development of the times as well as demands from customers. With new development
philosophy guiding new practices, we have embarked on the journey of “China life
revitalization” and pursued high-quality development with concerted efforts.
In the year of 2019, net profit attributable to equity
holders of the Company amounted to RMB58,287
million, an increase of 411.5% year on year. Value of
one year’s sales of the Company reached RMB58,698
m i l l i o n , a n i n c r e a s e o f 1 8 . 6 % y e a r o n y e a r ,
significantly leading the market. The core solvency
r a t i o a n d c o m p r e h e n s i v e s o l v e n c y r a t i o w e r e
266.71% and 276.53%, respectively. The Company
has been listed on the “Forbes Global 2000” for
16 consecutive years, ranking 105th in 2019. Based
on the Company’s sound operating performance,
the Board has proposed to distribute a final cash
dividend of RMB0.73 per share (inclusive of tax) and
such proposal will be submitted to the 2019 Annual
General Meeting for review and discussion.
A l l t h e s e a c h i e v e m e n t s e m b o d i e d d e v o t i o n ,
dedication and hard work of all the staff and sales
tea m s of the Com pa ny, a nd dem o nst ra te d t he
precious splendor, spirit and strength of China
L i f e . O v e r t h e p a s t y e a r , w e a d h e r e d t o t h e
operational guideline of “prioritizing business value,
strengthening sales force, achieving stable growth,
upgrading technology, optimizing services and
guarding against risks” and took “Dual Centers and
Dual Focuses” as our strategic core, making new
strides in shouldering corporate social responsibility,
quality development, technology empowerment,
reform and transformation, and risk prevention and
control.
1 The predecessor of the Company, one of the first batch of
enterprises to underwrite insurance business in China, was
approved by the Chinese Government for establishment in
October 1949, when the People’s Republic of China was founded.
In 1996, in compliance with the separate operation regulation,
Zhong Bao Life Insurance Company was established to focus
on life insurance business. In 1999, Zhong Bao Life Insurance
Company was renamed as China Life Insurance Company. In
2003, China Life Insurance Company accelerated its reform and
development and was restructured into China Life Insurance
( G r o u p ) C o m p a n y , w h i c h f o u n d e d t h e C o m p a n y a s a s o l e
promoter.
12
CHAIRMAN’S STATEMENTChina Life Insurance Company Limited•2019 Annual Report•Chairman’s Statement We firmly committed to serving the society and
shouldering social responsibilities for the interest of
the public. The Company gave full play to the functions
of insurance as an economic “shock absorber” and social
“stabilizer”, and underwrote an insured sum of RMB397
trillion for the public on a cumulative basis, with the
total claims payment of more than RMB120 billion. It
actively carried out policy-oriented businesses such as
supplementary major medical expenses insurance and
medical insurance administration projects, which helped
improve basic social medical insurance protection and
service level and significantly alleviated the illness-related
poverty. The Company targeted to the specific insurance
needs of poverty-stricken people, and made claims
payment of nearly RMB3 billion to poverty-stricken people
in relation to supplementary major medical expenses
insurance protection. In 2019, the Company gave support
to the targeted poverty alleviation work, helping nearly
87,000 poverty-stricken people be lifted from poverty. The
Company proactively aligned its needs for development
with national strategies. Leveraging on the leading role
and demonstration effect of insurance funds, it actively
participated in the country’s major development strategies
including those for the coordinated development of the
Beijing-Tianjin-Hebei Region, the construction of the
Xiong’an New Area, the integrated development along the
Yangtze River Delta, and the building of the Guangdong-
Hong Kong-Macao Greater Bay Area, and took multiple
measures to promote the coordinated development
o f r e g i o n a l e c o n o m i e s . T h e C o m p a n y a l s o l e d t h e
investment in the hydropower development project in the
upper reaches of the Yellow River in Qinghai Province,
participated in the mixed ownership reform of state-
owned enterprises, and promoted the sustainable and
healthy development of green industries.
W e a d h e r e d t o t h e c o n c e p t o f v a l u e - o r i e n t e d
development and realised consistent improvement
in our development quality. We strengthened the
asset-liability management and further promoted the
synergy between assets and liabilities. The Company
continuously consolidated the development foundation,
took active measures to increase the volume of value-
oriented business while enhancing the profitability of
scale business. The Company’s gross written premiums
exceeded RMB560 billion, maintaining a leading position
in the market, and the growth of value of one year’s
sales was substantially higher than that of its peers,
representing the coordinated growth of business value
and scale. By sticking to the protection role of insurance,
the Company further optimized its business structure,
with its long-term regular premiums growing over 40%
year on year, and the percentage of premiums from
designated protection-oriented products in the first-
year regular premiums rising by 8.6 percentage points
year on year. The Company allocated to yield seeking
assets with long duration while grasping the short-term
opportunities of the market, the gross investment income
registered RMB169,043 million, representing a significant
increase year on year, and the gross investment yield
was 5.24%. The comprehensive investment yield2 was
7.28%, representing an increase of 418 BPs from 2018.
Besides, the total number of the Company’s sales force
amounted to 1.848 million, and the size of the sales force
was expanded with improved quality. The monthly average
productive agents increased by 34.9% year on year.
Both the quality and size of the Company’s sales force
improved against the downward trend, and a new-type
sales team was established.
We continued to deepen technological empowerment,
which comprehensively enhanced our sales and
services. The Company kicked off the three-year action
plan for the “Technology-driven China Life” initiative,
actively applying technologies, such as AI, Big Data and
Internet of Things, to empower the whole insurance value
chain, pushed forward the upgrade of customer-oriented
sales model, and stepped up efforts in providing one-stop
integrated financial and insurance services for customers.
The Company improved the whole chain of services,
accelerated the building of the “One Customer, One
China Life” platform, further transformed and upgraded
its operations and services by promoting integrated,
intelligent and ecological operations and services, and
built up an “Insurance Plus” ecosystem. The Company
further improved the customer experience and introduced
intelligent underwriting and intelligent customer service
s y s t e m s . T h e p a p e r l e s s p o l i c y a p p l i c a t i o n r a t e f o r
individual customers reached 97.8%, and the number
of claims settled automatically in the whole process
exceeded 10 million. The Company’s service efficiency
was increased significantly with the digitalized service
supply system being further optimized.
2 Comprehensive investment yield = (Gross investment income – Interest paid for securities sold under agreements to repurchase + Current net fair value
changes of available-for-sale securities recognised in other comprehensive income)/((Investment assets at the end of the previous year – Securities sold
under agreements to repurchase at the end of the previous year – Derivative financial liabilities at the end of the previous year + Investment assets at the
end of the period – Securities sold under agreements to repurchase at the end of the period – Derivative financial liabilities at the end of the period)/2)
13
China Life Insurance Company Limited•2019 Annual Report•Chairman’s Statement We continued to reform and innovate, which boosted
vigorous driving forces for our development. The
Company steadily carried out the “Dingxin Project”,
upheld the concept of a “strong headquarters, streamlined
p r o v i n c i a l b r a n c h e s , o p t i m i z e d c i t y b r a n c h e s a n d
invigorated field offices”, and a development system
of “Yi Ti Duo Yuan” was initially formed, featuring a
strengthened individual agent channel with an emphasis
on its core role of value creation in coordination with
the development of group insurance, bancassurance
and health insurance. By focusing on the value chain,
the Company reconstructed a market-oriented and
professional investment management system. It sped
up the integration of front, middle and back offices and
initially built an integrated intelligent operational system
and a precise financial resource allocation system. It also
optimized and improved the assessment and evaluation
of management personnel, adopting market-oriented
mechanism in talent selection and recruitment. Keeping
in step with the national and regional development
strategies, the Company vigorously pushed forward
business revitalization in key cities, and built the new
organizations, new mechanisms, new teams and new
systems to cater to the urban market. The Company also
implemented the “Gorgeous Counties, Happy Villages”
project to consolidate its competitive strengths in rural
markets of strategic importance, and generated more
sources of growth from the grassroots branches of the
Company.
We continued to strengthen our capability in risk
control and prevention, and firmly held onto the
bottom line of risks. The Company constantly improved
the top-level design for risk management and control,
improved the risk management system and the risk
p r e f e r e n c e t r a n s m i s s i o n m e c h a n i s m , c o m p l e t e d a
closed loop of risk management and control covering
all links of its value chain and all aspects of operation
and management, and established a comprehensive
risk control model with full staff participation and whole
process management. The Company carried out in-
depth risk inspections, comprehensively prevented
and controlled key risks, strengthened the technology
empowerment in risk management and control, continued
to build the intelligent risk control system, and achieved
more accurate prevention and control of fraud risks and
money laundering risks.
A fter the outbrea k of C OVID- 19 i n e arly 202 0, the
Company took immediate actions in providing insurance
protection, donating epidemic prevention supplies, and
offering health-related insurance services, etc. The
Company expanded the scope of insurance coverage of
its current products, upgraded claims settlement services,
and improved online services. It provided complimentary
i n s u r a n c e p r o t e c t i o n f o r o v e r 2 . 4 8 m i l l i o n p e o p l e
fighting on the front line of the epidemic. While serving
the national battle against the outbreak, the Company
leveraged on the achievements of “Technology-driven
China Life” to enrich a variety of insurance products sold
online, innovate online sales team management model,
conduct sales online, and strengthen remote service
capabilities, so as to secure the sales force management
and business operation in an orderly manner, and provide
comprehensive protection for the customers’ rights.
14
China Life Insurance Company Limited•2019 Annual Report•Chairman’s Statement Looking ahead, we firmly believe that the Chinese
economy will maintain its long-term sound development
a n d i t s h i g h - q u a l i t y g r o w t h f u n d a m e n t a l s r e m a i n
unchanged, and that the domestic insurance industry is
still at an important stage full of strategic opportunities.
I n 2 0 2 0 , w e w i l l c o n t i n u e t o p u r s u e h i g h - q u a l i t y
development, stick to value creation during the whole
process of the Company’s reform and development, and
make concrete progress with “China Life Revitalization”.
We will vigorously push forward the market-oriented
reforms, accelerate the implementation of the “Dingxin
Project”, speed up the digitalization process in business
operation, enhance the application of digital technologies
in sales, services and management, and strengthen
the application of technological empowerment in sales,
services and business operation. We will speed up the
integration of service platforms, and shape the Company’s
operation and services to be more integrated, intelligent
and ecological. We will also strengthen risk management
and control, strive to prevent major risks, enhance
asset-liability management, implement “Environmental,
Social and Governance (ESG)” concept, and advance our
corporate governance.
“Many a little makes a mickle.” The Company will
continue to uphold its original aspiration of “Protecting
P e o p l e ’ s G o o d L i f e ” , r e v i t a l i z e C h i n a L i f e , f o r g e
ahead with the reform initiatives, and strive to create
value for our shareholders, customers and society,
making unremitting efforts to promote the high-quality
development of the Chinese insurance industry, build a
moderately prosperous society in all respects, and realise
the first centenary goal of the country.
By Order of the Board
Wang bin
Chairman
Beijing, China
25 March 2020
15
China Life Insurance Company Limited•2019 Annual Report•Chairman’s Statement ChiNa lifE
rEviTaliZaTiON
diNgXiN PrOjECT
Principles
Strong headquarters, streamlined
provincial branches, optimized
city branches and invigorated
field offices
One goal
Build a vibrant organizational
structure to achieve the goal of
revitalizing China Life
Two focuses
Create a strengthened individual
agent channel in coordination with
other channels (Yi Ti Duo Yuan)
and a market-oriented investment
management system
“Yi Ti” refers to the strengthened
individual agent channel by
upgrading the general team and
consolidating the upsales, insurance
planners and tele-sales teams for
enhanced value creation; “Duo
Yuan” refers to the operation of
business through bancassurance,
group and health insurance channels
so as to form effective synergy
with individual agent channel, and
consolidate market leading position.
Two Engines
Establish market-oriented
incentive and talent development
mechanisms and optimize
the models of technological
development
Two Supports
Integrated intelligent operational
system and precise financial
resource allocation system
maNagEmENT diSCuSSiON
aNd aNalySiS
rEviEW Of buSiNESS OPEraTiONS
iN 2019
In 2019, despite the complicated situation of increased
risks and challenges at home and abroad, the Company
c o n c e n t r a t e d o n t h e s t r a t e g i c g o a l o f “ C h i n a L i f e
Revitalization” with “Dual Centers and Dual Focuses” as
its strategic core, adhered to the overall keynote of making
steady progress, and upheld the operational guideline of
“prioritizing business value, strengthening sales force,
achieving stable growth, upgrading technology, optimizing
services, and guarding against risks”. The Company
accelerated the establishment of a development system
of “Yi Ti Duo Yuan” with strengthened individual agent
channel in coordination with other channels as well as
a market-oriented investment management system,
strengthened technological empowerment, focused
on the transformation of sales and the development of
protection-oriented business, reformed its sales models,
investment and services systems, constantly improved
the efficiency of risk prevention and control, and achieved
the coordinated growth of business scale and value.
During the Reporting Period, the Company’s gross written
premiums amounted to RMB567,086 million, an increase
of 5.8% year on year, maintaining its industry leadership
position. As at 31 December 2019, embedded value of
the Company reached RMB942,087 million, an increase
of 18.5% from the end of 2018. Value of one year’s
sales was RMB58,698 million, an increase of 18.6%
year on year. During the Reporting Period, the Company
continued to enhance the asset-liability management,
and its gross investment income reached RMB169,043
million, a significant increase of 77.7% from 2018. Due to
an increase in gross investment income and the impact
from the new policy on pre-tax deduction of underwriting
and policy acquisition costs, net profit attributable to
equity holders of the Company was RMB58,287 million,
an increase of 411.5% year on year. As at the end
of the Reporting Period, the core solvency ratio and
the comprehensive solvency ratio were 266.71% and
276.53%, respectively.
18
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis From left to right:
Mr. Zhao Guodong, Mr. Zhan Zhong, Mr. Zhao Peng, Mr. Su Hengxuan, Mr. Li Mingguang, Mr. Ruan Qi, Ms. Yang Hong
Key Performance indicators of 2019
Gross written premiums
Premiums from new policies
Including: First-year regular premiums
First-year regular premiums with a payment duration
of ten years or longer
Renewal premiums
Gross investment income
Net profit attributable to equity holders of the Company
Value of one year’s sales1
Including: Exclusive individual agent channel
Bancassurance channel
Group insurance channel
Policy Persistency Rate (14 months)2 (%)
Policy Persistency Rate (26 months)2 (%)
Embedded value
Number of long-term in-force policies (hundred million)
Notes:
1. Numbers may not be additive due to rounding.
RMB million
2019
2018
567,086
181,289
109,416
59,168
385,797
169,043
58,287
58,698
52,189
6,288
221
86.80
85.90
535,826
171,148
104,419
41,635
364,678
95,148
11,395
49,511
42,839
6,357
314
91.10
86.00
as at
31 december
2019
As at
31 December
2018
942,087
3.03
795,052
2.85
2. The Persistency Rate for long-term individual life insurance policy is an important operating performance indicator for life insurance companies. It
measures the ratio of in-force policies in a pool of policies after a certain period of time. It refers to the proportion of policies that are still effective during
the designated month in the pool of policies whose issue date was 14 or 26 months ago.
19
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
during the reporting Period, with a commitment to
high-quality development, the Company achieved a
rapid growth in its business value. Value of one year’s
sales of the Company was RMB58,698 million, an increase
of 18.6% year on year. The new business margin of one
year’s sales of the exclusive individual agent channel
and the bancassurance channel increased by 3.2 and
5.1 percentage points year on year, respectively. As at
31 December 2019, embedded value of the Company
reached RMB942,087 million, increasing by 18.5% from
the end of 2018. The surrender rate 3 was 1.89%, a
decrease of 2.80 percentage points year on year.
during the reporting Period, the Company vigorously
developed its long-term regular business and its
business structure was further optimized. First-year
regular premiums amounted to RMB109,416 million,
which accounted for 97.89% of long-term first-year
premiums, increasing by 7.73 percentage points year
on year. In particular, first-year regular premiums with a
payment duration of ten years or longer were RMB59,168
m i l l i o n ( a y e a r - o n - y e a r i n c r e a s e o f 4 2 . 1 % ) , w h i c h
accounted for 54.08% of the first-year regular premiums
(a year-on-year increase of 14.21 percentage points).
Renewal premiums amounted to RMB385,797 million
(a year-on-year increase of 5.8%), which accounted for
68.03% of the gross written premiums.
during the reporting Period, the Company emphasized
its due role of insurance protection, and made great
efforts to develop protection-oriented business. The
Company accelerated the development of protection-
oriented businesses and further diversified its product
mix. Out of the top ten insurance products by first-year
regular premiums, six were protection-oriented products.
The percentage of premiums from designated protection-
oriented insurance business in the first-year regular
premiums rose by 8.6 percentage points year on year,
with an increase in both the number of protection-oriented
insurance policies and average premiums per policy.
during the reporting Period, the Company achieved
s i g n i f i c a n t i n c r e a s e i n i n v e s t m e n t i n c o m e b y
constantly enhancing the asset-liability management
and optimizing its asset allocation strategies. The
C o m p a n y r e c o r d e d a g r o s s i n v e s t m e n t i n c o m e o f
RMB169,043 million, a year-on-year increase of 77.7%
from 2018.
In 2019, the Company kicked off the “Dingxin Project”
under the guidance of “China Life Revitalization” strategy
with “Dual Centers and Dual Focuses” as its strategic
core. As at the end of the Reporting Period, the Company
completed the optimization of its organizational structure
Premium breakdown (rmb million)
Renewal
premiums
385,797
Single premiums
2,358
Short-term
insurance premiums
69,515
2019
First-year
regular premiums
109,416
Renewal
premiums
364,678
Single premiums
11,399
Short-term
insurance premiums
55,330
2018
First-year
regular premiums
104,419
value of one year’s sales (rmb million)
2019
2018
58,698
18.6%
49,511
Embedded value (rmb million)
As at 31 December 2019
As at 31 December 2018
942,087
18.5%
795,052
3 Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of long-term insurance contracts)
20
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis and personnel adjustments and actively explored and
established an organizational model and mechanism
in line with the Company’s strategy. in terms of sales
function, a development system of “Yi Ti Duo Yuan” was
initially formed, which featured a strengthened individual
agent channel at the core of value creation. The Company
integrated all sales resources for individual insurance
business and consolidated the bancassurance channel’s
insurance planners, tele-sales and agent channel’s upsales
teams. By separately managing and operating the general
agent team and the new upsales team, which were both
supported by the four functions of individual insurance
planning, individual insurance operation, training and
integrated finance functions, the Company deepened
the transformation and upgrade of individual insurance
business. In the development of the diversification (“Duo
Yuan”) system, the Company reinforced and improved
the existing advantages of the other channels. The group
insurance channel focused on the development of its
professional operation capacity. The bancassurance
channel would generate business through bank outlets,
properly coordinate growth in business scale and value,
and optimize its business structure. The health insurance
channel focused on professional development. in terms
of the investment function, the Company further
improved its top-down investment management system
in line with the investment value creation chain, including
strategic asset allocation, tactical asset allocation,
investment management, strengthened risk management
in all aspects and investment operation support. in terms
of operations, the Company accelerated the integration
of front, middle, and back offices, gradually established
an integrated intelligent operational system and a precise
financial resource allocation system, and started to set up
an operation and financial sharing service center. Based on
the completion of its organizational restructuring in 2019,
the Company will continue to push forward the “Dingxin
Project” reforms, further improve its operational and
management capabilities, and further promote reform and
transformation in sales, investment, product, operations,
technology, and human resources.
buSiNESS aNalySiS
insurance business
Gross written premiums categorized by business
for the year ended 31 december
life insurance business
First-year business
First-year regular
Single
Renewal business
health insurance business
First-year business
First-year regular
Single
Renewal business
accident insurance business
First-year business
First-year regular
Single
Renewal business
Total
2019
446,562
100,674
98,342
2,332
345,888
105,581
66,213
11,000
55,213
39,368
14,943
14,402
74
14,328
541
567,086
RMB million
2018
Change
437,540
106,212
94,834
11,378
331,328
83,614
50,705
9,430
41,275
32,909
14,672
14,231
155
14,076
441
535,826
2.1%
-5.2%
3.7%
-79.5%
4.4%
26.3%
30.6%
16.6%
33.8%
19.6%
1.8%
1.2%
-52.3%
1.8%
22.7%
5.8%
Note: Single premiums in the above table include premiums from short-term insurance business.
During the Reporting Period, by further improving its business structure, gross written premiums from the life insurance
business of the Company amounted to RMB446,562 million, rising by 2.1% year on year; gross written premiums from
the health insurance business reached RMB105,581 million, rising by 26.3% year on year; and gross written premiums
from the accident insurance business were RMB14,943 million, a year-on-year increase of 1.8%.
21
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
Gross written premiums categorized by channel
for the year ended 31 december
RMB million
Exclusive individual agent Channel
First-year business of long-term insurance
First-year regular
Single
Renewal business
Short-term insurance business
bancassurance Channel
First-year business of long-term insurance
First-year regular
Single
Renewal business
Short-term insurance business
group insurance Channel
First-year business of long-term insurance
First-year regular
Single
Renewal business
Short-term insurance business
Other Channels1
First-year business of long-term insurance
First-year regular
Single
Renewal business
Short-term insurance business
Total
Notes:
2019
436,621
84,142
83,865
277
336,676
15,803
70,060
23,851
23,820
31
44,623
1,586
28,846
3,018
968
2,050
1,995
23,833
31,559
763
763
–
2,503
28,293
2018
408,278
79,513
79,241
272
316,930
11,835
76,841
31,881
23,239
8,642
43,785
1,175
26,404
3,487
1,004
2,483
1,649
21,268
24,303
937
935
2
2,314
21,052
567,086
535,826
1. Other channels mainly include supplementary major medical expenses insurance business, tele-sales, online sales, etc.
2. The Company’s channel premium breakdown was presented based on the separate groups of sales personnel including exclusive individual agent team,
group insurance sales representatives, bancassurance sales team and other distribution channels.
In 2019, by consistently focusing on business value
growth and accelerating reform and transformation, the
Company’s core businesses developed at a faster speed
with its value of one year’s sales rising significantly. With
its sales force expanding steadily, quality of the sales
force improved constantly. As at the end of 2019, the
total number of the Company’s sales force reached 1.848
million.
Exclusive individual agent Channel. In 2019, focusing
on business value growth, the exclusive individual agent
channel deepened transformation and upgrade in its
sales management, prioritized the growth of protection-
oriented business, reinforced coordinated development
of business, sales force and day-to-day management,
and achieved coordinated growth of business scale and
value, with its new business margin of one year’s sales
22
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
increasing significantly. During the Reporting Period, gross
written premiums from the exclusive individual agent
channel amounted to RMB436,621 million, an increase
of 6.9% year on year. First-year regular premiums from
the channel were RMB83,865 million, an increase of
5.8% year on year, which accounted for 99.67% of first-
year premiums of long-term insurance. In particular,
the percentage of first-year regular premiums with a
payment duration of ten years or longer in first-year regular
premiums was 62.24%, an increase of 15.89 percentage
points year on year. Renewal premiums amounted to
RMB336,676 million, an increase of 6.2% year on year.
New business margin of one year’s sales of the channel
reached 45.3%, a year-on-year increase of 3.2 percentage
points. In 2019, the sales force of the channel was
improved in both quantity and quality, which substantially
drove business growth. As at the end of 2019, the number
of exclusive individual agents was 1.613 million, an
increase of 12.1% from the end of 2018. The quality of the
sales force was improved constantly, with the number of
monthly average productive agents increasing by 34.9%
year on year and the monthly average number of agents
selling designated protection-oriented products increasing
by 43.8% year on year. As at the end of 2019, the number
of upsales agents which were included in the exclusive
individual agents reached 577,000, an increase of 42.1%
from the end of 2018, outpacing the growth of the
exclusive individual agent force as a whole. In 2019, the
day-to-day management of the channel was strengthened
significantly, with various day-to -d ay man ag em e nt
indicators being improved.
first-year regular premiums from
exclusive individual agent channel (rmb million)
52,200 (62.24%)
83,865
2019
36,731 (46.35%)
2018
5.8%
79,241
First-year regular premiums with a payment
duration of 10 years or longer
Exclusive individual agents
1.613
million
bancassurance Channel. In 2019, with an emphasis on
regular premium business, the bancassurance channel
furthered its business restructuring, with its new business
margin of one year’s sales of the channel rising constantly.
During the Reporting Period, gross written premiums
from the bancassurance channel amounted to RMB70,060
million, a decrease of 8.8% year on year. First-year regular
premiums were RMB23,820 million, an increase of 2.5%
year on year. In particular, first-year regular premiums with
a payment duration of ten years or longer were RMB5,925
million (a year-on-year increase of 47.2%), accounting
for 24.87% of the first-year regular premiums, a year-on-
year increase of 7.55 percentage points. New business
margin of one year’s sales of the channel reached 23.8%,
increasing by 5.1 percentage points year on year. Renewal
premiums amounted to RMB44,623 million (a year-on-
year increase of 1.9%), accounting for 63.69% of the
gross written premiums from this channel, a year-on-year
increase of 6.71 percentage points. As at the end of 2019,
as a result of strengthening its sales team management
and improving sales force quality, the number of sales
representatives of the bancassurance channel was
166,000, with the monthly average active insurance
planners for long-term business increasing by 36.1% year
on year.
first-year regular premiums from
bancassurance channel (rmb million)
5,925 (24.87%)
23,820
2019
2018
4,026 (17.32%)
2.5%
23,239
First-year regular premiums with a payment
duration of 10 years or longer
Sales representatives
166,000
Monthly average active
insurance planners for
long-term business
increased by
36.1%
year on year
Monthly average
productive agents
increased by
34.9%
year on year
23
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis group insurance Channel. In 2019, the group insurance
channel consistently deepened business diversification,
stepped up efforts to expand key business segments,
and achieved rapid development of various businesses.
During the Reporting Period, gross written premiums
from the group insurance channel were RMB28,846
million, an increase of 9.2% year on year. Short-term
insurance premiums from the channel were RMB23,833
million, an increase of 12.1% year on year. The Company
actively carried out the pilot program of tax deferred
pension insurance business and consistently promoted
the tax-advantaged health insurance business. With
stricter performance appraisal and seeking for quality
enhancement of its sales team, the number of direct sales
representatives was 65,500 as at the end of 2019, among
which, the number of high-performance representatives
reached 45,000.
medical expenses insurance programs, providing services
to nearly 400 million people in 31 provinces and cities.
I t a l s o p r o v i d e d s u p p l e m e n t a r y m e d i c a l i n s u r a n c e
protection for social security in 15 provinces, serving 38
million people, undertook over 600 medical insurance
administration projects, covering more than 100 million
people, and offered long-term care insurance protection
for more than 13 million people. In 2019, the Company
saw a faster growth in its online sales business. The
Company emphasized product innovation, reinforced
quality management and guarded against business risk.
To optimize customer experience, the Company provided
quick and convenient ways for online insurance application
and diversified online services to insurance customers via
various models, including direct sales on the Company’s
official website, integration of both online and offline
sales, and collaboration with platform resources.
direct sales representatives
65,500
High-performance
representatives
45,000
Other Channels. In 2019, gross written premiums from
other channels reached RMB31,559 million, an increase
of 29.9% year on year. The Company actively developed
policy-oriented health insurance businesses, including
supplementary major medical expenses insurance,
long-term care insurance and supplementary medical
insurance for social security, which consistently led
the market. As at the end of the Reporting Period, the
Company carried out over 230 supplementary major
The Company actively consolidated internal and external
e c o l o g i c a l r e s o u r c e s , s t e a d i l y p u s h e d f o r w a r d i t s
coordinated business development with other subsidiaries
of CLIC, carried out market expansion and widened
customer base through the strategy of “One Customer,
One-stop Service”. In 2019, premiums from property
insurance cross-sold by the Company increased by 9.4%
year on year, whereas new bids of enterprise annuity
funds and pension security products of Pension Company
cross-sold by the Company grew by 26.7% year on
year. Meanwhile, the Company entrusted CGB to sell
bancassurance products, with first-year regular premiums
for 2019 increasing by 52.8% year on year. The number
of new debit cards and credit cards jointly issued by the
Company and CGB during the year exceeded one million,
which demonstrated the synergy effects of platform
operation, positive interaction and mutual benefits to both
companies.
24
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis Analysis of major insurance products
Top five insurance products in terms of gross written premium
for the year ended 31 december
RMB million
insurance product
China Life Xin Fu Ying Jia
Annuity Insurance
(
國壽鑫福贏家年金保險
)2
gross written
premium
37,024
Standard
premiums
from new
policies1
major sales channel
Surrenders
–
Mainly through the channel of
exclusive individual agents
China Life Xin Xiang Jin Sheng
Annuity Insurance (Type A)
)
(
款）
國壽鑫享金生年金保險（
A
China Life Supplementary Major Medical
Expenses Insurance for Rural and
Urban Citizens (Type A)
(
A
國壽城鄉居民大病團體醫療保險（
China Life Hong Fu Zhi Zun Annuity
)
型）
Insurance (participating insurance)
(
)2
國壽鴻福至尊年金保險（分紅型）
China Life Xin Ru Yi Annuity Insurance
(platinum version)
(
)2
國壽鑫如意年金保險（白金版）
Notes:
36,345
10,948
Mainly through the channel of
exclusive individual agents
25,757
25,757
Through other channels
21,429
21,276
–
–
Mainly through the channel of
exclusive individual agents
Mainly through the channel of
exclusive individual agents
586
140
–
503
504
1. Standard premiums were calculated in accordance with the calculation methods set forth in the “Notice on Establishing the Industry Standard of
Standard Premiums in the Life Insurance Industry” (Bao Jian Fa [2004] No. 102) and the “Supplementary Notice of the ‘Notice on Establishing
the Industry Standard of Standard Premiums in the Life Insurance Industry’” (Bao Jian Fa [2005] No. 25) of the former China Insurance Regulatory
Commission.
2. China Life Xin Fu Ying Jia Annuity Insurance, China Life Hong Fu Zhi Zun Annuity Insurance (participating insurance) and China Life Xin Ru Yi Annuity
Insurance (platinum version) have been replaced by their upgraded products and are no longer on sale, and the gross written premiums are recorded as
renewal premiums.
Top three insurance products in terms of net increase in investment contract
for the year ended 31 december
Net increase
in investment
insurance product
contract major sales channel
China Life Xin Account Endowment Insurance
10,107 Mainly through the channel of
(universal type) (exclusive version)
)
(
國壽鑫賬戶兩全保險（萬能型）（尊享版）
exclusive individual agents
China Life Xin Account Endowment Insurance
7,598 Mainly through the channel of
(universal type) (diamond version)
)
(
國壽鑫賬戶兩全保險（萬能型）（鑽石版）
exclusive individual agents
China Life Jin Account Endowment Insurance
3,385 Mainly through the channel of
(universal type)
)
(
國壽金賬戶兩全保險（萬能型）
exclusive individual agents
RMB million
Surrender
value
157
349
134
25
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
Insurance contracts
Life insurance
Health insurance
Accident insurance
Total of insurance contracts
Including: residual marginNote
as at
31 december
2019
As at
31 December
2018
2,385,407
158,800
8,529
2,552,736
768,280
2,081,822
125,743
8,466
2,216,031
684,082
RMB million
Change
14.6%
26.3%
0.7%
15.2%
12.3%
Note: The residual margin is a component of insurance contract reserve, which results in no Day 1 gain at the initial recognition of an insurance contract.
The residual margin is set to zero if it is negative. The growth of residual margin arises mainly from new business.
As at the end of the Reporting Period, the reserves of insurance contracts of the Company increased by 15.2% from the
end of 2018, which is primarily due to the accumulation of insurance liabilities from new policies and renewal business.
As at the date of the statement of financial position, the reserves of various insurance contracts of the Company passed
the adequacy test.
Analysis of claims and policyholder benefits
for the year ended 31 december
Insurance benefits and claims expenses
Life insurance business
Health insurance business
Accident insurance business
Investment contract benefits
Policyholder dividends resulting from participation in profits
2019
509,467
427,673
75,471
6,323
9,157
22,375
RMB million
2018
Change
479,219
412,876
59,689
6,654
9,332
19,646
6.3%
3.6%
26.4%
-5.0%
-1.9%
13.9%
During the Reporting Period, insurance benefits and claims expenses rose by 6.3% year on year due to an increase
in reserves for insurance liabilities. In particular, health insurance business rose by 26.4% year on year due to health
insurance business growth. Investment contract benefits declined by 1.9% year on year due to a decrease in the
settlement interest rate of universal insurance accounts. Policyholder dividends resulting from participation in profits
increased by 13.9% year on year due to an increase in investment yield from participating account.
Analysis of underwriting and policy acquisition costs and other expenses
for the year ended 31 december
Underwriting and policy acquisition costs
Finance costs
Administrative expenses
Other expenses
Statutory insurance fund contribution
2019
81,396
4,255
40,275
9,602
1,163
2018
62,705
4,116
37,486
7,642
1,097
RMB million
Change
29.8%
3.4%
7.4%
25.6%
6.0%
During the Reporting Period, underwriting and policy acquisition costs rose by 29.8% year on year due to an increase
in the commissions of regular business resulting from the Company’s enhanced efforts in business restructuring.
Administrative expenses increased by 7.4% year on year as a result of business growth.
26
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
investment business
In 2019, the global economic growth slowed down
synchronously, with repeated trade frictions becoming
the biggest disturbance factor. The growth of domestic
economy slightly slowed down but generally remained
stable. The interest rate of the domestic bond market
fluctuated and declined within a narrow range, and the
stock market saw a significant rise compared to the
beginning of 2019. The Company constantly reinforced its
asset-liability management and increased the allocation
in yield seeking assets and strategic assets. In respect
of fixed-income investment, the Company optimized
the portfolio structure and accumulated assets with
long duration. While grasping opportunities to allocate
to traditional fixed-income assets with long duration, it
increased allocation to non-standard financial assets and
bank capital replenishment instruments, etc. As a result,
the Company’s investment yields were increased while
the credit risk was strictly controlled. In respect of its
open market equity investment, the Company achieved
satisfactory investment returns through effectively
implementing tactical allocations, carrying out rebalancing
as appropriate and optimizing the structure of equity
holdings. As at the end of the Reporting Period, the
Company’s investment assets reached RMB3,573,154
million, an increase of 15.1% from the end of 2018.
Investment portfolios
As at the end of the Reporting Period, our investment assets categorized by investment object are set out as below:
investment category
fixed-maturity financial assets
Term deposits
Bonds
Debt-type financial products1
Other fixed-maturity investments2
Equity financial assets
Common stocks
Funds3
Bank wealth management products
Other equity investments4
investment properties
Cash and others5
investments in associates and
joint ventures
Total
Notes:
as at 31 december 2019
As at 31 December 2018
amount
Percentage
Amount
Percentage
RMB million
2,674,261
535,260
1,410,564
415,024
313,413
605,996
276,604
118,450
32,640
178,302
12,141
57,773
222,983
3,573,154
74.85%
14.98%
39.48%
11.62%
8.77%
16.95%
7.74%
3.31%
0.91%
4.99%
0.34%
1.62%
2,407,236
559,341
1,309,831
351,277
186,787
424,656
178,710
106,271
32,854
106,821
9,747
60,714
77.55%
18.02%
42.20%
11.32%
6.01%
13.68%
5.76%
3.42%
1.06%
3.44%
0.31%
1.96%
6.24%
201,661
100.00%
3,104,014
6.50%
100.00%
1. Debt-type financial products include debt investment schemes, equity investment plans, trust schemes, project asset-backed plans, credit asset-backed
securities, specialized asset management plans, and asset management products, etc.
2. Other fixed-maturity investments include policy loans, statutory deposits-restricted, and interbank certificates of deposit, etc.
3. Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money market funds as at 31 December 2019 and
31 December 2018 were RMB1,829 million and RMB4,635 million, respectively.
4. Other equity investments include private equity funds, unlisted equities, preference shares, and equity investment plans, etc.
5. Cash and others include cash, cash at banks, short-term deposits and securities purchased under agreements to resell, etc.
27
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
As at the end of the Reporting Period, among the major
types of investments, the percentage of investment in
bonds changed to 39.48% from 42.20% as at the end of
2018, the percentage of term deposits changed to 14.98%
from 18.02% as at the end of 2018, the percentage of
investment in debt-type financial products increased to
11.62% from 11.32% as at the end of 2018, and the
percentage of investment in stocks and funds (excluding
money market funds) increased to 11.00% from 9.03% as
at the end of 2018.
The Company’s debt-type financial products mainly
concentrated on sectors such as transportation, public
utilities and energy, and the financing entities were
primarily large central-owned enterprises and state-
owned enterprises. As at the end of the Reporting Period,
over 99% of the debt-type financial products held by
the Company had ratings of AAA or above by external
rating institutions. In general, the quality of the debt-type
financial products invested by the Company was in good
condition and the risks were well controlled.
Investment income
for the year ended 31 december
gross investment income
Net investment income
Net income from fixed-maturity investments
Net income from equity investments
Net income from investment properties
Investment income from cash and others
Share of profit of associates and joint ventures
Net realised gains on financial assets
Net fair value gains through profit or loss
disposal gains and impairment loss of associates and joint ventures
Net investment yield1
gross investment yield2
Notes:
2019
169,043
149,109
116,254
22,804
31
861
9,159
1,831
19,251
(1,148)
4.61%
5.24%
RMB million
2018
95,148
133,017
106,422
17,776
105
969
7,745
(19,591)
(18,278)
–
4.64%
3.29%
1. Net investment yield = (Net investment income – Interest paid for securities sold under agreements to repurchase)/((Investment assets at the end of the
previous year – Securities sold under agreements to repurchase at the end of the previous year + Investment assets at the end of the period – Securities
sold under agreements to repurchase at the end of the period)/2)
2. Gross investment yield = (Gross investment income – Interest paid for securities sold under agreements to repurchase)/((Investment assets at the end
of the previous year – Securities sold under agreements to repurchase at the end of the previous year – Derivatives financial liabilities at the end of the
previous year + Investment assets at the end of the period – Securities sold under agreements to repurchase at the end of the period – Derivatives
financial liabilities at the end of the period)/2)
In 2019, the Company’s net investment income was
RMB149,109 million, an increase of RMB16,092 million from
2018 and a year-on-year increase of 12.1%. As the Company
increased its allocation in interest-bearing assets such as
bonds with long duration, stocks with high dividends and
non-standard assets in recent years, although the interest
rate fluctuated and trended downwards, the Company’s
net investment yield remained stable at 4.61%. In the
meantime, in respect of the equity investments, the
Company followed the long-term investment direction
and effectively implemented tactical allocations under
the established strategic asset allocation guidance, and
the Company’s investment income rose significantly.
The gross investment income of the Company reached
RMB169,043 million, an increase of RMB73,895 million
from 2018, and the gross investment yield was 5.24%,
an increase of 195 BPs from the end of 2018. The
comprehensive investment yield taking into account
the current net fair value changes of available-for-sale
securities recognised in other comprehensive income was
7.28%, an increase of 418 BPs from the end of 2018.
Major investments
During the Reporting Period, there was no material equity
investment or non-equity investment of the Company that
is subject to disclosure requirements.
28
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
aNalySiS Of SPECifiC iTEmS
Profit before income Tax
for the year ended 31 december
Profit before income tax
Life insurance business
Health insurance business
Accident insurance business
Other businesses
2019
59,795
42,418
5,875
489
11,013
2018
13,921
1,630
4,100
495
7,696
RMB million
Change
329.5%
2,502.3%
43.3%
-1.2%
43.1%
During the Reporting Period, due to an increase in gross
investment income, profit before income tax from the
life insurance business increased by 2,502.3% year on
year, profit before income tax from the health insurance
business increased by 43.3% year on year, profit before
income tax from the accident insurance business basically
remained flat compared to 2018, and profit before income
tax from other businesses increased by 43.1% year on
year.
The Company’s investment portfolio also provides it with
a source of liquidity to meet unexpected cash outflows.
The Company is also subject to market liquidity risk due to
the large size of its investments in some of the markets. In
some circumstances, some of its holdings of investment
securities may be large enough to have an influence on
the market value. These factors may adversely affect the
Company’s ability to sell these investments or sell them at
a fair price.
Liquidity uses
The Company’s principal cash outflows primarily relate to
the payables for the liabilities associated with its various
life insurance, annuity, accident insurance and health
insurance products, operating expenses, income taxes
and dividends that may be declared and paid to its equity
holders. Cash outflows arising from its insurance activities
primarily relate to benefit payments under these insurance
products, as well as payments for policy surrenders,
withdrawals and policy loans.
The Company believes that its sources of liquidity are
sufficient to meet its current cash requirements.
analysis of Cash flows
Liquidity sources
The Company’s cash inflows mainly come from insurance
premiums, income from non-insurance contracts, interest
income, dividends and bonus, and proceeds from sale
and maturity of investment assets. The primary liquidity
risks with respect to these cash inflows are the risk of
surrender by contract holders and policyholders, as well as
the risks of default by debtors, interest rate fluctuations
and other market volatilities. The Company closely
monitors and manages these risks.
The Company’s cash and bank deposits can provide it
with a source of liquidity to meet normal cash outflows.
As at the end of the Reporting Period, the balance of cash
and cash equivalents was RMB53,306 million. In addition,
the vast majority of the Company’s term deposits in
banks allow it to withdraw funds on deposits, subject to
a penalty interest charge. As at the end of the Reporting
Period, the amount of term deposits was RMB535,260
million.
29
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
Consolidated cash flows
The Company has established a cash flow testing system, and conducts regular tests to monitor the cash inflows and
outflows under various scenarios and adjusts the asset portfolio accordingly to ensure sufficient sources of liquidity.
for the year ended 31 december
RMB million
2019
2018
Change Main Reasons for Change
Net cash inflow/(outflow) from
286,032
147,552
operating activities
93.9% A decrease in surrender
payments and maturity
payments
Net cash inflow/(outflow) from
(247,515)
(238,373)
3.8% The needs for investment
investing activities
Net cash inflow/(outflow) from
(36,075)
92,963
N/A
management
The needs for liquidity
management
financing activities
Foreign exchange gains/(losses)
on cash and cash equivalents
Net increase/(decrease) in
cash and cash equivalents
55
81
-32.1% –
2,497
2,223
12.3% –
Solvency ratio
An insurance company shall have the capital commensurate
with its risks and business scale. According to the nature
and capacity of loss absorption by capital, the capital of an
insurance company is classified into the core capital and
the supplementary capital. The core solvency ratio is the
ratio of core capital to minimum capital, which reflects the
adequacy of the core capital of an insurance company. The
comprehensive solvency ratio is the ratio of the sum of
core capital and supplementary capital to minimum capital,
which reflects the overall capital adequacy of an insurance
company. The following table shows our solvency ratios as
at the end of the Reporting Period:
Core capital
Actual capital
Minimum capital
Core solvency ratio
Comprehensive solvency ratio
RMB million
as at
31 december
2019
As at
31 December
2018
952,030
987,067
356,953
266.71%
276.53%
761,353
761,367
303,872
250.55%
250.56%
Note: The China Risk Oriented Solvency System was formally implemented on 1 January 2016. This table is compiled according to the rules of the system.
As at the end of the Reporting Period, the Company’s
c o m p r e h e n s i v e s o l v e n c y r a t i o i n c r e a s e d b y 2 5 . 9 7
percentage points from the end of 2018, which was due
to an increase in gross investment income, improvement
o f b u s i n e s s s t r u c t u r e a n d t h e i s s u a n c e o f c a p i t a l
supplemental bonds of RMB35 billion.
Sale of material assets and Equity
During the Reporting Period, there was no sale of material
assets and equity of the Company.
30
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
major Subsidiaries and associates of the Company
Company Name
major business Scope
China Life Asset
Management
Company Limited
China Life Pension
Company Limited
China Life Property and
Casualty Insurance
Company Limited
Management and utilization of proprietary funds; acting as agent
or trustee for asset management business; consulting business
relevant to the above businesses; other asset management
business permitted by applicable PRC laws and regulations
Group pension insurance and annuity; individual pension
insurance and annuity; short-term health insurance; accident
insurance; reinsurance of the above insurance businesses;
business for the use of insurance funds that are permitted by
applicable PRC laws and regulations; pension insurance asset
management product business; management of funds in RMB
or foreign currency as entrusted by entrusting parties for the
retirement benefit purpose; other businesses permitted by
the CBIRC
Property loss insurance; liability insurance; credit insurance and
guarantee insurance; short-term health insurance and accident
insurance; reinsurance of the above insurance businesses;
business for the use of insurance funds that are permitted by
applicable PRC laws and regulations; other business permitted
by the CBIRC
RMB million
registered
Capital
Shareholding
Total assets
Net assets
Net Profit
4,000
60%
11,914
10,354
1,286
5,644
4,084
635
3,400
70.74%
is held by the
Company,
and 3.53% is
held by AMC
18,800
40%
91,167
23,330
2,123
China Guangfa Bank
Co., Ltd.
The businesses approved by the CBIRC include commercial
banking businesses such as public and private deposits, loans,
payment and settlement, and capital business
19,687
43.686%
2,632,798
209,564
12,581
Note: For details, please refer to Note 9 and Note 35 in the Notes to the Consolidated Financial Statements in this annual report.
Structured Entities Controlled by the Company
Details of structured entities controlled by the Company is set out in the Note 42 in the Notes to the Consolidated
Financial Statements in this annual report.
31
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis
TEChNOlOgiCal EmPOWErmENT
aNd OPEraTiONS aNd SErviCES
Technological Empowerment
During 2019, the Company kicked off its three-year
action plan for the “Technology-driven China Life”
initiative in all aspects. It actively applied advanced
technologies to empower the whole insurance value
chain, constantly strengthened its technological service
capabilities to integrate internal resources and connecting
with customers, and steadily pushed forward digital
transformation to support its high-quality development.
Core Business Empowerment and Intelligent
Upgrade
Sales empowerment and management model upgrade.
The Company adopted technologies such as AI, Big Data
and Internet of Things to achieve data integration, which
help achieve smarter, more accurate and convenient
insurance sales. In 2019, the online customer acquisition
grew by 47% year on year, and the percentage of online
sales force recruitment reached 70%. The Company held
online training sessions for new agents with 4.9 million
person-times participation. More than 60 million person-
times of customers were recommended to the sales team
via the intelligent platform, and the ratio of customers
who purchased long-term insurance policies increased by
five times.
field offices empowerment and equipment upgrade.
The application of the “Internet of Things” technology
accelerated the real-time interconnection between
different field offices and networks as well as the
intelligent upgrade of daily office operations. In 2019,
the Company added 88,000 sets of intelligent equipment
and achieved full digital coverage at Star Field Offices.
It deployed more than 2,000 self-service terminals at its
service counters across China and set up demonstrative
5G digital field offices in multiple cities. It established a
sales command center that covered the entire country
and had direct access to the frontline, enabling real-time
information transmission and turning its field offices into
the digital bases for further services extension.
Services empowerment and experience upgrade.
The Company continued to advance the application of
AI in the fields of underwriting, policy administration,
claims settlement, services and risk control. In 2019, the
approval rate of individual insurance policies by automatic
underwriting was 89.4%, and the number of claims settled
automatically in the whole process reached more than
11.3 million. The Company introduced a short-term risk
identification model for critical illness insurance with a
91% accuracy rate in identifying risks. It also developed
a platform to utilize intelligent technologies to discover
and verify suspected money-laundering activities, thus
effectively solving the difficulties in identifying and
verifying money laundering activities. The Company also
stepped up efforts in identifying non-compliance of agents
by intelligent means, which enhanced its ability to control
sales risks in a practical manner.
Establishment of Ecosystem to Integrate Internal
Resources and Connect with Customers
Cloud-based infrastructure enabling comprehensive
upgrade. The Company revamped its IT infrastructure
and utilized industry-leading hybrid clouds to achieve the
rapid deployment of front office applications and secure
storage of back office data, which effectively improved
the stability, smoothness and security of the systems.
Specifically, resource allocation efficiency and overall
access speed increased by ten times and three times,
respectively. While substantially expanding the resources
of its basic platform, the Company also managed to
continually reduce the costs of resources.
roll-out of new digital applications. The Company
unveiled component-based plug-in professional service
modules and efficiently launched various types of flexibly-
combined “light” applications suited to market application
scenarios for its users, which promptly responded to
regulatory requirements and market demand. A series of
innovative applications as represented by cloud video and
cloud desktop transformed its traditional office model,
and provided readily available, mobile, convenient live-
streaming and smart office services for its salespersons
and employees across the country, which helped the
Company vigorously advance digitalized operations.
digital ecosystem featuring openness and sharing.
Capitalizing on flexible data and resources, the Company
continued to enrich and expand its FinTech ecosystem
based on the digital platform, thus continually improving
its ability to create value by integrating internal resources
and connecting with customers. In 2019, the Company
developed more than 1,000 innovative applications based
on the platform and cooperated with more than 6,000
institutions to carry out various services and over 40,000
activities, which enriched the Company’s insurance-
centered ecosystem services.
32
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis Operations and Services
I n 2 0 1 9 , b y a d h e r i n g t o t h e “ c u s t o m e r - o r i e n t e d
approach” and the goal of “strengthening efficiency,
promoting technology-driven development, achieving
value improvements and offering first-class customer
experience”, the Company developed a three-year
action plan for excellent services, pushed forward the
construction of a “production, service and control”
structure and rolled out the model featuring “multi-
point access to the front office, integrated and intelligent
headquarters and operation sharing”. All these efforts
helped promote the Company’s operations and services to
be more integrated, intelligent and ecosystem-based.
focusing on the market and insurance products being
more diversified. In 2019, closely following the market
trend and demands of its customers, the Company
d e v e l o p e d a t o t a l o f 1 0 2 n e w i n s u r a n c e p r o d u c t s ,
including 23 life insurance products, 43 health insurance
products, 27 accident insurance products and 9 annuity
insurance products. Among these new products, 89
were protection-oriented products and 13 were long-term
savings products.
focusing on integration and customer services being
more accessible. The Company improved the integrated
financial service ecology and achieved the goal of “One
Customer, One China Life” by optimizing its service
process throughout the entire service chain. Customers
were able to access various financial services provided
by CLP&C, Pension Company, CGB, AMP and China
Life Insurance (Overseas) Company Limited through
the multi-media Customer Contact Center or China Life
Insurance APP.
focusing on online services and customer services being
more convenient. The Company made a breakthrough in
its service capability of online platform as well as digital
business processing. The efficiency of claims settlement
was improved significantly, with the time required for
individual claims payment being shortened by 41% year
on year and the direct payment by the Company being
provided in more than 15,000 medical institutions. The
Company established the industry-leading whole process
automatic claims settlement mode, and the rate of
automatic claims settlement increased by 41.5 percentage
points. Insurance policy service became more convenient
with the paperless policy application rate for individual
customers reaching 97.8%, an increase of 7.8 percentage
points year on year. Policy administration processed online
increased by 47% year on year.
fo c u s i n g o n b u s i n e s s s c e n a r i o s a n d c u s t o m e r
services being smarter. The Company provided more
differentiated and customized services to customers by
advancing the application of AI technology in business
scenarios. It launched the Intelligent Underwriting System
2.0, improved its differentiated underwriting policies,
applied insurance service records model and launched
underwriting Q&A robots, which helped improve the
service quality of its sales agents and increased the rate
of intelligent underwriting by 5.9 percentage points year
on year. With continuous sophisticated training of the AI
model, product recommendation to targeted customers
reached over 300 million times. The volume of services
provided by the online robots increased by 77% year on
year.
fo c u s i n g o n d e m a n d s a n d s e r v i c e s b e i n g m o r e
customized. By further enhancing high-quality service
supply system, the Company maintained a high level
of customer satisfaction and loyalty. The Company
continued to push forward the upgrading of its services
by implementing a project of customer experience
improvement, completing a customer experience blueprint
and listening to the customers. The Company also
launched new models such as “Insurance + Health” and
“Insurance + Rescue” and 70 upgraded services such as
Policy Loan (“Suixinjie”). The Company widely promoted
the “Five Exclusive VIP Services” and organized more
than 30,000 value-added service activities of all kinds
such as “Little Painters of China Life” and “China Life 700
Running”, providing services of over 40 million customer-
times.
Constantly implementing the strategy of “inclusive
healthcare” and “integrated aged-care”. By consolidating
the resources of healthcare and medical services, the
Company established a healthcare ecosystem covering
all life cycles. It created an innovative model for the
cooperation between medical and insurance entities with
the construction of the online and offline platforms, and
promoted application of the claims settlement model that
integrated government and businesses in the form of
“basic medical insurance + supplemental major medical
expenses insurance + commercial insurance.” Meanwhile,
the Company constantly promoted the development and
operation of its “Integrated Aged-care” projects. The
opening and operation of the elderly communities of “China
Life Caregarden Ya Jing” in Yangcheng Lake, Suzhou and
“China Life Caregarden Yi Jing” in Haitang Bay, Sanya
was set to provide a boost to the Company in building
an integrated financial ecosystem featuring “Financial
Insurance + Health Care + Elderly Care”. The Company
set up the China Life Integrated Aged Care Fund and China
Life Jiequan Investment Fund (Inclusive Healthcare Fund
II), focusing on companies and funds engaging in inclusive
healthcare-related sectors such as healthcare, elderly care,
health information management, pharmaceutical production
and services, and medical apparatus and instruments
production, with a view to further promoting the strategic
layout in the retirement service and health care industry.
33
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis governance, and vigorously implement the “Dingxin
Project”. It will step up efforts to develop its protection-
oriented business and long-term savings business, push
forward the transformation and upgrade of sales force,
improve operations and services capabilities, strengthen
technological empowerment, enhance the management
of assets and liabilities, firmly maintain the bottom
line of risks management and control, and ensure that
substantive progress is achieved in the implementation
o f v a r i o u s s t r a t e g i c a r r a n g e m e n t s o f “ C h i n a L i f e
Revitalization” so as to lay a solid foundation for building a
world-class life insurance company.
Potential risks
Currently, the global economic growth has continued
t o s l o w d o w n a n d i s s t i l l a t t h e s t a g e o f i n - d e p t h
adjustments following the international financial crisis.
The global landscape is changing rapidly, with a growing
number of new sources of turmoil and risks worldwide.
China is going through a critical stage in transforming
its development model, optimizing economic structure
and switching the driving force for growth. With the
intertwining of structural, institutional and cyclical
problems and the growing impact of the “three-stage
superposition”, the Chinese economy faces increasing
downward pressure. The outbreak of COVID-19 in early
2020 will have an impact on the Company’s business in
the short term. The Company has taken various measures
to ensure the orderly operation of its business. The
Chinese economy is highly resilient and has enormous
potential. The Company will continue to stay alert and
actively respond to any impacts associated with the
outbreak. In 2020, the Company will continue to enhance
its analysis on complex risk factors and strive to push
forward its high-quality development.
The Company expects that it will have sufficient capital
to meet its insurance business expenditures and new
general investment needs in 2020. At the same time, the
Company will make corresponding financing arrangements
based on capital market conditions to further implement
its future business development strategies.
PErfOrmaNCE Of ThE COrPOraTE
SOCial rESPONSibiliTy
For the performance by the Company of its corporate
social responsibility during the Reporting Period, please
refer to the full text of the “2019 Environmental, Social
and Governance & Social Responsibility Report” (“ESG
Report 2019”) separately disclosed by the Company on
the website of the SSE (http://www.sse.com.cn) and the
HKExnews website of the Hong Kong Exchanges and
Clearing Limited (http://www.hkexnews.hk). The specific
information on environment is set out in Part 6 of the
“ESG Report 2019”.
fuTurE PrOSPECT
industry landscape and development Trends
The life insurance industry in China is still at an important
stage full of strategic opportunities, with high-quality
development as the main theme. Although the global
economic growth has continued to slow down, the
basic trend of the Chinese economy maintaining stable
growth towards long-term sound development remains
unchanged. In 2019, China’s per capita GDP exceeded
USD10,000 for the first time, and the demand of people
for insurance protection is increasing. In the meantime,
with the gradual increase in urbanization rate and the
further promotion of a “Healthy China” strategy, there will
continue to be enormous potential for the development
of the life insurance industry. As the insurance regulator
sets explicit requirements and goals for promoting the
high-quality development of the insurance industry, it
is expected to see further acceleration in high-quality
development of this industry. With the full opening of the
insurance market, the entities offering insurance services
will become more diversified and market competition
will further increase, which will help improve consumer
experience and promote the sustainable and healthy
development of the industry. As insurance companies
have promoted the application of information technology
in areas such as sales, management and services, it is set
to accelerate the digital transformation of the insurance
industry.
development Strategies and business Plans of
the Company
In 2020, the Company will take high-quality development
as its fundamental requirement, adhere to the overall
keynote of making progress with stability, and take
“Dual Centers and Dual Focuses” as its strategic core.
The Company will uphold the operational guideline of
“prioritizing business value, strengthening sales force,
achieving stable growth, upgrading technology, optimizing
services, and guarding against risks”. The Company will
strengthen its efforts to create value, modernize corporate
34
China Life Insurance Company Limited•2019 Annual Report•Management Discussion and Analysis EmbEddEd valuE
baCKgrOuNd
China Life Insurance Company Limited prepares financial
statements to public investors in accordance with the
relevant accounting standards. An alternative measure
of the value and profitability of a life insurance company
c a n b e p r o v i d e d b y t h e e m b e d d e d v a l u e m e t h o d .
Embedded value is an actuarially determined estimate
of the economic value of the life insurance business
of an insurance company based on a particular set of
assumptions about future experience, excluding the
economic value of future new business. In addition,
the value of one year’s sales represents an actuarially
determined estimate of the economic value arising from
new life insurance business issued in one year based on a
particular set of assumptions about future experience.
China Life Insurance Company Limited believes that
reporting the Company’s embedded value and value of
one year’s sales provides useful information to investors
in two respects. First, the value of the Company’s in-force
business represents the total amount of shareholders’
interest in distributable earnings, in present value
terms, which can be expected to emerge over time, in
accordance with the assumptions used. Second, the value
of one year’s sales provides an indication of the value
created for investors by new business activity based on
the assumptions used and hence the potential of the
business. However, the information on embedded value
and value of one year’s sales should not be viewed as
a substitute of financial measures under the relevant
accounting basis. Investors should not make investment
decisions based solely on embedded value information
and the value of one year’s sales.
It is important to note that actuarial standards with respect
to the calculation of embedded value are still evolving.
There is still no universal standard which defines the
form, calculation methodology or presentation format of
the embedded value of an insurance company. Hence,
differences in definition, methodology, assumptions,
accounting basis and disclosures may cause inconsistency
when comparing the results of different companies.
Also, the calculation of embedded value and value of one
year’s sales involves substantial technical complexity
and estimates can vary materially as key assumptions
are changed. Therefore, special care is advised when
interpreting embedded value results.
The values shown below do not consider the future
financial impact of transactions between the Company and
CLIC, CLI, AMC, Pension Company, CLP&C, and etc.
35
China Life Insurance Company Limited•2019 Annual Report•Embedded Value dEfiNiTiONS Of EmbEddEd valuE
aNd valuE Of ONE yEar’S SalES
liability mismatch risk, credit risk, the risk of operating
experience’s fluctuation and the economic cost of capital
through the use of a risk-adjusted discount rate.
The embedded value of a life insurer is defined as the
sum of the adjusted net worth and the value of in-force
business allowing for the cost of required capital.
“Adjusted net worth” is equal to the sum of:
• Net assets, defined as assets less corresponding policy
liabilities and other liabilities valued; and
• N e t - o f - t a x a d j u s t m e n t s f o r r e l e v a n t d i f f e r e n c e s
between the market value and the book value of assets,
together with relevant net-of-tax adjustments to certain
liabilities.
The market value of assets can fluctuate significantly
over time due to the impact of the prevailing market
environment. Hence the adjusted net worth can fluctuate
significantly between valuation dates.
The “value of in-force business” and the “value of one
year’s sales” are defined here as the discounted value of
the projected stream of future shareholders’ interest in
distributable earnings for existing in-force business at the
valuation date and for one year’s sales in the 12 months
immediately preceding the valuation date.
The value of in-force business and the value of one
year’s sales have been determined using a traditional
deterministic discounted cash flow methodology. This
methodology makes implicit allowance for the cost of
investment guarantees and policyholder options, asset/
Summary Of rESulTS
PrEParaTiON aNd rEviEW
The embedded value and the value of one year’s sales
were prepared by China Life Insurance Company Limited
in accordance with the “CAA Standards of Actuarial
Practice: Appraisal of Embedded Value” issued by the
China Association of Actuaries (“CAA”) in November
2016. Willis Towers Watson, an international firm of
consultants, performed a review of China Life’s embedded
value. The review statement from Willis Towers Watson is
contained in the “Willis Towers Watson’s review opinion
report on embedded value” section.
aSSumPTiONS
Economic assumptions: The calculations are based upon
assumed corporate tax rate of 25% for all years. The
investment return is assumed to be 5% per annum.
14% grading to 18% (remaining level thereafter) of the
investment return is assumed to be exempt from income
tax. The investment return and tax exempt assumptions
are based on the Company’s strategic asset mix and
expected future returns. The risk-adjusted discount rate
used is 10% per annum.
Other operating assumptions such as mortality, morbidity,
lapses and expenses are based on the Company’s recent
operating experience and expected future outlook.
The embedded value as at 31 December 2019, the value of one year’s sales for the 12 months ended 31 December 2019,
and the corresponding results as at 31 December 2018 are shown below:
Components of Embedded value and value of One year’s Sales
iTEm
A Adjusted Net Worth
B Value of In-Force Business before Cost of Required Capital
C Cost of Required Capital
D Value of In-Force Business after Cost of Required Capital (B + C)
E Embedded value (a + d)
F Value of One Year’s Sales before Cost of Required Capital
G Cost of Required Capital
h value of One year’s Sales after Cost of required Capital (f + g)
Note: Numbers may not be additive due to rounding.
36
RMB million
31 december
2019
31 December
2018
482,793
509,515
(50,220)
459,295
942,087
63,745
(5,047)
58,698
386,054
454,786
(45,788)
408,998
795,052
54,728
(5,218)
49,511
China Life Insurance Company Limited•2019 Annual Report•Embedded Value
valuE Of ONE yEar’S SalES by ChaNNEl
The value of one year’s sales for the 12 months ended 31 December 2019 by channel is shown below:
value of One year’s Sales by Channel
Channel
Exclusive Individual Agent Channel
Bancassurance Channel
Group Insurance Channel
Total
Note: Numbers may not be additive due to rounding.
RMB million
31 december
2019
31 December
2018
52,189
6,288
221
58,698
42,839
6,357
314
49,511
The new business margin of one year’s sales for the 12 months ended 31 December 2019 by channel is shown below:
New business margin of One year’s Sales by Channel
Channel
Exclusive Individual Agent Channel
Bancassurance Channel
Group Insurance Channel
by fyP
by aPE
31 december
2019
31 December
2018
31 december
2019
31 December
2018
45.3%
23.8%
0.6%
42.2%
18.7%
0.8%
45.3%
23.8%
0.6%
42.2%
24.3%
0.9%
Note: FYP (First Year Premium) is the written premium used for calculation of the value of one year’s sales and APE (Annual Premium Equivalent) is
calculated as the sum of 100 percent of first year regular premiums and 10 percent of single premiums.
37
China Life Insurance Company Limited•2019 Annual Report•Embedded Value
mOvEmENT aNalySiS
The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
analysis of Embedded value movement in 2019
Investment Experience Variance
iTEm
A Embedded Value at the Start of Year
B Expected Return on Embedded Value
C Value of New Business in the Period
D Operating Experience Variance
E
F Methodology, Model and Assumption Changes
G Market Value and Other Adjustments
H Exchange Gains or Losses
I Shareholder Dividend Distribution and Capital Injection
J Other
K Embedded value as at 31 december 2019 (sum a through j)
Notes: 1) Numbers may not be additive due to rounding.
2)
Items B through J are explained below:
RMB million
795,052
66,625
58,698
128
31,906
(6,846)
3,023
198
(4,916)
(1,781)
942,087
B Reflects expected impact of covered business, and the expected return on investments supporting the 2019 opening net worth.
C Value of one year’s sales for the 12 months ended 31 December 2019.
D Reflects the difference between actual operating experience in 2019 (including mortality, morbidity, lapse, and expenses etc.) and the
assumptions.
E Compares actual with expected investment returns during 2019.
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 2019 to 31 December 2019 and other adjustments.
H Reflects the gains or losses due to changes in exchange rate.
I Reflects dividends distributed to shareholders during 2019.
J Other miscellaneous items.
38
China Life Insurance Company Limited•2019 Annual Report•Embedded Value
SENSiTiviTy rESulTS
Sensitivity tests were performed using a range of alternative assumptions. In each of the sensitivity tests, only the
assumption referred to was changed, with all other assumptions remaining unchanged. The results are summarized
below:
Sensitivity results
Base case scenario
1. Risk discount rate +50bps
2. Risk discount rate -50bps
Investment return +50bps
3.
4.
Investment return -50bps
5. 10% increase in expenses
6. 10% decrease in expenses
7. 10% increase in mortality rate for non-annuity products
and 10% decrease in mortality rate for annuity products
8. 10% decrease in mortality rate for non-annuity products
and 10% increase in mortality rate for annuity products
9. 10% increase in lapse rates
10. 10% decrease in lapse rates
11. 10% increase in morbidity rates
12. 10% decrease in morbidity rates
13. Using 2018 EV appraisal assumptions
14. Allowing for diversification in calculation of VIF
RMB million
Value of In-Force
Business after Cost
of Required Capital
Value of One Year’s
Sales after Cost
of Required Capital
459,295
438,848
481,260
541,563
377,380
453,307
465,282
456,176
462,414
458,735
459,777
452,934
465,808
458,961
492,975
58,698
55,936
61,684
68,296
49,108
55,346
62,050
57,867
59,532
57,534
59,902
56,483
60,925
59,483
–
39
China Life Insurance Company Limited•2019 Annual Report•Embedded Value
Opinion
Based on the scope of work above, we have concluded
that:
• the embedded value methodology used by China Life
is in accordance with the “CAA Standards of Actuarial
Practice: Appraisal of Embedded Value” issued by the
CAA;
• the economic assumptions used by China Life are
internally consistent, have been set with regard to
current economic conditions, and have made allowance
for the company’s current and expected future asset
mix and investment strategy;
• the operating assumptions used by China Life have
been set with appropriate regard to past, current and
expected future experience; and
• the EV Results have been prepared, in all material
respects, in accordance with the methodology and
assumptions set out in the Embedded Value section.
for and on behalf of Willis Towers Watson
lingde hong
victoria Xie
25 March 2020
WilliS TOWErS WaTSON’S rEviEW
OPiNiON rEPOrT ON EmbEddEd
valuE
To the directors of China life insurance Company
limited
China Life Insurance Company Limited (“China Life”)
has prepared embedded value results as at 31 December
2019 (“EV Results”). The disclosure of these EV Results,
together with a description of the methodology and
assumptions that have been used, are shown in the
Embedded Value section.
China Life has engaged Towers Watson Management
Consulting (Shenzhen) Co. Ltd. Beijing Branch (“Willis
Towers Watson”) to review its EV Results. This report
is addressed solely to China Life in accordance with the
terms of our engagement letter, and sets out the scope
of our work and our conclusions. To the fullest extent
permitted by applicable law, we do not accept or assume
any responsibility, duty of care or liability to anyone other
than China Life for or in connection with our review work,
the opinions we have formed, or for any statement set
forth in this report.
Scope of work
Our scope of work covered:
• a review of the methodology used to develop the
embedded value and value of one year’s sales as at
31 December 2019, 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 the embedded value and value of one
year’s sales as at 31 December 2019; and
• a review of the results of China Life’s calculation of the
EV Results.
In carrying out our review, we have relied on the accuracy
of audited and unaudited data and information provided by
China Life.
40
China Life Insurance Company Limited•2019 Annual Report•Embedded Value
SigNifiCaNT
EvENTS
maTErial liTigaTiONS Or
arbiTraTiONS
During the Reporting Period, the Company was not
involved in any material litigation or arbitration.
majOr CONNECTEd TraNSaCTiONS
Continuing Connected Transactions
During the Reporting Period, the following continuing
connected transactions were carried out by the Company
pursuant to Rule 14A.76(2) of the Rules Governing the
Listing of Securities on the HKSE (the “Listing Rules”),
including the policy management agreement between the
Company and CLIC, the asset management agreement
between the Company and AMC, the insurance sales
framework agreement between the Company and CLP&C,
the framework agreements entered into by CLWM with
CLIC, CLP&C, CLI, Pension Company and China Life
E-commerce Company Limited (“CLEC”), respectively,
the framework agreement between CLI and AMP 4,
the framework agreements entered into by Chongqing
International Trust Inc. (“Chongqing Trust”) with CLWM
and AMC, respectively, and the framework agreement
between the Company and China Life Capital. These
continuing connected transactions were subject to the
reporting, announcement and annual review requirements
but were exempt from the independent shareholders’
approval requirement under the Listing Rules. CLIC, the
controlling shareholder of the Company, holds 60% of the
equity interest in CLP&C and 100% of the equity interest
in each of CLI, CLEC and China Life Capital. Therefore,
each of CLIC, CLP&C, CLI, CLEC and China Life Capital
constitutes a connected person of the Company. AMC
is held as to 60% and 40% by the Company and CLIC,
respectively, and is therefore a connected subsidiary of
the Company. Each of CLWM and AMP is a subsidiary
of AMC, and is therefore a connected subsidiary of the
Company. Chongqing Trust is an associate of CLIC and
CLP&C by virtue of its acting as the trustee of a trust
scheme of which CLP&C is a beneficiary, and is therefore
also a connected person of the Company pursuant to Rule
14A.13(2) of the Listing Rules.
4 The 2020-2022 framework agreement renewed by CLI and AMP was subject to the reporting, announcement, annual review and independent
shareholders’ approval requirements under Chapter 14A of the Listing Rules, and the transactions contemplated thereunder for the years from 2020 to
2022 have been approved by the independent shareholders of the Company.
41
China Life Insurance Company Limited•2019 Annual Report•Significant Events During the Reporting Period, the continuing connected
transactions carried out by the Company that were subject
to the reporting, announcement, annual review and
independent shareholders’ approval requirements under
Chapter 14A of the Listing Rules included the framework
agreements entered into by AMP with the Company,
Pension Company, CLIC and CLP&C, respectively, the
asset management agreement for alternative investments
between the Company and CLI, and the “Framework
Agreement in relation to the Subscription and Redemption
of Trust Products and Other Daily Transactions” between
the Company and Chongqing Trust5. Such agreements and
the transactions thereunder have been approved by the
independent shareholders of the Company.
During the Reporting Period, the Company also carried
out certain continuing connected transactions, including
the asset management agreement between CLIC and
A M C , a n d t h e f r a m e w o r k a g r e e m e n t b e t w e e n t h e
Company and CLWM, which were exempt from the
reporting, announcement, annual review and independent
shareholders’ approval requirements under Chapter 14A of
the Listing Rules.
T h e C o m p a n y h a s c o m p l i e d w i t h t h e d i s c l o s u r e
requirements under Chapter 14A of the Listing Rules in
respect of the above continuing connected transactions.
W h e n c o n d u c t i n g t h e a b o v e c o n t i n u i n g c o n n e c t e d
transactions during the Reporting Period, the Company
has followed the pricing policies and guidelines formulated
at the time when such transactions were entered into.
Policy Management Agreement
Since 30 September 2003, the Company and CLIC have
from time to time entered into policy management
agreements. The renewed agreement between the parties
expired on 31 December 2017. The Company and CLIC
entered into the 2018 policy management agreement
on 26 December 2017, with a term from 1 January 2018
to 31 December 2020. Pursuant to the agreement, the
Company will continue to accept CLIC’s entrustment
to provide policy administration services relating to the
non-transferred policies. For details as to the method of
calculation of the service fee, please refer to Note 35 in
the Notes to the Consolidated Financial Statements. The
annual cap for the three years ending 31 December 2020
is RMB708 million.
Asset Management Agreements
Asset Management Agreement between the Company
and AMC
Since 30 November 2003, the Company and AMC have
from time to time entered into asset management
agreements. The renewed agreement between the parties
expired on 31 December 2018. On 28 December 2018,
the Company and AMC entered into the 2019-2021 asset
management agreement, with a term of three years
from 1 January 2019 to 31 December 2021. Pursuant
to the agreement, AMC agreed to invest and manage
assets entrusted to it by the Company, on a discretionary
basis, within the scope granted by the Company and in
accordance with the requirements of applicable laws and
regulations, regulatory requirements and the investment
guidelines given by the Company. In consideration of
AMC’s services in respect of investing and managing
various categories of assets entrusted to it by the
Company under the agreement, the Company agreed to
pay AMC a service fee. For details as to the method of
calculation of the service fee, please refer to Note 35 in
the Notes to the Consolidated Financial Statements. The
annual cap for the three years ending 31 December 2021
is RMB2,000 million.
For the year ended 31 December 2019, the Company paid
AMC a service fee of RMB1,352.57 million.
Asset Management Agreement between CLIC and AMC
Since 30 November 2003, CLIC and AMC have from time
to time entered into asset management agreements.
The renewed agreement between the parties expired on
31 December 2018. On 29 December 2018, CLIC and
AMC entered into the 2019-2021 asset management
agreement, with an entrustment term from 1 January
2019 to 31 December 2021. Pursuant to the agreement,
AMC agreed to invest and manage assets entrusted
to it by CLIC, on a discretionary basis, subject to the
investment guidelines and instructions given by CLIC. In
consideration of AMC’s services in respect of investing
and managing assets entrusted to it by CLIC under the
agreement, CLIC agreed to pay AMC a service fee. For
details as to the method of calculation of the service fee,
please refer to Note 35 in the Notes to the Consolidated
Financial Statements. The annual caps for the three years
ending 31 December 2021 are RMB320 million, RMB310
million and RMB300 million, respectively.
For the year ended 31 December 2019, the service fee
paid by CLIC to the Company amounted to RMB574.58
million.
For the year ended 31 December 2019, CLIC paid AMC a
service fee of RMB89.27 million.
5 The 2020-2022 framework agreement renewed by the Company and Chongqing Trust was subject to the reporting, announcement and annual review
requirements but were exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules. The Company has
performed its disclosure obligation by way of announcement in respect of the transactions contemplated thereunder for the years from 2020 to 2022.
42
China Life Insurance Company Limited•2019 Annual Report•Significant Events Asset Management Agreement for Alternative Investments
between the Company and CLI
Since 22 March 2013, the Company and CLI have from
time to time entered into asset management agreements
for alternative investments. The renewed agreement
between the parties expired on 31 December 2018. As
approved by the 2017 Annual General Meeting of the
Company, the Company and CLI entered into the 2019
asset management agreement for alternative investments
on 31 December 2018. Such agreement took effect from
1 January 2019, with a term of two years. Unless a party
serves the other party a written notice for non-renewal
prior to 90 working days before the expiry date of the
agreement, the agreement will be automatically renewed
for one year from the expiry date thereof. Pursuant to
the agreement, CLI agreed to invest and manage assets
entrusted to it by the Company (including equity, real
estate, related financial products and quasi-securitization
financial products), on a discretionary basis, within the
scope of utilization of insurance funds as specified
by regulatory authorities and in accordance with the
requirements of applicable laws and regulations and the
investment guidelines given by the Company, and the
Company agreed to pay CLI the investment management
service fee, floating management fee, performance-
based bonus and real estate operation management fee
in respect of the investment and management services
provided by CLI to the Company. For details as to the
method of calculation of the investment management
service fee, floating management fee, performance-
based bonus and real estate operation management fee,
please refer to Note 35 in the Notes to the Consolidated
Financial Statements. In addition, the assets entrusted
by the Company to CLI will also be partially used for the
subscription of the related financial products established
and issued by CLI or of which CLI has participated in the
establishment and issuance, and such related financial
products will be limited to infrastructure investment
schemes and project asset-backed schemes.
For the three years ending 31 December 2021, the
annual caps on the contractual amount of assets newly
entrusted by the Company to CLI for investment and
management, as well as the annual caps on the amount
of the investment management service fee, floating
management fee, performance-based bonus and real
estate operation management service fee payable by the
Company to CLI are as follows:
amount of assets Newly
Entrusted for investment and
management during the Period
(including the amount
for Subscription of the related
financial Products)
(RMB million or its
equivalent in foreign currency)
amount of the investment
management Service fee,
floating management fee,
Performance-based bonus
and real Estate Operation
management Service fee
(RMB million or its
equivalent in foreign currency)
For the year ended
31 December 2019
For the year ending
31 December 2020
For the year ending
31 December 2021
200,000
(including the amount for the subscription
of the related financial products: 100,000)
200,000
(including the amount for the subscription
of the related financial products: 100,000)
200,000
(including the amount for the subscription
of the related financial products: 100,000)
1,391
1,982
2,266
43
China Life Insurance Company Limited•2019 Annual Report•Significant Events
The above amount of assets entrusted by the Company to
CLI for investment and management for the year ended
31 December 2019 would also include the amount of
subscription of the fund products by the Company under
the cooperation framework agreement for investment
management with insurance funds between the Company
and China Life Capital for the year ended 31 December
2019 (for details, please refer to the section headed
“Cooperation Framework Agreement for Investment
Management with Insurance Funds between the Company
and China Life Capital” below).
For the year ended 31 December 2019, the investment
management service fee, floating management fee,
performance-based bonus and real estate operation
management service fee paid by the Company to CLI
amounted to RMB652.75 million, and the contractual
amount of assets newly entrusted by the Company to
CLI for investment and management was RMB13,110.00
million. For the year ended 31 December 2019, the
amount for the subscription of the related financial
products established and issued by CLI or of which CLI
had participated in the establishment and issuance was
RMB13,110.00 million.
Cooperation Framework Agreement for Investment
Management with Insurance Funds between the Company
and China Life Capital
The Company entered into the “Cooperation Framework
Agreement for Investment Management with Insurance
Funds” with China Life Capital on 7 June 2018, with a
term from 7 June 2018 to 31 December 2019. Pursuant
to the agreement, the Company would subscribe in the
capacity of the limited partner for the fund products of
which China Life Capital or any of its subsidiaries served
(individually and jointly with third parties) as the general
partner, and/or the fund products of which China Life
Capital served as the manager (including the fund manager
and co-manager). For the two years ended 31 December
2019, the annual cap for the subscription by the Company
in the capacity of the limited partner of the fund products
of which China Life Capital or any of its subsidiaries served
as the general partner was RMB5,000 million, and the
annual caps for the management fee charged by China
Life Capital as the general partner or the manager of the
fund products were RMB150 million and RMB200 million,
respectively.
The Company entered into the 2020-2022 framework
agreement with China Life Capital on 31 December 2019,
with a term from 1 January 2020 to 31 December 2022.
Pursuant to the agreement, the Company will continue
to subscribe in the capacity of the limited partner for
the fund products of which China Life Capital or any of
its subsidiaries serves (individually and jointly with third
parties) as the general partner, and/or the fund products of
which China Life Capital serves as the manager (including
the fund manager and co-manager). For the three years
e n d i n g 3 1 D e c e m b e r 2 0 2 2 , t h e a n n u a l c a p f o r t h e
subscription by the Company in the capacity of the limited
partner of the fund products of which China Life Capital
or any of its subsidiaries serves as the general partner is
RMB5,000 million, and the annual cap for the management
fee charged by China Life Capital as the general partner or
the manager of the fund products is RMB200 million.
For the year ended 31 December 2019, the amount of
subscription by the Company in the capacity of the limited
partner of the fund products of which China Life Capital or
any of its subsidiaries serves as the general partner was
RMB3,010.00 million, and the management fee charged
by China Life Capital as the general partner or the manager
of the fund products was RMB38.51 million.
Insurance Sales Framework Agreement
Since 18 November 2008, the Company and CLP&C have
from time to time entered into insurance sales framework
agreements. The renewed agreement between the
parties expired on 7 March 2018. The Company and
CLP&C entered into the 2018 insurance sales framework
agreement on 31 January 2018, with a term of three years
from 8 March 2018 to 7 March 2021. Pursuant to the
agreement, CLP&C will continue to entrust the Company
to act as an agent to sell selected insurance products
within the authorized regions, and pay an agency service
fee to the Company in consideration of the services
provided. For details as to the method of calculation of
the agency service fee, please refer to Note 35 in the
Notes to the Consolidated Financial Statements. The
annual caps for the three years ending 31 December 2020
are RMB4,260 million, RMB5,540 million and RMB7,050
million, respectively.
For the year ended 31 December 2019, CLP&C paid the
Company an agency service fee of RMB2,297.42 million.
44
China Life Insurance Company Limited•2019 Annual Report•Significant Events Framework Agreements with AMP
Framework Agreement between the Company and AMP
The Company and AMP entered into the “Framework
Agreement in relation to Subscription and Redemption
of Fund Products, Sale of Funds, Asset Management for
Specific Clients and Other Daily Transactions” on 30 May
2014. The agreement expired on 31 December 2016. As
approved by the First Extraordinary General Meeting 2016
of the Company, the 2017-2019 framework agreement
was entered into between the Company and AMP on 30
December 2016 for a term of three years from 1 January
2017 to 31 December 2019. Pursuant to the agreement,
the Company and AMP would continue to conduct
certain daily transactions, including the subscription and
redemption of fund products, sales agency services,
asset management for specific clients and other daily
transactions permitted by laws and regulations. Pricing of
the transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years ended
31 December 2019, the annual cap of the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products was RMB72,600 million;
the annual cap of the redemption price and corresponding
redemption fee for the redemption of fund products
was RMB72,600 million; the annual caps of the sales
commission fee and client maintenance fee payable by
AMP were RMB700 million, RMB800 million and RMB900
million, respectively; the annual caps of the management
fee and performance-based fee payable by the Company
for the asset management for specific clients were
RMB300 million, RMB400 million and RMB500 million,
respectively; and the annual cap of the fees for other daily
transactions was RMB100 million.
As approved by the First Extraordinary General Meeting
2 0 1 9 o f t h e C o m p a n y , t h e 2 0 2 0 - 2 0 2 2 f r a m e w o r k
agreement was entered into between the Company
and AMP on 31 December 2019 for a term of three
y e a r s f r o m 1 J a n u a r y 2 0 2 0 t o 3 1 D e c e m b e r 2 0 2 2 .
Pursuant to the agreement, the Company and AMP will
continue to conduct certain daily transactions, including
the subscription and redemption of fund products,
sales agency services, asset management for specific
clients and other daily transactions permitted by laws
and regulations. Pricing of the transactions under the
agreement shall be determined by the parties through
arm’s length negotiations with reference to industry
practices. For the three years ending 31 December
2022, the annual cap of the subscription price and
corresponding subscription fee for the subscription of
fund products is RMB72,600 million; the annual cap of the
redemption price and corresponding redemption fee for
the redemption of fund products is RMB72,600 million;
the annual caps of the sales commission fee and client
maintenance fee payable by AMP are RMB700 million,
RMB800 million and RMB900 million, respectively;
the annual caps of the management fee (including the
performance-based fee) payable by the Company for
the asset management for specific clients are RMB300
million, RMB400 million and RMB500 million, respectively;
and the annual cap of the fees for other daily transactions
is RMB100 million.
For the year ended 31 December 2019, the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products were RMB20,475.00 million,
the redemption price and corresponding redemption fee
for the redemption of fund products were RMB7,951.54
million, the sales commission fee and client maintenance
fee paid by AMP were RMB0.87 million, the management
fee and performance-based fee paid by the Company
for the asset management for specific clients were
RMB31.20 million, and the fees for other daily transactions
were RMB6.68 million.
Framework Agreement between Pension Company and
AMP
Pension Company and AMP entered into the “Framework
Agreement in relation to Subscription and Redemption
o f F u n d P r o d u c t s , S a l e o f F u n d s a n d O t h e r D a i l y
Transactions” on 4 September 2014. The agreement
expired on 31 December 2016. As approved by the First
Extraordinary General Meeting 2016 of the Company,
the 2017-2019 framework agreement was entered into
between Pension Company and AMP on 23 December
2016 for a term of three years from 1 January 2017
to 31 December 2019. Pursuant to the agreement,
Pension Company and AMP would continue to conduct
certain daily transactions, including the subscription and
redemption of fund products, sales agency services,
asset management for specific clients and other daily
transactions permitted by laws and regulations. Pricing of
the transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years ended
31 December 2019, the annual cap of the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products is RMB10,000 million; the
annual cap of the redemption price and corresponding
redemption fee for the redemption of fund products
was RMB10,000 million; the annual cap of the sales
commission fee and client maintenance fee payable
by AMP was RMB100 million; the annual cap of the
management fee and performance-based fee payable by
Pension Company for the asset management for specific
clients was RMB100 million; and the annual cap of the
fees for other daily transactions was RMB100 million.
45
China Life Insurance Company Limited•2019 Annual Report•Significant Events P e n s i o n C o m p a n y a n d A M P o r i g i n a l l y i n t e n d e d t o
enter into the 2020-2022 framework agreement by 31
December 2019 to renew the 2017-2019 framework
agreement, and the 2020-2022 framework agreement has
been approved by the First Extraordinary General Meeting
2019 of the Company. However, due to the adjustment
of business arrangement, it is expected that Pension
Company and AMP will not enter into the 2020-2022
framework agreement.
For the year ended 31 December 2019, the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products were RMB1,426.49 million,
the redemption price and corresponding redemption fee
for the redemption of fund products were RMB1,403.22
million, the sales commission fee and client maintenance
fee paid by AMP were RMB0 million, the management
fee and performance-based fee paid by Pension Company
for the asset management for specific clients were RMB0
million, and the fees for other daily transactions were
RMB0 million.
Framework Agreement between CLIC and AMP
CLIC and AMP entered into the “Framework Agreement
in relation to Subscription and Redemption of Fund
Products” on 30 May 2014. The agreement expired on 31
December 2016. As approved by the First Extraordinary
General Meeting 2016 of the Company, the 2017-2019
framework agreement was entered into between CLIC
and AMP on 16 December 2016 for a term of three years
from 1 January 2017 to 31 December 2019. Pursuant to
the agreement, CLIC and AMP would continue to conduct
certain daily transactions, including the subscription and
redemption of fund products and asset management
for specific clients. Pricing of the transactions under the
agreement shall be determined by the parties through
arm’s length negotiations with reference to industry
practices. For the three years ended 31 December 2019,
the annual cap of the subscription price and corresponding
subscription fee for the subscription of fund products was
RMB10,000 million; the annual cap of the redemption
p r i c e a n d c o r r e s p o n d i n g r e d e m p t i o n f e e f o r t h e
redemption of fund products was RMB10,000 million; and
the annual cap of the management fee and performance-
based fee payable by CLIC for the asset management for
specific clients was RMB100 million.
As approved by the First Extraordinary General Meeting
2 0 1 9 o f t h e C o m p a n y , t h e 2 0 2 0 - 2 0 2 2 f r a m e w o r k
agreement was entered into between CLIC and AMP on 6
September 2019 for a term of three years from 1 January
2020 to 31 December 2022. Pursuant to the agreement,
CLIC and AMP will continue to conduct certain daily
transactions, including the subscription and redemption
46
o f f u n d p r o d u c t s a n d p r i v a t e a s s e t m a n a g e m e n t .
Pricing of the transactions under the agreement shall
be determined by the parties through arm’s length
negotiations with reference to industry practices. For the
three years ending 31 December 2022, the annual cap
of the subscription price and corresponding subscription
fee for the subscription of fund products is RMB10,000
million; the annual cap of the redemption price and
corresponding redemption fee for the redemption of fund
products is RMB10,000 million; and the annual cap of
the management fee (including the performance-based
fee) payable by CLIC for the private asset management is
RMB100 million.
For the year ended 31 December 2019, the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products were RMB1,100.00 million,
the redemption price and corresponding redemption fee
for the redemption of fund products were RMB1,430.66
million, and the management fee and performance-based
fee paid by CLIC for the asset management for specific
clients were RMB22.96 million.
Framework Agreement between CLP&C and AMP
C L P & C a n d A M P e n t e r e d i n t o t h e “ C o o p e r a t i o n
Framework Agreement” on 6 June 2014. The agreement
expired on 31 December 2016. As approved by the First
Extraordinary General Meeting 2016 of the Company,
the 2017-2019 framework agreement was entered into
between CLP&C and AMP on 22 December 2016 for a
term of three years from 1 January 2017 to 31 December
2019. Pursuant to the agreement, CLP&C and AMP would
continue to conduct certain daily transactions, including
the subscription and redemption of fund products,
sales agency services, asset management for specific
clients and other daily transactions permitted by laws
and regulations. Pricing of the transactions under the
agreement shall be determined by the parties through
arm’s length negotiations with reference to industry
practices. For the three years ended 31 December 2019,
the annual cap of the subscription price for the fund
products was RMB10,000 million; the annual cap of the
redemption price for the fund products was RMB10,000
million; the annual cap of the subscription fee for the
fund products was RMB100 million; the annual cap of
the redemption fee for the fund products was RMB100
million; the annual cap of the sales commission fee and
client maintenance fee payable by AMP was RMB100
million; the annual cap of the management fee and
performance-based fee payable by CLP&C for the asset
management for specific clients was RMB100 million; and
the annual cap of the fees for other daily transactions was
RMB100 million.
China Life Insurance Company Limited•2019 Annual Report•Significant Events As approved by the First Extraordinary General Meeting
2 0 1 9 o f t h e C o m p a n y , t h e 2 0 2 0 - 2 0 2 2 f r a m e w o r k
agreement was entered into between CLP&C and AMP on
3 December 2019 for a term of three years from 1 January
2020 to 31 December 2022. Pursuant to the agreement,
CLP&C and AMP will continue to conduct certain daily
transactions, including the subscription and redemption of
fund products, asset management for specific clients and
other daily transactions permitted by laws and regulations.
Pricing of the transactions under the agreement shall
be determined by the parties through arm’s length
negotiations with reference to industry practices. For the
three years ending 31 December 2022, the annual cap of
the subscription price for the fund products is RMB10,000
million; the annual cap of the redemption price for the
fund products is RMB10,000 million; the annual cap of the
subscription fee for the fund products is RMB100 million;
the annual cap of the redemption fee for the fund products
is RMB100 million; the annual cap of the management fee
(including the performance-based fee) payable by CLP&C
for the asset management for specific clients is RMB100
million; and the annual cap of the fees for other daily
transactions is RMB100 million.
For the year ended 31 December 2019, the subscription
price for the fund products was RMB0 million, the
redemption price for the fund products was RMB0
million, the subscription fee for the fund products was
RMB0 million, the redemption fee for the fund products
was RMB0 million, the sales commission fee and client
maintenance fee paid by AMP were RMB0 million, the
management fee and performance-based fee paid by
CLP&C for the asset management for specific clients were
RMB4.84 million, and the fees for other daily transactions
were RMB0.09 million.
Framework Agreement between CLI and AMP
CLI and AMP entered into the “Framework Agreement
in relation to Subscription and Redemption of Fund
Products, Asset Management for Specific Clients and
Other Daily Transactions” on 20 December 2017. The
agreement became effective upon signing by the parties
and expired on 31 December 2019. Pursuant to the
agreement, CLI and AMP would conduct certain daily
transactions, including the subscription and redemption of
fund products, asset management for specific clients and
other daily transactions permitted by laws and regulations.
Pricing of the transactions under the agreement shall
be determined by the parties through arm’s length
negotiations with reference to industry practices. For the
three years ended 31 December 2019, the annual caps
of the subscription price and corresponding subscription
fee for the subscription of fund products were RMB5,000
m i l l i o n , R M B 7 , 0 0 0 m i l l i o n a n d R M B 7 , 0 0 0 m i l l i o n ,
respectively; the annual caps of the redemption price and
corresponding redemption fee for the redemption of fund
products were RMB5,000 million, RMB7,000 million and
RMB7,000 million, respectively; the annual cap of the
management fee and performance-based fee payable by
CLI for the asset management for specific clients was
RMB50 million; and the annual cap of the fees for other
daily transactions was RMB50 million.
As approved by the First Extraordinary General Meeting
2 0 1 9 o f t h e C o m p a n y , t h e 2 0 2 0 - 2 0 2 2 f r a m e w o r k
agreement was entered into between CLI and AMP on 17
February 2020 for a term of three years from 1 January
2020 to 31 December 2022. Pursuant to the agreement,
CLI and AMP will continue to conduct certain daily
transactions, including the subscription and redemption
of fund products, asset management for specific clients,
advisory services and other daily transactions permitted
by laws and regulations. Pricing of the transactions
under the agreement shall be determined by the parties
t h r o u g h a r m ’ s l e n g t h n e g o t i a t i o n s w i t h r e f e r e n c e
to industry practices. For the three years ending 31
December 2022, the annual cap of the subscription price
and corresponding subscription fee for the subscription
of fund products is RMB10,000 million; the annual cap
of the redemption price and corresponding redemption
fee for the redemption of fund products is RMB10,000
million; the annual cap of the management fee (including
the performance-based fee) payable by CLI and its
subsidiaries for the asset management for specific clients
is RMB150 million; the annual cap of the management
fee (including the performance-based fee) payable by the
subsidiaries of AMP for the asset management for specific
clients is RMB150 million; the annual cap of the advisory
fee payable by CLI and its subsidiaries for the advisory
services is RMB150 million; the annual cap of the advisory
fee payable by AMP and its subsidiaries for the advisory
services is RMB150 million; and the annual cap of the fees
for other daily transactions is RMB150 million.
For the year ended 31 December 2019, the subscription
p r i c e a n d c o r r e s p o n d i n g s u b s c r i p t i o n f e e f o r t h e
subscription of fund products were RMB104.34 million,
the redemption price and corresponding redemption fee
for the redemption of fund products were RMB296.81
million, the management fee and performance-based
fee paid by CLI for the asset management for specific
clients were RMB0 million, and the fees for other daily
transactions were RMB0 million.
47
China Life Insurance Company Limited•2019 Annual Report•Significant Events Framework Agreements with CLWM
Framework Agreement between the Company and CLWM
T h e “ F r a m e w o r k A g r e e m e n t i n r e l a t i o n t o A s s e t
Management Services and Other Daily Transactions”
dated 30 December 2015 entered into between the
Company and CLWM expired on 31 December 2017.
The Company and CLWM entered into the 2018-2020
framework agreement on 28 December 2017, pursuant
to which the Company will continue to conduct certain
t r a n s a c t i o n s w i t h C L W M d u r i n g t h e p e r i o d f r o m 1
January 2018 to 31 December 2020, including the asset
management services, the sales agency services for
asset management products and other daily transactions
p e r m i t t e d b y l a w s a n d r e g u l a t i o n s . P r i c i n g o f t h e
transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years ending
31 December 2020, the annual cap of the management
fee payable by the Company for the asset management
services is RMB240 million; the annual cap of fees
in connection with the sales agency services payable
by CLWM, including the sales commission fee, client
maintenance fee, handling fee and intermediary fee, is
RMB100 million; and the annual cap of the fees for other
daily transactions is RMB100 million.
For the year ended 31 December 2019, the management
fee paid by the Company for the asset management
services was RMB3.60 million; the fees in connection with
the sales agency services paid by CLWM, including the
sales commission fee, client maintenance fee, handling
fee and intermediary fee, were RMB0 million; and the fees
for other daily transactions were RMB12.28 million.
Framework Agreement between CLIC and CLWM
T h e “ F r a m e w o r k A g r e e m e n t i n r e l a t i o n t o A s s e t
Management Services” dated 26 January 2016 entered
into between CLIC and CLWM expired on 31 December
2017. CLIC and CLWM entered into the 2018-2020
framework agreement on 27 December 2017, pursuant to
which CLIC will continue to conduct certain transactions
with CLWM during the period from 1 January 2018 to
31 December 2020, including the asset management
services and advisory services. Pricing of the transactions
under the agreement shall be determined by the parties
t h r o u g h a r m ’ s l e n g t h n e g o t i a t i o n s w i t h r e f e r e n c e
to industry practices. For the three years ending 31
December 2020, the annual caps of the management fee
payable by CLIC for the asset management services are
RMB50 million, RMB120 million and RMB180 million,
respectively; and the annual caps of the advisory fee
payable by CLIC for the advisory services are RMB50
million, RMB80 million and RMB120 million, respectively.
For the year ended 31 December 2019, the management
fee paid by CLIC for the asset management services was
RMB1.35 million, and the advisory fee paid by CLIC for the
advisory services was RMB3.04 million.
Framework Agreement between CLP&C and CLWM
T h e “ F r a m e w o r k A g r e e m e n t i n r e l a t i o n t o A s s e t
Management Services and Other Daily Transactions”
dated 9 March 2016 entered into between CLP&C and
CLWM expired on 31 December 2017. CLP&C and
CLWM entered into the 2018-2020 framework agreement
on 29 December 2017, pursuant to which CLP&C will
continue to conduct certain transactions with CLWM
during the period from 1 January 2018 to 31 December
2020, including the asset management services, advisory
services and other daily transactions permitted by laws
and regulations. Pricing of the transactions under the
agreement shall be determined by the parties through
arm’s length negotiations with reference to industry
practices. For the three years ending 31 December 2020,
the annual caps of the management fee payable by CLP&C
for the asset management services are RMB50 million,
RMB150 million and RMB240 million, respectively; the
annual caps of the advisory fee payable by CLP&C for
the advisory services are RMB40 million, RMB80 million
and RMB120 million, respectively; and the annual caps of
the fees for other daily transactions are RMB150 million,
RMB400 million and RMB700 million, respectively.
For the year ended 31 December 2019, the management
fee paid by CLP&C for the asset management services
was RMB0.56 million, the advisory fee paid by CLP&C for
the advisory services was RMB5.88 million, and the fees
for other daily transactions were RMB0.01 million.
Framework Agreement between CLI and CLWM
T h e “ F r a m e w o r k A g r e e m e n t i n r e l a t i o n t o A s s e t
Management Services and Other Daily Transactions”
dated 3 February 2016 entered into between CLI and
CLWM expired on 31 December 2017. CLI and CLWM
entered into the 2018-2020 framework agreement on 20
December 2017, pursuant to which CLI will continue to
conduct certain transactions with CLWM during the period
from 1 January 2018 to 31 December 2020, including the
asset management services, advisory services and other
daily transactions permitted by laws and regulations.
Pricing of the transactions under the agreement shall
be determined by the parties through arm’s length
negotiations with reference to industry practices. For the
three years ending 31 December 2020, the annual caps of
the management fee for the asset management services
are RMB40 million, RMB80 million and RMB120 million,
respectively; the annual caps of the advisory fee for the
48
China Life Insurance Company Limited•2019 Annual Report•Significant Events advisory services are RMB40 million, RMB80 million and
RMB120 million, respectively; and the annual caps of
the fees for other daily transactions are RMB20 million,
RMB80 million and RMB160 million, respectively.
For the year ended 31 December 2019, the management
fee for the asset management services was RMB0.54
million, the advisory fee for the advisory services was
RMB0 million, and the fees for other daily transactions
were RMB0 million.
Framework Agreement between Pension Company and
CLWM
P e n s i o n C o m p a n y a n d C L W M e n t e r e d i n t o t h e
“Framework Agreement in relation to Daily Connected
Transactions” on 26 March 2018, pursuant to which
Pension Company will conduct certain transactions
with CLWM during the period from 1 January 2018 to
31 December 2020, including the asset management
services, advisory services and other daily transactions
p e r m i t t e d b y l a w s a n d r e g u l a t i o n s . P r i c i n g o f t h e
transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years
ending 31 December 2020, the annual caps of the
management fee payable by Pension Company for the
asset management services are RMB100 million, RMB150
million and RMB200 million, respectively; the annual
caps of the advisory fee payable by Pension Company for
the advisory services are RMB40 million, RMB80 million
and RMB90 million, respectively; and the annual caps of
the fees for other daily transactions are RMB90 million,
RMB180 million and RMB270 million, respectively.
For the year ended 31 December 2019, the management
fee paid by Pension Company for the asset management
services was RMB0 million, the advisory fee paid by
Pension Company for the advisory services was RMB0.24
million, and the fees for other daily transactions were
RMB0 million.
Framework Agreement between CLEC and CLWM
C L E C a n d C L W M e n t e r e d i n t o t h e “ F r a m e w o r k
Agreement in relation to Daily Connected Transactions”
on 29 December 2017, pursuant to which CLEC will
conduct certain transactions with CLWM during the period
from 1 January 2018 to 31 December 2020, including the
asset management services, advisory services and other
daily transactions permitted by laws and regulations.
Pricing of the transactions under the agreement shall
be determined by the parties through arm’s length
negotiations with reference to industry practices. For the
three years ending 31 December 2020, the annual caps
of the management fee payable by CLEC for the asset
management services are RMB5 million, RMB10 million
and RMB15 million, respectively; the annual caps of the
advisory fee payable by CLEC for the advisory services
are RMB5 million, RMB10 million and RMB15 million,
respectively; and the annual caps of the fees for other
daily transactions are RMB200 million; RMB300 million
and RMB400 million, respectively.
For the year ended 31 December 2019, there was no
relevant transaction between CLEC and CLWM.
Framework Agreements with Chongqing Trust
F r a m e w o r k A g r e e m e n t b e t w e e n t h e C o m p a n y a n d
Chongqing Trust
As approved by the 2016 Annual General Meeting of the
Company, the Company and Chongqing Trust entered into
the “Framework Agreement in relation to the Subscription
and Redemption of Trust Products and Other Daily
Transactions” on 21 June 2017. The agreement became
effective upon signing by the parties and expired on 31
December 2019. Pursuant to the agreement, the Company
and Chongqing Trust would conduct the subscription and
redemption of trust products and other daily transactions
permitted by laws and regulations in their ordinary course
of business and on normal commercial terms. Pricing of
the transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years ended
31 December 2019, the annual cap of the subscription
amount of the trust products was RMB50,000 million
(including the trustee’s remuneration of no more than
RMB500 million per year to be received by Chongqing
Trust from the trust assets); the annual cap of the
redemption amount of the trust products was RMB4,500
million; and the annual cap of the fees for other daily
transactions was RMB100 million.
The Company and Chongqing Trust entered into the 2020-
2022 framework agreement on 27 December 2019, with a
term of three years from 1 January 2020 to 31 December
2022. Pursuant to the agreement, the Company and
Chongqing Trust will continue to conduct the subscription
a n d r e d e m p t i o n o f t r u s t p r o d u c t s a n d o t h e r d a i l y
transactions permitted by laws and regulations. Pricing of
the transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the three years ending
31 December 2022, the annual cap of the total amount
of subscription and redemption of the trust products
is RMB30,000 million; the annual cap of the trustee’s
remuneration is RMB500 million; and the annual cap of the
fees for other daily transactions is RMB100 million.
49
China Life Insurance Company Limited•2019 Annual Report•Significant Events For the year ended 31 December 2019, the subscription
amount of the trust products was RMB14,300.63 million
(including the trustee’s remuneration of RMB20.52 million
received by Chongqing Trust from the trust assets), the
redemption amount of the trust products was RMB0
million, and the fees for other daily transactions were
RMB0 million.
Framework Agreement between CLWM and Chongqing
Trust
CLWM and Chongqing Trust entered into the “Framework
Agreement in relation to Daily Connected Transactions”
on 29 December 2017, with a term from 1 January 2018
to 31 December 2019. Pursuant to the agreement, CLWM
and Chongqing Trust would conduct the subscription of
trust products, asset management services, advisory
services and other daily transactions permitted by laws
and regulations in their ordinary course of business and
on normal commercial terms. Pricing of the transactions
under the agreement shall be determined by the parties
through arm’s length negotiations with reference to
industry practices. For the two years ended 31 December
2019, the annual cap of the subscription amount of the
trust products was RMB10,000 million (including the
trustee’s remuneration of no more than RMB150 million
per year to be received by Chongqing Trust from the trust
assets); the annual cap of the management fee for the
asset management services was RMB150 million; the
annual cap of the advisory fee for the advisory services
was RMB150 million; and the annual cap of the fees for
other daily transactions was RMB100 million.
For the year ended 31 December 2019, there was no
relevant transaction between CLWM and Chongqing
Trust.
Framework Agreement between AMC and Chongqing
Trust
AMC and Chongqing Trust entered into the “Framework
Agreement in relation to Daily Connected Transactions”
on 7 November 2018. The agreement became effective
upon signing by the parties and expired on 31 December
2019. Pursuant to the agreement, AMC and Chongqing
Trust would conduct the subscription of trust products,
asset management services and other daily transactions
permitted by laws and regulations in their ordinary course
of business and on normal commercial terms. Pricing of
the transactions under the agreement shall be determined
by the parties through arm’s length negotiations with
reference to industry practices. For the two years ended
31 December 2019, the annual caps of the subscription
amount of the trust products were RMB1,200 million and
RMB1,800 million, respectively (including the trustee’s
remunerations of no more than RMB100 million and
RMB150 million, respectively, per year to be received by
Chongqing Trust from the trust assets); the annual caps of
the management fee for the asset management services
were RMB100 million and RMB150 million, respectively;
and the annual cap of the fees for other daily transactions
was RMB100 million.
For the year ended 31 December 2019, there was no
relevant transaction between AMC and Chongqing Trust.
Confirmation by auditor
The Board has received a comfort letter from the auditor
of the Company with respect to the above continuing
connected transactions which were subject to the
reporting, announcement and/or independent shareholders’
approval requirements, and the letter stated that during the
Reporting Period:
1. nothing has come to the auditors’ attention that
causes them to believe that the disclosed continuing
connected transactions have not been approved by the
Company’s Board of Directors;
2. for transactions involving the provision of goods or
services by the Company, nothing has come to the
auditors’ attention that causes them to believe that
the transactions were not, in all material respects, in
accordance with the pricing policies of the Company;
3. nothing has come to the auditors’ attention that
causes them to believe that the transactions were not
entered into, in all material respects, in accordance
w i t h t h e r e l e v a n t a g r e e m e n t s g o v e r n i n g s u c h
transactions; and
4. nothing has come to the auditors’ attention that
causes them to believe that the amounts of the
continuing connected transactions have exceeded the
total amount of the annual caps set by the Company.
50
China Life Insurance Company Limited•2019 Annual Report•Significant Events Confirmation by Independent Directors
The Company’s Independent Directors have reviewed
the above continuing connected transactions which
were subject to the reporting, announcement and/or
independent shareholders’ approval requirements, and
confirmed that:
1. the transactions were entered into in the ordinary and
usual course of business of the Company;
2. t h e t r a n s a c t i o n s w e r e c o n d u c t e d o n n o r m a l
commercial terms;
3. the transactions were entered into in accordance with
the agreements governing those continuing connected
transactions, and the terms are fair and reasonable and
in the interests of shareholders of the Company as a
whole; and
4. the amounts of the above transactions have not
exceeded the relevant annual caps.
Other major Connected Transactions
Formation of Partnership (Hebei Xiongan Baiyangdian
Ecological and Environmental Protection Fund)
As approved at the sixteenth meeting of the sixth
session of the Board of Directors, the Company and
other investors (each as a limited partner) originally
intended to enter into a partnership agreement with
China Xiongan Group Fund Management Co., Ltd. and
China Life Industrial Investment Management Co., Ltd.
(“CLIIM”) (each as a general partner) by 31 December
2019 for the formation of Hebei Xiongan Baiyangdian
Ecological and Environmental Protection Fund (Limited
Partnership). The Company planned to contribute RMB3
billion to the partnership. China Life Capital would serve
as the manager of the partnership. The partnership shall
have a term of fifteen years. It shall invest in ecological
and environmental protection projects in Baiyangdian
watershed, covering water, solid waste treatment and
other industries.
As there might be changes in the investors of the
p a r t n e r s h i p a n d t h e s i z e o f t h e p a r t n e r s h i p m i g h t
decrease, the parties were not able to enter into the
partnership agreement by 31 December 2019 as originally
planned. The Company will promptly make a further
announcement in respect of the connected transaction
when the terms of the partnership agreement are finalized
by the parties.
Formation of Partnership (Jiangsu China Life
Jiequan Equity Investment Center)
As approved at the eighteenth meeting of the sixth
session of the Board of Directors, the Company, Jiangsu
P r o v i n c i a l G o v e r n m e n t I n v e s t m e n t F u n d ( L i m i t e d
Partnership) and CLP&C (each as a limited partner)
entered into a partnership agreement with China Life
(J ia ngsu) Equi ty I nvest ment C o. , L td. (“ China Lif e
Jiangsu”) (as the general partner) on 30 December 2019
for the formation of Jiangsu China Life Jiequan Equity
Investment Center (Limited Partnership). The total capital
contribution by all partners of the partnership shall be
RMB5 billion, of which RMB3 billion shall be contributed
by the Company. China Life Equity Investment Co., Ltd.
(“CLEI”) shall serve as the manager of the partnership.
The partnership shall have a term of eight years. It will
primarily invest in any enterprises or funds associated
with the health industries such as medical care, aged
care, health information management, pharmaceutical
production and services, and the production of health
supplements and medical devices, and may apply no more
than 20% of the paid-in capital contribution to investment
in enterprises or funds in high-tech industries, strategic
emerging industries and transformation and upgrade of
traditional industries.
51
China Life Insurance Company Limited•2019 Annual Report•Significant Events Formation of Partnership (China Life Aged-care
Industry Investment Fund)
As approved by the First Extraordinary General Meeting
2020 of the Company, the Company (as the limited
partner) will entered into a partnership agreement with
China Life Qiyuan (Beijing) Aged-care Industry Investment
Management Co., Ltd. (tentative name) (“China Life
Qiyuan”) (as the general partner) for the formation of
China Life Aged-care Industry Investment Fund (Limited
Partnership). The total initial capital amount of the
partnership shall be RMB10 billion, of which no more
than RMB10 billion shall be contributed by the Company,
and no more than RMB10 million shall be contributed
by China Life Qiyuan. CLEI will serve as the manager of
the partnership. The partnership shall have a term of ten
years. It will focus on the investment in the aged-care
industry, including industrial assets such as continuing
care retirement communities, boutique apartments
for the aged in urban core areas and community home
care services, as well as the upstream and downstream
businesses along the aged-care industry chain which are
in line with the development direction of the industry and
permitted by regulatory authorities.
Each of CLIIM, China Life Capital, CLP&C, China Life
Jiangsu, CLEI and China Life Qiyuan is a subsidiary of
CLIC, and therefore a connected person of the Company.
The transactions concerning the formation of partnerships
as described above constituted connected transactions
of the Company that were subject to the reporting and
announcement requirements but were exempt from the
independent shareholders’ approval requirement under
Rule 14A.76(2) of the Listing Rules. The connected
transaction in relation to the formation of China Life Aged-
care Industry Investment Fund (Limited Partnership)
as described above was subject to consideration and
approval by the shareholders’ general meeting of the
Company pursuant to the SSE Listing Rules.
T h e C o m p a n y h a s c o m p l i e d w i t h t h e d i s c l o s u r e
requirements under Chapter 14A of the Listing Rules in
respect of the connected transactions concerning the
formation of partnerships as described above.
Statement on Claims, debt Transactions and
guarantees etc. of a Non-operating Nature with
related Parties
During the Reporting Period, the Company was not
involved in claims, debt transactions or guarantees of a
non-operating nature with related parties.
maTErial CONTraCTS aNd ThEir
PErfOrmaNCE
During the Reporting Period, the Company neither acted
as trustee, contractor or lessee of other companies’
assets, nor entrusted, contracted or leased its assets to
other companies, the profit or loss from which accounted
f o r 1 0 % o r m o r e o f t h e C o m p a n y ’ s p r o f i t s f o r t h e
Reporting Period, nor were there any such matters that
occurred in previous periods but subsisted during the
Reporting Period.
The Company neither gave external guarantees nor
provided guarantees to its non-wholly owned subsidiaries
during the Reporting Period.
Entrusted wealth management during the Reporting
Period or any wealth management occurred in previous
periods but subsisted during the Reporting Period:
Investment is one of the principal businesses of the
C o m p a n y . T h e C o m p a n y h a s a d o p t e d t h e m o d e o f
entrusted investment for management of its investment
assets, and established a diversified framework of
entrusted investment management with China Life’s
internal managers playing the key role and the external
managers offering effective supports. The internal
m a n a g e r s i n c l u d e A M C a n d i t s s u b s i d i a r i e s , a n d
CLI. The external managers comprise both domestic
and overseas managers, including fund companies,
securities companies and other professional investment
management institutions. The Company selected different
investment managers based on the purpose of allocation
of various types of investments, their risk features and
the expertise of different managers, so as to establish
a great variety of investment portfolios and improve the
efficiency of capital utilization. The Company entered into
entrusted investment management agreements with all
managers and supervised the managers’ daily investment
performance through the measures such as investment
g u i d e l i n e s , a s s e t e n t r u s t m e n t a n d p e r f o r m a n c e
appraisals. The Company also adopted risk control
measures in respect of specific investments based on
the characteristics of different managers and investment
products.
Except as otherwise disclosed in this annual report, the
Company had no other material contracts during the
Reporting Period.
52
China Life Insurance Company Limited•2019 Annual Report•Significant Events uNdErTaKiNgS Of ThE COmPaNy,
SharEhOldErS, EffECTivE
CONTrOllErS, aCQuirErS,
dirECTOrS, SuPErviSOrS, SENiOr
maNagEmENT Or OThEr rElaTEd
ParTiES WhiCh arE EiThEr givEN
Or EffECTivE duriNg ThE
rEPOrTiNg PEriOd
Prior to the listing of the Company’s A Shares (30
November 2006), land use rights were injected by CLIC
into the Company during its reorganization. Out of
these, four pieces of land (with a total area of 10,421.12
square meters) had not had its formalities in relation to
the change of ownership completed. Further, out of the
properties injected into the Company, there were six
properties (with a gross floor area of 8,639.76 square
meters) in respect of which the formalities in relation to
the change of ownership had not been completed. CLIC
undertook to complete the above-mentioned formalities
within one year of the date of listing of the Company’s A
Shares, and in the event that such formalities could not
be completed within such period, CLIC would bear any
potential losses to the Company due to the defective
ownership.
CLIC strictly followed these commitments. As at the end
of the Reporting Period, save for the two properties and
related land of the Company’s Shenzhen Branch, the
ownership registration formalities of which had not been
completed due to historical reasons, all other formalities in
relation to the change of land and property ownership had
been completed. The Shenzhen Branch of the Company
continues to use such properties and land, and no other
parties have questioned or hindered the use of such
properties and land by the Company.
The Company’s Shenzhen Branch and the other co-owners
of the properties have issued a letter to the governing
department of the original owner of the properties
in respect of the confirmation of ownership of the
properties, requesting it to report the ownership issue to
the State-owned Assets Supervision and Administration
C o m m i s s i o n o f t h e S t a t e C o u n c i l ( “ S A S A C ” ) , a n d
requesting the SASAC to confirm the respective shares
of each co-owner in the properties and to issue written
documents in this regard to the department of land and
resources of Shenzhen, so as to assist the Company and
the other co-owners to complete the formalities in relation
to the division of ownership of the properties.
Given that the change of ownership of the above two
properties and related land use rights were directed by the
co-owners, and all formalities in relation to the change of
ownership were proceeded slowly due to reasons such as
issues rooted in history and government approvals, CLIC
the controlling shareholder of the Company, made further
commitment as follows: CLIC will assist the Company
in completing, and urge the co-owners to complete,
the formalities in relation to the change of ownership in
respect of the above two properties and related land use
rights as soon as possible. If the formalities cannot be
completed due to the reasons of the co-owners, CLIC will
take any other legally practicable measures to resolve the
issue and will bear any potential losses suffered by the
Company as a result of the defective ownership.
rESTriCTiON ON majOr aSSETS
The major assets of the Company are financial assets.
During the Reporting Period, there was no major asset
of the Company being seized, detained or frozen that is
subject to the disclosure requirements.
TargETEd POvErTy allEviaTiON
F o r t h e p e r f o r m a n c e b y t h e C o m p a n y o f i t s s o c i a l
responsibility for poverty alleviation during the Reporting
Period, please refer to Part 2 of the full text of the “ESG
Report 2019” separately disclosed by the Company on
the website of the SSE (http://www.sse.com.cn) and the
HKExnews website of the Hong Kong Exchanges and
Clearing Limited (http://www.hkexnews.hk).
OThErS
As approved by the CBIRC and the People’s Bank of
China, the Company issued capital supplemental bonds
(the “Bonds”) in the national inter-bank bond market
in a principal amount of RMB35 billion on 20 March
2019 and completed the issuance on 22 March 2019.
The Bonds have a principal amount of RMB35 billion, a
term of 10 years and a fixed coupon rate of 4.28% per
annum. The Company has a conditional right to redeem
the Bonds at the end of the fifth year. The proceeds from
the issuance of the Bonds will be used to supplement
the Company’s capital so as to enhance its solvency
according to applicable laws and approvals from regulatory
authorities. For further details, please refer to the
announcements published by the Company on the website
of the SSE (http://www.sse.com.cn) and the HKExnews
website of Hong Kong Exchanges and Clearing Limited
(http://www.hkexnews.hk).
53
China Life Insurance Company Limited•2019 Annual Report•Significant Events COrPOraTE
gOvErNaNCE
WiTh high COmPliaNCE
aNd EffiCiENCy
COrPOraTE
gOvErNaNCE
rEPOrT Of ThE bOard Of dirECTOrS
Directors of the Company during the Reporting Period and up to the date of this report were as follows:
EXECuTivE
dirECTOrS
NON-
EXECuTivE
dirECTOrS
iNdEPENdENT
dirECTOrS
Wang Bin (Chairman)
Su Hengxuan
Li Mingguang
Zhao Peng
Xu Hengping
Xu Haifeng
Yuan Changqing
Liu Huimin
Yin Zhaojun
Wang Junhui
Chang Tso Tung Stephen
Robinson Drake Pike
Tang Xin
Leung Oi-Sie Elsie
(appointed on 16 August 2019)
(appointed on 20 February 2020)
(resigned on 24 January 2019 due to the reason of age)
(resigned on 28 June 2019 due to the reason of age)
(appointed on 16 August 2019)
56
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance
From left to right:
Mr. Tang Xin, Mr. Chang Tso Tung Stephen, Mr. Zhao Peng, Mr. Li Mingguang, Mr. Su Hengxuan, Mr. Wang Bin, Mr. Yuan Changqing, Mr. Liu Huimin,
Mr. Yin Zhaojun, Mr. Wang Junhui, Mr. Robinson Drake Pike, Ms. Leung Oi-Sie Elsie
PriNCiPal buSiNESS
The Company is a leading life insurance company in
China and possesses an extensive distribution network
comprising exclusive agents, direct sales representatives,
and dedicated and non-dedicated agencies, providing
products and services such as individual and group life
insurance, accident and health insurance. The Company
is one of the largest institutional investors in China, and
becomes one of the largest insurance asset management
companies in China through its controlling shareholding in
AMC. The Company also has controlling shareholding in
Pension Company.
buSiNESS rEviEW
Overall operation of the Company during the
Reporting Period
For details of the overall operation of the Company during
the Reporting Period, the future development of its
business and the principal risks faced by it, please refer
to the sections headed “Management Discussion and
Analysis” and “Internal Control and Risk Management”
in this annual report. These discussions form part of the
“Report of the Board of Directors”.
Environmental policies and performance of the
Company
In active response to the national call for the “Development
of Green Finance”, the Company pushed forward the
progressive greening of financial system and took into
account the national economy and the people’s livelihood
when developing its investment business. It put into
practice the low carbon concept in its daily operations and
business development and adhered to green operation
for the purpose of making positive contributions to the
objective of building a beautiful China.
The Company incorporated ESG concept into its decision
making for investment assessment, with a view to
achieving the coordination and consistency of economic,
environmental and social benefits. AMC officially signed
the United Nations – Supported Principles for Responsible
Investment, making itself the first insurance asset
management company signing such principles and putting
the ESG investment concept into practice. In 2019, the
Company, as a cornerstone investor, invested RMB9
billion in the project of Qinghai Huanghe Hydropower
Development Co., Ltd. for the mixed-ownership reform
and the introduction of strategic investor, becoming
the second largest shareholder of Qinghai Huanghe
Hydropower Development Co., Ltd. and offering its
support to the development of the clean energy industry.
57
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The Company, as a financial service institution, carries
out its major business activities in a manner that does
not pose any material adverse effect on eco-environment
and natural resources, and gives support to the national
strategic approach of green development by taking full
advantage of its business characteristics. The Company
has actively built digitalized field offices and convened
v a r i o u s m e e t i n g s b y w a y o f w e b c a s t f o r i t s d a i l y
operations. In 2019, more than 97,000 meetings were
convened via the webcast. In the meantime, the Company
actively established an e-service platform for its insurance
sales development, with insurance policy administration
services on China Life Insurance APP reaching a record
high.
Compliance by the Company with the relevant
laws and regulations that have a significant
impact
The Company adhered to the code of conduct of “being
trustworthy, assuming risks, emphasizing on services
and being legal compliant” and promoted the compliance
culture and concepts of “being compliant on a voluntary
basis, and creating value from compliance”, thereby
creating the compliance environment of “starting from
the top level and having responsibility for all to be
compliant”. The Company strictly observed and effectively
i m p l e m e n t e d a p p l i c a b l e l a w s a n d r e g u l a t i o n s a n d
regulatory requirements, such as the Insurance Law, the
Company Law and the “Regulations for the Administration
of Insurance Companies”, and implemented the spirit and
requirements of major regulatory documents on product
development and design, sales management, investment
supervision and corporate governance, etc., as released by
the CBIRC in a stringent manner for the purpose of further
carrying out compliance management responsibilities at
all levels and in various lines. The Company consistently
improved the compliance management framework of
“three lines of defense” in business, compliance and audit
to ensure that the three lines of defense performed their
own functions and collaborated with each other, which
formed a joint force in compliance management. The
Company also consolidated its foundation in all aspects for
its steady and healthy development and firmly defended
the bottom line of the systematic risk, which guaranteed
the healthy and high-quality development of the Company
on an ongoing basis.
Relationship between the Company and its
customers
With adherence to the customer-oriented approach all
along, the Company is committed to offering high-quality
services to its customers on a continuous basis, and
has provided insurance policy services and value-added
services for more than 500 million customers. In 2019, the
evaluation results of customer satisfaction and customer
loyalty maintained at a high level.
The Company consistently reinforced the protection
of consumers’ legitimate rights and interests, fostered
sound corporate governance, clearly defined the duties
and responsibilities of various parties, promoted the
establishment of system, strengthened education on the
rights and interests of insurance consumers and stepped
up efforts on risk alerts.
In 2019, the total number of customer complaints received
by the Company decreased significantly from the last year,
and various indicators continued to be positive.
Please also refer to the “Technological Empowerment
and Operations and Services” in the section headed
“Management Discussion and Analysis” in this annual
report.
Relationship between the Company and its
employees
The Company created a harmonious labor relationship
according to law and entered into employment contracts
with its employees in a timely manner. The Company
strengthened the management of employees in all
aspects by establishing the following three mechanisms:
an employee team management mechanism with the
characteristics of basic level orientation, combination
of training and utilization of employees, hierarchical
responsibility and unified regulation; a performance
management mechanism that is strategy-based and
result-oriented, adopts hierarchical classification, and
focuses on application; and a remuneration distribution
mechanism that is based on the principles of salary
determined by position, remuneration paid based on
performance, emphasis on incentives and preference
to the local level. The Company was concerned about
the overall development of employees, and actively
improved the comprehensive quality and professional
skills of employees through various means, such as
the establishment of systems for position training and
promotion education of employees at all levels, and the
development of various types of high-quality learning
models (including face-to-face teaching and online
autonomous learning), so as to facilitate the career
development of employees. The Company attached
importance to humanistic concern by safeguarding the
legitimate rights and interest of employees in a practical
manner and encouraging employees to arrange vacations
and annual leave in a scientific way, with an aim to achieve
work-life balance.
58
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The Company actively promoted the construction of
a d e m o c r a t i c m a n a g e m e n t s y s t e m w i t h e m p l o y e e
representative meetings as its basic form to protect
the democratic rights of employees and to facilitate
the joint development between employees and the
Company. Its head office and provincial branches have
fully established the system of employee representative
meetings, organized their respective employees to
p e r f o r m d e m o c r a t i c m a n a g e m e n t a n d s u p e r v i s o r y
role according to law, and inspected and monitored
t h e i m p l e m e n t a t i o n o f a n y r e s o l u t i o n s a d o p t e d b y
employee representative meetings, thus carrying out
the supervisory and performing functions of proposals in
a serious manner and constantly improving democratic
management. The first meeting of the third session of
the employee representative meeting of the Company
was held in Beijing on 17 December 2019, during which
the “Administrative Work Report” and the “Report on
Financial Situation” of the Company were considered and
approved.
For details regarding the Company’s employees (including
the number of employees, composition of professionals,
educational levels, remuneration policy and training
program), please refer to the section headed “Directors,
Supervisors, Senior Management and Employees” in this
annual report.
fOrmulaTiON aNd imPlEmENTaTiON Of
PrOfiT diSTribuTiON POliCy
In accordance with Article 217 of the Articles
of Association, the basic principles of the
Company’s profit distribution are as follows:
1. The Company shall take the investment return for
investors into full account and allocate the required
percentage of the Company’s realized distributable
profits to shareholders as dividends each year;
2. The Company shall maintain a sustainable and steady
profit distribution policy and at the same time take
into consideration the Company’s long-term interest,
general interest of all the shareholders and the
sustainable development of the Company;
3. The Company shall give priority to cash dividends as its
profit distribution manner.
In accordance with Article 218 of the Articles of
Association, the Company’s profit distribution
policy is as follows:
1. P r o f i t d i s t r i b u t i o n m o d e s : T h e C o m p a n y m a y
distribute dividends in the form of cash or shares
or a combination of cash and shares. If practicable,
the Company may distribute interim dividends. The
Company’s dividends shall not bear interest, save
in the case where the Company fails to distribute
the dividends to the shareholders on the day when
dividends were due to have been distributed;
2. Conditions for and percentage of distribution of cash
dividends: If the Company makes profits in a given
year and the cumulative undistributed profit is positive,
the Company shall distribute dividends in the form
of cash and the cumulative profits distributed in cash
over the past three years by the Company shall be no
less than thirty percent (30%) of the average annual
distributable profits in recent three years;
3. Conditions for distribution of share dividends: If
the Company’s operation is sound and the Board
of Directors is of the opinion that share dividends
distribution is in the interest of all the Company’s
shareholders since the Company’s stock price does
not match the Company’s share capital, the Company
may propose a share dividends distribution plan if
the conditions for cash dividends listed above are
satisfied.
In addition, the Company’s profit distribution is required
to comply with relevant regulatory requirements. If
the Company’s core solvency ratio or comprehensive
solvency ratio does not meet the minimum requirements,
the CBIRC may adopt regulatory measures against
the Company due to its failure to meet the minimum
requirements, which may restrict the Company’s ability to
distribute dividends to its shareholders.
59
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance In accordance with Article 219 of the Articles of
Association, the procedures of reviewing the
Company’s profit distribution proposal is as
follows:
The Company’s profit distribution proposal shall be
r e v i e w e d b y t h e B o a r d o f D i r e c t o r s . T h e B o a r d o f
D i r e c t o r s s h a l l h a v e a s u f f i c i e n t d i s c u s s i o n o f t h e
reasonableness of the profit distribution proposal. After a
special resolution regarding the proposal is reached and
independent opinions have been given by the Company’s
Independent Directors, the proposal shall be submitted to
the Company’s general meeting for approval. In reviewing
the profit distribution proposal, the Company shall provide
Internet-based voting mechanism to the shareholders.
When deliberating on specific cash dividend proposal
by the Company’s general meeting, the Company shall
make active communication with shareholders, especially
small- and medium-sized shareholders, through various
channels. The Company shall also fully solicit opinions and
appeals from investors, and give timely reply to concerns
of small- and medium-sized investors.
Profit distribution plan and public reserves
capitalization plan
Profit distribution plan or public reserves capitalization plan
for the year of 2019
In accordance with the profit distribution plan for the year
2019 approved by the Board on 25 March 2020, with the
appropriation to its discretionary surplus reserve fund
of RMB5,857 million (10% of the net profit for 2019),
the Company, based on 28,264,705,000 shares in issue,
proposed to distribute cash dividends amounting to
RMB20,633 million to all shareholders of the Company
at RMB0.73 per share (inclusive of tax). The foregoing
profit distribution plan is subject to the approval by the
2019 Annual General Meeting to be held on 29 June 2020
(Monday). Dividends payable to domestic shareholders are
declared, valued and paid in RMB. Dividends payable to
shareholders of the Company’s foreign-listed shares are
declared and valued in RMB and paid in the currency of
the jurisdiction in which the foreign-listed shares are listed
(if the Company is listed in more than one jurisdiction,
dividends shall be paid in the currency of the Company’s
principal jurisdiction of listing as determined by the
Board). The Company shall pay dividends to shareholders
of foreign-listed shares in conformity with the PRC
regulations on foreign exchange control. If no such
regulations are in place, the applicable exchange rate is
the average closing rate published by the People’s Bank of
China one week before the declaration of the distribution
of dividends.
No public reserve capitalization is provided for in the profit
distribution plan for the current financial year.
The profit distribution policy of the Company complied
with the Articles of Association and the examination and
approval procedures of the Company, clearly defined
the dividend distribution standards and percentage and
the decision-making procedures and system. Small-
and medium-sized shareholders of the Company have
s u f f i c i e n t o p p o r t u n i t i e s t o e x p r e s s t h e i r o p i n i o n s
and appeals, and their legitimate rights have been
well protected. The Independent Directors diligently
considered the profit distribution policy and expressed
their independent opinion in this regard.
The dividend distribution of the Company for the recent 3 years is as follows:
amount of
dividends
per ten
shares
(rmb)
(including
tax)
Transfer
of public
reserve into
share capital
per ten
shares
(shares)
amount of
cash
dividends
(including
tax)
Number of
bonus
stocks per
ten shares
(shares)
year in
which dividends
were distributed
Net profit
attributable to
equity holders of
the Company in
the consolidated
statements for
the year in which
dividends were
distributed
RMB million
Percentage of
amount of
cash dividends in
net profit
attributable to
equity holders of
the Company in
the consolidated
statements
–
–
–
7.3
1.6
4.0
–
–
–
20,633
4,522
11,306
58,287
11,395
32,253
35%
40%
35%
2019
2018
2017
60
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance
ChaNgES iN aCCOuNTiNg ESTimaTES
The changes in accounting estimates of the Company
during the Reporting Period are set out in Note 3 in the
Notes to the Consolidated Financial Statements in this
annual report.
PurChaSE, SalE Or rEdEmPTiON Of ThE
COmPaNy’S SECuriTiES
During the Reporting Period, the Company and its
subsidiaries did not purchase, sell or redeem any of the
Company’s listed securities.
rESErvES
Details of the reserves of the Company are set out in Note
38 in the Notes to the Consolidated Financial Statements
in this annual report.
ChariTablE dONaTiONS
The total amount of charitable donations made by the
Company during the Reporting Period was approximately
RMB192.80 million.
PrOPErTy, PlaNT aNd EQuiPmENT
Details of the movement in property, plant and equipment
of the Company are set out in Note 6 in the Notes to the
Consolidated Financial Statements in this annual report.
SharE CaPiTal
Details of the movement in share capital of the Company
are set out in Note 36 in the Notes to the Consolidated
Financial Statements in this annual report.
iNfOrmaTiON Of TaX dEduCTiON fOr
hOldErS Of liSTEd SECuriTiES
Shareholders are taxed and/or enjoy tax relief for the
dividend income received from the Company in accordance
with the “Individual Income Tax Law of the People’s
Republic of China”, the “Enterprise Income Tax Law of the
People’s Republic of China”, and relevant administrative
rules, governmental regulations and guiding documents.
Please refer to the announcement published by the
Company on the website of the SSE on 13 June 2019 for
the information on income tax in respect of the dividend
distributed to A Share shareholders during the Reporting
Period, and the announcement published by the Company
on the HKExnews website of the Hong Kong Exchanges
and Clearing Limited on 30 May 2019 for the information on
income tax in respect of the dividend distributed to H Share
shareholders during the Reporting Period.
h SharE STOCK aPPrECiaTiON righTS
No H Share stock appreciation rights of the Company were
granted or exercised in 2019. The Company will deal with
such rights and related matters in accordance with the
PRC governmental policies.
day-TO-day OPEraTiONS Of ThE bOard
Details of the Board meetings and the Board’s performance
of its duties during the Reporting Period are set out in the
section headed “Report of Corporate Governance” in this
annual report.
dirECTOrS’ aNd SuPErviSOrS’ SErviCE
CONTraCTS
N o n e o f t h e D i r e c t o r s o r S u p e r v i s o r s h a s e n t e r e d
into any service contracts with the Company and its
subsidiaries that are not terminable within one year or
can only be terminated by the Company with payment of
compensation (other than statutory compensation).
iNTErESTS Of dirECTOrS aNd SuPErviSOrS
(aNd ThEir CONNECTEd ENTiTiES) iN
maTErial TraNSaCTiONS, arraNgEmENTS
Or CONTraCTS
None of the Directors or Supervisors (and their connected
entities) is or was materially interested, directly or
indirectly, in any transaction, arrangement or contract of
significance entered into by the Company or its controlling
shareholders or any of their respective subsidiaries at any
time during the Reporting Period or subsisted at the end of
the Reporting Period.
61
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance dirECTOrS’ aNd SuPErviSOrS’ righTS TO
aCQuirE SharES
No arrangements to which the Company, any of its
subsidiaries or holding companies, or any subsidiary
of the Company’s holding companies is a party, and
whose objects are, or one of whose objects is, to enable
Directors or Supervisors (including their spouses and
children under the age of 18) to acquire benefits by
means of the acquisition of shares in, or debentures of,
the Company or any other body corporate, subsisted at
any time during the Reporting Period or at the end of the
Reporting Period.
diSClOSurE Of iNTErESTS Of dirECTOrS,
SuPErviSOrS aNd ThE ChiEf EXECuTivE iN
ThE SharES Of ThE COmPaNy
As at the end of the Reporting Period, none of the
Directors, Supervisors and the chief executive of the
Company had any interests or short positions in the
shares, underlying shares or debentures of the Company
or its associated corporations (within the meaning of
Part XV of the Securities and Futures Ordinance (Chapter
571 of the Laws of Hong Kong) (the “SFO”)) that were
required to be recorded in the register of the Company
required to be kept pursuant to Section 352 of the SFO or
which had to be notified to the Company and the HKSE
pursuant to the Model Code for Securities Transactions by
Directors of Listed Issuers (the “Model Code”) as set out
in Appendix 10 to the Listing Rules. In addition, the Board
has created a code of conduct in relation to the sale and
purchase of the Company’s securities by Directors and
Supervisors, which is no less stringent than the Model
Code. Upon specific inquiry by the Company, the Directors
and Supervisors have confirmed compliance with the
Model Code and the Company’s own code of conduct in
the year of 2019.
PrE-EmPTivE righTS aNd arraNgEmENTS
fOr SharE OPTiONS
According to the Articles of Association and relevant
PRC laws, there is no provision for any pre-emptive
rights of the shareholders of the Company. At present,
the Company does not have any arrangement for share
options.
maNagEmENT CONTraCTS
No management or administration contracts for the whole
or substantial part of any business of the Company were
entered into during the Reporting Period.
maTErial guaraNTEES
Independent Directors of the Company have rendered
their independent opinions on the Company’s external
guarantees, and are of the view that:
1. during the Reporting Period, the Company did not
provide any external guarantee;
2. the Company’s internal control system regarding
external guarantees is in compliance with laws,
regulations, and the requirements under the “Notice
in relation to the Standardization of Capital Flows
between Listed Companies and Connected Parties and
Issues in relation to External Guarantees Granted by
Listed Companies”; and
3. the Company has expressly provided in its Articles
of Association the level of authority required for
approving external guarantees and the approval
procedures.
rESPONSibiliTy STaTEmENT Of dirECTOrS
ON fiNaNCial rEPOrTS
T h e D i r e c t o r s a r e r e s p o n s i b l e f o r o v e r s e e i n g t h e
preparation of the financial report for each financial period
which gives a true and fair view of the Company’s financial
position, performance results and cash flows for that
period. To the best knowledge of the Directors, there
was no material event or condition during the Reporting
Period that might have a material adverse effect on the
continuing operation of the Company.
bOard’S STaTEmENT ON iNTErNal CONTrOl
In accordance with the requirements of the “Standard
Regulations on Corporate Internal Control”, the Board
conducted an assessment on internal control relating
to the Company’s financial reporting functions, and
confirmed that its internal control was effective as at 31
December 2019.
62
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance majOr CuSTOmErS
audiTOrS
In 2019, the gross written premiums received from the
Company’s five largest customers accounted for less than
30% of the Company’s gross written premiums for the
year. There is no related party of the Company among the
five largest customers.
SuffiCiENCy Of PubliC flOaT
B a s e d o n t h e i n f o r m a t i o n p u b l i c l y a v a i l a b l e t o t h e
Company and within the knowledge of the Directors as at
the Latest Practicable Date (25 March 2020), not less than
25% of the issued share capital of the Company (being
the minimum public float applicable to the shares of the
Company) was held in public hands.
COmPliaNCE WiTh ThE COrPOraTE
gOvErNaNCE COdE
The Company has applied the principles of the Corporate
Governance Code (the “CG Code”) as set out in Appendix
14 to the Listing Rules, and has complied with all code
provisions of the CG Code during the Reporting Period.
A resolution was passed at the 2018 Annual General
Meeting to engage Ernst & Young Hua Ming LLP as the
PRC auditor and the auditor for US Form 20-F of the
Company for the year 2019, and Ernst & Young as the
Hong Kong auditor of the Company for the year 2019, who
will hold office until the conclusion of the 2019 Annual
General Meeting. Ernst & Young Hua Ming LLP and Ernst
& Young have been serving as the Company’s auditors for
seven consecutive years.
Remuneration paid by the Company to the auditors is
subject to the approval at the shareholders’ general
meeting, pursuant to which the Board is authorized to
determine the amount and make payment. Audit fees
paid by the Company to the auditors will not affect the
independence of the auditors.
Remuneration paid by the Company to the auditors in 2019 was as follows:
Service/Nature
Audit, review and agreed-up procedures fee
Including: Internal control audit fee
Non-audit services fee
Total
RMB million
fees
61.48
11.50
2.28
63.76
At the 2019 Annual General Meeting to be held on 29 June 2020, the Board will propose a resolution to re-appoint Ernst
& Young Hua Ming LLP as the PRC auditor and the auditor for US Form 20-F of the Company for the year 2020, and Ernst
& Young as the Hong Kong auditor of the Company for the year 2020.
By Order of the Board
Wang bin
Chairman
Beijing, China
25 March 2020
63
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance
rEPOrT Of ThE bOard Of
SuPErviSOrS
aCTiviTiES Of ThE bOard Of SuPErviSOrS
Currently, the sixth session of the Board of Supervisors
comprises Mr. Jia Yuzeng, Mr. Luo Zhaohui, Mr. Han
Bing, Mr. Cao Qingyang and Ms. Wang Xiaoqing, with
Mr. Jia Yuzeng acting as the Chairman of the Board of
Supervisors. Of the members of the Board of Supervisors,
Mr. Jia Yuzeng, Mr. Luo Zhaohui and Mr. Han Bing
are Non-employee Representative Supervisors, and
Mr. Cao Qingyang and Ms. Wang Xiaoqing are Employee
Representative Supervisors. In February 2019, Mr. Shi
Xiangming resigned from his position as a Supervisor
o f t h e C o m p a n y d u e t o t h e a d j u s t m e n t o f w o r k
arrangements. In July 2019, Mr. Tang Yong resigned
f r o m h i s p o s i t i o n a s a S u p e r v i s o r o f t h e C o m p a n y
due to the adjustment of work arrangements. In July
2019, Mr. Huang Xin resigned from his position as a
Supervisor of the Company due to the adjustment of work
arrangements. In January 2020, Mr. Song Ping resigned
from his position as a Supervisor of the Company due to
the adjustment of work arrangements.
attending meetings of the board of Supervisors
and diligently discharging their duties. Pursuant to
the regulatory requirements of the jurisdictions where
the Company is listed, the Articles of Association and
the “Procedural Rules for the Board of Supervisors’
Meetings” of the Company, and in accordance with the
work arrangement of the Board of Supervisors, the Board
of Supervisors convened its regular meetings in a timely
manner, at which it considered and approved proposals
in relation to the Company’s financial reports, periodic
reports, internal control, and risk management, etc. In
2019, the sixth session of the Board of Supervisors held
five meetings in total, at which the Supervisors earnestly
expressed their views, actively participated in discussions
and diligently discharged their duties, thereby providing
valuable advice for the business development of the
Company.
From left to right:
Ms. Wang Xiaoqing, Mr. Cao Qingyang, Mr. Jia Yuzeng, Mr. Luo Zhaohui, Mr. Han Bing
64
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance attending and participating in corporate governance
meetings and actively exercising their supervisory
role. In 2019, the Board of Supervisors attended the
2018 Annual General Meeting and the First Extraordinary
General Meeting 2019 of the Company, and participated
in the regular meetings of the Board. All members of
the Board of Supervisors participated in the regular
meetings of the Audit Committee, the Nomination and
Remuneration Committee, the Risk Management and
Consumer Rights Protection Committee, the Strategy and
Assets and Liabilities Management Committee, and the
Connected Transactions Control Committee, respectively,
in accordance with the work allocation among Supervisors
determined by the Board of Supervisors. By attending
these meetings, all Supervisors diligently discharged
their duties, oversaw the procedures for convening
meetings, carefully listened to the matters considered
at the meetings, and participated in discussions when
necessary, thus bringing positive effects on further
enhancement of corporate governance.
Supervising and evaluating the performance of duties
by directors. The Company commenced an evaluation
of the performance of duties by Directors in accordance
with the requirements such as the “Measures for the
Administration of Independent Directors of Insurance
Institutions” issued by the CBIRC and the “Operational
Guidance for Evaluating the Performance of Duties
by Directors of Insurance Companies” issued by the
Insurance Association of China and after taking into
account the “Provisional Measures for Evaluating the
Performance of Duties by Directors” of the Company.
Based on the performance of duties by Directors in 2019
and by reference to the information obtained during their
participation of meetings of the Board and various special
committees, the members of the Board of Supervisors
evaluated and scored the Directors of the Company and
formed evaluation opinions on them, which therefore
i m p r o v e d t h e m e c h a n i s m f o r t h e s u p e r v i s i o n a n d
evaluation of duty performance of Directors.
ac t i v e l y c o n d u c t i n g r e s e a r c h a n d i n v e s t i g a t i o n
activities and examining and understanding the
business operation of local branches. In 2019, all
m e m b e r s o f t h e B o a r d o f S u p e r v i s o r s c a r r i e d o u t
oversight of and conducted investigation and research
on Beijing Branch, Jiangsu Branch, Zhejiang Branch,
Guangxi Zhuang Autonomous Region Branch and other
branches of the Company, respectively. The investigation
and research activities were mainly conducted through
various means such as seminar, individual interview and
on-site inspection. Through the investigation and research
activities, the Board of Supervisors comprehended the
corporate business development of local branches in great
depth, examined the effectiveness of the implementation
by local branches of decisions made by the Board and
the management as well as the establishment of the risk
prevention and control mechanism, discussed matters
in relation to the optimization of the risk prevention and
control mechanism and the promotion of the “Dingxin
Project”, and fully listened to the opinions and advices
given by local branches.
attending training courses and constantly enhancing
performance of duties by the Supervisors. In 2019, all
members of the Board of Supervisors attended a training
course on the topic of “Standards of New Insurance
Contracts and their Effects”, with Ernst & Young Hua
Ming LLP and Ernst & Young, the external auditors of
the Company, as the speaker, which gave them the
opportunity to familiarize with and understand the impact
of the standards of new insurance contracts on the
subsequent management of the Company. Pursuant to
the regulatory requirements, all members of the Board of
Supervisors attended the training programs on anti-money
laundering. Pursuant to the regulatory requirements of
the industry, the new Supervisors of the Company sat
for the examinations of the CBIRC regarding the approval
of qualifications of new directors, supervisors and
senior management officers of insurance institutions as
organized by the CBIRC.
65
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance 3. Acquisition and sale of assets. During the Reporting
Period, the prices for acquisition and sale of assets
were fair and reasonable. The Board of Supervisors is
not aware of any insider trading, any acts harming the
interests of shareholders or incurring any loss to the
Company’s assets.
4. Connected transactions. During the Reporting Period,
the connected transactions of the Company were
on commercial terms. The Board of Supervisors is
not aware of any acts harming the interests of the
Company.
5.
Internal control system and self-evaluation report
on internal control. During the Reporting Period,
the Company sought to improve its internal control
system, and continued to improve the effectiveness
of such system. The Board of Supervisors of the
Company reviewed the self-evaluation report on the
Company’s internal control system and did not raise
any objection against the self-evaluation report of
the Board regarding the Company’s internal control
system.
iNdEPENdENT OPiNiON Of ThE bOard Of
SuPErviSOrS ON CErTaiN maTTErS
During the Reporting Period, the Board of Supervisors
of the Company performed its supervisory duties in a
diligent manner in accordance with the requirements
of the Company Law, the Articles of Association and
the “Procedural Rules for the Board of Supervisors’
Meetings”.
1. The Company’s operational compliance with the
law. During the Reporting Period, the Company’s
o p e r a t i o n s w e r e i n c o m p l i a n c e w i t h t h e l a w .
The Company’s operations and decision-making
procedures were in compliance with the Company
Law and the Articles of Association. All Directors and
senior management of the Company maintained strict
principles of diligence and integrity and performed
their duties conscientiously. The Board of Supervisors
is not aware of any of them having violated any
law, regulation, or any provision in the Articles of
Association or harmed the interests of the Company in
the course of discharging their duties.
2. The authenticity of the financial report. The Company’s
annual financial report truly reflected the Company’s
financial position and operating results. Ernst &
Y o u n g H u a M i n g L L P a n d E r n s t & Y o u n g h a v e
performed audits and have issued standard and
unqualified auditors’ reports in respect of the financial
statements for the year 2019 in accordance with the
China Standards on Auditing of PRC Certified Public
Accountants and the International Standards on
Auditing, respectively.
By Order of the Board of Supervisors
jia yuzeng
Chairman of the Board of Supervisors
Beijing, China
25 March 2020
66
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance ChaNgES iN OrdiNary SharES aNd SharEhOldErS iNfOrmaTiON
ChaNgES iN SharE CaPiTal
During the Reporting Period, there was no change in the total number of shares and the share capital of the Company.
iSSuE aNd liSTiNg Of SECuriTiES
As at the end of the Reporting Period, the Company had not issued any securities in the last three years. During the
Reporting Period, there was no change in the total number of shares and the share structure of the Company due to bonus
issues or placings, nor were there any internal employees’ shares.
iNfOrmaTiON ON SharEhOldErS aNd EffECTivE CONTrOllEr
Total number of shareholders and their shareholdings
Total number of ordinary
share shareholders as at
the end of the reporting
Period
No. of A Share shareholders:
101,051
No. of H Share shareholders:
27,228
Total number of ordinary
share shareholders as
at the end of the month
prior to the disclosure of
the annual report
No. of A Share shareholders:
116,377
No. of H Share shareholders:
27,086
Particulars of top ten shareholders of the Company
Name of shareholder
Nature of shareholder
Percentage of
shareholding
Number of shares
held as at the
end of the
reporting Period
increase/decrease
during the
reporting Period
Number of shares
subject to selling
restrictions
Number of shares
pledged or frozen
Unit: Shares
China Life Insurance (Group) Company
State-owned legal person
68.37%
19,323,530,000
0
HKSCC Nominees Limited
Overseas legal person
25.91%
7,323,690,703
+3,393,048
China Securities Finance Corporation Limited
State-owned legal person
Central Huijin Asset Management Limited
State-owned legal person
Hong Kong Securities Clearing Company Limited
Overseas legal person
2.56%
0.42%
0.19%
723,937,634
119,719,900
0
0
54,650,164
+23,940,802
China Universal Asset Management Co., Ltd
– Industrial and Commercial Bank
of China Limited – China Universal
– Tianfu Bull No. 53 Asset Management Plan
Other
0.05%
15,015,845
0
National Social Security Fund Portfolio 103
State-owned legal person
0.05%
12,995,533
+12,995,533
Industrial and Commercial Bank of China Limited
– SSE 50 Exchange Traded Index Securities
Other
Investment Fund
0.05%
12,806,123
–5,369,800
National Social Security Fund Portfolio 416
State-owned legal person
China National Nuclear Corporation
State-owned legal person
0.05%
0.04%
12,720,175
+12,720,175
12,400,000
0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
67
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Details of shareholders
1. HKSCC Nominees Limited is a company that holds shares on behalf of the
clients of the Hong Kong stock brokers and other participants of the CCASS
system. The relevant regulations of the HKSE do not require such persons
to declare whether their shareholdings are pledged or frozen. Hence,
HKSCC Nominees Limited is unable to calculate or provide the number of
shares that are pledged or frozen.
2. China Universal Asset Management Co., Ltd – Industrial and Commercial
Bank of China Limited – China Universal – Tianfu Bull No. 53 Asset
Management Plan has Industrial and Commercial Bank of China Limited as
its asset trustee. Industrial and Commercial Bank of China Limited – SSE
50 Exchange Traded Index Securities Investment Fund has Industrial and
Commercial Bank of China Limited as its fund depositary. Save as above,
the Company was not aware of any connected relationship and concerted
parties as defined by the “Measures for the Administration of the Takeover
of Listed Companies” among the top ten shareholders of the Company.
Information relating to the Controlling Shareholder and Effective Controller
The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
Name of company
China Life Insurance (Group) Company
Legal representative
Wang Bin
Date of incorporation
Major businesses
Shareholdings in other
subsidiaries and affiliates
listed in China or abroad
during the Reporting Period
21 July 2003 (CLIC was formerly known as China Life Insurance Company, a company
approved and formed by the State Council in January 1999. With the approval of
the former China Insurance Regulatory Commission in 2003, China Life Insurance
Company was restructured as CLIC)
Insurance services including receipt of premiums and payment of benefits in respect
of the in-force life, health, accident and other types of personal insurance business,
and the reinsurance business; holding or investing in domestic and overseas insurance
companies or other financial insurance institutions; funds application business
permitted by national laws and regulations or approved by the State Council of PRC;
other businesses approved by banking and insurance regulatory agencies.
As at 31 December 2019, CLIC held 1,785,098,644 H shares of Town Health
International Medical Group Limited, representing 23.72% of its total shares.
68
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The effective controller of the Company is the Ministry of Finance of the People’s Republic of China. The equity and
controlling relationship6 between the Company and its effective controller is set out in below:
Ministry of Finance
of the PRC
National Council for Social
Security Fund
90%
10%
China Life Insurance
(Group) Company
68.37%
China Life Insurance
Company Limited
During the Reporting Period, there was no change to the controlling shareholder and the effective controller of the
Company. As at the end of the Reporting Period, there was no other corporate shareholder holding more than 10% of the
shares in the Company.
iNTErESTS aNd ShOrT POSiTiONS iN ThE SharES aNd uNdErlyiNg SharES Of ThE COmPaNy
hEld by SubSTaNTial SharEhOldErS aNd OThEr PErSONS uNdEr hONg KONg laWS aNd
rEgulaTiONS
So far as is known to the Directors, Supervisors and
the chief executive of the Company, as at 31 December
2019, the following persons (other than the Directors,
Supervisors and the chief executive of the Company) had
interests or short positions in the shares or underlying
shares of the Company which would fall to be disclosed to
the Company under the provisions of Divisions 2 and 3 of
Part XV of the SFO, or which were recorded in the register
required to be kept by the Company pursuant to Section
336 of the SFO, or as otherwise notified to the Company
and the HKSE:
Name of substantial
shareholder
Capacity
Class of
shares
Number of
shares held
Percentage of the
respective class
of shares
Percentage of the
total number of
shares in issue
China Life Insurance
(Group) Company
BlackRock, Inc. (Note 1)
JPMorgan Chase & Co. (Note 2)
Beneficial owner
A Shares
19,323,530,000 (L)
92.80%
68.37%
Interest in controlled
corporation
H Shares
596,096,797 (L)
355,000 (S)
Interest in controlled corporation,
investment manager, person
having a security interest in
shares, trustee, approved lending
agent
H Shares
460,067,443 (L)
128,651,185 (S)
157,493,474 (P)
8.01%
0.00%
6.18%
1.72%
2.11%
2.11%
0.00%
1.63%
0.46%
0.56%
The letter “L” denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interest in a lending pool.
6
In order to consistently carry out the relevant arrangements under the “Notice of the State Council on Issuing the Implementation Plan for Transferring
Part of State-owned Capital to Supplement Social Security Fund” (Guo Fa [2017] No. 49), the CBIRC has approved the one-off transfer by the Ministy of
Finance of 10% of its equity interest in CLIC to the National Council for Social Securit Fund (the “SSF”) (the “Gratuitous Transfer”) in accordance with
the “Reply for the Approval of Change of Shareholder of China Life Insurance (Group) Company” (CBIRC’s Reply [2020] No. 63). Upon completion fo the
Gratuitous Transfer, the Ministry of Finance and the SSF will hold 90% and 10% equity interest in CLIC, respectively.
69
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance (Note 1): BlackRock, Inc. was interested in a total of 596,096,797 H shares 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 International 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 BlackRock Investment Management (Taiwan)
Limited were interested in 7,811,000 H shares, 13,660,000 H shares, 172,685,588 H shares, 198,392,000 H shares, 2,147,000 H shares,
15,318,722 H shares, 1,116,000 H shares, 5,388,000 H shares, 24,226,318 H shares, 1,086,000 H shares, 2,829,000 H shares, 1,254,000
H shares, 56,388,918 H shares, 26,547,000 H shares, 28,389,313 H shares, 476,000 H shares, 23,817,331 H shares, 10,588,607 H shares,
3,906,000 H shares, 60,000 H shares, and 10,000 H shares, respectively. All of these entities are either controlled or indirectly controlled
subsidiaries of BlackRock, Inc. Of these 596,096,797 H shares, 9,201,000 H shares were cash settled unlisted derivatives.
BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 355,000 H shares (0.00%). These 355,000 H
shares were cash settled unlisted derivatives.
(Note 2): JPMorgan Chase & Co. was interested in a total of 460,067,443 H shares in accordance with the provisions of Part XV of the SFO. Of these
shares, J.P. Morgan Bank Luxembourg S.A.-Amsterdam Branch, J.P. Morgan Securities LLC, JPMORGAN ASSET MANAGEMENT (UK) LIMITED,
JPMorgan Chase Bank, National Association, JPMorgan Asset Management (Asia Pacific) Limited, China International Fund Management Co.,
Ltd., JPMorgan Asset Management (Taiwan) Limited, J.P. Morgan AG, J.P. Morgan Bank Luxembourg S.A.-Stockholm Bankfilial, JPMORGAN
CHASE BANK, N.A.-LONDON BRANCH, J.P. Morgan Investment Management Inc., J.P. Morgan Bank Luxembourg S.A.-Oslo Branch, JPMorgan
Chase Bank, N.A.-Sydney Branch, J.P. Morgan Bank Luxembourg S.A., J.P. Morgan Trust Company of Delaware, JPMorgan Chase Bank, N.A.-
Hong Kong Branch, J.P. MORGAN SECURITIES PLC and J.P. Morgan (Suisse) SA were interested in 4,473,173 H shares, 14,556,596 H shares,
12,485,000 H shares, 65,326,723 H shares, 64,913,000 H shares, 37,000 H shares, 5,798,000 H shares, 1,000 H shares, 3,618,779 H shares,
74,231,967 H shares, 56,762,361 H shares, 267,240 H shares, 3,765,773 H shares, 4,095,000 H shares, 4,640 H shares, 8,717,503 H shares,
136,449,372 H shares and 4,564,316 H shares, respectively. All of these entities are either controlled or indirectly controlled subsidiaries of
JPMorgan Chase & Co.
Included in the 460,067,443 H shares are 157,493,474 H shares (2.11%), which are held in the “lending pool”, as defined under Section 5(4) of the
Securities and Futures (Disclosure of Interests – Securities Borrowing and Lending) Rules. Of these 460,067,443 H shares, 15,096,000 H shares
were physically settled listed derivatives, 1,840,000 H shares were cash settled listed derivatives, 21,164,574 H shares were physically settled
unlisted derivatives and 43,437,000 H shares were cash settled unlisted derivatives.
JPMorgan Chase & Co. held a short position as defined under Part XV of the SFO in 128,651,185 H shares (1.72%). Of these 128,651,185 H
shares, 12,915,000 H shares were physically settled listed derivatives, 7,316,000 H shares were cash settled listed derivatives, 32,643,315 H
shares were physically settled unlisted derivatives, 73,840,248 H shares were cash settled unlisted derivatives and 2 H shares were convertible
instruments listed derivatives.
Save as disclosed above, the Directors, Supervisors and the chief executive of the Company are not aware of any other
party who, as at 31 December 2019, had an interest or short position in the shares and underlying shares of the Company
which was recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.
70
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance dirECTOrS, SuPErviSOrS, SENiOr maNagEmENT aNd EmPlOyEES
dirECTOrS, SuPErviSOrS aNd SENiOr maNagEmENT
CURRENT DIRECTORS
Name
Position
gender
date of birth
Term
Wang Bin
Su Hengxuan
Li Mingguang
Zhao Peng
Chairman of the Board,
Executive Director
Executive Director
Executive Director
Executive Director
Yuan Changqing
Non-executive Director
Liu Huimin
Yin Zhaojun
Non-executive Director
Non-executive Director
Wang Junhui
Non-executive Director
Chang Tso Tung Stephen
Independent Director
Robinson Drake Pike
Independent Director
Tang Xin
Independent Director
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
November 1958
Since 3 December 2018
February 1963
Since 20 December 2018
July 1969
April 1972
Since 16 August 2019
Since 20 February 2020
September 1961
Since 11 February 2018
June 1965
Since 31 July 2017
July 1965
July 1971
Since 31 July 2017
Since 16 August 2019
November 1948
Since 20 October 2014
October 1951
Since 11 July 2015
September 1971
Since 7 March 2016
Leung Oi-Sie Elsie
Independent Director
Female
April 1939
Since 20 July 2016
Total
/
/
/
/
Number
of shares
held at the
beginning
of the year
Number of
shares held
at the end
of the year
reason for
changes
Salary/
remuneration
paid in rmb
ten thousands
Other benefits,
social insurance,
housing
provident
fund and
enterprise
annuity
fund paid by
the Company
in rmb
ten thousands
Total
emoluments
received from
the Company
during
the reporting
Period in rmb
ten thousands
(before tax)
Whether
received
emolument
from
connected
parties of
the Company
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
/
/
/
/
/
/
/
/
/
/
/
/
/
0
0
0
0
0
0
59.67
9.62
69.29
/
0
0
0
0
32.00
32.00
32.00
30.00
/
0
0
0
0
0
0
0
0
/
0
0
0
0
32.00
32.00
32.00
30.00
185.67
9.62
195.29
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
/
Notes:
1. According to the “Procedural Rules for the Board Meetings of China Life Insurance Company Limited”, Directors serve for a term of three years and may
be re-elected. However, Independent Directors may not serve for more than six years.
2. The positions of the Directors in this annual report reflect their positions as at the submission date of this annual report. The emoluments are calculated
based on their terms of office during the Reporting Period.
3. According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the Executive Directors is
currently subject to review and approval. The result of the review will be disclosed when the final amount is confirmed.
4. Following the election at the 2018 Annual General Meeting of the Company and upon the approval by the CBIRC Beijing Bureau, Mr. Li Mingguang and
Mr. Wang Junhui became an Executive Director and a Non-executive Director of the sixth session of the Board of Directors of the Company, respectively,
on 16 August 2019. After the consideration and approval by the First Extraordinary General Meeting 2019 of the Company and upon the approval by the
CBIRC Beijing Bureau, Mr. Zhao Peng became an Executive Director of the sixth session of the Board of Directors of the Company on 20 February 2020.
71
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance CURRENT SUPERVISORS
Name
Position
gender
date of birth
Term
Number
of shares
held at the
beginning
of the year
Number of
shares held
at the end
of the year
reason for
changes
Salary/
remuneration
paid in rmb
ten thousands
Other benefits,
social insurance,
housing
provident
fund and
enterprise
annuity
fund paid by
the Company
in rmb
ten thousands
Total
emoluments
received from
the Company
during
the reporting
Period in rmb
ten thousands
(before tax)
Whether
received
emolument
from connected
parties of
the Company
Jia Yuzeng
Luo Zhaohui
Han Bing
Cao Qingyang
Wang Xiaoqing
Chairman of the Board of
Supervisors
Supervisor
Supervisor
Employee Representative
Supervisor
Employee Representative
Supervisor
Male
Male
Male
Male
June 1962
Since 11 July 2018
March 1974
Since 11 February 2018
November 1971
Since 12 July 2019
May 1963
Since 12 July 2019
Female
October 1965
Since 27 December 2019
Total
/
/
/
/
0
0
0
0
0
0
0
0
0
0
0
0
/
/
/
/
/
/
125.30
0
25.28
28.58
3.96
183.12
22.95
0
16.94
15.41
2.82
58.12
148.25
0
42.22
43.99
6.78
241.24
No
Yes
No
No
No
/
Notes:
1. Pursuant to the Articles of Association, Supervisors serve for a term of three years and may be re-elected.
2. The positions of the Supervisors in this annual report reflect their positions as at the submission date of this annual report. The emoluments are calculated
based on their terms of office during the Reporting Period.
3. According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the Chairman of the Board of
Supervisors and the Supervisors is currently subject to review and approval. The result of the review will be disclosed when the final amount is confirmed.
4. Following the election at the third extraordinary meeting of the second session of the employee representative meeting of the Company and upon the
approval by the CBIRC Beijing Bureau, Mr. Cao Qingyang became an Employee Representative Supervisor of the sixth session of the Board of Supervisors
of the Company on 12 July 2019. Following the election at the 2018 Annual General Meeting of the Company and upon the approval by the CBIRC Beijing
Bureau, Mr. Han Bing became a Non-employee Representative Supervisor of the sixth session of the Board of Supervisors of the Company on 12 July
2019. Following the election at the fourth extraordinary meeting of the second session of the employee representative meeting of the Company and
upon the approval by the CBIRC Beijing Bureau, Ms. Wang Xiaoqing became an Employee Representative Supervisor of the sixth session of the Board of
Supervisors of the Company on 27 December 2019.
72
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance CURRENT SENIOR MANAGEMENT
Name
Position
gender
date of birth
Term
Number
of share
held at the
beginning
of the year
Number of
share held
at the end
of the year
reason for
changes
Salary/
remuneration
paid in rmb
ten thousands
Other benefits,
social insurance,
housing
provident
fund and
enterprise
annuity
fund paid by
the Company
in rmb
ten thousands
Total
emoluments
received from
the Company
during
the reporting
Period in rmb
ten thousands
(before tax)
Whether
received
emolument
from connected
parties of
the Company
Su Hengxuan
President
Male
February 1963
Since April 2019
Li Mingguang
Zhao Peng
Ruan Qi
Vice President,
Chief Actuary,
Board Secretary
Vice President
Vice President
Zhan Zhong
Vice President
Male
July 1969
Appointed as Vice President
since November 2014,
Chief Actuary since March
2012, Board Secretary
since June 2017
Male
Male
Male
April 1972
July 1966
April 1968
Since March 2018
Since April 2018
Since July 2019
Yang Hong
Vice President
Female
February 1967
Since July 2019
Zhao Guodong
Assistant to the President
Male
November 1967
Since October 2019
Xu Chongmiao
Compliance Officer
Total
/
Male
/
October 1969
Since July 2018
/
/
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
/
/
/
/
/
/
/
/
/
0
0
0
143.20
23.00
166.20
93.98
125.30
119.33
119.33
16.25
52.80
670.19
17.38
22.95
26.48
26.52
5.71
31.89
153.93
111.36
148.25
145.81
145.85
21.96
84.69
824.12
Yes
No
Yes
No
No
No
No
No
/
Notes:
1. The positions of the members of the Senior Management in this annual report reflect their positions as at the submission date of this annual report. The
emoluments are calculated based on their terms of office during the Reporting Period.
2. According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the Senior Management is
currently subject to review and approval. The result of the review will be disclosed when the final amount is confirmed.
3. After the consideration by the ninth meeting of the sixth session of the Board of Directors of the Company and upon the approval by the CBIRC, Mr. Su
Hengxuan became the President of the Company on 2 April 2019. After the consideration by the fourteenth and eighteenth meetings of the sixth session
of the Board of Directors of the Company and upon the approval by the CBIRC Beijing Bureau, Mr. Zhan Zhong and Ms. Yang Hong became the Vice
Presidents of the Company, respectively, on 12 July 2019. After the consideration by the sixteenth meeting of the sixth session of the Board of Directors
of the Company and upon the approval by the CBIRC Beijing Bureau, Mr. Zhao Guodong became an Assistant to the President of the Company on 25
October 2019.
73
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Name
Previous Position
gender
date of birth
Term
Xu Hengping
Executive Director
Vice President
Male
November 1958
Xu Haifeng
Executive Director
Vice President
Male
May 1959
Shi Xiangming
Supervisor
Male
November 1959
Tang Yong
Supervisor
Male
July 1972
Huang Xin
Song Ping
Employee
Representative
Supervisor
Employee
Representative
Supervisor
Male
February 1974
Male
June 1964
Zhao Lijun
Vice President
Male
July 1963
Xiao Jianyou
Vice President
Male
September 1968
11 July 2015 –
24 January 2019
November 2014 –
January 2019
11 July 2015 –
28 June 2019
November 2014 –
June 2019
25 May 2009 –
18 February 2019
2 February 2019 –
22 July 2019
20 June 2018 –
22 July 2019
15 March 2018 –
3 January 2020
July 2016 –
August 2019
October 2016 –
May 2019
Total
/
/
/
/
Notes:
Number
of share
held at the
beginning
of the year
Number of
share held
at the end
of the year
reason for
changes
Salary/
remuneration
paid in rmb
ten thousands
Other benefits,
social insurance,
housing
provident
fund and
enterprise
annuity
fund paid by
the Company
in rmb
ten thousands
Total
emolument
received from
the Company
during
the reporting
Period
Whether
received
emolument
from connected
parties of
the Company
reason for changes
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
/
/
/
/
/
/
/
/
0.85
1.79
2.64
No
Resigned due to the
reason of age
60.51
10.09
70.60
9.53
4.74
0
4.67
14.20
2.78
7.52
0
0
48.44
30.74
79.18
95.47
15.19
110.66
52.21
9.84
62.05
No
No
Yes
Yes
No
No
No
Resigned due to the
reason of age
Resigned due to the
adjustment of work
arrangements
Resigned due to the
adjustment of work
arrangements
Resigned due to the
adjustment of work
arrangements
Resigned due to the
adjustment of work
arrangements
Resigned due to the
adjustment of work
arrangements
Resigned due to the
adjustment of work
arrangements
/
271.75
75.10
346.85
/
/
1. This table sets out the information of Directors, Supervisors and Senior Management who resigned or retired during the Reporting Period and as at the
submission date of this annual report.
2. The emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and Senior Management during the
Reporting Period.
3. According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the Executive Directors,
Supervisors and the Senior Management is currently subject to review and approval. The result of the review will be disclosed when the final amount is
confirmed.
74
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance dirECTOrS
mr. Wang bin, born in 1958, Chinese
Mr. Wang is the Chairman of the Board of Directors of the Company, the Chairman
of the Board of Directors and the Secretary to the Party Committee of China Life
Insurance (Group) Company, the Chairman of the Board of Directors of China Life Asset
Management Company Limited, the Chairman of the Board of Directors of China Life
Insurance (Overseas) Company Limited, and a Director and the Chairman of the Board
of Directors of China Guangfa Bank Co., Ltd. Mr. Wang has successively been employed
by government authorities and financial institutions, with nearly 30 years of experience
in financial management. He worked at the People’s Bank of China, participating in
the preparation and establishment of Agricultural Development Bank of China as an
important member. Mr. Wang served as the General Manager of Jiangxi Branch of
Agricultural Development Bank of China, and the President of Tianjin Branch and Beijing
Branch of the Bank of Communications Co., Ltd. (the “Bank of Communications”). He
served as the Vice President of the Bank of Communications from 2005 to 2012 and
concurrently served as an Executive Director of the Bank of Communications from 2010
to 2012. From March 2012 to August 2018, he served as the Chairman of the Board of
Directors and the Secretary to the Party Committee of China Taiping Insurance Group
Ltd. Mr. Wang holds a doctoral degree in economics. He is a researcher, a delegate
to the 19th National Congress of the Communist Party of China, and a member of
the 12th and 13th National Committee of the Chinese People’s Political Consultative
Conferences.
mr. Su hengxuan, born in 1963, Chinese
Mr. Su became an Executive Director of the Company in December 2018. He has been
the President of the Company since April 2019 and the Vice President of China Life
Insurance (Group) Company since December 2017. He was the President of China Life
Pension Company Limited from March 2015 to February 2018. Mr. Su served various
positions in the Company from 2000 to 2015, including the Deputy General Manager
of Henan Branch, the General Manager of the Individual Insurance Department of the
Company, the General Manager of the Individual Insurance Sales Department of the
Company, an Assistant to the President and the Vice President of the Company. Mr. Su
graduated from Wuhan University and the University of Science and Technology of
China and obtained a doctoral degree in management science and engineering from
the University of Science and Technology of China in 2011. Mr. Su, a senior economist,
has over 35 years of experience in the operation and management of life insurance
business.
mr. li mingguang, born in 1969, Chinese
Mr. Li became an Executive Director of the Company in August 2019. He has been
the Vice President of the Company since November 2014, the Chief Actuary of the
Company since March 2012, the Chief Actuary of China Life Pension Company Limited
since May 2012 and the Board Secretary of the Company since June 2017. Mr. Li
joined the Company in 1996 and subsequently served as the Deputy Division Chief,
the Division Chief, an Assistant to the General Manager of the Product Development
Department, the Responsible Actuary of the Company and the General Manager of
the Actuarial Department. He graduated from Shanghai Jiaotong University with a
bachelor’s degree in computer science in 1991, Central University of Finance and
Economics majoring in monetary banking (actuarial science) with a master’s degree in
1996 and Tsinghua University with an EMBA in 2010, and also studied in University of
Pennsylvania in the United States in 2011. Mr. Li is a Fellow of the China Association
of Actuaries (FCAA) and a Fellow of the Institute and Faculty of Actuaries (FIA). He was
the Chairman of the first session of the China Actuarial Working Committee and the
Secretary-general of both the first and the second sessions of the China Association of
Actuaries. He is currently an Executive Director of the China Association of Actuaries
and a member of the China National Master of Insurance Education Supervisory
Committee.
75
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance mr. Zhao Peng, born in 1972, Chinese
Mr. Zhao became an Executive Director of the Company in February 2020. He has
been the Vice President of the Company since March 2018 and the Chief Financial
Officer of China Life Insurance (Group) Company since August 2019. He served as an
Assistant to the President of the Company from October 2017 to March 2018 and the
General Manager of Zhejiang Branch of the Company from January 2015 to October
2017. From 2014 to 2015, he successively served as the Deputy General Manager
(at the general manager level of the provincial branches) and the Person-in-Charge of
Zhejiang Branch of the Company. From 2003 to 2014, he successively held various
positions in China Life Insurance (Group) Company, including the Division Chief of the
Capital Management Division of the Finance Department, an Assistant to the General
Manager and the Division Chief of the Capital Management Division of the Finance
Department, an Assistant to the General Manager, the Deputy General Manager and
the General Manager of the Finance and Accounting Department, and the General
Manager of the Finance Department. From 1995 to 2003, Mr. Zhao successively served
as a staff member of the Capital Division, a staff member of the Financial Management
Division, the Deputy Division Chief and the Division Chief of the Capital Division of the
Planning and Finance Department of China Life Insurance Company. Mr. Zhao graduated
from Hunan College of Finance and Economics in July 1995, majoring in actuarial
science with a bachelor’s degree in economics, from Central University of Finance and
Economics in June 2002, majoring in finance with a master’s degree in economics, and
from Tsinghua University in January 2007, majoring in business administration with a
master’s degree in business administration.
mr. yuan Changqing, born in 1961, Chinese
Mr. Yuan became a Non-executive Director of the Company in February 2018. He is
the Vice Chairman, President and Deputy Secretary to the Party Committee of China
Life Insurance (Group) Company. Mr. Yuan served as the Chairman of the Supervisory
Committee and the Deputy Secretary to the Party Committee of Agricultural Bank of
China Limited from April 2015 to May 2017. He served as the Deputy General Manager
and the Secretary to the Discipline Inspection Committee of China Everbright Group
Corporation Limited from November 2014 to April 2015, the Secretary to the Discipline
Inspection Committee of China Everbright Group Limited from December 2008 to
August 2012, and an Executive Director, the Deputy General Manager and the Secretary
to the Discipline Inspection Committee of China Everbright Group Limited from August
2012 to November 2014, during which he concurrently acted as the Chairman of
Everbright Securities Company Limited. During the period from 1995 to 2008, he served
as the Vice President, President and Secretary to the Party Committee of Xinjiang
Branch, the President and Secretary to the Party Committee of Henan Branch, and
the Director of the Organization Department of the Party Committee and the General
Manager of the Human Resources Department of the head office of Industrial and
Commercial Bank of China Limited. During the period from 1981 to 1995, he held
various professional and management positions in branch offices of the People’s Bank
of China and Industrial and Commercial Bank of China. Mr. Yuan, a senior economist,
graduated from the University of Hong Kong, majoring in international business
administration with a master’s degree in business administration.
mr. liu huimin, born in 1965, Chinese
Mr. Liu became a Non-executive Director of the Company in July 2017. He has been
the Vice President of China Life Insurance (Group) Company since September 2013.
He served as the Vice President of China Life Asset Management Company Limited
from 2004, and the President and a Director of the same company from 2006, during
which he concurrently served as the Chairman of China Life Franklin Asset Management
Company Limited and the Chairman of China Life AMP Asset Management Co., Ltd.,
etc. Mr. Liu graduated from the Peking University with a doctoral degree in international
law. Before that, he graduated from the School of Social Sciences of the University
of Sussex in the United Kingdom with a master’s degree in development economics
and the Peking University with a bachelor’s degree in national economic management,
respectively.
76
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance mr. yin Zhaojun, born in 1965, Chinese
Mr. Yin became a Non-executive Director of the Company in July 2017. He has been
the President of China Guangfa Bank Co., Ltd. since September 2019 and the Vice
President of China Life Insurance (Group) Company since October 2016. He joined the
Bank of Communications in July 1990, and consecutively served as an Assistant to
the President of Beijing Branch and the Vice President of Shanxi branch of the Bank
of Communications from 2005, and the President of Shanxi Branch, Hebei Branch and
Beijing Branch of the Bank of Communications from 2011. Mr. Yin graduated from
the China University of Political Science and Law with a master’s degree in public
administration. Before that, he graduated from the Faculty of Accounting of the Beijing
College of Finance and Commerce with a bachelor’s degree in economics.
mr. Wang junhui, born in 1971, Chinese
Mr. Wang became a Non-executive Director of the Company in August 2019. He has
been the Chief Investment Officer of China Life Insurance (Group) Company and the
President of China Life Asset Management Company Limited since August 2016. He
has been the Chairman of China Life Franklin Asset Management Company Limited
since September 2016 and the Chairman of China Life AMP Asset Management Co.,
Ltd. since December 2016. From 2004 to 2016, he served as an Assistant to the
President and the Vice President of China Life Asset Management Company Limited,
and the President of China Life Investment Holding Company Limited. From 2002 to
2004, he served as the Director of the Investment Department and an Assistant to the
General Manager of Harvest Fund Management Co., Ltd. Mr. Wang graduated from
the School of Computer Science of Beijing University of Technology with a bachelor’s
degree in software in 1995, and Chinese Academy of Fiscal Sciences of the Ministry of
Finance of the PRC with a doctoral degree in finance in 2008. He is a senior economist.
mr. Chang Tso Tung Stephen, born in 1948, Chinese
Mr. Chang became an Independent Director of the Company in October 2014. He
served as the Vice Chairman of the Greater China Region of Ernst & Young, the
Managing Partner for professional services and the Chairman of auditing and consulting
service of Ernst & Young until his retirement in 2004. From 2007 to 2013, Mr. Chang
was an Independent Non-executive Director of China Pacific Insurance (Group) Co.,
Ltd. Mr. Chang is currently an Independent Non-executive Director of Kerry Properties
Limited and Hua Hong Semiconductor Limited, all of which are listed on the HKSE.
Mr. Chang has been practicing as a certified public accountant in Hong Kong for
around 30 years and has extensive experience in accounting, auditing and financial
management. Mr. Chang holds a bachelor’s degree of science from the University of
London, and is a fellow member of the Institute of Chartered Accountants in England
and Wales.
77
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance mr. robinson drake Pike, born in 1951, american
Mr. Pike became an Independent Director of the Company in July 2015. Before his
retirement from Goldman Sachs in 2014, Mr. Pike served as the Managing Director
of Goldman Sachs and the Chief Representative of the Beijing Representative Office
of Goldman Sachs International Bank UK from August 2011 to May 2014, and the
Managing Director of Goldman Sachs and the senior advisor and project coordinator
sent to the Industrial and Commercial Bank of China by Goldman Sachs from January
2007 to August 2011. He was the Senior Vice President of Lehman Brothers and the
Deputy Head and the Head of Asia Credit Risk Management of Lehman Brothers from
July 2000 to December 2006. Mr. Pike has over 30 years of experience in the Asian
financial industry with a focus on risk management and China’s banking industry.
He holds a bachelor’s degree of arts in Chinese Language and Literature from Yale
University and a master’s degree of public affairs in development economics from
Princeton University’s Woodrow Wilson School.
mr. Tang Xin, born in 1971, Chinese
Mr. Tang became an Independent Director of the Company in March 2016. He is
a professor of the School of Law of Tsinghua University, the Deputy Head of the
Commercial Law Research Center of Tsinghua University, an associate editor of
“Tsinghua Law Review”, a member of the Listing Committee of the Shanghai Stock
Exchange, the Chairman of the Independent Director Committee of China Association
for Public Companies, and an Independent Director of each of Harvest Fund
Management Co., Ltd., GF Securities Co., Ltd. and Bank of Guizhou Co., Ltd. Mr. Tang
was elected as a member of the first and second sessions of the Merger, Acquisition
and Reorganization Review Committee of the China Securities Regulatory Commission
from 2008 to 2010. He served as an Independent Director of China Spacesat Co., Ltd.
from 2008 to 2014, an Independent Director of each of SDIC Power Holdings Co., Ltd.
and Changjiang Securities Company Limited from 2009 to 2013, and an Independent
Director of Beijing Rural Commercial Bank Co., Ltd. from 2009 to 2015. Mr. Tang
graduated from Renmin University of China with bachelor’s, master’s and doctorate
degrees in law.
ms. leung Oi-Sie Elsie, born in 1939, Chinese
Ms. Leung became an Independent Director of the Company in July 2016. She was the
first Secretary for Justice of Hong Kong, a member of the Executive Council of Hong
Kong, the Deputy Director of the Hong Kong Basic Law Committee of the Standing
Committee of the 2nd, 3rd and 4th National People’s Congress and a consultant
of Iu, Lai & Li Solicitors & Notaries. Ms. Leung served as a member of the Social
Welfare Advisory Committee and the Equal Opportunities Commission, an executive
committee member and a council member of the Hong Kong Federation of Women, the
Chairperson and President of the International Federation of Women Lawyers, and the
Honorary President of the Nanhai Worldwide Friendship Federation. She is a Justice
of the Peace, a Notary Public and a China-Appointed Attesting Officer. She has been
awarded the “Grand Bauhinia Medal” and admitted as a solicitor by the Law Societies
of Hong Kong and England. Ms. Leung graduated from the University of Hong Kong with
a master’s degree in law, and is a fellow of the International Academy of Matrimonial
Lawyers. She has been an Independent Non-executive Director of United Company
RUSAL Plc since December 2009, an Independent Non-executive Director of China
Resources Power Holdings Company Limited since April 2010, and an Independent
Non-executive Director of PetroChina Company Limited since June 2017.
78
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance SuPErviSOrS
mr. jia yuzeng, born in 1962, Chinese
Mr. Jia became the Chairman of the Board of Supervisors of the Company in July 2018.
During the period from 2006 to March 2018, he served as a Supervisor, the General
Manager of the Human Resources Department, an Assistant to the President, the Vice
President, the Board Secretary, an Executive Director and the Compliance Officer of
China Life Pension Company Limited. During the period from 2004 to 2006, he served
as the General Manager of the Work Department of the Trade Union, the Executive
Deputy Director of the Trade Union and a Supervisor of the Company. During the period
from 1988 to 2004, he successively served as the Division Head of the General Office
and a secretary (at the deputy director level) of the PRC Ministry of Supervision, the
Deputy Director (responsible for daily operations) of the Minister Office of the General
Supervision Office under the Supervision Department of the Central Commission for
Discipline Inspection, and an inspector (at the director level), supervisor, inspector (at
the deputy bureau chief level) and special supervisor of the General Office of the Central
Commission for Discipline Inspection. Mr. Jia graduated from the Open University
of Hong Kong in 2003, majoring in business administration with a master’s degree in
business administration.
mr. luo Zhaohui, born in 1974, Chinese
Mr. Luo became a Supervisor of the Company in February 2018. Mr. Luo worked at the
Risk Management Department of China Life Insurance Company and the General Office
of China Life Insurance (Group) Company from August 2002 to August 2013, and was
appointed as the Senior Manager of the Comprehensive Information Division of the
General Office of China Life Insurance (Group) Company in May 2009 and an Assistant
to the General Manager of the Strategic Planning Department of China Life Insurance
(Group) Company in August 2013. Mr. Luo was seconded to Shijiazhuang Branch of
the Company in Hebei Province as the Deputy General Manager during the period
from November 2013 to October 2015, and was then appointed as the Deputy General
Manager and the General Manager of the Strategic Planning Department of China Life
Insurance (Group) Company in July 2016 and November 2019, respectively. Mr. Luo has
been involved in strategic management related work for a long time, with considerable
working experience in such aspects as risk management, market analysis and research,
life insurance operation, as well as strategic planning and management. Mr. Luo, a
senior economist, graduated from Peking University, majoring in finance with a doctoral
degree.
mr. han bing, born in 1971, Chinese
Mr. Han became a Supervisor of the Company in July 2019. He has been the General
Manager of the Human Resources Department of the Company since December 2018.
He served as the General Manager of the Human Resources Department of China Life
Pension Company Limited from March 2016 to December 2018. During the period
from 2014 to 2016, he successively served as the Deputy General Manager and the
Secretary to the Discipline Inspection Committee of Ningbo Branch, and the Deputy
General Manager and the Secretary to the Discipline Inspection Committee of Tibet
Autonomous Region Branch of the Company. During the period from 2006 to 2014, he
served as the Deputy General Manager of the Human Resources Department of the
Company. Mr. Han graduated from Beijing College of Economics in 1994, majoring in
labour economy with a bachelor’s degree in economics.
79
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance mr. Cao Qingyang, born in 1963, Chinese
Mr. Cao became a Supervisor of the Company in July 2019. He has been the General
Manager of the Product Development Department of the Company since February
2011. From 2008 to 2011, he successively served as the Deputy General Manager
of Tianjin Branch and the Group Leader of the Statistics Working Group of the
Company. From 2004 to 2008, he successively served as the General Manager of the
Investor Relations Department, the Deputy Secretary-General of the Board Secretariat
and concurrently the General Manager of the Investor Relations Department, and
the Deputy Secretary-General of the Board Secretariat of the Company. Mr. Cao
graduated from Nankai University in 2004, majoring in finance with a doctoral degree in
economics.
ms. Wang Xiaoqing, born in 1965, Chinese
Ms. Wang became a Supervisor of the Company in December 2019. She has been the
Deputy General Manager of the Risk Management Department of the Company since
April 2018. From May 2016 to April 2018, she served as the Secretary to the Discipline
Inspection Committee of Tibet Autonomous Region Branch of the Company. From
2008 to 2016, she successively served as an Assistant to the General Manager of the
Individual Insurance Sales Department, the Deputy General Manager of No. 5 Business
Management Department in Beijing Branch, an Assistant to the General Manager and
the Deputy General Manager of the County Insurance Management Department, and
the Deputy General Manager of the Audit Department of the Company. From 2001
to 2008, she successively served as the Deputy Division Chief of the Agent Training
Division, the Deputy Division Chief of the Sales Inspection Division, the Division Chief
of the Agent Management Division, and the Division Chief of the Comprehensive
Development Division of the Individual Insurance Sales Department of the Company.
Ms. Wang graduated from Nanjing Communication Engineering College in 1988,
majoring in radio communication engineering with a bachelor’s degree in engineering.
80
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance SENiOr maNagEmENT
mr. Su hengxuan, please see the section “directors” for his profile.
mr. li mingguang, please see the section “directors” for his profile.
mr. Zhao Peng, please see the section “directors” for his profile.
mr. ruan Qi, born in 1966, Chinese
Mr. Ruan became the Vice President of the Company in April 2018. He served as
the Chief Information Technology Officer of the Company from January 2018 to April
2018. Mr. Ruan served as the Chief Information Technology Officer and the General
Manager (at the general manager level of the provincial branches) of the Information
Technology Department of the Company from October 2016 to January 2018. He served
as the General Manager (at the general manager level of the provincial branches) of
the Information Technology Department of the Company from March 2016 to October
2016. He served as the General Manager of China Life Data Center and the General
Manager (at the general manager level of the provincial branches) of the Information
Technology Department of the Company from 2014 to 2016, and the Deputy General
Manager and the General Manager of the Information Technology Department of the
Company from 2004 to 2014. He successively served as the Deputy Division Chief
of the Computer Division of Fujian Branch, and the Deputy Manager (responsible for
daily operations) and the Manager of the Information Technology Department of the
Company from 2000 to 2004. Mr. Ruan, a senior engineer, graduated from Beijing
Institute of Posts and Telecommunications in August 1987, majoring in computer
science and communications with a bachelor’s degree in engineering and from Xiamen
University with a master’s degree in business administration for senior management
(EMBA) in December 2007.
mr. Zhan Zhong, born in 1968, Chinese
Mr. Zhan became the Vice President of the Company in July 2019. He has been the
Marketing Director of the Company since August 2017 and the General Manager (as
the general manager level of the provincial branches) of the Individual Insurance Sales
Department of the Company since July 2014. He was an Employee Representative
Supervisor of the Company from July 2015 to August 2017. Mr. Zhan served as the
Deputy General Manager (responsible for daily operations) and the General Manager
of the Company’s Qinghai Branch from 2013 to 2014. From 2009 to 2013, Mr. Zhan
successively served as the Deputy General Manager (responsible for daily operations)
and the General Manager of the Individual Insurance Sales Department of the Company.
From 2005 to 2009, he successively served as the General Manager of the Individual
Insurance Sales Department of the Company’s Guangdong Branch and an Assistant
to the General Manager of the Company’s Guangdong Branch. From 1996 to 2005, he
successively served as the Director of the Marketing Department of Chengdu High-tech
Sub-branch of Zhongbao Life Insurance Company, an Assistant to the Manager and the
Manager of the Marketing Department of Chengdu Branch, and the Deputy General
Manager of Chengdu Branch of Taikang Life Insurance Company. Mr. Zhan graduated
from Kunming Institute of Technology in July 1989, majoring in industrial electric
automation with a bachelor’s degree in engineering.
81
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance ms. yang hong, born in 1967, Chinese
Ms. Yang became the Vice President of the Company in July 2019. She has been the
Operation Director of the Company since March 2018 and the General Manager of the
Operation Service Center of the Company since January 2018. Ms. Yang successively
served as the Deputy General Manager (responsible for daily operations) and the
General Manager of the Research and Development Center, the General Manager (at
the general manager level of the provincial branches) of the Business Management
Department and the General Manager (at the general manager level of the provincial
branches) of the Business Process Management Department of the Company from
2011 to 2018. From 2002 to 2011, she successively served as an Assistant to the
General Manager and the Deputy General Manager of the Business Management
Department, and the General Manager of the Customer Service Department of the
Company. Ms. Yang graduated from the Computer Science Department of Jilin
University in 1989, majoring in system structure with a bachelor’s degree of science,
and from the School of Economics and Management of Tsinghua University in 2013 with
a master’s degree in business administration for senior management.
mr. Zhao guodong, born in 1967, Chinese
Mr. Zhao became an Assistant to the President of the Company in October 2019. He
has been the General Manager of Jiangsu Branch of the Company in July 2018. He
successively served as the Deputy General Manager (responsible for daily operations)
and the General Manager of Chongqing Branch, the General Manager of Hunan Branch
of the Company from 2016 to 2018, the Deputy General Manager of each of Fujian
Branch and Hunan Branch of the Company from 2007 to 2016, as well as the Deputy
General Manager of Changde Branch and the General Manager of Yiyang Branch of
the Company in Hunan Province from 2001 to 2007. Mr. Zhao graduated from Hunan
Computer School in 1988, majoring in computer software, and from China Central Radio
and TV University in 2006, majoring in business administration.
mr. Xu Chongmiao, born in 1969, Chinese
Mr. Xu became the Compliance Officer of the Company in July 2018. He has been
the General Manager of the Legal and Compliance Department and the Legal Officer
of the Company since September 2014. From 2006 to 2014, he successively served
as the Deputy General Manager of the Legal Affairs Department, the Deputy General
Manager of the Legal and Compliance Department and the Legal Officer at the general
manager level of the Company. From 2000 to 2006, he successively served as the
Deputy Division Chief of the Regulations Division of the Development and Research
Department and a senior regulations researcher of the Legal Affairs Department of
the Company. Mr. Xu graduated from Fudan University in August 1991, majoring in
economic law with a bachelor’s degree in law, and from Renmin University of China
in July 1996 and July 2005, respectively, majoring in economic law with master’s and
doctorate degrees in law. Mr. Xu is admitted as a lawyer and certified public accountant
in the PRC.
82
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance COmPaNy SECrETary
mr. heng victor ja Wei, born in 1977, british
Mr. Heng is the managing partner of Morison Heng, Certified Public Accountants.
Mr. Heng holds a Master of Science degree of the Imperial College of Science,
Technology and Medicine, the University of London. Mr. Heng is a member of The
Hong Kong Institute of Certified Public Accountants and a fellow of The Association
of Chartered Certified Accountants. Mr. Heng has over 15 years of experience in
accounting and auditing for private and public companies and financial consultancy.
Mr. Heng serves as an Independent Non-executive Director of CIMC-Tian Da Holdings
Company Limited, Lee & Man Chemical Company Limited, Matrix Holdings Limited,
Best Food Holding Company Limited and SCUD Group Limited, all of which are listed on
the main board of the HKSE.
POSiTiONS hEld by CurrENT dirECTOrS, SuPErviSOrS aNd SENiOr maNagEmENT iN
SharEhOldErS Of ThE COmPaNy
Name
Wang Bin
Name of shareholders
Position
Term
China Life Insurance (Group) Company
Chairman
Since August 2018
Su Hengxuan
China Life Insurance (Group) Company
Vice President
Since December 2017
Zhao Peng
China Life Insurance (Group) Company
Chief Financial Officer
Since December 2019
Yuan Changqing
China Life Insurance (Group) Company
Vice Chairman, President
Since May 2017
Liu Huimin
Yin Zhaojun
China Life Insurance (Group) Company
Vice President
Since September 2013
China Life Insurance (Group) Company
Vice President
Since October 2016
Wang Junhui
China Life Insurance (Group) Company
Chief Investment Officer
Since August 2016
Luo Zhaohui
China Life Insurance (Group) Company
General Manager of
the Strategic Planning
Department
Since November 2019
83
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance rEmuNEraTiON Of dirECTOrS, SuPErviSOrS
aNd SENiOr maNagEmENT
Decision-making procedures for the remuneration of
Directors, Supervisors and senior management: The
remuneration of Directors and Supervisors are approved
by shareholders at general meetings, whereas the
remuneration of senior management is approved by the
Board of Directors.
Basis for determination of the remuneration of Directors,
Supervisors and senior management: The remuneration
o f D i r e c t o r s , S u p e r v i s o r s a n d s e n i o r m a n a g e m e n t
are determined based on the operating results of the
Company and the performance appraisal conducted by the
Board of Directors, and in accordance with the measures
for the administration of remunerations of the Company.
Actual payment of remuneration to Directors, Supervisors
and senior management: During the Reporting Period,
the remuneration actually received by all Directors,
Supervisors and senior management (including the
resigned Directors, Supervisors and senior management)
from the Company totaled RMB15.3821 million. In
a c c o r d a n c e w i t h t h e r e l e v a n t r e q u i r e m e n t s o f t h e
measures for the administration of remuneration of the
Company, the standard for performance-based bonus
(as part of the compensation) payable to Directors,
Supervisors and senior management of the Company in
2019 has not yet been determined.
EmPlOyEES
Employees
Number of employees of the Company
Number of employees of the Company’s major subsidiaries
Employees in total
Retired employees of the Company and its major subsidiaries for
which extra costs have to be incurred
102,250
1,576
103,826
20
As at the end of the Reporting Period, the composition of the employees of the Company and its major subsidiaries is as
follows:
Structure of Expertise
Class of Expertise
Management and administration
Sales and sales management
Finance and auditing
Insurance verification, claims processing and customer services
Other expertise and technicians
Others
Total
84
Number of
Employees
18,495
46,678
4,911
25,622
4,749
3,371
103,826
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Education Level
Education level
Master or above
Bachelor
College Diploma
Secondary School
Others
Total
Number of
Employees
5,082
64,655
28,693
1,967
3,429
103,826
Remuneration Policy for Employees
T h e C o m p a n y h a s e s t a b l i s h e d a r e m u n e r a t i o n a n d
incentive system with reference to employee’s positions,
the Company’s performance and market conditions.
Training Plans
Adhering to the philosophy of “people-oriented and both
capability and integrity being equally important”, the
Company has been promoting the unity between the
growth of the Company and its employees in a harmonious
way. In 2019, the Company continuously implemented the
work requirements of “close to the frontline, close to the
practice and adapt to the era” for education and training
in a consistent manner, focused on talent cultivation and
made great efforts to provide training courses for cadre
employees by closely upholding the strategic arrangement
of “China Life Revitalization” and the overall objective and
task of “three guarantees and three concentrations”. The
Company also enriched training resources, innovated new
forms of training, and organized employees at all levels
within the Company to complete the training tasks for
the year, so as to improve the comprehensive quality and
professional skills of employees and ensure the supply
of talents for promoting the high-quality development of
the Company. Through the implementation of a series of
training and cultivation programs such as the cultivation of
new employees, base platform cultivation, “2551” Project
and Wings Program, the Company effectively promoted
its relevant works in corporate business development,
team building of employees, corporate culture cultivation,
c u s t o m e r s e r v i c e i m p r o v e m e n t , w o r k e f f i c i e n c y
optimization and compliance risk prevention in 2019.
85
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance rEPOrT Of COrPOraTE gOvErNaNCE
OvErviEW Of COrPOraTE gOvErNaNCE
The Company implements good corporate governance policies and strongly believes that through fostering sound
corporate governance, further enhancing its transparency and establishing an effective system of accountability, the
Company can operate in a more systematic manner, make decisions in a more scientific way, and boost the confidence
of investors.
Shareholders’
General
Meeting
Board of
Directors
Board of
Supervisors
Audit
Committee
Nomination and
Remuneration
Committee
Risk Management
and Consumer Rights
Protection Committee
Strategy and Assets and
Liabilities Management
Committee
Connected
Transactions
Control Committee
Board Secretary
Board of Directors’ Office/
Company Secretary
(Corporate Governance Structure Chart)
In accordance with the regulatory requirements of its
listed jurisdictions and the relevant provisions of its
Articles of Association, the Company has continuously
improved the decision-making mechanism of the Board.
The Board is accountable to shareholders of the Company
with respect to the assets and resources entrusted to it
by the shareholders, and performs its duties on corporate
governance. All members of the Board have taken
initiatives to look into the Company’s affairs and have
had a comprehensive understanding of the Company’s
b u s i n e s s e s . T h e y h a v e d e v o t e d s u f f i c i e n t t i m e i n
performing their duties as Directors with due care and in
a diligent and efficient manner. By setting up mechanisms
including regular reporting of business development
strategies and marketing tactics, the management of the
Company can periodically report the business operation,
development strategies and marketing tactics to the
Board, which provides a basis for the Board’s decision-
making.
With the establishment of a corporate governance system
with reasonably designed structure, well-developed
mechanism, strict rules and regulations, as well as high
efficiency in operation as its core objectives, the Company
continues to promote development of its corporate
governance framework, strictly perform its obligation
of information disclosure, enhance its transparency and
actively serve the interest of public investors so as to
enhance its image and position in the capital market.
The Company has set up a corporate governance structure
with well-defined duties and responsibilities strictly in
accordance with relevant laws, regulations and regulatory
requirements, including the Company Law and the
Securities Law of the PRC. The corporate governance
structure of the Company generally meets the regulatory
requirements of its listed jurisdictions and the relevant
provisions. The Company has carried out its corporate
governance procedures strictly in accordance with
relevant laws, regulations and regulatory requirements,
including the Company Law and the Securities Law of
the PRC, as well as the requirements of its Articles of
Association and procedural rules. Shareholders’ general
meetings, Board meetings and Board of Supervisors
m e e t i n g s o f t h e C o m p a n y h a v e b e e n f u n c t i o n i n g
independently and coordinately.
86
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The Company has actively promoted the establishment
of corporate governance, continuously improved its
corporate governance structure and enhanced its scientific
decision-making ability. In order to improve the decision-
making efficiency of the specialized Board committees,
t h e B o a r d h a s e s t a b l i s h e d f i v e s p e c i a l i z e d B o a r d
committees, i.e. the Audit Committee, the Nomination
and Remuneration Committee, the Risk Management and
Consumer Rights Protection Committee, the Strategy
and Assets and Liabilities Management Committee, and
the Connected Transactions Control Committee. These
specialized Board committees conduct studies on specific
matters, hold meetings on both regular and ad-hoc basis,
communicate with the management, provide advice and
recommendations for the Board’s consideration, and
deal with matters entrusted or authorized by the Board,
for the purpose of improving the Board’s efficiency and
intensifying the Board’s functions.
The Board of Supervisors of the Company has carried out
its work and performed its duties in accordance with the
Articles of Association and the “Procedural Rules for the
Board of Supervisors Meetings”. Members of the Board of
Supervisors attended the shareholders’ general meetings
and the Board of Supervisors meetings, participated in the
Board meetings and the meetings of the specialized Board
committees based on their work allocation, and conducted
investigations on local branches to have an in-depth
understanding of the implementation of the decisions
made by the Board, so as to diligently perform their role of
supervision.
The Company has carried out the procedures relating to
the resignation and appointment of Directors, Supervisors
and the senior management in compliance with the
regulatory requirements of its listed jurisdictions and
the provisions of its Articles of Association. Mr. Xu
H e n g p i n g a n d M r . X u H a i f e n g r e s i g n e d f r o m t h e i r
positions as Directors, respectively, due to the reason
of age. Mr. Shi Xiangming, Mr. Tang Yong, Mr. Huang
Xin and Mr. Song Ping resigned from their positions as
Supervisors, respectively, due to the adjustment of work
arrangements. The Board subsequently considered and
approved the proposals in relation to the nomination
of Mr. Zhao Peng as the Person-in-Charge of Finance
of the Company, the nomination of Mr. Zhan Zhong as
the Vice President of the Company, the nomination of
Ms. Yang Hong as the Vice President of the Company,
the nomination of Mr. Zhao Guodong as an Assistant to
the President of the Company, and the nomination of
Mr. Yang Chuanyong as the Person-in-Charge of Audit of
the Company. Following the election at the 2018 Annual
General Meeting of the Company and upon the approval
by the CBIRC, the appointment of Mr. Li Mingguang
and Mr. Wang Junhui as Directors became effective
on 16 August 2019, and the appointment of Mr. Han
Bing as a Supervisor became effective on 12 July 2019.
Following the election at the third extraordinary meeting
of the second session of the employee representative
meeting of the Company and upon the approval by
the CBIRC, the appointment of Mr. Cao Qingyang as a
Supervisor became effective on 12 July 2019. Following
the election at the fourth extraordinary meeting of the
second session of the employee representative meeting
of the Company and upon the approval by the CBIRC,
the appointment of Ms. Wang Xiaoqing as a Supervisor
became effective on 27 December 2019. Following the
election at the First Extraordinary General Meeting 2019
of the Company and upon the approval by the CBIRC,
the appointment of Mr. Zhao Peng as a Director became
effective on 20 February 2020. The Company has complied
with its systems relating to corporate goverance and
strictly implemented the above corporate governance
procedures.
The Company has made information disclosure in a
timely, open and transparent manner pursuant to the
requirements of the listing rules of its listed jurisdictions.
The Company has continuously improved its management
of investor relations and enhanced its communication with
investors in both form and substance, thus ensuring that
all shareholders enjoy equal rights and have access to
information about the Company in an open, fair, true and
accurate manner.
The Company has consistently made improvements to its
systems relating to corporate governance. Pursuant to the
regulatory requirements such as the “Measures for the
Administration of Connected Transactions of Insurance
Companies” and the “Guiding Opinions on Banking
and Insurance Institutions Strengthening the Building
of Working Systems and Mechanisms for Protection of
Consumer Rights and Interests” published by the CBIRC,
and after taking into account its actual operation, the
Company has formulated the new “Procedural Rules for
the Connected Transactions Control Committee Meetings
of the Board of Directors” and made amendments to
the “Procedural Rules for the Risk Management and
Consumer Rights Protection Committee Meetings of the
Board of Directors”.
87
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The Board of Directors and the Board of Supervisors
of the Company have conducted in-depth investigation
and research activities. The members of the Board
carried out investigation and research on AMC, received
reports concerning its overall situation, and discussed
with the management of AMC at seminars about its
business operation, investment strategy, allocation plan,
investment return, and risk control and prevention for
the purpose of further understanding the development
of the Company’s investment business and its entrusted
investments in great depth. The members of the Board
of Supervisors carried out oversight of and conducted
investigation and research on Beijing Branch, Jiangsu
Branch, Zhejiang Branch, Guangxi Zhuang Autonomous
Region Branch and other branches of the Company,
respectively, for the purposes of being more familiar
with the business development of local branches and
comprehending the circumstances associated with the
implementation by local branches of business decisions of
the Board and the management and their establishment
of risk prevention and control mechanisms, which thus
enhanced the legal compliance and risk prevention of the
Company in a practical manner.
The Company has actively organized Directors and
Supervisors to attend various training courses and
examinations. All members of the the Board of Directors
a n d t h e B o a r d o f S u p e r v i s o r s a t t e n d e d a t r a i n i n g
course on the topic of “Standards of New Insurance
Contracts and their Effects”, with the external auditors
of the Company as the speaker, which gave them the
opportunity to familiarize with and understand the impact
of the standards of new insurance contracts on the
subsequent management of the Company. Mr. Liu Huimin
and Mr. Yin Zhaojun, the Non-executive Directors of
the Company, attended the 2nd and 4th special training
courses of 2019 for directors and supervisors of listed
companies within Beijing as organized by the Listed
Companies Association of Beijing, respectively. Pursuant
to the regulatory requirements, all members of the Board
of Directors and the Board of Supervisors attended the
training programs on anti-money laundering. Pursuant
to the regulatory requirements of the industry, Mr. Li
Mingguang and Mr. Wang Junhui, the new Directors of
the Company, and Mr. Han Bing, Mr. Cao Qingyang and
Ms. Wang Xiaoqing, the new Supervisors of the Company,
sat for the examinations of the CBIRC regarding the
approval of qualifications of new directors, supervisors
and senior management officers of insurance institutions
as organized by the CBIRC.
During the Reporting Period, the Company was awarded
t h e “ 2 0 1 9 M o s t R e s p e c t e d C o m p a n y i n A s i a ” b y
Institutional Investor, an international authoritative finance
magazine, the “Excellent Award for Investor Relations of
Listed Companies” by the Hong Kong Investor Relations
Association, and the “Best Listed Company Award” by
New Fortune Magazine.
88
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Shareholders’ general meeting
The shareholders’ general meeting, as an organ of the
highest authority of the Company, exercises its duties
and functions in accordance with relevant laws. Its
duties and powers include the election, appointment and
removal of Directors and Non-employee Representative
Supervisors, review and approval of the reports of the
Board of Directors and the Board of Supervisors, review
and approval of the annual budget and final accounts of the
Company, and any other matters required by the Articles
of Association to be approved by way of resolution of the
shareholders’ general meeting. The Company ensures
that all shareholders are equally treated so as to ensure
that the rights of all shareholders are protected, including
the right of access to information in relation to, and the
right to vote in respect of, major matters of the Company.
The Company has the ability to operate and manage its
business autonomously, and is separate and independent
from its controlling shareholder in its business operations,
personnel, assets and financial matters.
Shareholders’ general meetings convened during the Reporting Period are as follows:
Session of the meeting
date of the meeting
index for websites on which
resolutions were published
date of publication
of resolutions
2018 Annual General Meeting
30 May 2019
First Extraordinary General Meeting 2019
19 December 2019
http://www.sse.com.cn
http://www.hkexnews.hk
http://www.e-chinalife.com
http://www.sse.com.cn
http://www.hkexnews.hk
http://www.e-chinalife.com
30 May 2019
19 December 2019
Fifteen proposals including: the “Proposal in relation to
the Report of the Board of Directors of the Company for
the Year 2018”, the “Proposal in relation to the Report
of the Board of Supervisors of the Company for the Year
2018”, the “Proposal in relation to the Financial Report
of the Company for the Year 2018”, the “Proposal in
relation to the Profit Distribution Plan of the Company
for the Year 2018”, the “Proposal in relation to the
R e m u n e r a t i o n o f D i r e c t o r s a n d S u p e r v i s o r s o f t h e
Company”, the “Proposal in relation to the Remuneration
of Auditors of the Company for the Year 2018 and the
Appointment of Auditors of the Company for the Year
2019”, the “Proposal in relation to the Amendments to
the ‘Articles of Association’”, the “Proposal in relation to
the General Mandate for the Issuance of H Shares by the
Company”, the “Proposal in relation to the Authorization
associated with the Overseas Issue of Senior Bonds by
the Company”, the “Proposal in relation to the Election
of Mr. Li Mingguang as an Executive Director of the Sixth
Session of the Board of Directors of the Company” and
the “Proposal in relation to the Election of Mr. Wang
Junhui as a Non-executive Director of the Sixth Session of
the Board of Directors of the Company”, were considered
and approved by a combination of onsite and online voting,
and the “Duty Report of the Independent Directors of the
Board of Directors of the Company for the Year 2018” and
the “Report on the Status of Connected Transactions and
the Execution of Connected Transactions Management
System of the Company for the Year 2018” were received
and reviewed at the 2018 Annual General Meeting held in
Beijing on 30 May 2019.
Three proposals including: the “Proposal in relation to the
Election of Mr. Zhao Peng as an Executive Director of the
Sixth Session of the Board of Directors of the Company”,
the “Proposal on the ‘Framework Agreement in relation
to Daily Connected Transactions’ of China Life AMP
Asset Management Co., Ltd.” and the “Proposal on the
Renewal of the ‘Framework Agreement in relation to Daily
Connected Transactions’ between the Company and China
Guangfa Bank Co., Ltd.” were considered and approved
by a combination of on-site and online voting at the First
Extraordinary General Meeting 2019 held in Beijing on
19 December 2019.
89
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Attendance records of Directors at the shareholders’ general meetings convened during the Reporting Period:
Name of director
Type of director
Wang Bin
Su Hengxuan
Li Mingguang
Executive Director
Executive Director
Executive Director
Yuan Changqing
Non-executive Director
Liu Huimin
Yin Zhaojun
Wang Junhui
Non-executive Director
Non-executive Director
Non-executive Director
Chang Tso Tung Stephen
Independent Director
Robinson Drake Pike
Independent Director
Tang Xin
Independent Director
Leung Oi-Sie Elsie
Independent Director
Number of
shareholders’
general meetings
required to attend
Number of
meetings
attended in
person
Number of
meetings
absent
attendance
rate
2
2
1
2
2
2
1
2
2
2
2
2
1
1
1
0
0
1
2
2
2
1
0
1
0
1
2
2
0
0
0
0
1
100%
50%
100%
50%
0
0
100%
100%
100%
100%
50%
Attendance records of the resigned Directors at the shareholders’ general meetings convened during the Reporting
Period:
Name of director
Type of director
Number of
shareholders’
general meetings
required to attend
Number of
meetings
attended in
person
Number of
meetings
absent
attendance
rate
Xu Hengping
Xu Haifeng
Executive Director
Executive Director
0
1
–
1
–
0
–
100%
90
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance bOard
The Board is the standing decision-making body of the
Company and its main duties include: performing the
function of corporate governance of the Company, convening
shareholders’ general meetings, implementing resolutions
passed at such meetings, improving the Company’s
corporate governance policies, approving the Company’s
development strategies and operation plans, formulating
and supervising the Company’s financial policies, annual
budgets and financial reports, providing an objective
evaluation on the Company’s operating results in its
financial reports and other disclosure documents, dealing
with senior management personnel matters, arranging for
Directors and senior management to attend various training
courses, attaching importance to the enhancement of their
professional quality, reviewing the compliance policies
of the Company, assessing the internal control systems
of the Company and reviewing the compliance by the
Company with the Corporate Governance Code. The day-
to-day management and operation of the Company are
delegated to the management. The responsibilities of Non-
executive Directors and Independent Directors include,
without limitation, regularly attending meetings of the Board
and the specialized Board committees of which they are
members, providing opinions at meetings of the Board and
the specialized Board committees, resolving any potential
conflict of interest, serving on the Audit Committee, the
Nomination and Remuneration Committee and other
specialized Board committees, and inspecting, supervising
and reporting on the performance of the Company. The
Board is accountable to the shareholders of the Company
and reports to them.
Currently, the Board comprises twelve members, including
four Executive Directors, four Non-executive Directors and
four Independent Directors. The number of Independent
Directors complies with the minimum requirement of three
Independent Directors and the requirement that at least
one-third of the Board be represented by Independent
Directors under the regulatory rules of the industry and its
listed jurisdictions. All members of the Board have devoted
sufficient time in dealing with the affairs of the Board and
attended the relevant training courses organized by external
regulatory authorities and the Company according to
regulatory requirements. They have referred to regulatory
documents on a regular basis so as to keep themselves
informed of the regulatory development in a timely manner.
The Company has purchased director’s liability insurances
for its Directors, which provide protection to Directors for
liabilities that might arise in the course of their performance
of duties according to law and facilitate Directors to fully
perform their duties. So far as the Company is aware, no
financial, business, family or other material relationship
exists among members of the Board of Directors, the
Board of Supervisors or the senior management, including
between Mr. Wang Bin, the Chairman of the Board, and
Mr. Su Hengxuan, the President of the Company.
In 2019, Independent Directors of the Company possessed
extensive experience in various fields, such as macro-
economics, finance and insurance, legal compliance,
accounting and auditing. The Company also complies with
the requirement of the Listing Rules of the HKSE that at
least one of its Independent Directors has appropriate
professional qualifications or accounting qualifications
or related financial management expertise. As required
under the Listing Rules of the SSE and the HKSE, the
Company has obtained a written confirmation from
each of its Independent Directors in respect of their
independence, and the Company is of the opinion that all of
the Independent Directors are independent of the Company
and strictly perform their duties as Independent Directors.
Pursuant to the Articles of Association, Directors shall be
elected at the shareholders’ general meeting for a term of
three years and may be re-elected on expiry of the three-
year term. However, Independent Directors may not serve
for more than six years.
Meetings of the Board are held both on a regular and an
ad-hoc basis. Regular meetings are convened at least four
times a year for the examination and approval of proposals,
such as annual report, interim report, quarterly reports,
related financial reports, and major business operations of
the year. Meetings are convened by the Chairman of the
Board and a notice is given to all Directors 14 days before
such meetings. Agendas and related documents are sent
to the Directors at least 3 days prior to such meetings. In
2019, all notices, agendas and related documents in respect
of such regular Board meetings were sent in compliance
with the above requirements. By fully reviewing all the
relevant proposals, the Board has confirmed that the
information contained in its periodic reports and financial
reports is true, accurate and complete and contains no
false representations, misleading statements or material
omissions, and no event or situation which would have
material adverse impacts on the Company’s ongoing
operation has been found.
91
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Regular Board meetings are held mainly to review the
quarterly, interim or annual reports of the Company
and to deal with other related matters. The practice
of obtaining Board consent through the circulation of
written resolutions does not constitute a regular Board
meeting. An ad-hoc Board meeting may be convened in
urgent situations if requisitioned by any of the following:
shareholders representing over one-tenth of voting
shares, Directors constituting more than one-third of the
total number of Directors, the Board of Supervisors, more
than two Independent Directors, the Chairman of the
Board or the President of the Company. If the resolution
to be considered at such ad-hoc Board meetings has been
circulated to all the Directors and more than half of the
Directors having voting rights approve such resolution by
signing the resolution in writing, the ad-hoc Board meeting
need not be physically convened and such resolution in
writing shall become an effective resolution.
If a Director is materially interested in a matter to be
considered by the Board, the Director having such conflict
of interest shall have no voting right on the matter to be
considered and shall not be counted in the quorum for the
Board meeting. All Directors shall have access to the advice
and services of the Board Secretary and the Company
Secretary. Detailed minutes of Board meetings regarding
matters considered by the Board and decisions reached,
including any concerns raised by Directors or dissenting
views expressed, are kept by the Board Secretary. Minutes
of Board meetings are available upon reasonable notice for
inspection and comment upon by Directors.
Currently, the sixth session of the Board comprises the
following members: Mr. Wang Bin, Mr. Su Hengxuan,
Mr. Li Mingguang and Mr. Zhao Peng, all being Executive
Directors, Mr. Yuan Changqing, Mr. Liu Huimin, Mr. Yin
Zhaojun and Mr. Wang Junhui, all being Non-executive
Directors, and Mr. Chang Tso Tung Stephen, Mr. Robinson
Drake Pike, Mr. Tang Xin and Ms. Leung Oi-Sie Elsie, all
being Independent Directors, with Mr. Wang Bin as the
Chairman of the Board. In January 2019, Mr. Xu Hengping
resigned from his position as a Director due to the reason
of age. In June 2019, Mr. Xu Haifeng resigned from his
position as a Director due to the reason of age.
The Board of Directors of the Company has conducted in-
depth investigation and research activities. In May 2019,
the members of the Board carried out investigation and
research on AMC, received reports concerning its overall
situation, and discussed with the management of AMC
at seminars about its business operation, investment
strategy, allocation plan, investment return, and risk
control and prevention. Through the investigation and
research, the Board of Directors further understood the
development of the Company’s investment business and
its entrusted investments in great depth and examined
the effectiveness of the implementation of decisions of
the Board, which thus enhanced the legal compliance and
risk prevention of the Company in a practical manner. In
2019, all members of the the Board of Directors attended
a training course on the topic of “Standards of New
Insurance Contracts and their Effects”, with the external
auditors of the Company as the speaker, which gave
them the opportunity to familiarize with and understand
the impact of the standards of new insurance contracts
on the subsequent management of the Company. Mr. Liu
Huimin and Mr. Yin Zhaojun, the Non-executive Directors
of the Company, attended the 2nd and 4th special
training courses of 2019 for directors and supervisors
of listed companies within Beijing as organized by the
Listed Companies Association of Beijing, respectively.
Pursuant to the regulatory requirements, all members of
the the Board of Directors attended the training programs
on anti-money laundering. Pursuant to the regulatory
requirements of the industry, Mr. Li Mingguang and
Mr. Wang Junhui, the new Directors of the Company,
sat for the examinations of the CBIRC regarding the
approval of qualifications of new directors, supervisors
and senior management officers of insurance institutions
as organized by the CBIRC.
The Company has consistently improved its corporate
governance structure, regulated the acts of Directors in
performing their duties, and optimized the mechanism
for s upervi si ng a nd eval uating th e p erf orm anc e of
duties by Directors. Pursuant to the “Measures for the
Administration of Independent Directors of Insurance
Institutions” published by the CBIRC, the “Operational
Guidance for Evaluating the Performance of Duties
by Directors of Insurance Companies” issued by the
Insurance Association of China, the “Provisional Measures
for Evaluating the Performance of Duties by Directors” of
the Company and other requirements, and after taking into
account the actual situation of its corporate governance,
the Company conducted an evaluation of the performance
of duties by Directors. Based on the self-assessment of
Directors and the evaluation of the Board of Supervisors,
all members of the Board of the Company were evaluated
as competent in their performance of duties in 2019.
92
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Meetings and attendance
In 2019, five regular Board meetings and seven ad-hoc Board meetings were held by the sixth session of the Board. The
attendance records of individual Directors are as follows:
Name of director
Type of director
Number of
meetings
required
to attend
Number of
meetings
attended
in person
Number of
meetings
attended
by proxies
Number of
meetings
absent
rate of
attendance
in person
Wang Bin
Su Hengxuan
Li Mingguang
Executive Director
Executive Director
Executive Director
Yuan Changqing
Non-executive Director
Liu Huimin
Yin Zhaojun
Non-executive Director
Non-executive Director
Wang Junhui
Non-executive Director
Chang Tso Tung Stephen
Independent Director
Robinson Drake Pike
Independent Director
Tang Xin
Independent Director
Leung Oi-Sie Elsie
Independent Director
Notes:
12
12
3
12
12
12
3
12
12
12
12
9
11
3
10
9
10 Note 5
3
12 Note 7
12 Note 8
12 Note 9
11 Note 10
3 Note 1
1 Note 2
0
2 Note 3
3 Note 4
2 Note 6
0
0
0
0
1 Note 11
0
0
0
0
0
0
0
0
0
0
0
75%
91.7%
100%
83.3%
75%
83.3%
100%
100%
100%
100%
91.7%
Whether
the directors
failed to
attend two
consecutive
meetings
in person
No
No
No
No
Yes
No
No
No
No
No
No
1. At the sixteenth meeting of the sixth session of the Board held on 23 July 2019, Mr. Wang Bin gave written authorization for Mr. Su Hengxuan to act as
his proxy to attend, vote at and chair the meeting; at the eighteenth meeting of the sixth session of the Board held on 22 August 2019, Mr. Wang Bin
gave written authorization for Mr. Su Hengxuan to act as his proxy to attend, vote at and chair the meeting; at the twentieth meeting of the sixth session
of the Board held on 29 October 2019, Mr. Wang Bin gave written authorization for Mr. Su Hengxuan to act as his proxy to attend, vote at and chair the
meeting.
2. At the fourteenth meeting of the sixth session of the Board held on 30 May 2019, Mr. Su Hengxuan gave written authorization for Mr. Xu Haifeng to act
as his proxy to attend and vote at the meeting.
3. At the twelfth meeting of the sixth session of the Board held on 27 March 2019, Mr. Yuan Changqing gave written authorization for Mr. Tang Xin to act as
his proxy to attend and vote at the meeting; at the twentieth meeting of the sixth session of the Board held on 29 October 2019, Mr. Yuan Changqing
gave written authorization for Mr. Wang Junhui to act as his proxy to attend and vote at the meeting.
4. At the twelfth meeting of the sixth session of the Board held on 27 March 2019, Mr. Liu Huimin gave written authorization for Mr. Yin Zhaojun to act as his
proxy to attend and vote at the meeting; at the thirteenth meeting of the sixth session of the Board held on 25 April 2019, Mr. Liu Huimin gave written
authorization for Mr. Yin Zhaojun to act as his proxy to attend and vote at the meeting; and at the twentieth meeting of the sixth session of the Board
held on 29 October 2019, Mr. Liu Huimin gave written authorization for Mr. Robinson Drake Pike to act as his proxy to attend and vote at the meeting.
5. At the twentieth meeting of the sixth session of the Board held on 29 October 2019, Mr. Yin Zhaojun attended the meeting by telephony.
6. At the eighteenth meeting of the sixth session of the Board held on 22 August 2019, Mr. Yin Zhaojun gave written authorization for Mr. Liu Huimin to act
as his proxy to attend and vote at the meeting; at the twenty-first meeting of the sixth session of the Board held on 19 December 2019, Mr. Yin Zhaojun
gave written authorization for Mr. Yuan Changqing to act as his proxy to attend and vote at the meeting.
7. At the sixteenth meeting of the sixth session of the Board held on 23 July 2019, Mr. Chang Tso Tung Stephen attended the meeting by telephony.
8. At the sixteenth meeting of the sixth session of the Board held on 23 July 2019, Mr. Robinson Drake Pike attended the meeting by telephony.
9. At the twentieth meeting of the sixth session of the Board held on 29 October 2019, Mr. Tang Xin attended the meeting by telephony.
10. At the twentieth meeting of the sixth session of the Board held on 29 October 2019, Ms. Leung Oi-Sie Elsie attended the meeting by telephony; at the
twenty-first meeting of the sixth session of the Board held on 19 December 2019, Ms. Leung Oi-Sie Elsie attended the meeting by telephony.
11. At the sixteenth meeting of the sixth session of the Board held on 23 July 2019, Ms. Leung Oi-Sie Elsie gave written authorization for Mr. Tang Xin to
act as her proxy to attend and vote at the meeting.
93
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance In 2019, the attendance records of the resigned Directors of of the Company at the Board meetings are as follows:
Name of director
Type of director
Number of
meetings
required
to attend
Number of
meetings
attended
in person
Number of
meetings
attended
by proxies
Number of
meetings
absent
rate of
attendance
in person
Whether
the directors
failed to
attend two
consecutive
meetings
in person
Xu Hengping
Executive Director
Xu Haifeng
Executive Director
1
6
1
5
0
1Note
0
0
100%
83.3%
No
No
Note: At the thirteenth meeting of the sixth session of the Board held on 25 April 2019, Mr. Xu Haifeng gave written authorization for Mr. Su Hengxuan to
act as his proxy to attend and vote at the meeting.
Performance of duties by Independent Directors
In 2019, all Independent Directors of the Company
possessed extensive experience in various fields, such
a s m a c r o - e c o n o m i c s , f i n a n c e a n d i n s u r a n c e , l e g a l
compliance, accounting and auditing. They satisfied the
criteria for Independent Directors under the regulatory
r u l e s o f t h e C o m p a n y ’ s l i s t e d j u r i s d i c t i o n s . T h e
Independent Directors of the Company performed their
duties pursuant to the Articles of Association and the
provisions and requirements of the listing rules of the
Company’s listed jurisdictions.
A l l I n d e p e n d e n t D i r e c t o r s d i l i g e n t l y f u l f i l l e d t h e i r
responsibilities and faithfully performed their duties by
attending meetings of the Board and the specialized
Board committees in 2019, examining and approving
the Company’s business development, its financial
management and connected transactions, participating
in the establishment of specialized Board committees,
providing professional and constructive advice in respect
of major decisions of the Company, seriously listening
to the reports from relevant personnel, understanding
the daily operations and any possible operational risks of
the Company in a timely manner, and expressing their
opinions and exercising their functions and powers at
Board meetings, thus actively performing their duties
as Independent Directors in an effective manner. At the
annual special meeting between the Chairman and the
Independent Directors, all Independent Directors put
forward their own views and opinions on various aspects
such as the macro-environment, modern economy and
industry development, policies of the insurance industry,
and corporate governance, etc., and gave advices and
recommendations on matters including the development
strategy of the Company, development of investment
business, brand and image building, team building, and
coordinated development with the businesss of overseas
companies. The Board attached great importance to
opinions and advice from Independent Directors, actively
strengthened its communication with them and adopted
their advice after careful deliberation and discussion.
I n 2 0 1 9 , t h e C o m p a n y p r o v i d e d v a r i o u s m a t e r i a l s
to Independent Directors, which facilitated them to
comprehend information associated with the insurance
industry. All Independent Directors obtained information
relating to the operation and management of the Company
through various channels, which therefore formed the
basis of their scientific and prudent decisions.
94
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance In 2019, the Independent Directors of the Company
and the representatives from the external auditors
convened four special meetings to communicate and
discuss on matters including annual audit, new rules of
the HKSE on ESG Report, and contents and impacts of
IFRS17. The Independent Directors also met with the
person-in-charge of the relevant departments, such as
the Strategy and Planning Department, the Investment
Management Center, the Finance Department, the
Actuarial Department, the Audit Department, and the
Culture and Brand Department of the Company, to discuss
business development, financial budget, strategic and
asset allocation, and work relating to the audit of the
Company. In May 2019, Mr. Chang Tso Tung Stephen,
Mr. Robinson Drake Pike, Mr. Tang Xin and Ms. Leung
Oi-Sie Elsie, all being the Independent Directors of the
Company, carried out investigation and research on AMC,
received reports concerning its overall situation, and
discussed with the management of AMC at seminars
about its business operation, investment strategy,
allocation plan, investment return, and risk control and
prevention for the purpose of further understanding the
development of the Company’s investment business and
its entrusted investments in great depth and examining
the effectiveness of the implementation of decisions of
the Board, which thus enhanced the legal compliance
a n d r i s k p r e v e n t i o n o f t h e C o m p a n y i n a p r a c t i c a l
manner. According to the arrangement of the Board for
annual training courses, all Independent Directors of
the Company attended a training course on the topic
of “Standards of New Insurance Contracts and their
Effects”, with the external auditors of the Company as the
speaker, which gave them the opportunity to familiarize
with and understand the impact of the standards of new
insurance contracts on the subsequent management of
the Company. All Independent Directors attended the
training programs on anti-money laundering for directors,
supervisors and senior management officers as organized
by the Company.
During the Reporting Period, no Independent Director has
raised any objection against the proposals and matters
considered by the Board of the Company.
ChairmaN aNd PrESidENT
During the Reporting Period, Mr. Wang Bin has served as
the Chairman of the Board of the Company. The Chairman
of the Board is the legal representative of the Company,
primarily responsible for convening and presiding over
Board meetings, ensuring the implementation of Board
resolutions, attending annual general meetings and
arranging attendance by Chairmen/Chairpersons of Board
committees to answer questions raised by shareholders,
signing securities issued by the Company and other
important documents, providing leadership for the Board
to ensure that the Board works effectively and performs
its responsibilities, encouraging all Directors to make
a full and active contribution to the Board’s affairs,
and promoting a culture of openness and debate. The
Chairman of the Board is accountable to and reports to the
Board. During the Reporting Period, Mr. Su Hengxuan has
served as the President of the Company. The President is
responsible for the day-to-day operations of the Company,
mainly including implementing strategies, policies,
operation plans and investment schemes approved by the
Board, formulating the Company’s internal management
structure and fundamental management policies, drawing
up basic rules and regulations of the Company, submitting
to the Board any requests for appointment or removal of
senior management officers and exercising other rights
granted to him under the Articles of Association and by the
Board. The President is fully accountable to the Board for
the operations of the Company.
bOard Of SuPErviSOrS
P u r s u a n t t o t h e C o m p a n y L a w a n d t h e A r t i c l e s o f
Association, the Company has established a Board of
Supervisors. The Board of Supervisors performs the
following duties in accordance with the Company Law, the
Articles of Association and the “Procedural Rules for the
Board of Supervisors Meetings”: to examine the finances
of the Company; to monitor whether the Directors,
President, Vice Presidents and other senior management
officers of the Company have acted in contravention
of laws, regulations, the Articles of Association and
resolutions of the shareholders’ general meetings when
discharging their duties; to review the financial information
of the Company such as financial reports, results reports
and profit distribution plans to be approved by the Board;
to propose the convening of extraordinary shareholders’
general meetings, to propose resolutions at shareholders’
g e n e r a l m e e t i n g s a n d t o p e r f o r m a n y o t h e r d u t i e s
under the laws, regulations and regulatory rules of the
Company’s listed jurisdictions.
95
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance The Board of Supervisors consists of Non-employee
R e p r e s e n t a t i v e S u p e r v i s o r s , s u c h a s s h a r e h o l d e r
r e p r e s e n t a t i v e s , a n d E m p l o y e e R e p r e s e n t a t i v e
Supervisors, of which the Employee Representative
Supervisors shall not be less than one-third of the Board of
Supervisors. Non-employee Representative Supervisors,
such as shareholder representatives, shall be elected
and removed by a shareholders’ general meeting while
Employee Representative Supervisors shall be elected and
removed by employees of the Company in a democratic
manner.
T h e B o a r d o f S u p e r v i s o r s i s a c c o u n t a b l e t o t h e
shareholders and reports its work to the shareholders’
general meeting according to relevant laws. It is also
responsible for appraising the Company’s operations,
financial reports, connected transactions and internal
control, etc. during the Reporting Period.
Meetings of the Board of Supervisors are convened by
the Chairman of the Board of Supervisors. According to
the Articles of Association, the Company formulated the
“Procedural Rules for the Board of Supervisors Meetings”
and established protocols for the Board of Supervisors
meetings. Board of Supervisors meetings are categorized
as regular or ad-hoc meetings in accordance with the
degree of pre-planning involved. There are at least three
regular meetings each year, mainly to adopt and review
financial reports and periodic reports, and examine the
financial condition and internal control of the Company.
Ad-hoc meetings are convened when necessary.
The sixth session of the Board of Supervisors of the
Company comprises Mr. Jia Yuzeng, Mr. Luo Zhaohui,
Mr. Han Bing, Mr. Cao Qingyang and Ms. Wang Xiaoqing,
with Mr. Jia Yuzeng acting as the Chairman of the Board of
Supervisors. Mr. Jia Yuzeng, Mr. Luo Zhaohui and Mr. Han
Bing are Non-employee Representative Supervisors,
whereas Mr. Cao Qingyang and Ms. Wang Xiaoqing
are Employee Representative Supervisors. In February
2019, Mr. Shi Xiangming resigned from his position as
a Non-employee Representative Supervisor due to the
adjustment of work arrangements. In July 2019, Mr. Tang
Yong resigned from his position as a Non-employee
Representative Supervisor due to the adjustment of work
arrangements. In July 2019, Mr. Huang Xin resigned from
his position as an Employee Representative Supervisor
due to the adjustment of work arrangements. In January
2020, Mr. Song Ping resigned from his position as
an Employee Representative Supervisor due to the
adjustment of work arrangements.
Meetings and attendance
In 2019, five meetings were held by the sixth session of the Board of Supervisors. Attendance records of individual
Supervisors are as follows:
Name of Supervisor
Jia Yuzeng
Luo Zhaohui
Han Bing
Cao Qingyang
Song Ping
Notes:
Number of
meetings
attended
attendance
rate
5/5
5/5Note 1
3/3
3/3
2/5Note 2
100%
100%
100%
100%
40%
1. At the sixth meeting of the sixth session of the Board of Supervisors held on 25 April 2019, Mr. Luo Zhaohui attended the meeting by telephony.
2. At the seventh meeting of the sixth session of the Board of Supervisors held on 22 August 2019, Mr. Song Ping gave written authorization for Mr. Cao
Qingyang to act as his proxy to attend and vote at the meeting; at the eighth meeting of the sixth session of the Board of Supervisors held on 29 October
2019, Mr. Song Ping gave written authorization for Mr. Cao Qingyang to act as his proxy to attend and vote at the meeting; at the ninth meeting of the
sixth session of the Board of Supervisors held on 19 December 2019, Mr. Song Ping gave written authorization for Mr. Cao Qingyang to act as his proxy
to attend and vote at the meeting.
96
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance In 2019, the attendance records of the resigned Supervisors of of the Company at the meetings of the Board of
Supervisors are as follows:
Name of Supervisor
Shi Xiangming
Tang Yong
Huang Xin
Number of
meetings
attended
0/0
2/2
0/2Note
attendance
rate
–
100%
0
Note: At the fifth meeting of the sixth session of the Board of Supervisors held on 27 March 2019, Mr. Huang Xin gave written authorization for Mr. Luo
Zhaohui to act as his proxy to attend and vote at the meeting; at the sixth meeting of the sixth session of the Board of Supervisors held on 25 April
2019, Mr. Huang Xin gave written authorization for Mr. Song Ping to act as his proxy to attend and vote at the meeting.
The Board of Supervisors had no objection in
respect of any matters under its supervision
during the Reporting Period.
audiT COmmiTTEE
The Company established its Audit Committee on 30
June 2003. In 2019, the Audit Committee comprised
only Independent Directors of the Company. Currently,
the Audit Committee of the sixth session of the Board
comprises the Independent Directors, Mr. Robinson Drake
Pike, Mr. Chang Tso Tung Stephen and Mr. Tang Xin, with
Mr. Robinson Drake Pike acting as the Chairman.
Activities of the Board of Supervisors during the
Reporting Period
For the activities carried out by the Board of Supervisors
during the Reporting Period, please refer to the “Report of
the Board of Supervisors” in this annual report.
All members of the Audit Committee have extensive
experience in financial matters. The principal duties of
the Audit Committee are to review and supervise the
preparation of the Company’s financial reports, assess the
effectiveness of the Company’s internal control system,
supervise the Company’s internal audit system and its
implementation, and recommend the engagement or
replacement of external auditors. The Audit Committee is
also responsible for communications between the internal
and external auditors and the establishment of the internal
reporting mechanism of the Company.
Meetings and attendance
In 2019, six meetings were held by the Audit Committee of the sixth session of the Board. Attendance records of
individual members are as follows:
Name of member
Position
Robinson Drake Pike
Independent Director, Chairman of the Audit Committee
of the sixth session of the Board
Chang Tso Tung Stephen
Independent Director, member of the Audit Committee
of the sixth session of the Board
Tang Xin
Independent Director, member of the Audit Committee
of the sixth session of the Board
Number of
meetings
attended
attendance
rate
6/6
6/6
100%
100%
4/6Note
66.7%
Note: At the sixth meeting of the Audit Committee of the sixth session of the Board held on 26 March 2019, Mr. Tang Xin gave written authorization for
Mr. Robinson Drake Pike to act as his proxy to attend and vote at the meeting; at the seventh meeting of the Audit Committee of the sixth session
of the Board of Directors held on 24 April 2019, Mr. Tang Xin gave written authorization for Mr. Robinson Drake Pike to act as his proxy to attend and
vote at the meeting.
97
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Performance of duties by the Audit Committee
In 2019, the Audit Committee performed its relevant
d u t i e s a n d f u n c t i o n s i n s t r i c t c o m p l i a n c e w i t h t h e
“Procedural Rules for the Audit Committee Meetings”.
All members of the Audit Committee performed their
o b l i g a t i o n s i n a r e s p o n s i b l e m a n n e r a n d r e v i e w e d
the proposals in relation to the audit of the Company,
its financial reports, connected transactions, internal
control and legal compliance. During meetings of the
Audit Committee, all members actively participated in
discussions and gave guiding opinions on any proposals
considered and discussed at the meetings.
Reviewing and approving financial reports. The Audit
C o m m i t t e e , a c c o r d i n g t o i t s d u t i e s , r e v i e w e d a n d
approved annual, interim and quarterly financial reports of
the Company. The Audit Committee was of the view that
the financial reports of the Company reflected the overall
situation of the Company in a true, accurate and complete
manner, and gave its written opinion in this regard. By
reviewing and monitoring the completeness of financial
statements, annual report and accounts, interim report
and quarterly reports of the Company, and examining
significant matters such as financial statements and
reports, the Audit Committee guaranteed the accuracy
and completeness of the financial information disclosed
by the Company and the consistency of its financial
reports. Prior to the audit conducted by the accounting
firm and the review of the annual report, the Audit
Committee communicated the relevant situations with
the auditors and listened to the report in connection with
the arrangement of the audit. After a preliminary opinion
on audit was issued by the accounting firm, the Audit
Committee commenced in-depth communications with it
so as to understand whether there were any issues arisen
during the audit.
Reviewing connected transactions. In 2019, the Audit
Committee reviewed the proposal on the framework
agreement in relation to daily connected transactions of
AMP and the proposal on the renewal of the framework
agreement in relation to daily connected transactions
between the Company and Guangfa Bank, and submitted
it to the Board and shareholders’ general meetings
for approval; and listened to the report on the list of
connected parties of the Company on a regular basis. The
Audit Committee reviewed the audit report on connected
transactions for conscientious implementation of laws and
regulations with respect to connected transactions. The
Company entered into written agreements in respect of
all new connected transactions, the formalities of which
were fully completed. The contents of the agreements
were in compliance with law, and their approval and
disclosure procedures were in compliance with the
regulatory requirements. Hence, the Company better
performed its obligations as a listed company pursuant to
the regulatory requirements of its listed jurisdictions.
Assessing the work of and strengthening communications
with external auditors. Besides regular meetings, the
Audit Committee convened communication meetings
in advance with external auditors for several times so
as to discuss the annual audit plan of the Company,
determine the service scope of the annual audit, listen
to the report given by the auditors with respect to the
results of the audit on and review of periodic financial
reports of the Company, and gave opinions and advice
on the agreed-upon procedures proposed annually and
quarterly by the external auditors of the Company and
the pre-approval of the scope of additional services.
Through communications, the Audit Committee enhanced
the effectiveness of the internal control of the Company
and further supervised the performance of duties by the
external auditors in a diligent and responsible way.
98
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Assessing the effectiveness of internal control and
m o n i t o r i n g t h e o p e r a t i o n o f t h e C o m p a n y t o b e i n
compliance with law. The Audit Committee provided
guidance to the Company on the management of internal
control, devised the working plan for internal control
assessment, reviewed the work report on assessment
of internal control, and inspected the rectification of
problems identified in the internal control pursuant
to Section 404 of the U.S. Sarbanes-Oxley Act. The
Audit Committee earnestly performed its duties and
responsibilities and monitored the Company to carry out
its work in compliance with laws and regulations pursuant
to the relevant requirements of the CBIRC, the SSE and
the HKSE. As required by its duties and responsibilities,
the Audit Committee reviewed the annual and half-year
compliance reports of the Company to ensure that its work
was conducted strictly according to the relevant regulatory
requirements in a reasonable and efficient manner.
Examining the internal audit functions of the Company. In
2019, the Audit Committee reviewed proposals including
the proposal on the 2018 internal audit work, and the
proposal on the internal audit work report for the first
half of 2019, and convened communication meetings
in advance with the Audit Department of the Company,
with a view to communicating any matters of concern in
an effective manner, further understanding the duties of
the Company’s audit departments and supervising the
effectiveness of the internal audit function. The Audit
Committee was of the view that the internal audit function
of the Company was effective during the Reporting
Period.
Conducting investigation and research activities. In
order to better understand the external investment of
the Company and the operation of AMC, Mr. Robinson
Drake Pike, the Chairman of the Audit Committee,
and Mr. Chang Tso Tung Stephen and Mr. Tang Xin,
t h e m e m b e r s o f t h e A u d i t C o m m i t t e e , c a r r i e d o u t
investigation and research on AMC in May 2019, received
reports concerning its overall situation, and discussed
with the management of AMC at seminars about its
business operation, internal control and internal audit
for the purpose of further understanding and examining
the effectiveness of internal control of the Company’s
investment business.
NOmiNaTiON aNd rEmuNEraTiON COmmiTTEE
The Company established the Management Training
and Remuneration Committee on 30 June 2003. On 16
March 2006, the Board resolved to change the name of
the Management Training and Remuneration Committee
to the Nomination and Remuneration Committee, with
a majority of Independent Directors on the committee.
Currently, the Nomination and Remuneration Committee
of the sixth session of the Board comprises Mr. Tang Xin
and Mr. Robinson Drake Pike, the Independent Directors,
and Mr. Yuan Changqing, a Non-executive Director, with
Mr. Tang Xin acting as the Chairman.
The Nomination and Remuneration Committee is mainly
responsible for reviewing the structure of the Board,
its number of members and composition and drawing
up plans for the appointment, succession and appraisal
c r i t e r i a o f D i r e c t o r s a n d s e n i o r m a n a g e m e n t . T h e
committee is also responsible for formulating training
and remuneration policies for the senior management
of the Company. The Nomination and Remuneration
Committee, as an advisor to the Board on the nomination
of Directors, shall first discuss and agree on the list
o f c a n d i d a t e s t o b e n o m i n a t e d a s n e w D i r e c t o r s ,
following which such candidates are recommended to
the Board. The Board shall then determine whether
such candidates’ appointments should be proposed for
approval at the shareholders’ general meeting. The major
criteria considered by the Nomination and Remuneration
Committee and the Board are educational background,
management and research experience in the insurance
i n d u s t r y , a n d t h e c a n d i d a t e s ’ c o m m i t m e n t t o t h e
Company. As to the nomination of Independent Directors,
the Nomination and Remuneration Committee will give
special consideration to the independence of the relevant
candidates.
T h e N o m i n a t i o n a n d R e m u n e r a t i o n C o m m i t t e e
d e t e r m i n e s , w i t h d e l e g a t e d r e s p o n s i b i l i t y , t h e
remuneration packages of all Executive Directors and
senior management officers. The fixed salary of the
E x e c u t i v e D i r e c t o r s a n d o t h e r m e m b e r s o f s e n i o r
management are determined in accordance with market
levels and their respective positions, and the amount
of their performance-related bonuses is determined
according to the results of performance appraisals.
Directors’ fees and the volume of share appreciation rights
to be granted are determined with reference to market
levels and the actual circumstances of the Company.
99
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Meetings and attendance
In 2019, six meetings were held by the Nomination and Remuneration Committee of the sixth session of the Board.
Attendance records of individual members are as follows:
Name of member
Position
Tang Xin
Robinson Drake Pike
Yuan Changqing
Notes:
Independent Director, Chairman of the Nomination
and Remuneration Committee of the sixth session
of the Board
Independent Director, member of the Nomination
and Remuneration Committee of the sixth session
of the Board
Non-executive Director, member of the Nomination
and Remuneration Committee of the sixth session
of the Board
Number of
meetings
attended
attendance
rate
5/6Note 1
83.3%
6/6Note 2
100%
5/6Note 3
83.3%
1. At the fifth meeting of the Nomination and Remuneration Committee of the sixth session of the Board held on 24 April 2019, Mr. Tang Xin gave written
authorization for Mr. Robinson Drake Pike to act as his proxy to attend and vote at the meeting.
2. At the seventh meeting of the Nomination and Remuneration Committee of the sixth session of the Board held on 23 July 2019, Mr. Robinson Drake
Pike attended the meeting by telephony.
3. At the fourth meeting of the Nomination and Remuneration Committee of the sixth session of the Board held on 26 March 2019, Mr. Yuan Changqing
gave written authorization for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
Performance of duties by the Nomination and
Remuneration Committee
In 2019, the Nomination and Remuneration Committee
performed its relevant duties and functions in strict
compliance with the “Procedural Rules for the Nomination
and Remuneration Committee Meetings”. All members
o f t h e N o m i n a t i o n a n d R e m u n e r a t i o n C o m m i t t e e
performed their obligations in a responsible manner and
reviewed the proposals on the candidates for Directors,
nomination of senior management officers, business
objectives and appraisal results, the remuneration of
Directors, Supervisors and senior management, and the
report on the duty performance of the Audit Committee
and the Nomination and Remuneration Committee.
During meetings of the Nomination and Remuneration
C o m m i t t e e , a l l m e m b e r s a c t i v e l y p a r t i c i p a t e d i n
discussions and gave guiding opinions on the proposals
considered and discussed at the meetings.
Nomination and proposed appointment of Directors and
senior management officers of the Company and the
Board diversity policy. The Company firmly believes
that the Board diversity may enhance the decision-
making capability of the Board, and considers the Board
diversity as a key factor for maintaining a sound corporate
governance standard and achieving the sustainable
development of the Company. In accordance with the
“Procedural Rules for the Nomination and Remuneration
Committee Meetings” and the Board diversity policy,
the Nomination and Remuneration Committee seriously
reviewed the structure of the Board, its number of
members and composition (taking into account diversity
factors, including gender, age, cultural and educational
background, skills, knowledge and experience), fully
reviewed the professional qualifications and industrial
background of the candidates for Directors and members
of the Board committees and the independence of
100
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Independent Directors, and submitted the opinions
in relation thereto to the Board, conducted a careful
assessment on the qualifications, skills, knowledge and
experience of candidates for senior management officers
to ensure that the candidates met the requirements
set by the Company, and submitted a review opinion
t o t h e B o a r d . T h e N o m i n a t i o n a n d R e m u n e r a t i o n
Committee agreed to submit such proposals to the Board
for consideration. In 2019, after fully considering the
educational background of Mr. Li Mingguang, Mr. Wang
Junhui and Mr. Zhao Peng and their experience in product
actuarial function, assets and liabilities management,
strategic investment and financial management and
taking into account the qualification requirements for
appointment as members of the specialized Board
c o m m i t t e e s , t h e N o m i n a t i o n a n d R e m u n e r a t i o n
Committee reviewed the proposals in relation to the
nomination of Mr. Li Mingguang, Mr. Wang Junhui and
Mr. Zhao Peng as the candidates for Directors of the
sixth session of the Board, the members of the Risk
Management and Consumer Rights Protection Committee
of the sixth session of the Board and the members of
the Strategy and Assets and Liabilities Management
Committee of the sixth session of the Board, respectively.
The above nominations were considered and approved by
the Board.
The members of the sixth session of the Board of the
Company possess extensive experience in various
fields, such as finance and insurance, macro-economics,
financial accounting, law and management. Currently, the
diversified composition of the sixth session of the Board is
as follows:
Directors by type:
Executive director
Non-executive director
independent director
4 persons
4 persons
4 persons
Directors by gender:
Directors by age:
male
11 persons
female
1 person
40-49 years old
50-59 years old
60-69 years old
Over 70 years old
3 persons
5 persons
2 persons
2 persons
Proposing remuneration policy of Directors, Supervisors
and senior management officers of the Company. The
Nomination and Remuneration Committee took into
account various factors such as business development
m a n a g e m e n t , s t r a t e g i c i n v e s t m e n t d e c i s i o n s , a n d
c o r p o r a t e g o v e r n a n c e m a n a g e m e n t a n d c o n t r o l ,
c a r e f u l l y e x a m i n e d a n d d e t e r m i n e d t h e s p e c i f i c
remuneration packages of all Executive Directors and
senior management officers, approved the terms of
service contracts between the Company and each of
the Executive Directors, Non-executive Directors and
Independent Directors and pushed forward the signing of
service contracts between the Company and all Directors,
defined the rights, obligations and remunerations of
Directors, and seriously appraised the performance of
Directors in the discharge of their duties.
Carrying out the performance appraisal of Directors,
Supervisors and senior management officers of the
Company. The Nomination and Remuneration Committee
reviewed proposals such as the results of evaluating the
performance of duties by Directors for 2018, the results
of performance appraisal of senior management officers
for 2018 and the performance target contract of senior
management for 2019, the remuneration of Directors and
Supervisors of the Company, and the remuneration of
senior management officers of the Company, and made
recommendations to the Board in respect of matters such
as the determination of performance target, performance
appraisal procedures and results.
101
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Conducting investigation and research activities. In
order to better understand the external investment of
the Company and the operation of AMC, Mr. Tang Xin,
the Chairman of the Nomination and Remuneration
Committee, and Mr. Robinson Drake Pike, a member of
the Nomination and Remuneration Committee, carried out
investigation and research on AMC in May 2019, received
reports concerning its overall situation, and discussed with
the management of AMC at seminars about its business
operation, organizational structure, staff composition
and remuneration system for the purpose of further
understanding the remuneration standard and appraisal
incentive measures of AMC.
riSK maNagEmENT aNd CONSumEr righTS
PrOTECTiON COmmiTTEE
T h e C o m p a n y e s t a b l i s h e d i t s R i s k M a n a g e m e n t
C o m m i t t e e o n 3 0 J u n e 2 0 0 3 . I n D e c e m b e r 2 0 1 9 ,
the “Proposal in relation to the Change to the Risk
Management and Consumer Rights Protection Committee
of the Board of Directors” was considered and approved
at the twenty-first meeting of the sixth session of
the Board, pursuant to which the Risk Management
Committee was renamed as the Risk Management and
Consumer Rights Protection Committee, the additional
function of management of consumers’ rights protection
w a s i n c l u d e d i n t h e f u n c t i o n s o f t h e o r i g i n a l R i s k
Management Committee, and corresponding changes and
amendments were made in such areas as the functions
and responsibilities of the committee and the procedural
rules of the committee. Currently, the Risk Management
and Consumer Rights Protection Committee of the sixth
session of the Board comprises Ms. Leung Oi-Sie Elsie, an
Independent Director, Mr. Liu Huimin and Mr. Yin Zhaojun,
the Non-executive Directors, and Mr. Li Mingguang, an
Executive Director, with Ms. Leung Oi-Sie Elsie acting
as the Chairperson. In January 2019, Mr. Xu Hengping
resigned from his position as a member of the Risk
Management Committee of the sixth session of the Board
due to the reason of age.
The Risk Management and Consumer Rights Protection
C o m m i t t e e i s m a i n l y r e s p o n s i b l e f o r f o r m u l a t i n g
the Company’s system of risk control benchmarks,
establishing well-developed risk management and internal
control systems and the system for the management of
consumer rights protection, examining and reviewing the
Company’s risk preference, risk tolerance and the work
reports from the senior management and the Consumer
Rights Protection Department, formulating the Company’s
risk management policy and major policy on consumer
rights protection, reviewing the assessment reports in
relation to the Company’s risk management and internal
control, studying major investigation findings on risk
management and internal control matters as delegated by
the Board or on its own initiative and the management’s
response to these findings, dealing with major risk
emergency events or crisis events or major disagreement
in risk management, and supervising and directing the
senior management and the relevant departments to
resolve any issues identified during the rectification
process in a timely manner.
102
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Meetings and attendance
In 2019, three meetings were held by the Risk Management and Consumer Rights Protection Committee of the sixth
session of the Board. Attendance records of individual members are as follows:
Name of member
Position
Leung Oi-Sie Elsie
Liu Huimin
Yin Zhaojun
Li Mingguang
Notes:
Independent Director, Chairperson of the Risk
Management and Consumer Rights Protection
Committee of the sixth session of the Board
Non-executive Director, member of the Risk
Management and Consumer Rights Protection
Committee of the sixth session of the Board
Non-executive Director, member of the Risk
Management and Consumer Rights Protection
Committee of the sixth session of the Board
Executive Director, member of the Risk Management
and Consumer Rights Protection Committee of the
sixth session of the Board
Number of
meetings
attended
attendance
rate
2/3Note 1
66.7%
1/3Note 2
33.3%
2/3Note 3
66.7%
1/1
100%
1. At the fourth meeting of the Risk Management Committee of the sixth session of the Board held on 18 December 2019, Ms. Leung Oi-Sie Elsie gave
written authorization for Mr. Liu Huimin to act as her proxy to attend and vote at the meeting.
2. At the second meeting of the Risk Management Committee of the sixth session of the Board held on 26 March 2019, Mr. Liu Huimin gave written
authorization for Mr. Yin Zhaojun to act as his proxy to attend and vote at the meeting; at the third meeting of the Risk Management Committee of the
sixth session of the Board held on 24 April 2019, Mr. Liu Huimin gave written authorization for Mr. Yin Zhaojun to act as his proxy to attend and vote at
the meeting.
3. At the fourth meeting of the Risk Management Committee of the sixth session of the Board held on 18 December 2019, Mr. Yin Zhaojun gave written
authorization for Mr. Li Mingguang to act as his proxy to attend and vote at the meeting.
In 2019, the attendance record of the resigned Director of the Company at the meetings of the Risk Management
Committee is as follows:
Name of member
Position
Xu Hengping
Executive Director, member of the Risk Management
Committee of the sixth session of the Board
Number of
meetings
attended
attendance
rate
0/0
–
103
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Performance of duties by the Risk Management
and Consumer Rights Protection Committee
In 2019, the Risk Management and Consumer Rights
Protection Committee performed its duties and functions
in strict compliance with the “Procedural Rules for the
Risk Management and Consumer Rights Protection
Committee Meetings”. All members performed their
obligations in a responsible manner and reviewed the
proposals in relation to the internal control system
of the Company, risk management and construction
i n c o m p l i a n c e w i t h l a w . D u r i n g m e e t i n g s o f t h e
Risk Management and Consumer Rights Protection
C o m m i t t e e , a l l m e m b e r s a c t i v e l y p a r t i c i p a t e d i n
discussions and gave guiding opinions on the proposals
considered and discussed at the meetings.
Reviewing the system of the Company in relation to
risk management. In 2019, the Risk Management and
Consumer Rights Protection Committee assisted the
Board in optimizing the system of the Company in relation
to internal control and risk management, considered and
approved the relevant rules and regulations such as the
amendments to the “Comprehensive Risk Management
R u l e s ” , a s w e l l a s t h e p r o p o s a l s i n c l u d i n g t h e
amendments to the “Measures for the Administraion of
Anti-insurance Fraud of the Company” and the “Measures
for the Administration of Anti-money Laundering Work of
the Company”, and submitted the review opinions to the
Board.
Reviewing the risk analysis on major matters concerning
the business operation and management of the Company.
In 2019, the Risk Management and Consumer Rights
Protection Committee reviewed the risk analysis on
major matters concerning the business operation and
management of the Company, reviewed and approved
the proposals in relation to the risk compliance analysis
on the asset strategic allocation plan for the years from
2020 to 2022 and the risk compliance analysis on the
asset allocation plan for the year 2020, and gave guiding
opinions on risk control for major matters concerning the
business operation and management of the Company in
accordance with the regulatory requirements of the CBIRC
on the China Risk Oriented Solvency System (C-ROSS).
Providing its opinions for the review of the proposals
on risk management to the Board. In 2019, the Risk
Management and Consumer Rights Protection Committee
closely monitored and controlled and effectively prevented
internal and external risks of the Company, assisted the
Board in reviewing the assessment reports on business
risk and internal control of the Company according to
the regulatory requirements in the PRC and overseas.
The Risk Management and Consumer Rights Protection
Committee provided its opinions for the review of the
104
reports on risk management such as the work summary
on anti-money laundering for the year 2018 and the work
plan for the year 2019, the statement of the Company on
risk preference for the year 2019, the audit report on the
solvency risk management system of the Company for the
year 2019, the reputational risk management report and
the work report on fraudulent risk management, which
offered professional support to the Board’s decision-
making in a scientific manner.
Conducting investigation and research activities. In
order to better understand the external investment of
the Company and the operation of AMC, Ms. Leung
Oi-Sie Elsie, the Chairperson of the Risk Management
Committee, carried out investigation and research on
AMC in May 2019, received reports concerning its overall
situation, and discussed with the management of AMC
at seminars about its business operation, compliance
construction, and risk control and prevention for the
p u r p o s e o f f u r t h e r u n d e r s t a n d i n g t h e c o m p l i a n c e
construction and risk control and prevention of the
Company’s investment business.
STraTEgy aNd aSSETS aNd liabiliTiES
maNagEmENT COmmiTTEE
The Company established the Strategy Committee on 30
June 2003. In October 2010, the proposal to establish the
Strategy and Investment Decision Committee on the basis
of the Strategy Committee was reviewed and approved
at the ninth meeting of the third session of the Board.
In June 2018, the proposal to establish the Strategy and
Assets and Liabilities Management Committee on the
basis of the Strategy and Investment Decision Committee
was reviewed and approved at the twenty-fourth meeting
of the fifth session of the Board. Currently, the Strategy
and Assets and Liabilities Management Committee of
the sixth session of the Board comprises Mr. Chang
Tso Tung Stephen and Ms. Leung Oi-Sie Elsie, the
Independent Directors, Mr. Su Hengxuan and Mr. Zhao
Peng, the Executive Directors, and Mr. Wang Junhui, a
Non-executive Director, with Mr. Chang Tso Tung Stephen
acting as the Chairman. In June 2019, Mr. Xu Haifeng
resigned from his position as a member of the Strategy
and Assets and Liabilities Management Committee of the
sixth session of the Board due to the reason of age.
The Strategy and Assets and Liabilities Management
Committee is mainly responsible for the drawing-up
of long-term development strategies of the Company,
conducting studies on important matters concerning
assets and liabilities management and the relevant
policies and systems, the system for the application and
management of insurance funds, and major strategic
investment decisions of the Company, and making
recommendations in respect thereof.
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Meetings and attendance
In 2019, six meetings were held by the Strategy and Assets and Liabilities Management Committee of the sixth session
of the Board. Attendance records of individual members are as follows:
Name of member
Position
Chang Tso Tung Stephen
Su Hengxuan
Wang Junhui
Leung Oi-Sie Elsie
Notes:
Independent Director, Chairman of the Strategy and
Assets and Liabilities Management Committee of the
sixth session of the Board
Executive Director, member of the Strategy and
Assets and Liabilities Management Committee of the
sixth session of the Board
Non-executive Director, member of the Strategy and
Assets and Liabilities Management Committee of the
sixth session of the Board
Independent Director, member of the Strategy and
Assets and Liabilities Management Committee of the
sixth session of the Board
Number of
meetings
attended
attendance
rate
6/6Note 1
100%
6/6
2/2
100%
100%
3/6Note 2
50%
1. At the seventh meeting of the Strategy and Assets and Liabilities Management Committee of the sixth session of the Board held on 23 July 2019,
Mr. Chang Tso Tung Stephen attended the meeting by telephony.
2. At the seventh meeting of the Strategy and Assets and Liabilities Management Committee of the sixth session of the Board held on 23 July 2019,
Ms. Leung Oi-Sie Elsie gave written authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting; at the ninth
meeting of the Strategy and Assets and Liabilities Management Committee of the sixth session of the Board held on 28 October 2019, Ms. Leung Oi-Sie
Elsie gave written authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting; at the tenth meeting of the
Strategy and Assets and Liabilities Management Committee of the sixth session of the Board held on 18 December 2019, Ms. Leung Oi-Sie Elsie gave
written authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting.
In 2019, attendance record of the resigned Director of the Company at the meetings of the Strategy and Assets and
Liabilities Management Committee is as follows:
Name of member
Position
Xu Haifeng
Executive Director, member of the Strategy and
Assets and Liabilities Management Committee of the
sixth session of the Board
Number of
meetings
attended
attendance
rate
1/2Note
50%
Note: At the sixth meeting of the Strategy and Assets and Liabilities Committee of the sixth session of the Board held on 24 April 2019, Mr. Xu Haifeng
gave written authorization for Mr. Su Hengxuan to act as his proxy to attend and vote at the meeting.
105
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Performance of duties by the Strategy and Assets
and Liabilities Management Committee
In 2019, all members of the Strategy and Assets and
Liabilities Management Committee attended meetings in a
timely manner, reviewed the proposals on the application
of the Company’s insurance funds, annual investments,
major strategic projects, assets and liabilities management
and annual related reports. Members of the Strategy and
Assets and Liabilities Management Committee diligently
performed their duties. During meetings of the Strategy
and Assets and Liabilities Management Committee, all
members actively participated in discussions and gave
professional advices on any proposals considered and
discussed at the meetings.
Reviewing annual asset allocation plan and entrusted
investments of the Company. In 2019, the Strategy and
Assets and Liabilities Management Committee carefully
reviewed the proposals on investment plans such as
the annual asset allocation plan of the Company and the
annual investment plan of the Company for self-use real
estate, the proposals on authorization of investments such
as the annual authorization by the Company of investment
in non self-use real estate, the annual authorization of
investment entrusted by the Company in connection with
Renminbi liberalization and the annual authorization by
the Company of investment in equity investment funds,
and the proposals on investment guidelines such as the
management guidelines on the investment made by CLI
under the entrustment of the Company. The Strategy
and Assets and Liabilities Management Committee fully
reviewed the above proposals and submitted its opinions
to the Board in this regard.
Reviewing the systems of the Company concerning
assets and liabilities management. In 2019, the Strategy
and Assets and Liabilities Management Committee
reviewed and approved the proposal on the amendments
to the systems of the Company concerning assets
and liabilities management as well as asset allocation
pursuant to the requirements of the “Rules for the
Management and Supervision of Insurance Assets and
Liabilities” published by the CBIRC, studied on the
amendments to the “Comprehensive Risk Management
Rules”, the “Measures for the Administration of Risk
Preference System”, and the “Measures for the Assets
and Liabilities Management of the Company”, and made
recommendations to the Board.
Discussing the Company’s development plans and major
strategic projects. In 2019, the Strategy and Assets
and Liabilities Management Committee discussed and
reviewed the proposal on the 2018 assessment report
for the outline of the 13th five-year development plan,
and submitted its opinions to the Board. The Strategy and
Assets and Liabilities Management Committee reviewed
major strategic projects of the Company, such as the
strategic asset allocation plan of the Company for the
years from 2020 to 2022, and the investments by the
Company in the projects of Ruibo, Baiyangdian Ecological
and Environmental Protection Fund and China Life
(Jiangsu) Jiequan Health Industry Investment Fund, fully
discussed the necessity, feasibility and risks of the project
proposals and made recommendations to the Board.
Convening communication meetings of the Strategy and
Assets and Liabilities Management Committee in advance.
In 2019, Mr. Chang Tso Tung Stephen, the Chairman
of the Strategy and Assets and Liabilities Management
Committee, convened special meetings with the person-
in-charge of various departments such as the Corporate
Strategy and Planning Department, the Investment
Management Center, the Finance Department, the
A c t u a r i a l D e p a r t m e n t , a n d t h e C u l t u r e a n d B r a n d
D e p a r t m e n t f o r t h e p u r p o s e o f u n d e r s t a n d i n g a n d
discussing the new business plan, financial budget, 2019
investments and the “Dingxin Project” of the Company
as well as the impact of the new ESG rules published
by the HKSE. The Strategy and Assets and Liabilities
Management Committee also communicated any matters
of concern in a timely and effective manner, kept itself
informed of the current development of the Company
from time to time, and made recommendations in respect
thereof.
Conducting investigation and research activities. In
order to better understand the external investment of
the Company and the operation of AMC, Mr. Chang
Tso Tung Stephen, the Chairman of the Strategy and
Assets and Liabilities Management Committee, and
Ms. Leung Oi-Sie Elsie, a member of the Strategy and
Assets and Liabilities Management Committee, carried
out investigation and research on AMC in May 2019,
received reports concerning its overall situation, and
discussed with the management of AMC at seminars
about its business operation, investment strategy,
allocation plan, and investment return for the purpose
of further understanding the business development of
the Company’s investment business and its entrusted
investments.
106
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance CONNECTEd TraNSaCTiONS CONTrOl
COmmiTTEE
The Company established its Connected Transactions
Control Committee on 29 October 2019. In October 2019,
the “Proposal in relation to the Establishment of the
Connected Transactions Control Committee of the Board
of Directors” was reviewed at the twentieth meeting
of the six session of the Board, pursuant to which a
new Connected Transactions Control Committee was
established under the Board of the Company. Currently,
the Connected Transactions Control Committee of the
sixth session of the Board comprises Mr. Tang Xin,
Mr. Chang Tso Tung Stephen, Mr. Robinson Drake Pike
and Ms. Leung Oi-Sie Elsie, the Independent Directors,
with Mr. Tang Xin acting as the Chairman.
The principal duties of the Connected Transactions
Control Committee are to confirm connected parties of
the Company, manage, examine and approve connected
transactions to control risks relating to connected
transactions, and focus on the compliance and necessity
of connected transactions and the fairness of their pricing,
which provide an important basis for the Board’s decision-
making in connected transaction management.
Meetings and attendance
In 2019, one meeting was held by the Connected Transactions Control Committee of the sixth session of the Board.
Attendance records of individual members are as follows:
Name of member
Position
Tang Xin
Chang Tso Tung Stephen
Robinson Drake Pike
Leung Oi-Sie Elsie
Independent Director, Chairman of the Connected
Transactions Control Committee of the sixth session
of the Board
Independent Director, member of the Connected
Transactions Control Committee of the sixth session
of the Board
Independent Director, member of the Connected
Transactions Control Committee of the sixth session
of the Board
Independent Director, member of the Connected
Transactions Control Committee of the sixth session
of the Board
Number of
meetings
attended
attendance
rate
1/1
1/1
1/1
100%
100%
100%
0/1Note
0
Note: At the first meeting of the Connected Transactions Control Committee of the sixth session of the Board held on 18 December 2019, Ms. Leung Oi-
Sie Elsie gave written authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting.
107
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Performance of duties by the Connected
Transactions Control Committee
In 2019, the Connected Transactions Control Committee
performed its duties and functions in strict compliance
w i t h t h e “ P r o c e d u r a l R u l e s f o r t h e C o n n e c t e d
Transactions Control Committee Meetings”. All members
performed their obligations in a responsible manner
and reviewed the proposals in relation to the connected
transactions of the Company. During meetings of the
Connected Transactions Control Committee, all members
actively participated in discussions and gave guiding
opinions on the proposals considered and discussed at the
meetings.
In 2019, the Connected Transactions Control Committee
focused on the compliance and necessity of connected
transactions and the fairness of their pricing when
reviewing the proposals in relation to the connected
transactions of the Company pursuant to the regulatory
requirements of the CBIRC with respect to connected
t r a n s a c t i o n s . T h e C o n n e c t e d T r a n s a c t i o n s C o n t r o l
C o m m i t t e e a l s o s u b m i t t e d i t s r e v i e w o p i n i o n s i n
connection with the proposals in relation to the connected
transactions such as the investment by the Company in
China Life Aged-care Industry Investment Fund and the
“Framework Agreement in relation to Daily Connected
Transaction” between the Company and Chongqing
Trust, which offered professional support to the Board’s
decision-making in a scientific manner.
iNdEPENdENCE Of ThE COmPaNy frOm iTS
CONTrOlliNg SharEhOldEr
Employees: The Company is independent in the aspects
of employment, human resources and remuneration
management.
A s s e t s : T h e C o m p a n y o w n s a l l a s s e t s r e l a t i n g t o
the operation of its principal business. At present,
the Company does not provide any guarantee for its
shareholders. The Company’s assets are independent,
complete, and independent of the shareholders of the
Company and other related parties.
Finance: The Company has established a separate financial
department, and an independent financial accounting
system and financial management system; further, the
Company makes financial decisions on its own; it employs
separate financial personnel, opens separate accounts
with banks and does not share bank accounts with
CLIC; the Company, as a separate taxpayer, pays taxes
individually according to law.
Organization: The Company has established a well-
developed organizational system, under which internal
bodies such as the Board of Directors and the Board of
Supervisors operate separately. There is no subordinate
relationship between such internal bodies and the
functional departments of the Company’s controlling
shareholder.
B u s i n e s s o p e r a t i o n s : T h e C o m p a n y i n d e p e n d e n t l y
develops personal insurance businesses, including life
insurance, health insurance and accident insurance
businesses, reinsurance relating to the above insurance
businesses, use of funds permitted by applicable PRC
laws and regulations or the State Council, as well as all
types of personal insurance services, consulting business
and agency business, sale of securities investment funds,
and other businesses permitted by the banking and
insurance administrative and regulatory authorities of the
PRC. The Company currently possesses the “Insurance
Company Legal Person Permit” (Number: 000005) issued
by the CBIRC. The Company is independently engaged
in the businesses as prescribed in its business scope
according to law, has separate sales and agency channels
and is licensed to use licensed trademarks without
consideration. The completeness and independence of
the Company’s business operations will not be adversely
affected by its relationship with related parties.
108
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance PErfOrmaNCE aPPraiSal aNd iNCENTivES
fOr SENiOr maNagEmENT
The Company implements a term-of-service and target-
related responsibility system for senior management.
At the beginning of each year, performance target
contracts will be entered into between the Chairman of
the Board and the President, and between the President
and other senior management of the Company. The
performance target contract system is an important tool
in disassembling the strategic goals of the Company
in a scientific manner, which is conducive towards the
breakdown of targets and transmission of responsibility,
enhancing the implementation capability of the Company
and ensuring the successful completion of its annual
business targets. The performance appraisal criteria listed
in the individual performance target contracts of senior
management are partially linked to the business targets
of the Company and partially formulated with reference to
the duties and functions of their respective positions.
T h e r e m u n e r a t i o n f o r s e n i o r m a n a g e m e n t m a i n l y
comprises position compensation, performance rewards,
welfare benefits and medium and long term incentives.
SharEhOldErS’ iNTErESTS
To safeguard shareholders’ interests, in addition to the
right to participate in the Company’s affairs by attending
shareholders’ general meetings, shareholders have the
right to convene extraordinary shareholders’ general
meetings under certain circumstances.
If the number of Directors is less than the number stipulated
in the Company Law or two-thirds of the number specified by
the Articles of Association, or the uncovered losses incurred
amount to one-third of the Company’s total share capital or
if the Board or the Board of Supervisors deems necessary,
or more than half of the Directors (including at least two
Independent Directors) request, or shareholders holding
10% or more shares of the Company make a requisition, the
Board shall convene an extraordinary shareholders’ general
meeting within two months. Where shareholders holding
10% or more shares request an extraordinary shareholders’
general meeting, such shareholders shall make a request in
writing to the Board with a clear agenda. The Board shall,
upon receipt of such a written request, convene a meeting
as soon as possible. If the Board fails to convene a meeting
within 30 days of the receipt of such a written request,
shareholders making such a request may convene a meeting
by themselves at the cost of the Company within four
months of the receipt by the Board of such a written request.
In accordance with the Articles of Association, when the
Company convenes the shareholders’ general meeting,
shareholders individually or in aggregate holding 3% or
more of the shares of the Company shall have the right
to submit proposals to the Company. The Company
should include such matters that fall into the scope of
the functions and powers of the shareholders’ general
meeting in the agenda of the meeting. Shareholders
individually or in aggregate holding 3% or more of the
shares of the Company may submit provisional proposals
in writing to the convenor sixteen days prior to the
shareholders’ general meeting. The provisional proposals
shall fall into the scope of the functions and powers of the
shareholders’ general meeting and specify explicit topics
and specific resolution matters.
Shareholders may put forward enquiries to the Board
through the Board Secretary or the Company Secretary, or
put forward proposals at shareholders’ general meetings
through their proxies. The Company has made available its
contact details in its correspondence with shareholders to
enable such enquiries or proposals to be properly directed.
iNfOrmaTiON diSClOSurE aNd iNvESTOr
rElaTiONS
T h e C o m p a n y h a s e s t a b l i s h e d a w e l l - d e v e l o p e d
and practical information disclosure system in strict
compliance with the laws and regulations of its listed
jurisdictions and continued to improve the quality of its
information disclosure so as to ensure that domestic and
overseas investors obtain true, accurate and complete
information. The Company has proactively developed
investor relations and strengthened its contact and
communication with domestic and overseas investors, and
addressed hot issues as earlier as possible, which enabled
domestic and overseas investors to understand the
business operations of the Company in a timely manner.
The Company continued to strengthen the construction
of its information disclosure system and implement the
regulatory requirements relating to information disclosure
in a practical manner in order to ensure the timeliness,
fairness, truthfulness, accuracy and completeness of
information disclosure. The Company constantly enhanced
the quality of information disclosure, actively studied and
improved the method of disclosure of key information
from the perspective of investors, in particular medium
and small investors, to enable them to have a deeper
understanding of the Company’s development strategies,
business operations and major issues, optimized the
109
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance layout of periodic reports, increased the readability of
periodic reports by various means such as adding charts
and pictures; and inserted additional “business highlights”
and “index of information disclosure announcements” as
published during the Reporting Period to enable investors
to have a clearer understanding of the core business
operation of the Company. The Company extended the
scope and depth of information disclosure of periodic
and ad-hoc reports to ensure investors to obtain timely
and accurate information affecting their decisions. The
Company also strengthened the implementation of the
basic system of information disclosure, regularly organized
training courses relating to information disclosure and
compliance, carried out timely study and promotion of
regulatory rules of its listed jurisdictions in the PRC and
overseas, and explained the key tasks for information
disclosure and compliance and any difficulties therein.
The Company strictly managed its inside information
and carried out the registration and filing procedures on
persons who have knowledge of inside information in
compliance with laws, strengthened the confidentiality of
inside information, and safeguarded the legitimate rights
and interests of investors, with a view to maintaining
the fairness, impartiality and openness of information
disclosure of the Company. The Company was awarded
Grade A in the assessment by the Shanghai Stock
Exchange on information disclosure for the year of 2018-
2019.
In 2019, the Company kept abreast with the development
pace of technology era in its investor relations, and
consistently made innovation in its communications with
and services to investors, which constantly enhanced
the efficiency of communication between the Company
and capital market. The work conducted by the Company
for investor relations mainly included holding general
meetings, organizing open days, holding results briefings,
embarking on global non-deal roadshows, meeting and
holding conference calls with investors and analysts,
attending investors’ meetings, frequently updating
information on its investor relations website, and timely
responding to enquiries from investors and analysts.
The Company innovated a live streaming platform for
results announcements and broadcast live its results
presentation meetings simultaneously on the local and
international share trading platforms, such as Tencent
Portfolio, Sina Finance and Futu Securities, to enormously
increase its exposure, thereby facilitating investors
to comprehend the operating results of the Company
directly through internet and mobile phone. Looking back
to 2019, the Company communicated with more than
4,400 investors and analysts through different channels,
including communicating with more than 1,100 investors
who attended results briefings and open days physically
and by conference calls, holding over 200 meetings with
approximately 1,600 investors and analysts who visited
the Company for the year, communicating with more than
1,600 institutional investors by participating in a total of
55 investors’ meetings held locally or internationally, and
meeting and visiting more than 130 investors in non-deal
roadshows for annual and interim results. In addition, the
Company kept in close contact with investors by various
means such as phone and internet, corresponded with
them through more than 1,700 emails, answered more
than 350 calls and emails, and recorded a click-through
rate of 40,000 viewers for the internet broadcast of results
briefings and open days.
In the assessment and selection of the “2019 Best
Corporate Management Team and Most Respected
Company in Asia” held by Institutional Investor, the
C o m p a n y w o n t h e a w a r d o f t h e “ M o s t R e s p e c t e d
Company in Asia”. In the assessment and selection of
the “5th Session of Investor Relations Awards” organized
by the Hong Kong Investor Relations Association, the
Company was awarded the “Excellent Award for Investor
Relations of Listed Companies”. In the assessment and
selection of the “1st Session of Best Listed Companies
Awards” organized by New Fortune Magazine, the
C om pany wa s awa rded the “B e st Li s ted C om pan y
Award”. In the assessment and selection of the “3rd
Session of Excellent IR in China” jointly organized by
Shanghai Securities News and Roadshow China, the
Company was awarded the “Best Investor Relations
Frontier Award”, the “Best Case Award” and the “Best
Leader Award”, and was nominated by the Investor
Relation Magazine, a global authoritative magazine for
investor relations, for the 2019 Excellent Award for the
Greater China Region. In addition, Mr. Li Mingguang, the
Board Secretary of the Company, was awarded the 2019
“Golden Quality” – Outstanding Board Secretary Award by
Shanghai Securities News.
110
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance ChaNgES Of ThE arTiClES Of aSSOCiaTiON
iNTErNal CONTrOl aNd riSK maNagEmENT
The resolution on the amendments to the Articles of
Association of the Company was put to vote and adopted
at the 2018 Annual General Meeting held on 30 May 2019
and became effective after being approved by the CBIRC
(CBIRC’s Reply [2019] No. 822) on 30 August 2019. The
amendments to the Articles of Association mainly include:
1. adding the information concering the establishment of
the Party Committee into the Articles of Association in
accordance with the requirements of the “Guidelines on
the Articles of Association of Insurance Companies” (Bao
Jian Fa [2017] No. 36) published by the CBIRC and the
“Governance Standards for Listed Companies” released
by the CSRC; 2. adding the obligation of shareholders
who hold more than 5% of shares of the Company to
inform the Company of significant mattes in accordance
with the Company Law, the “Guidelines on the Articles
of Association of Insurance Companies”, the “Guidelines
on the Articles of Association of Listed Companies”,
the “Governance Standards for Listed Companies” and
the actual situation of the operation and management of
the Company; 3. adding the chapter of “Special Matters
of Corporate Governance”, which stipulates that the
Company shall adopt the internal corrective procedures
and apply to the CBIRC for guidance if it faces possible
failures in its corporate governance mechanim, and sets
out the obligations to be undertaken by the Company
and its shareholders, etc.; 4. further defining the specific
duties and powers of shareholders’ general meetings and
the Board of Directors and setting out any share transfer
of the controlling shareholder and the circumstances
where no meeting of the Board of Directors shall be
convened by way of communication voting; 5. determining
the form of nomination of Independent Directors, their
duties and powers, and their right to report to the CBIRC,
adding the additional obligation of Independent Directors
to inform the Board of their inability to attend meetings,
the restrictive conditions for their re-appointment and
the procedures of removal of Independent Directors, and
removing the restrictions on the number of Independent
Directors nominated by shareholders, etc.; and 6. revising
a n d m o d i f y i n g t h e p r o v i s i o n s w i t h r e s p e c t t o t h e
repurchase of shares of the Company in accordance
with the Company Law. Please check the website of the
Company (http://www.e-chinalife.com) and the HKExnews
website of Hong Kong Exchanges and Clearing Limited
(http://www.hkexnews.hk) for the latest version of the
Articles of Association.
The Company has consistently complied with the regulatory
requirements of relevant regulatory authorities, such as
the SSE, the HKSE, the U.S. Securities and Exchange
C o m m i s s i o n ( t h e “ S E C ” ) a n d t h e N e w Y o r k S t o c k
Exchange, with respect to corporate internal control.
Internal Control
The Company has been devoting significant effort towards
the promotion of internal control and the establishment of
internal control related systems. In accordance with the
requirements of Section 404 of the “U.S. Sarbanes-Oxley
Act”, the “Standard Regulations on Corporate Internal
Control”, the “Implementation Guidelines for Corporate
Internal Control”, the “Guidance on Internal Control for
Companies Listed on the Shanghai Stock Exchange”,
the “Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited”, and the “Basic
Standards of Internal Control for Insurance Companies”
issued by the CBIRC, the Company has carried out a lot
of work on its internal control system establishment,
rules implementation and risk management by strictly
f o l l o w i n g i t s c o r p o r a t e g o v e r n a n c e s t r u c t u r e . T h e
Company has also formulated and issued the “Internal
Control Implementation Manual of China Life Insurance
Company Limited (2019 Edition)” to strengthen the
implementation of internal control standards and internal
control assessments, and actively promoted the culture
and philosophy of internal control, thereby continuously
enhancing the internal control of the Company.
Pursuant to the requirements of the “Notice on the Proper
Preparation for Disclosure of 2019 Annual Reports of
Listed Companies” promulgated by the SSE, the Company
shall release an Internal Control Self-assessment Report
simultaneously with the publication of its 2019 annual
report. Meanwhile, the Company, as an overseas private
issuer, was required to provide a specific assessment
report on its internal control system relating to financial
reporting for the year ended 31 December 2019 in its
Form 20-F (U.S. Annual Report) submitted to the SEC in
accordance with Section 404 of the U.S. Sarbanes-Oxley
Act. In accordance with the requirements of laws and
regulations relating to internal control of the jurisdictions
where the Company is listed, the Company has completed
internal control self-assessments in relation to the
requirements of Section 404 of the U.S. Sarbanes-
Oxley Act and the SSE for the year ended 31 December
2019 in two stages, namely, interim assessment and
supplementary test, and confirmed after the assessments
that its internal controls were effective. The Company has
also received from its independent auditors an unqualified
111
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance opinion on the effectiveness of its internal control in
relation to financial reporting as at 31 December 2019.
The Company’s assessment report and the report of its
independent auditors will be included as an attachment to
its annual report submitted to the SSE and its Form 20-F
submitted to the SEC.
It is the responsibility of the Board of the Company to
establish and effectively implement well-established
internal control systems, assess their effectiveness and
disclose the report on the internal control assessment.
The Board and the Audit Committee are responsible for
leading the implementation of internal control measures
of the Company, and the Board of Supervisors supervises
the internal control assessments performed by the Board.
The Company has established the Risk Management
Department in its headquarters and branches. The
C o m p a n y a l s o c o n d u c t s t e s t s o n t h e m a n a g e m e n t
level, assesses the effectiveness of the established and
implemented internal control systems in accordance with
the regulatory requirements of the jurisdictions where
the Company is listed, and reports to the Board, the Audit
Committee and the management.
In compliance with regulatory requirements and having
c o n s i d e r e d t h e c h a r a c t e r i s t i c s o f i t s b u s i n e s s a n d
management requirements, the Company has established
and implemented a series of internal control measures and
procedures with respect to currency and funds, insurance
operations, external investments, physical assets,
information technology, financial reporting and information
disclosure to ensure the safety and integrity of its
assets. By strictly complying with relevant PRC laws and
regulations as well as the internal rules and regulations of
the Company, the quality of accounting information has
been improved.
A relatively well-developed internal control system
has been established in terms of team-building, sales
and operations, and system management for the sales
channels, such as individual insurance, bancassurance,
group insurance and health insurance. This internal
control system regulates the relevant authorizations
a n d o p e r a t i o n a l w o r k f l o w s , a n d e f f e c t i v e l y a d o p t s
the measures to prevent and manage risks relating to
the operation of exclusive agents. The Company has
promulgated clear regulations for the workflows and
authorizations relating to the verification of insurance
policies, insurance claims and insurance preservation.
The Company has also formulated business operation
standards and service quality standards, developed
systems of business, document and file management, and
further regulated the management of business approval
authority to strengthen its control over business risk and
improve the quality of its services.
In accordance with relevant laws and regulations such
as the “Accounting Law of the People’s Republic of
China” and the “Enterprise Accounting Standards” and
taking into account the needs of the Company for its
business development, operation and management, the
Company has formulated and issued the “Accounting
System of China Life Insurance Company Limited”
and the “Accounting Practices of China Life Insurance
Company Limited”. The accounting units of the Company
at all levels have implemented them in strict compliance
with the requirements of the accounting system and
various basic systems to regulate works relating to
financial accounting and preparation of financial reports.
The accounting units of the Company at all levels have
assigned positions in a reasonable manner, clearly
defined duties and responsibilities of such positions and
their scope of authority on management, and strictly
prohibited employees from serving incompatible positions
concurrently, thus exercising the control over financial
risks in an efficient manner.
The Company has formulated the “Measures on the
Administration of the Accountability System for Major
Errors in Periodic Report Disclosures of China Life
Insurance Company Limited”, which set forth provisions
governing the basic responsibilities of periodic report
disclosures, the major errors in periodic report disclosures
and the responsibility attribution. As at 31 December
2019, there has been no major error in periodic report
disclosures of the Company. In order to enhance the
confidentiality of its inside information and regulate the
collection, management and reporting of its material
information, the Company has formulated the “Measures
for the Administration of Persons Who Have Knowledge
of Inside Information of China Life Insurance Company
Limited” and, after taking into account the regulatory
requirements, revised the “Rules for the Administration of
Information Disclosure of China Life Insurance Company
Limited” and the “System of Internal Reporting of
Material Information of China Life Insurance Company
Limited” in 2018. In particular, the internal report on
material information has been included in the indicator
system under the internal control report of the Company.
Persons responsible for reporting material information
(including all departments, branches, subsidiaries and
affiliates of the Company, the controlling shareholder
and the shareholders holding over 5% of shares of
the Company) obtain and identify potential material
information at the level of operation and management
by making use of various information technologies, and
submit and report such information to the President and
the Board of the Company as earlier as possible. The
Board then makes the final decision on whether to release
the material information, and discloses the same to such
extent as it considers reasonable and practicable.
112
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance internal audit and further strengthen the mechanism for
internal audit management, which effectively performed
the supervisory role of audit. The Company carried out
the economic responsibility audit on managers at all
levels, anti-money laundering audit, and a variety of
audits with a focus on connected transactions, assets
and liabilities management, solvency risk management
system, internal control over the application of insurance
funds, risk management of insurance frauds and certain
key issues that the management of the Company were
concerned about. Meanwhile, the Company has put more
efforts on the application of audit results, and played a
proactive role to supervise and direct the implementation
of rectification measures for any issues identified in audit,
facilitating the standardized management and compliance
operation of the Company. The Company has formulated
regulations with respect to the reporting, investigation,
handling of and responsibility attribution for cases involving
any violations of laws, disciplinary rules and regulations
by employees, each being implemented by the Legal
and Compliance Department, which ensures that cases
involving any violations of laws, disciplinary rules and
regulations by employees are handled in a timely manner,
and the persons involved will be attributed to proper
responsibility. The Legal and Compliance Department
reports the cases involving insurance agents (which
specifically refer to judicial cases) and manages the
responsibility attribution of such cases in accordance with
regulations such as the “Notice on the Establishment of
a Reporting System of Judicial Cases involving Insurance
Industry” issued by the CBIRC and internal policies such
as the “Implementing Rules for Responsibility Attribution
of Cases”. The Company has constantly optimized three
lines of defense for compliance management to establish
an efficient compliance management system, with a view
to identifying, guarding against and mitigating material
compliance risks. The Company has also fostered the
compliance concepts such as active compliance and value
of compliance, and promoted a good interaction between
the compliance management functional department of the
Company and external regulators, which enhanced the
overall compliance management standard of the Company
and pushed forward its transformation and restructuring.
The Company has established a well-developed system
relating to investment decisions in accordance with the
relevant laws and regulations and based on the actual
situation of investment management. The system defines
the approval and decision-making authority, authorization
mechanism and specific decision-making procedures for
investment management. All major investment decisions
shall be approved and implemented in strict compliance
with the internal decision-making process of the Company
and the requirements of its investment management
system. The Investment Decisions Committee is a
permanent body of the Company for investment decisions,
which is responsible for reviewing major investments and
providing support to any investment decisions made by
the management.
The Company has established a comprehensive information
technology system to cover all aspects of IT work and
formed a closed-loop control mechanism focusing on
centralized review and publication, periodic inspection and
continuous improvement. By conducting measures such
as the inspection and evaluation of system implementation
on a regular basis, the Company has guaranteed the
effective implementation of the system and facilitated
the standardization and normalization of various IT work.
Further, the Company has constantly promoted the
construction of the systems of information safety and
information risk control, and formulated and implemented
a series of effective information safety control measures
at various stages of the system research and development
and its operation and maintenance, thereby strengthening
the Company’s information safety protection capability. The
Company has explored the establishment of an efficient
information risk control system and strengthened its control
over information risks in advance, so as to effectively
ensure the successful commencement of various tasks. In
2019, the Company conducted several internal and external
risk assessments to consistently enhance its capability of
managing information safety risks.
The Risk Management Department, the Audit Department
and the Legal and Compliance Department of the Company
are responsible for the supervision and inspection of its
internal control measures. The Company identifies issues
in the areas of system design, control implementation
and risk management in a timely manner through the
adoption of various measures such as walk-through test,
control test and risk analysis. It also eliminates loopholes,
guards against risks and reduces losses by adopting
various measures to improve systems, enhance legal
compliance and pursue responsible persons. In 2019,
the Company actively adapted to the stringent regulatory
environment in the PRC and overseas financial industry
and strictly complied with the regulatory requirements
to constantly improve the organizational structure of
113
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Risk Management
Risk Management System
The Company has established an organizational system
for comprehensive risk management with the ultimate
responsibility assumed by the Board, under the direct
le ad e rship of the managemen t, h avi n g re l i an ce on
the risk management departments and with the close
cooperation among the relevant functional departments,
and developed a 5-tier organizational structure for risk
management covering the corporate governance level,
the headquarters level, the provincial branches level, the
local or city branches level, and the county sub-branches
level. With the reliance on the 5-tier risk management
and control structure, the Company has put in place
three lines of defense that focus on risk management:
the first line of defense consists of branches and sub-
branches at all levels and various functional departments
that identify, assess, address, monitor and report risks
at the front end of business; the second line of defense
is composed of the Risk Management and Consumer
Rights Protection Committee of the Board, as well
a s t h e R i s k M a n a g e m e n t C o m m i t t e e a n d t h e R i s k
Management Department of the Company that take
lead in formulating the system, standard and limit for a
variety of risks and make recommendations to address
such risks; the third line of defense comprises the Audit
Committee of the Board, as well as the internal audit
department and other departments of the Company that
supervise the risk management workflows established
by the Company and the procedures and actions for
control of various risks. The three lines of defense have
been coordinated with each other in a proactive manner
to organize and commence any work in relation to risk
management. By establishing the organizational structure
of risk control, the Company has gradually established a
criss-cross network of risk control system, with the risk
management departments at all levels as leading bodies,
the relevant functional departments as main bodies, the
vertical decision-making control system and horizontal
interactive collaboration mechanism as supporting
systems and the comprehensive risk management as
focus, thus laying a strong foundation for the Company to
achieve a comprehensive risk management system with
full coverage, all-employee participation and effective
workflows.
Work in relation to Risk Management
Pursuant to the requirements of the CBIRC on the China
Risk Oriented Solvency System (C-ROSS), the Company
pushed forward the establishment of a solvency risk
management system, and built a “1+7+N” comprehensive
risk management system with the “Comprehensive Risk
Management Rules” as the general principles, seven
types of risks (including insurance risk, market risk,
credit risk, operational risk, strategic risk, reputation
risk and liquidity risk) as the key focuses, and having
reliance on a series of implementing rules for business
such as the “Measures for the Administration of Risk
Preference System”. The Company actively implemented
key risk monitoring and risk pre-warning classification
management, and consistently reinforced the mechanism
for formation, transmission and application of the risk
preference system, which created a system for the daily
management of risk preference with the statement on
risk preference as the carrier, and the risk tolerance and
limit indicators as the focus. Through the combination
of risk preference with various lines of operation and
management, the Company maintained a good interaction
between risk management and business development.
The Company conducts a self-assessment on solvency
risk management capability every year so as to assess all
work in relation to risk management in two dimensions:
the soundness of the system and the effectiveness of its
implementation. The Company took specific rectification
measures against its own shortcomings and weaknesses,
which helped enhanced its risk management standard in
all aspects.
The Company consistently followed the requirements
under anti-money laundering laws and regulations,
and performed legal responsibilities including client
identity verification, documentation of client identity
information and transaction records, money laundering
risk classification and report of large sums and suspicious
t r a n s a c t i o n d a t a . M e a n w h i l e , p u r s u a n t t o e x t e r n a l
regulatory requirements, the Company conducted special
governance on illegal fund raising activities and carried
out the self-inspection and rectification in key risk areas,
which improved the Company’s precaution capability in
key risk areas.
I n 2 0 1 9 , t h e C o m p a n y v i g o r o u s l y p r o m o t e d t h e
informatization of risk management by actively applying
the latest advanced technologies such as big data
a n d a r t i f i c i a l i n t e l l i g e n c e , t h u s m a k i n g s i g n i f i c a n t
breakthroughs in the intelligent application of anti-
money laundering, intelligent identification of illegal fund-
raising risks, monitoring of sale risk pre-warning, and risk
management data mart. The significant improvement of
informatization and intellectualization of risk management,
and the introduction of a new platform by the Company for
risk management provided a strong support to the high-
quality development of the Company.
Risk Identification and Control
The major risks of the Company in the course of operation
and management include insurance risk, market risk,
credit risk, operational risk, strategic risk, reputation risk,
liquidity risk and information safety risk.
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China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Insurance Risk
Insurance risk refers to the risk of losses arising from
the adverse deviation of the actual situation from the
projections of assumptions such as mortality, morbidity,
claim ratio, lapse rate and expenses.
The Company assessed and monitored insurance risks
through sensitivity analysis and other actuarial appraisal
methods, with a focus on the impact of loss ratio, expense
rate, lapse rate and other relevant assumptions on the
Company’s operating results. The Company managed
insurance risks through the following mechanisms and
processes: (1) establishing an organizational structure
and a system for insurance risk management, so that
insurance risk management can be performed within a
scientific, comprehensive and effective management
system; (2) devising a system for risk limit indicators and
carrying out normal monitoring analysis, so as to contain
risks within a controllable range; (3) implementing an
effective product development and management system
to strictly control product pricing risks, and strengthening
empirical analysis to offer support to pricing assumptions
and assessing assumptions, in order to prevent and
control insurance risks from the front end of products;
( 4 ) e f f e c t i v e l y g u a r d i n g a g a i n s t a d v e r s e s e l e c t i o n
risks and insurance frauds through the establishment
and implementation of a well-developed system for
verification of insurance policies and claims, as well as
the practical operation regulations; and (5) transferring
and mitigating insurance risk through a scientific and
r e a s o n a b l e r e i n s u r a n c e a r r a n g e m e n t . I n 2 0 1 9 , t h e
Company managed insurance risks in a regulated and
orderly manner, with sufficient and reasonable provisions
of minimum capital for insurance risks. The Company will
continuously keep a watch on the development trend of
insurance risks and enhance its capability of managing
insurance risks on an ongoing basis.
Market Risk
Market risk refers to the risk that exposes the Company to
unexpected losses due to adverse movement in (amongst
others) interest rate, equity prices, real estate prices and
exchange rate.
In order to address the market risks, the Company
continued to pay attention to the risk exposures of interest
rate, equity prices, real estate prices and exchange rate,
monitored value at risk/mark to market (VaR/MTM), yield
volatility, duration and other key market risk indicators
on a regular basis, set up a 2-tier risk limit indicator and
corresponding threshold values, carried out sensitivity
analysis and stress test to measure the risk losses to the
Company under stress scenarios and gave pre-warning of
market risks. Currently, the proportion of each investment
asset is in line with the requirements of the CBIRC and
the internal management provisions of the Company.
According to the results of the risk indicator monitoring
and stress test, the market risk of the Company was
within a normal controllable range. The Company primarily
adopted the following risk control measures in 2019:
(1) stepping up efforts on the study of macro economy,
currency and financial policies to assess domestic and
international economic and market trends in a timely
manner; (2) reviewing the risks of major assets and the
characteristics of their returns on a regular basis, so as
to constantly optimize the model of assets allocation;
(3) exercising an effective control over equity exposure
in public market to gradually reduce the proportion of
equity funds; (4) increasing investment in interest rate
bonds with long duration when appropriate opportunities
arose, with a view to extending the duration of assets and
narrowing the gap arising from the duration mismatch of
assets and liabilities; and (5) enhancing risk monitoring and
pre-warning to strengthen risk emergency management.
Credit Risk
Credit risk refers to the risk that exposes the Company to
unexpected losses due to non-performance or delay in the
performance of contractual obligations by counterparties,
or adverse changes in their credit standings.
The credit risks that the Company is exposed to mainly
relate to investment deposits, bond investments, non-
standard financial product investments and reinsurance
arrangements, etc.
Credit Risk of Investment Business
To address the credit risks of investment business,
the Company developed and continuously improved
the organizational structure of credit risk management,
and constantly optimized the process for credit risk
management. Meanwhile, the Company established
and made amendments to the management system
and strengthened the implementation of such system
pursuant to the regulatory requirements and management
practices; strengthened the research on risks and kept
on improving risk analysis, assessment, monitoring, pre-
warning and emergency response standard. By relying
on information technology, the Company consistently
e n h a n c e d t h e s t a n d a r d o f q u a n t i t a t i v e a n a l y s i s o n
credit risks and diversified the methods used for risk
m a n a g e m e n t a n d c o n t r o l . T h e C o m p a n y p r i m a r i l y
adopted the following measures in 2019: (1) continuously
improving the theories and logics of credit rating and its
models to enhance the credit risk management standard;
(2) carrying out credit risk limit management in multiple
dimensions, in order to enhance the level of preventing
credit risks prior to investment; (3) strengthening the
115
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance monitoring of credit risk indicators for the purposes of
indicating risk exposure and any change of risk distribution
in an effective manner and closely tracking down negative
information; and (4) stepping up efforts on the research
and feasibility study of any industries and sectors for key
investment to enhance the capability of the Company in
risk management and control during and after investment.
Reinsurance Risk
Reinsurance credit risk refers to the credit risk that may
possibly be faced by the Company in connection with
the obligations to be undertaken by reinsurers due to
their failure to perform reinsurance contracts. To address
the reinsurance credit risks, the Company adopted the
following measures: (1) properly setting self-retained
risk limits through an effective reinsurance management
system, and using reinsurance as an effective tool to
transfer risks to reinsurers with a high level of solvency;
(2) reviewing the relevant information of a reinsurer in
the reinsurance registration system in strict compliance
with the regulatory requirements prior to the execution
of a reinsurance contract to ensure that the reinsurer
in cooperation with the Company satisfies with the
regulatory requirements; and (3) conducting credit
assessment on reinsurers through internal rating to select
reinsurers that have higher credit standing to mitigate
credit risks.
Operational Risk
Operational risk refers to the risk of direct or indirect
losses arising from incomplete internal operational
processes, personnel, systems or external events.
The Company consistently implemented regulatory
requirements and its operational risk management
strategies, optimized the operational risk management
system, and regulated the operational risk management
p r o c e s s e s , s o a s t o e n h a n c e t h e e f f e c t i v e n e s s o f
operational risk management policies, systems and
process management on an ongoing basis. The Company
established an operational risk management system
that combines three management tools, namely internal
control and operational risk assessment, loss data
collection and key risk indicators monitoring, and further
reinforced the operational risk management at all levels
of branches, so as to facilitate the vertical expansion of
operational risk management network. In the meanwhile,
the Company reported operational risk governance to the
management and the corporate governance level on a
regular basis. The risk control measures adopted by the
Company mainly included the following: (1) developing an
operational risk management process compatible with the
nature, scale and risk characteristics of the Company’s
business, including the identification, assessment,
control, monitoring and reporting mechanisms; (2)
establishing a loss data room for operational risks to carry
out the loss data collection and analysis of operational
risks on a regular basis; (3) establishing a key indicator
room for operational risks to organize regular monitoring
of any risks that may cause losses and to take relevant
control measures against them; (4) performing the
consolidation of internal control processes, implementing
internal control standards and conducting internal control
assessment on a regular basis, with a view to constantly
increasing the control over operational risks; and (5)
promoting a culture of operational risk management
b y o r g a n i z i n g a n d c o n d u c t i n g t r a i n i n g c o u r s e s o n
operational risk management. In 2019, the operational risk
management was satisfactory, the relevant operational
risk monitoring indicators were within a safe range, and
losses from operational risks were controllable. With the
continual improvement of the operational risk control
system, the management foundation of the Company was
strengthened consistently.
Strategic Risk
Strategic risk refers to the risk of mismatch between
strategies, market conditions and capabilities of the
C o m p a n y a r i s i n g f r o m i n e f f e c t i v e f o r m u l a t i o n o r
implementation of strategies or changes in operational
environment.
The Company set up a relatively well-developed system
for strategic risk management, and established an
organizational system for strategic risk management
with the ultimate responsibility assumed by the Board,
under the direct leadership of the management and
with the division of labour and collaboration among
the relevant functional departments. By taking into full
account of various factors such as market conditions,
risk preference and capital position, the Company made
planning for its medium- and long-term development
and put the same into practice in annual business plans
and work plans, so as to strengthen the formulation,
a p p r o v a l , i m p l e m e n t a t i o n a n d e v a l u a t i o n o f w h o l e
process management of strategic and development
planning. The Company also created an indicator system
for the daily monitoring of strategic risks to monitor and
analyze strategic risks on a regular basis, which ensured
an effective execution of the Company’s strategic risk
management. In 2019, the soundness of the Company’s
strategic risk management system and the effectiveness
of its implementation were maintained.
116
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance Reputation Risk
Information safety risk
Reputation risk refers to the risk of losses due to the
negative comments to the Company from the stakeholders
arising from the operation and management of the
Company or external events. Reputation risk may exist
in all aspects of operation and management, including
c o r p o r a t e g o v e r n a n c e , p r o d u c t d e s i g n , s a l e s a n d
promotion, claim services, application of capital, client
complaints, petition through letters and visits and stability
maintenance, information safety, remuneration plans,
personnel management and information disclosure.
The Company established a system for reputation risk
management to define the organizational structure and
responsibilities of reputation risk management in strict
compliance with the regulatory requirements. Further,
the Company developed a mechanism for the evaluation
and responsibility attribution of reputation risks, and
optimized the processes covering the identification
a n d e x - a n t e e v a l u a t i o n , m o n i t o r i n g , r e s p o n s e a n d
disposal, reporting, and rectification of reputation risk.
By leveraging on technologies, the Company enhanced
the intellectualization of reputation risk management to
promptly identify reputation risk events and give pre-
warning in respect thereof. The Company also continued
to offer training courses and exercises on reputation risk
management to raise the risk awareness of all employees,
which helped enhance its risk response capability. In
2019, the Company constantly made improvements to
its system for reputation risk management, focused on
source management and organized training courses and
exercises. As a result, no major reputation risk events
have occurred for the year.
Liquidity Risk
Liquidity risk refers to the risk that the Company does not
have access to sufficient funds in time or at reasonable
costs to meet its liabilities or other payment obligations as
they become due.
The Company established a system for liquidity risk
management to define the organizational structure and
responsibilities of liquidity risk management. Further,
the Company developed the processes covering the
identification, evaluation, monitoring, response and
disposal, reporting, and rectification of liquidity risk, and
organized regular emergency exercises on liquidity risks.
Overall, the liquidity risk of the Company was insignificant.
The Company will constantly step up its effort on liquidity
risk management pursuant to the regulatory requirements
and its own regulations to ensure the performance of its
obligation and give insurance benefits as scheduled.
Information safety risk refers to the operational, legal
and reputation risks caused by natural factors, human
factors, technological loopholes or management defects
in the process of applying information technology in the
Company.
The Company attached great importance to information
safety risk management, and established the information
safety functional departments at the headquarters
and provincial levels for the strict implementation of
its system for information safety management, which
ensured that information safety risk was controllable. By
applying new cutting-edge technologies such as cloud
computing and big data in all aspects, the Company
built a security situational awareness platform for the
centralized analysis and coordinated disposal of various
safety risks. Through the introduction of systems for
adaptive security of host computers, deception defense
a n d a t t a c k s a t t r i b u t i o n , e t c . , t h e C o m p a n y f u r t h e r
improved its defense-in-depth system, achieving the
transformation from passive defense to active security
and from assets-driven approach to data-driven approach.
With the research on the security governance system of
hybrid cloud, the Company effectively protected client
information and the safety of third parties connected
to the Company at different levels including physical
aspect, network, host computer and application. In
addition, the Company constantly stepped up efforts on
education for the safety awareness of employees to foster
a corporate culture of “everyone places emphasis on
safety”, and conducted several assessments on internal
and external risks, which further enhanced the capability
of the Company in information safety risk management.
In 2019, the Company has not had any circumstances
where its operation was affected due to the breakdown of
computers or security breach.
For other analysis on the insurance risk, market risk, credit
risk and liquidity risk of the Company, please refer to the
“Risk Management” section in the Notes to the Financial
Statements of this annual report.
It should be stated that the risk management and internal
control of the Company are designed with the objectives
to reasonably ensure the legal compliance of business
operation and management, safety of assets, truthfulness
and completeness of financial reports and relevant
information, improvement of operating efficiency and
effect, and accomplishment of development strategy.
Given the inherent limitations on risk management and
internal control, the Company can only provide reasonable
assurance with respect to the accomplishment of the
above objectives.
117
China Life Insurance Company Limited•2019 Annual Report•Corporate Governance EXCEllENT
buSiNESS rESulTS
WiTh SOlid
fiNaNCial PErfOrmaNCE
fiNaNCial rEPOrT
iNdEPENdENT audiTOr’S rEPOrT
To the shareholders of China life insurance Company limited
(Incorporated in the People’s Republic of China with limited liability)
OPiNiON
We have audited the consolidated financial statements of China Life Insurance Company Limited (the “Company”) and its
subsidiaries (the “Group”) set out on pages 127 to 257, which comprise the consolidated statement of financial position
as at 31 December 2019, and the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies.
120
China Life Insurance Company Limited•2019 Annual Report•Financial Report OPiNiON (continued)
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of
the Group as at 31 December 2019, and of its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with International Financial Reporting Standards (“IFRSs”) issued by the International
Accounting Standards Board (“IASB”) and have been properly prepared in compliance with the disclosure requirements
of the Hong Kong Companies Ordinance.
baSiS fOr OPiNiON
We conducted our audit in accordance with International Standards on Auditing (“ISAs”) issued by the International
Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the
Group in accordance with the Code of Ethics for Professional Accountants (the “Code”) issued by the Hong Kong Institute
of Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEy audiT maTTErS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial
statements. The results of our audit procedures, including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying consolidated financial statements.
121
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability) KEy audiT maTTErS (continued)
Key audit matter
how our audit addressed the key audit matter
Valuation of insurance contract liabilities
At 31 December 2019, the Group had significant insurance
contract liabilities in the amount of RMB2,552.74 billion. As
disclosed in Notes 2.12 and 15 to the consolidated financial
statements, the Group’s insurance contract liabilities
are primarily comprised of long-term insurance contract
liabilities. The Group uses the discounted cash flow method
to estimate the reserve of long-term insurance contracts.
A u d i t i n g t h e G r o u p ’ s l o n g - t e r m i n s u r a n c e c o n t r a c t
liabilities was complex and required the involvement of
specialists due to the complexity of the actuarial models
and highly judgemental nature of the actuarial assumptions
used by management to estimate the liabilities. The
actuarial assumptions include mortality, morbidity, lapse
rates, discount rates, and expenses. Changes in these
assumptions could have significant effects on the valuation
of the long-term insurance contract liabilities.
We obtained an understanding, evaluated the design
and tested the operating effectiveness of controls over
the Group’s long-term insurance contract liabilities
valuation processes. For example, we tested controls
over management’s review of the actuarial models, the
actuarial assumptions, and the data inputs used.
To test the valuation of long-term insurance contract
liabilities, our audit procedures included, among others,
comparing the methodology, actuarial models and
actuarial assumptions used by the Group to recognised
actuarial practices and testing the completeness and
accuracy of the underlying insurance policy data used
in the valuation. We involved our actuarial specialists
to assist us with assessing the reasonableness of
the assumptions by comparing them to industry data,
historical experiences and expectations of the Group. For
a sample of selected insurance products, our actuarial
specialists performed an independent recalculation of
the long-term insurance contract liabilities. In addition,
our actuarial specialists assessed the reasonableness of
the movement of long-term insurance contract liabilities
considering changes in the actuarial assumptions in the
reporting period.
122
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability) KEy audiT maTTErS (continued)
Key audit matter
how our audit addressed the key audit matter
The impairment test for investment in an associate
At 31 December 2019, the Group held a material investment
in an associate, Sino-Ocean Group Holding Limited (“Sino-
Ocean”), a company listed on the Stock Exchange of Hong
Kong Limited, with a carrying value of RMB11.39 billion.
A s d i s c l o s e d i n N o t e 9 t o t h e c o n s o l i d a t e d f i n a n c i a l
statements, as the quoted market price of this investment
h a s b e e n c o n t i n u o u s l y b e l o w i t s c a r r y i n g v a l u e , t h e
Group performed an impairment test, and recognised an
impairment loss of RMB1.50 billion in 2019.
Auditing management’s impairment test of Sino-Ocean was
complex due to the significant estimates and judgements
involved in management’s assessment of its value in use,
including the selling prices of development properties, rental
prices of investment properties included in the projection
of future cash flows and the discount rates used. These
estimates and judgements may be affected by unexpected
changes in the future market or economic conditions.
We obtained an understanding, evaluated the design
and tested the operating effectiveness of internal
controls over the Group’s investment impairment
test of Sino-Ocean. For example, we tested controls
over management’s review of the impairment test
methodology and the significant assumptions used in the
valuation.
To test the impairment test of Sino-Ocean, our audit
p r o c e d u r e s i n c l u d e d , a m o n g o t h e r s , e v a l u a t i n g
the Group’s valuation methodology and testing the
completeness and accuracy of the underlying data used
in the cash flows projection. We compared the selling
prices of development properties and rental prices of
investment properties used in the cash flow projection to
the historical business results of Sino-Ocean and industry
data. We also involved our internal valuation specialists
to assist us with assessing the reasonableness of
the Group’s valuation methodology with reference to
valuation guidelines and industry practice. In addition, we
compared the discount rate used by the Group with the
discount rate developed by our valuation specialists using
information of comparable companies.
123
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability) KEy audiT maTTErS (continued)
Key audit matter
how our audit addressed the key audit matter
Fair value of level III financial assets
At 31 December 2019, the Group held material investments
in certain financial assets such as private equity funds,
preference shares, other equity and debt investments,
which are accounted for as available-for-sale securities at fair
value or securities at fair value through profit or loss with a
combined carrying value of RMB234.99 billion. As disclosed
in Note 4.4 to the consolidated financial statements, these
investments are classified as level III in the fair value
hierarchy as their fair values are measured using valuation
methodologies with significant unobservable inputs.
Auditing the fair value measurement of the Group’s level
III financial assets was complex due to the significant
estimates and judgements involved in the assessment
of valuation methodologies and significant unobservable
inputs, including discount rates for factors such as lack
of marketability and credit risk, among others. The use of
different valuation methodologies and changes in significant
unobservable inputs could result in significantly different fair
value estimates.
We obtained an understanding, evaluated the design and
tested the operating effectiveness of internal controls
over the Group’s fair value measurement of level III
financial assets. For example, we tested management’s
review controls over the valuation methodologies and
the significant unobservable inputs used in the fair value
measurements.
To test the fair value measurement of level III financial
assets, our audit procedures included, among others,
evaluating the Group’s valuation methodologies, testing
the significant unobservable inputs used by the Group in
determining the fair values, and testing the mathematical
accuracy of the Group’s valuation calculations. We
involved our valuation specialists to assist us with
e v a l u a t i n g t h e G r o u p ’ s v a l u a t i o n m e t h o d o l o g i e s
and assessing the reasonableness of the significant
unobservable inputs, including discount rates for factors
such as lack of marketability and credit risk, among
others used in the valuations by comparing them to
information available from third-party sources and market
data. For a sample of the Group’s level III financial assets,
our valuation specialists also independently developed
fair value estimates and compared them to the Group’s
valuation results.
OThEr iNfOrmaTiON iNCludEd iN ThE aNNual rEPOrT
The directors of the Company are responsible for the other information. The other information comprises the information
included in the Annual Report, other than the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
124
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability) rESPONSibiliTiES Of ThE dirECTOrS fOr ThE CONSOlidaTEd fiNaNCial
STaTEmENTS
The directors of the Company are responsible for the preparation of consolidated financial statements that give a true
and fair view in accordance with IFRSs issued by the IASB and the disclosure requirements of the Hong Kong Companies
Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of the
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors of the Company are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors of the Company either intend to liquidate the Company or to cease
operations or have no realistic alternative but to do so.
The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing the
Group’s financial reporting process.
audiTOr’S rESPONSibiliTiES fOr ThE audiT Of ThE CONSOlidaTEd
fiNaNCial STaTEmENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Our report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
125
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability) audiTOr’S rESPONSibiliTiES fOr ThE audiT Of ThE CONSOlidaTEd
fiNaNCial STaTEmENTS (continued)
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is Choi Kam Cheong, Geoffrey.
Ernst & young
Certified Public Accountants
Hong Kong
25 March 2020
126
China Life Insurance Company Limited•2019 Annual Report•Financial ReportIndependent audItor’s report (continued)to the shareholders of China Life Insurance Company Limited(Incorporated in the People’s Republic of China with limited liability)
aSSETS
Property, plant and equipment
Right-of-use assets
Investment properties
Investments in associates and joint ventures
Held-to-maturity securities
Loans
Term deposits
Statutory deposits – restricted
Available-for-sale securities
Securities at fair value through profit or loss
Derivative financial assets
Securities purchased under agreements to resell
Accrued investment income
Premiums receivable
Reinsurance assets
Other assets
Deferred tax assets
Cash and cash equivalents
Total assets
as at
31 december
2019
As at
31 December
2018
Notes
rmb million
RMB million
6
7
8
9
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
12
13
14
29
51,758
3,520
12,141
222,983
928,751
608,920
535,260
6,333
1,058,957
141,608
428
4,467
41,703
17,281
5,161
34,029
128
53,306
3,726,734
47,281
–
9,747
201,661
806,717
450,251
559,341
6,333
870,533
138,717
–
9,905
48,402
15,648
4,364
33,437
1,257
50,809
3,254,403
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
127
Consolidated statement of finanCial PositionChina Life Insurance Company Limited•2019 Annual Report•Financial ReportAs at 31 December 2019
liabiliTiES aNd EQuiTy
liabilities
Insurance contracts
Investment contracts
Policyholder dividends payable
Interest-bearing loans and borrowings
Lease liabilities
Bonds payable
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Securities sold under agreements to repurchase
Annuity and other insurance balances payable
Premiums received in advance
Other liabilities
Deferred tax liabilities
Current income tax liabilities
Statutory insurance fund
Total liabilities
Equity
Share capital
Other equity instruments
Reserves
Retained earnings
attributable to equity holders of the Company
Non-controlling interests
Total equity
Total liabilities and equity
as at
31 december
2019
As at
31 December
2018
Notes
rmb million
RMB million
15
16
17
18
10.7
19
20
29
21
36
37
38
2,552,736
267,804
112,593
20,045
3,091
34,990
3,859
–
118,088
51,019
60,898
81,114
10,330
223
602
3,317,392
28,265
7,791
197,221
170,487
403,764
5,578
409,342
2,216,031
255,434
85,071
20,150
–
–
2,680
1,877
192,141
49,465
46,650
58,426
–
2,630
558
2,931,113
28,265
7,791
149,293
133,022
318,371
4,919
323,290
3,726,734
3,254,403
Approved and authorised for issue by the Board of Directors on 25 March 2020.
Wang bin
Director
Su hengxuan
Director
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
128
China Life Insurance Company Limited•2019 Annual Report•Financial ReportAs at 31 December 2019Consolidated statement of finanCial Position (continued)
rEvENuES
Gross written premiums
Less: premiums ceded to reinsurers
Net written premiums
Net change in unearned premium reserves
Net premiums earned
Investment income
Net realised gains on financial assets
Net fair value gains through profit or loss
Other income
Total 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
Other expenses
Statutory insurance fund contribution
Total benefits, claims and expenses
Net gains on investments of associates and joint ventures
Including: share of profit of associates and joint ventures
Profit before income tax
Income tax
Net profit
Attributable to:
– Equity holders of the Company
– Non-controlling interests
2019
2018
Notes
rmb million
RMB million
22
23
24
25
25
25
26
27
21
9
28
29
567,086
(5,238)
561,848
(1,570)
560,278
139,919
1,831
19,251
8,195
729,474
(127,877)
(50,783)
(330,807)
(9,157)
(22,375)
(81,396)
(4,255)
(40,275)
(9,602)
(1,163)
(677,690)
8,011
9,159
59,795
(781)
59,014
58,287
727
535,826
(4,503)
531,323
700
532,023
125,167
(19,591)
(18,278)
8,098
627,419
(248,736)
(40,552)
(189,931)
(9,332)
(19,646)
(62,705)
(4,116)
(37,486)
(7,642)
(1,097)
(621,243)
7,745
7,745
13,921
(1,985)
11,936
11,395
541
basic and diluted earnings per share
31
rmb2.05
RMB0.39
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
129
Consolidated statement of Comprehensive inComeChina Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019
2019
2018
Notes
rmb million
RMB million
Other comprehensive income
Other comprehensive income that may be reclassified to profit or
loss in subsequent periods:
Fair value gains/(losses) on available-for-sale securities
Amount transferred to net profit from other comprehensive income
Portion of fair value changes on available-for-sale securities
attributable to participating policyholders
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
69,600
(4,635)
(19,521)
599
237
(11,292)
(24,591)
19,549
(32)
735
598
1,716
loss in subsequent periods
34,988
(2,025)
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
(76)
34,912
93,926
93,134
792
–
(2,025)
9,911
9,325
586
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
130
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Consolidated statement of Comprehensive inCome (continued)
attributable to equity holders
of the Company
Other
equity
instruments
Share
capital
reserves
retained
earnings
Non-
controlling
interests
Total
rmb million rmb million rmb million rmb million rmb million rmb million
(Note 36)
(Note 37)
(Note 38)
28,265
–
–
7,791
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
145,675
–
(2,070)
(2,070)
–
5,885
–
–
(197)
5,688
139,202
11,395
–
11,395
–
(5,885)
(11,690)
–
–
(17,575)
4,377
541
45
586
105
–
–
(149)
–
(44)
325,310
11,936
(2,025)
9,911
105
–
(11,690)
(149)
(197)
(11,931)
28,265
7,791
149,293
133,022
4,919
323,290
–
28,265
–
–
–
7,791
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16
(2,905)
–
(2,889)
149,309
–
34,847
34,847
13,087
–
–
(86)
64
13,065
130,117
58,287
–
58,287
(13,087)
(4,916)
–
86
–
(17,917)
4,919
727
65
792
–
–
(133)
–
–
(133)
320,401
59,014
34,912
93,926
–
(4,916)
(133)
–
64
(4,985)
as at 1 january 2018
Net profit
Other comprehensive income
Total comprehensive income
Transactions with owners
Capital paid in by non-controlling interests
Appropriation to reserves (Note 38)
Dividends paid (Note 33)
Dividends to non-controlling interests
Others
Total transactions with owners
as at 31 december 2018
Effect of associates’ adoption of
new accounting standards (Note 9)
as at 1 january 2019
Net profit
Other comprehensive income
Total comprehensive income
Transactions with owners
Appropriation to reserves (Note 38)
Dividends paid (Note 33)
Dividends to non-controlling interests
Reserves to retained earnings (Note 38)
Others
Total transactions with owners
as at 31 december 2019
28,265
7,791
197,221
170,487
5,578
409,342
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
131
Consolidated statement of Changes in equityChina Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019
CaSh flOWS frOm OPEraTiNg aCTiviTiES
Profit before income tax
Adjustments for:
Investment income
Net realised and unrealised losses/(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:
Decrease/(increase) 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
2019
2018
rmb million
RMB million
59,795
13,921
(139,919)
(21,082)
335,971
4,379
67
(8,011)
6,858
1,213
50,622
(8,636)
3,811
964
(125,167)
37,869
190,210
2,638
194
(7,745)
(9,020)
1,114
48,838
(9,991)
3,527
1,164
Net cash inflow/(outflow) from operating activities
286,032
147,552
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
Property, plant and equipment
Investments in associates and joint ventures
Decrease/(increase) in term deposits, net
Decrease in securities purchased under agreements to resell, net
Interest received
Dividends received
Increase in policy loans, net
Cash paid related to other investing activities
Cash received related to other investing activities
Net cash inflow/(outflow) from investing activities
112,182
133,519
450,014
72
1,432
(504,292)
(545,657)
(11,415)
(23,389)
24,102
5,468
116,846
25,169
(32,707)
–
1,141
(247,515)
48,942
110,425
278,003
274
–
(294,238)
(335,301)
(19,546)
(34,928)
(109,590)
26,258
106,342
19,503
(34,208)
(309)
–
(238,373)
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
132
Consolidated statement of Cash flowsChina Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019
CaSh flOWS frOm fiNaNCiNg aCTiviTiES
Increase/(decrease) in securities sold under agreements to repurchase, net
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 principal portion of lease liabilities
Capital injected into subsidiaries by non-controlling interests
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/(decrease) 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
2019
2018
rmb million
RMB million
(73,552)
(3,072)
(365)
(4,916)
(133)
34,988
123
(1,348)
12,961
(761)
(36,075)
55
2,497
50,809
53,306
52,800
506
104,832
(3,990)
–
(11,690)
(149)
–
727
–
3,560
(327)
92,963
81
2,223
48,586
50,809
50,792
17
The notes on pages 134 to 257 form an integral part of these consolidated financial statements.
133
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Consolidated statement of Cash flows (continued)
1 OrgaNiSaTiON aNd PriNCiPal aCTiviTiES
China Life Insurance Company Limited (the “Company”) was established in the People’s Republic of China (“China” or
the “PRC”) on 30 June 2003 as a joint stock company with limited liability as part of a group restructuring of China Life
Insurance (Group) Company (“CLIC”, formerly China Life Insurance Company) and its subsidiaries (the “Restructuring”).
The Company and its subsidiaries are hereinafter collectively referred to as the “Group”. The Group’s principal activities
are the writing of life, health, accident and other types of personal insurance business; reinsurance business for personal
insurance business; fund management business permitted by national laws and regulations or approved by the State
Council of the People’s Republic of China, etc.
The Company is a joint stock company incorporated in the PRC with limited liability. The address of its registered office is
16 Financial Street, Xicheng District, Beijing, the PRC. The Company is listed on the New York Stock Exchange, the Stock
Exchange of Hong Kong Limited, and the Shanghai Stock Exchange.
These consolidated financial statements are presented in millions of Renminbi (“RMB million”) unless otherwise stated.
These consolidated financial statements have been approved and authorised for issue by the Board of Directors on 25
March 2020.
2 Summary Of SigNifiCaNT aCCOuNTiNg POliCiES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 basis of preparation
The Group has prepared these consolidated financial statements in accordance with International Financial Reporting
Standards (“IFRSs”), amendments to IFRSs and interpretations issued by the International Accounting Standards Board
(“IASB”). These consolidated financial statements also comply with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the applicable
disclosure requirements of the Hong Kong Companies Ordinance. The Group has prepared the consolidated financial
statements under the historical cost convention, except for financial assets and liabilities at fair value through profit or
loss, available for sale securities, insurance contract liabilities and certain property, plant and equipment at deemed cost
as part of the Restructuring process. The preparation of financial statements in compliance with IFRSs requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the consolidated financial statements are disclosed in Note 3.
2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
financial year beginning on 1 January 2019
Standards/amendments
Content
IFRS 16
IAS 28 Amendments
IAS 19 Amendments
IFRIC 23
Annual Improvements to IFRSs
2015-2017 Cycle
Leases
Long-term Interests in Associates and Joint Ventures
Plan Amendment, Curtailment or Settlement
Uncertainty over Income Tax Treatments
Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23
Effective for
annual periods
beginning on or after
1 January 2019
1 January 2019
1 January 2019
1 January 2019
1 January 2019
134
Notes to the CoNsolidated FiNaNCial statemeNtsChina Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019
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 2019 (continued)
IFRS 16 – Leases
IFRS 16 supersedes IAS 17 Leases, and related interpretations from International Financial Reporting Interpretation
Committee and Standard Interpretation Committee. The standard sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single
on-balance sheet model. Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors continue to
classify leases as either operating or finance leases using similar principles as in IAS 17. Therefore, IFRS 16 did not have
any financial impact on leases where the Group is the lessor.
The Group has adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application
of 1 January 2019. Under this method, the standard has been applied retrospectively with the cumulative effect of
initial adoption as an adjustment to the opening balance of retained earnings as at 1 January 2019, and the comparative
information for 2018 was not restated and continues to be reported under IAS 17.
New definition of a lease
Under IFRS 16, at inception of a contract, an entity shall assess whether the contract is, or contains, a lease. A contract is,
or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange
for consideration. Control is conveyed where the customer has both the right to obtain substantially all of the economic
benefits from use of the identified asset and the right to direct the use of the identified asset. The Group elected to use
the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as
leases applying IAS 17 and IFRIC 4 at the date of initial application. Contracts that were not identified as leases under IAS
17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts
entered or changed on or after 1 January 2019.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease and non-lease component on the basis of their stand-alone prices. A practical expedient is
available to a lessee, which the Group has adopted, not to separate non-lease components and to account for the lease
and the associated non-lease components as a single lease component.
As a lessee – Leases previously classified as operating leases
As a lessee, the Group previously classified leases as either finance leases or operating leases based on the assessment
of whether the lease transferred substantially all the rewards and risks of ownership of assets to the Group. Under
IFRS 16, the Group applies a single approach to recognise and measure right-of-use assets and lease liabilities for all
leases, except for two elective exemptions for leases of low-value assets (elected on a lease by lease basis) and short-
term leases (elected by class of underlying asset). The Group has elected not to recognise right-of-use assets and
lease liabilities for (i) leases of low-value assets; and (ii) leases, that at the commencement date, have a lease term of
12 months or less. Instead, the Group recognises the lease payments associated with those leases as an expense on a
straight-line basis over the lease term.
Lease liabilities as at 1 January 2019 were recognised based on the present value of the remaining lease payments,
discounted using the incremental borrowing rate as at 1 January 2019.
The right-of-use assets were measured at the amount of the lease liabilities, adjusted by the amount of any prepaid
or accrued lease payments relating to the leases recognised in the statement of financial position immediately before
1 January 2019. All these assets were assessed for any impairment based on IAS 36 – Impairment of Assets on that date.
135
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 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 2019 (continued)
IFRS 16 – Leases (continued)
As a lessee – Leases previously classified as operating leases (continued)
The Group has used the following elective practical expedients when applying IFRS 16 as at 1 January 2019:
• Applied the recognition exemptions for leases of low value assets and leases with lease term that ends within 12
months from the date of initial application;
• Applied a single discount rate to a portfolio of leases with reasonably similar characteristics on the measurement of the
lease liability;
• Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application;
• Used hindsight in determining the lease term where the contract contains options to extend or terminate the lease;
• Relied on its assessment of whether leases are onerous immediately before the date of initial application. The Group
adjusted the right-of-use asset at the date of initial application by the amount of any provision for onerous leases
recognised in the statement of financial position immediately before the date of initial application.
In addition to land use rights, the Group recognised other right-of-use assets of RMB2,555 million and lease liabilities
of RMB2,185 million at the date of initial application. Compared to the end of 2018, after the relative adjustments, total
assets and total liabilities at the group level as at 1 January 2019 both increased by RMB2,194 million. The reconciliation
between the minimum unpaid lease payments of the operating leases disclosed in the Group’s financial statements for
the year ended 31 December 2018, and the lease liabilities recognised in the consolidated statement of financial position
at the date of initial application are as follows:
Operating lease commitments as at 31 December 2018
Less: short-term leases, those leases with a remaining lease term less than 12 months from
the date of initial application and leases of low-value assets
impact of discounting at the incremental borrowing rate as at 1 January 2019
Lease liabilities as at 1 January 2019
RMB million
2,474
(132)
(157)
2,185
The weighted average incremental borrowing rate the Group adopted as at 1 January 2019 in calculating the lease
liabilities in the consolidated statement of financial position was 3.76%.
Refer to Note 2.7 for relevant accounting policies.
136
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
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 2019 (continued)
IAS 28 Amendments – Long-term interests in associates and joint ventures
In October 2017, the IASB issued the amendments to IAS 28 which indicates that an entity applies IFRS 9 to long-term
interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of
the net investment in the associate or joint venture (long-term interests). The amendments also clarify that for the entity
that applies the temporary exemption from IFRS 9, IAS 39 applies to the long-term interests, and those entities are not
required to restate prior periods to reflect the application of amendments. The amendments are effective for annual
periods beginning on or after 1 January 2019.
The Group’s accounting treatment in the previous years is in line with the amendments, thus there has been no impact
on the Group’s consolidated financial statements as a result of the amendments.
IAS 19 Amendments – Plan Amendment, Curtailment or Settlement
In February 2018, the IASB issued the amendments to IAS 19 which addresses the accounting when a plan amendment,
curtailment or settlement occurs during a reporting period. The amendments are effective for annual periods beginning on
or after 1 January 2019 and apply retrospectively.
The Group has no defined benefit plans. The amendments under IAS 19 have had no impact on the Group’s consolidated
financial statements. The Group will adopt the amendments if such business occurs in the future.
IFRIC 23 – Uncertainty over Income Tax Treatments
In June 2017, the IASB issued IFRIC Interpretation 23 which clarifies application of the recognition and measurement
requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. The interpretation mainly
addresses the following four areas: whether an entity separately considers the uncertainty of tax treatments; assumptions
adopted by an entity to address the examination of tax treatments by taxation authorities; how an entity determines
taxable profit/(tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and how an entity considers
changes in facts and circumstances. The interpretation is effective for annual reporting periods beginning on or after
1 January 2019.
The Group’s accounting treatment in the previous years is in line with the clarification of the interpretation. The
clarification has had no significant impact on the Group’s consolidated financial statements.
Annual Improvements to IFRSs 2015-2017 Cycle – Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23
In December 2017, the Annual Improvements 2015-2017 Cycle issued set out amendments to IFRS 3, IFRS 11, IAS 12
and IAS 23, which are effective for annual periods beginning on or after 1 January 2019. There has been no significant
impact on the Group’s consolidated financial statements as a result of these amendments.
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2.1 basis of preparation (continued)
2.1.2 New accounting standards and amendments that are effective but temporary exemption is
applied by the Group for the financial year beginning on 1 January 2019
Standards/amendments
Content
IFRS 9
Financial Instruments
IFRS 9 – Financial Instruments
Effective for
annual periods
beginning on or after
1 January 2018
In July 2014, the IASB issued the final version of IFRS 9, bringing together all phases of the financial instruments project
to replace IAS 39 and all previous versions of IFRS 9. The standard introduces new requirements for classification and
measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January
2018, with early adoption permitted. Based on the current assessment, the Group expects that the adoption of IFRS 9 will
have a significant impact on the Group’s consolidated financial statements. The Group adopts the temporary exemption
permitted in Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (“IFRS 4
Amendment”) to apply IAS 39 rather than IFRS 9, until the effective date of IFRS 17. Refer to Note 34 for more details.
Classification and measurement
IFRS 9 requires that the Group classifies debt instruments based on the combined effect of application of business
models (hold to collect contractual cash flows, hold to collect contractual cash flows and sell financial assets or other
business models) and contractual cash flow characteristics (solely payments of principal and interest on the principal
amount outstanding or not). Debt instruments not giving rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding would be measured at fair value through profit or loss. Other debt
instruments giving rise to cash flows that are solely payments of principal and interest on the principal amount
outstanding would be measured at amortised cost, fair value through other comprehensive income (“FVOCI”) or fair
value through profit or loss, based on their respective business models. The Group analysed the contractual cash flow
characteristics of financial assets as at 31 December 2019 and made relevant disclosures in Note 34.
Equity instruments would generally be measured at fair value through profit or loss unless the Group elects to measure
at FVOCI for certain equity investments not held for trading. This will result in unrealised gains and losses on equity
instruments currently classified as available-for-sale securities being recorded in income going forward. Currently, these
unrealised gains and losses are recognised in other comprehensive income (“OCI”). If the Group elects to record equity
investments at FVOCI, gains and losses would never be recognised in income except for the received dividends which do
not represent a recovery of part of the investment cost.
Impairment
IFRS 9 replaces the “incurred loss” model with the “expected credit loss” model which is designed to include forward-
looking information. The Group is in the process of developing and testing the key models required under IFRS 9 and
analysing the impact on the expected loss provision; the Group believed that the provision for debt instruments of the
Group under the “expected credit loss” model would be larger than that under the previous “incurred loss” model.
Hedge accounting
The Group does not apply the hedge accounting currently, so the Group expects that the new hedge accounting model
under IFRS 9 will have no impact on the Group’s consolidated financial statements.
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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 2019
Standards/amendments
Content
IFRS 3 Amendments
IAS 1 and IAS 8 Amendments
IFRS 9, IAS 39 and IFRS 7
Amendments
Definition of a Business
Definition of Material
Interest Rate Benchmark Reform
IFRS 17
IFRS 10 and IAS 28 Amendments
Insurance Contracts
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
Effective for
annual periods
beginning on or after
1 January 2020
1 January 2020
1 January 2020
1 January 2021
No mandatory effective
date yet determined but
available for adoption
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
IFRS 3 Amendments – Definition of a business
In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations. The
amendments clarify and provide additional guidance on the definition of a business. The amendments clarify that for
an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a
substantive process that together significantly contribute to the ability to create outputs. A business can exist without
including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether
market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on
whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create
outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to
customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance
to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit
a simplified assessment of whether an acquired set of activities and assets is not a business. The amendments are
effective for annual reporting periods beginning on or after 1 January 2020 and apply prospectively. Earlier application is
permitted. The Group expects to adopt the amendments from 1 January 2020. The amendments are not expected to have
any significant impact on the Group’s consolidated financial statements.
IAS 1 and IAS 8 Amendments – Definition of Material
In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors to provide a new definition of material. The new definition states
that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions
that the primary users of general purpose financial statements make on the basis of those financial statements. The
amendments clarify that materiality will depend on the nature or magnitude of information. A misstatement of information
is material if it could reasonably be expected to influence decisions made by the primary users. The amendments are
effective for annual reporting periods beginning on or after 1 January 2020 and apply prospectively. Earlier application is
permitted. The Group expects to adopt the amendments from 1 January 2020. The amendments are not expected to have
any significant impact on the Group’s consolidated financial statements.
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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 2019 (continued)
IFRS 9, IAS 39 and IFRS 7 Amendments – Interest Rate Benchmark Reform
In September 2019, the IASB issued the amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments:
Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures to respond to the hedge accounting
induced in the Interbank Offered Rates (IBOR) reform. The amendments provide temporary reliefs which enable hedge
accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark.
The amendments are effective for annual reporting periods beginning on or after 1 January 2020 and apply retrospectively.
Earlier application is permitted. Because the Group has no interbank offered transactions and has no hedge accounting,
the amendments are not expected to have any significant impact on the Group’s consolidated financial statements.
IFRS 17 – Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance
contracts covering recognition and measurement, presentation and disclosure, which replaces IFRS 4 Insurance
Contracts.
In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies
for measurement purposes, IFRS 17 provides a comprehensive model (the general model) for insurance contracts,
supplemented by the variable fee approach for contracts with direct participation features and the premium allocation
approach mainly for short-duration which typically applies to certain non-life insurance contracts.
The main features of the new accounting model for insurance contracts are as follows:
• 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.
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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 2019 (continued)
IFRS 17 – Insurance Contracts (continued)
IFRS 17 is effective for annual reporting periods beginning on or after 1 January 2021. Early application is permitted,
provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. Retrospective application
is required, with comparative figures required. However, if full retrospective application for a group of insurance contracts
is impracticable, the entity is required to choose either the modified retrospective approach or the fair value approach.
In March 2020, the IASB decided to defer the effective date for IFRS 17 by two years to reporting periods beginning on or
after 1 January 2023. The IASB also decided to extend the exemption currently in place for qualifying insurers regarding
the application of IFRS 9, meaning that they could apply both standards for the first time to reporting periods beginning
on or after 1 January 2023. As at the approval date of the consolidated financial statements, the amendments to IFRS 17
have not yet been issued by the IASB.
The Group is currently assessing the impact of the standard upon adoption.
IFRS 10 and IAS 28 Amendments – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements in IFRS 10 and IAS 28 in dealing
with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require
a full recognition of a gain or loss when the sale or contribution of assets between an investor and its associate or joint
venture constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss resulting
from the transaction is recognised in the investor’s profit or loss only to the extent of the unrelated investor’s interest in
that associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an entity
that early adopts the amendments must apply them prospectively. The Group will apply these amendments when they
become effective.
2.2 Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year
ended 31 December 2019. Subsidiaries are those entities which are controlled by the Group (including the structured
entities controlled by the Group). Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically,
the Group controls an investee if and only if the Group has:
• 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.
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2.2 Consolidation (continued)
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
• 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.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders of the Company and to the non-controlling
interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting
policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full upon consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
the Group loses control over a subsidiary, it:
• 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;
• 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.
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2.2 Consolidation (continued)
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired,
and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the
acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the aggregate of the consideration transferred, the fair value of any non-controlling interest in the acquiree,
and the fair value of any previous equity interest in the acquiree at the acquisition date over the fair value of the net
identifiable assets acquired and liabilities assumed is recorded as goodwill. If this is less than the fair value of the net
assets of the subsidiary acquired in the case of a bargain purchase, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities assumed, and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. Goodwill is
tested annually for impairment and carried at cost less accumulated impairment losses. If there is any indication that
goodwill is impaired, recoverable amount is estimated and the difference between carrying amount and recoverable
amount is recognised as an impairment charge. Impairment losses on goodwill are not reversed in subsequent periods.
Gains or losses on the disposal of an entity take into consideration the carrying amount of goodwill relating to the entity
sold.
The investments in subsidiaries are accounted for only in the Company’s statement of financial position at cost less
impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost
also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the
basis of dividends received and receivable.
Transactions with non-controlling interests
The Group treats transactions with non-controlling interests that do not result in loss of controls as equity transactions.
For shares purchased from non-controlling interests, the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposal of
shares to non-controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair
value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition,
any amounts previously recognised in OCI in respect of that entity are accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously recognised in OCI are reclassified to profit or
loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the
amounts previously recognised in OCI is reclassified to profit or loss as appropriate.
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2.3 associates and joint ventures
Associates are entities over which the Group has significant influence, generally accompanying a shareholding of between
20% and 50% of the voting rights of the investee. Significant influence is the power to participate in the financial and
operating policy decisions of the investee, but is not control or joint control over those policies.
Joint ventures are the type of joint arrangements whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing
control.
Investments in associates and joint ventures are accounted for using the equity method of accounting and are initially
recognised at cost.
The Group’s share of post-acquisition profit or loss of its associates and joint ventures is recognised in net profit, and its
share of post-acquisition movements in OCI is recognised in the consolidated statement of comprehensive income. The
cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s
share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture, including
any other unsecured receivables, the Group does not recognise further losses unless it has obligations to make payments
on behalf of the associate or joint venture.
Unrealised gains on transactions between the Group and its associates or joint ventures are eliminated to the extent of
the Group’s interests in the associates or joint ventures. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Associates and joint ventures’ accounting policies have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of acquired associates or joint ventures at the date of acquisition. Goodwill on acquisitions of associates and
joint ventures is included in investments in associates and joint ventures and is tested for impairment as part of the
overall balance. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity take into
consideration the carrying amount of goodwill relating to the entity sold.
The Group determines at each reporting date whether there is any objective evidence that the investments in associates
and joint ventures are impaired. If this is the case, an impairment loss is recognised for the amount by which the
investment’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the investment’s
fair value less costs of disposal and value in use. The impairment of investments in the associates and joint ventures is
reviewed for possible reversal at each reporting date.
The investments in associates and joint ventures are stated at cost less impairment in the Company’s statement of
financial position. The results of associates and joint ventures are accounted for by the Company on the basis of dividends
received and receivable.
2.4 Segment reporting
The Group’s operating segments are presented in a manner consistent with the internal management reporting provided
to the operating decision maker – president office for deciding how to allocate resources and for assessing performance.
Operating segment refers to the segment within the Group that satisfies the following conditions: (i) the segment
generates income and incurs costs from daily operating activities; (ii) management evaluates the operating results of
the segment to make resource allocation decision and to evaluate the business performance; and (iii) the Group can
obtain relevant financial information of the segment, including financial condition, operating results, cash flows and other
financial performance indicators.
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2.5 foreign currency translation
The Company’s functional currency is RMB. Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that functional currency. The reporting currency
of the consolidated financial statements of the Group is RMB. Transactions in foreign currencies are translated at the
exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are
translated at the exchange rates ruling at the end of the reporting period. Exchange differences arising in these cases are
recognised in net profit.
2.6 Property, plant and equipment
Property, plant and equipment, are stated at historical costs less accumulated depreciation and any accumulated
impairment losses, except for those acquired prior to 30 June 2003, which are stated at deemed cost less accumulated
depreciation and any accumulated impairment losses.
The historical costs of property, plant and equipment comprise its purchase price, including import duties and non-
refundable purchase taxes, and any directly attributable costs of bringing the asset to its working condition and location
for its intended use. Expenditure incurred after terms of property, plant and equipment have been put into operation, such
as repairs and maintenance, is normally charged to the statement of comprehensive income in the period in which it is
incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in
the carrying amount of the assets as a replacement. Where significant parts of property, plant and equipment are required
to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates
them accordingly.
Depreciation
Depreciation is computed on a straight-line basis to write down the cost of each asset to its residual value over its
estimated useful lives as follows:
Buildings
Office equipment, furniture and fixtures
Motor vehicles
Leasehold improvements
Estimated useful lives
15 to 35 years
3 to 11 years
4 to 8 years
Over the shorter of the remaining term
of the lease and the useful lives
The residual values, depreciation method and useful lives are reviewed periodically to ensure that the method and
period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and
equipment.
Assets under construction mainly represent buildings under construction, which are stated at cost less any impairment
losses and are not depreciated, except for those acquired prior to 30 June 2003, which are stated at deemed cost less
any accumulated impairment losses. Cost comprises the direct costs of construction and capitalised borrowing costs on
related borrowed funds during the period of construction. Assets under construction are reclassified to the appropriate
category of property, plant and equipment, investment properties or other assets when completed and ready for use.
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2.6 Property, plant and equipment (continued)
Impairment and gains or losses on disposals
Property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised in net profit for the amount by which
the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset’s net selling price and
value in use.
The gain or loss on disposal of an item of property, plant and equipment is the difference between the net sales proceeds
and the carrying amount of the relevant asset, and is recognised in net profit.
2.7 leases
(i) Applicable from 1 January 2019
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of a
time, the Group assesses whether, throughout the period of use, the lessee has the right to obtain substantially all of the
economic benefits from use of the identified asset and the right to direct the use of the identified asset.
As a lessee
Initial measurement
At the commencement date of the lease, the Group recognises right-of-use assets representing the right to use the
leased assets, including buildings and land use rights, etc. The Group measures the lease liability at the present value
of the lease payments that are not paid at that date, except for short-term leases and leases of low-value assets. In
calculating the present value of the lease payments, the lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be readily determined, the Group uses its own incremental borrowing rate.
The lease term is the non-cancellable period of a lease when the Group has the right to use lease assets. When the Group
has an option to extend a lease and is reasonably certain to exercise that option to extend a lease, the lease term also
comprises the periods covered by the option to extend the lease. When the Group has an option to terminate the lease
and is reasonably certain not to exercise that option, the lease term also comprises the periods covered by the option to
terminate the lease. The Group reassesses whether it is reasonably certain to exercise an extension option, to exercise a
purchase option or not to exercise a termination option, upon the occurrence of either a significant event or a significant
change in circumstances that are within the control of the Group and affects whether the Group is reasonably certain to
exercise the commensurate options.
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2.7 leases (continued)
(i) Applicable from 1 January 2019 (continued)
As a lessee (continued)
Subsequent measurement
The Group applies the straight-line method in depreciating the right-of-use assets. If it is reasonably certain that
ownership of a leased asset transfers to the Group at the end of the lease term, the leased asset is depreciated under
the remaining useful life of the asset. If it cannot be reasonably determined that ownership of a leased asset transfers to
the Group at the end of the lease term, the Group depreciates the right-of-use asset from the commencement date to the
earlier of the end of the lease term or the end of the useful life of the right-of-use asset.
The Group uses a constant periodic rate of interest to calculate interest on the lease liability in each period during the
lease term and recognises the interest in profit or loss.
Variable lease payments not included in the measurement of the lease liability are recognised in profit or loss in the period
in which the event or condition that triggers the payment occurs.
After the commencement date of a lease, when there is a change in in-substance fixed payments, a change in the
amounts expected to be payable under a residual value guarantee, a change in future lease payments resulting from a
change in an index or a rate used to determine those payments, a change in the assessment or actual exercise situation
of a purchase option, an extension option or a termination option, the Group uses the changed present value of lease
payments to remeasure the lease liability. If the carrying amount of the right-of-use asset is reduced to zero and there
is a further reduction in the measurement of the lease liability, the Group recognises any remaining amount of the
remeasurement in profit or loss.
The Group assesses whether there is any indication that a right-of-use asset may be impaired at the end of reporting
period. If any such indication exists, the Group performs the impairment test. An impairment loss is recognised in net
profit for the amount by which the carrying amount of the right-of-use asset exceeds its recoverable amount, which is the
higher of the right-of-use asset’s net selling price and value in use.
As a lessor
At the commencement date of the lease, leases in which the Group does not transfer substantially all the risks and
rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on
a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss.
(ii) Applicable before 1 January 2019
As for leased assets, leases in which the Group does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental expenses of operating leases are recognised in the cost
of assets or profit or loss on a straight-line basis. Rental income arising is accounted for on a straight-line basis over the
lease terms and is included in revenue in the statement of profit or loss.
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2.8 investment properties
Investment properties are interests in land use rights and buildings that are held to earn rental income and/or for capital
appreciation, rather than for the supply of services or for administrative purposes.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and any impairment loss.
Depreciation is computed on the straight-line basis over the estimated useful lives. The estimated useful lives of
investment properties are 15 to 35 years.
Overseas investment properties, that are held by the Group in the form of property ownership, equity investment, or other
forms, have expected useful lives not longer than 50 years, determined based on the usage in their locations.
The useful lives and depreciation method are reviewed periodically to ensure that the method and period of depreciation
are consistent with the expected pattern of economic benefits from the individual investment properties.
An investment property is derecognised when either it has been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the
retirement or disposal of an investment property are recognised in the statement of comprehensive income in the year of
retirement or disposal. A transfer to, or from, an investment property is made when, and only when, there is evidence of
a change in use.
2.9 financial assets
2.9.a Classification
The Group classifies its financial assets into the following categories: securities at fair value through profit or loss, held-
to-maturity securities, loans and receivables and available-for-sale securities. Management determines the classification
of its financial assets at initial recognition which depends on the purpose for which the assets are acquired. The Group’s
investments in securities fall into the following four categories:
(i) Securities at fair value through profit or loss
This category has two sub-categories: securities held for trading and those designated as at fair value through profit or
loss at inception. Securities are classified as held for trading at inception if acquired principally for the purpose of selling
in the short-term or if they form part of a portfolio of financial assets in which there is evidence of taking short-term profit.
The Group may classify other financial assets as at fair value through profit or loss if they meet the criteria in IAS 39 and
designated as such at inception.
(ii) Held-to-maturity securities
Held-to-maturity securities are non-derivative financial assets with fixed or determinable payments and fixed maturities
that the Group has the positive intention and ability to hold to maturity and do not meet the definition of loans and
receivables nor designated as available-for-sale securities or securities at fair value through profit or loss.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market other than those that the Group intends to sell in the short-term or held as available-for-sale. Loans and
receivables mainly comprise term deposits, loans, securities purchased under agreements to resell, accrued investment
income and premium receivables as presented separately in the statement of financial position.
(iv) Available-for-sale securities
Available-for-sale securities are non-derivative financial assets that are either designated in this category or not classified
in any of the other categories.
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2.9 financial assets (continued)
2.9.b Recognition and measurement
Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase or sell assets.
Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through
profit or loss, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the
rights to receive cash flows from the investments have expired or when they have been transferred and the Group has
also transferred substantially all risks and rewards of ownership.
Securities at fair value through profit or loss and available-for-sale securities are carried at fair value. Equity investments
that do not have a quoted price in an active market and whose fair value cannot be reliably measured are carried at cost,
net of allowance for impairments. Held-to-maturity securities are carried at amortised cost using the effective interest
method. Investment gains and losses on sales of securities are determined principally by specific identification. Realised
and unrealised gains and losses arising from changes in the fair value of the securities at fair value through profit or
loss category, and the change of fair value of available-for-sale debt securities due to foreign exchange impact on the
amortised cost are included in net profit in the period in which they arise. The remaining unrealised gains and losses
arising from changes in the fair value of available-for-sale securities are recognised in OCI. When securities classified
as available-for-sale securities are sold or impaired, the accumulated fair value adjustments are included in net profit as
realised gains on financial assets.
Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at amortised
cost.
Loans are carried at amortised cost, net of allowance for impairment.
The Group purchases securities under agreements to resell substantially identical securities. These agreements are
classified as secured loans and are recorded at amortised cost, i.e., their costs plus accrued interests at the end of the
reporting period, which approximates fair value. The amounts advanced under these agreements are reflected as assets
in the consolidated statement of financial position. The Group does not take physical possession of securities purchased
under agreements to resell. Sale or transfer of the securities is not permitted by the respective clearing house on which
they are registered while the lent capital is outstanding. In the event of default by the counterparty, the Group has the
right to the underlying securities held by the clearing house.
2.9.c Impairment of financial assets other than securities at fair value through profit or loss
Financial assets other than those accounted for as at fair value through profit or loss are adjusted for impairment, where
there are declines in value that are considered to be impairment. In evaluating whether a decline in value is an impairment
for these financial assets, the Group considers several factors including, but not limited to, the following:
• 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.
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2.9 financial assets (continued)
2.9.c Impairment of financial assets other than securities at fair value through profit or loss (continued)
In evaluating whether a decline in value is impairment for equity securities, the Group also considers the extent or the
duration of the decline. The quantitative factors include the following:
• 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.
When the decline in value is considered impairment, held-to-maturity debt securities are written down to their present
value of estimated future cash flows discounted at the securities’ effective interest rates, available-for-sale debt
securities and equity securities are written down to their fair value, and the change is recorded in net realised gains
on financial assets in the period the impairment is recognised. The impairment loss is reversed through net profit if in
a subsequent period the fair value of a debt security increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised through net profit. The impairment losses recognised in net profit on
equity instruments are not reversed through net profit.
2.10 fair value measurement
The Group measures financial instruments, such as securities at fair value through profit or loss and available-for-sale
securities, at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
measurement of assets and liabilities is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
• 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.
The principal or the most advantageous market must be accessible by the Group at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
categorised within the fair value hierarchy, described in Notes 4.4, 8, 11 and 42(c) based on the lowest level input that is
significant to the fair value measurement as a whole.
For assets and liabilities that are measured at fair value on a recurring basis, the Group determines whether transfers
have occurred between each level in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
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2.11 Cash and cash equivalents
Cash amounts represent cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
with original maturities of 90 days or less, whose carrying value approximates fair value.
2.12 insurance contracts and investment contracts
2.12.1 Classification
The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by the Group
are classified as insurance contracts and investment contracts. Insurance contracts are those contracts that transfer
significant insurance risk. They may also transfer financial risk. Investment contracts are those contracts that transfer
financial risk without significant insurance risk. A number of insurance and investment contracts contain a discretionary
participating feature (“DPF”). This feature entitles the policyholders to receive additional benefits or bonuses that are, at
least in part, at the discretion of the Group.
2.12.2 Insurance contracts
2.12.2.a Recognition and measurement
(i) Short-term insurance contracts
Premiums from the sale of short duration accident and health insurance products are recorded when written and are
accreted to earnings on a pro-rata basis over the term of the related policy coverage. Reserves for short duration
insurance products consist of unearned premium reserve and expected claims and claim adjustment expenses reserve.
Actual claims and claim adjustment expenses are charged to net profit as incurred.
The unearned premium reserve represents the portion of the premiums written net of certain acquisition costs relating to
the unexpired terms of coverage.
Reserves for claims and claim adjustment expenses consist of the reserves for reported and unreported claims and
reserves for claims expenses with respect to insured events. In developing these reserves, the Group considers the
nature and distribution of the risks, claims cost development, and experiences in deriving the reasonable estimated
amount and the applicable margins. The methods used for reported and unreported claims include the case-by-case
estimation method, average cost per claim method, chain ladder method, etc. The Group calculates the reserves for
claims expenses based on the reasonable estimates of the future payments for claims expenses.
(ii) Long-term insurance contracts
Long-term insurance contracts include whole life insurance, term life insurance, endowment insurance and annuity
policies with significant life contingency risk. Premiums are recognised as revenue when due from policyholders.
The Group uses the discounted cash flow method to estimate the reserve of long-term insurance contracts. The reserve
of long-term insurance contracts consists of a reasonable estimate of liability, a risk margin and a residual margin. The
long-term insurance contract liabilities are calculated using various assumptions, including assumptions on mortality rates,
morbidity rates, lapse rates, discount rates, and expense assumptions, and based on the following principles:
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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.
On each reporting date, the Group reviews the assumptions for reasonable estimates of liability and risk margins, with
consideration of all available information, taking into account the Group’s historical experience and expectation of future
events. Changes in assumptions are recognised in net profit. Assumptions for the amortisation of residual margin are
locked in at policy issuance and are not adjusted at each reporting date.
(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.
Margin comprises risk margin and residual margin. Risk margin is the reserve accrued to compensate for the uncertain
amount and timing of future cash flows. At the inception of the contract, the residual margin is calculated net of certain
acquisition costs, mainly consist of underwriting and policy acquisition costs, by the Group representing Day 1 gain and
will be amortised over the life of the contracts. For insurance contracts of which future returns are affected by investment
yields of corresponding investment portfolios, their related residual margins are amortised based on estimated future
participating dividends payable to policyholders. For insurance contracts of which future returns are not affected by
investment yields of corresponding investment portfolios, their related residual margins are amortised based on sum
assured of outstanding policies. The subsequent measurement of the residual margin is independent from the reasonable
estimate of future discounted cash flows and risk margin. The assumption changes have no effect on the subsequent
measurement of the residual margin.
(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
Universal life contracts and unit-linked contracts are unbundled into the following components:
• insurance components
• non-insurance components
The insurance components are accounted for as insurance contracts; and the non-insurance components are accounted
for as investment contracts (Note 2.12.3), which are stated in the investment contract liabilities.
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2.12 insurance contracts and investment contracts (continued)
2.12.2 Insurance contracts (continued)
2.12.2.b Liability adequacy test
The Group assesses the adequacy of insurance contract reserves using the current estimate of future cash flows with
available information at the end of each reporting period. If that assessment shows that the carrying amount of its
insurance liabilities (less related intangible assets, if applicable) is inadequate in light of the estimated future cash flows,
the insurance contract reserves will be adjusted accordingly, and any changes of the insurance contract liabilities will be
recognised in net profit.
2.12.2.c Reinsurance contracts held
Contracts with reinsurers under which the Group is compensated for losses on one or more contracts issued by the
Group and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held.
Contracts with reinsurers that do not meet these classification requirements are classified as financial assets. Insurance
contracts entered into by the Group under which the contract holder is another insurer (inwards reinsurance) are included
with insurance contracts.
The benefits to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets.
Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the
reinsured insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance liabilities are
primarily premiums payable for reinsurance contracts and are recognised as expenses when due.
The Group assesses its reinsurance assets for impairment as at the end of reporting period. If there is objective evidence
that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable
amount and recognises that impairment loss in net profit.
2.12.3 Investment contracts
For investment contracts with or without DPF, the Company’s policy fee income mainly consists of acquisition cost
and various fees (handling fees and management fees, etc.) over the period of which the service is provided. Policy fee
income net of certain acquisition cost is amortised over the expected life of the contracts by period and recognised in
revenue.
Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment contracts are
carried at amortised cost.
2.12.4 DPF in long-term insurance contracts and investment contracts
DPF is contained in certain long-term insurance contracts and investment contracts. These contracts are collectively
called participating contracts. The Group is obligated to pay to the policyholders of participating contracts as a group at the
higher of 70% of accumulated surplus available and the rate specified in the contracts. The accumulated surplus available
mainly arises from net investment income and gains and losses arising from the assets supporting these contracts. To the
extent unrealised gains or losses from available-for-sale securities are attributable to policyholders, shadow adjustments
are recognised in OCI. The surplus owed to policyholders is recognised as policyholder dividend payable whether it is
declared or not. The amount and timing of distribution to individual policyholders of participating contracts are subject to
future declarations by the Group.
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2.13 financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are the portions owned by the external investors in the consolidated
structured entities (open-ended funds). Such financial liabilities are designated at fair value upon initial recognition, and all
realised or unrealised gains or losses are recognised in net profit.
2.14 Securities sold under agreements to repurchase
The Group retains substantially all the risk and rewards of ownership of securities sold under agreements to repurchase
which generally mature within 180 days from the transaction date. Therefore, securities sold under agreements to
repurchase are classified as secured borrowings. The Group may be required to provide additional collateral based on the
fair value of the underlying securities. Securities sold under agreements to repurchase are recorded at amortised cost,
i.e., their cost plus accrued interest at the end of the reporting period. It is the Group’s policy to maintain effective control
over securities sold under agreements to repurchase which includes maintaining physical possession of the securities.
Accordingly, such securities continue to be carried on the consolidated statement of financial position.
2.15 bonds payable
Bonds payable are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest rate method. Amortised cost is calculated by taking into account any discount or premium at acquisition and
transaction costs.
2.16 derivative instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at their fair value. The resulting gain or loss of derivative financial instruments is recognised in
net profit. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
Embedded derivatives that are not closely related to their host contracts and meet the definition of a derivative are
separated and fair valued through profit or loss. The Group does not separately measure embedded derivatives that
meet the definition of an insurance contract or embedded derivatives that are closely related to host insurance contracts
including embedded options to surrender insurance contracts for a fixed amount (or an amount based on a fixed amount
and an interest rate).
2.17 Employee benefits
Pension benefits
Full-time employees of the Group are covered by various government-sponsored pension plans under which the
employees are entitled to a monthly pension based on certain formulae. These government agencies are responsible for
the pension liability to these employees upon retirement. The Group contributes on a monthly basis to these pension
plans. In addition to the government-sponsored pension plans, the Group established an employee annuity fund pursuant
to the relevant laws and regulations in the PRC, whereby the Group is required to contribute to the schemes at fixed rates
of the employees’ salary costs. Contributions to these plans are expensed as incurred. Under these plans, the Group has
no legal or constructive obligation for retirement benefit beyond the contributions made.
Housing benefits
All full-time employees of the Group are entitled to participate in various government-sponsored housing funds. The Group
contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees. The Group’s
liability in respect of these funds is limited to the contributions payable in each year.
Stock appreciation rights
Compensation under the stock appreciation rights is measured based on the fair value of the liabilities incurred and is
expensed over the vesting period. Valuation techniques including option pricing models are used to estimate fair value
of relevant liabilities. The liability is re-measured at the end of each reporting period to its fair value until settlement. Fair
value changes in the vesting period are included in administrative expenses and changes after the vesting period are
included in net fair value gains through profit or loss in net profit. The related liability is included in other liabilities.
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2.18 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of equity instruments are
shown in equity as a deduction, net of tax, from the proceeds.
2.19 Other equity instruments
Other equity instruments are Core Tier 2 Capital Securities issued by the Group. These securities contain no contractual
obligation to deliver cash or another financial asset; or to exchange financial assets or financial liabilities with another
entity under conditions that are potentially unfavourable to the Group; or to be settled in the Group’s own equity
instruments. Therefore, the Group classifies these securities as other equity instruments. Fees, commissions and
other transaction costs of these securities’ issuance are deducted from equity. The distributions of the securities are
recognised as profit distribution at the time of declaration.
2.20 revenue recognition
Turnover of the Group represents the total revenues which include the following:
Premiums
Premiums from long-term insurance contracts are recognised as revenue when due from the policyholders.
Premiums from the sale of short duration accident and health insurance products are recorded when written and are
accreted to earnings on a pro-rata basis over the term of the related policy coverage.
Policy fee income
The policy fee income for investment contracts mainly consists of acquisition costs and various fees (handling fees and
management fees, etc.) over the period of which the service is provided. Policy fee income net of certain acquisition costs
is amortised over the expected life of the contracts and recognised as other income.
Investment income
Investment income comprises interest income from term deposits, cash and cash equivalents, debt securities, securities
purchased under agreements to resell, loans and dividend income from equity securities. Interest income is recorded
on an accrual basis using the effective interest rate method. Dividend income is recognised when the right to receive
dividend payment is established.
2.21 finance costs
Interest expenses for bonds payable, securities sold under agreements to repurchase, interest-bearing loans, borrowings
and lease liabilities are recognised within finance costs in net profit using the effective interest rate method.
2.22 Current and deferred income taxation
Income tax expense for the period comprises current and deferred tax. Income tax is recognised in net profit, except to
the extent that it relates to items recognised directly in OCI where the income tax is recognised in OCI.
Current income tax assets and liabilities for the current period are calculated on the basis of the tax laws enacted or
substantively enacted at the end of each reporting period in the jurisdictions where the Company and its subsidiaries
operate and generate taxable income. Management periodically evaluates positions taken with respect to situations in
which applicable tax regulations are subject to interpretation.
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2.22 Current and deferred income taxation (continued)
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Substantively enacted tax rates
are used in the determination of deferred income tax.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint
ventures except where the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not be reversed in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Conversely, previously unrecognised deferred tax assets are reassessed by the end of each reporting period
and are recognised to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income tax
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.
2.23 Provisions and contingencies
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of
economic resources will be required, or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised in the consolidated statement of financial position but is disclosed in the notes
to the consolidated financial statements. When a change in the probability of an outflow occurs so that such outflow is
probable and can be reliably measured, it will then be recognised as a provision.
2.24 dividend distribution
Dividend distribution to the Company’s equity holders is recognised as a liability in the Group’s consolidated financial
statements in the year in which the dividends are approved by the Company’s equity holders.
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The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and
judgements are continually evaluated and based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The Group exercises significant judgement in
making appropriate assumptions.
Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and liabilities,
are set out below. It is possible that actual results may be different from the estimates and judgements referred to below.
3.1 Estimates of future benefit payments and premiums arising from long-term insurance contracts
The determination of the liabilities under long-term insurance contracts is based on estimates of future benefit payments,
premiums and relevant expenses made by the Group and the margins. Assumptions about mortality rates, morbidity
rates, lapse rates, discount rates, expense assumptions and policy dividend assumptions are made based on the most
recent historical analysis and current and future economic conditions. The liability uncertainty arising from uncertain future
benefit payments, premiums and relevant expenses is reflected in the risk margin.
The residual margin relating to the long-term insurance contracts is amortised over the expected life of the contracts,
based on the assumptions (mortality rates, morbidity rates, lapse rates, discount rates, expenses assumption and policy
dividend assumptions) that are determined at inception of the contracts and remain unchanged for the duration of the
contracts.
The judgements exercised in the valuation of insurance contract liabilities (including contracts with DPF) affect the
amounts recognised in the consolidated financial statements as insurance contract benefits and insurance contract
liabilities.
The impact of the various assumptions and their changes are described in Note 15.
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3.2 financial instruments
The Group’s principal investments are debt securities, equity securities, term deposits and loans. The critical estimates
and judgements are those associated with the recognition of impairment and the measurement of fair value.
The Group considers a wide range of factors in the impairment assessment as described in Note 2.9.c.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When the fair values of financial assets and liabilities recorded in the
consolidated statement of financial position cannot be measured based on quoted prices in active markets, their fair value
is measured using valuation techniques which require a degree of judgements. The methods and assumptions used by
the Group in measuring the fair value of financial instruments are as follows:
• 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.
For the description of valuation techniques, please refer to Note 4.4. Using different valuation techniques and parameter
assumptions may lead to some differences of fair value estimations.
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3.3 impairment of investments in associates and joint ventures
The Group assesses whether there are any indicators of impairment for investments in associates and joint ventures
at the end of each reporting period. Investments in associates and joint ventures are tested for impairment when there
are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of
investments in associates and joint ventures exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use. The calculation of the fair value less costs of disposal is based on available data from
binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental
costs for disposing of investments in associates and joint ventures. When value in use calculations are undertaken, the
Group must estimate the expected future cash flows from investments in associates and joint ventures and choose a
suitable discount rate in order to calculate the present value of those cash flows.
3.4 income tax
The Group is subject to income tax in numerous jurisdictions. During the normal course of business, certain transactions
and activities for which the ultimate tax determination is uncertain, the Group needs to exercise significant judgement
when determining the income tax. If the final settlement results of the tax matters are different from the amounts
recorded, these differences will impact the final income tax expense and deferred tax for the period.
3.5 determination of control over investee
The Group applies its judgement to determine whether the control indicators set out in Note 2.2 indicate that the Group
controls structured entities such as funds and asset management products.
The Group issues certain structured entities (e.g. funds and asset management plans), and acts as a manager for such
entities according to the contracts. In addition, the Group may be exposed to variability of returns as a result of holding
shares of the structured entities. Determining whether the Group controls such structured entities usually focuses on the
assessment of the aggregate economic interests of the Group in the entities (including any carried interests and expected
management fees) and the decision-making rights on the entity. As at 31 December 2019, the Group has consolidated
some funds issued and managed by the Company’s subsidiary, China Life AMP Asset Management Company (“CL
AMP”), some debt investment schemes and asset management products issued and managed by the Company’s
subsidiary, China Life Asset Management Company Limited (“AMC”) and some trust schemes and debt investment
schemes issued and managed by third parties in the consolidated financial statements. Please refer to Note 42(d) for the
details.
159
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT
Risk management is carried out by the Company’s Risk Management Committee under policies approved by the
Company’s Board of Directors.
The Group issues contracts that transfer insurance risk or financial risk or both. This section summarises these risks and
the way the Group manages them.
4.1 insurance risk
4.1.1 Types of insurance risks
The risk under any one insurance contract is the possibility that an insured event occurs and the uncertainty about the
amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.
For a portfolio of insurance contracts where the theory of probability is applied to the pricing and provisioning, the principal
risk that the Group faces under its insurance contracts is that the actual claims and benefit payments are less favourable
than the underlying assumptions used in establishing the insurance liabilities. This occurs when the frequency or severity
of claims and benefits exceeds the estimates. Insurance events are random, and the actual number of claims and the
amount of benefits paid will vary each year from estimates established using statistical techniques.
Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability of the
expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a
change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the types
of insurance risks accepted and within each of these categories to achieve a sufficiently large population to reduce the
variability of the expected outcome. The Group manages insurance risk through underwriting strategies, reinsurance
arrangements and claims handling.
The Group manages insurance risks through two types of reinsurance agreements, ceding on a quota share basis or
a surplus basis, to cover insurance liability risk. Reinsurance contracts cover almost all products, which contain risk
liabilities. The products reinsured include: life insurance, accident and health insurance or death, disability, accident,
illness and assistance in terms of product category or function, respectively. These reinsurance agreements spread
insured risk to a certain extent and reduce the effect of potential losses to the Group. However, the Group’s direct
insurance liabilities to the policyholder are not eliminated because of the credit risk associated with the failure of
reinsurance companies to fulfil their responsibilities.
160
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.1 insurance risk (continued)
4.1.2 Concentration of insurance risks
All insurance operations of the Group are located in the PRC. There are no significant differences among the regions
where the Group underwrites insurance contracts.
The table below presents the Group’s major products of long-term insurance contracts:
for the year ended 31 december
2019
2018
Product name
rmb million
%
RMB million
%
Premiums of long-term insurance contracts
Xin Fu Ying Jia Annuity (a)
Xin Xiang Jin Sheng Annuity (Type A) (b)
Xin Ru Yi Annuity (c)
Kang Ning Whole Life (d)
Hong Ying Participating Endowment (e)
Others (f)
Total
insurance benefits of long-term
insurance contracts
Xin Fu Ying Jia Annuity (a)
Xin Xiang Jin Sheng Annuity (Type A) (b)
Xin Ru Yi Annuity (c)
Kang Ning Whole Life (d)
Hong Ying Participating Endowment (e)
Others (f)
Total
37,024
36,345
21,276
19,701
558
382,666
497,570
1,799
12
3,512
5,119
7,906
61,776
80,124
7.44%
7.30%
4.28%
3.96%
0.11%
76.91%
100.00%
2.25%
0.01%
4.38%
6.39%
9.87%
77.10%
38,397
257
21,960
20,667
1,448
397,767
480,496
1,847
–
3,526
4,663
28,741
95,621
7.99%
0.05%
4.57%
4.30%
0.30%
82.79%
100.00%
1.37%
–
2.62%
3.47%
21.38%
71.16%
100.00%
134,398
100.00%
as at 31 december 2019
As at 31 December 2018
rmb million
%
RMB million
%
liabilities of long-term insurance contracts
Xin Fu Ying Jia Annuity (a)
Xin Xiang Jin Sheng Annuity (Type A) (b)
Xin Ru Yi Annuity (c)
Kang Ning Whole Life (d)
Hong Ying Participating Endowment (e)
Others (f)
Total
86,876
27,554
90,379
309,519
35,403
1,971,600
2,521,331
3.45%
1.09%
3.58%
12.28%
1.40%
78.20%
100.00%
52,440
193
71,571
289,230
42,969
1,733,391
2,189,794
2.39%
0.01%
3.27%
13.21%
1.96%
79.16%
100.00%
161
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.1 insurance risk (continued)
4.1.2 Concentration of insurance risks (continued)
(a) Xin Fu Ying Jia Annuity is an annuity insurance contract with the options for regular premium of 3 years, 5 years or
10 years. Its insured period extends from the effective date of Xin Fu Ying Jia Annuity to the corresponding date when
policyholders reach the age of 88. This product is applicable to healthy policyholders between 28-day-old and 70-year-old.
From the effective date to the contractual date starting to claim of Xin Fu Ying Jia Annuity, the annuity payment of first
policy year is paid at 20% of the first premium of the product, and the following annuity payments are paid at 20% of the
basic sum insured by Xin Fu Ying Jia Annuity. From the first corresponding date after the contractual date starting to claim
of annuity, to the corresponding date when the policyholders reach the age of 88-year-old, annuity is paid at 3% of the
basic sum insured during the insured period if policyholders live to the annual corresponding effective date; annuity is paid
at the premium received (without interest) during the insured period if policyholders live to the contractual date starting to
claim of annuity; the contract terminates and death benefit is paid at the premium received (without interest) or the cash
value of the contract, whichever greater when death incurred before the contractual date starting to claim of annuity; the
contract terminates and death benefit is paid at the cash value of the contract when death incurred after contractual date
starting to claim of annuity; the contract terminates and accidental death benefit is paid at the premium received (without
interest) less any death benefit paid when accidents occurred and due to which death incurred within 180 days. Death
benefit and accidental death benefit are paid only once.
(b) Xin Xiang Jin Sheng Annuity (Type A) is an annuity insurance contract with the options for regular premium of 3 years
and 5 years paid annually or monthly. Its insured period is 15 years. This product is applicable to healthy policyholders
between 28-day-old and 65-year-old. To the first effective date after the fifth policy years and the first effective date after
the sixth policy years, if the policyholders live, the special survival payment shall be paid at 50% of the annual premium
according to the basic sum insured if the payment period is 3 years; and the survival payment shall be paid at 100% of
the annual premium according to the basic sum insured if the payment period is 5 years. From the first effective date
to the seventh policy years after the expiration date, if the policyholders live to the annual corresponding effective date,
the annuity payment shall be paid at 24% of annual premium according to the basic sum insured if the payment period
is 3 years; and the annuity payment shall be paid at 32% of annual premium according to the basic sum insured if the
payment period is 5 years. If the policyholders live to the annual corresponding effective date of the expiration period,
the contract terminates and maturity benefit is paid at the basic sum insured. If death incurred over insured period, the
contract terminates and death benefit is paid at the premium received (without interest).
(c) Xin Ru Yi Annuity is an annuity insurance contract with the options for regular premium of 3 years, 5 years or 10 years.
Its insured period extends from the effective date of Xin Ru Yi Annuity to the corresponding date when policyholders
reach the age of 80. This product is applicable to healthy policyholders between 28-day-old and 70-year-old. From the
effective date to the contractual date starting to claim of Xin Ru Yi Annuity, the annuity payment of the first policy year
is paid at 10% of the first premium of the product, and the following annuity payments are paid at the basic sum insured
by Xin Ru Yi Annuity. From the first corresponding date after the contractual date starting to claim of annuity to the
corresponding date when the policyholders reach the age of 80-year-old, the annuity payment of the first policy year is
paid at 110% of the basic sum insured during the insured period if policyholders live to the annual corresponding effective
date; the following annuity payments increase by 10% of the basic sum on the basis of the previous payment. The
maturity insurance premium is paid at the premium paid (without interest). The death benefit is paid at the larger value of
the insurance premium (without interest) and the cash value of the contract at the time of the death of the insured.
162
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.1 insurance risk (continued)
4.1.2 Concentration of insurance risks (continued)
(d) Kang Ning Whole Life is a whole life insurance contract with the options for single premium or regular premium of 10
years or 20 years. This product is applicable to healthy policyholders under 70-year-old. The critical illness benefit is paid at
200% of the basic sum insured. If the critical illness benefits are paid within the payment period, the insurance premium
of each subsequent period shall be exempted, and the contract shall continue to be valid from the date of the payment of
the critical illness benefits. Both death and disability benefits are paid at 300% of the basic sum insured less any critical
illness benefits paid.
(e) Hong Ying Participating Endowment is a participating endowment insurance contract with the options for single
premium or regular premium of 3 years, 5 years or 10 years. Its insured period can be 6 years, 10 years or 15 years. This
product is applicable to healthy policyholders between 30-day-old and 70-year-old. Maturity benefit of a single premium
policy is paid at the basic sum insured, while that of a regular premium policy is paid at the basic sum insured multiplied
by the number of years of the premium payments. Disease death benefit incurred within the first policy year is paid at
the premium received (without interest). Disease death benefit incurred after the first policy year is paid at the basic sum
insured for a single premium policy or the basic sum insured multiplied by the number of years of premium payments for
a regular premium policy. When accidents occurred during taking a train, a ship or a flight period, death benefit is paid at
the basic sum multiplied by 3 insured for a single premium policy or the basic sum multiplied by 3 and times the number
of years of premium payments insured for a regular premium policy. When accidents occurred out of the period of taking
a train, a ship or a flight, death benefit is paid at the basic sum multiplied by 2 insured for a single premium policy or the
basic sum multiplied by 2 and times the number of years of premium payments insured for a regular premium policy.
(f) Others consist of various long-term insurance contracts with no significant concentration.
4.1.3 Sensitivity analysis
Sensitivity analysis of long-term insurance contracts
Liabilities for long-term insurance contracts and liabilities unbundled from universal life insurance contracts and unit-linked
insurance contracts with insurance risk are calculated based on the assumptions on mortality rates, morbidity rates, lapse
rates and discount rates. Changes in insurance contract reserve assumptions reflect the Company’s actual operating
results and changes in its expectation of future events. The Company considers the potential impact of future risk factors
on its operating results and incorporates such potential impact in the determination of assumptions.
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 RMB28,045 million or RMB29,286 million (as at 31
December 2018: RMB23,322 million or RMB24,177 million) lower or 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 RMB1,336 million or RMB1,253 million (as at 31 December 2018: RMB1,672
million or RMB1,535 million) lower or higher, 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 RMB96,131 million or RMB108,946 million (as at 31 December 2018:
RMB83,634 million or RMB95,212 million) higher or lower, respectively.
163
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.1 insurance risk (continued)
4.1.3 Sensitivity analysis (continued)
Sensitivity analysis of short-term insurance contracts
The assumptions of reserves for claims and claim adjustment expenses may be affected by other variables such as claims
payment of short-term insurance contracts, which may result in the synchronous changes to reserves for claims and claim
adjustment expenses.
Holding all other variables constant, if claim ratios are 100 basis points higher or lower than the current assumption, pre-
tax profit is expected to be RMB670 million (as at 31 December 2018: RMB551 million) lower or higher, respectively.
The following table indicates the claim development for short-term insurance contracts without taking into account the
impacts of ceded business:
Estimated claims expenses
Year end
1 year later
2 years later
3 years later
4 years later
Estimated accumulated
claims expenses
Accumulated claims expenses paid
Short-term insurance contracts (accident year)
2015
20,497
21,427
21,422
21,422
21,422
2016
27,120
27,303
26,851
26,851
2017
33,926
34,845
34,328
2018
40,601
42,785
2019
49,727
Total
21,422
(21,422)
26,851
(26,851)
34,328
(34,328)
42,785
(40,864)
49,727
(33,244)
175,113
(156,709)
Unpaid claims expenses
–
–
–
1,921
16,483
18,404
The following table indicates the claim development for short-term insurance contracts taking into account the impacts of
ceded business:
Estimated claims expenses
Year end
1 year later
2 years later
3 years later
4 years later
Estimated accumulated claims
expenses
Accumulated claims expenses paid
Short-term insurance contracts (accident year)
2015
20,359
21,262
21,259
21,259
21,259
2016
26,897
27,107
26,655
26,655
2017
33,700
34,560
34,045
2018
40,157
42,280
2019
49,175
Total
21,259
(21,259)
26,655
(26,655)
34,045
(34,045)
42,280
(40,374)
49,175
(32,822)
173,414
(155,155)
Unpaid claims expenses
–
–
–
1,906
16,353
18,259
164
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.2 financial risk
The Group’s activities are exposed to a variety of financial risks. The key financial risk is that proceeds from the sale of
financial assets will not be sufficient to fund the obligations arising from the Group’s insurance and investment contracts.
The most important components of financial risk are market risk, credit risk and liquidity risk.
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. Risk management is carried out by a designated
department under policies approved by management. The responsible department identifies, evaluates and manages
financial risks in close cooperation with the Group’s operating units. The Group provides written principles for overall risk
management, as well as written policies covering specific areas, such as managing market risk, credit risk, and liquidity
risk.
The Group manages financial risk by holding an appropriately diversified investment portfolio as permitted by laws and
regulations designed to reduce the risk of concentration in any one specific industry or issuer. The structure of the
investment portfolio held by the Group is disclosed in Note 10.
The sensitivity analyses below are based on a change in an assumption while holding all other assumptions constant. In
practice this is unlikely to occur, and changes in some of the assumptions may be correlated, such as change in interest
rate and change in market price.
4.2.1 Market risk
(i) Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate due to changes
in market interest rates. The Group’s financial assets are principally composed of term deposits, debt securities and
loans which are exposed to interest rate risk. Changes in the level of interest rates could have a significant impact on
the Group’s overall investment return. Many of the Group’s insurance policies offer guaranteed returns to policyholders.
These guarantees expose the Group to interest rate risk.
The Group manages interest rate risk through adjustments to portfolio structure and duration, and, to the extent possible,
by monitoring the mean duration of its assets and liabilities.
The sensitivity analysis for interest rate risk illustrates how changes in interest income and the fair value of future cash
flows of a financial instrument will fluctuate because of changes in market interest rates at the end of the reporting
period.
As at 31 December 2019, if market interest rates were 50 basis points higher or lower with all other variables held
constant, pre-tax profit for the year would have been RMB528 million higher or lower (as at 31 December 2018: RMB145
million lower or higher), respectively, mainly as a result of higher or lower interest income on floating rate cash and cash
equivalents, term deposits, statutory deposits – restricted, debt securities and loans and the fair value losses or gains
on debt securities assets at fair value through profit or loss. Pre-tax available-for-sale reserve in equity would have been
RMB9,854 million lower or higher (as at 31 December 2018: RMB13,749 million lower or RMB10,045 million higher), as a
result of a decrease or increase in the fair value of available-for-sale securities.
165
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.1 Market risk (continued)
(ii) Price risk
Price risk arises mainly from the volatility of prices of equity securities held by the Group. Prices of equity securities are
determined by market forces. The Group is subject to increased price risk mainly because China’s capital markets are
relatively volatile.
The Group manages price risk by holding an appropriately diversified investment portfolio as permitted by laws and
regulations designed to reduce the risk of concentration in any one specific industry or issuer.
As at 31 December 2019, if the prices of all the Group’s equity securities had increased or decreased by 10% with all
other variables held constant, pre-tax profit for the year would have been RMB5,641 million (as at 31 December 2018:
RMB5,073 million) higher or lower, respectively, mainly as a result of an increase or decrease in fair value of equity
securities excluding available-for-sale securities. Pre-tax available-for-sale reserve in equity would have been RMB38,559
million (as at 31 December 2018: RMB24,898 million or RMB34,474 million) higher or lower, respectively, as a result
of an increase or decrease in fair value of available-for-sale equity securities. If prices decreased to the extent that the
impairment criteria were met, a portion of such decrease of the available-for-sale equity securities would reduce pre-tax
profit through impairment.
(iii) Currency risk
Currency risk is the volatility of fair value or future cash flows of financial instruments resulted from changes in foreign
currency exchange rates. The Group’s currency risk exposure mainly arises from cash and cash equivalents, term
deposits, debt investments, equity investments, interest-bearing loans and borrowings denominated in currencies other
than the functional currency, such as US dollar, HK dollar, GB pound and EUR, etc.
The following table summarises primary financial assets and financial liabilities denominated in currencies other than RMB
as at 31 December 2019 and 2018, expressed in RMB equivalent:
as at 31 december 2019
uS dollar
hK dollar gb pound
Eur
Others
Total
financial assets
Equity securities
– Available-for-sale securities
– Securities at fair value through
profit or loss
Debt securities
– Held-to-maturity securities
– Loans
– Available-for-sale securities
– Securities at fair value through
profit or loss
Term deposits
Cash and cash equivalents
11,086
95,428
–
–
–
106,514
4,549
218
1,592
7,557
448
8,026
1,842
660
871
2,166
1,292
9,538
–
–
–
–
32
444
–
–
–
35
–
406
–
–
–
15
–
20
–
–
–
9
–
3
218
1,592
7,557
507
8,058
2,715
Total
35,318
96,564
1,312
2,201
1,304
136,699
financial liabilities
Interest-bearing loans and
other borrowings
Total
166
12,892
12,892
–
–
2,515
2,515
4,638
4,638
–
–
20,045
20,045
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.1 Market risk (continued)
(iii) Currency risk (continued)
As at 31 December 2018
US dollar
HK dollar
GB pound
EUR
Others
Total
financial assets
Equity securities
– Available-for-sale securities
– Securities at fair value through
profit or loss
Debt securities
– Held-to-maturity securities
– Loans
– Available-for-sale securities
– Securities at fair value through
profit or loss
Term deposits
Cash and cash equivalents
9,994
41,379
–
–
–
51,373
4,511
150
1,766
2,240
627
7,502
1,768
163
951
2,315
1,076
9,016
–
–
–
–
–
261
–
–
–
19
–
287
–
–
–
7
–
42
–
–
–
4
–
–
150
1,766
2,240
657
7,502
2,358
Total
28,558
41,803
1,257
2,364
1,080
75,062
financial liabilities
Interest-bearing loans and
other borrowings
Total
13,108
13,108
–
–
2,385
2,385
4,657
4,657
–
–
20,150
20,150
As at 31 December 2019, if RMB had strengthened or weakened by 10% against US dollar, HK dollar, GB pound, EUR
and other foreign currencies, with all other variables held constant, pre-tax profit for the year would have been RMB1,013
million (as at 31 December 2018: RMB353 million) lower or higher, respectively, mainly as a result of foreign exchange
losses or gains on translation of US dollar, HK dollar, GB pound, EUR and other foreign currencies denominated financial
assets and financial liabilities other than the available-for-sale equity securities included in the table above. Pre-tax
available-for-sale reserve in equity would have been RMB10,423 million (as at 31 December 2018: RMB4,909 million)
lower or higher, respectively, as a result of foreign exchange losses or gains on translation of the available-for-sale equity
securities at fair value. The actual exchange losses in 2019 were RMB67 million (2018: exchange losses of RMB194
million).
167
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.2 Credit risk
Credit risk is the risk that one party of a financial transaction or the issuer of a financial instrument will fail to discharge
its obligation and cause another party to incur a financial loss. Because the Group’s investment portfolio is restricted
to the types of investments as permitted by the China Banking and Insurance Regulatory Commission (“CBIRC”) and a
significant portion of the portfolio is in government bonds, government agency bonds, corporate bonds with higher credit
rating and term deposits with the state-owned commercial banks, the Group’s overall exposure to credit risk is relatively
low.
Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Group manages
credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction
structures. Where appropriate, the Group obtains collateral in the form of rights to cash, securities, property and
equipment to lower the credit risk.
Credit risk exposure
The carrying amount of financial assets included on the consolidated statement of financial position represents the
maximum credit risk exposure at the reporting date without taking account of any collateral held or other credit
enhancements attached. The Group has no credit risk exposure relating to off-balance sheet items as at 31 December
2019 and 2018.
Collateral and other credit enhancements
Securities purchased under agreements to resell are pledged by counterparties’ debt securities or term deposits of which
the Group could take the ownership if the owner of the collateral defaults. Policy loans and most of premium receivables
are collateralised by their policies’ cash value according to the terms and conditions of policy loan contracts and policy
contracts, respectively.
Credit quality
The Group’s debt securities investment mainly includes government bonds, government agency bonds, corporate bonds
and subordinated bonds or debts, and most of the debt securities are guaranteed by either the Chinese government or
Chinese government controlled financial institutions. As at 31 December 2019, 99.8% (as at 31 December 2018: 99.9%)
of the corporate bonds held by the Group or the issuers of these corporate bonds had credit ratings of AA/A-2 or above.
As at 31 December 2019, 100% (as at 31 December 2018: 99.9%) of the subordinated bonds or debts held by the Group
either had credit ratings of AA/A-2 or above, or were issued by national commercial banks. The bonds, debts or their
issuers’ credit ratings are assigned by a qualified appraisal institution in the PRC and updated at each reporting date.
As at 31 December 2019, 99.7% (as at 31 December 2018: 99.9%) of the Group’s bank deposits are with the four
largest state-owned commercial banks, other national commercial banks and China Securities Depository and Clearing
Corporation Limited (“CSDCC”) in the PRC. The Group believes these commercial banks, and CSDCC have a high credit
quality. The Group’s most other loans excluding policyholder loans, are guaranteed by third parties or with pledge, or have
the fiscal annual budget income as the source of repayment, or have higher credit rating borrowers. As a result, the Group
concludes that the credit risk associated with term deposits and accrued investment income thereof, statutory deposits
- restricted, other loans, and cash and cash equivalents has not caused a material impact on the Group’s consolidated
financial statements as at 31 December 2019 and 2018.
The credit risk associated with securities purchased under agreements to resell, policy loans and most of premium
receivables has not caused a material impact on the Group’s consolidated financial statements taking into consideration
their sufficient collateral held and maturity terms of no more than one year as at 31 December 2019 and 2018.
168
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.3 Liquidity risk
Liquidity risk is the risk that the Group is unable to obtain funds at a reasonable funding cost when required to meet a
repayment obligation and fund its asset portfolio within a certain time.
In the normal course of business, the Group attempts to match the maturity of financial assets to the maturity of
insurance and financial liabilities.
The following tables set forth the contractual and expected undiscounted cash flows for financial assets and liabilities and
insurance liabilities:
Contractual and expected cash flows
(undiscounted)
later than
1 year but
not later
than
3 years
later than
3 years but
not later
than
5 years
Not later
than
1 year
later
than
5 years
Carrying
value
Without
maturity
605,996
1,523,748
608,920
535,260
6,333
4,467
41,703
17,281
53,306
605,996
–
–
–
–
–
–
–
–
–
107,632
232,715
119,827
479
4,467
40,710
17,281
53,306
–
319,656
174,260
184,707
2,315
–
250,805
117,001
294,477
4,594
–
1,701,886
191,290
8,087
–
–
561
–
–
–
432
–
–
–
–
–
–
as at 31 december 2019
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
3,397,014
605,996
576,417
681,499
667,309
1,901,263
financial and insurance liabilities
Expected cash outflows
Insurance contracts
Investment contracts
2,552,736
267,804
Contractual cash outflows
Securities sold under agreements
to repurchase
118,088
–
–
–
179,925
(24,020)
209,603
(29,900)
(35,264)
23,462
(5,015,173)
(606,662)
(118,088)
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
3,859
(3,859)
–
51,019
20,045
34,990
3,091
–
–
–
–
(51,019)
(4,776)
(332)
(1,331)
–
–
–
–
–
–
(1,572)
(2,996)
(1,491)
(16,111)
(37,996)
(440)
–
–
–
–
–
(74)
Subtotal
3,051,632
(3,859)
(19,641)
173,644
(66,349)
(5,621,909)
Net cash inflow/(outflow)
345,382
602,137
556,776
855,143
600,960
(3,720,646)
169
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.3 Liquidity risk (continued)
Contractual and expected cash flows
(undiscounted)
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
Carrying
value
Without
maturity
422,780
1,391,310
450,251
559,341
6,333
9,905
48,402
15,648
50,809
422,780
–
–
–
–
–
–
–
–
–
80,801
182,978
172,525
782
9,905
47,834
15,648
50,809
–
290,449
101,149
145,634
739
–
298,644
88,718
237,508
6,005
–
1,417,910
172,050
77,961
–
–
540
–
–
–
28
–
–
–
–
–
–
As at 31 December 2018
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
2,954,779
422,780
561,282
538,511
630,903
1,667,921
financial and insurance liabilities
Expected cash outflows
Insurance contracts
Investment contracts
2,216,031
255,434
Contractual cash outflows
Securities sold under agreements
to repurchase
192,141
–
–
–
197,289
(13,098)
222,170
(10,293)
(13,489)
(11,422)
(4,391,739)
(629,318)
Financial liabilities at fair value
through profit or loss
Annuity and other insurance
balances payable
Interest-bearing loans and other
borrowings
Subtotal
2,680
(2,680)
–
49,465
20,150
–
–
(192,141)
(49,465)
–
–
–
(16,977)
(3,798)
–
–
–
–
–
–
–
–
2,735,901
(2,680)
(74,392)
208,079
(24,911)
(5,021,057)
Net cash inflow/(outflow)
218,878
420,100
486,890
746,590
605,992
(3,353,136)
The amounts set forth in the tables above for insurance and investment contracts in each column are the cash flows
representing expected future benefit payments taking into consideration of future premiums payments or deposits from
policyholders. The excess cash inflows from matured financial assets will be reinvested to cover any future liquidity
exposures. The estimate is subject to assumptions related to mortality, morbidity, the lapse rate, the loss ratio of short-
term insurance contracts, expense and other assumptions. Actual experience may differ from estimates.
170
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.3 Liquidity risk (continued)
The liquidity analysis above does not include policyholder dividends payable of RMB112,593 million as at 31 December
2019 (as at 31 December 2018: RMB85,071 million). As at 31 December 2019, declared dividends of RMB77,512 million
(as at 31 December 2018: RMB74,932 million) included in policyholder dividends payable have a maturity not later than
one year. For the remaining policyholder dividends payable, the amount and timing of the undiscounted cash flows
are indeterminate due to the uncertainty of future experiences including investment returns and are subject to future
declarations by the Group.
Although all investment contracts with DPF and investment contracts without DPF contain contractual options to
surrender that can be exercised immediately by all policyholders at any time, the Group’s expected cash flows as shown
in the above tables are based on past experience and future expectations. Should these contracts be surrendered
immediately, it would cause a cash outflow of RMB61,178 million and RMB204,037 million, respectively for the year
ended 31 December 2019 (2018: RMB58,669 million and RMB194,290 million, respectively), payable within one year.
4.2.4 Capital management
The Group’s objectives for managing capital are to comply with the insurance capital requirements based on the minimum
capital and actual capital required by the CBIRC, prevent risk in operation and safeguard the Group’s ability to continue
as a going concern so that it can continue to provide returns for equity holders and benefits for other stakeholders. The
Group replenishes capital to improve the solvency ratio by issuing Core Tier 2 Capital Securities and bonds for capital
replenishment according to the relevant laws and the approval of the relevant authorities.
The Group is also subject to other local capital requirements, such as statutory deposits - restricted requirement, statutory
insurance fund requirement, statutory reserve fund requirement and general reserve requirement discussed in detail in
Note 10.4, Note 21 and Note 38, respectively.
The Group manages capital to ensure its continuous and full compliance with the regulations mainly through monitoring
its quarterly solvency ratios, as well as the solvency ratio based on annual stress testing.
171
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.2 financial risk (continued)
4.2.4 Capital management (continued)
The table below summarises the core and comprehensive solvency ratio, core capital, actual capital and minimum capital
of the Company under Insurance Institution Solvency Regulations (No. 1 - No. 17):
Core capital
Actual capital
Minimum capital
Core solvency ratio
Comprehensive solvency ratio
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
952,030
987,067
356,953
267%
277%
761,353
761,367
303,872
251%
251%
According to the solvency ratios results mentioned above, and the unquantifiable evaluation results of operational
risk, strategic risk, reputational risk and liquidity risk of insurance companies, the CBIRC evaluates the comprehensive
solvency of insurance companies and supervises insurance companies by classifying them into four categories:
(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.
According to the Supervision Information System of the China Risk Oriented Solvency System, the latest Integrated Risk
Rating result of the Company was Category A.
4.3 disclosures about interest in unconsolidated structured entities
The Group’s interest in unconsolidated structured entities are recorded as securities at fair value through profit or
loss, available-for-sale securities and loans. These structured entities typically raise funds by issuing securities or other
beneficiary certificates. The purpose of these structured entities is primarily to generate management service fees,
or provide finance to public and private infrastructure construction. Refer to Note 3.5 for the Group’s consolidation
judgements related to structured entities.
These structured entities that the Group has interest in are guaranteed by third parties with higher credit ratings, or by
pledging, or by having the fiscal budget income as the source of repayment, or by borrowers with higher credit ratings.
The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in or
sponsored.
172
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
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
The Group believes that the maximum exposure approximates the carrying amount of interest in these unconsolidated
structured entities. The size of unconsolidated structured entities as well as the Group’s carrying amount of the assets
recognised in the financial statements relating to its interest in unconsolidated structured entities and the Group’s
maximum exposure are shown below:
as at 31 december 2019
Size
unconsolidated structured entities
Carrying
amount
of assets
maximum
exposure
interest held by
the group
Funds managed by affiliated entities
185,158
6,497
6,497
rmb million
rmb million
rmb million
Funds managed by third parties
Trust schemes managed by affiliated entities
Trust schemes managed by third parties
Debt investment schemes
managed by affiliated entities
Debt investment schemes managed by
third parties
Others managed by affiliated entities Note 2
Others managed by third parties Note 2
Note 1
6,400
Note 1
34,025
Note 1
452,814
Note 1
106,205
3,588
71,707
14,832
37,112
10,827
98,003
106,205
3,588
71,707
14,832
37,112
10,827
98,003
investment income
and service fee
investment income
investment income
and service fee
investment income
investment income
and service fee
investment income
investment income
and service fee
investment income
As at 31 December 2018
Size
Unconsolidated structured entities
Carrying
amount
of assets
Maximum
exposure
Interest held by
the Group
Funds managed by affiliated entities
120,797
629
629
RMB Million
RMB Million
RMB Million
Funds managed by third parties
Trust schemes managed by affiliated entities
Trust schemes managed by third parties
Debt investment schemes
managed by affiliated entities
Debt investment schemes managed by
third parties
Note 1
3,800
Note 1
59,456
Note 1
Others managed by affiliated entities Note 2
422,006
104,678
2,680
89,769
32,029
33,330
9,502
104,678
2,680
89,769
32,029
33,330
9,502
Others managed by third parties Note 2
Note 1
110,035
110,035
Investment income
and service fee
Investment income
Investment income
and service fee
Investment income
Investment income
and service fee
Investment income
Investment income
and service fee
Investment income
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.
173
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.3 disclosures about interest in unconsolidated structured entities (continued)
(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
As at 31 December 2019, the size of the unconsolidated structured entities that the Group sponsored but had no
interest was RMB600,223 million (as at 31 December 2018: RMB400,419 million), which were mainly funds, special
asset management schemes, pension security products and pension products, etc., sponsored by the Group to generate
management service fee income. In 2019, the management service fee from these structured entities was RMB1,749
million (2018: RMB1,338 million), which was recorded as other income. The Group did not transfer assets to these
structured entities.
4.4 fair value hierarchy
Level 1 fair value is based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can obtain at the measurement date.
Other than Level 1 quoted prices, Level 2 fair value is based on valuation techniques using significant inputs, that are
observable for the asset being measured, either directly or indirectly, for substantially the full term of the asset through
corroboration with observable market data. Observable inputs generally used to measure the fair value of securities
classified as Level 2 include quoted market prices for similar assets in active markets; quoted market prices in markets
that are not active for identical or similar assets and other market observable inputs. This level includes the debt securities
for which quotations are available from pricing services providers. Fair values provided by pricing services providers are
subject to a number of validation procedures by management. These procedures include a review of the valuation models
utilised and the results of these models, as well as the recalculation of prices obtained from pricing services at the end of
each reporting period.
Under certain conditions, the Group may not receive a price quote from independent third-party pricing services. In this
instance, the Group’s valuation team may choose to apply an internally developed valuation method to the assets or
liabilities being measured, determine the main inputs for valuation, and analyse the change of the valuation and report it
to management. Key inputs involved in internal valuation services are not based on observable market data. They reflect
assumptions made by management based on judgements and experiences. The assets or liabilities valued by this method
are generally classified as Level 3.
As at 31 December 2019, assets classified as Level 1 accounted for approximately 35.11% of assets measured at fair
value on a recurring basis. Fair value measurements classified as Level 1 include certain debt securities, equity securities
that are traded in an active exchange market or interbank market and open-ended funds with public market price
quotation. The Group considers a combination of certain factors to determine whether a market for a financial instrument
is active, including the occurrence of trades within the specific period, the respective trading volume, and the degree
which the implied yields for a debt security for observed transactions differs from the Group’s understanding of the
current relevant market rates and information. Trading prices from the Chinese interbank market are determined by both
trading counterparties and can be observed publicly. The Company adopted this price of the debt securities traded on the
Chinese interbank market at the reporting date as their fair market value and classified the investments as Level 1. Open-
ended funds also have active markets. Fund management companies publish the net asset value of these funds on their
websites on each trade date. Investors subscribe for and redeem units of these funds in accordance with the funds’ net
asset value published by the fund management companies on each trade date. The Company adopted the unadjusted net
asset value of the funds at the reporting date as their fair market value and classified the investments as Level 1.
As at 31 December 2019, assets classified as Level 2 accounted for approximately 44.98% of assets measured at
fair value on a recurring basis. They primarily include certain debt securities and equity securities. Valuations are
generally obtained from third party pricing services for identical or comparable assets, or through the use of valuation
methodologies using observable market inputs, or recent quoted market prices. Valuation service providers typically
gather, analyse and interpret information related to market transactions and other key valuation model inputs from
multiple sources, and through the use of widely accepted internal valuation models, provide a theoretical quote on various
securities. Debt securities are classified as Level 2 when they are valued at recent quoted prices from the Chinese
interbank market or from valuation service providers.
174
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 4 riSK maNagEmENT (continued)
4.4 fair value hierarchy (continued)
At 31 December 2019, assets classified as Level 3 accounted for approximately 19.91% of assets measured at fair
value on a recurring basis. They primarily include unlisted equity securities and unlisted debt securities. Fair values are
determined using valuation techniques, including discounted cash flow valuations, the comparable companies approach,
etc. The determination of Level 3 is primarily based on the significance of certain unobservable inputs.
For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 3.2.
The following table presents the Group’s quantitative disclosures of fair value measurement hierarchy for assets and
liabilities measured at fair value as at 31 December 2019:
assets measured at fair value
Available-for-sale securities
– Equity securities
Funds
Common stocks
Preferred stocks
Wealth management products
Others
– Debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
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
Derivative financial assets
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
fair value measurement using
Quoted prices
in active
markets
level 1
Significant
observable
inputs
level 2
Significant
unobservable
inputs
level 3
Total
rmb million
rmb million
rmb million
rmb million
102,349
214,206
–
–
–
2,620
24,305
5,360
1,069
–
16,023
40,070
–
33
362
7,999
–
–
–
22,117
–
32,640
28,319
21,138
146,884
143,095
52,853
6,817
78
211
20
8
6,497
69,200
1,091
–
–
–
58,314
–
70,585
–
–
–
–
105,650
–
–
–
–
–
16
–
428
102,349
236,323
58,314
32,640
98,904
23,758
171,189
148,455
53,922
112,467
16,101
40,281
20
41
6,859
77,215
1,091
428
414,396
530,968
234,993
1,180,357
(3,859)
(10)
(3,869)
–
–
–
–
–
–
(3,859)
(10)
(3,869)
175
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.4 fair value hierarchy (continued)
The following table presents the changes in Level 3 assets and liabilities for the year ended 31 December 2019:
available-for-sale securities
Securities
at fair value
through
profit or loss
derivative
financial
assets
Total
assets
derivative
financial
liabilities
Total
liabilities
debt
securities
Equity
securities
debt
securities
rmb million
rmb million
rmb million
rmb million
rmb million
rmb million
rmb million
Opening balance
Purchases
Transferred into Level 3
Transferred out of Level 3
Total gains/(losses) recorded
in profit or loss
Total gains/(losses) recorded
in other comprehensive income
Disposals
Maturity
79,248
35,453
–
–
100,000
46,561
–
(15,866)
–
–
221
(200)
(9,072)
3,205
(4,000)
(1,001)
Closing balance
105,650
128,899
–
–
16
–
–
–
–
–
16
–
–
–
–
179,248
82,014
16
(15,866)
428
428
–
–
–
3,426
(4,200)
(10,073)
428
234,993
(1,877)
–
–
–
404
–
1,473
–
–
(1,877)
–
–
–
404
–
1,473
–
–
176
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.4 fair value hierarchy (continued)
The following table presents the Group’s quantitative disclosures of fair value measurement hierarchy for assets and
liabilities measured at fair value as at 31 December 2018:
Fair value measurement using
Quoted prices
in active
markets
Level 1
Significant
observable
inputs
Level 2
Significant
unobservable
inputs
Level 3
Total
RMB million
RMB million
RMB million
RMB million
92,260
113,750
–
–
34
2,587
53,433
10,206
–
–
13,891
34,392
–
82
1,556
7,052
–
44
15,871
–
31,348
–
25,853
126,840
175,514
21,314
1,595
76
849
1,506
36
5,204
72,722
1,351
–
13,848
32,707
–
53,445
–
–
–
200
79,048
–
–
–
–
–
–
–
92,304
143,469
32,707
31,348
53,479
28,440
180,273
185,720
21,514
80,643
13,967
35,241
1,506
118
6,760
79,774
1,351
assets measured at fair value
Available-for-sale securities
– Equity securities
Funds
Common stocks
Preferred stocks
Wealth management products
Others
– Debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Others
Securities at fair value through
profit or loss
– Equity securities
Funds
Common stocks
Wealth management products
– Debt securities
Government bonds
Government agency bonds
Corporate bonds
Others
Total
329,243
480,123
179,248
988,614
liabilities measured at fair value
Financial liabilities at fair value through
profit or loss
Investment contracts at fair value through
profit or loss
Derivative financial liabilities
Total
(2,680)
(9)
–
(2,689)
–
–
–
–
–
–
(1,877)
(1,877)
(2,680)
(9)
(1,877)
(4,566)
177
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.4 fair value hierarchy (continued)
The following table presents the changes in Level 3 assets and liabilities for the year ended 31 December 2018:
Available-for-sale securities
Debt
securities
Equity
securities
Securities
at fair value
through
profit or loss
Equity
securities
Total
assets
Derivative
financial
liabilities
Total
liabilities
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
Opening balance
Purchases
Transferred into Level 3
Transferred out of Level 3
Total gains/(losses) recorded in profit or loss
Total gains/(losses) recorded in other
comprehensive income
Disposals
Maturity
Closing balance
57,333
19,755
–
–
–
3,024
–
(864)
89,111
7,891
180
(467)
–
3,446
(161)
–
79,248
100,000
655
–
–
(655)
–
–
–
–
–
147,099
27,646
180
(1,122)
–
6,470
(161)
(864)
–
–
–
–
(1,877)
–
–
–
–
–
–
–
(1,877)
–
–
–
179,248
(1,877)
(1,877)
The assets and liabilities whose fair value measurements are classified under Level 3 above do not have material impact
on the profit or loss of the Group.
For the assets and liabilities measured at fair value on a recurring basis, during the year ended 31 December 2019,
RMB13,307 million (2018: RMB11,215 million) debt securities were transferred from Level 1 to Level 2 within the fair
value hierarchy, whereas RMB9,716 million (2018: RMB16,119 million) debt securities were transferred from Level 2 to
Level 1. No material equity securities were transferred from Level 1 to Level 2 (2018: RMB3,491 million were transferred
from Level 1 to Level 2), whereas RMB853 million equity securities were transferred from Level 2 to Level 1 (2018: no
material transfer).
For the years ended 31 December 2019 and 2018, there were no significant changes in the business or economic
circumstances that affected the fair value of the Group’s financial assets and liabilities. There were also no
reclassifications of financial assets.
As at 31 December 2019 and 2018, significant unobservable inputs such as discount rate and discounts for lack of
marketability were used in the valuation of primarily assets and liabilities at fair value classified as Level 3. The fair value
was not significantly sensitive to reasonable changes in these significant unobservable inputs.
178
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
4 riSK maNagEmENT (continued)
4.4 fair value hierarchy (continued)
The table below presents information about the significant unobservable inputs used for primary assets and liabilities at
fair value classified as Level 3 as at 31 December 2019 and 31 December 2018:
fair value
Equity
securities
31 December 2019: 26,265
31 December 2018: 34,388
31 December 2019: 28,346
31 December 2018: 23,976
31 December 2019: 72,477
31 December 2018: 37,847
valuation
techniques
Comparable
companies
approach
Net asset value
method
Discounted cash
flow method
Significant
unobservable
inputs
range
relationships
between fair value and
unobservable inputs
Discounts for lack
of marketability
31 December 2019: 11%-35%
31 December 2018: 5%-25%
The fair value is inversely related to the
discounts for lack of marketability
N/A
N/A
N/A
Discount rate
31 December 2019: 3.80%-6.38%
31 December 2018: 3.80%-7.50%
The fair value is inversely related to
discount rate
debt
securities
31 December 2019: 105,666
31 December 2018: 79,248
Discounted cash
flow method
Discount rate
31 December 2019: 3.02%-6.22%
31 December 2018: 4.00%-6.60%
The fair value is inversely related to
discount rate
derivative
financial
instruments
428
31 December 2019:
31 December 2018: (1,877)
Comparable
companies
approach
Discounts for lack
of marketability
31 December 2019: 15%
31 December 2018: 11%
The fair value is inversely related to the
discounts for lack of marketability
179
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
5 SEgmENT iNfOrmaTiON
5.1 Operating segments
The Group operates in four operating segments:
(i) Life insurance business (Life)
Life insurance business relates primarily to the sale of life insurance policies, including those life insurance policies
without significant insurance risk transferred.
(ii) Health insurance business (Health)
Health insurance business relates primarily to the sale of health insurance policies, including those health insurance
policies without significant insurance risk transferred.
(iii) Accident insurance business (Accident)
Accident insurance business relates primarily to the sale of accident insurance policies.
(iv) Other businesses (Others)
Other businesses relate primarily to income and cost of the agency business in respect of transactions with CLIC, etc.,
as described in Note 35, net share of profit of associates and joint ventures, income and expenses of subsidiaries, and
unallocated income and expenditure of the Group.
5.2 allocation basis of income and expenses
Investment income, net realised gains on financial assets, net fair value gains through profit or loss and foreign exchange
gains/(losses) within other expenses are allocated among segments in proportion to the respective segments’ average
liabilities of insurance contracts and investment contracts at the beginning and end of the year. Administrative expenses
are allocated among segments in proportion to the unit cost of respective products in the different segments. Unallocated
other income and other expenses are presented in the “Others” segment directly. Income tax is not allocated.
5.3 allocation basis of assets and liabilities
Financial assets, securities sold under agreements to repurchase and derivative financial liabilities are allocated among
segments in proportion to the respective segments’ average liabilities of insurance contracts and investment contracts
at the beginning and end of the year. Insurance and investment contract liabilities are presented under the respective
segments. The remaining assets and liabilities are not allocated.
180
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 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
Other expenses
Including: inter-segment expenses
Statutory insurance fund contribution
446,562
2,584
61,612
113,950
268,416
445,719
129,334
1,646
16,947
1,110
–
594,756
105,581
–
–
–
–
99,575
7,849
100
1,027
60
–
108,611
14,943
–
–
–
–
14,984
443
6
58
–
–
15,491
(124,194)
(3,649)
(34)
–
(303,479)
(8,810)
(22,251)
(57,071)
(3,288)
(25,328)
(7,120)
(1,573)
(797)
(44,613)
(27,209)
(347)
(124)
(16,554)
(200)
(9,075)
(692)
(95)
(273)
(6,170)
(119)
–
–
(5,443)
(12)
(2,962)
(169)
(5)
(93)
Segment benefits, claims and expenses
(552,338)
(102,736)
(15,002)
–
–
–
–
–
–
42,418
5,875
489
–
–
–
–
–
–
2,293
79
1,219
8,698
1,673
12,289
–
–
–
–
–
(2,328)
(755)
(2,910)
(3,294)
–
–
(9,287)
8,011
9,159
11,013
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
31,861
2,671
1,931
917
109
312
946
479
–
–
–
–
–
–
–
–
–
(1,673)
(1,673)
(1,673)
–
–
–
–
–
–
–
–
1,673
1,673
–
1,673
–
–
–
–
–
567,086
560,278
139,919
1,831
19,251
8,195
–
729,474
(127,877)
(50,783)
(330,807)
(9,157)
(22,375)
(81,396)
(4,255)
(40,275)
(9,602)
–
(1,163)
(677,690)
8,011
9,159
59,795
(781)
59,014
58,287
727
34,847
4,379
181
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
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
3,111,140
8,953
3,120,093
183,142
12,109
195,251
10,080
572
10,652
76,907
222,983
299,890
2,385,407
252,362
158,800
15,442
106,377
80,820
6,447
5,687
2,824,966
186,376
8,529
–
365
346
9,240
–
–
4,899
23,904
28,803
–
–
–
–
–
–
–
–
3,381,269
244,617
3,625,886
51,758
49,090
3,726,734
2,552,736
267,804
118,088
110,757
3,049,385
268,007
3,317,392
182
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
5 SEgmENT iNfOrmaTiON (continued)
For the year ended 31 December 2018
Life
Health
Accident
Others
Elimination
Total
RMB million
437,540
3,145
46,375
126,318
261,702
436,863
116,721
(18,439)
(16,946)
1,088
–
519,287
83,614
–
–
–
–
80,279
6,393
(1,008)
(927)
84
–
84,821
14,672
–
–
–
–
14,881
441
(70)
(65)
–
–
15,187
(245,786)
(2,922)
(28)
–
(167,090)
(9,020)
(19,523)
(43,108)
(3,304)
(23,728)
(5,339)
(1,492)
(759)
(33,801)
(22,966)
(312)
(123)
(11,806)
(181)
(7,881)
(487)
(82)
(242)
(80,721)
–
–
(6,751)
125
–
–
(4,808)
(12)
(2,982)
(140)
(5)
(96)
(14,692)
–
–
1,630
4,100
495
–
–
–
–
–
–
1,612
(74)
(340)
8,505
1,579
9,703
–
–
–
–
–
(2,983)
(619)
(2,895)
(3,255)
–
–
(9,752)
7,745
7,745
7,696
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
Other expenses
Including: inter-segment expenses
Statutory insurance fund contribution
Segment benefits, claims and expenses
(517,657)
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
(2,579)
1,589
(141)
505
(10)
202
660
342
–
–
–
–
–
–
–
–
–
(1,579)
(1,579)
(1,579)
–
–
–
–
–
–
–
–
1,579
1,579
–
1,579
–
–
–
–
–
535,826
532,023
125,167
(19,591)
(18,278)
8,098
–
627,419
(248,736)
(40,552)
(189,931)
(9,332)
(19,646)
(62,705)
(4,116)
(37,486)
(7,642)
–
(1,097)
(621,243)
7,745
7,745
13,921
(1,985)
11,936
11,395
541
(2,070)
2,638
183
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
5 SEgmENT iNfOrmaTiON (continued)
As at 31 December 2018
Life
Health
Accident
Others
Elimination
Total
RMB million
–
–
–
–
–
–
–
–
–
2,942,485
220,942
3,163,427
47,281
43,695
3,254,403
2,216,031
255,434
1,877
192,141
72,976
2,738,459
192,654
2,931,113
assets
Financial assets
Others
Segment assets
unallocated
Property, plant and equipment
Others
Total
liabilities
Insurance contracts
Investment contracts
Derivative financial liabilities
Securities sold under agreements to
repurchase
Others
2,743,378
9,696
2,753,074
145,889
8,975
154,864
9,835
610
10,445
43,383
201,661
245,044
2,081,822
240,152
1,773
178,499
46,328
125,743
15,282
97
9,759
3,607
8,466
–
7
674
211
9,358
–
–
–
3,209
22,830
26,039
Segment liabilities
2,548,574
154,488
unallocated
Others
Total
184
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
6 PrOPErTy, PlaNT aNd EQuiPmENT
Office
equipment,
furniture and
fixtures
buildings
37,262
7,171
415
–
(77)
44,771
(10,414)
(1,397)
(48)
48
(11,811)
(24)
–
–
(24)
7,658
288
1,026
–
(604)
8,368
(5,443)
(620)
–
579
(5,484)
–
–
–
–
26,824
32,936
2,215
2,884
motor
vehicles
assets under
construction
leasehold
improvements
Total
rmb million
1,340
–
195
–
(171)
1,364
(813)
(190)
–
162
(841)
–
–
–
–
527
523
16,902
(8,164)
8,656
(2,977)
(39)
14,378
–
–
–
–
–
(1)
–
–
(1)
2,191
532
3
–
(107)
2,619
(1,377)
(283)
–
79
(1,581)
–
–
–
–
65,353
(173)
10,295
(2,977)
(998)
71,500
(18,047)
(2,490)
(48)
868
(19,717)
(25)
–
–
(25)
16,901
14,377
814
1,038
47,281
51,758
Cost
As at 1 January 2019
Transfers upon completion
Additions
Transfers into investment properties
Disposals
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Charge for the year
Other additions
Disposals
as at 31 december 2019
impairment
As at 1 January 2019
Charge for the year
Disposals
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
185
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
6 PrOPErTy, PlaNT aNd EQuiPmENT (continued)
Office
equipment,
furniture and
fixtures
Buildings
32,457
4,889
85
–
(169)
37,262
(9,248)
(1,196)
30
(10,414)
(24)
–
–
(24)
6,873
123
932
–
(270)
7,658
(5,122)
(578)
257
(5,443)
–
–
–
–
23,185
26,824
1,751
2,215
Motor
vehicles
Assets under
construction
Leasehold
improvements
Total
RMB million
1,403
–
282
–
(345)
1,340
(955)
(151)
293
(813)
–
–
–
–
448
527
16,696
(5,500)
11,416
(5,634)
(76)
16,902
–
–
–
–
–
(1)
–
(1)
16,696
16,901
1,830
393
54
–
(86)
2,191
(1,203)
(212)
38
(1,377)
–
–
–
–
627
814
59,259
(95)
12,769
(5,634)
(946)
65,353
(16,528)
(2,137)
618
(18,047)
(24)
(1)
–
(25)
42,707
47,281
Cost
As at 1 January 2018
Transfers upon completion
Additions
Transfers into investment properties
Disposals
as at 31 december 2018
accumulated depreciation
As at 1 January 2018
Charge for the year
Disposals
as at 31 december 2018
impairment
As at 1 January 2018
Charge for the year
Disposals
as at 31 december 2018
Net book value
As at 1 January 2018
as at 31 december 2018
As at 31 December 2019, the net book value of buildings above which were in process to obtain title certificates was
RMB8,852 million (as at 31 December 2018: RMB6,798 million).
186
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
7 lEaSES
(a) right-of-use assets
Cost
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Charge for the year
Deductions
as at 31 december 2019
impairment
As at 1 January 2019
Charge for the year
Deductions
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
buildings
Others
Total
rmb million
2,554
2,262
(130)
4,686
–
(1,196)
29
(1,167)
–
–
–
–
2,554
3,519
1
1
–
2
–
(1)
–
(1)
–
–
–
–
1
1
2,555
2,263
(130)
4,688
–
(1,197)
29
(1,168)
–
–
–
–
2,555
3,520
The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
year ended 31 December 2019.
The Group’s right-of-use assets include the above assets and land use rights disclosed in Note 14.
(b) The amounts recognised in profit or loss in relation to leases are as follows:
Interest on lease liabilities
Depreciation charge of right-of-use assets
Expense relating to short-term leases
Expense relating to leases of low-value assets (except for short-term lease liabilities)
Total
31 december
2019
rmb million
106
1,197
440
3
1,746
187
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
8 iNvESTmENT PrOPErTiES
Cost
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
fair value
As at 1 January 2019
as at 31 december 2019
Cost
As at 1 January 2018
Additions
Deductions
as at 31 december 2018
accumulated depreciation
As at 1 January 2018
Additions
Deductions
as at 31 december 2018
Net book value
As at 1 January 2018
as at 31 december 2018
fair value
As at 1 January 2018
as at 31 december 2018
188
buildings
rmb million
10,227
3,022
(351)
12,898
(480)
(325)
48
(757)
9,747
12,141
12,449
14,870
Buildings
RMB million
3,366
6,875
(14)
10,227
(302)
(186)
8
(480)
3,064
9,747
4,629
12,449
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
8 iNvESTmENT PrOPErTiES (continued)
The Company leases part of its investment properties to its subsidiaries and charges rentals based on the areas occupied
by the respective entities. These properties are categorised as property, plant and equipment of the Group in the
consolidated statement of financial position.
The Group has no restrictions on the use of its investment properties and no contractual obligations to each investment
property purchased, constructed or developed or for repairs, maintenance and enhancements.
As at 31 December 2019, the net book value of investment properties which were in process to obtain title certificates
was RMB5,809 million (as at 31 December 2018: RMB3,407 million).
The fair value of investment properties of the Group as at 31 December 2019 amounted to RMB14,870 million (as at
31 December 2018: RMB12,449 million), which was estimated by the Group having regards to valuations performed by
independent appraisers. The investment properties were classified as Level 3 in the fair value hierarchy.
The Group uses the market comparison approach as its primary method to estimate the fair value of its investment
properties. Under the market comparison approach, the estimated fair value of a property is based on the average sale
price of comparable properties recently sold, with consideration of the comprehensive adjustment coefficient, which is
composed of a number of adjusting factors, including the time and the conditions of sale, the geographical location, age,
decoration, floor area, lot size of the property and other factors.
Under the market comparison approach, an increase (decrease) in the comprehensive adjustment coefficient will result in
an increase (decrease) in the fair value of investment properties.
9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
as at 31 december 2018/31 december 2017
Adjustment (i)
as at 1 january
Change of the cost
Share of profit or loss
Declared dividends
Other equity movements
Impairment
as at 31 december
2019
2018
rmb million
RMB million
201,661
(2,889)
198,772
18,590
9,159
(3,227)
1,189
(1,500)
222,983
161,472
–
161,472
34,229
7,745
(2,903)
1,118
–
201,661
189
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
(continued)
Accounting
method
As at
31 December
2018
Cost
Adjustment (i)
As at
1 January
2019
Change of
the cost
Share of
profit or loss
Declared
dividends
Other
equity
movements
as at
31 december
2019
Percentage
of equity
interest
Accumulated
amount of
impairment
Provision of
impairment
movement
5,374
(284)
276
–
75,180
43.686%
–
545
(369)
(101)
(1,500)
11,387
29.59%
(2,510)
Equity Method
45,176
72,655
(2,841)
69,814
Equity Method
11,245
12,812
Equity Method
6,000
7,963
Equity Method
1,339
1,501
Equity Method
20,000
21,387
–
–
–
–
Equity Method
Equity Method
21,829
29,231
21,892
23,524
(48)
–
12,812
7,963
1,501
21,387
21,844
23,524
134,820
161,734
(2,889)
158,845
–
–
–
–
–
849
49
–
–
1,146
(1,104)
–
5,566
5,566
453
725
9,141
(170)
(460)
(2,387)
Equity Method
6,281
5,787
Equity Method
Equity Method
7,656
41,921
55,858
5,741
28,399
39,927
–
–
–
–
5,787
5,741
28,399
39,927
190,678
201,661
(2,889)
198,772
–
224
17
13,007
13,024
18,590
(596)
390
18
9,159
(162)
–
(678)
(840)
520
–
4
(59)
400
1,040
–
(22)
171
149
–
–
–
–
–
9,332
40.00%
1,550
35.00%
21,433
43.86%
10.29%
22,068
29,755
–
–
–
–
–
(1,500)
170,705
(2,510)
–
–
–
–
5,849
66.67%
75.00%
5,140
41,289
52,278
–
–
–
–
(3,227)
1,189
(1,500)
222,983
(2,510)
associates
China Guangfa Bank
Co., Ltd. (“CGB”) (ii)
Sino-Ocean Group
Holding Limited
(“Sino-Ocean”) (iii)
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”) (iv)
Others (v)
Subtotal
joint ventures
Joy City Commercial
Property Fund L.P.
(“Joy City”)
Mapleleaf Century Limited
(“MCL”)
Others (v)
Subtotal
Total
190
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
(continued)
(i) On 1 January 2019, CGB began to adopt IFRS 9. The cumulative effect of initial adoption of IFRS 9 was adjusted to its
equity as at 1 January 2019. Accordingly, the impact was adjusted by the Group based on its percentage of holding. As
at 1 January 2019, The Group’s retained earnings were decreased by RMB2,857 million and reserves were increased by
RMB16 million. The Group’s equity as at 1 January 2019 was decreased by RMB2,841 million in total.
On 1 January 2019, China Unicom began to adopt IFRS 16. The cumulative effect of initial adoption of IFRS 16 was
adjusted to its equity as at 1 January 2019. Accordingly, the impact was adjusted by the Group based on its percentage
of holding. The Group’s retained earnings as at 1 January 2019 were decreased by RMB48 million.
(ii) The 2018 final dividend of RMB0.033 in cash per ordinary share was approved and declared in the Annual General
Meeting of CGB on 16 August 2019. The Company received a cash dividend of RMB284 million.
(iii) The 2018 final dividend of HKD0.073 in cash per ordinary share was approved and declared in the Annual General
Meeting of Sino-Ocean on 16 May 2019. The Company received a cash dividend equivalent to RMB145 million. The 2019
interim dividend of HKD0.110 in cash per ordinary share was approved and declared by the board of directors of Sino-
Ocean on 21 August 2019. The Company received a cash dividend equivalent to RMB224 million.
Sino-Ocean, the Group’s associate is listed in Hong Kong. On 31 December 2019, the stock price of Sino-Ocean was
HKD3.13 per share. As at 31 December 2018, the cumulative impairment loss of RMB1.01 billion for the investment
in Sino-Ocean had been recognised by the Group. The Group performed an impairment test to this investment on 31
December 2019. An impairment loss of RMB1.50 billion was recognised for this investment valued using the discounted
future cash flow method for the year ended 31 December 2019. In the valuation, the Group separated the development
property and investment property by considering the different future cash flow features. The discount rates applied in the
valuation were 10% and 8% for development property and investment property, respectively.
(iv) The 2018 final dividend of RMB0.0533 in cash per ordinary share was approved and declared in the Annual General
Meeting of China Unicom on 8 May 2019. The Company received a cash dividend of RMB170 million. As at 31 December
2019, China Unicom’s share price is RMB5.89 per share.
(v) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
(vi) Except for the non-publicly issued stock of China Unicom having a 36-month period restricted for sale, there is no
significant restriction for the Group to dispose of its other associates and joint ventures.
191
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
(continued)
As at 31 December 2019, the major associates and joint ventures of the Group are as follows:
Name
associates
CGB
Sino-Ocean
CLP&C
COFCO Futures
Pipeline Company
China Unicom
joint ventures
Joy City
MCL
Place of incorporation
Percentage of equity
interest held
PrC
hong Kong, PrC
PrC
PrC
PrC
PrC
The british Cayman islands
The british virgin islands
43.686%
29.59%
40.00%
35.00%
43.86%
10.29%
66.67%
75.00%
As at 31 December 2018, the major associates and joint ventures of the Group are as follows:
Place of incorporation
Percentage of equity
interest held
PRC
Hong Kong, PRC
PRC
PRC
PRC
PRC
The British Cayman Islands
The British Virgin Islands
43.686%
29.59%
40.00%
35.00%
43.86%
10.29%
66.67%
75.00%
Name
associates
CGB
Sino-Ocean
CLP&C
COFCO Futures
Pipeline Company
China Unicom
joint ventures
Joy City
MCL
192
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
(continued)
The following table illustrates the financial information of the Group’s major associates and joint ventures as at 31
December 2019 and for the year ended 31 December 2019:
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
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
2,632,798
2,423,234
209,564
164,573
412
164,985
43.686%
75,180
–
75,180
76,312
12,581
643
13,224
243,700
178,088
65,612
49,909
(6,209)
43,700
29.59%
13,897
(2,510)
11,387
56,704
4,166
152
4,318
91,167
67,837
23,330
23,330
–
23,330
40.00%
9,332
–
9,332
69,498
2,123
1,310
3,433
12,671
9,792
2,879
2,872
–
2,872
35.00%
1,550
–
1,550
793
153
1
154
36,327
777
35,550
35,550
449
35,999
43.86%
21,433
–
21,433
5,008
2,635
–
2,635
564,231
240,735
323,496
143,327
17,454
160,781
10.29%
22,068
–
22,068
291,435
11,264
(501)
10,763
10,281
168
10,113
10,113
(1,339)
8,774
66.67%
5,849
–
5,849
306
287
–
287
24,381
13,620
10,761
10,761
(3,908)
6,853
75.00%
5,140
–
5,140
795
348
–
348
193
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
9 iNvESTmENTS iN aSSOCiaTES aNd jOiNT vENTurES
(continued)
The following table illustrates the financial information of the Group’s major associates and joint ventures as at 31
December 2018 and for the year ended 31 December 2018:
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
2,373,291
2,214,781
158,510
158,510
933
159,443
43.686%
72,655
–
72,655
59,279
10,707
4,160
14,867
249,362
186,224
63,138
48,385
(4,938)
43,447
29.59%
13,822
(1,010)
12,812
48,821
4,666
(1,518)
3,148
83,561
63,654
19,907
19,907
–
19,907
40.00%
7,963
–
7,963
65,564
121
(503)
(382)
8,986
6,246
2,740
2,732
–
2,732
35.00%
1,501
–
1,501
643
98
1
99
36,467
1,043
35,424
35,424
470
35,894
43.86%
21,387
–
21,387
4,746
2,545
–
2,545
541,762
224,822
316,940
140,144
17,926
158,070
10.29%
21,892
–
21,892
290,877
9,301
(245)
9,056
10,243
265
9,978
9,978
(1,297)
8,681
66.67%
5,787
–
5,787
457
438
–
438
22,266
11,897
10,369
10,369
(2,714)
7,655
75.00%
5,741
–
5,741
458
609
–
609
(i)
Including adjustments for the difference of accounting policies, fair value and others.
The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2019 and 31 December
2018. The Group had a capital contribution commitment of RMB24,430 million with joint ventures as at 31 December 2019
(as at 31 December 2018: RMB20,768 million). The capital contribution commitment amount has been included in the
capital commitments in Note 41.
194
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS
10.1 held-to-maturity securities
debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Total
debt securities
Listed in Mainland, PRC
Listed in Hong Kong, PRC
Listed overseas
Unlisted (i)
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
215,928
401,799
198,322
112,702
928,751
209,123
157
62
719,409
928,751
179,943
266,986
212,709
147,079
806,717
109,597
130
20
696,970
806,717
(i) Unlisted debt securities include those traded on the Chinese interbank market.
As at 31 December 2019, an accumulated impairment loss of RMB17 million (2018: RMB42 million) for the investment of
held-to-maturity securities has been recognised by the Group.
195
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.1 held-to-maturity securities (continued)
as at
31 december 2019
As at
31 December 2018
debt securities – fair value hierarchy
level 1
level 2
Total
Level 1
Level 2
Total
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Total
rmb million rmb million rmb million RMB million RMB million RMB million
15,749
57,955
7,914
–
81,618
212,449
357,058
198,879
118,571
886,957
228,198
415,013
206,793
118,571
968,575
15,387
72,455
10,965
–
98,807
175,622
204,029
209,302
155,783
744,736
191,009
276,484
220,267
155,783
843,543
debt securities – Contractual maturity schedule
Maturing:
Within one year
After one year but within five years
After five years but within ten years
After ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
24,454
128,266
241,372
534,659
928,751
16,907
137,840
279,086
372,884
806,717
196
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.2 loans
Policy loans (i)
Other loans
Total
Impairment
Net value
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 2019, maturities of policy loans were within 6 months (as at 31 December 2018: same).
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
174,872
436,766
611,638
(2,718)
608,920
142,165
308,086
450,251
–
450,251
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
213,937
229,415
129,596
38,690
611,638
(2,718)
608,920
167,498
138,939
99,501
44,313
450,251
–
450,251
197
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.3 Term deposits
Maturing:
Within one year
After one year but within five years
After five years but within ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
107,039
420,191
8,030
535,260
158,920
323,021
77,400
559,341
As at 31 December 2019, the Group’s term deposits of RMB3,491 million (as at 31 December 2018: RMB16,691 million)
were deposited in banks to back overseas borrowings and are restricted to use.
In September 2016, CL Hotel Investor, L.P. and Glorious Fortune Forever Limited, subsidiaries of the Company, entered
into a loan agreement with the New York and Seoul branches of Agricultural Bank of China, respectively. In December
2016, Sunny Bamboo Limited and Golden Bamboo Limited, subsidiaries of the Company, entered into a loan agreement
with the Hong Kong branch of Agricultural Bank of China. The Company arranged deposits with Beijing Xicheng branch
of Agricultural Bank of China to back these loans. As at 31 December 2019, the amounts of such term deposits were
RMB361 million, RMB380 million and RMB750 million, respectively (as at 31 December 2018: RMB6,861 million,
RMB7,080 million and RMB750 million).
On 6 December 2017, New Fortune Wisdom Limited and New Capital Wisdom Limited, subsidiaries of Ningbo Meishan
Bonded Port Area Guo Yang Guo Sheng Investment Partnership (Limited Partnership) (“Guo Yang Guo Sheng”), a
subsidiary of the Company, entered into a loan agreement with a subsidiary of Agricultural Bank of China. Guo Yang Guo
Sheng arranged deposits with Beijing Xicheng branch of the Agricultural Bank of China to back these loans. As at 31
December 2019, the amounts of such term deposits and current deposits were RMB2,000 million (as at 31 December
2018: same) and RMB1,069 million (as at 31 December 2018: RMB1,274 million), respectively.
10.4 Statutory deposits – restricted
Contractual maturity schedule:
Within one year
After one year but within five years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
180
6,153
6,333
500
5,833
6,333
Insurance companies in China are required to deposit an amount that equals 20% of their registered capital with banks in
compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
during liquidation proceedings.
198
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.5 available-for-sale securities
available-for-sale securities, at fair value
debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Others (i)
Subtotal
Equity securities
Funds
Common stocks
Preferred stocks
Wealth management products
Others (i)
Subtotal
available-for-sale securities, at cost
Equity securities
Others (i)
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
23,758
171,189
148,455
53,922
112,467
509,791
102,349
236,323
58,314
32,640
98,904
528,530
28,440
180,273
185,720
21,514
80,643
496,590
92,304
143,469
32,707
31,348
53,479
353,307
20,636
1,058,957
20,636
870,533
(i) Other available-for-sale securities mainly include unlisted equity investments, private equity funds, trust schemes and perpetual bonds.
199
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.5 available-for-sale securities (continued)
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
2019
As at
31 December
2018
rmb million
RMB million
46,505
463,286
509,791
152,293
95,428
1,458
299,987
549,166
1,058,957
53,933
442,657
496,590
102,190
55,066
162
216,525
373,943
870,533
Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
price quotation, wealth management products and private equity funds.
debt securities – Contractual maturity schedule
Maturing:
Within one year
After one year but within five years
After five years but within ten years
After ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
26,075
155,110
226,421
102,185
509,791
11,511
170,606
214,826
99,647
496,590
200
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.6 Securities at fair value through profit or loss
debt securities
Government bonds
Government agency bonds
Corporate bonds
Others
Subtotal
Equity securities
Funds
Common stocks
Wealth management products
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
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
41
6,859
77,215
1,091
85,206
16,101
40,281
–
20
56,402
118
6,760
79,774
1,351
88,003
13,967
35,241
1,506
–
50,714
141,608
138,717
35,804
102
167
49,133
85,206
39,770
611
6,418
9,603
56,402
39,145
108
202
48,548
88,003
31,962
97
6,552
12,103
50,714
141,608
138,717
Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
price quotation.
201
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
10 fiNaNCial aSSETS (continued)
10.7 derivative financial instruments
derivative financial assets
Forward contract
derivative financial liabilities
Forward contract
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
428
–
–
1,877
Note: The derivative financial instruments of the Company above are all forward contracts to purchase equity securities. The fair value is based on active
quoted price of the equity security with consideration of discounts for lack of marketability, which is classified as Level 3.
10.8 Securities purchased under agreements to resell
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
4,467
4,467
9,905
9,905
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
12,310
25,048
4,345
41,703
40,710
993
41,703
19,805
23,486
5,111
48,402
47,834
568
48,402
Maturing:
Within 30 days
Total
10.9 accrued investment income
Bank deposits
Debt securities
Others
Total
Current
Non-current
Total
202
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
11 fair valuE Of fiNaNCial aSSETS aNd liabiliTiES
The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
investment contracts:
Carrying value
Estimated fair value (i)
as at
31 december
2019
As at
31 December
2018
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
rmb million
RMB million
928,751
608,920
535,260
6,333
1,038,321
141,608
428
4,467
53,306
(267,804)
(3,859)
–
(118,088)
(34,990)
(20,045)
806,717
450,251
559,341
6,333
849,897
138,717
–
9,905
50,809
(255,434)
(2,680)
(1,877)
(192,141)
–
(20,150)
968,575
623,840
535,260
6,333
1,038,321
141,608
428
4,467
53,306
(260,592)
(3,859)
–
(118,088)
(35,551)
(20,045)
843,543
458,669
559,341
6,333
849,897
138,717
–
9,905
50,809
(245,803)
(2,680)
(1,877)
(192,141)
–
(20,150)
Held-to-maturity securities (ii)
Loans (iii)
Term deposits
Statutory deposits – restricted
Available-for-sale securities, at fair value
Securities at fair value through profit or loss
Derivative financial assets
Securities purchased under agreements
to resell
Cash and cash equivalents
Investment contracts (iii)
Financial liabilities at fair value through
profit or loss
Derivative financial liabilities
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 securities is determined by reference with other debt securities which are measured by fair value. Please refer to
Note 4.4.
(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.
The fair value of policy loans approximated its carrying value. The fair values of other loans and investment contracts at
amortised cost were determined using valuation techniques, with consideration of the present value of expected cash
flows arising from contracts using a risk-adjusted discount rate, allowing for the risk-free rate available on the valuation
date, credit risk and risk margin associated with the future cash flows. The fair values of other loans and investment
contracts at amortised cost were classified as Level 3.
12 PrEmiumS rECEivablE
As at 31 December 2019, the carrying value of premiums receivable within one year was RMB17,205 million (as at 31
December 2018: RMB15,607 million).
203
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
13 rEiNSuraNCE aSSETS
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
Land use rights (i)
Disbursements
Tax prepaid
Automated policy loans
Investments receivable and prepaid
Prepayments to constructors
Due from related parties
Others
Total
Current
Non-current
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
3,839
808
369
145
5,161
1,318
3,843
5,161
3,123
731
370
140
4,364
1,241
3,123
4,364
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
7,830
5,946
5,615
3,377
2,665
847
757
6,992
34,029
24,175
9,854
34,029
7,906
4,162
–
3,269
8,885
504
725
7,986
33,437
23,533
9,904
33,437
(i) The Group’s right-of-use assets include the above land use rights and right-of-use assets disclosed in Note 7.
204
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
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.
In developing discount rate assumptions, the Group considers investment experience, the current investment portfolio
and trend of the relevant yield curves. The assumed discount rates reflect the future economic outlook as well as the
Group’s investment strategy. The assumed discount rates with risk margin are as follows:
As at 31 December 2019
As at 31 December 2018
discount rate assumptions
4.85%
4.85%
For the insurance contracts of which future insurance benefits are not affected by investment yields of the corresponding
investment portfolios, the discount rate assumption is based on the “Yield curve of reserve computation benchmark for
insurance contracts”, published on the “China Bond” website with consideration of liquidity spreads, taxation and other
relevant factors. The assumed spot discount rates with risk margin for the past two years are as follows:
As at 31 December 2019
As at 31 December 2018
discount rate assumptions
3.52%~4.83%
3.47%~4.86%
There is uncertainty on the discount rate assumption, which is affected by factors such as future macro-economy,
monetary and foreign exchange policies, capital market and availability of investment channels of insurance funds. The
Group determines the discount rate assumption based on the information obtained at the end of each reporting period
including consideration of risk margin.
(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.
The Group bases its mortality assumptions on China Life Insurance Mortality Table (2000-2003), adjusted where
appropriate to reflect the Group’s recent historical mortality experience. The main source of uncertainty with life insurance
contracts is that epidemics and wide-ranging lifestyle changes could result in deterioration in future mortality experience,
thus leading to an inadequate reserving of liability. Similarly, improvements in longevity due to continuing advancements
in medical care and social conditions may expose the Group to longevity risk.
The Group bases its morbidity assumptions for critical illness products on analysis of historical experience and
expectations of future developments. There are two main sources of uncertainty. Firstly, wide-ranging lifestyle changes
could result in future deterioration in morbidity experience. Secondly, future development of medical technologies and
improved coverage of medical facilities available to policyholders may bring forward the timing of diagnosing critical
illness, which demands earlier payment of the critical illness benefits. Both could ultimately result in an inadequate
reserving of liability if current morbidity assumptions do not properly reflect such trends.
Risk margin is considered in the Group’s mortality and morbidity assumptions.
205
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
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 2019
As at 31 December 2018
45.00
45.00
0.85%~0.90%
0.85%~0.90%
25.00
25.00
0.90%
0.90%
(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 applied a consistent method to determine risk margin. The Group considers risk margin for 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.
The Group adopted a consistent process to decide on assumptions for the insurance contracts disclosed in this note.
On each reporting date, the Group reviews the assumptions for reasonable estimates of liability and risk margin, with
consideration of all available information, and taking into account the Group’s historical experience and expectation of
future events.
206
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
15 iNSuraNCE CONTraCTS (continued)
(b) Net liabilities of insurance contracts
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
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
2,521,331
2,189,794
18,404
13,001
14,805
11,432
2,552,736
2,216,031
(3,839)
(3,123)
(145)
(369)
(4,353)
(140)
(370)
(3,633)
2,517,492
2,186,671
18,259
12,632
14,665
11,062
2,548,383
2,212,398
207
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
15 iNSuraNCE CONTraCTS (continued)
(c) movements in liabilities of short-term insurance contracts
The table below presents movements in claims and claim adjustment expense reserve:
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
2019
2018
rmb million
RMB million
2,536
12,269
14,805
(33,244)
(14,551)
49,727
1,667
18,404
2,781
15,623
18,404
2,672
11,106
13,778
(27,165)
(12,876)
40,601
467
14,805
2,536
12,269
14,805
The table below presents movements in unearned premium reserves:
As at 1 January
Increase
Release
As at 31 December
2019
rmb million
2018
RMB million
gross
Ceded
Net
Gross
Ceded
Net
11,432
13,001
(11,432)
13,001
(370)
(369)
370
(369)
11,062
12,632
(11,062)
12,289
11,432
(12,289)
12,632
11,432
(527)
(370)
527
(370)
11,762
11,062
(11,762)
11,062
208
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
15 iNSuraNCE CONTraCTS (continued)
(d) movements in liabilities of long-term insurance contracts
The table below presents movements in the liabilities of long-term insurance contracts:
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
2019
2018
rmb million
RMB million
2,189,794
1,999,066
497,570
(282,189)
114,234
(4,906)
7,308
(480)
480,496
(385,761)
99,618
(6,020)
2,946
(551)
2,521,331
2,189,794
(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 2019, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
products, which increased insurance contract liabilities by RMB4,737 million. This change reflected the Group’s most recent experience and future
expectations about the morbidity rates as at the reporting date. Changes in assumptions other than morbidity rates increased insurance contract
liabilities by RMB2,571 million.
For the year ended 31 December 2018, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
products, which increased insurance contract liabilities by RMB3,877 million. This change reflected the Group’s most recent experience and future
expectations about the morbidity rates as at the reporting date. Changes in assumptions other than morbidity rates decreased insurance contract
liabilities by RMB931 million.
209
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
16 iNvESTmENT CONTraCTS
Investment contracts with DPF at amortised cost
Investment contracts without DPF
– At amortised cost
– At fair value through profit or loss
Total
The table below presents movements of investment contracts with DPF:
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
11 January 2019
17 June 2019
27 September 2019
30 September 2019
11 January 2020
6 November 2020
6 December 2020
18 January 2021
25 June 2024
16 September 2024
27 September 2024
1.50%
3.54%
2.30%
2.40%
1.50%
LIBOR+2.70%(i)
EURIBOR +3.80%(ii)
2.50%
3.08%
3.30%
USD LIBOR+1.00%
Guaranteed loans
Guaranteed loans
Guaranteed loans
Guaranteed loans
Guaranteed loans
Credit loans
Guaranteed loans
Credit loans
Credit loans
Credit loans
Credit loans
Total
(i)
2.70% when LIBOR is negative.
(ii) 3.80% when EURIBOR is negative.
210
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
61,657
59,129
206,137
10
267,804
196,296
9
255,434
2019
2018
rmb million
RMB million
59,129
57,153
4,238
(2,959)
(38)
1,287
61,657
4,096
(3,318)
(38)
1,236
59,129
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
–
–
–
–
989
126
3,126
523
2,515
5,999
6,767
993
2,385
6,657
6,451
–
–
3,139
525
–
–
–
20,045
20,150
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
18 bONdS PayablE
As at 31 December 2019, all bonds payable were the bonds for capital replenishment (the “Bond”) with a total carrying
value of RMB34,990 million (as at 31 December 2018: nil), and the fair value of RMB35,551 million (as at 31 December
2018: nil). The fair value of the Bond was classified as level 2 in the fair value hierarchy. The following table presents the
par value of the bonds payable:
issue date
maturity date
interest rate p.a.
22 March 2019
22 March 2029
4.28%
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
35,000
35,000
–
–
The fair value of bonds payable is based on the valuation results of China Central Depository & Clearing Co., Ltd.
On 20 March 2019, the Company issued a bond in the national inter-bank bond market at a principal amount of RMB35
billion, and completed the issuance on 22 March 2019. The bond has a 10-year maturity and a fixed coupon rate of 4.28%
per annum. The Company has a conditional right to redeem the bonds at the end of the fifth year. If the Company does
not redeem the bonds at the end of the fifth year, the coupon rate per annum for the remaining 5 years will be raised to
5.28%.
Bonds payable are measured at amortised cost as described in Note 2.15.
19 SECuriTiES SOld uNdEr agrEEmENTS TO rEPurChaSE
Interbank market
Stock exchange market
Total
Maturing:
Within 30 days
After 90 days
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
63,631
54,457
118,088
117,928
160
118,088
125,788
66,353
192,141
192,141
–
192,141
As at 31 December 2019, bonds with a carrying value of RMB92,011 million (as at 31 December 2018: RMB139,784
million) were pledged as collateral for financial assets sold under agreements to repurchase resulting from repurchase
transactions entered into by the Group in the interbank market.
For debt repurchase transactions through the stock exchange, the Group is required to deposit certain exchange-traded
bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchange’s regulation which
should be no less than the balance of the related repurchase transaction. As at 31 December 2019, the carrying value of
securities deposited in the collateral pool was RMB256,700 million (as at 31 December 2018: RMB174,323 million). The
collateral is restricted from trading during the period of the repurchase transaction.
211
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
20 OThEr liabiliTiES
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
Agent deposits
Interest payable of debt instruments
Stock appreciation rights (Note 32)
Tax payable
Others
Total
Current
Non-current
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
21,400
14,113
11,475
7,418
3,329
1,998
1,327
748
674
18,632
81,114
81,114
–
81,114
9,407
11,739
11,199
5,268
3,479
1,793
252
490
666
14,133
58,426
58,426
–
58,426
21 STaTuTOry iNSuraNCE fuNd
As required by the CIRC Order [2008] No. 2, “Measures for Administration of Statutory Insurance Fund”, all insurance
companies have to pay the statutory insurance fund contribution from 1 January 2009. The Group is subject to the
statutory insurance fund contribution, (i) at 0.15% and 0.05% of premiums and accumulated policyholder deposits from
life policies with guaranteed benefits and life policies without guaranteed benefits, respectively; (ii) at 0.8% and 0.15%
of premiums from short-term health policies and long-term health policies, respectively; (iii) at 0.8% of premiums from
accident insurance contracts, at 0.08% and 0.05% of accumulated policyholder deposits from accident investment
contracts with guaranteed benefits and without guaranteed benefits, respectively. When the accumulated statutory
insurance fund contributions reach 1% of total assets, no additional contribution to the statutory insurance fund is
required.
212
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
22 iNvESTmENT iNCOmE
Debt securities
– held-to-maturity securities
– available-for-sale securities
– at fair value through profit or loss
Equity securities
– available-for-sale securities
– at fair value through profit or loss
Bank deposits
Loans
Securities purchased under agreements to resell
Total
for the year ended
31 december
2019
2018
rmb million
RMB million
38,229
21,373
3,546
21,823
981
26,695
27,111
161
34,657
22,991
3,869
16,492
1,284
22,699
22,894
281
139,919
125,167
For the year ended 31 December 2019, the interest income included in investment income was RMB117,115 million
(2018: RMB107,391 million). All interest income was accrued using the effective interest method.
23 NET rEaliSEd gaiNS ON fiNaNCial aSSETS
Debt securities
Realised gains (i)
Impairment (ii)
Subtotal
Equity securities
Realised gains (i)
Impairment (ii)
Subtotal
Total
for the year ended
31 december
2019
2018
rmb million
RMB million
3,714
(3,749)
(35)
4,504
(2,638)
1,866
1,831
399
(42)
357
(11,785)
(8,163)
(19,948)
(19,591)
(i) Realised gains were generated mainly from available-for-sale securities.
(ii) During the year ended 31 December 2019, the Group recognised an impairment charge of RMB888 million (2018: RMB4,542 million) of available-
for-sale funds, an impairment charge of RMB1,750 million (2018: RMB3,621 million) of available-for-sale equity securities, an impairment charge of
RMB1,027 million (2018: nil) of available-for-sale debt securities, an impairment charge of RMB2,718 million (2018: nil) of loans and an impairment
charge of RMB4 million (2018: RMB42 million) of held-to maturity securities, for which the Group determined that objective evidence of impairment
existed.
213
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
24 NET fair valuE gaiNS ThrOugh PrOfiT Or lOSS
Debt securities
Equity securities
Stock appreciation rights
Financial liabilities at fair value through profit or loss
Derivative financial instruments
Total
for the year ended 31 december
2019
2018
rmb million
RMB million
778
18,279
(258)
(380)
832
19,251
2,006
(18,938)
343
188
(1,877)
(18,278)
25 iNSuraNCE bENEfiTS aNd ClaimS EXPENSES
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
for the year ended 31 december 2018
Life insurance death and other benefits
Accident and health claims and claim adjustment expenses
Increase in insurance contract liabilities
Total
gross
Ceded
Net
RMB million
RMB million
RMB million
130,975
51,394
331,523
513,892
250,627
41,056
190,703
482,386
(3,098)
(611)
(716)
(4,425)
(1,891)
(504)
(772)
(3,167)
127,877
50,783
330,807
509,467
248,736
40,552
189,931
479,219
26 iNvESTmENT CONTraCT bENEfiTS
Benefits of investment contracts are mainly the interest credited to investment contracts.
214
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
27 fiNaNCE COSTS
Interest expenses for securities sold under agreements to repurchase
Interest expenses for interest-bearing loans and borrowings
Interest expenses for bonds payable
Interest on lease liabilities
Total
28 PrOfiT bEfOrE iNCOmE TaX
Profit before income tax is stated after charging/(crediting) the following:
Employee salaries and welfare costs
Housing benefits
Contribution to the defined contribution pension plan
Depreciation and amortisation
Foreign exchange losses/(gains)
Remuneration in respect of audit services provided by auditors
for the year ended 31 december
2019
2018
rmb million
RMB million
2,392
589
1,168
106
4,255
3,565
551
–
–
4,116
for the year ended 31 december
2019
2018
rmb million
RMB million
20,125
1,189
2,905
4,379
67
60
19,268
1,061
2,531
2,638
194
59
29 TaXaTiON
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax relates to the same tax authority.
(a) The amount of taxation charged to net profit represents:
Current taxation - Enterprise income tax
Deferred taxation
Total tax charges
for the year ended 31 december
2019
2018
rmb million
RMB million
614
167
781
6,397
(4,412)
1,985
215
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
29 TaXaTiON (continued)
(b) The reconciliation between the Group’s effective tax rate and the statutory tax rate of 25% in the PRC (2018: same)
is as follows:
Profit before income tax
Tax computed at the statutory tax rate
Adjustment on current income tax of previous period (i)
Non-taxable income (ii)
Expenses not deductible for tax purposes (ii)
Unused tax losses
Tax losses utilised from previous periods
Others
Income tax at the effective tax rate
for the year ended 31 december
2019
2018
rmb million
RMB million
59,795
14,949
(5,228)
(9,589)
313
239
–
97
781
13,921
3,480
(324)
(6,771)
5,319
25
(86)
342
1,985
(i) According to Cai Shui [2019] No. 72, Notice on Pre-tax Deduction Policy of Commissions and Handling Charges for Insurance Companies, the
commissions and handling charges incurred by insurance companies related to its operating activities, which do not exceed 18% of the total premium
income of the year after deducting surrender premium, etc., are allowed to be deducted in calculating the taxable income, and the excessive part
is allowed to be brought forward to the subsequent years. This notice issued above was effective from 1 January 2019 and applicable to the final
settlement and payment of enterprise income tax filing for the year ended 31 December 2018. Accordingly, the Company’s current income tax was
deducted by RMB5,154 million regarding to the final settlement and payment.
(ii) Non-taxable income mainly includes interest income from government bonds, and 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 2019 and 31 December 2018, the amounts of deferred tax assets and liabilities are as follows:
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
13,352
(23,554)
128
(10,330)
10,160
(8,903)
1,257
–
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
Net deferred tax liabilities
216
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
29 TaXaTiON (continued)
(c) As at 31 December 2019 and 31 December 2018, the amounts of deferred tax assets and liabilities are as follows:
(continued)
As at 31 December 2019 and 31 December 2018, deferred income tax was calculated in full on temporary differences
under the liability method using the principal tax rate of 25%. The movements in net deferred income tax assets and
liabilities during the period are as follows:
Net deferred tax assets/(liabilities)
insurance
investments
Others
Total
RMB million
RMB million
RMB million
RMB million
as at 1 january 2018
(Charged)/credited to net profit
(Charged)/credited to other
comprehensive income
– Available-for-sale securities
– Portion of fair value changes on
available-for-sale securities attributable
to participating policyholders
– Others
as at 31 december 2018
as at 1 january 2019
(Charged)/credited to net profit
(Charged)/credited to other comprehensive
income
– Available-for-sale securities
– Portion of fair value changes on available-
for-sale securities attributable to
participating policyholders
– Others
as at 31 december 2019
(i)
(6,737)
1,421
–
8
–
(5,308)
(5,308)
1,985
(ii)
(494)
2,713
1,673
–
35
3,927
3,927
(2,428)
–
(16,260)
4,880
–
1,557
–
88
(iii)
2,360
278
–
–
–
2,638
2,638
276
–
–
–
(4,871)
4,412
1,673
8
35
1,257
1,257
(167)
(16,260)
4,880
88
(14,673)
2,914
(10,202)
(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
securities, securities at fair value through profit or loss, and others.
(iii) The deferred tax arising from the others category is mainly related to the temporary differences of employee salaries and welfare costs payable.
Unrecognised deductible tax losses of the Group amounted to RMB1,321 million as at 31 December 2019 (as at
31 December 2018: RMB365 million). Unrecognised deductible temporary differences of the Group amounted to
RMB1 million as at 31 December 2019 (as at 31 December 2018: RMB378 million).
217
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
29 TaXaTiON (continued)
(d) The analysis of net deferred tax assets and deferred tax liabilities is as follows:
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
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
7,508
5,844
13,352
(19,906)
(3,648)
(23,554)
(10,202)
3,947
6,213
10,160
(7,490)
(1,413)
(8,903)
1,257
30 NET PrOfiT aTTribuTablE TO EQuiTy hOldErS Of ThE COmPaNy
Net profit attributable to equity holders of the Company is recognised in the financial statements of the Company to the
extent of RMB53,205 million (2018: RMB6,987 million).
31 EarNiNgS PEr SharE
There is no difference between the basic and diluted earnings per share. The basic and diluted earnings per share for the
year ended 31 December 2019 are calculated based on the net profit for the year attributable to ordinary equity holders of
the Company and the weighted average of 28,264,705,000 ordinary shares (2018: same).
32 STOCK aPPrECiaTiON righTS
The Board of Directors of the Company approved, on 5 January 2006, an award of stock appreciation rights of 4.05 million
units and on 21 August 2006, another award of stock appreciation rights of 53.22 million units to eligible employees. The
exercise prices of the two awards were HKD5.33 and HKD6.83, respectively, the average closing price of shares in the
five trading days prior to 1 July 2005 and 1 January 2006, the dates for vesting and exercise price setting purposes of this
award. Upon the exercise of stock appreciation rights, exercising recipients will receive payments in RMB, subject to any
withholding tax, equal to the number of stock appreciation rights exercised times the difference between the exercise
price and market price of the H shares at the time of exercise.
Stock appreciation rights have been awarded in units, with each unit representing the value of one H share. No shares
of common stock will be issued under the stock appreciation rights plan. According to the Company’s plan, all stock
appreciation rights will have an exercise period of five years from the date of award and will not be exercisable before the
fourth anniversary of the date of award unless specific market or other conditions have been met. On 26 February 2010,
the Board of Directors of the Company extended the exercise period of all stock appreciation rights, which is also subject
to government policy.
218
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
32 STOCK aPPrECiaTiON righTS (continued)
As at 31 December 2019, there were 55.01 million units outstanding and exercisable (as at 31 December 2018: same). As
at 31 December 2019, the amount of intrinsic value for the vested stock appreciation rights was RMB735 million (as at 31
December 2018: RMB477 million).
The fair value of the stock appreciation rights is estimated on the date of valuation at each reporting date using lattice-
based option valuation models based on expected volatility from 30% to 36%, an expected dividend yield of no higher
than 3% and a risk-free interest rate ranging from 1.42% to 1.82%.
The Company recognised a loss of RMB258 million in the net fair value through profit or loss in the consolidated
comprehensive income representing the fair value change of the rights during the year ended 31 December 2019 (2018:
fair value gain of RMB343 million). RMB735 million and RMB13 million were included in salary and staff welfare payable
included under other liabilities for the units not exercised and exercised but not paid as at 31 December 2019 (as at 31
December 2018: RMB477 million and RMB13 million), respectively. There was no unrecognised compensation cost for
the stock appreciation rights as at 31 December 2019 (as at 31 December 2018: nil).
33 dividENdS
Pursuant to the shareholders’ approval at the Annual General Meeting on 30 May 2019, a final dividend of RMB0.16
(inclusive of tax) per ordinary share totalling RMB4,522 million in respect of the year ended 31 December 2018 was
declared and paid in 2019. The dividend has been recorded in the consolidated financial statements for the year ended 31
December 2019.
A distribution of RMB394 million (inclusive of tax) to the holders of Core Tier 2 Capital Securities was approved by
management in 2019 according to the authorisation by the Board of Directors, which was delegated by the General
Meeting.
Pursuant to a resolution passed at the meeting of the Board of Directors on 25 March 2020, a final dividend of RMB0.73
(inclusive of tax) per ordinary share totalling approximately RMB20,633 million for the year ended 31 December 2019 was
proposed for shareholders’ approval at the forthcoming Annual General Meeting. The dividend has not been recorded in
the consolidated financial statements for the year ended 31 December 2019.
34 diSClOSurES abOuT ThE TEmPOrary EXEmPTiON frOm ifrS 9
According to IFRS 4 Amendments, the Company made the assessment based on the Group’s financial position of 31
December 2015, concluding that the carrying amount of the Group’s liabilities arising from contracts within the scope
of IFRS 4, which includes any deposit components or embedded derivatives unbundled from insurance contracts, was
significant compared to the total carrying amount of all its liabilities. And the percentage of the total carrying amount of
its liabilities connected with insurance relative to the total carrying amount of all its liabilities is greater than 90 percent.
There had been no significant change in the activities of the Group since then that requires reassessment. Therefore, the
Group’s activities are predominantly connected with insurance, meeting the criteria to apply temporary exemption from
IFRS 9.
Sino-Ocean, China Unicom and certain associates of the Group, have adopted IFRS 9. CGB, an associate of the Group,
has adopted IFRS 9 since 1 January 2019. According to IFRS 4 Amendments, the Group elected not to apply uniform
accounting policies when using the equity method for these associates. The effects of adopting new accounting
standards by CGB upon the Group’s consolidated statement of financial position are disclosed in Note 9.
219
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 34 diSClOSurES abOuT ThE TEmPOrary EXEmPTiON frOm ifrS 9 (continued)
(a) The tables below present the fair value of the following groups of financial assets(i) under IFRS 9 as at 31 December
2019 and 31 December 2018 and fair value changes for the years ended 31 December 2019 and 31 December 2018:
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 on SPPI
Total
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 SPPI
– Financial assets with contractual terms that do not give rise on SPPI
Total
fair value as at 31 december
2019
2018
rmb million
RMB million
141,608
138,717
–
–
1,615,856
860,644
2,618,108
1,502,203
528,377
2,169,297
fair value changes
for the year ended 31 december
2019
2018
rmb million
RMB million
19,057
(16,932)
–
–
6,029
77,741
102,827
95,480
(40,447)
38,101
(i) Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale securities and held-to-maturity securities.
220
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
34 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 on SPPI:
domestic
Rating not required(iv)
AAA
AA+
AA
AA-
Subtotal
Overseas
AAA
A+
A
A-
BBB+
BBB-
Not rated
Subtotal
Total
Carrying amount(iii)
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
657,905
893,336
7,671
1,163
3,000
653,328
787,908
13,026
1,152
70
1,563,075
1,455,484
30
4,014
3,541
35
135
14
25
7,794
–
–
1,755
493
118
14
24
2,404
1,570,869
1,457,888
221
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
34 diSClOSurES abOuT ThE TEmPOrary EXEmPTiON frOm ifrS 9 (continued)
(c) The table below presents financial assets without low credit risk for aforementioned financial assets with contractual
terms that give rise on SPPI:
Domestic
Overseas
Total
Domestic
Overseas
Total
as at 31 december 2019
Carrying
amount (iii)
fair value
rmb million
rmb million
11,834
25
11,859
8,237
9
8,246
As at 31 December 2018
Carrying
amount (iii)
Fair value
RMB million
RMB million
14,248
24
14,272
14,539
12
14,551
(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, carrying amount before adjusting impairment allowance is disclosed here.
(iv) Mainly including government bonds and policy financial bonds.
222
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(a) related parties with control relationship
Information of the parent company is as follows:
relationship
with the Company
Immediate and
ultimate holding
company
Nature of
ownership
State-owned
legal
representative
Wang Bin
Name
CLIC
location of
registration
Beijing, China
Principal business
I n s u r a n c e s e r v i c e s i n c l u d i n g r e c e i p t
of premiums and payment of benefits
in respect of the in-force life, health,
accident and other types of personal
insurance business, and the reinsurance
business; holding or investing in domestic
and overseas insurance companies or
other financial insurance institutions;
fund management business permitted by
national laws and regulations or approved
by the State Council of the People’s
Republic of China; and other businesses
approved by insurance regulatory agencies.
(b) Subsidiaries
Refer to Note 42(d) for the basic and related information of subsidiaries.
(c) associates and joint ventures
Refer to Note 9 for the basic and related information of associates and joint ventures.
(d) Other related parties
Significant related parties
China Life Real Estate Co., Limited (“CLRE”)
China Life Insurance (Overseas) Company Limited (“CL Overseas”)
China Life Investment Holding Company Limited (“CLI”)
China Life Ecommerce Company Limited (“CL Ecommerce”)
China Life Enterprise Annuity Fund (“EAP”)
relationship with the Company
Under common control of CLIC
Under common control of CLIC
Under common control of CLIC
Under common control of CLIC
A pension fund jointly set up by
the Company and others
223
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(e) registered capital of related parties with control relationship and changes during the year
As at
31 December
2018
Increase
Decrease
as at
31 december
2019
million
million
million
million
Name of related party
CLIC
AMC
China Life Pension Company Limited
(“Pension Company”)
China Life (Suzhou) Pension and
Retirement Investment Company
Limited (“Suzhou Pension Company”)
RMB4,600
RMB4,000
RMB3,400
RMB1,991
CL AMP
CL Wealth
Shanghai Rui Chong Investment Co., Limited
RMB1,288
RMB200
RMB6,800
(“Rui Chong Company”)
China Life (Beijing) Health Management
RMB1,730
Co., Limited (“CL Health”)(i)
China Life Franklin (Shenzhen) Equity
USD2
Investment Fund Management Co., Limited
(“Franklin Shenzhen Company”)
Xi’an Shengyi Jingsheng Real Estate
Co., Ltd. (“Shengyi Jingsheng”)
Dalian Hope Building Company Ltd.
(“Hope Building”)
RMB1,131
RMB484
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
rmb4,600
rmb4,000
rmb3,400
rmb1,991
rmb1,288
rmb200
rmb6,800
RMB(200)
rmb1,530
–
–
–
uSd2
rmb1,131
rmb484
(i)
The Group reduced its capital contribution to CL Health by RMB200 million for the year ended 31 December 2019. As at 4 September 2019, CL Health
completed the business registration modification procedure for the registered capital with the amount reduced from RMB1,730 million to RMB1,530
million.
(ii) The table above does not include the partnerships and the subsidiaries which were not set up or invested in Mainland China that having control
relationship with the Group. These partnerships and subsidiaries do not have related information about registered capital.
224
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(f) Percentages of holding of related parties with control relationship and changes during the year
Shareholder
As at 31 December 2018
as at 31 december 2019
CLIC
RMB19,324
68.37%
–
–
rmb19,324
68.37%
Percentage
of holding
Amount
million
Increase
Decrease
amount
million
million
million
Percentage
of holding
Subsidiaries
As at 31 December 2018
as at 31 december 2019
AMC
Pension Company
Amount
million
RMB1,680
RMB2,746
China Life Franklin Asset Management
HKD130
Company Limited (“AMC HK”)
Suzhou Pension Company
CL AMP
CL Wealth
Golden Phoenix Tree Limited
King Phoenix Tree Limited
Rui Chong Company
New Aldgate Limited
Glorious Fortune Forever Limited
CL Hotel Investor, L.P.
Golden Bamboo Limited
Sunny Bamboo Limited
Fortune Bamboo Limited
RMB1,586
RMB1,095
RMB200
–
–
RMB6,800
RMB1,167
–
–
RMB1,993
RMB1,876
RMB2,435
China Century Core Fund Limited
USD1,125
CL Health
RMB1,730
Percentage
of holding
60.00%
directly
74.27%
directly and
indirectly
50.00%
indirectly
100.00%
directly
85.03%
indirectly
100.00%
indirectly
100.00%
directly
100.00%
indirectly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
indirectly
100.00%
directly
Increase
Decrease
amount
million
million
million
–
–
–
RMB200
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
rmb1,680
rmb2,746
hKd130
rmb1,786
rmb1,095
rmb200
–
–
rmb6,800
rmb1,167
–
–
rmb1,993
rmb1,876
rmb2,435
uSd1,125
RMB(200)
rmb1,530
Percentage
of holding
60.00%
directly
74.27%
directly and
indirectly
50.00%
indirectly
100.00%
directly
85.03%
indirectly
100.00%
indirectly
100.00%
directly
100.00%
indirectly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
directly
100.00%
indirectly
100.00%
directly
225
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 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 2018
as at 31 december 2019
Franklin Shenzhen Company
Amount
million
USD2
Guo Yang Guo Sheng
RMB3,250
New Capital Wisdom Limited
New Fortune Wisdom Limited
–
–
Wisdom Forever Limited Partnership
USD452
Shanghai Yuan Shu Yuan Jiu Investment
Management Partnership (Limited
Partnership)
Shanghai Yuan Shu Yuan Pin Investment
Management Partnership (Limited
Partnership)
RMB606
RMB606
Shanghai Wansheng Industry Partnership
RMB4,000
(Limited Partnership)
Ningbo Meishan Bonded Port Area
Bai Ning Investment Partnership
(Limited Partnership)
Hope Building
Wuhu Yuanxiang Tianfu Investment
Management Partnership (Limited
Partnership)
RMB1,680
RMB484
RMB533
Wuhu Yuanxiang Tianyi Investment
RMB533
Management Partnership (Limited
Partnership)
Shengyi Jingsheng
CBRE Global Investors U.S. Investments I,
LLC (“CG Investments”) (i)
China Life Guangde(Tianjin) Equity
Investment Fund Partnership (Limited
Partnership) (“CL Guang De”) (i)
RMB1,063
–
–
Percentage
of holding
Increase
Decrease
amount
Percentage
of holding
million
million
million
uSd2
–
100.00%
indirectly
99.997%
directly
100.00%
indirectly
100.00%
indirectly
100.00%
indirectly
99.98%
directly
99.98%
directly
99.98%
directly
99.98%
directly
100.00%
indirectly
99.98%
directly
99.98%
directly
100.00%
indirectly
–
–
–
–
–
–
–
–
–
–
–
–
–
–
RMB2,859
–
RMB10
RMB(100)
rmb3,150
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
uSd452
rmb606
rmb606
rmb4,000
rmb1,680
rmb484
rmb533
rmb533
rmb1,063
rmb2,859
rmb10
100.00%
indirectly
99.997%
directly
100.00%
indirectly
100.00%
indirectly
100.00%
indirectly
99.98%
directly
99.98%
directly
99.98%
directly
99.98%
directly
100.00%
indirectly
99.98%
directly
99.98%
directly
100.00%
indirectly
99.99%
directly
99.95%
directly
(i) CG Investments and CL Guang De were newly included in the consolidated financial statements of the Group for the year ended 31 December 2019.
226
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(g) Transactions with significant related parties
The following table summarises significant transactions carried out by the Group with its significant related parties:
for the year ended 31 december
2019
2018
Notes
rmb million
RMB million
Transactions with CliC and its subsidiaries
Policy management fee received from CLIC
Asset management fee received from CLIC
Payment of dividends from the Company to CLIC
Distribution of profits from AMC to CLIC
Asset management fee received from CL Overseas
Asset management fee received from CLP&C
Payment of insurance premium to CLP&C
Claim and other payments received from CLP&C
Agency fee received from CLP&C
Rental and a service fee received from CLP&C
Dividend from CLP&C
Payment of rental, project fee and other expenses to CLRE
Property leasing expenses charged by CLI
Payment of an asset management fee to CLI
Property leasing income received from CLI
Payment of a business management service fee to CL Ecommerce
Transactions between Cgb and the group
Interest on deposits received from CGB
Dividend from CGB (Note 9)
Commission expenses charged by CGB
Capital contribution to CGB
Transactions between Sino-Ocean and the group
Dividend from Sino-Ocean (Note 9)
Interest of corporate bonds received from Sino-Ocean
Transactions between EaP and the group
Contribution to EAP
Transaction between other associates and joint ventures and the group
Distribution of profits from other associates and joint ventures
to the Group (Note 9)
Transactions between amC and the Company
Payment of an asset management fee to AMC
Distribution of profits from AMC
Transactions between Pension Company and the Company
Rental received from Pension Company
Agency fee received from Pension Company for entrusted
(i) (vii)
(ii.a)
(ii.b)
(ii.c)
(iii) (vii)
(iv)
(ii.d) (vii)
(v)
(ii.e) (vii)
sales of annuity funds and other businesses
(vi)
Marketing fee income for promotion of annuity business from
Pension Company
575
89
3,092
122
86
14
48
16
2,297
51
–
43
78
653
39
–
2,584
284
158
–
369
27
1,003
2,574
1,353
183
54
54
8
629
100
7,729
128
63
14
47
14
2,959
50
66
45
83
529
37
53
1,425
–
112
13,012
558
27
593
2,279
1,326
193
45
43
13
227
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(g) Transactions with significant related parties (continued)
The following table summarises significant transactions carried out by the Group with its significant related parties:
(continued)
for the year ended 31 december
2019
2018
Notes
rmb million
RMB million
Transactions between amC hK and the Company
Payment of an investment management fee to AMC HK
(ii.f)
Transactions between Suzhou Pension Company and the Company
Capital contribution to Suzhou Pension Company
Transactions between rui Chong Company and the Company
Rental fee charged by Rui Chong Company
Transactions between the guo yang guo Sheng and the Company
Capital withdrawal from Guo Yang Guo Sheng
Transactions between the Cl health and the Company
Capital withdrawal from CL Health
Transactions between other associates and joint ventures and the Company
Distribution of profits from other associates and joint ventures to the Company
Transactions between the consolidated structured entities/
other subsidiaries and the Company
Distribution of profits from the consolidated structured entities to the Company
Distribution of profits from the other subsidiaries to the Company
18
200
47
100
200
18
–
47
–
–
2,210
1,424
10,965
206
8,247
426
Notes:
(i)
(ii.a)
On 26 December 2017, the Company and CLIC renewed a renewable insurance agency agreement, effective from 1 January 2018 to 31 December
2020. The Company performs its duties of insurance agents in accordance with the agreement, but does not acquire any rights and profits or assume
any obligations, losses and risks as an insurer of the non-transferable policies. The policy management fee was payable semi-annually, and is equal to
the sum of (1) the number of policies in force as at the last day of the period, multiplied by RMB8.0 per policy and (2) 2.5% of the actual premiums and
deposits received during the period, in respect of such policies. The policy management fee income is included in other income in the consolidated
statement of comprehensive income.
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 effective from 1 January 2019 to 31 December 2021. In accordance with the agreement, CLIC paid AMC a basic service fee
at the rate of 0.05% per annum for the management of insurance funds. The service fee was calculated on a monthly basis and payable on a seasonal
basis, by multiplying the average book value of the assets under management (after deducting the funds obtained from and interests accrued for
repurchase transactions, deducting the principal and interests of debt and equity investment schemes, project asset-backed schemes, customised
non-standard products) at the beginning and the end of any given month by the rate of 0.05%, divided by 12. According to specific projects, debt
investment schemes, equity investment plans, project asset-backed plans, and customised non-standard products are based on contractual agreed
rate, without paying for 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.
(ii.b)
In 2018, CL Overseas renewed an investment management agreement with AMC HK, effective from 1 January 2018 to 31 December 2022. In
accordance with the agreement, CL Overseas entrusted AMC HK to manage and make investments for its insurance funds and paid AMC HK a
basic investment management fee and an investment performance fee. The basic investment management fee was accrued by multiplying the
weighted average total funds by the basic fee rate. The investment performance fee was calculated based on the difference between the total actual
annual yields and predetermined net realised yield. The basic investment management fee was calculated and payable on a semi-annual basis. The
investment performance fee was payable according to the total actual annual yield at the end of each year.
(ii.c) On 15 May 2018, CLP&C renewed an agreement for the management of insurance funds with AMC, entrusting AMC to manage and make
investments for its insurance funds, effective from 1 January 2018 to 31 December 2019. The agreement was subject to an automatic one-year
renewal if no objections were raised by both parties upon expiry. In accordance with the agreement, CLP&C paid AMC a fixed service fee and a
variable service fee. The fixed service fee was calculated on a monthly basis and payable on an annual basis, by multiplying the average net asset value
of assets of each category under management at the beginning and the end of any given month by the responding annual investment management
fee rate, divided by 12. The variable service fee was payable on an annual basis, and linked to investment performance.
228
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(g) Transactions with significant related parties (continued)
Notes: (continued)
(ii.d) On 31 December 2018, the Company and CLI renewed a management agreement of alternative investment of insurance funds, effective from
1 January 2019 to 31 December 2020. In accordance with the agreement, the Company entrusted CLI to engage in investment, operation and
management of equities, real estate and related financial products, and securitised financial products under the instructions of the annual guidelines.
The Company paid CLI an asset management fee and a performance related bonus based on the agreement. For fixed-income projects, the
management fee rate was between 0.05% and 0.6% according to different ranges of returns; for non-fixed-income projects, the management fee rate
for invested projects was 0.3%, the management fee rates for newly signed projects were between 0.05% and 0.3% according to CLI’s involvement
in project management and the performance-related bonus is based on the internal return rate upon expiry of the project. In addition, the Company
adjusts the investment management fees for fixed-income projects and non-fixed-income projects based on the annual evaluation results on CLI’s
performance. The adjustment (variable management fee) ranges from negative 10% to positive 15% of the investment management fee in the current
period.
(ii.e) On 28 December 2018, the Company and AMC renewed a renewable agreement for the management of insurance funds, effective from 1 January
2019 to 31 December 2021. In accordance with the agreement, the Company entrusted AMC to manage and make investments for its insurance
funds and paid AMC a fixed investment management service fee and a variable investment management service fee. The fixed annual service fee
was calculated and payable on a seasonal basis, by multiplying the average net value of the assets under management by the rate of 0.05%; the
variable investment management service fee was payable annually, based on the results of performance evaluation, at 20% of the fixed service fee
per annum. Asset management fees charged to the Company by AMC are eliminated in the consolidated statement of comprehensive income.
(ii.f) On 31 December 2018, the Company and AMC HK renewed the management agreement of insurance funds investment, which is effective from
1 January 2019 to 31 December 2021. In accordance with the agreement, the Company entrusted AMC HK to manage and make investments for
its insurance funds and paid AMC HK an asset management fee on a seasonal basis and the maximum investment management fee paid annually
is RMB30 million. The management fee rate for financial products, such as investment plans, project asset-backed plans, customised products and
insurance asset management products, set up by AMC HK in the industry permitted by regulatory policies, is set according to contractual terms.
The management fee rate for the directive investment operation of term deposits, common stocks, funds, financial products and other investment
products, universal account B-2 and entrusted assets account alike was 0.02%; the management fee rate for unlisted equity investment was 0.3%;
the management fee rate for customised investment portfolio was agreed upon the management fee of market-oriented entrusted investment. Asset
management fees charged to the Company by AMC HK are eliminated in the consolidated statement of comprehensive income.
(iii) On 31 January 2018, the Company and CLP&C signed a new framework insurance agency 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 three years, from 8 March 2018 to 7 March 2021.
(iv) On 29 December 2017, the Company renewed a property leasing agreement with CLI, effective from 1 January 2018 to 31 December 2020, pursuant
to which CLI leased to the Company certain buildings of its own. Annual rental payable by the Company to CLI in relation to the CLI properties
is determined either by reference to the market rent, or, the costs incurred by CLI in holding and maintaining the properties, plus a margin of
approximately 5%. The rental was paid on a semi-annual basis, and each payment was equal to one half of the total annual rental.
(v)
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. The agreement is effective from the signing date to 16 August 2020.
On 28 December 2018, the Company and CGB signed another insurance agency agreement to distribute corporate group insurance products. The
corporate group insurance products suitable for distribution through bancassurance channels are included in the agreement. The Company paid the
agency commission by multiplying the net amount of total premiums received from the sale of each category group insurance product after deducting
the surrender premiums, by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed by
reference to comparable market prices of independent third-parties. The commissions are paid on a monthly basis. The agreement is effective for two
years from 1 January 2019, with an automatic one-year renewal if no objections were raised by either party upon expiry.
(vi) On 1 January 2019, the Company and Pension Company renewed an entrusted agency agreement for pension business acted by life business.
The agreement is effective from 1 January 2019 to 31 December 2021. The business means that Pension Company entrusted the Company to sell
enterprise annuity funds, pension security business, occupational pension business and the third-party asset management business. The commissions
agreed upon in the agreement include the daily business commissions and the annual promotional plans commissions. According to the agreement,
the commissions for the entrusting service of enterprise annuity fund management, which is the core business of Pension Company, are calculated
at 30% to 80% of the annual entrusting management fee revenues, depending on the duration of the agreement. The commissions for account
management service are calculated at 60% of the first year’s account management fee and were only charged for the first year, regardless of the
duration of the agreement. The commissions for investment management services, in accordance with the duration of the agreement, are calculated
at 60% to 3% of the annual investment management fee (excluding risk reserves for investment), and decreased annually. The commissions of the
group pension plan are, in accordance with the duration of the contracts, calculated at 50% to 3% of the annual investment management fee, and
decreased annually; the commissions of the personal pension plan are calculated at 30% to 50% of the annual investment management fee according
to the various rates of daily management fee applied to the various individual pension management products in all of the management years; the
commissions of occupation annuity and third-party asset management business are in accordance with the provision of annual promotional plans,
which should be determined by both parties on a separate occasion. The commissions charged to Pension Company by the Company are eliminated
in the consolidated statement of comprehensive income of the Group.
(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.
229
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued) 35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(h) amounts due from/to significant related parties
The following table summarises the balances due from and to significant related parties. The balances of the Group are
all unsecured. The balance of the Group are non-interest-bearing and have no fixed repayment dates except for deposits
with CGB, wealth management products and other securities of CGB, and corporate bonds issued by Sino-Ocean.
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 deposited with CGB
Wealth management products and other securities of CGB
Amount due from CGB
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
Salaries and other benefits
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
334
56
334
(31)
18
(401)
2
59,420
844
894
(75)
605
8
13
(68)
(381)
(9)
30
(35)
118
350
68
284
(9)
15
(362)
2
61,880
115
1,557
(63)
593
8
6
(67)
(218)
(10)
25
(28)
18
for the year ended 31 december
2019
2018
rmb million
RMB million
15
34
The total compensation package for the Company’s key management personnel for the year ended 31 December 2019
has not yet been finalised in accordance with regulations of the relevant PRC authorities. The final compensation will be
disclosed in a separate announcement when determined. The compensation of 2018 has been approved by the relevant
authorities. The total compensation of 2018 was RMB34 million, including a deferred payment about RMB7 million.
230
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
35 SigNifiCaNT rElaTEd ParTy TraNSaCTiONS
(continued)
(j) Transactions with state-owned enterprises
Under IAS 24 Related Party Disclosures (“IAS 24”), business transactions between state-owned enterprises controlled
by the PRC government are within the scope of related party transactions. CLIC, the ultimate holding company of the
Group, is a state-owned enterprise. The Group’s key business is insurance and investment related and therefore the
business transactions with other state-owned enterprises are primarily related to insurance and investment activities. The
related party transactions with other state-owned enterprises were conducted in the ordinary course of business. Due to
the complex ownership structure, the PRC government may hold indirect interests in many companies. Some of these
interests may, in themselves or when combined with other indirect interests, be controlling interests which may not be
known to the Group. Nevertheless, the Group believes that the following captures the material related parties and has
applied IAS 24 exemption and disclosed only qualitative information.
As at 31 December 2019, most of the bank deposits of the Group were with state-owned banks; the issuers of
corporate bonds and subordinated bonds held by the Group were mainly state-owned enterprises. For the year ended
31 December 2019, a large portion of group insurance business of the Group was with state-owned enterprises; the
majority of bancassurance commission charges were paid to state-owned banks and postal offices; and the majority of the
reinsurance agreements of the Group were entered into with a state-owned reinsurance company.
36 SharE CaPiTal
registered, authorised, issued and fully paid
Ordinary shares of RMB1 each
28,264,705,000
28,265
28,264,705,000
28,265
as at 31 december 2019
As at 31 December 2018
No. of shares
rmb million
No. of shares
RMB million
As at 31 December 2019, the Company’s share capital was as follows:
Owned by CLIC (i)
Owned by other equity holders
Including: domestic listed
overseas listed (ii)
Total
as at 31 december 2019
No. of shares
rmb million
19,323,530,000
8,941,175,000
1,500,000,000
7,441,175,000
28,264,705,000
19,324
8,941
1,500
7,441
28,265
(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.
231
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
37 OThEr EQuiTy iNSTrumENTS
(a) basic information
Core Tier 2 Capital Securities
Total
As at
31 December
2018
Increase
Decrease
as at
31 december
2019
RMB million
RMB million
RMB million
rmb million
7,791
7,791
–
–
–
–
7,791
7,791
The Company issued Core Tier 2 Capital Securities at par with the nominal value of USD1,280 million on 3 July 2015,
and listed such securities on the Stock Exchange of Hong Kong Limited on 6 July 2015. The securities were issued in
the specified denomination of USD200,000 and integral multiples of USD1,000 in excess thereof. After a deduction
of the issue expense, the total amount of the proceeds raised from this issuance was USD1,274 million or RMB7,791
million. The issued capital securities have a term of 60 years, extendable upon expiry. Distributions shall be payable
on the securities semi-annually and the Company has the option to redeem the securities at the end of the fifth year
after issuance and on any distribution payment date thereafter. The initial distribution rate for the first five interest-
bearing years is 4.00%, if the Company does not exercise this option, the rate of distribution will be reset based on the
comparable US treasury yield plus a margin of 2.294% at the end of the fifth year and every five years thereafter.
(b) Equity attributable to equity holders
Equity attributable to equity holders of the Company
Equity attributable to ordinary equity holders of the Company
Equity attributable to other equity instruments holders of the Company
Equity attributable to non-controlling interests
Equity attributable to ordinary equity holders of non-controlling interests
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
403,764
395,973
7,791
5,578
5,578
318,371
310,580
7,791
4,919
4,919
Refer to Note 33 for the information of distribution to other equity instruments holders of the Company for the year ended
31 December 2019. As at 31 December 2019, there were no accumulated distributions unpaid attributable to other equity
instrument holders of the Company.
232
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
38 rESErvES
as at 1 january 2018
Other comprehensive income
for the year
Appropriation to reserves
Others
Other
comprehensive
income
reclassifiable
to profit or
loss under
the equity
method
unrealised
gains/
(losses)
from
available-
for-sale
securities
Share
premium
Other
reserves
Other
comprehensive
income non-
reclassifiable
to profit or
loss under
the equity
method
Exchange
differences
on translating
foreign
operations
Total
Statutory
reserve
fund
discretionary
reserve fund
general
reserve
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
53,860
1,281
(1,986)
(717)
33,384
30,152
30,541
(a)
(b)
(c)
–
–
–
–
–
(197)
1,084
(3,426)
–
–
(5,412)
as at 31 december 2018
53,860
Effect of associates’ adoption
of new accounting standards
(Note 9)
as at 1 january 2019
Other comprehensive income
for the year
Appropriation to reserves
Other comprehensive income
to retained earnings
Others
–
–
–
53,860
1,084
(5,412)
–
–
–
–
–
–
–
64
34,006
–
–
–
as at 31 december 2019
53,860
1,148
28,594
770
–
–
53
16
69
687
–
–
–
756
–
1,275
–
–
3,218
–
–
1,392
–
34,659
33,370
31,933
–
–
–
34,659
33,370
31,933
–
5,857
–
–
–
1,275
–
–
–
5,955
–
–
40,516
34,645
37,888
(840)
586
–
–
(254)
–
(254)
230
–
–
–
(24)
–
–
–
–
–
–
–
(76)
–
(86)
–
(162)
145,675
(2,070)
5,885
(197)
149,293
16
149,309
34,847
13,087
(86)
64
197,221
(a) Pursuant to the relevant PRC laws, the Company appropriated 10% of its net profit under Chinese Accounting Standards (“CAS”) to statutory reserve
which amounted to RMB5,857 million for the year ended 31 December 2019 (2018: RMB1,275 million).
(b) Approved at the Annual General Meeting in May 2019, the Company appropriated RMB1,275 million to the discretionary reserve fund for the year ended
31 December 2018 based on net profit under CAS (2018: RMB3,218 million).
(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 2019, the Company appropriated 10% of net profit under CAS which amounted to RMB5,857 million to the general reserve
for future uncertain catastrophes, which cannot be used for dividend distribution or conversion to share capital increment (2018: RMB1,275 million).
In addition, pursuant to the CAS, the Group appropriated RMB98 million to the general reserve of its subsidiaries attributable to the Company in the
consolidated financial statements (2018: RMB117 million).
Under related PRC law, dividends may be paid only out of distributable profits. Any distributable profits that are not
distributed in a given year are retained and available for distribution in the subsequent years.
233
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
39 NOTES TO ThE CONSOlidaTEd STaTEmENT Of CaSh flOWS
Changes in liabilities arising from financing activities
interest-
bearing
loans and
borrowings
bonds
payable
lease
liabilities
Other liability-
payable to
the third-party
holders of
consolidated
structured
entities
Other
liability-
interest
payable
related to
financing
activities
Securities
sold under
agreements to
repurchase
Total
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
18,794
727
629
–
20,150
20,150
–
–
–
–
–
–
–
–
–
–
–
87,309
104,832
–
–
192,141
2,185
192,141
6,252
3,155
–
–
9,407
9,407
(242)
137
34,988
–
(1,348)
–
(73,552)
–
11,993
–
at 1 january 2018
Changes from financing
cash flows
Foreign exchange movement
Interest expense
at 31 december 2018
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
20,045
34,990
–
–
–
–
–
–
2
–
–
2,239
106
(91)
3,091
(501)
–
–
–
–
–
–
–
118,088
21,400
127
112,482
(3,990)
–
4,115
252
252
(3,072)
–
–
–
4,147
–
1,327
104,724
629
4,115
221,950
224,135
(31,233)
137
(501)
2,239
4,255
(91)
198,941
40 PrOviSiONS aNd CONTiNgENCiES
The following is a summary of the significant contingent liabilities:
Pending lawsuits
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
523
488
The Group involves in certain lawsuits arising from the ordinary course of business. In order to accurately disclose the
contingent liabilities for pending lawsuits, the Group analysed all pending lawsuits case by case at the end of each interim
and annual reporting period. A provision will only be recognised if management determines, based on third-party legal
advice, that the Group has present obligations and the settlement of which is expected to result in an outflow of the
Group’s resources embodying economic benefits, and the amount of such obligations could be reasonably estimated.
Otherwise, the Group will disclose the pending lawsuits as contingent liabilities. As at 31 December 2019 and 2018, the
Group had other contingent liabilities but disclosure of such was not practical because the amounts of liabilities could not
be reliably estimated and were not material in aggregate.
234
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
41 COmmiTmENTS
(a) Capital commitments
The Group had the following capital commitments relating to property development projects and investments:
Contracted, but not provided for
Investments
Property, plant and equipment
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
64,866
3,941
68,807
81,217
4,930
86,147
(b) Operating lease commitments – as lessee
The future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
Total
As at
31 December
2018
RMB million
1,049
1,373
52
2,474
The Group adopted IFRS 16 as at the date of 1 January 2019. As a lessee, the Group measured, presented and disclosed
its operating lease commitments as at 31 December 2019 based on IFRS 16 and did not restate the comparative
information. Please refer to Note 2.1.
(c) Operating lease commitments – as lessor
The future minimum rentals receivable under non-cancellable operating leases are as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
578
1,133
231
1,942
530
1,306
300
2,136
235
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS
Statement of financial position
as at 31 december 2019
as at
31 december
2019
As at
31 December
2018
Notes
rmb million
RMB million
42(a)
42(b)
42(c)
42(d)
42(e)
42(f)
42(g)
42(h)
42(i)
42(j)
42(k)
10.7
42(l)
42(m)
12
13
42(n)
42(o)
15
16
18
10.7
42(p)
42(q)
42(o)
21
36
42(r)
42(s)
49,230
3,272
3,914
63,228
154,501
927,892
594,913
528,754
5,653
1,037,629
117,473
428
1,963
41,005
17,281
5,161
29,081
–
48,802
3,630,180
2,552,736
267,804
112,593
2,842
34,990
–
113,189
51,019
60,898
56,701
10,890
–
602
3,264,264
28,265
7,791
194,168
135,692
365,916
43,192
–
3,525
43,543
137,257
806,050
445,117
553,428
5,653
858,936
125,304
–
9,066
47,790
15,648
4,364
28,687
1,381
47,904
3,176,845
2,216,031
255,434
85,071
–
–
1,877
188,932
49,465
46,650
46,660
–
2,441
558
2,893,119
28,265
7,791
147,278
100,392
283,726
3,630,180
3,176,845
aSSETS
Property, plant and equipment
Right-of-use assets
Investment properties
Investments in subsidiaries
Investments in associates and joint ventures
Held-to-maturity securities
Loans
Term deposits
Statutory deposits – restricted
Available-for-sale securities
Securities at fair value through profit or loss
Derivative financial assets
Securities purchased under agreements to resell
Accrued investment income
Premiums receivable
Reinsurance assets
Other assets
Deferred tax assets
Cash and cash equivalents
Total assets
liabiliTiES aNd EQuiTy
liabilities
Insurance contracts
Investment contracts
Policyholder dividends payable
Lease liabilities
Bonds payable
Derivative financial liabilities
Securities sold under agreements to repurchase
Annuity and other insurance balances payable
Premiums received in advance
Other liabilities
Deferred tax liabilities
Current income tax liabilities
Statutory insurance fund
Total liabilities
Equity
Share capital
Other equity instruments
Reserves
Retained earnings
Total equity
Total liabilities and equity
236
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(a) Property, plant and equipment
Office
equipment
furniture and
fixtures
buildings
motor
vehicles
assets
under
construction
leasehold
improvements
rmb million
Cost
As at 1 January 2019
Transfers upon completion
Additions
Transfers into investment properties
Disposals
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Charge for the year
Disposals
as at 31 december 2019
impairment
As at 1 January 2019
Charge for the year
Disposals
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
35,837
6,864
75
–
(77)
42,699
(10,123)
(1,336)
48
(11,411)
(24)
–
–
(24)
25,690
31,264
7,458
234
1,002
–
(602)
8,092
(5,308)
(598)
577
(5,329)
–
–
–
–
2,150
2,763
1,319
–
193
–
(171)
1,341
(797)
(188)
162
(823)
–
–
–
–
522
518
Total
60,791
(172)
9,258
(520)
(996)
68,361
(17,574)
(2,398)
866
(19,106)
(25)
–
–
(25)
14,031
(7,802)
7,988
(520)
(39)
13,658
–
–
–
–
(1)
–
–
(1)
2,146
532
–
–
(107)
2,571
(1,346)
(276)
79
(1,543)
–
–
–
–
14,030
13,657
800
1,028
43,192
49,230
237
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(a) Property, plant and equipment (continued)
Office
equipment
furniture and
fixtures
Buildings
Motor
vehicles
Assets
under
construction
Leasehold
improvements
RMB million
31,628
4,282
82
–
(155)
35,837
(8,998)
(1,150)
25
(10,123)
(24)
–
–
(24)
22,606
25,690
6,684
120
907
–
(253)
7,458
(4,990)
(556)
238
(5,308)
–
–
–
–
1,694
2,150
1,383
–
280
–
(344)
1,319
(940)
(150)
293
(797)
–
–
–
–
443
522
10,951
(4,887)
10,175
(2,194)
(14)
14,031
–
–
–
–
–
(1)
–
(1)
10,951
14,030
1,798
390
44
–
(86)
2,146
(1,179)
(205)
38
(1,346)
–
–
–
–
619
800
Total
52,444
(95)
11,488
(2,194)
(852)
60,791
(16,107)
(2,061)
594
(17,574)
(24)
(1)
–
(25)
36,313
43,192
Cost
As at 1 January 2018
Transfers upon completion
Additions
Transfers into investment properties
Disposals
as at 31 december 2018
accumulated depreciation
As at 1 January 2018
Charge for the year
Disposals
as at 31 december 2018
impairment
As at 1 January 2018
Charge for the year
Disposals
as at 31 december 2018
Net book value
As at 1 January 2018
as at 31 december 2018
238
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(b) right-of-use assets
Cost
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Charge for the year
Deductions
as at 31 december 2019
impairment
As at 1 January 2019
Charge for the year
Deductions
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
buildings
Others
Total
rmb million
2,578
1,999
(130)
4,447
–
(1,205)
29
(1,176)
–
–
–
–
2,578
3,271
1
–
–
1
–
–
–
–
–
–
–
–
1
1
2,579
1,999
(130)
4,448
–
(1,205)
29
(1,176)
–
–
–
–
2,579
3,272
The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
year ended 31 December 2019.
239
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(c) investment properties
Cost
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
accumulated depreciation
As at 1 January 2019
Additions
Deductions
as at 31 december 2019
Net book value
As at 1 January 2019
as at 31 december 2019
fair value
As at 1 January 2019
as at 31 december 2019
Cost
As at 1 January 2018
Additions
Deductions
as at 31 december 2018
accumulated depreciation
As at 1 January 2018
Additions
Deductions
as at 31 december 2018
Net book value
As at 1 January 2018
as at 31 december 2018
fair value
As at 1 January 2018
as at 31 december 2018
buildings
rmb million
3,883
520
(16)
4,387
(358)
(115)
–
(473)
3,525
3,914
4,886
5,462
Buildings
RMB million
1,718
2,194
(29)
3,883
(317)
(54)
13
(358)
1,401
3,525
2,688
4,886
The fair value of investment properties of the Company as at 31 December 2019 amounted to RMB5,462 million (as at
31 December 2018: RMB4,886 million), which was estimated by the Company having regards to valuations performed by
independent appraisers. The investment properties were classified as Level 3 in the fair value hierarchy.
240
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(d) investments in subsidiaries
Unlisted investments at cost
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
63,228
43,543
(i) The table below presents the basic information of the Company’s subsidiaries as at 31 December 2019:
Name
AMC (i)
Pension Company (i)
Place of incorporation
and operation
Percentage of
equity interest held
PrC
PrC
AMC HK
Suzhou Pension Company (i)
hong Kong, PrC
PrC
CL AMP (i)
CL Wealth (i)
Golden Phoenix Tree Limited
King Phoenix Tree Limited
Rui Chong Company (i)
New Aldgate Limited
Glorious Fortune Forever Limited
CL Hotel Investor, L.P.
Golden Bamboo Limited
Sunny Bamboo Limited
Fortune Bamboo Limited
China Century Core Fund Limited
CL Health (i)
Franklin Shenzhen Company (i)
Guo Yang Guo Sheng (ii)
New Capital Wisdom Limited
New Fortune Wisdom Limited
Wisdom Forever Limited
Partnership
Yuan Shu Yuan Jiu (ii)
Yuan Shu Yuan Pin (ii)
Hope Building (i)
Wansheng (ii)
Bai Ning (ii)
Yuanxiang Tianfu (ii)
Yuanxiang Tianyi (ii)
Shengyi Jingsheng (i)
CG Investments
CL Guang De (ii)
PrC
PrC
hong Kong, PrC
The british jersey island
PrC
hong Kong, PrC
hong Kong, PrC
uSa
The british virgin islands
The british virgin islands
The british virgin islands
The british
Cayman islands
PrC
PrC
PrC
The british virgin islands
The british virgin islands
The british
Cayman islands
PrC
PrC
PrC
PrC
PrC
PrC
PrC
PrC
uSa
PrC
60.00% directly
74.27% directly
and indirectly
50.00% indirectly
100.00% directly
85.03% indirectly
100.00% indirectly
100.00% directly
100.00% indirectly
100.00% directly
100.00% directly
100.00% directly
100.00% directly
100.00% directly
100.00% directly
100.00% directly
100.00% indirectly
100.00% directly
100.00% indirectly
99.997% directly
100.00% indirectly
100.00% indirectly
100.00% indirectly
99.98% directly
99.98% directly
100.00% indirectly
99.98% directly
99.98% directly
99.98% directly
99.98% directly
100.00% indirectly
99.99% directly
99.95% directly
registered capital
Principal activities
rmb4,000 million
rmb3,400 million
asset management
Pension and annuity
Not applicable
rmb1,991 million
rmb1,288 million
rmb200 million
Not applicable
Not applicable
rmb6,800 million
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
rmb1,530 million
uSd2 million
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
rmb484 million
Not applicable
Not applicable
Not applicable
Not applicable
rmb1,131 million
Not applicable
Not applicable
asset management
investment in
retirement properties
fund management
financial service
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
health management
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
investment
(i)
The above subsidiaries are registered as limited companies in accordance of the Company Law of the People’s Republic of China.
(ii) The above subsidiaries are registered as limited liability partnerships in accordance of the Law of the People’s Republic of China on Partnerships.
Non-controlling interests in subsidiaries are not significant to the Company.
241
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(d) investments in subsidiaries (continued)
(ii) The table below presents the basic information of the Company’s major consolidated structured entities as at 31
December 2019:
Name
Percentage
of shares held
Trust/
investments
received
Principal
activities
Kun Lun Trust • Tianjin Urban
99.99% directly
rmb10,001 million
investment management
Communications Construction No. 1
Collective Fund Trust Scheme
Jiao Yin Guo Xin • Shaanxi Coal and Chemical
Industry Group Co., Ltd. Debt-to-Equity
Swap Collective Fund Trust Scheme
Shan Guo Tou • Jing Tou Corporate Trust
Loan Collective Funds Trust Scheme
75.00% directly
and indirectly
rmb10,000 million
investment management
100.00% directly
rmb10,000 million
investment management
China Life – China Hua Neng Debt-to-Equity
100.00% directly
rmb10,000 million
investment management
Swap Investment Scheme
Jiao Yin Guo Xin • China Aluminium Co., Ltd.
Supply-side Reform Collective Fund Trust
Scheme
99.99% directly
rmb10,000 million
investment management
Jian Xin Trust – CL Guo Xin Collective
99.99% directly
rmb10,000 million
investment management
Fund Trust Scheme
Chongqing Trust Fund • Guo Rong No. 4
85.00% directly
rmb10,000 million
investment management
Collective Fund Trust Scheme
Jiao Yin Guo Xin • Jing Tou Corporate
91.92% directly
rmb9,994 million
investment management
Collective Funds Trust Scheme
Shang Xin – Ningbo Wu Lu Si Qiao PPP
88.02% directly
rmb9,928 million
investment management
Collective Fund Trust Scheme
China Life – Yanzhou Coal Mining Debt
100.00% directly
rmb9,000 million
investment management
Investment Scheme
Kun Lun Trust • China Metallurgical No. 1
86.25% directly
rmb8,000 million
investment management
Collective Fund Trust Scheme
Zhong Xin Jing Cheng • Tianjin Port Group
Loans Collective Fund Trust Scheme
Jiang Su Trust •Xin Bao Sheng No. 144
(Jing Tou) Collective Fund Trust Scheme
Bridge Heng Yi 604 Collective
Fund Trust Scheme
China Life – Hua Neng Development of
Infrastructure Debt Investment Scheme
Kun Lun Trust • Jizhong Energy Group Loan
Collective Fund Trust Scheme
Jiao Yin Guo Xin • CLI – China Nonferrous
Metal Collective Fund Trust Scheme
100.00% directly
rmb6,000 million
investment management
83.33% directly
rmb6,000 million
investment management
81.00% directly
and indirectly
100% directly
rmb5,370 million
investment management
rmb5,000 million
investment management
99.98% directly
rmb5,000 million
investment management
99.98% directly
rmb5,000 million
investment management
242
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(e) investments in associates and joint ventures
as at 1 january
Investments in associates and joint ventures
as at 31 december
(f) held-to-maturity securities
debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Total
debt securities
Listed in Mainland, PRC
Unlisted
Total
2019
2018
rmb million
RMB million
137,257
17,244
154,501
104,039
33,218
137,257
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
215,715
401,799
197,676
112,702
927,892
208,909
718,983
927,892
179,852
266,986
212,133
147,079
806,050
109,506
696,544
806,050
Unlisted debt securities include those traded on the Chinese interbank market.
The estimated fair value of all held-to-maturity securities was RMB967,662 million as at 31 December 2019 (as at 31
December 2018: RMB842,839 million).
As at 31 December 2019, no accumulated impairment loss for the investment of held-to-maturity securities has been
recognised by the Company (as at 31 December 2018: RMB29 million).
debt securities – Contractual maturity schedule
Maturing:
Within one year
After one year but within five years
After five years but within ten years
After ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
24,227
128,078
241,155
534,432
927,892
16,816
137,699
278,851
372,684
806,050
243
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(g) loans
Policy loans
Other loans
Total
Impairment
Net value
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
(h) Term deposits
Maturing:
Within one year
After one year but within five years
After five years but within ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
174,872
422,759
597,631
(2,718)
594,913
142,165
302,952
445,117
–
445,117
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
213,096
221,464
124,531
38,540
597,631
(2,718)
594,913
167,248
135,164
98,416
44,289
445,117
–
445,117
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
102,483
418,441
7,830
528,754
156,407
319,821
77,200
553,428
As at 31 December 2019, the Company’s term deposits of RMB1,491 million (as at 31 December 2018: RMB 14,691
million) were deposited in banks to back overseas borrowings and are restricted to use. Please refer to Note 10.3 for the
details.
244
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(i) Statutory deposits – restricted
Contractual maturity schedule:
Within one year
After one year but within five years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
–
5,653
5,653
500
5,153
5,653
Insurance companies in China are required to deposit an amount that equals to 20% of their registered capital with banks
in compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
during liquidation proceedings.
(j) available-for-sale securities
available-for-sale securities, at fair value
debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds/debts
Others (i)
Subtotal
Equity securities
Funds
Common stocks
Preferred stocks
Wealth management products
Others (i)
Subtotal
available-for-sale securities, at cost
Equity securities
Others (i)
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
23,647
171,108
147,109
53,922
101,569
497,355
101,787
236,241
58,314
32,640
90,733
519,715
28,097
180,151
183,508
21,514
73,078
486,348
91,971
143,431
32,707
31,348
52,572
352,029
20,559
1,037,629
20,559
858,936
(i) Other available-for-sale securities mainly include unlisted equity investments, private equity funds and perpetual bonds.
245
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(j) available-for-sale securities (continued)
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
2019
As at
31 December
2018
rmb million
RMB million
45,900
451,455
497,355
151,940
95,428
1,458
291,448
540,274
1,037,629
52,950
433,398
486,348
102,018
55,066
162
215,342
372,588
858,936
Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
price quotation, wealth management products and private equity funds.
debt securities – Contractual maturity schedule
Maturing:
Within one year
After one year but within five years
After five years but within ten years
After ten years
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
25,578
146,914
224,393
100,470
497,355
11,379
166,622
210,805
97,542
486,348
246
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(k) Securities at fair value through profit or loss
debt securities
Government bonds
Government agency bonds
Corporate bonds
Others
Subtotal
Equity securities
Funds
Common stocks
Wealth management products
Others
Subtotal
Total
debt securities
Listed in Mainland, PRC
Listed overseas
Unlisted
Subtotal
Equity securities
Listed in Mainland, PRC
Listed in Hong Kong, PRC
Listed overseas
Unlisted
Subtotal
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
32
4,633
64,838
942
70,445
9,699
37,309
–
20
47,028
77
5,254
71,020
1,206
77,557
12,456
33,785
1,506
–
47,747
117,473
125,304
31,523
136
38,786
70,445
31,058
581
6,418
8,971
47,028
35,383
168
42,006
77,557
29,803
87
6,552
11,305
47,747
117,473
125,304
Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
price quotation.
247
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(l) Securities purchased under agreements to sell
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
1,963
1,963
9,066
9,066
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
12,039
24,723
4,243
41,005
40,025
980
41,005
19,622
23,258
4,910
47,790
47,265
525
47,790
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
7,265
5,615
5,430
3,377
2,619
661
4,114
29,081
21,741
7,340
29,081
7,326
–
4,162
3,269
8,840
611
4,479
28,687
21,268
7,419
28,687
Maturing:
Within 30 days
Total
(m) accrued investment income
Bank deposits
Debt securities
Others
Total
Current
Non-current
Total
(n) Other assets
Land use rights
Tax prepaid
Disbursements
Automated policy loans
Investments receivable and prepaid
Due from related parties
Others
Total
Current
Non-current
Total
248
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(o) deferred tax
(i) The movements in deferred tax assets and liabilities during the year are as follows:
Deferred tax assets/(liabilities)
insurance
investments
Others
Total
RMB million
RMB million
RMB million
RMB million
as at 1 january 2018
(Charged)/credited to net profit
(Charged)/credited to other comprehensive income
– Available-for-sale securities
– Portion of fair value changes on available-for-
sale securities attributable to participating
policyholders
as at 31 december 2018
as at 1 january 2019
(Charged)/credited to net profit
(Charged)/credited to other comprehensive income
– Available-for-sale securities
– Portion of fair value changes on available-for-
sale securities attributable to participating
policyholders
as at 31 december 2019
(6,737)
1,421
–
8
(5,308)
(5,308)
1,985
480
2,792
902
–
4,174
4,174
(3,070)
–
(16,181)
4,880
1,557
–
(15,077)
2,266
249
–
–
2,515
2,515
115
–
–
2,630
(3,991)
4,462
902
8
1,381
1,381
(970)
(16,181)
4,880
(10,890)
(ii) The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
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
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
6,854
5,588
12,442
(19,835)
(3,497)
(23,332)
(10,890)
3,265
6,098
9,363
(6,672)
(1,310)
(7,982)
1,381
249
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(p) Securities sold under agreements to repurchase
Interbank market
Stock exchange market
Total
Maturing:
Within 30 days
After 90 days
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
61,539
51,650
113,189
113,029
160
113,189
124,518
64,414
188,932
188,932
–
188,932
As at 31 December 2019, bonds with a carrying value of RMB89,779 million (as at 31 December 2018: RMB138,404
million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from repurchase
transactions entered into by the Company in the interbank market.
For debt repurchase transactions through the stock exchange, the Company is required to deposit certain exchange-
traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchange’s regulation
which should be no less than the balance of the related repurchase transaction. As at 31 December 2019, the carrying
value of securities deposited in the collateral pool was RMB253,520 million (as at 31 December 2018: RMB170,873
million). The collateral is restricted from trading during the period of the repurchase transaction.
(q) Other liabilities
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
14,113
10,300
7,418
3,065
1,998
1,238
748
409
17,412
56,701
56,701
–
56,701
11,739
10,124
5,268
3,440
1,793
190
490
500
13,116
46,660
46,660
–
46,660
Interest payable to policyholders
Salary and welfare payable
Brokerage and commission payable
Payable to constructors
Agent deposits
Interest payable of debt instruments
Stock appreciation rights (Note 32)
Tax payable
Others
Total
Current
Non-current
Total
250
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(r) Other equity instruments
Equity attributable to equity holders of the Company
Equity attributable to ordinary equity holders of the Company
Equity attributable to other equity instruments holders of the Company
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
365,916
358,125
7,791
283,726
275,935
7,791
Refer to Note 33 for the information of distribution to other equity instruments holders for the year ended 31 December
2019. As at 31 December 2019, there were no accumulated distributions unpaid attributable to other equity instruments
holders.
(s) reserves
as at 1 january 2018
Other comprehensive income
for the year
Appropriation to reserves
as at 31 december 2018
as at 1 january 2019
Other comprehensive income
for the year
Appropriation to reserves
as at 31 december 2019
unrealised gains/
(losses) from
available-for-sale
securities
Share
premium
Statutory
reserve fund
discretionary
reserve fund
general
reserve
Total
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
53,860
–
–
53,860
53,860
–
–
53,860
(3,280)
(2,730)
–
(6,010)
(6,010)
33,901
–
27,891
33,336
–
1,275
34,611
34,611
–
5,857
40,468
30,152
–
3,218
33,370
33,370
–
1,275
34,645
30,172
–
1,275
31,447
31,447
–
5,857
37,304
144,240
(2,730)
5,768
147,278
147,278
33,901
12,989
194,168
(t) Provisions and contingencies
The following is a summary of the significant contingent liabilities:
Pending lawsuits
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
523
488
251
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
42 STaTEmENT Of fiNaNCial POSiTiON aNd NOTES TO KEy iTEmS (continued)
(u) Commitments
(i) Capital commitments
Capital commitments of the Company relating to property development projects and investments:
Contracted, but not provided for
Investments
Property, plant and equipment
Total
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
65,339
3,505
68,844
85,978
4,314
90,292
(ii) Operating lease commitments – as lessee
The future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
Total
As at
31 December
2018
RMB million
1,001
1,365
52
2,418
The Company adopted IFRS 16 as at 1 January 2019. As a lessee, the Company measured, presented and disclosed its
operating lease commitments as at 31 December 2019 based on IFRS 16 and did not restate the comparative information.
(iii) Operating lease commitments – as lessor
The future minimum rentals receivable under non-cancellable operating leases are as follows:
as at
31 december
2019
As at
31 December
2018
rmb million
RMB million
400
739
188
1,327
324
524
124
972
Not later than one year
Later than one year but not later than five years
Later than five years
Total
252
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
43 dirECTOrS’, SuPErviSOrS’, ChiEf EXECuTivE’S aNd SENiOr
maNagEmENT’S rEmuNEraTiON
The total compensation package for the directors, supervisors, chief executive and senior management for the year ended
31 December 2019 in accordance with the related measures for compensation management of the Company has not
yet been finalised. The amount of the compensation not provided for is not expected to have a significant impact on the
Group’s 2019 consolidated financial statements. The final compensation will be disclosed in a separate announcement
when determined.
(a) directors’ and chief executive’s emoluments
The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
December 2019 are as follows:
Name
Wang Bin (v)
Su Hengxuan (v)
Xu Hengping (i)
Xu Haifeng (ii)
Li Mingguang (iii)
Yuan Changqing (v)
Liu Huimin (v)
Yin Zhaojun (v)
Wang Junhui (iv) (v)
Chang Tso Tung Stephen
Robinson Drake Pike
Tang Xin
Leung Oi-Sie Elsie
remuneration
paid
benefits
in kind
Pension scheme
contributions
rmb thousand
–
–
8.5
605.1
596.7
–
–
–
–
320.0
320.0
320.0
300.0
–
–
17.9
59.8
60.0
–
–
–
–
–
–
–
–
–
–
–
41.1
36.2
–
–
–
–
–
–
–
–
Total
–
–
26.4
706.0
692.9
–
–
–
–
320.0
320.0
320.0
300.0
Xu Hengping resigned as executive director on 24 January 2019.
(i)
(ii) Xu Haifeng resigned as executive director on 28 June 2019.
(iii) Li Mingguang was appointed as executive director on 16 August 2019.
(iv) Wang Junhui was appointed as non-executive director on 16 August 2019.
(v) Wang Bin, Su Hengxuan and other non-executive directors did not receive remuneration from the Company.
(vi) The above remuneration was calculated based on the relevant employment period during the reporting period.
253
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
43 dirECTOrS’, SuPErviSOrS’, ChiEf EXECuTivE’S aNd SENiOr
maNagEmENT’S rEmuNEraTiON (continued)
(a) directors’ and chief executive’s emoluments (continued)
The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
December 2018 are as follows:
Performance
related
bonuses
Basic
salaries
Subtotal
of salary
income
–
–
–
1,790.0
1,432.0
1,432.0
–
–
–
–
250.0
250.0
250.0
250.0
–
–
–
1,044.2
1,050.1
1,145.6
–
–
–
–
70.0
70.0
70.0
50.0
–
–
–
2,834.2
2,482.1
2,577.6
–
–
–
–
320.0
320.0
320.0
300.0
Deferred
payment
included
in salary
income
–
–
–
626.5
630.1
687.4
–
–
–
–
–
–
–
–
Pension
scheme
contributions
Benefits
in kind
RMB thousand
–
–
–
136.9
134.7
134.7
–
–
–
–
–
–
–
–
–
–
–
97.7
97.7
97.7
–
–
–
–
–
–
–
–
Deferred
payment
included in
total
Actual
paid included
in total
–
–
–
626.5
630.1
687.4
–
–
–
–
–
–
–
–
–
–
–
2,442.3
2,084.4
2,122.6
–
–
–
–
320.0
320.0
320.0
300.0
Total
–
–
–
3,068.8
2,714.5
2,810.0
–
–
–
–
320.0
320.0
320.0
300.0
Name
Yang Mingsheng
Wang Bin
Su Hengxuan
Lin Dairen
Xu Hengping
Xu Haifeng
Yuan Changqing
Wang Sidong
Liu Huimin
Yin Zhaojun
Chang Tso Tung Stephen
Robinson Drake Pike
Tang Xin
Leung Oi-Sie Elsie
The compensation amounts disclosed above for these directors and the chief executive for the year ended 31 December
2018 were restated based on the finalised amounts determined during 2019.
The directors and chief executive received the compensation amounts disclosed above during their term of office in 2019
and 2018.
In addition to the directors’ emoluments disclosed above, certain directors of the Company received emoluments from
CLIC, the amounts of which were not apportioned between their services to the Company and their services to CLIC.
254
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
43 dirECTOrS’, SuPErviSOrS’, ChiEf EXECuTivE’S aNd SENiOr
maNagEmENT’S rEmuNEraTiON (continued)
(b) Supervisors’ emoluments
The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2019 are as
follows:
Name
Jia Yuzeng
Shi Xiangming (i)
Luo Zhaohui (viii)
Tang Yong (ii)
Han Bing (iii)
Huang Xin (iv)(viii)
Song Ping (v)
Cao Qingyang (vi)
Wang Xiaoqing (vii)
remuneration
paid
benefits
in kind
Pension scheme
contributions
rmb thousand
1,253.0
95.3
–
47.4
252.8
–
484.4
285.8
39.6
137.7
24.9
–
18.4
106.1
–
200.7
106.2
19.6
91.8
21.8
–
9.4
63.3
–
106.7
47.9
8.6
Total
1,482.5
142.0
–
75.2
422.2
–
791.8
439.9
67.8
(i)
(ii)
Shi Xiangming resigned as non-employee representative supervisor on 18 February 2019.
Tang Yong was appointed as non-employee representative supervisor on 2 February 2019 and resigned as non-employee representative supervisor on
22 July 2019.
(iii) Han Bing was appointed as non-employee representative supervisor on 12 July 2019.
(iv) Huang Xin resigned as employee representative supervisor on 22 July 2019.
(v)
Song Ping resigned as employee representative supervisor on 3 January 2020.
(vi)
Cao Qingyang was appointed as employee representative supervisor on 12 July 2019.
(vii) Wang Xiaoqing was appointed as employee representative supervisor on 27 December 2019.
(viii) Luo Zhaohui and Huang Xin did not receive remuneration from the Company.
(ix)
The above remuneration was calculated based on the relevant employment period during the reporting period.
255
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
43 dirECTOrS’, SuPErviSOrS’, ChiEf EXECuTivE’S aNd SENiOr
maNagEmENT’S rEmuNEraTiON (continued)
(b) Supervisors’ emoluments (continued)
The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2018 are as
follows:
Performance
related
bonuses
Basic
salaries
Subtotal
of salary
income
716.0
626.5
593.8
–
–
277.2
–
402.9
282.0
572.8
501.2
589.1
–
–
264.1
–
387.2
239.9
1,288.8
1,127.7
1,182.9
–
–
541.3
–
790.1
521.9
Deferred
payment
included
in salary
income
343.7
300.7
–
–
–
–
–
–
–
Pension
scheme
contributions
Benefits
in kind
RMB thousand
65.8
68.8
180.7
–
–
99.1
–
168.4
118.8
47.5
50.2
128.2
–
–
66.5
–
99.1
71.3
Deferred
payment
included
in total
Actual paid
included
in total
343.7
300.7
–
–
–
–
–
–
–
1,058.4
946.0
1,491.8
–
–
706.9
–
1,057.6
712.0
Total
1,402.1
1,246.7
1,491.8
–
–
706.9
–
1,057.6
712.0
Name
Miao Ping
Jia Yuzeng
Shi Xiangming
Xiong Junhong
Luo Zhaohui
Wang Cuifei
Li Guodong
Song Ping
Huang Xin
The compensation amounts disclosed above for these supervisors for the year ended 31 December 2018 were restated
based on the finalised amounts determined during 2019.
The supervisors received the compensation amounts disclosed above during their term of office in 2019 and 2018.
(c) five highest paid individuals
For the year ended 31 December 2019, the five individuals whose emoluments were the highest in the Company include
one director and one supervisor (2018: three directors).
Details of the remuneration of the five highest paid individuals are as follows:
Basic salaries, housing allowances, other allowances and benefits in kind
Pension scheme contributions
Total
2019
2018
rmb thousand
RMB thousand
7,085
459
7,544
13,583
489
14,072
256
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
43 dirECTOrS’, SuPErviSOrS’, ChiEf EXECuTivE’S aNd SENiOr
maNagEmENT’S rEmuNEraTiON (continued)
(c) five highest paid individuals (continued)
The emoluments fell within the following bands:
RMB0 – RMB1,000,000
RMB1,000,001 – RMB2,000,000
RMB2,000,001 – RMB3,000,000
RMB3,000,001 – RMB4,000,000
RMB4,000,001 – RMB4,500,000
Number of individuals
for the year ended 31 december
2019
2018
–
5
–
–
–
–
–
4
1
–
For the year ended 31 December 2019, no emoluments were paid by the Company to the directors, chief executive,
supervisors or any of the five highest paid individuals as an inducement to join or upon joining the Company or
compensation for loss of office as a director of any member of the Group or of any other office in connection with the
management (2018: nil).
The emoluments of the five highest paid individuals are the total emoluments paid to them during the year.
There was no arrangement under which a director, chief executive or supervisor waived or agreed to waive any
remuneration during the year.
44 SubSEQuENT EvENTS
Since the outbreak of Novel Coronavirus (“COVID-19”) pneumonia in the beginning of 2020, the Group has completely
implemented the arrangement of the prevention and control policies of “COVID-19” required by the government. While
taking comprehensive measures that effectively curbed the spread of the disease, the Group took full advantage of its
supporting and safeguarding function provided by the insurance business in response to the pandemic and played an
active role in coping with the potential hazardous impact on business operations that could be brought by “COVID-19”.
“COVID-19” has exerted a major impact on general economic operation in a short period. The Group has been witnessing
a domestic trend in which the situation of the containment of the pandemic is making sustained progress and the order of
life and production is being restored at an increasing pace. As of the issue date of these consolidated financial statements,
although the execution of internal policies related to prevention of the spread of “COVID-19” has brought certain
challenges to the Group in respect of the development of insurance business and the investment of insurance funds, the
impact of “COVID-19” on the Group is controllable for the reason that the Group has taken various measures to actively
respond and ensure the orderly operation of business.
The Group will continue to closely focus on both global and domestic situation of “COVID-19”, concerning its prevention
and control, and cope with the related impacts on the Company actively.
257
China Life Insurance Company Limited•2019 Annual Report•Financial ReportFor the year ended 31 December 2019Notes to the CoNsolidated FiNaNCial statemeNts (continued)
OThEr
iNfOrmaTiON
baSiC iNfOrmaTiON Of ThE COmPaNy
Registered Name in Chinese
Registered Name in English
中國人壽保險股份有限公司（簡稱「中國人壽」）
China Life Insurance Company Limited (“China Life”)
Legal Representative
Wang Bin
Registered Office Address
16 Financial Street, Xicheng District, Beijing, P.R. China
Postal Code
100033
Current Office Address
16 Financial Street, Xicheng District, Beijing, P.R. China
Postal Code
Telephone
Fax
Website
Email
100033
86-10-63633333
86-10-66575722
www.e-chinalife.com
ir@e-chinalife.com
Hong Kong Office Address
16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
Hung Hom, Kowloon, Hong Kong
852-29192628
852-29192638
Telephone
Fax
258
China Life Insurance Company Limited•2019 Annual Report•Other Information CONTaCT iNfOrmaTiON
Name
Office Address
Telephone
Fax
Email
board Secretary
Li Mingguang
Securities representative
Li Yinghui
16 Financial Street, Xicheng District,
Beijing, P.R. China
16 Financial Street, Xicheng District,
Beijing, P.R. China
86-10-63631241
86-10-66575112
86-10-63631191
86-10-66575112
ir@e-chinalife.com
liyh@e-chinalife.com
* Ms. Li Yinghui, Securities Representative of
the Company, is also the main contact person
of the external Company Secretary engaged
by the Company
iNfOrmaTiON diSClOSurE aNd PlaCE fOr ObTaiNiNg ThE rEPOrT
Media for the Company’s
A Share Disclosure
CSRC’s Designated Website for
the Company’s Annual Report
Disclosure
The Company’s H Share
Disclosure Websites
The Company’s Annual Report
may be obtained at
STOCK iNfOrmaTiON
Stock Type
A Share
H Share
ADR
China Securities Journal, Shanghai Securities News, Securities Times
www.sse.com.cn
HKExnews website of Hong Kong Exchanges and
Clearing Limited at www.hkexnews.hk
The Company’s website at www.e-chinalife.com
12/F, China Life Plaza, 16 Financial Street, Xicheng District, Beijing, P.R. China
Exchanges on which the
Stocks are listed
Stock Short Name
Stock Code
Shanghai Stock Exchange
China Life
601628
The Stock Exchange of
Hong Kong Limited
China Life
New York Stock Exchange
–
2628
LFC
259
China Life Insurance Company Limited•2019 Annual Report•Other Information OThEr rElEvaNT iNfOrmaTiON
H Share Registrar and
Transfer Office
Computershare Hong Kong
Investors Services Limited
Address: Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road East,
Wanchai, Hong Kong
Depositary of ADR
Deutsche Bank
Address: 60 Wall Street, New York, NY 10005
Domestic Legal Adviser
King & Wood Mallesons
International Legal Advisers
Latham & Watkins LLP
Debevoise & Plimpton LLP
domestic auditor
international auditor
Ernst & Young Hua Ming LLP
Ernst & Young
Auditors of the Company
Address: Level 16, Ernst &
Young Tower, Oriental Plaza,
No. 1 East Changan Avenue,
Dongcheng District, Beijing,
P.R. China
Name of the Signing Auditors:
Huang Yuedong, Wu Jun
Address: 22/F, CITIC Tower,
1 Tim Mei Avenue, Central, Hong Kong
260
China Life Insurance Company Limited•2019 Annual Report•Other Information iNdEX Of iNfOrmaTiON diSClOSurE aNNOuNCEmENTS
Serial No.
items
date of disclosure
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Announcement on the Approval of Issuance of Bonds for Capital Replenishment
Announcement of Premium Income
Announcement – Election of Employee Representative Supervisor
Election of Language and Means of Receipt of Corporate Communication
Reply Form
Announcement – Resignation of Executive Director
Announcement – Estimated Profit Decrease for the Year 2018
Announcement – Forfeiture of Unclaimed Dividends
Announcement of Premium Income
Announcement – Approval of Qualification as Supervisor by the CBIRC and
Resignation of Supervisor
Announcement – Approval from the People’s Bank of China on Issuance of Bonds
for Capital Replenishment
Announcement of Premium Income
Notice of Board Meeting
Announcement on Completion of Issuance of Bonds for Capital Replenishment
Announcement of Results for the Year Ended 31 December 2018
China Life Insurance Company Limited 2018 Corporate Social Responsibility Report
Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of
2018)
Announcement – Nomination of Non-Employee Representative Supervisor
China Life Insurance Company Limited – Announcement on Changes in Accounting
Estimates
Annual Report 2018
Reports of the Board of Directors & Board of Supervisors for 2018, Financial
Report & Profit Distribution Plan for 2018, Remuneration of Directors &
Supervisors, Remuneration & Appointment of Auditors, Election of Non-employee
Representative Supervisor, Amendments to Articles of Association and Procedural
Rules, General Mandate to Issue H Shares, Overseas Issue of Senior Bonds &
Notice of AGM
Notice of Annual General Meeting
Form of Proxy of Holders of H Shares for use at the Annual General Meeting of the
Company to be held on Thursday, 30 May 2019
Reply Slip of H Share Shareholders
Notification Letter and Change Request Form to Registered Shareholders
Notification Letter and Request Form to Non-Registered Shareholders
Notice of Board Meeting
Announcement – Approval of Qualification as President by the CBIRC
2019/1/14
2019/1/14
2019/1/21
2019/1/21
2019/1/21
2019/1/24
2019/1/29
2019/2/14
2019/2/18
2019/2/18
2019/3/6
2019/3/13
2019/3/14
2019/3/22
2019/3/27
2019/3/27
2019/3/27
2019/3/27
2019/3/27
2019/4/11
2019/4/11
2019/4/11
2019/4/11
2019/4/11
2019/4/11
2019/4/11
2019/4/11
2019/4/11
261
China Life Insurance Company Limited•2019 Annual Report•Other Information Serial No.
items
date of disclosure
Announcement of Premium Income
Announcement – Estimated Profit Increase for the First Quarter of 2019
2019 First Quarter Report
Summary of Solvency Quarterly Report of Insurance Company (First Quarter of
2019)
Announcement – Nomination of Executive Director and Non-executive Director
Supplemental Notice of Annual General Meeting
Supplemental Form of Proxy of Holders of H Shares for use at the Annual General
Meeting of the Company to be Held on Thursday, 30 May 2019
Notification Letter and Change Request Form to Registered Shareholders
Notification Letter and Request Form to Non-Registered Shareholders
Announcement of Premium Income
Announcement – Resolutions Passed at the Annual General Meeting and
Distribution of Final Dividend
Announcement of Premium Income
Announcement – Resignation of Executive Director
Announcement – Change of Person in Charge of Finance
Announcement of Premium Income
Announcement – Nomination of Executive Director
Announcement on Supplementary Information regarding the Compensation of
Directors, Supervisors and Senior Management Members in 2018
Announcement – Connected Transaction – Formation of Partnership
Announcement – Approval of Qualification of Supervisors by the CBIRC Beijing
Bureau and Resignation of Supervisors
Announcement – Estimated Profit Increase for the First Half of 2019
Notice of Board Meeting
Announcement of Premium Income
Announcement of Unaudited Interim Results for the Six Months Ended 30 June
2019
Announcement – Renewal of Continuing Connected Transactions under the
Cooperation Framework Agreement for Investment Management with Insurance
Funds
Announcement – Renewal of Continuing Connected Transactions with AMP
Announcement – Connected Transaction – Formation of Partnership
Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of
2019)
Announcement – Approval of Qualification of Directors by the CBIRC Beijing
Bureau
2019/4/15
2019/4/18
2019/4/25
2019/4/25
2019/4/25
2019/5/9
2019/5/9
2019/5/9
2019/5/9
2019/5/14
2019/5/30
2019/6/12
2019/6/28
2019/7/9
2019/7/15
2019/7/23
2019/7/23
2019/7/23
2019/7/23
2019/7/29
2019/8/12
2019/8/15
2019/8/22
2019/8/22
2019/8/22
2019/8/22
2019/8/22
2019/8/28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
262
China Life Insurance Company Limited•2019 Annual Report•Other Information Serial No.
items
date of disclosure
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
2019 Interim Report
Notification Letter and Change Request Form to Registered Shareholders
Notification Letter and Request Form to Non-Registered Shareholders
Announcement of Premium Income
Articles of Association of China Life Insurance Company Limited
Announcement of Premium Income
Notice of Board Meeting
Announcement – Estimated Profit Increase for the First Three Quarters of 2019
Delay in Dispatch of Circular
Announcement – Election of Employee Representative Supervisor
2019 Third Quarter Report
Announcement – Proposed Amendments to the Articles of Association
Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of
2019)
Notice of the First Extraordinary General Meeting 2019
Form of Proxy of Holders of H Shares for use at the First Extraordinary General
Meeting 2019 of the Company to be held on Thursday, 19 December 2019
Reply Slip of Holders of H Shares
Notification Letter and Change Request Form to Registered Shareholders
Notification Letter and Request Form to Non-Registered Shareholders
Announcement of Premium Income
Election of Mr. Zhao Peng as an Executive Director of the Sixth Session of the
Board of Directors, Proposed Amendments to the Articles of Association and the
Procedural Rules for the Board of Directors’ Meetings, Renewal of Continuing
Connected Transactions with AMP, Renewal of the Framework Agreement for
Daily Connected Transactions between the Company and CGB
Notification Letter and Change Request Form to Registered Shareholders
Notification Letter and Request Form to Non-Registered Shareholders
Announcement of Premium Income
Announcement – Withdrawal of Two Resolutions to be Considered at the First
Extraordinary General Meeting 2019
Announcement – Renewal of Continuing Connected Transactions between the
Company and Chongqing Trust
Announcement – Connected Transaction – Formation of Partnership
Announcement – Resolutions Passed at the First Extraordinary General Meeting
2019
Announcement on the Progress of Connected Transaction in relation to the
Formation of Partnership
2019/9/9
2019/9/9
2019/9/9
2019/9/11
2019/9/18
2019/10/16
2019/10/17
2019/10/18
2019/10/18
2019/10/23
2019/10/29
2019/10/29
2019/10/29
2019/10/31
2019/10/31
2019/10/31
2019/10/31
2019/10/31
2019/11/12
2019/11/14
2019/11/14
2019/11/14
2019/12/12
2019/12/13
2019/12/19
2019/12/19
2019/12/19
2019/12/30
263
China Life Insurance Company Limited•2019 Annual Report•Other Information dEfiNiTiONS aNd maTErial riSK alErT
In this annual report, unless the context otherwise requires, the following expressions have the following meanings:
China life, the Company 7
China Life Insurance Company Limited and its subsidiaries
CliC
amC
China Life Insurance (Group) Company, the controlling shareholder of the
Company
China Life Asset Management Company Limited, a non-wholly owned
subsidiary of the Company
Pension Company
China Life Pension Company Limited, a non-wholly owned subsidiary of the
Company
amP
ClWm
Cgb
ClP&C
Cli
China life Capital
CbirC
China Life AMP Asset Management Company Limited, an indirect non-wholly
owned subsidiary of the Company
China Life Wealth Management Company Limited, an indirect non-wholly
owned subsidiary of the Company
China Guangfa Bank Co., Ltd., an associate of the Company
China Life Property and Casualty Insurance Company Limited, a non-wholly
owned subsidiary of CLIC
China Life Investment Holding Company Limited, a wholly-owned subsidiary
of CLIC
China Life Capital Investment Company, an indirect wholly-owned subsidiary
of CLIC
China Banking and Insurance Regulatory Commission, the predecessors
of which are China Insurance Regulatory Commission and China Banking
Regulatory Commission
CbirC beijing bureau
Beijing Bureau of the China Banking and Insurance Regulatory Commission
CSrC
hKSE
SSE
Company law
insurance law
Securities law
China Securities Regulatory Commission
The Stock Exchange of Hong Kong Limited
Shanghai Stock Exchange
Company Law of the People’s Republic of China
Insurance Law of the People’s Republic of China
Securities Law of the People’s Republic of China
articles of association
Articles of Association of China Life Insurance Company Limited
China or PrC
For the purpose of this report, “China” or “PRC” refers to the People’s
Republic of China, excluding the Hong Kong Special Administrative Region,
Macau Special Administrative Region and Taiwan region
rmb
Renminbi Yuan
maTErial riSK alErT:
The Company has stated in this annual report the details of its existing risks including risks relating to macro trends,
insurance risk, market risk, credit risk, operational risk, strategic risk, reputation risk, liquidity risk and information safety
risk. Please refer to the “Future Prospect” in the section headed “Management Discussion and Analysis” and the
“Internal Control and Risk Management” in the section headed “Corporate Governance” of this annual report.
7 Except for “the Company” referred to in the Consolidated Financial Statements.
264
China Life Insurance Company Limited•2019 Annual Report•Other Information