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+小諧中國
+Address: 22/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong
+International Auditor: Ernst & Young
+Name of the Signing Auditors: Zhang Xiaodong, Huang Yuedong
+Dongcheng District, Beijing, P.R. China
+Address: Level 16, Ernst & Young Tower, Oriental Plaza, No.1 East Changan Avenue,
+Domestic Auditor: Ernst & Young Hua Ming LLP
+Auditors of the Company:
+Debevoise & Plimpton LLP
+Latham & Watkins
+International Legal Advisers:
+King & Wood Mallesons
+Domestic Legal Adviser:
+60 Wall Street, New York, NY 10005
+4
+Deutsche Bank
+Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share Registrar and Transfer Office:
+LFC
+2628
+Exchange
+New York Stock
+The Stock Exchange of
+Hong Kong Limited
+China Life
+China Life
+601628
+Shanghai Stock Exchange
+ADR
+H Share
+A Share
+Depositary of ADR:
+Stock Code
+China Life Insurance Company Limited Annual Report 2015
+RMB million
+14.6%
+404,275
+463,492
+Benefits, claims and expenses
+318,276
+322,126
+324,813
+9.8%
+330,105
+362,301
+370,899
+371,485
+417,883
+Financial Summary
+15.1%
+507,449
+Net premiums earned
+Total revenues
+For the year ended
+2011
+2012
+2013
+Change
+2014
+2015
+Major Financial Data¹
+Reporting Standards (IFRS)
+Under International Financial
+440,766
+391,557
+Stock Short Name
+Exchanges on which the
+Email: ir@e-chinalife.com
+Fax: 86-10-66575112
+Office Address: 16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Telephone: 86-10-63631191
+Board Secretary: Zheng Yong
+Legal Representative: Yang Mingsheng
+China Life Insurance Company Limited (“China Life")
+Registered Name in English:
+中國人壽保險股份有限公司(簡稱「中國人壽」)
+Registered Name in Chinese:
+Company Profile
+China Life Insurance Company Limited Annual Report 2015
+2
+Except for "the Company" referred to in the Consolidated Financial Statements.
+Securities Representative: Lan Yuxi
+The Company has stated in this report the details of its existing risks including risks relating to macro trends, risks
+relating to business and risks relating to investments. Please refer to the analysis of the risks which the Company may
+face in its future development in the section headed “Management Discussion and Analysis”.
+Renminbi Yuan
+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
+Articles of Association of China Life Insurance Company Limited
+Securities Law of the People's Republic of China
+Company Law of the People's Republic of China
+Insurance Law of the People's Republic of China
+China Securities Regulatory Commission
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+RMB
+China or PRC
+Articles of Association
+Securities Law
+Insurance Law
+Company Law
+SSE
+Material Risk Alert:
+Stocks are Listed
+Office Address: 16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Fax: 86-10-66575112
+Stock Type
+Stock Information:
+12/F, China Life Plaza, 16 Financial Street, Xicheng District, Beijing, P.R. China
+The Company's Annual Reports may be obtained at:
+The Company's website at www.e-chinalife.com
+The Company's H Share Disclosure Websites:
+HKExnews website at www.hkexnews.hk
+Company Profile
+China Life Insurance Company Limited Annual Report 2015
+3
+www.sse.com.cn
+CSRC's Designated Website for the Company's Annual Report Disclosure:
+Securities Times
+Shanghai Securities News
+Telephone: 86-10-63631068
+China Securities Journal
+Fax: 852-29192638
+Office Address: 1403, 14/F., C.L.I. Building, 313 Hennessy Road, Wanchai, Hong Kong
+Telephone: 852-29192628
+Hong Kong Office:
+Email: ir@e-chinalife.com
+Website: www.e-chinalife.com
+Fax: 86-10-66575722
+Telephone: 86-10-63633333
+16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Current Office Address:
+16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Registered Office Address:
+* Mr. Lan Yuxi, Securities Representative of the Company, is also the main contact person of the external Company
+Secretary engaged by the Company
+Email: lanyuxi@e-chinalife.com
+Media for the Company's A Share Disclosure:
+HKSE
+363,554 352,599
+352,219
+2.
+1.
+Notes:
+3.51
+2.79
+4.86
+increase of 0.88
+percentage point
+5.36
+6.24
+Gross investment yield (%)
+percentage point
+87.79
+88.25
+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.
+88.72
+87.21
+86.68
+Ratio of assets and liabilities³ (%)
+percentage points
+9.16
+5.38
+11.22
+decrease of 1.27
+12.83
+11.56
+Weighted average ROE (%)
+Major financial ratio
+4.74
+decrease of 0.53
+4.68
+Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities +
+Held-to-maturity securities + Term deposits + Securities purchased under agreements to resell + Loans + Statutory deposits
+restricted + Investment properties
+3.
+Beijing, China
+Chairman
+By Order of the Board
+Yang Mingsheng
+8
+In retrospect, the development experiences accumulated during the “12th Five-Year Plan” period are valuable; looking
+forward, the "13th Five-Year Plan" period will present important opportunities for the Company to accelerate its
+development. The Company will stick to the general strategy of innovation-driven development and the main theme of
+transformation and upgrading, follow the operation ideas of “emphasizing value, strengthening sales force, optimizing
+structure, achieving stable growth and guarding against risks", strengthen benchmarking practice and focus on making
+breakthroughs. The Company will also put more efforts in accelerating business development, transforming business
+model, deepening reforms and laying strong basis and solid foundation, so as to enable everyone to enjoy the high-
+quality services provided by the Company, to create greater value for investors, and to strive for building a world-class
+life insurance company.
+The year 2016 is the beginning of the “13th Five-Year Plan" and also a critical year for the Company to comprehensively
+deepen the reforms and push forward the “innovation-driven development strategy" in great depth. Facing new
+challenges and development opportunities, the Company will concentrate efforts and resources, reinforce execution in
+accordance with the general requirements of the “13th Five-Year Plan”, and strive to create a good beginning for its
+development during the “13th Five-Year Plan” period. The Company will seek to accelerate the development of core
+businesses, push forward sales transformation, boost the development of comprehensive sales and interactive businesses,
+and actively expand policy-oriented businesses. The exclusive individual agent channel will focus on developing
+businesses of regular premiums with 10 years or longer payment duration as well as the distributed short-term insurance
+businesses. The group insurance channel will seek to maintain its current profitability while further expanding its
+business scale and improving the profits. The bancassurance channel will make more efforts in transformation and
+development of regular premium businesses with long payment duration, good value and high quality. Meanwhile, the
+development of new business channels will be enhanced by adhering to the combination of online and offline sales,
+integration of online, tele and mobile sales, and the direct sales over the counter will be continually promoted. The
+Company will continue to make strategic investment in the development of its sales force with an aim to improve the
+quantity and quality of the sales team and enhance the hard power. While reinforcing and improving its competitive
+advantages in county-level markets, the Company will further accelerate its business development in key cities, thus
+firmly maintaining its leading position in the market. As to the Company's investment level, we will focus on enhancing
+the investment capabilities, improving the asset allocation management system and investment management framework,
+and optimizing the asset allocation structure, so as to improve the level of investment income. The Company will
+further implement the “innovation-driven development strategy", actively facilitate innovation in various fields, and
+push forward the construction of a “new generation” comprehensive business processing system with great efforts. By
+deepening its reforming progress, the Company will continue to enhance its development momentum. Moreover, the
+Company will be in full compliance with the requirements of China Risk Oriented Solvency System (C-ROSS), improve
+its effectiveness in risk control, strictly stick to the risk bottom line and steadily push forward the healthy and rapid
+development of the Company.
+Chairman's Statement
+China Life Insurance Company Limited Annual Report 2015
+7
+Calculated according to the premium data of life insurance companies in 2015 released by the CIRC.
+2
+During the period of “12th Five-Year Plan”, although the Company was confronted with the most complicated situation
+and the most challenges, it managed to overcome the difficulties and made progress in adjustment and transformation,
+laying a solid foundation for building a world-class life insurance company. The past five years helped us better recognize
+that the golden keys for opening up a new dimension of the Company's development were accelerating development
+by adhering to market orientation, optimizing structure by adhering to value guidance, improving service quality
+by emphasizing customer experience, enhancing information technology level by equipping the Company with high
+technologies, and strengthening local branches by building strong basis and solid foundation.
+The Company actively pushed forward the development of policy-oriented businesses. Relying on its competitive
+advantages in professionalism and business scale, the Company continued to develop policy-oriented businesses
+including Supplementary Major Medical Insurance for Urban and Township Residents, New Village Cooperative
+Medical Insurance and New Rural Pension Insurance. The Company's inclusive businesses such as micro-insurance
+business realized nationwide coverage, and the insurance products designed for particular population groups such
+as senior citizens benefited over 10 million people. In addition, the Company provided insurance coverage for over
+120,000 college-graduate village officials, and actively offered a career development platform for college-graduate village
+officials, with the number of the retired college-graduate village officials introduced to the Company's local branches
+amounting to over 1,000. The Company was constantly committed to the participation of public welfare and charitable
+undertakings. During the Reporting Period, the Company donated over RMB36 million through the China Life
+Foundation to provide support for several poverty alleviation projects and purchasing of medical vehicles in poverty-
+stricken areas. The Company also continually provided assistance for orphans from major disasters.
+Ratio of assets and liabilities = Total liabilities/Total assets
+tenure.
+The Board of Directors of the Company proposes the payment of a final dividend of RMB0.42 per share (inclusive of
+tax), subject to the shareholders' approval at the 2015 Annual General Meeting to be held on Monday, 30 May 2016.
+During the Reporting Period, the Company's total revenue was RMB507,449 million, a 15.1% increase year-on-
+year; net profit attributable to equity holders of the Company was RMB34,699 million, a 7.7% increase year-on-year;
+earnings per share (basic and diluted) were RMB1.22, a 7.1% increase year-on-year. One-year new business value was
+RMB31,528 million, a 35.6% increase year-on-year. The Company's market share² in 2015 was approximately 23.0%,
+maintaining a leading position in the life insurance market. As at the end of the Reporting Period, the Company's total
+assets reached RMB2,448,315 million, an increase of 9.0% from the end of 2014; embedded value was RMB560,277
+million, an increase of 23.2% from 2014. As at 31 December 2015, the Company's solvency ratio was 330.10%.
+China Life Insurance Company Limited Annual Report 2015
+Chairman's Statement
+6
+In 2015, faced with the complicated international environment and the challenging tasks of carrying out reform and
+development and maintaining stability at home, China experienced stable economic development as a whole together
+with progress being achieved and stability ensured, which provided a favorable environment for the sound and fast
+development of insurance industry. In this year, the Company proactively adapted to the new normal state of economic
+development by firmly adhering to the operation ideas of “emphasizing value, strengthening sales force, optimizing
+structure and achieving stable growth”, implementing the “innovation-driven development strategy” in great depth,
+capturing opportunities, responding calmly and confidently, staying realistic and pragmatic and forging ahead with
+determination, and thus achieved the best operation results since the “12th Five-Year Plan”. The Company achieved
+new heights in its business development, with the growth rate of first-year regular premiums achieving a new high record
+since the share restructuring and listing of the Company, and the growth rates of both gross written premiums and
+first-year regular premiums with 10 years or longer payment duration being the highest over the past seven years. The
+Company's efficiency was continuously improved due to structure optimization, with the one-year new business value
+hitting a record high. The Company's sales force reached a new high level with its number surpassing one million for the
+first time in the Company's history. The Company's development achieved the balance between speed and efficiency,
+size and structure, and short-term and long-term operation, bringing a successful close to the Company's “12th
+Five-Year Plan".
+Yang Mingsheng, Chairman
+Chairman's Statement
+China Life Insurance Company Limited Annual Report 2015
+5
+(Investment income + Net realised gains/(losses) on financial assets + Net fair value gains/(losses)
+through profit or loss + Total income from investment properties - Business tax and extra charges for investment)/((Investment
+assets at the beginning of the period + Investment assets at the end of the period)/2)
+=
+Gross investment yield
+4.
+The Company has continually improved its corporate governance. During the Reporting Period, the Company
+successfully completed the change of sessions of the Board of Directors and the Supervisory Committee and elected the
+fifth sessions of the Board of Directors and the Supervisory Committee. Mr. Xu Hengping, Mr. Xu Haifeng, Mr. Liu
+Jiade, Mr. Robinson Drake Pike and Mr. Tang Xin joined the new session of the Board of Directors, and Mr. Miao
+Ping, Mr. Zhan Zhong and Ms. Wang Cuifei joined the new session of the Supervisory Committee. The new sessions
+of the Board of Directors and the Supervisory Committee continue to play roles of decision-making and supervision
+in a variety of areas, such as strategic planning, risk management, internal control and compliance, and performance
+appraisal, etc. Meanwhile, the Company would like to express its gratitude to the resigned/retired Directors, Mr. Su
+Hengxuan, Mr. Miao Ping, Mr. Bruce Douglas Moore and Mr. Huang Yiping, and the retired Supervisors, Ms. Xia
+Zhihua, Ms. Yang Cuilian and Mr. Li Xuejun for their contributions to the development of the Company during their
+Insurance benefits and claims expenses
+2.42
+2.77
+18,331
+11,061
+24,765
+7.1%
+32,211
+34,514
+of the Company
+Net profit attributable to ordinary share holders
+18,331
+11,061
+24,765
+7.7%
+32,211
+Net cash inflow/(outflow) from operating activities
+34,699
+Net profit attributable to equity holders of
+20,513
+10,968
+29,451
+13.7%
+40,402
+45,931
+Profit before income tax
+290,717
+300,562
+312,288
+11.7%
+315,294
+the Company
+N/A
+(18,811)
+N/A
+(0.67)
+activities per share
+Net cash inflow/(outflow) from operating
+6.78
+7.82
+7.80
+13.5%
+10.05
+11.41
+share
+Equity holders' equity per
+0.65
+0.39
+78,247
+0.88
+1.14
+1.22
+Earnings per share (basic and diluted)
+Per share (RMB)
+9.0% 1,972,941 1,898,916 1,583,907
+8.9% 1,848,681 1,790,838 1,494,969
+8.3% 1,750,356 1,675,815 1,390,519
+13.5% 220,331 221,085 191,530
+2,448,315 2,246,567
+2,287,639 2,100,870
+2,122,101 1,959,236
+322,492 284,121
+Total equity holders' equity
+Total liabilities
+Investment assets
+2
+Total assets
+As at 31 December
+68,292 132,182 133,953
+7.1%
+23 March 2016
+CSRC
+CIRC
+Corporate Governance
+Internal Control
+Honors and Awards
+Independent Auditors' Report
+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
+Embedded Value
+1
+China Life Insurance Company Limited Annual Report 2015
+Contents
+2
+3
+Directors, Supervisors, Senior Management and Employees
+5
+Changes in Ordinary Shares and Shareholders Information
+Report of the Supervisory Committee
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+China Insurance Regulatory Commission
+Annual Report 2015
+成己为人
+成人达己
+The Company is a life insurance company established in Beijing, China on 30 June 2003 according to the
+Company Law and 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 the largest life insurance company in China. Our distribution network, comprising exclusive
+agents, direct sales representatives, and dedicated and non-dedicated agencies, is the most extensive one in China.
+The Company is one of the largest institutional investors in China, and through its controlling shareholding
+in China Life Asset Management Company Limited, the Company is the largest insurance asset management
+company in China. 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 2015, the Company had approximately 216 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.
+Definitions and Material Risk Alert
+Company Profile
+Financial Summary
+Chairman's Statement
+Management Discussion and Analysis
+Report of the Board of Directors
+Significant Events
+6
+Stock Code: 2628
+28
+CLIC
+AMC
+Pension Company
+CLP&C
+CLI
+AMP
+CLWM
+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
+China Life Pension Company Limited, a non-wholly owned subsidiary 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 Wealth Management Company Limited, an indirect non-
+wholly owned subsidiary of the Company
+China Life AMP Asset Management Co., Ltd., an indirect non-wholly
+owned subsidiary of the Company
+9
+The Company'
+report, unless the context otherwise requires, the following expressions have the following meanings:
+China Life Insurance Company Limited and its subsidiaries
+Definitions and Material Risk Alert
+38
+In this annual
+54
+58
+41
+97
+101
+102
+73
+103
+105
+107
+108
+110
+228
+China Life Insurance Company Limited Annual Report 2015
+100%
+2.
+Note: At the third meeting of the Strategy and Investment Decision Committee of the fifth session of the Board held on 21
+December 2015, Mr. Huang Yiping gave written authorization for Mr. Anthony Francis Neoh to act as his proxy to
+attend, vote and chair at the meeting.
+Performance of duties by the Strategy and Investment Decision Committee
+In 2015, all members of the Strategy and Investment Decision Committee attended meetings in a timely manner,
+reviewed the proposals on the application of the Company's insurance capital, annual investments, major
+strategic projects and annual related reports. Members of the Strategy and Investment Committee diligently
+performed their duties. During meetings of the Strategy and Investment Decision Committee, all members
+actively participated in discussions and gave professional advices on any proposals considered and discussed at the
+meetings.
+(1) Studying the application of the Company's insurance capital. All members of the Strategy and Investment
+Decision Committee carefully studied the regulatory requirements with respect to the application of
+insurance capital, and reviewed the proposals on the entrusted investment of the Company in overseas
+private equity markets and authorization of the amounts, the plans on the allocation of the Company's
+overseas assets and authorization of entrusted investment, and authorization of entrusted investment
+in relation to the marketization of the Company's RMB assets according to the Company's business
+development. In order to effectively promote the investment businesses of the Company, the Strategy and
+Investment Decision Committee conducted research on an annual authorization mechanism, which provided
+a key reference for the decision making of the Board.
+3/3
+92
+Discussing major strategic projects of the Company. In 2015, the Strategy and Investment Decision
+Committee fully discussed the necessity, feasibility and risks of the proposals on major strategic projects,
+including the overseas issue by the Company of RMB debt instruments for replenishment of capital, capital
+debt financing of the Company, strategic asset allocation plan of the Company for the years from 2016 to
+2020, overseas issue by the Company of senior bonds and establishment of China Life Health Insurance Co.,
+Ltd., and made significant recommendations to the Board.
+Corporate Governance
+(2)
+(3)
+(4)
+Reviewing annual investment plans and entrusted investments of the Company. In 2015, the Strategy
+and Investment Decision Committee carefully reviewed the proposals on investment plans such as the
+Company's annual investment plans and annual investment plans in relation to the self-use real estate of the
+Company; the proposals on the authorization of investments such as the authorization of annual investment
+in non self-use real estate of the Company and the authorization of annual investment in insurance asset
+management products of the Company; and the proposals on investment guidelines such as the annual
+agreement and investment management guidelines of the Company to AMC and CLI. The Strategy and
+Investment Decision Committee fully reviewed the above proposals and submitted its opinions to the Board
+in this regard.
+Finalizing the relevant annual reports of the Company. The Strategy and Investment Decision Committee
+discussed and reviewed the annual assessment report for the “Twelfth Five-year Plan" and the report on the
+solvency and capital planning of the Company for the next five years, and inspected, assessed and planned
+the implementation of various development objectives and the execution of major work and measures.
+Taking into account the overall situation of domestic and international markets and the future development
+trends, as well as the key issues identified in the assessment, the committee devised plans for the solvency of
+the Company in the coming five years and suggested the key work ideas and the measures for improvement
+for the next stage.
+INDEPENDENCE OF THE COMPANY FROM ITS CONTROLLING SHAREHOLDER
+Employees: The Company is independent in the aspects of employment, human resources and remuneration
+100%
+China Life Insurance Company Limited Annual Report 2015
+3/3
+and Investment Decision Committee of
+the fifth session of the Board
+67%
+Lin Dairen
+3/3
+100%
+management.
+the fifth session of the Board
+Wang Sidong
+Non-executive Director, member of the Strategy
+3/3
+100%
+and Investment Decision Committee of
+Xu Haifeng
+the fifth session of the Board
+Executive Director, member of the Strategy
+and Investment Decision Committee of
+the fifth session of the Board
+Anthony Francis Neoh
+Independent Director, member of the Strategy
+and Investment Decision Committee of
+33
+Assets: The Company owns all assets relating to 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.
+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.
+Organization: The Company has established a well-developed organizational system, under which internal bodies such as
+the Board and the Supervisory Committee operate separately. There is no subordinate relationship between such internal
+bodies and the functional departments of the Company's controlling shareholder.
+In 2015, the Company was awarded the "Corporate Governance Excellence Awards (for companies listed on the Main
+Board)" in the assessment and selection of the “Hong Kong Corporate Governance Excellence Awards" jointly organized
+by the Chamber of Hong Kong Listed Companies and the Centre for Corporate Governance and Financial Policy,
+Hong Kong Baptist University. In the assessment and selection of the “Gold Bull Award for the PRC Listed Companies
+in 2014" held by China Securities in 2015, the Company was awarded the title of the “Gold Bull Award for the Most
+Profitable Companies in 2014” and Mr. Zheng Yong, the Board Secretary, was awarded the title of the "Gold Bull
+Award for Best Board Secretary in 2014". In the assessment and selection of the “2014 China Most Valuable Listed
+Companies in the PRC" held by the Securities Times, Mr. Zheng Yong, the Board Secretary, was awarded the title of
+the “Top 100 Board Secretaries in the PRC Listed Companies”, whereas in the assessment and selection of the “Golden
+Governance-Outstanding Board Secretaries of Listed Companies in 2015" held by Shanghai Securities News, he was
+awarded the title of the "Golden Governance-Board Secretary for Information Disclosure".
+CHANGES OF THE ARTICLES OF ASSOCIATION
+With the approval at the 2014 Annual General Meeting held on 28 May 2015, the Company added the "fund sales
+business" into its business scope as stipulated in the Articles of Association and amended certain articles pursuant to the
+regulatory requirements. The amendment shall take effect after the approval of the CIRC is obtained. For details of such
+amendments, please refer to the Supplemental Notice of Annual General Meeting of the Company dated 8 May 2015.
+96
+China Life Insurance Company Limited Annual Report 2015
+Internal Control
+I.
+ESTABLISHMENT OF AN INTERNAL CONTROL SYSTEM
+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 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 CIRC, the Company has carried out a lot of work on its internal control
+system establishment, rules implementation and risk management by strictly following its corporate governance
+structure. The Company also formulated and issued the “Internal Control Implementation Manual of China Life
+Insurance Company Limited (2015 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 2015 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 2015 annual report. 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 2015 in its Form 20-F (U.S. Annual Report) submitted to the U.S. Securities and
+Exchange Commission (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 2015, and confirmed that its
+internal controls were effective. The Company had also received from its independent auditors an unqualified
+opinion on the effectiveness of its internal control in relation to financial reporting as at 31 December 2015. 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 Supervisory Committee supervises the internal control assessments performed by the Board.
+The Company has established Internal Control and Risk Management Departments and Internal Control and
+Compliance Departments in its headquarters and branches. The Company also conducts tests on the management
+level, assesses the effectiveness of the established and implemented internal control systems in accordance with the
+requirements of the PRC regulatory requirements and Section 404 of the U.S. Sarbanes-Oxley Act, and reports to
+the Board, the Audit Committee and the management.
+97
+China Life Insurance Company Limited Annual Report 2015
+Internal Control
+In compliance with regulatory requirements and having considered the characteristics of its business and
+management requirements, the Company 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 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, group insurance,
+bancassurance, health insurance and e-commerce. This internal control system regulates the relevant authorizations
+and operational workflows, and effectively adopts 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 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 “Provisional Measures on 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 of 31 December 2015, there has been no major error in periodic report disclosures of the
+Company. In order to regulate its inside information management and enhance the confidentiality of its inside
+information, the Company formulated the "Measures for the Administration of Persons Who Have Knowledge
+of Inside Information of China Life Insurance Company Limited", which was strictly implemented in all
+departments, branches, subsidiaries and major affiliates of the Company.
+98
+In 2015, the Company continuously improved and strengthened its relations with investors, which mainly included
+holding the Annual General Meeting, holding results release conferences, 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, establishing an investor relations hotline and an exclusive electronic
+mailbox to ensure timely replies to any enquiries from investors and analysts. In 2015, the Company communicated
+with more than 3,000 investors and analysts through different channels, including the reception at the Company
+of 142 groups of investors and analysts consisting of over 700 individuals in total, communicating with more than
+1,000 investors by participating in 16 investors' meetings held locally or overseas, and meeting and visiting more
+than 60 investors in roadshows. In addition, the Company kept in close contact with investors by phone and email,
+communicated with them through more than 1,500 emails, and answered their calls and emails for more than 1,000
+person-time.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+95
+33
+93
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+Business operations: The Company independently 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 its all types of personal insurance
+services, consulting business and agency business, and other businesses permitted by insurance administrative and
+regulatory authorities of the PRC. The Company currently possesses the “Insurance Company Legal Person Permit”
+(Number: 000005) issued by the CIRC. 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.
+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, a performance target contract will be entered into between the Chairman and the President, the
+President and the Vice Presidents, and the President's Office and the senior management of branches 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 capacity 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.
+The remuneration for senior management comprises basic salary, performance compensation, welfare benefits and
+medium and long term incentives.
+SHAREHOLDERS' INTERESTS
+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.
+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.
+94
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+Attendance rate
+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
+The Company has established a well-developed 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 through innovative work models, which enabled domestic and overseas investors to understand the business
+operations of the Company in a timely manner.
+In 2015, 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 promoted
+the innovation of periodic reports, actively studied and improved the method of disclosure of key information, and
+extended the scope and depth of information disclosure so as to enable investors to have a deeper understanding of the
+development strategies and business operations of the Company, thus further enhancing the quality of information
+disclosure of periodic reports. The Company disclosed important announcements in relation to its financial results with
+initiative and prudence, which ensured investors to obtain timely and accurate information affecting its decisions. The
+Company regularly organized training courses relating to information disclosure, carried out timely study and promotion
+of new regulatory rules of its listed jurisdictions in the PRC and overseas, and explained the key points and difficulties
+of information disclosure. The Company also strictly implemented the registration and filing procedures of persons
+who have knowledge of inside information, strengthened the confidentiality of the Company's inside information, and
+safeguarded the legitimate rights and interests of investors, with a view to maintaining the fairness, impartiality and
+openness of the information disclosure of the Company.
+95
+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 Supervisory Committee deems necessary, or more than half of the Directors (including at least
+two Independent Directors) requests, 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.
+2/3
+3.
+Number of meetings attended
+(1) Attending meetings of the Risk Management Committee of the Board and providing guidance on the
+risk management of the Company. In 2015, all members of the Risk Management Committee diligently
+performed their duties, attended all meetings in a timely manner, and reviewed the proposals on risk
+management and internal control of the Company. During meetings of the Risk Management Committee,
+all members actively participated in discussions and gave guiding opinions on any proposals considered and
+discussed at the meetings.
+(2)
+Providing its opinions for the review of the proposals on risk management to the Board. In 2015, the
+Risk Management Committee closely monitored and controlled and effectively prevented internal and
+external risks of the Company, assisted the Board in establishing a well-developed internal control system
+of the Company, formulated an operational risk management strategy of the Company, and reviewed
+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 Committee provided its opinions for the
+review of the proposals on risk management such as the Measures for the Classification of Five Tiers of
+the Company's Insurance Asset Risks (Trial) and the assessment management system of the Company's
+investment credit risks, which offered professional support to the Board's decision-making in a scientific
+manner.
+(3) Participated in meetings of the Audit Committee of the Board to listen to the matters relevant to the
+annual compliance report and the internal control assessment for the year. In 2015, members of the Risk
+Management Committee participated in the thirteenth meeting of the Audit Committee of the fourth
+session of the Board and listened to the 2014 internal control assessment of the Company, and the report on
+the adjustment of internal control system of the Company according to the COSO new framework.
+(4) Conducting investigation and research on local branches. From 19 to 24 August 2015, Mr. Anthony Francis
+Neoh, the Chairman of the Risk Management Committee, conducted investigation and research on local
+branches in Xinlin Gol and Chifeng for the purpose of understanding the risk prevention and control of the
+local branches, and advised the local branches to raise their awareness of risk prevention and adhere to the
+bottom line of risks in their business development so as to enhance the legal compliance and risk prevention
+in a practical manner.
+STRATEGY AND INVESTMENT DECISION 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. The Strategy and Investment Decision Committee is mainly responsible
+for the drawing-up of long-term development strategies and significant investment or financing plans of the Company,
+proposing significant projects of capital operation and assets management, and conducting studies and making
+recommendations on other important matters affecting the development of the Company.
+96
+90
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+At present, the Strategy and Investment Decision Committee of the fifth session of the Board comprises Mr. Tang Xin
+and Mr. Anthony Francis Neoh, the Independent Directors, Mr. Wang Sidong, a Non-executive Director, Mr. Lin
+Dairen and Mr. Xu Haifeng, the Executive Directors, with Mr. Tang Xin acting as the Chairman. Mr. Su Hengxuan
+resigned from his position as a member of the Strategy and Investment Decision Committee of the fourth session of
+the Board of the Company due to adjustment of working arrangements. Mr. Huang Yiping resigned from his position
+as the Chairman of the Strategy and Investment Decision Committee of the fifth session of the Board of the Company
+pursuant to relevant policies.
+1.
+Meetings and attendance
+In 2015, 2 regular meetings were held by the Strategy and Investment Decision Committee of the fourth session of
+the Board. Attendance records of individual members are as follows:
+Name of member
+Huang Yiping
+Position
+In 2015, the Risk Management Committee performed its duties and functions in strict compliance with the
+"Procedural Rules for Risk Management Committee Meetings". All members performed their obligations in a
+responsible manner, and gave guiding opinions on proposals in relation to the internal control system of the
+Company, risk management and construction in compliance with laws.
+Independent Director, Chairman of the Strategy
+and Investment Decision Committee of
+the fourth session of the Board
+Performance of duties by the Risk Management Committee
+Corporate Governance
+Independent Director, Chairman of
+the Risk Management Committee of
+the fifth session of the Board
+Non-executive Director, member of
+the Risk Management Committee of
+the fifth session of the Board
+Non-executive Director, member of
+the Risk Management Committee of
+the fifth session of the Board
+Executive Director, member of the
+Risk Management Committee of
+the fifth session of the Board
+2/2
+100%
+1/2
+Note 1
+50%
+1/2
+12
+Note 2
+50%
+2/2
+100%
+Notes:
+1.
+2.
+At the first meeting of the Risk Management Committee of the fifth session of the Board held on 28 October 2015, Mr.
+Zhang Xiangxian gave written authorization for Mr. Liu Jiade to act as his proxy to attend and vote at the meeting;
+At the second meeting of the Risk Management Committee of the fifth session of the Board held on 21 December 2015,
+Mr. Liu Jiade gave written authorization for Mr. Zhang Xiangxian to act as his proxy to attend and vote at the meeting.
+89
+China Life Insurance Company Limited Annual Report 2015
+2.
+Note
+Number of meetings attended
+2/2
+2/2
+100%
+Notes:
+1.
+2.
+At the fifteenth meeting of the Strategy and Investment Decision Committee of the fourth session of the Board held on
+23 March 2015, Mr. Lin Dairen gave written authorization for Mr. Su Hengxuan to act as his proxy to attend and vote at
+the meeting;
+At the fifteenth meeting of the Strategy and Investment Decision Committee of the fourth session of the Board held on
+23 March 2015, Mr. Wang Sidong gave written authorization for Mr. Anthony Francis Neoh to act as his proxy to attend
+and vote at the meeting;
+At the sixteenth meeting of the Strategy and Investment Decision Committee of the fourth session of the Board held on
+28 April 2015, Mr. Su Hengxuan gave written authorization for Mr. Lin Dairen to act as his proxy to attend and vote at
+the meeting.
+91
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+In 2015, 3 regular meetings were held by the Strategy and Investment Decision Committee of the fifth session of
+the Board. Attendance records of individual members are as follows:
+Name of member
+Huang Yiping
+Position
+Independent Director, Chairman of the Strategy
+and Investment Decision Committee of
+the fifth session of the Board
+Executive Director, member of the Strategy
+Independent Director, member of the Strategy
+and Investment Decision Committee of
+the fourth session of the Board
+Attendance rate
+Anthony Francis Neoh
+50%
+100%
+Lin Dairen
+Executive Director, member of the Strategy
+1/2
+Note 1
+50%
+and Investment Decision Committee of
+the fourth session of the Board
+Wang Sidong
+Non-executive Director, member of the Strategy
+1/2
+50%
+and Investment Decision Committee of
+the fourth session of the Board
+Su Hengxuan
+Executive Director, member of the Strategy
+and Investment Decision Committee of
+1/2
+Note 3
+the fourth session of the Board
+Note 2
+Xu Hengping
+Position
+Liu Jiade
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+At present, the Risk Management Committee of the fifth session of the Board comprises Mr. Anthony Francis Neoh, an
+Independent Director, Mr. Zhang Xiangxian and Mr. Liu Jiade, the Non-executive Directors, and Mr. Xu Hengping, an
+Executive Director, with Mr. Anthony Francis Neoh acting as the Chairman. Mr. Miao Ping retired from his position as
+a member of the Risk Management Committee due to the expiry of the term of the Risk Management Committee of the
+fourth session of the Board.
+1.
+Meetings and attendance
+In 2015, 2 regular meetings were held by the Risk Management Committee of the fourth session of the Board.
+Attendance records of individual members are as follows:
+Name of member
+Anthony Francis Neoh
+Zhang Xiangxian
+Miao Ping
+Independent Director, Chairman of
+the Risk Management Committee of
+the fourth session of the Board
+Non-executive Director, member of
+the Risk Management Committee of
+the fourth session of the Board
+Executive Director, member of the
+Risk Management Committee of
+Number of meetings attended
+Attendance rate
+the fourth session of the Board
+42
+Zhang Xiangxian
+Anthony Francis Neoh
+Attendance rate
+Number of meetings attended
+Position
+2/2
+In 2015, 2 regular meetings were held by the Risk Management Committee of the fifth session of the Board.
+Attendance records of individual members are as follows:
+Name of member
+22
+2/2
+100%
+2/2
+100%
+100%
+(Note 36)
+222,585
+28,265
+97,029
+95,037
+2,254
+32,211
+Total assets
+32,514
+39,232
+52
+39,284
+39,232
+32,211
+(Note 35)
+303
+(Note 34)
+Attributable to equity holders
+RMB million
+355
+of the Company
+Non-controlling
+interests
+Total
+Share
+Other equity
+RMB million
+Retained
+instruments
+Reserves
+RMB million
+RMB million
+RMB million
+earnings
+RMB million
+capital
+71,798
+Total transactions with owners
+Capital paid in by
+(7,052)
+As at 31 December 2014
+28,265
+145,919
+109,937
+3,210
+601
+287,331
+Net profit
+Other comprehensive income
+28,265
+145,919
+109,937
+3,210
+As at 1 January 2015
+Transactions with owners
+109
+9,658
+non-controlling interests
+826
+692
+1,518
+Appropriation to reserves (Note 36)
+8,832
+(17,311)
+(8,832)
+(8,479)
+(8,479)
+Dividends to non-controlling interests
+(91)
+(91)
+Total comprehensive income
+Dividends paid (Note 32)
+Other comprehensive income
+42,324
+As at 1 January 2014
+For the year ended 31 December 2015
+Other comprehensive income
+2015
+Note
+RMB million
+2014
+Consolidated Statement of Comprehensive Income
+RMB million
+profit or loss in subsequent periods:
+Fair value gains on available-for-sale securities
+54,080
+70,342
+Amount transferred to net profit from other comprehensive income
+(32,297)
+Other comprehensive income that may be reclassified to
+(7,120)
+China Life Insurance Company Limited Annual Report 2015
+105
+Income tax
+Net profit
+Attributable to:
+- Equity holders of the Company
+- Non-controlling interests
+Basic and diluted earnings per share
+RMB1.14
+35,187
+34,699
+488
+32,211
+303
+30
+RMB1.22
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+32,514
+Net profit
+Portion of fair value changes on available-for-sale securities
+(12,767)
+287,331
+71,798
+Attributable to:
+- Equity holders of the Company
+- Non-controlling interests
+41,775
+Total comprehensive income for the year, net of tax
+71,443
+355
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+106
+China Life Insurance Company Limited Annual Report 2015
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2015
+549
+attributable to participating policyholders
+39,284
+Other comprehensive income for the year, net of tax
+(11,035)
+Share of other comprehensive income of associates and joint ventures
+under the equity method
+353
+120
+Exchange differences on translating foreign operations
+10
+7,137
+Income tax relating to components of other comprehensive income
+(2,242)
+(13,023)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+7,137
+39,284
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods
+28
+34,699
+80
+35,187
+Net cash inflows/(outflows) from operating activities
+(18,811)
+78,247
+CASH FLOWS FROM INVESTING ACTIVITIES
+Disposals and maturities:
+Disposals of debt securities
+106
+Maturities of debt securities
+Property, plant and equipment
+Disposal of subsidiaries
+Purchases:
+Debt securities
+11,546
+21,242
+41,806
+Disposals of equity securities
+22,407
+313
+1,902
+(3,911)
+(100,089)
+(13,698)
+Financial liabilities at fair value through profit or loss
+403
+9,704
+Dividends received - securities at fair value through profit or loss
+Receivables and payables
+41,330
+Income tax paid
+(8,380)
+(1,923)
+Interest received – securities at fair value through profit or loss
+1,225
+70,482
+(1,974)
+400,451
+199
+3,875
+Interest received
+81,688
+78,903
+Dividends received
+8,828
+4,258
+(3,630)
+Decrease/(increase) in policy loans, net
+(13,478)
+Net cash inflows/(outflows) from investing activities
+67,047
+(69,257)
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+108
+(11,305)
+285,647
+(9,602)
+(25,972)
+437
+(53,340)
+(115,808)
+Equity securities
+(522,787)
+(312,544)
+Decrease/(increase) in securities purchased under agreements to resell, net
+Property, plant and equipment
+(5,048)
+Additional capital contribution to associates and joint ventures
+(766)
+(5,671)
+Decrease/(increase) in term deposits, net
+124,838
+(8,384)
+(268)
+(812)
+2,124
+Appropriation to reserves (Note 36)
+Dividends paid (Note 32)
+(10,090)
+(11,491)
+(11,491)
+Dividends to non-controlling interests
+(117)
+7,791
+(117)
+296
+296
+Total transactions with owners
+As at 31 December 2015
+7,791
+10,386
+Others
+(21,581)
+7,791
+Capital paid in by other equity
+7,076
+61
+7,137
+Total comprehensive income
+7,076
+34,699
+instruments holders
+549
+42,324
+Transactions with owners
+Capital paid in by
+non-controlling interests
+80
+(7,888)
+49
+(37)
+(3,441)
+28,265
+Depreciation and amortisation
+Foreign exchange gains
+Share of profit of associates and joint ventures, net
+Changes in operating assets and liabilities:
+Securities at fair value through profit or loss
+45,931
+Insurance contracts
+40,402
+(93,548)
+(42,506)
+(12,928)
+112,142
+108,955
+2,036
+(97,582)
+Net realised and unrealised gains on financial assets
+Investment income
+Adjustments for:
+7,791
+163,381
+123,055
+3,722
+326,214
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+107
+China Life Insurance Company Limited Annual Report 2015
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2015
+2015
+RMB million
+2014
+RMB million
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before income tax
+488
+2,448,315
+(10,744)
+40,402
+"2015 Top 500 Chinese Enterprises", ranking No.13
+"2015 Forbes Global 2000", ranking No.37
+of 2015"
+"21st Century Business Herald" - "Asian
+Insurance Companies Competitiveness Ranking
+"National Business Daily" - Assessment and
+Selection of the "Golden Tripod Award" (the 6th
+Session)
+"Value Line" Magazine - the "2nd China Listed
+Companies Value Ranking List of 2015"
+"Financial Times" "2015 Gold Medal List of
+Chinese Financial Institutions"
+"2015 Most Reliable Life Insurance Company"
+-
+The Chamber of Hong Kong Listed Companies
+and the Center for Corporate Governance and
+Financial Policy, Hong Kong Baptist University
+Hexun.com and China Securities Market
+Research and Design Center (SEEC) – the “13th
+China's Financial Annual Champion Awards of
+2015"
+"FORTUNE China"
+"Forbes"
+Honors and Awards
+China Life Insurance Company Limited Annual Report 2015
+100
+Millward Brown
+For an analysis and management of the major risk factors of the Company, please refer to Note 4 in the Notes to
+the Consolidated Financial Statements of this annual report.
+"Hong Kong Corporate Governance Excellence Awards"
+"2015 Golden Dragon Award - Best Listed Insurance
+Company of the Year"
+Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Our report is
+made solely to you, as a body, in accordance with the Hong Kong Companies Ordinance, and for no other purpose.
+We
+do not assume responsibility towards or accept liability to any other person for the contents of this report.
+DIRECTORS' RESPONSIBILITY 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 International Financial Reporting Standards 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+AUDITORS' RESPONSIBILITY
+We have audited the consolidated financial statements of China Life Insurance Company Limited (the "Company")
+and its subsidiaries set out on pages 103 to 227, which comprise the consolidated statement of financial position as at
+31 December 2015, 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 a summary of significant accounting
+policies and other explanatory information.
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+EY 安永
+Independent Auditors' Report
+China Life Insurance Company Limited Annual Report 2015
+"2015 BrandZ Top 100 Global Most Valuable Brands",
+ranking No.62
+101
+"2015 Top 100 China Listed Companies Most Respected by
+Investors"
+Call Center"
+International Customer Management Institute
+(ICMI) Assessment and Selection of the "2015
+Best Global
+Assessment and Selection of the "2015 China
+Listed Companies Most Respected by Investors"
+jointly organized by the Listed Companies
+Association of the PRC, China Securities Investor
+Protection Fund Corporation, the Shanghai
+Stock Exchange, the Shenzhen Stock Exchange,
+the Securities Association of China, the Asset
+Management Association of China, and co-
+organized by "Securities Times"
+"2015 Best Life Insurance Company in Asia"
+"2015 Golden Tripod Award - the Insurance Company
+with the Best Comprehensive Strength of the Year"
+"2015 Best Listed Company of China"
+"2015 Best Global Call Center"
+We conducted our audit in accordance with International Standards on Auditing. Those standards require that we
+comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
+consolidated financial statements are free from material misstatement.
+In 2015, the Company commenced a project for the establishment of a solvency risk management system pursuant
+to the requirements of the CIRC with respect to a trial run during the transitional period of the C-ROSS and
+benchmarked such system to the regulatory rules in all aspects so as to refine the regulatory assessment standards
+in two levels: the completeness of the system and the effectiveness of its implementation. By improving the system
+and mechanism of insolvency risk management, the Company optimized its mechanism for the formation and
+transmission of risk preference. A trial assessment on solvency risk management was carried out pursuant to the
+regulatory requirements, and the scores for such trial assessment effectively increased. Meanwhile, the Company
+conducted an in-depth analysis on the results of the trial assessment and prepared a breakdown structure in respect
+thereof in order to constantly improve its solvency risk management. The Company continued to comply with
+the "Guidelines for the Implementation of Comprehensive Risk Management of Personal Insurance Companies”
+issued by the CIRC, developed and improved the framework for comprehensive risk management, continued to
+carry out risk alert and risk alert classification management, and strengthened its ability to guard against risks in
+key risk fields.
+II. RISK MANAGEMENT
+Notes
+RMB million
+RMB million
+14
+1,715,985
+1,603,446
+Investment contracts
+2014
+15
+72,275
+Policyholder dividends payable
+107,774
+74,745
+Interest-bearing loans and borrowings
+Bonds payable
+675
+84,106
+The Company established a 5-tier organizational structure with the ultimate responsibility assumed by the Board,
+under the direct leadership of the management, having reliance on the risk management departments and with
+the close cooperation among the relevant functional departments. The first tier is the corporate governance level,
+including the Board, the Supervisory Committee, and the Risk Management Committee and the Audit Committee
+under the Board. The second tier is the headquarter level. The President's Office of the Company has set up the
+Internal Control and Risk Management Committee, under which several functional departments, such as the
+Internal Control and Risk Management Department, the Legal and Compliance Department, the Supervision
+Department, the Audit Department, and the departments in charge of finance and business administration, are
+established. The third tier is the provincial branches level. The General Manager's Office of the Company has set
+up the Internal Control and Risk Management Committee, under which several functional departments, such as
+the Internal Control and Compliance Department, the Supervision Department, and the departments in charge of
+finance and business administration, are established. The fourth tier is the local or city branches level, including
+Supervision (Legal and Compliance) Departments and related functional departments. The fifth tier is the
+county sub-branches level, the persons responsible for internal control and risk management of which have been
+determined. 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.
+2015
+December
+Internal Control
+China Life Insurance Company Limited Annual Report 2015
+99
+The Internal Control and Risk Management Department, Audit Department and Supervision Department of
+the Company are responsible for overseeing the implementation of its internal control policies. The Internal
+Control and Risk Management Department 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, enhances legal compliance and pursues responsible persons. Adhering to
+the risk-oriented principle, in addition to the routine audits, the Audit Department has carried out a variety of
+ad-hoc audits, covering strategic resources investment, invoices and seals management, costs overrun, information
+system security, connected transactions, rectification of internal control deficiencies, subsequent audit and anti-
+money laundering. These routine and ad-hoc audits enabled the Company to identify potential risks in a timely
+manner and promote the business operation of the Company in compliance with applicable laws and regulations
+through improving the supervision and remedial mechanisms, strengthening the implementation of rectification
+measures and enhancing the application of audit results. 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 Supervision 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 Supervision
+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 CIRC and internal policies
+such as the “Implementing Rules for Responsibility Attribution of Cases", and constantly optimizes the relevant
+internal policies pursuant to the standards for administration of cases of insurance institutions promulgated by the
+competent authorities in charge of supervision of the insurance industry.
+The Company has established a comprehensive information technology system and formed a closed-loop
+mechanism focusing on centralized review and publication, periodic inspection and continuous improvement.
+Further, the Company has promoted the construction of an information safety system, and formulated and
+implemented a series of effective internal control measures in the course of system development and testing and
+day-to-day operation and management, thereby strengthening the information safety control and improving the
+information safety management of the Company.
+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 at an appropriate level and their
+actual implementation shall be in strict compliance with the relevant requirements of the 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.
+China Life Insurance Company Limited Annual Report 2015
+Internal Control
+As at 31
+December
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+China Life Insurance Company Limited Annual Report 2015
+Consolidated Statement of Financial Position
+As at 31 December 2015
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+As at 31
+103
+16
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
+financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the
+risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those
+risk assessments, the auditors consider internal control relevant to the entity's preparation of consolidated financial
+statements that give a true and fair view 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 entity's internal control. An audit also
+includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
+by the directors, as well as evaluating the overall presentation of the consolidated financial statements.
+OPINION
+11,925
+21,503
+9.7
+Securities purchased under agreements to resell
+53,052
+137,990
+9.6
+Accrued investment income
+Securities at fair value through profit or loss
+770,516
+9.5
+Available-for-sale securities
+6,153
+6,333
+9.4
+Statutory deposits – restricted
+607,531
+690,156
+9.8
+44,350
+47,034
+76,096
+19,411
+23,642
+13
+1,032
+1,420
+49,552
+12
+Cash and cash equivalents
+Other assets
+Reinsurance assets
+11,166
+11,913
+11
+Premiums receivable
+233
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
+opinion.
+562,622
+Term deposits
+RMB million
+2014
+2,246,567
+Notes
+As at 31
+December
+As at 31
+December
+As at 31 December 2015
+Property, plant and equipment
+Consolidated Statement of Financial Position
+ASSETS
+102
+23 March 2016
+Hong Kong
+Certified Public Accountants
+Ernst & Young
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company
+and its subsidiaries as at 31 December 2015, and of their financial performance and cash flows for the year then ended
+in accordance with International Financial Reporting Standards and have been properly prepared in compliance with the
+disclosure requirements of the Hong Kong Companies Ordinance.
+China Life Insurance Company Limited Annual Report 2015
+9.3
+Investment properties
+69
+166,453
+207,267
+9.2
+Loans
+517,283
+504,075
+9.1
+7
+Held-to-maturity securities
+47,175
+8
+Investments in associates and joint ventures
+1,283
+1,237
+25,348
+26,974
+44,390
+28
+2,643
+17
+23
+10,209
+5,808
+Other income
+5,060
+4,185
+Total revenues
+Net fair value gains through profit or loss
+BENEFITS, CLAIMS AND EXPENSES
+Insurance benefits and claims expenses
+440,766
+Life insurance death and other benefits
+24
+(221,701)
+(192,659)
+Accident and health claims and claim adjustment expenses
+24
+507,449
+(21,009)
+7,120
+22
+Net change in unearned premium reserves
+Net premiums earned
+363,971
+(978)
+331,010
+(515)
+362,993
+330,495
+32,297
+(692)
+362,301
+330,105
+Investment income
+21
+97,582
+93,548
+Net realised gains on financial assets
+(390)
+Net written premiums
+(16,752)
+24
+(7,428)
+(4,151)
+Statutory insurance fund contribution
+20
+(743)
+(701)
+Total benefits, claims and expenses
+Other expenses
+(463,492)
+Share of profit of associates and joint ventures, net
+8
+1,974
+3,911
+Profit before income tax
+27
+45,931
+(404,275)
+Increase in insurance contract liabilities
+(25,432)
+Administrative expenses
+(109,509)
+(105,883)
+Investment contract benefits
+25
+(2,264)
+(1,958)
+Policyholder dividends resulting from participation in profits
+(27,458)
+(33,491)
+Underwriting and policy acquisition costs
+(35,569)
+(27,147)
+Finance costs
+26
+(4,320)
+(4,726)
+(24,866)
+2,623
+Less: premiums ceded to reinsurers
+REVENUES
+26,514
+20,062
+28
+16,953
+19,375
+5,347
+52
+19
+20
+217
+223
+Total liabilities
+Equity
+2,122,101
+1,959,236
+34
+20
+28,265
+15,850
+Statutory insurance fund
+67,994
+67,989
+Financial liabilities at fair value through profit or loss
+856
+10,890
+Securities sold under agreements to repurchase
+18
+32,266
+31,354
+Annuity and other insurance balances payable
+30,092
+25,617
+Premiums received in advance
+Other liabilities
+Deferred tax liabilities
+Current income tax liabilities
+46,089
+Gross written premiums
+28,265
+7,791
+3,210
+326,214
+287,331
+2,448,315
+2,246,567
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+104
+3,722
+China Life Insurance Company Limited Annual Report 2015
+For the year
+ended 31 December 2015
+2015
+2014
+Notes
+RMB million
+RMB million
+Consolidated Statement of Comprehensive Income
+35
+284,121
+Director
+36
+163,381
+145,919
+123,055
+109,937
+Share capital
+Other equity instruments
+322,492
+Reserves
+Attributable to equity holders of the Company
+Non-controlling interests
+Total equity
+Total liabilities and equity
+Approved and authorised for issue by the Board of Directors on 23 March 2016.
+Yang Mingsheng
+Director
+Lin Dairen
+Retained earnings
+2015
+RMB million
+10,090
+China Life Insurance Company Limited Annual Report 2015
+In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which reflects all phases of
+the financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement
+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. The Group is currently assessing the impact on the
+Group's consolidated financial statements.
+IFRS 15 - Revenue from Contracts with Customers
+IFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers.
+Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity
+expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS
+15 provide a more structured approach for measuring and recognising revenue. In September 2015, the
+IASB issued amendments to IFRS 15 regarding a one-year deferral of the mandatory effective date of IFRS
+15 to 1 January 2018. IFRS 15 is not applied to the insurance contracts and financial instruments, which
+are the main sources of the Group's revenue. The Group is currently assessing the impact on the Group's
+consolidated financial statements.
+IFRS 16 Leases
+IFRS 16 supersedes IAS 17 Leases. It requires lessees to recognise leases as assets and liabilities on their
+balance sheets, with certain exemptions. The lessor accounting is substantially unchanged. IFRS 16 will be
+effective for annual periods beginning on or after 1 January 2019. Early application is permitted, provided
+that IFRS 15 Revenue from Contracts with Customers is applied. The Group is currently assessing the impact
+on the Group's consolidated financial statements.
+In addition, the Annual Improvements 2012-2014 Cycle issued in September 2014 sets out amendments
+to other standards. These annual improvements were established to make non-urgent but necessary
+amendments to IFRSs. No material changes to the accounting policies of the Group are expected as a result
+of these annual improvements.
+114
+2
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+IFRS 9 - Financial Instruments
+2.2 Consolidation
+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.
+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.
+The consolidated financial statements include the financial statements of the Company and its subsidiaries
+for the year ended 31 December 2015. 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:
+In January 2016, the IASB published amendments to IAS 7 Statement of Cash Flows. The amendments
+require an entity to provide disclosures that enable users of financial statements to evaluate changes in
+liabilities arising from financing activities, including both changes arising from cash flows and non-cash
+changes. The amendments should be applied for annual periods beginning on or after 1 January 2017,
+early application permitted. When an entity first applies the amendments, it is not required to provide
+comparative information for preceding periods.
+2.1.2 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 2015 (continued)
+IAS 7 Amendments - Statement of Cash Flows
+2.1 Basis of preparation (continued)
+Financial Instruments
+1 January 2018
+Revenue from Contracts with Customers
+Leases
+1 January 2018
+1 January 2019
+-
+IAS 27 Amendments – Equity Method in Separate Financial Statements
+The amendments to IAS 27 will allow entities to use the equity method to account for investments in
+subsidiaries, joint ventures and associates in their separate financial statements. The amendments are
+effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. The
+amendments are not expected to have any impact on the Group's consolidated financial statements since the
+Group has no intention to apply the equity method in the separate financial statements.
+112
+2
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.2 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 2015 (continued)
+IFRS 10 and IAS 28 Amendments - Sale or Contribution of Assets between an Investor and its Associate or
+Joint Venture
+These amendments eliminate the inconsistency between the requirements in IFRS 10 and those in IAS 28
+Investments in Associates and Joint Ventures with regard to dealing with the contribution or sale of assets
+between an investor and its associate or joint venture. These amendments are effective for annual periods
+beginning on or after 1 January 2016, with early adoption permitted. The amendments are not expected to
+have any material impact on the Group's consolidated financial statements.
+IFRS 11 Amendments – Accounting for Acquisitions of Interests in Joint Operations
+The amendments to IFRS 11 require that a joint operator accounting for the acquisition of an interest in a
+joint operation, in which the activity of the joint operation constitutes a business, must apply the relevant
+IFRS 3 principles for business combinations accounting. The amendments also clarify that a previously held
+interest in a joint operation is not remeasured on the acquisition of an additional interest in the same joint
+operation while joint control is retained. The amendments are effective for annual periods beginning on
+or after 1 January 2016, with early adoption permitted. It is not expected that the amendments would be
+relevant to the Group, since the Group has no joint operation as at 31 December 2015.
+IFRS 10, IFRS 12 and IAS 28 Amendments – Investment Entities: Applying the Consolidation Exception
+Amendments to IFRS 10 clarify that the exemption from presenting consolidated financial statements
+applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures
+all of its subsidiaries at fair value. The amendments to IFRS 10 also clarify that only a subsidiary that is not
+an investment entity itself and provides support services to the investment entity is consolidated. All other
+subsidiaries of an investment entity are measured at fair value. Consequential amendments were made to
+IFRS 12 to require an investment entity that prepares financial statements in which all of its subsidiaries are
+measured at fair value through profit or loss in accordance with IFRS 9 to present the disclosures in respect
+of investment entities in accordance with IFRS 12. IAS 28 was also amended to allow an investor that is not
+itself an investment entity, and has an interest in an investment entity associate or joint venture, to retain
+the fair value measurement applied by the investment entity associate or joint venture to the interest in its
+subsidiaries. The amendments are not expected to have any material impact on the Group's consolidated
+financial statements as the Company is not an investment entity as defined in IFRS 10.
+113
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Profit or loss and each component of other comprehensive income (“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;
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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
+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
+annually 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.
+117
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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 resources 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.
+2.5 Foreign currency translation
+Except for China Life Franklin Asset Management Company Limited (“AMC HK") (Note 39(c)), the
+functional currency of the Group is RMB. 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.
+118
+For the year ended 31 December 2015
+1 January 2017
+Notes to the Consolidated Financial Statements
+2
+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.
+115
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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 interests 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.
+116
+China Life Insurance Company Limited Annual Report 2015
+Statement of Cash Flows
+•
+Investment Entities: Applying the Consolidation
+Exception
+2,630
+1,358
+(19,415)
+16,704
+241
+10
+29,062
+25,704
+Cash and cash equivalents
+Beginning of the year
+47,034
+21,330
+End of the year
+76,096
+47,034
+Analysis of balances of cash and cash equivalents
+Cash at banks and in hand
+74,135
+45,439
+Short-term bank deposits
+1,961
+1,595
+The notes on pages 110 to 227 form an integral part of these consolidated financial statements.
+109
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+(91)
+1
+(117)
+(11,491)
+1 January 2016
+CASH FLOWS FROM FINANCING ACTIVITIES
+Increase/(decrease) in securities sold under agreements to repurchase, net
+Cash received from issuing other equity instruments
+Cash received from borrowings
+Cash repaid to lenders
+Interest paid
+Dividends paid to equity holders of the Company
+Dividends paid to non-controlling interests
+Capital injected into subsidiaries by non-controlling interests
+Net cash inflows/(outflows) from financing activities
+Foreign exchange gains on cash and cash equivalents
+Net increase in cash and cash equivalents
+China Life Insurance Company Limited Annual Report 2015
+Consolidated Statement of Cash Flows
+For the
+year ended 31 December 2015
+2015
+2014
+RMB million
+RMB million
+(13,757)
+25,663
+7,791
+2,881
+(10)
+(4,618)
+(8,479)
+2
+(4,471)
+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 activity is the writing of life insurance business, providing life, annuity,
+accident and health insurance products in China.
+ended 31 December 2015
+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 2015 (continued)
+IFRS 13 Amendments Fair Value Measurement
+The amendments to IFRS 13 clarify that the portfolio exception in IFRS 13 can be applied not only to
+financial assets and financial liabilities, but also to other contracts within the scope of IFRS 9 Financial
+Instruments and IAS 39 Recognition and Measurement. The amendments have had no impact on the Group's
+consolidated financial statements.
+In addition, the Group has adopted the amendments to the Listing Rules relating to the disclosure of
+financial information with reference to the Hong Kong Companies Ordinance (Cap. 622) during the
+current financial year. The main impact to the financial statements is on the presentation and disclosure of
+certain information in the financial statements.
+2.1.2 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 2015
+Effective for annual period
+Standards/Amendments
+Content
+beginning on or after
+IFRS 10, IFRS 12 and
+IAS 28 Amendments
+IAS 7 Amendments
+IFRS 9
+IFRS 15
+IFRS 16
+Equity Method in Separate Financial Statements
+Sale or Contribution of Assets between
+an Investor and its Associate or Joint Venture
+Accounting for Acquisitions of Interests in
+Joint Operations
+1 January 2016
+1 January 2016
+ORGANIZATION AND PRINCIPAL ACTIVITIES
+1 January 2016
+year
+For the
+IAS 27 Amendments
+IFRS 10 and IAS 28
+Amendments
+IFRS 11 Amendments
+China Life Insurance Company Limited Annual Report 2015
+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 for issue by the Board of Directors on 23
+March 2016.
+Notes to the Consolidated Financial Statements
+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 conformity 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.
+110
+2
+For the year ended 31 December 2015
+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 2015
+Standards
+Notes to the Consolidated Financial Statements
+entities.
+Annual Improvements 2011-2013 Cycle
+The Annual Improvements 2010-2012 Cycle issued in January 2014 sets out amendments to a number of
+IFRSS and International Accounting Standards (“IASS”). Details of the main amendments that are effective
+for the current year are as follows:
+IFRS 8 Amendments - Operating Segments
+The amendments to IFRS 8 clarify that an entity must disclose the judgements made by management
+in applying the aggregation criteria in IFRS 8, including a brief description of operating segments that
+have been aggregated and the economic characteristics used to assess whether the segments are similar.
+The amendments also clarify that the reconciliation of segment assets to total assets is only required to be
+disclosed if the reconciliation is reported to the chief operating decision maker. The amendments have had
+no impact on the Group's consolidated financial statements.
+111
+IAS 24 Amendments – Related Party Disclosures
+The amendments to IAS 24 clarify that a management entity (an entity that provides key management
+personnel services) is a related party subject to the related party disclosures. In addition, an entity that
+uses a management entity is required to disclose the expenses incurred for management services. These
+amendments are not relevant for the Group as it does not receive any management services from other
+arrangement.
+The Annual Improvements 2011-2013 Cycle issued in January 2014 sets out amendments to a number of
+IFRSS and IASS. Details of the main amendments that are effective for the current year are as follows:
+IFRS 3 Amendments - Business Combinations
+The amendments to IFRS 3 clarify that joint arrangements, not just joint ventures, are outside the scope
+of IFRS 3. This scope exception applies only to the accounting in the financial statements of the joint
+arrangement itself. The amendments have had no impact on the Group as the Company is not a joint
+Annual Improvements 2010-2012 Cycle
+2.11 Insurance contracts and investment contracts
+2.11.1 Classification
+123
+2.11.2 Insurance contracts
+2.11.2.a Recognition and measurement
+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.
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the
+ended 31 December 2015
+year
+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.
+Notes to the Consolidated Financial Statements
+(i)
+China Life Insurance Company Limited Annual Report 2015
+2
+Short-term insurance contracts
+2.11 Insurance contracts and investment contracts (continued)
+The unearned premium reserve represents the portion of the premiums written net of certain
+acquisition costs relating to the unexpired terms of coverage.
+(ii) Long-term insurance contracts (continued)
+2.10 Cash and cash equivalents
+(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:
+2.11.2.a Recognition and measurement (continued)
+2.11.2 Insurance contracts (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+2
+124
+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 expenses assumption, and based on the following principles:
+Long-term insurance contracts include whole life and term life insurance, endowment insurance and
+annuity policies with significant life contingency risk. Premiums are recognised as revenue when due
+from policyholders.
+(ii) Long-term insurance contracts
+Reserves for claims and claim adjustment expenses consist of the reserves for reported and unreported
+claims and reserves for claim 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 claim expenses based on the reasonable
+estimates of the future payments for claim expenses.
+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.
+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.
+•
+The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient datas
+are available to measure fair value, maximising the use of relevant observable inputs and minimising the use
+of unobservable inputs.
+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 disappearance of an active market for that financial asset because of financial difficulties.
+it becomes probable that the issuer or debtor will enter into bankruptcy or other financial
+reorganisation; and
+•
+•
+a breach of contract, such as a default or delinquency in payments;
+•
+•
+2.8.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:
+2.8 Financial assets (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+•
+ended 31 December 2015
+significant financial difficulty of the issuer or debtor;
+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
+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 principal or the most advantageous market must be accessible to 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.
+in the absence of a principal market, in the most advantageous market for the asset or liability.
+•
+in the principal market for the asset or liability, or
+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:
+2.9 Fair value measurement
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+2
+122
+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.
+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.
+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 4.3, 7, 10 and 39(b) based on the lowest
+level input that is significant to the fair value measurement as a whole.
+•
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+additional non-guaranteed benefits, such as policyholder dividends;
+127
+Bonds payable primarily include subordinated debts. Subordinated debts 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.
+2.14 Bonds payable
+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.
+2.13 Securities sold under agreements to repurchase
+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 and trust schemes). Such financial liabilities are
+designated at fair value upon initial recognition, and all realised or unrealised gains or losses are recognised
+in net profit.
+China Life Insurance Company Limited Annual Report 2015
+2.12 Financial liabilities at fair value through profit or loss
+2.11.4 DPF in long-term insurance contracts and investment contracts
+Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment
+contracts are carried at amortised cost.
+contracts.
+Revenue from investment contracts with or without DPF is recognised as policy fee income, which consists
+of various fee incomes (policy fees, handling fees and management fees, etc.) during the period. Policy fee
+income net of acquisition cost is deferred as unearned revenue and amortised over the expected life of the
+2.11.3 Investment contracts
+2.11 Insurance contracts and investment contracts (continued)
+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 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.
+Notes to the Consolidated Financial Statements
+For the
+year
+year
+128
+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 is included in administrative
+expenses and changes after vesting period is included in net fair value gains/(losses) through profit or loss in
+net profit. The related liability is included in other liabilities.
+Stock appreciation rights
+each year.
+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
+Housing 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.
+Pension benefits
+2.16 Employee benefits
+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 relate 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).
+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. Fair values are obtained from quoted market prices in active market, taking into
+consideration of recent market transactions or valuation techniques, including discounted cash flow models
+and options pricing models, as appropriate. All derivatives are carried as assets when fair value is positive and
+as liabilities when fair value is negative.
+2.15 Derivative instruments
+2
+ended 31 December 2015
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+2.11.2.a Recognition and measurement (continued)
+2.11.2 Insurance contracts (continued)
+2.11 Insurance contracts and investment contracts (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+125
+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.
+(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.
+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 amortization of residual margin are locked in at
+policy issuance and are not adjusted at each reporting date.
+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.
+(ii)
+guaranteed benefits based on contractual terms, including payments for deaths,
+disabilities, diseases, survivals, maturities and surrenders;
+Long-term insurance contracts (continued)
+contracts.
+2
+126
+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.
+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.
+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.
+2.11.2.c Reinsurance contracts held
+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.
+2.11.2.b Liability adequacy test
+The insurance components are accounted for as insurance contracts; and the non-insurance
+components are accounted for as investment contracts (Note 2.11.3), which are stated in the
+investment contract liabilities.
+non-insurance components
+•
+insurance components
+•
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+(iii) Universal life contracts and unit-linked contracts
+(c) The Group has considered the impact of time value on the reserve calculation for insurance
+For the
+2.8.b Recognition and measurement
+China Life Insurance Company Limited Annual Report 2015
+2
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+119
+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.
+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.
+Impairment and gains or losses on disposals
+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.
+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.
+the lease and the useful lives
+Over the shorter of the remaining term of
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+5 to 11 years
+Estimated useful lives
+Leasehold improvements
+Motor vehicles
+Office equipment, furniture and fixtures
+Buildings
+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:
+Depreciation
+2.6 Property, plant and equipment (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+2
+Notes to the Consolidated Financial Statements
+15 to 35 years
+2.7 Investment properties
+4 to 8 years
+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.
+121
+Investment properties are interests in land 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.
+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 loan is
+outstanding. In the event of default by the counterparty to repay the loan, the Group has the right to the
+underlying securities held by the clearing house.
+Loans are carried at amortised cost, net of allowance for impairment.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at
+amortised cost.
+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.
+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.
+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.
+(iv) Available-for-sale securities
+(iii) Loans and receivables
+2.8.a Classification (continued)
+2.8 Financial assets (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+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.
+China Life Insurance Company Limited Annual Report 2015
+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 forms of property ownership, equity
+investment, or other forms, have expected useful lives of 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.
+2.8 Financial assets
+2.8.a Classification
+(i)
+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:
+This category has two sub-categories: securities held for trading and those designated 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 short term profit-taking. 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.
+120
+2
+Securities at fair value through profit or loss
+63,701
+Liabilities of long-term insurance contracts
+4.01%
+2.58%
+43,788
+New Xin Feng Endowment (Type A) (a)
+%
+100.00%
+%
+As at 31 December 2014
+As at 31 December 2015
+RMB million
+100.00%
+95,178
+Xin Annuity (b)
+RMB million
+38,917
+2.23%
+2,184
+115,277
+5.85%
+92,985
+37,810
+Hong Fu Participating Endowment (e)
+4.77%
+75,857
+2.29%
+5.49%
+Fu Lu Shuang Xi Participating Endowment (d)
+12.08%
+191,865
+12.60%
+214,120
+Kang Ning Whole Life (c)
+0.14%
+93,267
+Total
+304,677
+78,944
+Xin Annuity (b)
+0.06%
+56
+0.07%
+80
+New Xin Feng Endowment (Type A) (a)
+insurance contracts
+Insurance benefits of long-term
+100.00%
+Others (f)
+100.00%
+331,582
+Total
+60.84%
+185,350
+13
+0.01%
+Kang Ning Whole Life (c)
+3,692
+46.83%
+53,982
+Others (f)
+10.77%
+10,255
+47.17%
+54,374
+82.94%
+Hong Fu Participating Endowment (e)
+2,367
+2.72%
+3,136
+Fu Lu Shuang Xi Participating Endowment (d)
+3.74%
+3,556
+3.20%
+2.49%
+1,270,871
+136
+1,162,308
+4.1
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+137
+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 RMB315 million lower or higher, respectively (as at 31
+December 2014: RMB258 million).
+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.
+Sensitivity analysis of short-term insurance contracts
+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 RMB45,811 million or RMB52,049
+million (as at 31 December 2014: RMB41,300 million or RMB46,868 million) higher or lower,
+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 RMB4,032 million or RMB4,229 million (as at 31
+December 2014: RMB5,191 million or RMB5,478 million) lower or higher, respectively.
+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 RMB14,597 million
+or RMB15,253 million (as at 31 December 2014: RMB12,971 million or RMB13,554 million) lower or
+higher, respectively.
+Insurance risk (continued)
+4.1.3 Sensitivity analysis (continued)
+Sensitivity analysis of short-term insurance contracts (continued)
+The following table indicates the claim development for short-term insurance contracts without taking
+account of reinsurance impacts:
+8,279
+1 year later
+20,497
+16,499
+11,476
+8,056
+8,002
+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.
+Current year
+2015
+2014
+2013
+2012
+2011
+Estimated claims expenses
+Short-term insurance contracts (accident year)
+Total
+Sensitivity analysis of long-term insurance contracts
+4.1.3 Sensitivity analysis
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+4.1 Insurance risk (continued)
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2015
+year
+For the
+(a)
+Notes to the Consolidated Financial Statements
+135
+100.00%
+1,588,900
+100.00%
+1,698,773
+Total
+73.15%
+China Life Insurance Company Limited Annual Report 2015
+74.81%
+New Xin Feng is an endowment insurance contract with single premium. Its insured period is 5
+years. This product is applicable to healthy policyholders between 18-year-old and 70-year-old. Both
+maturity and death benefits are paid at the basic sum insured. Accident death benefit is paid at 300%
+of the basic sum insured.
+(c)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+RISK MANAGEMENT (continued)
+4
+63.89%
+Others consist of various long-term insurance contracts with no significant concentration.
+(b)
+(f)
+years or 10 years. The premium shall be paid annually, semiannually, quarterly or monthly. Its
+insured period extends from the effective date of the insurance contract to the corresponding date of
+the year when the policyholders turn 75-year-old. This product is applicable to healthy policyholders
+between 30-day-old and 60-year-old. Starting from the effective date of the insurance contract, the
+survival benefit is paid every two policy years on the corresponding date at 10% of the basic sum
+insured; the disease death benefit and maturity benefit are paid at the contractual amount of disease
+death benefit and maturity benefit.
+5
+Fu Lu Shuang Xi is an endowment insurance contract with the options for regular premium of 3 years,
+Kang Ning 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. Both death and disability benefits are
+paid at 300% of the basic sum insured less any critical illness benefits paid.
+Xin Annuity is an annuity insurance contract with single premium. Its insured period is 10 years. This
+product is applicable to healthy policyholders between 28-day-old and 65-year-old. Annuity is paid
+at the basic sum insured. Maturity benefit is paid at the premium received (without interest). Death
+benefit is paid at the premium received (without interest) or the cash value of the insurance contract,
+whichever greater.
+(e)
+(d)
+Hong Fu is a participating endowment insurance contract with the options for single premium or
+regular premium of 3 years. Its insured period can be 6 years or 9 years. This product is applicable
+to healthy policyholders between 30-day-old and 60-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. Accident death benefit is paid at 300% of the basic sum insured for a single premium policy or
+300% of the basic sum insured multiplied by the number of years of premium payments for a regular
+premium policy.
+211,826
+2015
+0.05%
+2.21 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 regulation is subject to interpretation.
+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 a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
+taxation authority.
+130
+2
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.22 Operating leases
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+ended 31 December 2015
+year
+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 unfavorable 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.
+2.19 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
+Leases where substantially all the risks and rewards of ownership of assets remain with the lessor company
+are accounted for as operating leases.
+Revenue from investment contracts is recognised as policy fee income, which consists of various fee incomes
+(policy fees, handling fees and management fees, etc.) over the period of which service is provided. Policy fee
+income net of certain acquisition costs is deferred as unearned revenue and amortised over the expected life
+of the contracts. Policy fee income is recognised in revenue as part of other 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.
+2.20 Finance costs
+Interest expenses for bonds payable, securities sold under agreements to repurchase and interest-bearing
+loans and borrowings are recognised within finance costs in net profit using the effective interest rate
+method.
+129
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+Investment income
+2.18 Other equity instruments
+Where the Group is the lessor, assets leased by the Group under operating leases are included in investment
+properties and rentals receivable under such operating leases are credited to the consolidated statement of
+comprehensive income on the straight-line basis over the lease terms.
+2.23 Provisions and contingencies
+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, and
+expenses assumption) 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 14.
+3.2 Investments
+The Group's principal financial instruments 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 2.8.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 consideration. The methods and assumptions used by the Group in measuring the fair value of
+financial instruments are as follows:
+132
+3
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+3.2 Investments (continued)
+8,164
+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, and expenses assumption 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.
+contracts
+3.1 Estimate of future benefit payments and premiums arising from long-term insurance
+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.
+past
+Provisions are recognised when the Group has a present legal or constructive obligation as a result of
+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.
+Where the Group is the lessee, rentals payable under operating leases are charged to the consolidated
+statement of comprehensive income on the straight-line basis over the lease terms. The aggregate benefit of
+incentives provided by the lessor is recognised as a reduction in rental expenses over the lease terms on the
+straight-line basis.
+131
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+3
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+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.
+China Life Insurance Company Limited Annual Report 2015
+Others (f)
+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.
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+62,635
+11.55%
+38,314
+New Xin Feng Endowment (Type A) (a)
+Premiums of long-term insurance contracts
+%
+RMB million
+%
+RMB million
+2014
+Product name
+The table below presents the Group's major products of long-term insurance contracts:
+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.
+4.1.2 Concentration of insurance risks
+4.1 Insurance risk (continued)
+20.56%
+Xin Annuity (b)
+35,606
+10.74%
+149
+0.02%
+63
+Hong Fu Participating Endowment (e)
+9.76%
+29,749
+6.71%
+For the year ended 31 December 2015
+22,265
+8.08%
+24,623
+7.09%
+23,508
+Kang Ning Whole Life (c)
+0.71%
+2,171
+Fu Lu Shuang Xi Participating Endowment (d)
+2.17 Share capital
+Notes to the Consolidated Financial Statements
+RISK MANAGEMENT (continued)
+China Life Insurance Company Limited Annual Report 2015
+133
+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.
+3.4 Income tax
+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. Further details are given in Note 8.
+3.3 Impairment of investments in associates and joint ventures
+For the description of valuation techniques, please refer to Note 4.3. Using different valuation techniques
+and parameter assumptions may lead to some differences of fair value estimations.
+term deposits and loans: the carrying amounts of these assets in the consolidated statement of financial
+position approximate fair value.
+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.
+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.
+•
+2
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+4
+134
+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.
+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 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.
+4.1.1 Types of insurance risks
+4.1 Insurance risk
+China Life Insurance Company Limited Annual Report 2015
+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.
+RISK MANAGEMENT
+The Group sponsors certain structured entities (e.g. funds), 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
+2015, the Group has consolidated some fund products issued and managed by the Company's subsidiary,
+China Life AMP Asset Management Company (“CL AMP"), and some trust schemes issued and managed by
+third parties in the consolidated financial statements. Please refer to Note 39(c) for the details.
+The Group applies its judgment 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.
+3.5 Determination of control over investee
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+4
+3
+Risk management is carried out by the Company's Risk Management Committee under policies approved by the
+Company's Board of Directors.
+11,872
+8,090
+2 years later
+Estimated accumulated
+7,977
+4 years later
+7,997
+7,977
+3 years later
+11,645
+7,997
+7,977
+2 years later
+17,127
+11,743
+8,035
+8,161
+1 year later
+20,359
+16,379
+claims
+11,331
+expenses
+7,997
+17,265
+138
+9,218
+8,104
+1,114
+Unpaid claims expenses
+(55,887)
+(12,255)
+(16,013)
+(11,645)
+(7,997)
+(7,977)
+expenses paid
+65,105
+20,359
+17,127
+11,645
+7,977
+7,916
+Accumulated claims
+Current year
+Accumulated claims
+65,750
+20,497
+8,090
+11,775
+8,123
+8,090
+expenses paid
+claims expenses
+4 years later
+8,123
+8,090
+3 years later
+11,775
+8,123
+7,889
+Estimated accumulated
+(8,090)
+17,265
+(11,775)
+Total
+2015
+2014
+2013
+(8,123)
+2011
+Estimated claims expenses
+Short-term insurance contracts (accident year)
+The following table indicates the claim development for short-term insurance contracts taking account of
+reinsurance impacts:
+2012
+8,148
+1,120
+expenses
+(16,145)
+Unpaid claims
+(56,482)
+(12,349)
+9,268
+142
+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.
+Collateral and other credit enhancements
+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 2015 and 2014.
+4.2.2 Credit risk
+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.
+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 Insurance Regulatory
+Commission ("CIRC”) and a significant portion of the portfolio is in government bonds, government
+agency bonds and term deposits with the state-owned commercial banks, the Group's overall exposure to
+credit risk is relatively low.
+As at 31 December 2015, 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 RMB1,592 million (as at 31 December 2014: RMB1,025 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 RMB1,085 million (as at 31 December 2014:
+RMB830 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 gains in 2015
+were RMB812 million (2014: exchange gains of RMB268 million).
+4
+(iii) Currency risk (continued)
+Credit risk exposure
+RISK MANAGEMENT (continued)
+In the normal course of business, the Group attempts to match the maturity of financial assets to the
+maturity of insurance and financial liabilities.
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+4.2.2 Credit risk (continued)
+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 2015,
+98.9% (as at 31 December 2014: 99.1%) 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 2015, 99.6% (as at 31 December
+2014: 99.6%) of the subordinated bonds or debts held by the Group either have 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 at the time of its issuance and updated at each
+reporting date.
+As at 31 December 2015, 99.9% (as at 31 December 2014: 99.7%) 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 other loans excluding policyholder
+loans, are guaranteed by third parties or with pledge, or have the national annual budget income as the
+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 will not cause a material impact on the Group's consolidated
+financial statements as at 31 December 2015 and 2014.
+source of
+The credit risk associated with securities purchased under agreements to resell, policy loans and most of
+premium receivables will not cause a material impact on the Group's consolidated financial statements
+taking into consideration their collateral held and maturity term of no more than one year as at 31
+December 2015 and 2014.
+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.
+4.2.1 Market risk (continued)
+4.2 Financial risk (continued)
+4.2 Financial risk (continued)
+Total
+ended 31 December 2015
+143
+260
+Term deposits
+8,774
+8,774
+Cash and cash equivalents
+3,662
+68
+54
+3,784
+12,750
+8,371
+4 RISK MANAGEMENT (continued)
+54
+Financial liabilities
+Interest-bearing loans and borrowings
+Total
+141
+2,623
+2,623
+2,623
+2,623
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+21,175
+China Life Insurance Company Limited Annual Report 2015
+296,268
+For the
+48,829
+56,003
+41,634
+Term deposits
+562,622
+190,658
+260
+128,322
+Statutory deposits-restricted
+6,333
+484
+6,404
+232
+Securities purchased under
+agreements to resell
+21,503
+21,503
+Accrued investment income
+49,552
+31,218
+18,327
+7
+Premiums receivable
+11,913
+11,913
+96,901
+207,267
+Loans
+910,196
+ended 31 December 2015
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+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 Later than 3
+As at 31 December 2015
+Carrying
+value
+Without
+maturity
+Not later
+than 1 year
+Notes to the Consolidated Financial Statements
+but not later
+years
+but not later
+than 5 years
+Later than
+5 years
+Financial assets
+Contractual cash inflows
+Equity securities
+411,623
+411,623
+Debt securities
+1,000,958
+130,340
+214,106
+170,658
+than 3 years
+- Available-for-sale securities
+402
+54
+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 2015, if all the Group's equity securities' prices had increased or decreased by 10%
+with all other variables held constant, pre-tax profit for the year would have been RMB2,248 million
+(as at 31 December 2014: RMB1,054 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 RMB22,999 million (as at 31 December 2014:
+RMB12,881 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 and loans denominated
+in currencies other than the functional currency, such as US dollar, HK dollar, GB pound and EUR.
+140
+4
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.1 Market risk (continued)
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+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 largely
+because China's stock markets are relatively volatile.
+(iii) Currency risk (continued)
+As at 31 December 2015
+US dollar HK dollar
+GB pound
+EUR
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+4,715
+8,442
+172
+The following table summarises financial assets and financial liabilities denominated in currencies
+other than RMB as at 31 December 2015 and 2014, expressed in RMB equivalent:
+13,329
+Price risk
+4.2.1 Market risk (continued)
+4
+RISK MANAGEMENT (continued)
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+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 9.
+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
+(ii)
+(i)
+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 2015, 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 RMB416 million (as at 31
+December 2014: RMB883 million) higher or lower, 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 RMB6,928 million (as at 31
+December 2014: RMB6,675 million) lower or higher respectively, as a result of a decrease or increase
+in the fair value of available-for-sale securities.
+139
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+Interest rate risk
+-
+- Securities at fair value
+3,413
+18,007
+9,148
+1,286
+2,212
+1,242
+31,895
+Financial liabilities
+Interest-bearing loans and borrowings
+Total
+2,643
+2,643
+2,643
+Total
+2,643
+US dollar
+HK dollar
+GB pound
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+8,303
+8,303
+Debt securities
+- Held-to-maturity securities
+54
+As at 31 December 2014
+through profit or loss
+4,531
+14
+70
+1,139
+2,190
+1,056
+7,868
+Debt securities
+- Held-to-maturity securities
+68
+- Available-for-sale securities
+266
+68
+266
+6
+- Securities at fair value through
+371
+15
+8
+8
+Cash and cash equivalents
+Term deposits
+5,431
+5,431
+Cash and cash equivalents
+3,743
+636
+132
+profit or loss
+76,096
+year
+Subtotal
+Financial liabilities at fair
+value through profit or loss
+10,890
+(10,890)
+Annuity and other insurance
+balances payable
+25,617
+(25,617)
+Interest-bearing loans and
+borrowings
+2,623
+(106)
+Bonds payable
+67,989
+(3,424)
+(213)
+(73,198)
+(2,783)
+Subtotal
+1,828,929
+(10,890)
+(150,835)
+(207,037)
+(35,244) (2,547,580)
+Net cash inflows/(outflows)
+326,174
+(46,089)
+46,089
+agreements to repurchase
+Securities sold under
+11,166
+Cash and cash equivalents
+47,034
+47,034
+Subtotal
+2,155,103
+236,030
+472,477
+592,460
+394,308
+1,044,967
+Financial and insurance liabilities
+225,140
+Expected cash outflows
+1,603,446
+(60,896)
+(118,434)
+(22,634)
+(2,463,567)
+Investment contracts
+72,275
+(14,703)
+(15,192)
+(9,827)
+(84,013)
+Contractual cash outflows
+Insurance contracts
+321,642
+385,423
+359,064
+282,820
+236,151
+85,676
+80,193
+294%
+76,096
+According to CIRC Order [2008] No.1, “Solvency Regulations of Insurance Companies", the solvency
+ratio is computed by dividing the actual capital by the minimum capital. The CIRC closely monitors
+those insurance companies with a solvency ratio less than 100% and may, depending on the individual
+circumstances, undertakes certain regulatory measures, including but not limited to restriction of payment
+of dividends. Insurance companies with a solvency ratio between 100% and 150% will be required to submit
+and implement plans preventing capital deterioration to an inadequate level. Insurance companies with a
+solvency ratio above 100% but with significant solvency risk identified would be required to take necessary
+rectifying actions.
+In addition, pursuant to "Notification of Related Matters on Official Implementation of China Risk Oriented
+Solvency System" released by the CIRC, insurance companies should implement “Insurance Institution
+Solvency Regulations (No.1-No.17)” (“Solvency II”) from 1 January 2016. The Company will compute
+solvency ratio in accordance with Solvency II, recognising, assessing and managing variant risks starting
+from 1 January 2016.
+4.3 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, and as well as the recalculation of prices obtained from pricing services at the
+end of each reporting period.
+147
+Solvency ratio
+China Life Insurance Company Limited Annual Report 2015
+For the
+year
+ended 31 December 2015
+4
+RISK MANAGEMENT (continued)
+4.3
+Fair value hierarchy (continued)
+Under certain conditions, the Group may not receive price quote from independent third party pricing
+services. In this instance, the Group's valuation team may choose to apply 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 2015, assets classified as Level 1 accounted for approximately 35.24% 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.
+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 fund
+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 reporting dates as their fair market value and classified the
+investments as Level 1.
+As at 31 December 2015, assets classified as Level 2 accounted for approximately 57.47% 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.
+At 31 December 2015, assets classified as Level 3 accounted for approximately 7.29% 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, market
+comparison approach, etc.
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see
+Note 3.2.
+148
+Notes to the Consolidated Financial Statements
+11,166
+Actual capital
+Minimum capital
+As at 31
+December 2015
+RMB million
+(1,502,613)
+145
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+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, lapse rate, loss ratio and expense and other assumptions. Actual experience may differ
+from estimates.
+The liquidity analysis above does not include policyholder dividends payable amounting to RMB107,774
+million as at 31 December 2015 (as at 31 December 2014: RMB74,745 million). As at 31 December 2015,
+declared dividends of RMB56,597 million (as at 31 December 2014: RMB44,515 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 cash flows are indeterminate due to the uncertainty of
+future experiences including investment returns and are subject to future declarations by the Group.
+As at 31
+December 2014
+RMB million
+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 were surrendered immediately, it would cause a cash outflow of RMB49,905 million
+and RMB33,471 million, respectively for the year ended 31 December 2015 (2014: RMB47,589 million
+and RMB24,064 million, respectively), payable within one year.
+The Group's objectives for managing capital, which is actual capital calculated as the difference between
+admitted assets (defined by the CIRC) and the admitted liabilities (defined by the CIRC), are to comply
+with the insurance capital requirements required by the CIRC to meet the minimum capital 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 is also subject to other local capital requirements, such as statutory deposits restricted
+requirement, statutory reserve fund requirement, general reserve requirement and statutory insurance fund
+requirement discussed in detail in Note 9.4, Note 36 and Note 20, respectively.
+The Group ensures its continuous and full compliance with the regulations mainly through monitoring its
+quarterly and annual solvency ratios, as well as the solvency ratio based on dynamic solvency testing.
+146
+4
+RISK MANAGEMENT (continued)
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+4.2 Financial risk (continued)
+4.2.4 Capital management (continued)
+The table below summarises the solvency ratio of the Company, the actual capital held against the minimum
+required capital:
+4.2.4 Capital management
+Premiums receivable
+330%
+8,413
+balances payable
+30,092
+(30,092)
+Interest-bearing loans and
+borrowings
+2,643
+(107)
+Bonds payable
+67,994
+(33,424)
+(214)
+(39,774)
+(2,693)
+Subtotal
+1,933,030
+(856)
+(192,806)
+(100,892)
+12,320 (2,897,277)
+Net cash inflows/(outflows)
+414,837
+410,767
+366,307
+483,042
+367,542
+(1,945,447)
+Annuity and other insurance
+(856)
+856
+value through profit or loss
+4,009
+2,347,867
+411,623
+559,113
+583,934
+355,222
+951,830
+Financial and insurance liabilities
+Expected cash outflows
+Insurance contracts
+(81,630)
+(44,697)
+144
+26,347
+Investment contracts
+84,106
+(16,199)
+(16,207)
+(11,334)
+(108,091)
+Contractual cash outflows
+Securities sold under
+agreements to repurchase
+31,354
+(31,354)
+Financial liabilities at fair
+(2,789,186)
+4
+1,715,985
+4.2 Financial risk (continued)
+186,285
+982,202
+Loans
+166,453
+85,652
+27,423
+44,344
+36,144
+Term deposits
+690,156
+212,356
+367,662
+186,342
+155,236
+Statutory deposits-restricted
+6,153
+182
+2,620
+4,434
+agreements to resell
+11,925
+11,925
+Accrued investment income
+44,350
+RISK MANAGEMENT (continued)
+31,928
+26,621
+72,234
+Securities purchased under
+Debt securities
+China Life Insurance Company Limited Annual Report 2015
+941,836
+4.2.3 Liquidity risk (continued)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+Contractual and expected cash flows (undiscounted)
+Carrying
+Without
+Not later
+but not later
+but not later
+Later than
+Later than 1 year Later than 3 years
+value
+As at 31 December 2014
+Equity securities
+Contractual cash inflows
+Financial assets
+5 years
+than 5 years
+236,030
+than 3 years
+year
+236,030
+than 1
+maturity
+Charge for the
+(1,005)
+Disposals
+As at 1 January 2015
+Impairment
+(14,131)
+(942)
+year
+(24)
+117
+(7,446)
+As at 31 December 2015
+669
+126
+393
+As at 31 December 2015
+33
+Disposals
+(1,748)
+(116)
+(4,738)
+(24)
+16,783
+(24)
+year
+ended 31 December 2015
+(135)
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+157
+26,974
+366
+7,565
+382
+1,878
+As at 31 December 2015
+25,348
+303
+6,333
+396
+2,203
+16,113
+As at 1 January 2015
+Net book value
+(24)
+(658)
+352
+Charge for the year
+54
+Additions
+(22)
+172
+(1,686)
+6
+1,486
+Transfers upon completion
+38,424
+1,246
+6,333
+1,392
+6,676
+22,777
+As at 1 January 2015
+Cost
+RMB million
+Total
+construction improvements
+6 PROPERTY, PLANT AND EQUIPMENT (continued)
+vehicles
+128
+(839)
+2,981
+3,528
+(13,052)
+(943)
+(996)
+(4,473)
+(6,640)
+As at 1 January 2015
+Accumulated depreciation
+41,129
+1,308
+7,565
+1,387
+6,616
+24,253
+As at 31 December 2015
+(801)
+(123)
+(63)
+(133)
+(418)
+(64)
+Disposals
+13
+Office
+equipment
+furniture and
+Disposals
+fixtures
+year
+Charge for the
+(25)
+As at 1 January 2014
+Impairment
+(13,052)
+(943)
+(996)
+(4,473)
+(6,640)
+As at 31 December 2014
+792
+26
+54
+654
+58
+(1,844)
+(111)
+(167)
+(778)
+(788)
+Disposals
+Charge for the year
+1
+(24)
+4
+158
+fixtures
+25,348
+303
+6,333
+396
+2,203
+16,113
+As at 31 December 2014
+23,393
+308
+6,125
+565
+2,381
+14,014
+As at 1 January 2014
+Net book value
+(24)
+(25)
+---- (2)
+As at 31 December 2014
+Buildings
+(12,000)
+(883)
+(45)
+100
+(3,194)
+-
+268
+2,781
+Transfers upon completion
+35,418
+1,166
+6,125
+1,448
+6,730
+19,949
+As at 1 January 2014
+Cost
+RMB million
+Total
+Leasehold
+construction improvements
+Assets under
+Motor
+vehicles
+Additions
+(858)
+175
+2
+(4,349)
+(5,910)
+As at 1 January 2014
+Accumulated depreciation
+38,424
+1,246
+6,333
+1,392
+6,676
+22,777
+As at 31 December 2014
+(1,114)
+(33)
+(212)
+(58)
+(683)
+(128)
+Disposals
+4,165
+13
+3,614
+361
+Buildings
+RISK MANAGEMENT (continued)
+Assets under
+26,974
+Total
+Others
+Property, plant and equipment
+Unallocated
+2,396,307
+62,075
+8,443
+74,482
+2,251,307
+Segment assets
+2,335,836
+60,471
+47,175
+475
+4,917
+7,904
+Others
+14,900
+7,968
+69,565
+2,243,403
+and cash equivalents)
+Financial assets (including cash
+Assets
+RMB million
+Total
+Elimination
+25,034
+2,448,315
+Liabilities
+Insurance contracts
+188,889
+Others
+Unallocated
+1,933,212
+4,485
+7,001
+71,293
+1,850,433
+Segment liabilities
+101,767
+3,499
+401
+3,278
+Others
+94,589
+31,354
+986
+108
+931
+29,329
+Securities sold under agreements to repurchase
+10,060
+74,046
+Investment contracts
+1,715,985
+6,492
+57,024
+1,652,469
+Others
+Accident
+As at 31 December 2015
+Health
+45,931
+2,700
+1,753
+557
+40,921
+Segment results
+1,974
+1,974
+Share of profit of associates and joint ventures, net
+(463,492)
+1,081
+(4,644)
+(12,107)
+Income tax
+(44,647)
+expenses
+Segment benefits, claims and
+(743)
+(94)
+(103)
+(546)
+Statutory insurance fund contribution
+1,081
+(4)
+(33)
+(1,044)
+Including: inter-segment expenses
+(7,428)
+(403,175)
+Total
+(10,744)
+35,187
+Life
+SEGMENT INFORMATION (continued)
+5
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+153
+2,036
+145
+40
+240
+Net profit
+263
+Depreciation and amortisation
+7,076
+492
+23
+202
+6,359
+equity holders of the Company
+Other comprehensive income attributable to
+488
+34,699
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+1,388
+154
+2,122,101
+5
+(14)
+(870)
+Available-for-sale securities
+profit or loss
+Total
+Debt securities
+RMB million
+Equity securities
+RMB million
+Equity securities
+RMB million
+RMB million
+501
+21,635
+(856)
+542
+39,449
+39,449
+2,785
+1,319
+4,104
+(390)
+(329)
+(719)
+352
+352
+3,664
+3,664
+(4,800)
+22,678
+(4,800)
+value through
+other comprehensive income
+Sales
+711
+1,884
+43,006
+- Debt securities
+18,304
+76,680
+94,984
+Total
+312,817
+510,154
+64,728
+887,699
+Liabilities measured at fair value
+Closing balance
+Financial liabilities at fair value
+Investment contracts at fair value
+through profit or loss
+Total
+(856)
+(14)
+(870)
+The following table presents the changes in Level 3 assets for the year ended 31 December 2015:
+Securities at fair
+Opening balance
+Purchases
+Transferred into Level 3
+Transferred out of Level 3
+Total gains recorded in profit or loss
+Total gains recorded in
+through profit or loss
+1,081
+501
+1,884
+32,624
+285,574
+Net premiums earned
+35,319
+217,662
+- Annuity
+- Endowment
+29,767
+- Whole life
+2,871
+- Term life
+331,010
+12,199
+11,907
+33,192
+Gross written premiums
+Revenues
+Total
+Elimination
+Others
+Accident
+RMB million
+Health
+Life
+For the year ended 31 December 2014
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+SEGMENT INFORMATION (continued)
+285,619
+62,343
+330,105
+89,814
+64,728
+149
+Segment revenues
+(928)
+928
+Including: inter-segment revenue
+4,185
+(928)
+4,148
+67
+898
+Other income
+5,808
+Investment income
+(547)
+154
+6,179
+Net fair value gains/(losses) through profit or loss
+7,120
+(48)
+24
+174
+6,970
+Net realised gains/(losses) on financial assets
+93,548
+1,183
+315
+2,236
+22
+(997)
+(840)
+(327)
+Operating segments (continued)
+(iv) Other businesses (Others)
+Other businesses relate primarily to income and allocated cost of insurance agency business in respect
+of services to CLIC as described in Note 33, 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/(losses) through profit or loss
+and foreign exchange gains/(losses) within other expenses are allocated among segments in proportion to
+the respective segment's 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 and securities sold under agreements to repurchase are allocated among segments in
+proportion to the respective segment's 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.
+152
+5
+SEGMENT INFORMATION (continued)
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+5.1
+For the year ended 31 December 2015
+Health
+Accident
+RMB million
+Others
+Elimination
+Total
+Revenues
+Gross written premiums
+308,169
+42,041
+13,761
+363,971
+- Term life
+3,476
+Life
+- Whole life
+SEGMENT INFORMATION (continued)
+ended 31 December 2015
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+4
+RISK MANAGEMENT (continued)
+4.3 Fair value hierarchy (continued)
+The assets whose fair value measurements are classified under Level 3 above do not have
+on the profit or loss of the Group.
+any
+material impact
+5
+For the assets and liabilities measured at fair value, during the year ended 31 December 2015, RMB59,214
+million (2014: RMB22,436 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB12,129 million (2014: RMB10,344 million) debt securities were transferred
+from Level 2 to Level 1. No material equity securities were transferred between Level 1 and Level 2.
+For the years ended 31 December 2015 and 2014, 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 2015 and 2014, unobservable inputs such as weighted average cost of capital and
+liquidity discount were used in the valuation of assets at fair value classified as Level 3. The fair value was
+not significantly sensitive to reasonable changes in these unobservable inputs.
+5
+SEGMENT INFORMATION
+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.
+151
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+5.1 Operating segments
+150
+28,119
+- Annuity
+1,081
+(1,081)
+Segment revenues
+444,096
+45,204
+13,860
+5,370
+(1,081)
+507,449
+Benefits, claims and
+expenses
+Insurance benefits and claims expenses
+Life insurance death and other benefits
+Including: inter-segment revenue
+(219,944)
+(20)
+(221,701)
+Accident and health claims and claim
+adjustment expenses
+(16,858)
+(4,151)
+(21,009)
+Increase in insurance contract liabilities
+(93,668)
+(15,803)
+(38)
+(109,509)
+Investment contract benefits
+(1,737)
+- Endowment
+5,060
+5,006
+177,871
+98,703
+Net premiums earned
+308,081
+40,855
+13,365
+362,301
+Investment income
+93,819
+2,983
+344
+436
+97,582
+(1,081)
+Net realised gains/(losses) on financial assets
+992
+115
+(69)
+32,297
+Net fair value gains/(losses) through profit or loss
+9,863
+313
+36
+(3)
+10,209
+Other income
+1,074
+61
+31,259
+40,411
+22,678
+21,635
+ended 31 December 2015
+4
+RISK MANAGEMENT (continued)
+4.3
+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 2014:
+Assets measured at fair value
+Fair value measurement using
+Quoted prices
+in active
+Significant
+observable
+market
+inputs
+year
+Level 1
+Significant
+unobservable
+inputs
+Level 3
+Total
+RMB million
+RMB million
+RMB million
+RMB million
+Available-for-sale securities
+- Equity securities
+151,817
+23,479
+21,635
+- Debt securities
+25,437
+Level 2
+369,403
+For the
+China Life Insurance Company Limited Annual Report 2015
+(6,345)
+Other expenses
+(27,458)
+(2,218)
+(3,136)
+(3,811)
+(18,293)
+Administrative expenses
+(4,320)
+(122)
+(15)
+(129)
+(4,054)
+Notes to the Consolidated Financial Statements
+Finance costs
+(1,307)
+(3,813)
+(5,528)
+(24,921)
+Underwriting and policy acquisition costs
+(33,491)
+(163)
+(33,328)
+participation in profits
+Policyholder dividends resulting from
+(2,264)
+(188)
+(2,076)
+(35,569)
+542
+501
+Securities at fair value through
+Total gains recorded in profit or loss
+Total gains recorded in
+other comprehensive income
+Closing balance
+value through
+Available-for-sale securities
+profit or loss
+Total
+Debt securities
+RMB million
+Equity securities
+RMB million
+Equity securities
+RMB million
+RMB million
+Transferred out of Level 3
+301
+200
+5,935
+13,889
+6,135
+363
+473
+836
+(377)
+(377)
+69
+69
+2,126
+2,126
+501
+13,588
+196,931
+395,341
+Transferred into Level 3
+Opening balance
+profit or loss
+- Equity securities
+22,716
+582
+542
+23,840
+- Debt securities
+18,805
+10,407
+29,212
+Total
+218,775
+403,871
+Purchases
+22,678
+Liabilities measured at fair value
+Investment contracts at fair value
+through profit or loss
+(10,890)
+Investment contracts at fair value
+through profit or loss
+(21)
+Total
+(10,911)
+(10,890)
+(21)
+(10,911)
+The following table presents the changes in Level 3 assets for the year ended 31 December 2014:
+Securities at fair
+645,324
+- Equity securities
+84,106
+Securities at fair value
+(358,784)
+Segment benefits, claims and expenses
+(701)
+(79)
+(116)
+(506)
+Statutory insurance fund contribution
+928
+(3)
+(32,003)
+(22)
+Including: inter-segment expenses
+(4,151)
+928
+(562)
+(705)
+(204)
+(3,608)
+Other expenses
+(25,432)
+(903)
+(2,087)
+(10,722)
+928
+303
+32,211
+- Non-controlling interests
+through profit or loss
+Attributable to
+32,514
+Net profit
+(7,888)
+Income tax
+(3,694)
+40,402
+1,546
+3,252
+30,651
+Segment results
+3,911
+3,911
+Share of profit of associates and joint ventures, net
+(404,275)
+28
+4,953
+(2,576)
+(4,092)
+(16,677)
+Investment contract benefits
+(110)
+(8,196)
+(97,577)
+Increase in insurance contract liabilities
+(3,869)
+(12,883)
+adjustment expenses
+Accident and health claims and claim
+(1,806)
+(13)
+(191,291)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+expenses
+Benefits, claims and
+440,766
+(928)
+4,736
+12,268
+(1,355)
+(152)
+(192,659)
+(16,752)
+Administrative expenses
+(4,726)
+(27,147)
+(24,866)
+|||
+(148)
+(16)
+(111)
+(4,451)
+Finance costs
+(897)
+(3,354)
+(4,770)
+(18,126)
+Underwriting and policy acquisition costs
+(124)
+(24,742)
+participation in profits
+Policyholder dividends resulting from
+(1,958)
+(105,883)
+Other comprehensive income attributable to
+equity holders of the Company
+38,270
+951
+Others
+46,089
+1,551
+152
+1,076
+43,310
+Securities sold under agreements to repurchase
+72,275
+8,565
+90,703
+63,710
+1,603,446
+5,860
+38,872
+1,558,714
+Insurance contracts
+Liabilities
+2,246,567
+20,615
+25,348
+Investment contracts
+2,732
+372
+13,513
+Motor
+equipment
+furniture and
+Office
+PROPERTY, PLANT AND EQUIPMENT
+6
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+156
+1,959,236
+Total
+130,106
+Others
+Unallocated
+1,829,130
+15,064
+6,384
+51,245
+1,756,437
+Segment liabilities
+107,320
+Total
+35,255
+Others
+Unallocated
+Health
+Life
+Assets
+SEGMENT INFORMATION (continued)
+5
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+As at 31 December 2014
+China Life Insurance Company Limited Annual Report 2015
+2,124
+152
+221
+324
+1,427
+Depreciation and amortisation
+39,232
+(123)
+134
+155
+Accident
+Others
+Elimination
+2,200,604
+71,811
+7,273
+53,998
+2,067,522
+Segment assets
+56,568
+44,390
+312
+3,985
+7,881
+Others
+2,144,036
+27,421
+6,961
+50,013
+2,059,641
+cash and cash equivalents)
+Financial assets (including
+RMB million
+Total
+Property, plant and equipment
+389,435
+- Equity holders of the Company
+347,810
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+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 2015:
+Assets measured at fair value
+Available-for-sale securities
+- Equity securities
+Fair value measurement using
+Quoted prices
+Significant
+in active
+market
+observable
+inputs
+Fair value hierarchy (continued)
+Level 1
+Significant
+unobservable
+inputs
+Level 3
+RMB million
+RMB million
+RMB million
+Total
+RMB million
+233,527
+51,940
+62,343
+- Debt securities
+20,575
+380,823
+501
+401,899
+Level 2
+4.3
+Leasehold
+After one year but within five
+97,540
+of the associates and joint ventures
+Total equity attributable to equity holders
+600
+4,054
+330
+19,531
+2,452
+19,531
+97,540
+Total equity
+4,449
+7
+6,146
+48,190
+99,995
+41,231
+330
+3,520
+330
+2,452
+41,470
+19,531
+97,540
+2,452
+after adjustments
+Total equity attributable to equity holders
+(534)
+239
+Total adjustments (i)
+600
+4,054
+of the associates and joint ventures
+46,103
+1,739,047
+Total liabilities
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+70.00%
+Jersey Island
+35.00%
+PRC
+For the year ended 31 December 2015
+29.46%
+40.00%
+PRC
+20.00%
+PRC
+Percentage of equity interest held
+162
+Hong Kong, PRC
+8
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+The following table illustrates the summarised financial information of the Group's associates and joint ventures as
+at 31 December 2015 and for the year ended 31 December 2015:
+600
+8,503
+337
+8,598
+65,634 148,185
+1,836,587
+Total assets
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+Sanya
+Company
+Street SLP
+CLP&C Sino-Ocean Futures Technology
+Bank
+COFCO Annoroad
+10 Upper
+CGB
+600
+Country of incorporation
+Proportion of the Group's ownership
+40.00%
+163
+541
+(37)
+2,171
+2,637
+10,092
+China Life Insurance Company Limited Annual Report 2015
+Total comprehensive income
+(15)
+(80)
+379
+1,028
+Other comprehensive income
+496
+45
+(37)
+Notes to the Consolidated Financial Statements
+year
+Total assets
+RMB million
+RMB million
+RMB million
+10 Upper Bank
+Street SLP
+COFCO
+Futures
+For the
+Sino-Ocean
+RMB million
+CGB
+The following table illustrates the summarised financial information of the Group's associates and joint ventures as
+at 31 December 2014 and for the year ended 31 December 2014:
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+8
+ended 31 December 2015
+CLP&C
+RMB million
+15
+2,251
+2,258
+Impairment
+306
+2,464
+246
+1,397
+13,407
+(1,010)
+7,812
+Gross carrying value of the investments
+51.00%
+70.00%
+16.67%
+35.00%
+29.998%
+22,553
+Net carrying value of the investments
+22,553
+7,812
+9,064
+Net profit/(loss)
+432
+100
+390
+31,226
+46,829
+54,735
+Total revenues
+06
+306
+2,464
+246
+1,397
+12,397
+20.00%
+10 Upper Bank Street SLP
+Joint venture
+COFCO Futures
+(106)
+1,435
+1,435
+Buildings
+RMB million
+As at 31 December 2014
+As at 1 January 2014
+(46)
+Fair value
+As at 1 January 2014
+Net book value
+As at 31 December 2014
+Charge for the year
+As at 1 January 2014
+Accumulated depreciation
+As at 31 December 2014
+As at 31 December 2014
+(152)
+1,283
+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.
+INVESTMENT PROPERTIES (continued)
+8
+7
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+1,329
+China Life Insurance Company Limited Annual Report 2015
+The fair values of investment properties of the Group as at 31 December 2015 amounted to RMB2,238 million
+(as at 31 December 2014: RMB2,080 million), which was estimated by the Group having regards to valuations
+performed by an independent appraiser. The investment properties were classified as Level 3 in the fair value
+hierarchy.
+There were no investment properties without title certificates as at 31 December 2015.
+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.
+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 categorized as property, plant and equipment of the
+Group in the consolidated statement of financial position.
+2,080
+2,045
+160
+Additions
+As at 1 January 2014
+Cost
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+As at 1 January 2015
+Fair value
+As at 31 December 2015
+As at 1 January 2015
+For the year ended 31 December 2015
+Net book value
+As at 1 January 2015
+Charge for the year
+Accumulated depreciation
+As at 31 December 2015
+Additions
+As at 1 January 2015
+Cost
+As at 31 December 2015
+Buildings
+RMB million
+1,435
+1,435
+7 INVESTMENT PROPERTIES (continued)
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+159
+2,238
+As at 31 December 2015
+2,080
+1,237
+1,283
+(198)
+(46)
+(152)
+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.
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+As at 1 January
+Investments in associates and joint ventures
+40.00%
+PRC
+20.00%
+Percentage of equity interest held
+PRC
+Company Limited (“Sanya Company”)(ii)
+Hong Kong, PRC
+China Life (Sanya) Healthy Investment
+Joint ventures
+Co., Ltd. ("Annoroad Technology")(i)
+Annoroad Gene Technology (Beijing)
+COFCO Futures Company Limited
+("COFCO Futures")
+China Guangfa Bank Co., Ltd (“CGB")
+China Life Property & Casualty Insurance
+Company Limited ("CLP&C")
+Sino-Ocean
+Associates
+10 Upper Bank Street SLP
+29.998%
+PRC
+35.00%
+Sino-Ocean
+CLP&C
+CGB
+Associates
+Name
+As at 31 December 2014, the Group owned the following associates and joint ventures:
+In December 2015, the Group contributed RMB306 million in Sanya Company, holding 51.00% of its
+equity interests. According to the investment agreement and the articles of association of Sanya Company,
+the Group has joint control with another investor over Sanya Company, and therefore accounted for it as a
+joint venture.
+In June 2015, the Group contributed RMB250 million in Annoroad Technology, holding 16.67% of its
+equity interests. According to the provisions of the agreement, the Group can impose a significant influence
+over Annoroad Technology's financial and operating decisions through its general meeting and board of
+directors, and therefore accounted for it as an associate.
+(ii)
+51.00%
+70.00%
+PRC
+Jersey Island
+16.67%
+PRC
+Country of incorporation
+1,648,056
+Name
+8
+268
+5,671
+766
+34,775
+44,390
+2014
+RMB million
+2,984
+RMB million
+As at 31 December
+Impairment (ii)
+Dividend received (i)
+Other equity movements
+Share of profit
+Scrip dividend
+2015
+3,911
+649
+280
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+161
+The Group's investments in associates and joint ventures are unlisted except for Sino-Ocean, which is
+listed in Hong Kong. As at 31 December 2015, the stock price of Sino-Ocean was HKD4.97 per share.
+As its business performance declined in 2015, and the quoted market price of Sino-Ocean (stock price per
+share multiplies shares held by the Group) was below the carrying value for more than one year, the Group
+performed an impairment test to this investment. As at 31 December 2015, the recoverable amount of this
+investment valued using the discounted future cash flow method was approximately RMB12.40 billion and
+therefore an impairment loss of RMB1.01 billion was made for this investment in 2015. 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. The impairment for this investment is included in Share of profit of
+associates and joint ventures, net in the consolidated statement of comprehensive income.
+2014 final dividend of HKD0.165 per ordinary share was approved and declared in the annual general
+meeting of Sino-Ocean Land Holdings Limited (“Sino-Ocean”) on 12 May 2015. On 22 May 2015, Sino-
+Ocean made the announcement of scrip dividend plan, according to which the shareholders could elect to
+receive the 2014 final dividend in cash or in scrip shares. The Company elected the cash option and received
+cash dividend amounting to RMB286 million. 2015 interim dividend of HKD0.075 per ordinary share was
+approved and declared in the board meeting of Sino-Ocean on 21 August 2015, and each shareholder could
+elect to receive the 2015 interim dividend in cash or in scrip shares. The Company elected the cash option
+and received cash dividend amounting to RMB136 million.
+(ii)
+(i)
+44,390
+47,175
+(1,010)
+(515)
+(604)
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+As at 31 December 2015, the Group owned the following associates and joint ventures:
+52,769
+132,212
+9,784
+As at 31
+December 2014
+December 2015
+As at 31
+(i)
+Total
+After ten years
+RMB million
+After five years but within ten years
+After one year but within five
+Within one year
+Maturing:
+Total
+Other loans (i)
+Policy loans
+years
+9.2 Loans
+RMB million
+73,654
+18,180
+Subtotal
+Available-for-sale securities, at cost
+Equity securities
+Total
+Others (i)
+84,959
+347,810
+20,807
+15,259
+770,516
+607,531
+(i) Other available-for-sale securities mainly include unlisted equity investments and private equity
+funds, etc. The Group did not guarantee or provide any financing support for other available-for-
+sale securities, and considers that the carrying value of other available-for-sale securities represents its
+122,308
+196,931
+FINANCIAL ASSETS (continued)
+9
+ended 31 December 2015
+2,000
+7 INVESTMENT PROPERTIES
+Within one year
+As at 31
+December 2014
+RMB million
+As at 31
+December 2015
+RMB million
+Maturing:
+11,823
+Debt securities - Contractual maturity schedule
+The estimated fair value of all held-to-maturity securities was RMB550,844 million as at 31 December 2015
+(as at 31 December 2014: RMB526,526 million).
+517,283
+504,075
+449,024
+442,085
+23
+Unlisted debt securities include those traded on the Chinese interbank market.
+After one year but within five
+years
+86,198
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+165
+517,283
+504,075
+Total
+284,882
+248,427
+After ten years
+149,986
+167,450
+After five years but within ten years
+70,592
+41,050
+Others (i)
+21,038
+50,053
+300
+6,033
+6,153
+6,333
+6,153
+Insurance companies in China are required to deposit an amount that equals to 20% of their registered
+capital with banks in conformity with regulations of the CIRC. These funds may not be used for any
+purpose, other than to pay off debts during liquidation proceedings.
+167
+As at 31
+December 2014
+RMB million
+China Life Insurance Company Limited Annual Report 2015
+For the
+year
+ended 31 December 2015
+9
+FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities
+Notes to the Consolidated Financial Statements
+RMB million
+December 2015
+As at 31
+years
+After five years but within ten years
+181,780
+200,214
+380,842
+463,442
+26,500
+Total
+562,622
+690,156
+9.4 Statutory deposits – restricted
+Contractual maturity schedule:
+Within one year
+After one year but within five years
+Total
+Available-for-sale securities, at fair value
+24
+Debt securities
+Government agency
+1,217
+401,899
+395,341
+Equity securities
+Funds
+163,366
+4,722
+83,121
+74,629
+71,592
+Preferred stocks
+18,712
+3,000
+Wealth management products
+Common stocks
+22,798
+19,298
+206,511
+bonds
+Corporate bonds
+Subordinated bonds/debts
+Others (i)
+Subtotal
+December 2015
+As at 31
+As at 31
+December 2014
+RMB million
+RMB million
+25,713
+26,328
+145,399
+138,487
+206,767
+Government bonds
+Within one year
+37
+68,199
+3,749
+2,539
+40,491
+16,893
+87,449
+of the associates and joint ventures
+Total adjustments (i)
+Total equity attributable to equity holders
+2,539
+44,383
+16,893
+As at 31
+December 2014
+RMB million
+RMB million
+December 2015
+3,749
+As at 31
+984
+Total equity attributable to equity holders of
+Gross carrying value of the investments
+70.00%
+35.00%
+29.46%
+40.00%
+20.00%
+(209)
+Proportion of the Group's ownership
+2,539
+41,475
+16,893
+87,449
+adjustments
+the associates and joint ventures after
+3,540
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+December 2014
+December 2015
+As at 31
+As at 31
+166,453
+87,449
+92,799
+Total equity
+7,245
+87,829
+35,876
+1,560,607
+Total liabilities
+8,199
+4,450
+RMB million
+RMB million
+90,250
+Maturing:
+9.3 Term deposits
+FINANCIAL ASSETS (continued)
+9
+166
+During the year ended 31 December 2015, the Group's investment income from the above asset
+management products was RMB6,455 million (2014: RMB4,137 million), and the related asset
+management fee received by AMC for all asset management products it issued was RMB224 million
+(2014: RMB171 million).
+Other loans mainly consisted of different types of asset management products. As at 31 December
+2015, RMB172,983 million (as at 31 December 2014: RMB84,300 million) of asset management
+products had been managed by China Life Asset Management Company Limited ("AMC”), a
+subsidiary of the Company, of which RMB37,978 million (as at 31 December 2014: RMB39,571
+million) was owned by the Group. Meanwhile, the Group also owned RMB75,936 million (as at 31
+December 2014: RMB50,034 million) of asset management products managed by other financial
+institutions. Asset management products are guaranteed by third parties or with pledge, or have the
+national annual budget income as the source of repayment, or have higher credit rating borrowers.
+The Group did not guarantee or provide any financing support for other loans, and considers that the
+carrying value of other loans represents its maximum risk exposure.
+166,453
+207,267
+8,700
+32,345
+24,239
+53,894
+84,078
+80,214
+20,535
+6,757
+13,186
+1,434
+Total
+Unlisted
+Listed in Singapore
+Listed in Hong Kong, PRC
+Listed in mainland, PRC
+Debt securities
+China Life Insurance Company Limited Annual Report 2015
+Total
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+9.1 Held-to-maturity securities
+FINANCIAL ASSETS
+Subordinated bonds/debts
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+As at 31
+61,916
+517,283
+504,075
+155,705
+152,135
+146,595
+146,405
+126,140
+126,097
+88,843
+79,438
+RMB million
+RMB million
+As at 31
+December 2014
+December 2015
+9
+50
+164
+The Group had no contingent liabilities or capital commitments with the associates and joint ventures as at 31
+December 2015 and 31 December 2014.
+44,644
+Total comprehensive income
+Other comprehensive income
+Net profit
+Total revenues
+2,478
+36,522
+maximum risk
+13,186
+6,757
+20,535
+Net carrying value of the investments
+Impairment
+2,478
+1,434
+40,411
+3,306
+241
+(157)
+92
+4,587
+1,725
+14,157
+(299)
+8
+(19)
+318
+2,120
+142
+84
+4,606
+1,407
+12,037
+(i) Including adjustments for the difference of accounting policies, fair value and others.
+207,267
+168
+exposure.
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+19,411
+23,642
+6,455
+6,368
+12,956
+17,274
+19,411
+23,642
+173
+Total
+As at 31
+December 2015
+For the
+year
+ended 31 December 2015
+14
+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.
+170
+9
+Notes to the Consolidated Financial Statements
+FINANCIAL ASSETS (continued)
+9.7 Securities purchased under agreements to resell
+Carrying value
+Maturing:
+Total
+9.8 Accrued investment income
+Bank deposits
+Debt securities
+Others
+Total
+INSURANCE CONTRACTS
+Within 30 days
+11
+investment contracts:
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+49,552
+1,599
+2,144
+15,667
+15,703
+27,084
+44,350
+31,705
+RMB million
+As at 31
+December 2014
+December 2015
+As at 31
+11,925
+21,503
+RMB million
+53,052
+Current
+31,928
+FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+10
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+31,218
+China Life Insurance Company Limited Annual Report 2015
+44,350
+49,552
+Total
+12,422
+18,334
+Non-current
+171
+137,990
+23,840
+43,006
+Funds
+Equity securities
+29,212
+94,984
+401
+24,873
+88,291
+4,085
+5,689
+254
+603
+RMB million
+RMB million
+As at 31
+December 2014
+December 2015
+As at 31
+Subtotal
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+9
+6,119
+FINANCIAL ASSETS (continued)
+Debt securities
+Government bonds
+Government agency
+bonds
+Corporate bonds
+Others
+9.6 Securities at fair value through profit or loss
+499
+Common stocks
+36,887
+29,212
+Equity securities
+Listed in mainland, PRC
+32,427
+23,488
+Listed in Hong Kong
+94,984
+70
+Unlisted
+6,099
+4,410
+352
+Subtotal
+Total
+Listed overseas
+11,925
+Subtotal
+86,076
+23,341
+Subtotal
+Total
+43,006
+23,840
+137,990
+23,292
+53,052
+Listed in mainland, PRC
+8,852
+5,920
+Listed overseas
+56
+Unlisted
+Debt securities
+21,503
+As at 31
+December 2014
+RMB million
+December 2015
+RMB million
+21,503
+11,925
+21,503
+11,925
+Cash and cash equivalents
+76,096
+47,034
+76,096
+47,034
+Investment contracts (iii)
+(84,106)
+(72,275)
+(82,644)
+(70,694)
+Financial liabilities at fair value through profit or loss
+(856)
+(10,890)
+The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+(i)
+(68,370)
+(69,580)
+(67,989)
+(67,994)
+Securities purchased under agreements to resell
+Bonds payable (iii)
+(31,354)
+(46,089)
+(31,354)
+Securities sold under agreements to repurchase
+(10,890)
+(856)
+(46,089)
+53,052
+137,990
+53,052
+207,267
+166,453
+207,267
+526,526
+550,844
+517,283
+166,453
+504,075
+Loans
+Held-to-maturity securities (ii)
+As at 31
+December 2014
+RMB million
+Estimated fair value (i)
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+RMB million
+Term deposits
+(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 4.3. The fair value of held-to-maturity under Level 1
+was RMB29,777 million and under Level 2 was RMB521,067 million as at 31 December 2015 (as at 31
+December 2014: Level 1 RMB69,506 million and Level 2 RMB457,020 million).
+562,622
+562,622
+137,990
+Securities at fair value through profit or loss
+592,272
+749,709
+592,272
+749,709
+690,156
+Available-for-sale securities, at fair value
+6,333
+6,153
+6,333
+-
+Statutory deposits – restricted
+690,156
+6,153
+401,899
+(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.
+PREMIUMS RECEIVABLE
+1,032
+As at 31
+December 2015
+As at 31
+December 2014
+RMB million
+RMB million
+Receivable from constructors
+Land use rights
+6,341
+1,656
+5,998
+6,137
+Investments receivable
+4,242
+4,104
+Automated policy loans
+2,520
+2,281
+As at 31
+For the year ended 31 December 2015
+Non-current
+Current
+Total
+2,100
+1,420
+2,833
+684
+772
+Due from related parties
+2,449
+936
+Tax refundable
+Others
+908
+1,246
+124
+OTHER ASSETS
+Total
+Non-current
+Current
+Total
+Claims recoverable from reinsurers (Note 14)
+China Life Insurance Company Limited Annual Report 2015
+Ceded unearned premiums (Note 14)
+Long-term insurance contracts ceded (Note 14)
+13
+REINSURANCE ASSETS
+12
+172
+As at 31 December 2015, the carrying value of premiums receivable within one year was RMB11,899 million (as
+at 31 December 2014: RMB11,143 million).
+Due from reinsurance companies
+The fair values of investment contracts at amortised cost and bonds payable 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 investment contracts at amortised cost and
+bonds payable were classified as Level 3.
+Notes to the Consolidated Financial Statements
+As at 31
+December 2015
+174
+1,032
+1,420
+39
+50
+65
+For the year ended 31 December 2015
+87
+37
+908
+1,246
+RMB million
+RMB million
+As at 31
+December 2014
+20
+169
+395,341
+121,381
+(9,636)
+- Cash paid for prior year claims
+(6,865)
+(4,557)
+Claims incurred
+- Claims arising in current year
+20,497
+16,499
+669
+355
+- Claims arising in prior years
+Total as at 31 December - Gross
+Notified claims
+Incurred but not reported
+Total as at 31 December - Gross
+The table below presents movements in unearned premium reserves:
+9,268
+Gross
+Net
+Ceded
+Gross
+2014
+RMB million
+RMB million
+(12,349)
+2015
+9,268
+5,181
+7,520
+2,135
+1,748
+7,316
+7,316
+Cash paid for current year claims
+Cash paid for claims settled
+4,655
+China Life Insurance Company Limited Annual Report 2015
+14
+1,602,434
+1,714,602
+7,165
+7,857
+Notes to the Consolidated Financial Statements
+7,277
+1,587,992
+1,697,527
+176
+Total, net
+- Unearned premiums
+Total
+9,218
+Ceded
+For the year ended 31 December 2015
+(c)
+7,316
+Total as at 1 January – Gross
+3,820
+5,181
+835
+2,135
+INSURANCE CONTRACTS (continued)
+RMB million
+2014
+2015
+Incurred but not reported
+Notified claims
+The table below presents movements in claims and claim adjustment expense reserve:
+Movements in liabilities of short-term insurance contracts
+RMB million
+Net
+As at 1 January
+7,230
+1,482,946
+1,588,900
+331,582
+(300,990)
+RMB million
+2014
+2015
+RMB million
+As at 31 December
+304,677
+Other movements
+– Change in discount rates
+Change in assumptions
+Accretion of interest
+Release of liabilities (i)
+Premiums
+As at 1 January
+- Change in other assumptions (ii)
+The table below presents movements in the liabilities of long-term insurance contracts:
+(265,137)
+69,214
+178
+For the year ended 31 December 2014, the change in other assumptions was mainly caused by
+the change in morbidity rate assumptions of certain products, which increased insurance contract
+liabilities by RMB441 million. This change reflected the Group's most recent experience and future
+expectations about morbidity rate as at the reporting date. Changes in assumptions other than
+morbidity rates decreased insurance contract liabilities by RMB21 million.
+For the year ended 31 December 2015, the change in other assumptions was mainly caused by
+the change in morbidity rate assumptions of certain products, which increased insurance contract
+liabilities by RMB980 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 RMB7 million.
+(ii)
+The release of liabilities mainly consists of release due to death or other termination and related
+expenses, release of residual margin and change of reserves for claims and claim adjustment expenses.
+(i)
+68,741
+1,588,900
+1,379
+1,043
+420
+987
+(4,599)
+8,510
+1,698,773
+Short-term insurance contracts
+(d) Movements in liabilities of long-term insurance contracts
+14
+(7,230)
+Release
+7,165
+(65)
+7,230
+7,857
+65
+(87)
+Increase
+6,775
+(121)
+6,896
+7,165
+(65)
+7,944
+INSURANCE CONTRACTS (continued)
+(7,165)
+121
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+177
+(6,896)
+7,165
+7,230
+7,857
+(87)
+7,944
+As at 31 December
+(6,775)
+(65)
+Long-term insurance contracts
+- Claims and claim adjustment expenses
+(1,012)
+401,899
+348,944
+359,611
+260
+46,137
+42,022
+266
+RMB million
+As at 31
+December 2014
+December 2015
+RMB million
+As at 31
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+Subtotal
+Unlisted
+Listed in Singapore
+Listed in mainland, PRC
+Net
+4.80%-5.00%
+4.80%-5.00%
+As at 31 December 2014
+As at 31 December 2015
+Discount rate assumptions
+In developing discount rate assumptions, the Group considers investment experience, the current
+investment portfolio and trend of the relevant yield curves. The discount rates reflect the future
+economic outlook as well as the Group's investment strategy. The assumed discount rates with risk
+margin for the past two years are as follows:
+395,341
+reserves.
+(i)
+(a) Process used to decide on assumptions
+9
+FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities (continued)
+Debt securities
+For the insurance contracts of which future insurance benefits are affected by investment yields of
+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
+Equity securities
+Listed in mainland, PRC
+85,658
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+Within one year
+32,598
+13,939
+Maturing:
+After one year but within five years
+139,737
+After five years but within ten years
+112,419
+120,284
+After ten years
+121,016
+135,866
+Discount rate assumptions
+Debt securities - Contractual maturity schedule
+607,531
+71,553
+Listed in Hong Kong, PRC
+8,391
+8,303
+Listed in Singapore
+172
+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.
+Unlisted
+132,334
+Subtotal
+Total
+368,617
+212,190
+770,516
+274,396
+As at 31 December 2015
+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 discount rates with
+risk margin for the past two years are as follows:
+3.42%-5.78%
+3.52%-5.96%
+9,268
+1,588,900
+1,698,773
+As at 31
+December 2014
+RMB million
+As at 31
+December 2015
+RMB million
+Total, gross
+7,316
+- Unearned premiums
+Short-term insurance contracts
+Long-term insurance contracts
+Gross
+(b) Net liabilities of insurance contracts
+As at 31 December 2014
+(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 flow. When determining risk margin, the Group considers historical
+experience, future expectations and other factors. The Group determines risk margin level by itself as
+the regulations have not imposed any specific requirement on it.
+- Claims and claim adjustment expenses
+(a) Process used to decide on assumptions (continued)
+7,944
+1,715,985
+(1,383)
+Total, ceded
+(65)
+(87)
+- Unearned premiums (Note 12)
+(39)
+7,230
+(50)
+Short-term insurance contracts
+(908)
+(1,246)
+Long-term insurance contracts (Note 12)
+Recoverable from reinsurers
+1,603,446
+- Claims and claim adjustment expenses (Note 12)
+INSURANCE CONTRACTS (continued)
+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.
+ended 31 December 2015
+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.
+174
+14
+INSURANCE CONTRACTS (continued)
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+(a) Process used to decide on assumptions (continued)
+(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 by age of the insured and contract
+type.
+(iii)
+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.
+14
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+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 considers risk
+margin for expense assumptions based on information obtained at the end of each reporting period.
+Components of expense assumptions include cost per policy and percentage of premium as follows:
+Individual Life
+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. First,
+wide-ranging lifestyle changes could result in future deterioration in morbidity experience. Second,
+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.
+As at 31 December 2015
+As at 31 December 2014
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+RMB Per Policy
+175
+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.
+0.85%-0.90%
+0.85%-0.90%
+% of Premium
+RMB Per Policy
+% of Premium
+Group Life
+37.00-45.00
+37.00-45.00
+15.00
+14.00
+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 RMB32,638 million (2014: RMB28,271 million).
+(19,375)
+EARNINGS PER SHARE
+The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC
+(2014: 25%) is as follows:
+188
+(16,953)
+There is no difference between basic and diluted earnings per share. The basic and diluted earnings per share for
+the year ended 31 December 2015 are based on the net profit for the year attributable to ordinary equity holders
+of the Company and the weighted average number of 28,264,705,000 ordinary shares (2014: 28,264,705,000
+ordinary shares).
+Net deferred tax liabilities
+7,888
+(29,120)
+Subtotal
+Reversal of impairment
+Realised gains
+Debt securities
+NET REALISED GAINS ON FINANCIAL ASSETS
+22
+For the year ended 31 December 2015, the interest income included in investment income was RMB88,306
+million (2014: RMB88,984 million). All interest income was accrued using the effective interest method.
+93,548
+97,582
+114
+89
+299
+368
+8,138
+11,115
+34,934
+32,285
+106
+326
+4,458
+8,950
+1,571
+1,382
+18,571
+18,526
+25,357
+24,541
+RMB million
+RMB million
+Equity securities
+2014
+Realised gains
+Subtotal
+23
+During the year ended 31 December 2015, the Group recognised an impairment charge of RMB147 million
+(2014: RMB146 million) of available-for-sale funds, an impairment charge of RMB174 million (2014: RMB1,003
+million) of available-for-sale common stocks, and no impairment charge (2014: Nil) of other available-for-sale
+securities, for which the Group determined that objective evidence of impairment existed.
+22 NET REALISED GAINS ON FINANCIAL ASSETS (continued)
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+7,120
+32,297
+6,978
+32,301
+(1,149)
+(321)
+8,127
+32,622
+142
+(4)
+142
+(4)
+RMB million
+RMB million
+2014
+ended 31 December
+year
+2015
+For the
+183
+Net realised gains on financial assets are from available-for-sale securities.
+Total
+Impairment
+For the year ended 31 December
+2015
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+Payable to constructors
+1,025
+845
+Stock appreciation rights (Note 31)
+1,044
+1,045
+Interest payable of subordinated debts
+761
+1,117
+Agent deposits
+2,550
+Payable to third party holders of consolidated trust schemes
+1,919
+2,598
+Commission and brokerage payable
+4,589
+5,220
+Salary and welfare payable
+5,008
+6,410
+Interest payable to policyholders
+RMB million
+RMB million
+As at 31
+December 2014
+December 2015
+As at 31
+20
+OTHER LIABILITIES
+19
+634
+783
+Tax payable
+Others
+China Life Insurance Company Limited Annual Report 2015
+Total
+Others
+Securities purchased under agreements to resell
+Loans
+Bank deposits
+- at fair value through profit or loss
+- available-for-sale securities
+Equity securities
+- at fair value through profit or loss
+- available-for-sale securities
+-held-to-maturity securities
+Debt securities
+21 INVESTMENT INCOME
+NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+182
+20,062
+26,514
+20,062
+26,514
+20,062
+26,514
+STATUTORY INSURANCE FUND
+Total
+Current
+Non-current
+Total
+4,216
+5,584
+717
+511
+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 to the CIRC 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.
+Debt securities
+Equity securities
+Stock appreciation rights
+2014
+RMB million
+RMB million
+For the year ended 31 December
+2015
+4,726
+4,320
+59
+106
+1,234
+784
+3,433
+3,430
+RMB million
+RMB million
+2014
+ended 31 December
+year
+2015
+For the
+185
+Auditors' remuneration
+Foreign exchange gains
+Depreciation and amortisation
+Contribution to the defined contribution pension plan
+Housing benefits
+Employee salaries and welfare costs
+Profit before income tax is stated after charging/(crediting) the following:
+PROFIT BEFORE INCOME TAX
+Total
+for interest-bearing loans and borrowings
+Interest expenses
+13,045
+11,564
+824
+787
+10,744
+1,433
+(4,664)
+6,455
+15,408
+2014
+RMB million
+RMB million
+year ended 31 December
+2015
+For the
+Taxation charges
+Deferred taxation
+Current taxation - Enterprise income tax
+(b)
+(a) The amount of taxation charged to net profit represents:
+Interest expenses for securities sold under agreements to repurchase
+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.
+28
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+55
+60
+(268)
+(812)
+2,124
+2,036
+1,553
+1,678
+TAXATION
+ended 31 December 2015
+Interest expenses for bonds payable
+FINANCE COSTS
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+221,701
+(248)
+221,949
+Life insurance death and other benefits
+For the year ended 31 December 2015
+RMB million
+RMB million
+RMB million
+Net
+Ceded
+Gross
+5,808
+10,209
+(1,186)
+(61)
+(255)
+180
+4,977
+9,324
+2,272
+766
+year ended 31 December
+2015
+2014
+RMB million
+RMB million
+For the
+INSURANCE BENEFITS AND CLAIMS EXPENSES
+24
+Total
+Financial liabilities at fair value through profit or loss
+21,166
+(157)
+21,009
+109,847
+26
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+25 INVESTMENT CONTRACT BENEFITS
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+(25,621)
+315,294
+(368)
+315,662
+Total
+105,883
+(62)
+105,945
+27
+Increase in insurance contract liabilities
+(102)
+16,854
+Accident and health claims and claim adjustment expenses
+192,659
+(204)
+192,863
+Life insurance death and other benefits
+For the year ended 31 December 2014
+352,219
+(743)
+352,962
+Total
+109,509
+(338)
+Profit before income tax
+year
+184
+Notes to the Consolidated Financial Statements
+Investments
+Others
+RMB million
+RMB million
+RMB million
+Total
+RMB million
+(i)
+(ii)
+(iii)
+(11,627)
+5,627
+1,081
+(4,919)
+552
+(1,940)
+(45)
+(1,433)
+(15,805)
+2,759
+23
+(15,805)
+2,759
+23
+As at 31 December 2014
+(8,316)
+(12,095)
+1,036
+(19,375)
+As at 1 January 2015
+Insurance
+- Others
+attributable to participating
+policyholders
+available-for-sale securities
+10,101
+(3,324)
+(3,434)
+2,655
+1,190
+(41)
+1
+19
+(30)
+12
+Income tax at the effective tax rate
+10,744
+7,888
+(i)
+(8,316)
+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
+commission, brokerage, donation and other expenses that do not meet the criteria for deduction
+according to the relevant tax regulations.
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+TAXATION (continued)
+28
+(c)
+As at 31 December 2015 and 2014, deferred income tax was calculated in full on temporary differences
+under the liability method using a principal tax rate of 25%. The movements in deferred tax assets and
+liabilities during the year are as follows:
+Deferred tax assets/(liabilities)
+As at 1 January 2014
+(Charged)/credited to net profit
+(Charged)/credited to other
+comprehensive income
+- Available-for-sale securities
+- Portion of fair value changes on
+186
+11,483
+(12,095)
+(19,375)
+28
+29
+30
+TAXATION (continued)
+(c) The movements in deferred tax assets and liabilities during the year are as follows: (continued)
+Unrecognised deductible tax losses of the Group amounted to RMB727 million as at 31 December 2015
+(as at 31 December 2014: RMB879 million). Unrecognised deductible temporary differences of the Group
+amounted to RMB186 million as at 31 December 2015 (as at 31 December 2014: RMB166 million).
+(d)
+The analysis of 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
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+9,528
+4,219
+2,639
+2,027
+12,167
+6,246
+Deferred tax liabilities:
+- deferred tax liabilities to be settled after 12 months
+(26,850)
+(24,130)
+- deferred tax liabilities to be settled within 12 months
+(2,270)
+(1,491)
+For the
+Subtotal
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+(Charged)/credited to net profit
+3,673
+843
+148
+4,664
+(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 2015
+(5,445)
+1,036
+3,192
+(1,451)
+(16,686)
+1,184
+(5,445)
+3,192
+11
+(16,953)
+(i)
+(ii)
+(iii)
+The deferred tax arising from the insurance category is 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.
+The deferred tax arising from the investments category is mainly related to the temporary differences
+of unrealised gains/(losses), which includes available-for-sale securities, securities at fair value through
+profit or loss, and others.
+The deferred tax arising from the others category is mainly related to the temporary differences of
+employee salaries and welfare costs payable.
+187
+China Life Insurance Company Limited Annual Report 2015
+11
+40,402
+16,752
+2014
+RMB million
+The Company issued the above three subordinated bonds with a maturity term of 10 years to qualified investors
+who met the relevant regulatory requirements. The coupon rates per annum for the first 5 years are 5.50%, 4.70%,
+4.58%, respectively, for bonds issued on 26 October 2011, 29 June 2012 and 5 November 2012. The Company
+has the right to call the subordinated bonds at par at the end of the fifth year after issuance. If the Company
+does not exercise the call option, the coupon rate per annum for the remaining 5 years will be raised by 200 basis
+points.
+68,000
+68,000
+Total
+10,000
+10,000
+4.58%
+5 November 2022
+5 November 2012
+28,000
+28,000
+4.70%
+29 June 2022
+30,000
+30,000
+5.50%
+26 October 2021
+26 October 2011
+29 June 2012
+RMB million
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+Interest rate p.a.
+Maturity date
+Issue date
+Par Value
+As at 31 December 2015, all bonds payable were subordinated bonds with a total carrying value of RMB67,994
+million (as at 31 December 2014: RMB67,989 million) and the par value of RMB68,000 million (as at 31
+December 2014: RMB68,000 million).
+BONDS PAYABLE
+17
+Subordinated bonds are measured at amortised cost as described in Note 2.14.
+180
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+45,931
+181
+China Life Insurance Company Limited Annual Report 2015
+transaction.
+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
+2015, the carrying value of securities deposited in the collateral pool was RMB67,169 million (as at 31 December
+2014: RMB49,963 million). The collateral is restricted from trading during the period of the repurchase
+As at 31 December 2015, bonds with a carrying value of RMB28,802 million (as at 31 December 2014:
+RMB42,177 million) were pledged as collateral for financial assets sold under agreements to repurchase resulting
+from repurchase transactions entered into the Group in the interbank market.
+46,089
+31,354
+3,000
+118
+42,971
+31,354
+46,089
+31,354
+2,623
+4,612
+41,477
+27,922
+As at 31
+December 2014
+RMB million
+As at 31
+Total
+After 90 days
+After 30 but within 90 days
+Within 30 days
+Maturing:
+Total
+Stock exchange market
+Interbank market
+18 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+For the year ended 31 December 2015
+3,432
+2,643
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+50,295
+As at 31
+December 2014
+RMB million
+RMB million
+As at 31
+December 2015
+For the year ended 31 December 2015
+179
+As at 31 December
+Interest credited
+Policy fees deducted from account balances
+Deposits withdrawn, payments on death and other benefits
+Deposits received
+As at 1 January
+The table below presents movements of investment contracts with DPF:
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+Total
+- At fair value through profit or loss
+- At amortised cost
+Investment contracts with DPF at amortised cost
+15 INVESTMENT CONTRACTS
+Tax computed at the statutory tax rate
+Non-taxable income (i)
+Expenses not deductible for tax purposes (i)
+Tax losses utilised from previous periods
+Unused tax losses
+Others
+For the year ended 31 December
+3.54%
+RMB million
+2015
+47,962
+33,797
+Investment contracts without DPF
+14
+17 June 2019
+Interest rate
+As at 31
+December 2015
+RMB million
+24,292
+Guaranteed loans
+Maturity date
+16 INTEREST-BEARING LOANS AND BORROWINGS
+ended 31 December 2015
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+47,962
+50,295
+1,288
+1,164
+year
+(34)
+(33)
+84,106
+21
+2014
+RMB million
+2015
+47,962
+RMB million
+46,555
+3,746
+3,486
+(2,543)
+(3,334)
+72,275
+Single
+11,888
+12,049
+First-year regular
+77
+161
+13,403
+13
+281
+150
+Total
+13
+363,971
+331,010
+China Life Insurance Company Limited Annual Report 2015
+13,480
+Management Discussion and Analysis
+Gross written premiums categorized by channel:
+Renewal business
+First-year business
+24,435
+13,761
+41,340
+For the year ended 31 December
+Renewal business
+173,720
+174,273
+Health Insurance Business
+42,041
+33,192
+First-year business
+12,199
+19,525
+18,993
+14,459
+First-year regular
+5,442
+5,066
+Renewal business
+17,606
+13,667
+Accident Insurance Business
+Single
+2015
+111
+2014
+3,372
+2,878
+First-year regular
+199
+Renewal business
+553
+506
+Short-term insurance business
+15,983
+Single
+13,945
+106,028
+99,825
+First-year business of long-term insurance
+87,222
+77,881
+73,508
+65,918
+First-year regular
+56,381
+Bancassurance Channel
+2,989
+3,571
+First-year business of long-term insurance
+Exclusive Individual Agent Channel
+225,957
+205,417
+First-year business of long-term insurance
+47,974
+34,455
+Single
+495
+335
+First-year regular
+47,479
+34,120
+Renewal business
+171,632
+165,131
+Short-term insurance business
+6,351
+5,831
+Group Insurance Channel
+20,107
+17,440
+RMB million
+First-year regular
+Business tax and extra charges for
+investment) ((Investment assets at the beginning of the period + Investment assets at the end of the period) / 2)
+Gross investment yield including net share of profit of associates and joint ventures = (Investment income + Net realised gains/
+(losses) on financial assets + Net fair value gains/(losses) through profit or loss + Total income from investment properties
+Business tax and extra charges for investment + Net share of profit of associates and joint ventures) / ((Investment assets at the
+beginning of the period + Investments in associates and joint ventures at the beginning of the period + Investment assets at the
+end of the period + Investments in associates and joint ventures at the end of the period) / 2)
+Comprehensive investment yield
+78,068
+=
+8
+9
+(Investment income + Net income from investment properties
+-
+-
+13,714
+=
+(Investment income + Net realised gains/(losses) on financial assets + Net fair value gains/
+(losses) through profit or loss + Current net fair value changes of available-for-sale securities recognized in other comprehensive
+income + Total income from investment properties – Business tax and extra charges for investment) / ((Investment assets at the
+beginning of the period + Investment assets at the end of the period) / 2)
+7 Net investment yield
+11
+The Company fully completed the promotion of comprehensive counter service system, with one-stop services
+becoming available at 2,578 counters nationwide. To improve customer experience, the Company launched global
+emergency services and VIP services for all long-term policy holders, which covered multi-layer and various classes
+of global emergency services, health consultation and VIP care services. The Company continued to support
+children education and development and participate in public welfare undertakings, and held painting and
+drawing events for children across China for five consecutive years. The Company also cared about physical and
+mental health of customers, and actively held various customer activities, such as sports events and lectures, etc.
+The results of customer satisfaction and customer loyalty were increased by 1.2% and 4.8% year-on-year, reaching
+a record high.
+The Company continuously complied with Section 404 of the U.S. Sarbanes-Oxley Act. Meanwhile, it
+implemented procedures for the compliance with standard systems of corporate internal control by following
+the "Standard Regulations on Corporate Internal Control" and the "Implementation Guidelines for Corporate
+Internal Control" jointly issued by five PRC ministries including the Ministry of Finance, etc, and the "Basic
+Standards of Internal Control for Insurance Companies” issued by the CIRC. In addition, the Company updated
+and benchmarked its internal control system to the “Internal Control-Integrated Framework (2013)” issued by
+the U.S. Committee of Sponsoring Organizations (COSO). In accordance with the CIRC's requirements on the
+commissioning in the C-ROSS transition period, the Company launched programs to build up its solvency risk
+management system, fully benchmarked itself to the regulatory rules, strengthened the soundness, compliance
+and validity of its risk management system, and optimized the formation and transmission mechanisms of
+risk preference. The Company complied with the “Guidelines for the Implementation of Comprehensive Risk
+Management of Life Insurance Companies" issued by the CIRC, continued the work in relation to risk alert
+classification management, and created a monitoring system on key risks and explored a remote and vertical
+monitoring mode based on its information system. The Company also took the opportunity of the CIRC's special
+inspection, namely “two strengthens and two containments”, to identify internal control problems and make
+effective adjustments. All the above measures helped to improve the Company's risk management framework,
+secure the risk bottom line and optimize the internal control process, which enhanced the Company's capability in
+risk management.
+II ANALYSIS OF MAJOR ITEMS OF CONSOLIDATED STATEMENT OF COMPREHENSIVE
+INCOME
+(1) Total Revenues
+For the year ended 31 December
+RMB million
+2015
+2014
+Net premiums earned
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+Life insurance business
+Including debt investment plans, equity investment plans, trust schemes, project asset-backed plans, asset-backed securities and
+specialized asset management plans, etc.
+5 Exclusive of currency fund.
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+I
+From left to right:
+Mr. Zheng Yong, Mr. Yang Zheng, Mr. Xu Haifeng, Mr. Lin Dairen, Mr. Xu Hengping, Mr. Li Mingguang,
+Mr. Xiao Jianyou
+BUSINESS OVERVIEW OF 2015
+In 2015, the Company achieved a fast growth of its business and maintained its leading position in the market,
+with its business structure continuously optimized and the operating results noticeably improved. During the
+Reporting Period, the Company's net premiums earned was RMB362,301 million, an increase of 9.8% from 2014,
+with RMB308,081 million from life insurance business, increased by 7.9% from 2014, RMB40,855 million from
+health insurance business, increased by 25.2% from 2014, RMB13,365 million from accident insurance business,
+increased by 12.2% from 2014; first-year premiums for policies with insurance duration of more than one year
+increased by 20.1% from 2014, first-year regular premiums increased by 32.9% from 2014, and the percentage
+of first-year regular premiums in first-year premiums for policies with insurance duration of more than one year
+increased to 44.22% in 2015 from 39.94% in 2014; first-year regular premiums with 10 years or longer payment
+duration increased by 25.4% from 2014, and the percentage of first-year regular premiums with 10 years or longer
+payment duration in first-year regular premiums was 52.20%; renewal premiums increased by 1.9% from 2014,
+and the percentage of renewal premiums in gross written premiums was 52.64%. As at 31 December 2015, the
+number of in-force policies increased by 9.6% from the end of 2014; the Policy Persistency Rate (14 months and
+26 months)³ reached 90.00% and 85.50%, respectively; and the Surrender Rate* was 5.55%, a 0.09 percentage
+point increase from 2014.
+3
+The Persistency Rate for long-term individual 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.
+Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premium of
+long-term insurance contracts)
+6
+9
+With respect to the exclusive individual agent channel, the Company has achieved a relatively rapid increase in
+business scale and a remarkable increase in business value based on the continued business structure optimization.
+During the Reporting Period, gross written premiums from the exclusive individual agent channel increased by
+10.0% year-on-year; first-year regular premiums increased by 39.2% year-on-year; the percentage of first-year
+regular premiums in first-year premiums was 98.97%; first-year regular premiums with 10 years or longer payment
+duration increased by 24.5% year-on-year; the percentages of first-year regular premiums with 5 years or longer
+payment duration and first-year regular premiums with 10 years or longer payment duration in gross first-year
+regular premiums were 90.50% and 61.15%, respectively; and renewal premiums increased by 3.9% year-on-
+year and the percentage of renewal premiums in gross written premiums of the exclusive individual agent channel
+was 75.96%. The Company has made significant achievements in its persistent implementation of the “effective
+expansion" strategy for team building. As at the end of the Reporting Period, the Company had a total of 979,000
+exclusive individual agents which increased by 31.7% from the end of 2014. The Company continued to promote
+the professional development for the exclusive individual agent channel, and its sustainable development capacities
+have been enhanced remarkably.
+With respect to the group insurance channel, businesses maintained a steady growth. During the Reporting Period,
+gross written premiums from the group insurance channel increased by 15.3% year-on-year; short-term insurance
+premiums increased by 14.6% year-on-year and short-term accident insurance premiums increased by 12.5% year-
+on-year. The group insurance channel actively provided services for economic and social development, effectively
+pushed forward the development of micro-insurance business, insurance for college-graduate village officials, birth
+planning insurance, accident insurance for senior citizens and new village cooperative supplementary accident
+insurance, etc. The Company also actively developed the medical insurance business in the high-end market, and
+further operated the multinational co-insurance business and the international insurance business such as the travel
+insurance for Sino-Russian tourism. As at the end of the Reporting Period, the Company had a total of 45,000
+group insurance sales representatives in the group insurance channel.
+With respect to the bancassurance channel, the Company actively responded to new challenges from market
+competition by rapidly expanding the sales team, deepening cooperation between different sales channels and
+strengthening sales support, enhancing the fundamental management and promoting business development.
+While maintaining the business scale as well as the steady growth of regular premiums, the Company made great
+efforts in developing businesses with medium- to long-term regular premiums (particularly the regular premiums
+with 10 years or longer payment duration) and achieved remarkable results in its channel transformation. During
+the Reporting Period, gross written premiums from the bancassurance channel increased by 6.2% year-on-year,
+first-year premiums for policies with insurance duration of more than one year increased by 12.0% year-on-year,
+first-year regular premiums increased by 14.6% year-on-year, and first-year regular premiums with 10 years or
+longer payment duration increased by 35.9% year-on-year. As at the end of the Reporting Period, the number of
+intermediary bancassurance outlets was 56,000, with a total of 131,000 sales representatives which increased by
+84.5% from the end of 2014.
+In 2015, the Company improved its asset allocation capacity representing the core value and operation
+characteristics of life insurance, made continuous efforts in diversifying its investment products, channels and
+regions, and gradually formed a management structure, which was based on a strategic asset allocation, and relied
+on diversified and market-oriented investments with the entrustors' active allocation and arrangement as well as
+the organization and implementation by the investment managers. In terms of investment portfolios, in regard
+to the falling interest rates, an unsteadily increasing bond market and the narrowed credit spread, the Company
+actively responded to the fixed income investment environment by increasing its allocation in transactional bonds
+and other financial products. Meanwhile, in view of the increasing fluctuations and distinct divisions of the stock
+10
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+market, the Company highly boosted market operations with the advantage of a market-oriented agency, and
+actively promoted allocation globally and made investments in sophisticated markets and high-quality assets while
+considering the prospective movement of exchange rate. As at the end of the Reporting Period, the Company's
+investment assets reached RMB2,287,639 million, an increase of 8.9% from the end of 2014. Among the major
+types of investments, the percentage of bonds was 43.55%, the percentage of term deposits was 24.59%, the
+percentage of stocks and funds³ was 9.34%, and the percentage of financial assets, such as the debt investment
+plans, equity investment plans and trust schemes etc., was 5.26%. During the Reporting Period, interest and
+dividend income increased steadily, and net investment yield was 4.30%. Spread income increased significantly,
+the
+investment yield was 6.24%, and the gross investment yield including net share of profit of associates
+and joint ventures³ was 6.20%. The comprehensive investment yield taking into account the current net fair value
+changes of available-for-sale financial assets recognized in other comprehensive income was 7.23%.
+gross
+In 2015, the Company further implemented the “innovation-driven development strategy". On the basis of
+further optimizing and improving its IT governance structure, the Company initiated the construction of the
+"new generation" comprehensive business processing system which featured as customer oriented, Internet-
+based, responsive and reliable. The Company fully promoted Cloud Assistant, Cloud Signage, Cloud Desktop
+and Total Internet Connection in order to speed up its mobile Internet-based operation. The Company stepped
+up the efforts in product innovation, further optimized its product development mechanism, and introduced
+several new products aimed at specific market segments and meeting customers' emerging demands. The Company
+innovated a new mobile Internet-based sales model, which enabled a whole electronic process from product
+advertising, purchase, premium payment to policy generation. The Company further promoted the application
+of E-China Life and E-Store across sales channels, effectively promoting the sales of its major products. The
+Company reinforced the innovation of operation and services by launching E-customer Service with Internet
+services and mobile app services as its core, marking a new beginning of the Company's “Internet plus" service.
+The nationwide promotion of "Counter Pass" system provided "four-pass" services of policy enquiry, claim
+acceptance, settlement and payment across provinces without geographical restrictions. The Company put more
+efforts in promoting centralized operation and realized centralized underwriting and claim assessment across eight
+provinces and municipalities, which accumulated precious experiences for the implementation of the Company's
+"Rui Operation" strategy. With automation rate of insurance underwriting and preservation reaching 74% and
+81%, respectively, and the launch of a smart claim settlement platform, a pilot program of quick claim settlement
+and direct payment at hospitals, the Company's operational productivity and efficiency was further improved.
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+Health insurance business
+362,301
+330,105
+1.
+Life Insurance Business
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+During the Reporting Period, net premiums earned from life insurance business increased by 7.9%
+year-on-year. This was primarily due to an increase in the first-year premiums for policies with
+insurance duration of more than one year resulting from the Company's enhanced efforts in team
+building and business development.
+Health Insurance Business
+During the Reporting Period, net premiums earned from health insurance business increased by
+25.2% year-on-year. This was primarily due to the Company's enhanced efforts in developing health
+insurance business.
+3. Accident Insurance Business
+During the Reporting Period, net premiums earned from accident insurance business increased by
+12.2% year-on-year. This was primarily due to the Company's continuous efforts in developing
+accident insurance business.
+Gross written premiums categorized by business:
+Net Premiums Earned
+For the year ended 31 December
+2015
+2014
+Life Insurance Business
+First-year business
+308,169
+285,619
+134,449
+111,346
+Single
+RMB million
+2.
+440,766
+507,449
+308,081
+285,574
+40,855
+32,624
+Accident insurance business
+13,365
+11,907
+Investment income
+97,582
+93,548
+Net realised gains on financial assets
+32,297
+7,120
+Net fair value gains through profit or loss
+10,209
+5,808
+Other income
+5,060
+4,185
+Total
+12
+70,006
+11,963
+4
+18,558
+Total
+16
+463,492
+404,275
+Insurance Benefits and Claims Expenses
+1
+Life Insurance Business
+Management Discussion and Analysis
+2
+701
+3
+Health Insurance Business
+During the Reporting Period, insurance benefits and claims expenses attributable to health insurance
+business increased by 53.3% year-on-year. This was primarily due to an increase in the scale of health
+insurance business and the update of actuarial assumptions, such as discount rate assumption of
+reserves of traditional insurance contracts.
+Accident Insurance Business
+During the Reporting Period, insurance benefits and claims expenses attributable to accident
+insurance business increased by 5.4% year-on-year. This was primarily due to an increase in the scale
+of accident insurance business.
+Investment Contract Benefits
+During the Reporting Period, investment contract benefits increased by 15.6% year-on-year. This was
+primarily due to an increase in the scale of investment contracts.
+Policyholder Dividends Resulting from Participation in Profits
+During the Reporting Period, policyholder dividends resulting from participation in profits increased by
+34.7% year-on-year. This was primarily due to an increase in investment yields of the participating products.
+Underwriting and Policy Acquisition Costs
+During the Reporting Period, insurance benefits and claims expenses attributable to life insurance
+business increased by 8.6% year-on-year. This was primarily due to an increase in the scale of life
+insurance business.
+During the Reporting Period, underwriting and policy acquisition costs increased by 31.0% year-on-year.
+This was primarily due to an increase in underwriting costs for first-year regular premium business resulting
+from the growth of the Company's business and the optimization of its business structure.
+743
+7,428
+Accident insurance business
+4,209
+3,992
+Investment contract benefits
+2,264
+1,958
+Policyholder dividends resulting from participation in profits
+33,491
+24,866
+4,151
+Underwriting and policy acquisition costs
+27,147
+Finance costs
+4,320
+4,726
+Administrative expenses
+27,458
+25,432
+Other expenses
+Statutory insurance fund contribution
+35,569
+22,434
+Finance Costs
+Administrative Expenses
+1,753
+1,546
+2,700
+4,953
+45,931
+40,402
+During the Reporting Period, profit before income tax in life insurance business increased by 33.5%
+year-on-year. This was primarily due to the growth of business and an increase in income from
+investments as compared to the corresponding period of 2014.
+Health Insurance Business
+During the Reporting Period, profit before income tax in health insurance business decreased by
+82.9% year-on-year. This was primarily due to the update of actuarial assumptions, such as discount
+rate assumption of reserves of traditional insurance contracts, which partially reduced the profit for the
+period.
+3,252
+3
+During the Reporting Period, profit before income tax in accident insurance business increased by
+13.4% year-on-year. This was primarily due to an increase in the scale of accident insurance business
+as compared to the corresponding period of 2014.
+4
+Other Business
+During the Reporting Period, profit before income tax in other business decreased by 45.5% year-
+on-year. This was primarily due to a decrease in net profits of associates and the impairment of
+investments in associates.
+(4) Income Tax
+During the Reporting Period, income tax of the Company was RMB10,744 million, a 36.2% increase year-
+on-year. This was primarily due to an increase in profit before income tax.
+(5) Net Profit
+During the Reporting Period, net profit attributable to equity holders of the Company was RMB34,699
+million, a 7.7% increase year-on-year. This was mainly attributable to factors such as the increase in
+investment income. However, update of actuarial assumptions, such as discount rate assumption of reserves
+of traditional insurance contracts, partially reduced the profit for the period.
+18
+Accident Insurance Business
+During the Reporting Period, finance costs decreased by 8.6% year-on-year. This was primarily due to a
+decrease in interest payments for securities sold under agreements to repurchase.
+557
+40,921
+During the Reporting Period, administrative expenses increased by 8.0% year-on-year. This was primarily
+due to the Company's increased investment in team building for the purpose of enhancing its sustainable
+development capacity.
+Other Expenses
+During the Reporting Period, other expenses increased by 78.9% year-on-year. This was primarily due to
+an increase in business taxes and surcharges expenses resulting from an increase in taxable income from
+investments.
+17
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+(3) Profit before Income Tax
+For the year ended 31 December
+30,651
+Life insurance business
+Accident insurance business
+Other business
+Total
+1
+Life Insurance Business
+2
+RMB million
+2015
+2014
+Health insurance business
+34,398
+288,868
+313,612
+1.
+2.
+363,971
+331,010
+Other channels mainly include supplementary major medical insurance business, telephone sales, etc.
+The Company's channel premium breakdown was presented based on the separate groups of sales personnels
+including exclusive individual agent team, direct sales representatives, bancassurance sales team, and other
+distribution channels.
+14
+Investment Income
+For the year ended 31 December
+Notes:
+China Life Insurance Company Limited Annual Report 2015
+RMB million
+2015
+2014
+Investment income from securities at fair value through profit or loss
+1,708
+1,677
+Investment income from available-for-sale securities
+27,476
+23,029
+Management Discussion and Analysis
+Investment income from held-to-maturity securities
+Total
+9,806
+21,815
+Short-term insurance business
+248
+129
+Other Channels¹
+11,879
+8,328
+First-year business of long-term insurance
+1,209
+6,428
+1,262
+701
+889
+First-year regular
+508
+373
+Renewal business
+864
+638
+Short-term insurance business
+Single
+24,541
+25,357
+Investment income from bank deposits
+15
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+Net Realised Gains on Financial Assets
+During the Reporting Period, net realised gains on financial assets increased by 353.6% year-on-year. This
+was primarily due to a significant increase in the spread income of available-for-sale stocks and funds.
+Net Fair Value Gains through Profit or Loss
+During the Reporting Period, net fair value gains through profit or loss increased by 75.8% year-on-year.
+This was primarily due to a significant increase in the spread income of stocks at fair value through profit of
+loss.
+Other Income
+During the Reporting Period, other income increased by 20.9% year-on-year. This was primarily due to
+an increase in the commission fees earned from CLP&C resulting from the Company's increased efforts in
+promoting its interactive business.
+During the Reporting Period, investment income from loans increased by 36.6% year-on-year. This
+was primarily due to an increase in the scale of policy loans and trust schemes, etc.
+(2)
+For the year ended 31 December
+RMB million
+2015
+2014
+Insurance benefits and claims expenses
+Life insurance business
+Health insurance business
+352,219
+315,294
+Benefits, Claims and Expenses
+Investment Income from Loans
+During the Reporting Period, investment income from bank deposits decreased by 7.6% year-on-year.
+This was primarily due to a decrease in the allocation of negotiated deposits and the investment yield
+of newly increased allocation under the low interest rate environment.
+Investment Income from Bank Deposits
+Investment income from loans
+Other investment income
+32,285
+34,934
+11,115
+8,138
+457
+413
+Total
+97,582
+93,548
+1
+2
+3
+5
+Investment Income from Securities at Fair Value through Profit or Loss
+During the Reporting Period, investment income from securities at fair value through profit or loss
+increased by 1.8% year-on-year. This was primarily due to an increase in dividend income from stocks
+at fair value through profit or loss.
+Investment Income from Available-for-Sale Securities
+During the Reporting Period, investment income from available-for-sale securities increased by 19.3%
+year-on-year. This was primarily due to an increase in dividend income from available-for-sale funds,
+wealth management products and other equity investments.
+Investment Income from Held-to-Maturity Securities
+During the Reporting Period, investment income from held-to-maturity securities decreased by 3.2%
+year-on-year. This was primarily due to a decrease in the allocation of treasury bonds.
+Renewal business
+China Life Insurance Company Limited Annual Report 2015
+Single
+A pension fund jointly set up by the Company and
+others
+68.37%
+CLIC
+RMB19,324
+Subsidiaries
+As at 31 December 2014
+Amount
+million
+Percentage
+of holding
+Increase
+million
+Decrease
+million
+Amount
+million
+As at 31 December 2015
+Percentage
+of holding
+AMC
+RMB1,680
+60.00%
+RMB1,680
+60.00%
+directly
+directly
+Pension Company
+RMB2,746
+74.27%
+RMB2,746
+74.27%
+directly
+directly
+RMB19,324
+68.37%
+As at 31 December 2015
+Amount Percentage
+million
+of holding
+Decrease
+million
+6,800
+4,600
+4,000
+3,400
+300
+588
+200
+6,800
+(i)
+In December 2015, the Company completed a RMB500 million capital contribution to Suzhou
+Pension Company. After the contribution, the paid-in capital of Suzhou Pension Company increased
+from RMB300 million to RMB800 million. As at 31 December 2015, since the business registration
+modification procedure for Suzhou Pension Company was still in progress, the registered capital
+remained RMB300 million.
+191
+China Life Insurance Company Limited Annual Report 2015
+and indirectly
+Notes to the Consolidated Financial Statements
+year
+ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(c) Registered capital of related parties with control relationship and changes during the year
+(continued)
+(ii) AMC HK and Golden Phoenix Tree Limited were registered in Hong Kong, and King Phoenix Tree
+Limited was registered in the Jersey Island, so the legal definition of registered capital is not applicable
+for them.
+(d) Percentages of holding of related parties with control relationship and changes during the
+year
+Shareholder
+Amount
+million
+As at 31 December 2014
+Percentage
+of holding
+Increase
+million
+For the
+Rui Chong Company
+and indirectly
+HKD30
+King Phoenix Tree Limited
+100.00%
+100.00%
+indirectly
+indirectly
+Rui Chong Company
+RMB6,199
+RMB6,199
+100.00%
+directly
+192
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e)
+Transactions with significant related parties
+The following table summarises significant transactions carried out by the Group with its significant related
+parties:
+Notes
+For the year ended 31 December
+2015
+RMB million
+2014
+RMB million
+Transactions with CLIC and its subsidiaries
+Policy management fee received from CLIC
+(i)(viii)
+directly
+directly
+100.00%
+100.00%
+50.00%
+indirectly
+-- HKD30
+50.00%
+indirectly
+Suzhou Pension Company
+RMB300
+100.00%
+RMB800
+100.00%
+directly
+directly
+CL AMP
+AMC HK
+RMB500
+RMB500
+85.03%
+indirectly
+indirectly
+CL Wealth
+RMB200
+100.00%
+RMB200
+100.00%
+indirectly
+indirectly
+Golden Phoenix Tree Limited
+85.03%
+200
+CL Wealth
+588
+A subsidiary of the Company
+A subsidiary of the Company
+China Life (Suzhou) Pension and Retirement Investment
+Company Limited ("Suzhou Pension Company")
+Golden Phoenix Tree Limited
+Shanghai Rui Chong Investment Co., Limited
+("Rui Chong Company”) (i)
+AMC HK
+CL AMP
+King Phoenix Tree Limited
+China Life Wealth Management Co., Limited ("CL
+Wealth")
+Sino-Ocean
+A subsidiary of the Company
+A subsidiary of the Company
+A subsidiary of the Company
+An indirect subsidiary of the Company
+An indirect subsidiary of the Company
+An indirect subsidiary of the Company
+An indirect subsidiary of the Company
+An associate of the Company
+CGB
+CLP&C
+COFCO Futures
+Annoroad Technology
+10 Upper Bank Street SLP
+Sanya Company
+China Life Real Estate Co., Limited ("CLRE")
+China Life Insurance (Overseas) Company Limited ("CL
+Overseas")
+Immediate and ultimate holding company
+Relationship with the Company
+China Life Pension Company Limited ("Pension
+Company")
+AMC
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+31
+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. The exercise prices of stock appreciation rights were the average
+closing price of the shares in the five trading days prior to the date of the 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.
+32
+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.
+All the stock appreciation rights awarded were fully vested as at 31 December 2015. As at 31 December 2015,
+there were 55.01 million units outstanding and exercisable (as at 31 December 2014: 55.01 million). As at 31
+December 2015, the amount of intrinsic value for the vested stock appreciation rights was RMB832 million (as at
+31 December 2014: RMB1,012 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 25% to 45%, an expected dividend yield of
+no higher than 2% and a risk-free interest rate ranging from 0.05% to 0.25%.
+The Company recognised a gain of RMB180 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 2015
+(2014: fair value loss of RMB255 million). RMB832 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 2015 (as at 31 December 2014: RMB1,012 million and RMB13 million), respectively. There was
+no unrecognised compensation cost for the stock appreciation rights as at 31 December 2015 (as at 31 December
+2014: Nil).
+DIVIDENDS
+China Life Investment Holding Company Limited (“CLI”)
+China Life Ecommerce Company Limited (“CL
+Pursuant to the shareholders' approval at the Annual General Meeting on 28 May 2015, a final dividend of
+RMB0.40 (inclusive of tax) per ordinary share totalling RMB11,306 million in respect of the year ended 31
+December 2014 was declared and paid in 2015. The dividend has been recorded in the consolidated financial
+statements for the year ended 31 December 2015.
+Pursuant to a resolution passed at the meeting of the Board of Directors on 23 March 2016, a final dividend of
+RMB0.42 (inclusive of tax) per ordinary share totalling approximately RMB11,871 million for the year ended
+31 December 2015 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 2015.
+189
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS
+(a)
+Related parties
+The table below summarises the names of significant related parties and nature of relationship with the
+Company as at 31 December 2015:
+Significant related parties
+CLIC
+A distribution of RMB185 (inclusive of tax) million to the holders of Core Tier 2 Capital Securities was approved
+by the management according to the authorization by the Board of Directors in 2015.
+Ecommerce")
+China Life Enterprise Annuity Fund (“EAP”)
+CL AMP Zunxiang Bond Securities Investment Fund
+Relationship with
+the company
+Nature of
+ownership
+Legal
+representative
+Immediate and
+ultimate holding
+company
+Refer to Note 39(c) for the basic and related information of subsidiaries.
+State-owned
+Yang
+Mingsheng
+(c) Registered capital of related parties with control relationship and changes during the
+year
+Name of related party
+Beijing, Insurance services including receipt
+China 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.
+As at 31
+December 2014
+RMB million
+Decrease
+RMB million
+As at 31
+December 2015
+RMB million
+CLIC
+4,600
+AMC
+4,000
+Pension Company
+2,500
+900
+Suzhou Pension Company (i)
+300
+CL AMP
+Increase
+RMB million
+950
+registration Principal business
+CLIC
+CL AMP Zengjinbao Money Market Fund
+CL AMP Xinqianbao Money Market Fund
+Shang Xin Lv Di Collective Fund Trust Scheme
+Jiao Yin Guo Xin - Wen Jian No. 798 Collective Fund
+Trust Scheme (the second batch)
+Jiao Yin Guo Xin - Wen Jian No. 1119 Collective Fund
+Trust Scheme
+Shang Xin Jing Neng Jin Tai Indemnificatory Housing
+Collective Fund Trust Scheme
+An associate of the Company
+An associate of the Company
+An associate of the Company
+An associate of the Company
+A joint venture of the Company
+A joint venture of the Company
+Under common control of CLIC
+Under common control of CLIC
+Under common control of CLIC
+Under common control of CLIC
+A directly and indirectly held consolidated
+structured entity of the Company
+A directly held consolidated structured entity of the
+Company
+Location of
+A directly and indirectly held consolidated
+structured entity of the Company
+A directly held consolidated structured entity of the
+Company
+A directly held consolidated structured entity of the
+Company
+A directly held consolidated structured entity of the
+Company
+(i)
+Rui Chong Company was incorporated in 2015.
+190
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+A directly and indirectly held consolidated
+structured entity of the Company
+987
+RMB500
+(ii.a)
+On 8 March 2015, the Company and CLP&C signed a new 2-year framework insurance agency agreement,
+whereby the Company entrusted CLP&C to act as an agent to sell designated life insurance products in certain
+authorised jurisdictions. The brokerage fee was determined based on market practice. The agreement was subject to
+an automatic one-year renewal if no objections were raised by both parties upon expiry.
+On 31 December 2014, the Company signed a property leasing agreement with CLI, effective till 31 December
+2017, pursuant to which CLI leased to the Company certain owned buildings. 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.
+196
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e)
+Transactions with significant related parties (continued)
+Notes (continued):
+(v)
+(vi)
+On 19 April 2012, 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 selling of insurance products, and collecting
+premiums and paying benefits. The Company paid the agency commission by multiplying the net amount of total
+premiums received from sale of each category individual insurance product after deducting the withdrawn policies
+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 for three years and subject to an automatic one-year renewal with no
+limitation of times if no objections were raised by either party upon expiry. On 19 April 2015, the agreement was
+automatically renewed for another one year.
+On 18 March 2015, the Company and CL Ecommerce signed a one year agreement for managing the regional
+telemarketing centre, effective on the signing date. Pursuant to the agreement, the Company entrusted CL
+Ecommerce to manage the operation of its telemarketing centre, and paid the management fee accordingly. The
+total amount of the management fee is not expected to exceed RMB100 million, but is still pending for negotiation
+between the two parties based on the actual circumstance.
+(vii) On 27 November 2014, the Company and Pension Company signed an agency agreement for the distribution and
+customer service of enterprise annuity funds, pension management business and occupational pension management
+business. The agreement was effective from 28 November 2014 and expiry after 1 year, and was subject to an
+automatic one-year renewal if no objections were raised by either party upon expiry. On 28 November 2015,
+the agreement was automatically renewed for another one year. 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 service, 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 calculation base,
+method and charge rate for the agency fee of occupation annuity should refer to that of enterprise annuity funds.
+The charge rate for the agency fee of group pension plan is in line with that of the investment management fee
+of enterprise annuity funds. The agency fee of personal pension plan is 30% of the daily management fee of the
+personal pension plan annually.
+(viii) 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.
+(ix)
+The transaction constitutes a one-off connected transaction which is subject to reporting and announcement
+requirements but is 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.
+Asset management fee received from CLIC
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Amounts due from/to significant related parties
+(f)
+On 8 April 2012, the Company and CLP&C signed a 2-year framework insurance agency agreement, whereby
+the Company entrusted CLP&C to act as an agent to sell designated life insurance products in certain authorised
+jurisdictions. The brokerage fee was determined based on cost (tax included) plus a margin. The agreement was
+subject to an automatic one-year renewal if no objections were raised by both parties upon expiry. This agreement
+expired on 7 April 2015.
+On 8 March 2015, the Company and CLP&C signed a new 2-year framework insurance agency agreement,
+whereby CLP&C entrusted the Company to act as an agent to sell designated P&C insurance products in certain
+authorized jurisdictions. The agency fee was determined based on cost (tax included) plus a margin. The agreement
+was subject to an automatic one-year renewal if no objections were raised by both parties upon expiry.
+On 8 March 2012, the Company and CLP&C renewed a 2-year framework insurance agency agreement, whereby
+CLP&C entrusted the Company to act as an agent to sell designated P&C insurance products in certain authorized
+jurisdictions. The agency fee was determined based on cost (tax included) plus a margin. The agreement was
+subject to an automatic one-year renewal if no objections were raised by both parties upon expiry. This agreement
+expired on 7 March 2015.
+(iv)
+On 29 December 2014, the Company and CLIC signed a renewable insurance agency agreement, effective from
+1 January 2015 to 31 December 2017. The agreement was subject to an automatic three-year renewal if no
+objections were raised by both parties. 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-transferrable 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 RMB8.00 per policy and (2)
+2.50% 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.
+(ii.a) On 31 December 2014, CLIC signed an asset management agreement with AMC, entrusting AMC to manage and
+make investments of its insurance funds. The agreement is effective from the signing date to 31 December 2015.
+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 and payable on a monthly basis, by multiplying
+the average book value of the assets under management (after deducting the funds obtained and interests accrued
+for from repurchase transactions, debt and equity investment schemes, project asset-backed schemes, the principal
+and interests of customized non-standard products) at the beginning and the end of any given month by the rate of
+0.05%, divided by 12. At the end of each year, CLIC assessed the investment performance of the assets managed by
+AMC, compared actual results against benchmark returns and made adjustment to the basic service fee.
+194
+33
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e) Transactions with significant related parties (continued)
+Notes (continued):
+(ii.b) On 24 January 2014, CL Overseas renewed an investment management agreement with AMC HK, effective from
+1 January 2014 to 31 December 2014. On 27 April 2015, agreed by both parties, the agreement was automatically
+renewed for another year. In accordance with the agreement, CL Overseas entrusted AMC HK to manage and
+make investments of 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 total
+actual annual yield and predetermined net realized 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) In 2015, CLP&C signed an agreement for the management of insurance funds with AMC, entrusting AMC to
+manage and make investments of its insurance funds. The agreement was effective from 1 January 2015 to 31
+December 2016. In accordance with the agreement, CLP&C paid AMC a fixed service fee and a variable service
+fee. The fixed service fee was calculated and payable on a monthly basis, by multiplying the average net asset value
+of each category assets 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 linked to investment
+performance.
+The following table summarises the balances due from and to significant related parties. The balances are
+non-interest bearing, unsecured and have no fixed repayment dates except for the deposits with CGB and
+the subordinated debts and corporate bonds issued by Sino-Ocean.
+(ii.d) On 31 December 2014, the Company and CLI signed a management agreement of alternative investment of
+insurance funds, which was effective for 1 year from 1 January 2015. In accordance with the agreement, the
+Company entrusted CLI to engage in specialized investment, operation and management of equities, real estates
+and related financial products, securitized 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 is 0.05%-0.6% according to a different range of returns and without
+performance related bonus; for non-fixed-income projects, the management fee rate is 0.3% and the performance
+related bonus was linked to the return on comprehensive investment upon expiry of the project.
+195
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e)
+Transactions with significant related parties (continued)
+Notes (continued):
+(ii.f) On 19 September 2013, the Company and AMC HK renewed the offshore investment management service
+agreement, effective for two years starting from the signing date. The agreement was subject to an automatic one-
+year renewal if no objections were raised by both parties upon expiry. On 19 September 2015, the agreement was
+automatically renewed for another one year. In accordance with the agreement, the Company entrusted AMC HK
+to manage and make investment of its insurance funds and paid AMC HK an asset management fee. The asset
+management fee was calculated at a fixed rate of 0.40% of portfolio asset value and a performance bonus capped at
+0.15% of portfolio asset value for assets managed on a discretionary basis. Management fees on assets managed on
+a non-discretionary basis are calculated at 0.05% of portfolio asset value. The above management fee was calculated
+based on the net value of the entrusted asset from the monthly reports provided by the trustee, without deducting
+the monthly management fee payable. The fixed management fee was calculated monthly and payable quarterly. A
+performance bonus was calculated and payable on an annual basis. Asset management fees charged to the Company
+by AMC HK are eliminated in the consolidated statement of comprehensive income.
+(iii)
+(ii.e) On 27 December 2012, the Company and AMC entered into a renewable agreement for the management of
+insurance funds, effective from 1 January 2013 to 31 December 2014. The agreement was subject to an automatic
+one-year renewal if no objections were raised by both parties upon expiry. The agreement was automatically
+renewed for 1 year from 1 January 2015. In accordance with the agreement, the Company entrusted AMC to
+manage and make investments of its insurance funds and paid AMC a fixed service fee and a variable service fee.
+The fixed annual service fee was calculated and payable on a monthly basis, by multiplying the average net value
+of the assets under management by the rate of 0.05%; the variable service fee was payable annually, based on the
+results of performance evaluation, at 20% of the fixed service fee per annum. The service fees were determined by
+the Company and AMC based on an analysis of the cost of service, market practice and the size and composition
+of the asset pool to be managed. Asset management fees charged to the Company by AMC are eliminated in the
+consolidated statement of comprehensive income.
+The resulting balance due from and to significant related parties of the Group
+Amount due from CLIC
+Amount due to CLIC
+(6)
+16
+12
+(71)
+(49)
+2
+2
+(1)
+9,660
+16,287
+194
+296
+(2)
+(13)
+872
+260
+4
+(40)
+50
+48
+(6)
+(5)
+(325)
+(225)
+(7)
+(3)
+(1)
+(i)
+114
+15
+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 due to CLRE
+Amount deposited with CGB
+Amount due from CGB
+Amount due to CGB
+Subordinated debts and corporate bonds of Sino-Ocean
+Amount due from CL Ecommerce
+203
+Amount due to CL Ecommerce
+Amount due from Pension Company
+Amount due to Pension Company
+Amount due to AMC
+Amount due to AMC HK
+198
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+526
+541
+(1)
+(1)
+21
+The resulting balance due from and to subsidiaries of the Company
+Notes:
+197
+Distribution from the Group's consolidated trust
+schemes to the Company
+Payment of rental, project fee and others expenses to CLRE
+Property leasing expenses charged by CLI
+(iv)
+Asset management fee received from CLI
+Payment to CLI for purchase of fixed assets
+(ix)
+Payment of an asset management fee to CLI
+(ii.d)(viii)
+167
+Property leasing income received from CLI
+Payment of a business management service fee to CL Ecommerce
+(vi)
+428222532
+4
+41
+35
+86
+17
+14
+97
+29
+2221
+79
+89
+29
+Rental and a service fee received from CLP&C
+(iii)
+Payment of an agency fee to CLP&C
+1,013
+133
+128
+Payment of dividends from the Company to CLIC
+7,729
+5,797
+Distribution of profits from AMC to CLIC
+106
+187
+Asset management
+fee received from CL Overseas
+(ii.b)
+39
+Transactions between CGB and the Group
+30
+(ii.c)
+26
+11
+Payment of insurance premium to CLP&C
+51
+50
+Claim and other payments received from CLP&C
+17
+18
+Agency fee received from CLP&C
+(iii)(viii)
+1,464
+Asset management fee received from CLP&C
+Interest on deposits received from CGB
+91
+838
+2014
+RMB million
+Transactions between AMC and the Company
+Payment of an asset management fee to AMC
+Distribution of profits from AMC
+(ii.e)(viii)
+1,020
+886
+158
+137
+Transactions between Pension Company and the Company
+Rental received from Pension Company
+24
+23
+For the year ended 31 December
+2015
+RMB million
+Agency fee received from Pension Company for entrusted
+sales of annuity funds
+20
+12
+Marketing fee income for promotion of annuity business
+from Pension Company
+14
+19
+Transactions between AMC HK and the Company
+Payment of an investment management fee to AMC HK
+14
+11
+Transactions between the Group's consolidated trust
+schemes and the Company
+524
+(vii)
+Notes
+(ii.f)
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Transactions with significant related parties (continued)
+(e)
+(v)
+15
+Commission expenses charged by CGB
+Transactions between Sino-Ocean and the Group
+Scrip dividend from Sino-Ocean
+Cash dividend from Sino-Ocean (Note 8)
+Interest payment of subordinated debts and
+bonds received from Sino-Ocean
+Project management fee paid to Sino-Ocean
+Transactions between EAP and the Group
+Contribution to EAP
+corporate
+193
+268
+422
+8
+559
+131
+year
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+286
+For the
+34
+59
+25
+34
+303
+ended 31 December 2015
+57
+654
+(919)
+54
+25
+790
+As at 31 December 2014
+(6,469)
+(4,382)
+(982)
+year
+Impairment
+As at 1 January 2014
+(25)
+Charge for the
+Disposals
+1
+As at 31 December 2014
+(24)
+----(25)
+(24)
+(12,752)
+Disposals
+Accumulated depreciation
+(108)
+(58)
+Net book value
+(212)
+(32)
+(1,113)
+As at 31 December 2014
+22,114
+6,527
+1,373
+6,332
+(1,797)
+1,222
+As at 1 January 2014
+(5,764)
+(4,275)
+(870)
+(836)
+(11,745)
+Charge for the year
+(762)
+(761)
+(166)
+37,568
+As at 1 January 2014
+1,513
+2,331
+1,513
+Accumulated depreciation
+As at 1 January 2015
+(168)
+Charge for the
+year
+(49)
+Transfer from property, plant and equipment
+As at 31 December 2015
+(217)
+Buildings
+RMB million
+Net book value
+As at 31 December 2015
+Fair value
+As at 1 January 2015
+1,345
+1,296
+2,231
+As at 31 December 2015
+2,415
+208
+(683)
+As at 1 January 2015
+13,497
+As at 31 December 2015
+Additions
+559
+6,125
+306
+22,818
+As at 31 December 2014
+15,621
+2,145
+391
+6,332
+303
+Transfer from property, plant and equipment
+24,792
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+39
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Investment properties
+Cost
+As at 1 January 2015
+207
+(128)
+The Group had the following capital commitments relating to property development projects and
+4,138
+For the year ended 31 December
+2015
+RMB million
+Salaries and other benefits
+Key management personnel compensation
+(g)
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+Buildings
+Office
+equipment
+Cost
+Property, plant and equipment
+(a)
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+39
+ended 31 December 2015
+year
+2014
+RMB million
+14
+25
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+199
+28,265
+28,264,705,000
+28,265
+28,264,705,000
+For the
+RMB million
+RMB million
+As at 31 December 2015
+No. of shares
+Registered, authorised, issued and fully paid
+Ordinary shares of RMB1 each
+34 SHARE CAPITAL
+As at 31 December 2015, 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 2015, a large portion of its group insurance business of the Group were with
+state-owned enterprises; the majority of bancassurance commission charges were paid to state-owned banks
+and postal office; and almost all of the reinsurance agreements of the Group were entered into with a state-
+owned reinsurance company.
+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.
+(h) Transactions with state-owned enterprises
+The total compensation package for the Company's key management personnel for the year ended 31
+December 2015 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 2014 has been approved by the relevant authorities. The total compensation of 2014 was RMB25 million,
+including a deferred payment I about RMB5 million.
+As at 31 December 2014
+No. of shares
+year
+Notes to the Consolidated Financial Statements
+205
+Total liabilities
+223
+217
+20
+Statutory insurance fund
+5,256
+Current income tax liabilities
+19,023
+16,883
+39(p)
+Deferred tax liabilities
+19,431
+23,182
+39(0)
+Other liabilities
+15,850
+32,266
+Equity
+2,114,123
+1,943,137
+Share capital
+2,211,673
+2,418,226
+Total liabilities and equity
+268,536
+304,103
+Total equity
+95,265
+106,375
+China Life Insurance Company Limited Annual Report 2015
+Retained earnings
+161,672
+39(r)
+Reserves
+28,265
+28,265
+7,791
+39(q)
+Other equity instruments
+34
+145,006
+Premiums received in advance
+ended 31 December 2015
+As at 31 December 2015, the Company's share capital was as follows:
+284,121
+322,492
+As at 31
+December 2014
+RMB million
+December 2015
+RMB million
+As at 31
+For the year ended 31 December 2015
+Equity attributable to ordinary equity holders of non-controlling interests
+Equity attributable to non-controlling interests
+Equity attributable to ordinary equity holders of the Company
+Equity attributable to other equity instruments holders of the Company
+Equity attributable to equity holders of the Company
+(b) Equity attributable to equity holders
+OTHER EQUITY INSTRUMENTS (continued)
+35
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+200
+The Company issued Core Tier 2 Capital Securities at par with the nominal value of USD1,280 million on
+3 July 2015, and obtained an approval to list such securities on the Stock Exchange of Hong Kong Limited,
+effective on 6 July 2015. 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. The initial distribution rate for the first five interest-bearing years is
+4.00%, and the Company may redeem the securities at its option at the end of the fifth year after issuance.
+If the Company does not exercise this option, the rate of distribution will be reset based on comparable US
+treasury yield plus a margin of 2.294% at the end of the fifth
+and every
+year
+five years thereafter.
+314,701
+284,121
+7,791
+3,722
+reserve
+fund
+the equity
+method
+for-sale
+securities
+reserves
+Other
+Share
+premium
+translating
+Statutory Discretionary
+7,791
+under
+Exchange
+differences on
+of investees
+Share of other
+Unrealised comprehensive
+gains/ income
+(losses) from
+36 RESERVES
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company
+for the year
+ended 31 December 2015. As at 31 December 2015, there were no accumulated distributions
+unpaid attributable to other equity instruments holders of the Company.
+3,210
+3,722
+3,210
+available-
+34 SHARE CAPITAL (continued)
+1,280
+1,280
+1,500
+1,500,000,000
+8,941
+8,941,175,000
+19,324
+19,323,530,000
+RMB million
+No. of shares
+As at 31 December 2015
+(ii)
+All shares owned by CLIC are domestic listed shares.
+(i)
+Overseas listed (ii)
+Total
+Including: Domestic listed
+Owned by other equity holders
+Owned by CLIC (i)
+7,441,175,000
+7,441
+28,264,705,000
+28,265
+Total
+7,791
+1,280
+7,791
+1,280
+Core Tier 2 Capital Securities
+RMB million
+RMB million Quantity million
+7,791
+RMB million Quantity million
+Quantity million
+As at 31
+December 2015
+Decrease
+Increase
+As at 31
+December 2014
+(a) Basic information
+35 OTHER EQUITY INSTRUMENTS
+Overseas listed shares are traded on the Stock Exchange of Hong Kong and the New York Stock Exchange.
+RMB million Quantity million
+25,617
+30,092
+Annuity and other insurance balances payable
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+585
+524
+17
+13
+361
+253
+207
+258
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+RMB million
+203
+39
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+Statement of financial position
+As at 31 December 2015
+Investments in associates and joint ventures
+11,705
+11,843
+39(c)
+Investments in subsidiaries
+1,345
+1,296
+39(b)
+Total
+Investment properties
+26,421
+39(a)
+Property, plant and equipment
+As at 31
+December 2014
+RMB million
+RMB million
+Notes
+As at 31
+December 2015
+ASSETS
+24,792
+39(d)
+Later than five years
+Later than one year but not later than five
+As at 31
+December 2014
+As at 31
+December 2015
+The future minimum lease payments under non-cancellable operating leases are as follows:
+(b) Operating lease commitments - as lessee
+33,903
+36,307
+9,887
+87
+23,929
+30,453
+5,820
+34
+RMB million
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+Total
+Property, plant and equipment
+Others
+Investments
+Contracted, but not provided for
+Not later than one year
+Later than one year but not later than five
+years
+Later than five years
+Not later than one year
+The future minimum rentals receivable under non-cancellable operating leases are as follows:
+as lessor
+-
+(c) Operating lease commitments
+The operating lease payments charged to profit before income tax for the year ended 31 December 2015
+were RMB857 million (2014: RMB774 million).
+1,312
+1,275
+years
+10
+753
+721
+549
+534
+ཚཊྚ॰
+RMB million
+RMB million
+Total
+20
+27,810
+27,044
+Held-to-maturity securities
+Insurance contracts
+Liabilities
+LIABILITIES AND EQUITY
+As at 31 December 2015
+Statement of financial position (continued)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+2,211,673
+2,418,226
+204
+Total assets
+42,984
+74,750
+17,969
+16,294
+As at 31
+December 2015
+Notes
+RMB million
+As at 31
+December 2014
+RMB million
+44,538
+30,368
+39(n)
+Securities sold under agreements to repurchase
+67,989
+67,994
+17
+Bonds payable
+39(m)
+74,745
+Policyholder dividends payable
+72,275
+84,106
+15
+Investment contracts
+1,603,446
+1,715,985
+14
+107,774
+1,032
+1,420
+12
+39(i)
+Available-for-sale securities
+5,653
+5,653
+39(h)
+-
+Statutory deposits – restricted
+685,471
+766,799
+560,807
+Term deposits
+165,913
+203,152
+39(f)
+Loans
+516,710
+503,489
+39(e)
+39(g)
+reserve
+605,245
+39(j)
+Cash and cash equivalents
+Other assets
+Disposals
+Reinsurance assets
+11,166
+11,913
+11
+Premiums receivable
+Securities at fair value through profit or loss
+43,981
+39(1)
+Accrued investment income
+11,841
+21,461
+39(k)
+Securities purchased under agreements to resell
+38,822
+135,733
+49,385
+General
+investments:
+fund
+19,286
+As at 1 January 2014
+RMB million
+Total
+Leasehold
+Assets under
+construction improvements
+vehicles
+Motor
+equipment
+furniture
+and fixtures
+Buildings
+Office
+6,606
+Cost
+(a)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+206
+26,421
+356
+7,544
+378
+1,829
+Property, plant and equipment (continued)
+1,429
+6,125
+1,142
+(1,680)
+166
+(22)
+Additions
+51
+341
+128
+2,955
+8
+3,483
+Disposals
+(64)
+12
+3,613
+2
+336
+175
+Additions
+(45)
+100
+(3,194)
+268
+2,781
+Transfers upon completion
+34,588
+16,314
+As at 31 December 2015
+24,792
+303
+(115)
+(134)
+(639)
+(813)
+Charge for the year
+(12,752)
+(919)
+(982)
+(4,382)
+(6,469)
+As at 1 January 2015
+Accumulated depreciation
+40,262
+1,282
+7,544
+1,368
+6,481
+23,587
+As at 31 December 2015
+(767)
+(114)
+(63)
+(133)
+(393)
+foreign
+(1,701)
+6
+Disposals
+369
+6,332
+391
+2,145
+(24)
+----(24)
+As at 1 January 2015
+Net book value
+(24)
+As at 31 December 2015
+49
+(24)
+Disposals
+year
+Charge for the
+As at 1 January 2015
+Impairment
+(13,817)
+(926)
+(990)
+(4,652)
+(7,249)
+As at 31 December 2015
+636
+108
+126
+33
+1,486
+15,621
+37,568
+296
+296
+Others
+10,090
+3,492
+3,160
+Appropriation to reserves
+7,076
+3
+364
+6,709
+Other comprehensive income for the year
+145,919
+21,747
+21,627
+24,801
+(184)
+As at 31 December 2015
+23,254
+53,860
+29,963
+Approved at the Annual General Meeting in May 2015, the Company appropriated RMB3,160 million to the
+discretionary reserve fund for the year ended 31 December 2014 based on net profit under CAS (2014: RMB2,470
+million).
+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 RMB3,438 million for the year ended 31 December 2015 (2014:
+RMB3,160 million).
+(c)
+(b)
+(a)
+36 RESERVES (continued)
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+201
+163,381
+25,239
+24,787
+28,239
+180
+1,113
+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 2015, the Company appropriated 10% of net profit under CAS
+which amounted to RMB3,438 million to the general reserve for future uncertain catastrophes, which cannot be used for
+dividend distribution or conversion to share capital increment (2014: RMB3,160 million). In addition, pursuant to the
+CAS, the Group appropriated RMB54 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2014: RMB42 million).
+817
+53,860
+39,089
+Other comprehensive income for the year
+97,029
+18,545
+19,157
+21,641
+(327)
+(15,835)
+53,860
+As at 1 January 2014
+(c)
+(b)
+(a)
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+Total
+reserve operations
+Transfers upon completion
+143
+416
+39,232
+3,160
+As at 1 January 2015
+145,919
+(3)
+21,747
+21,627
+24,801
+(184)
+23,254
+817
+53,860
+As at 31 December 2014
+826
+826
+Others
+8,832
+3,202
+2,470
+Appropriation to reserves
+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 subsequent years.
+3,438
+The following is a summary of the significant contingent liabilities:
+1,222
+6,332
+1,373
+6,527
+22,114
+As at 1 January 2015
+RMB million
+Total
+construction improvements
+vehicles
+Leasehold
+Motor Assets under
+37 PROVISIONS AND CONTINGENCIES
+furniture
+and fixtures
+389
+Pending lawsuits
+As at 31
+December 2015
+RMB million
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+38
+COMMITMENTS
+The Group involves in certain lawsuits arising from the ordinary course of businesses. 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 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
+2015 and 2014, 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.
+(a) Capital commitments
+440
+RMB million
+As at 31
+December 2014
+202
+36,887
+38,822
+135,733
+22,058
+42,745
+Total
+Subtotal
+21,559
+Common stocks
+401
+5,858
+Funds
+Equity securities
+16,764
+92,988
+Debt securities
+14,782
+86,816
+499
+Listed in mainland, PRC
+8,194
+5,098
+352
+Subtotal
+Total
+42,745
+22,058
+135,733
+4,149
+38,822
+216
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(k) Securities purchased under agreements to sell
+Maturing:
+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.
+254
+1,728
+6,099
+Listed overseas
+Listed overseas
+56
+Unlisted
+84,738
+11,666
+Subtotal
+Unlisted
+92,988
+Equity securities
+Listed in mainland, PRC
+32,427
+21,706
+Listed in Hong Kong
+70
+16,764
+5,218
+As at 31
+December 2015
+RMB million
+119,987
+After ten years
+120,003
+120,485
+Total
+215
+399,810
+394,035
+China Life Insurance Company Limited Annual Report 2015
+RMB million
+Notes to the Consolidated Financial Statements
+Within 30 days
+112,012
+For the
+ended 31 December 2015
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j)
+As at 31
+December 2014
+Securities at fair value through profit or loss
+Debt securities
+Government bonds
+Government agency
+bonds
+Corporate bonds
+Others
+Subtotal
+year
+553
+After five years but within ten years
+135,733
+85,403
+71,548
+Listed in Hong Kong, PRC
+8,391
+8,303
+Listed in Singapore
+172
+Unlisted
+273,023
+131,359
+Subtotal
+Total
+139,624
+366,989
+766,799
+605,245
+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.
+Debt securities - Contractual maturity schedule
+Maturing:
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+Within one year
+32,062
+13,939
+After one year but within five
+years
+211,210
+Total
+Cost
+Bank deposits
+Debt securities
+16,294
+Total
+3,240
+2,147
+Others
+625
+756
+Due from related parties
+2,449
+936
+Tax refundable
+2,281
+2,520
+Automated policy loans
+3,431
+4,126
+5,943
+5,809
+Investments receivable
+Land use rights
+As at 31
+December 2014
+RMB million
+RMB million
+As at 31
+December 2015
+(m) Other assets
+30,368
+17,969
+Current
+Non-current
+Total
+(n) Securities sold under agreements to repurchase
+218
+Total
+After 90 days
+3,000
+Within 30 days
+41,538
+30,368
+Maturing:
+44,538
+30,368
+4,039
+2,902
+Listed in mainland, PRC
+40,499
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+RMB million
+17,969
+16,294
+6,063
+5,900
+11,906
+10,394
+Total
+Stock exchange market
+Interbank market
+27,466
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+12,377
+18,256
+Non-current
+31,604
+31,129
+Current
+43,981
+49,385
+1,596
+2,131
+15,450
+15,642
+Total
+26,935
+As at 31
+December 2014
+RMB million
+December 2015
+RMB million
+As at 31
+11,841
+21,461
+11,841
+21,461
+As at 31
+December 2014
+RMB million
+RMB million
+As at 31
+December 2015
+Total
+Others
+31,612
+(1) Accrued investment income
+49,385
+China Life Insurance Company Limited Annual Report 2015
+39
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Investment properties (continued)
+As at 1 January 2014
+Additions
+Transfer from property, plant and equipment
+As at 31 December 2014
+Buildings
+RMB million
+1,513
+1,513
+Accumulated depreciation
+As at 1 January 2014
+43,981
+(119)
+year
+(49)
+Transfer from property, plant and equipment
+As at 31 December 2014
+(168)
+Net book value
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+39
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+Charge for the
+Equity securities
+Corporate bonds
+399,810
+Investment management
+No. 798 Collective Fund
+Trust Scheme (the second batch)
+Jiao Yin Guo Xin-Wen Jian
+98.00% directly
+RMB500 million
+Investment management
+No. 1119 Collective Fund
+Trust Scheme
+Shang Xin Jing Neng Jin Tai
+66.67% directly
+RMB1,500 million
+Investment management
+Indemnificatory Housing
+Collective Fund Trust Scheme
+(d) Investments in associates and joint ventures
+As at 1 January
+Investments in associates and joint ventures
+Scrip dividend
+RMB2,000 million
+As at 31 December
+100.00% directly
+RMB4,000 million
+2,195
+1,345
+1,394
+As at 31 December 2014
+As at 1 January 2014
+Fair value
+As at 31 December 2014
+Investment Fund
+CL AMP Zengjinbao Money
+Market Fund
+57.67% directly
+RMB262 million
+Investment management
+CL AMP Xinqianbao Money
+Market Fund
+Shang Xin Lv Di Collective
+Fund Trust Scheme
+Jiao Yin Guo Xin-Wen Jian
+99.98% directly and indirectly
+As at 1 January 2014
+Investment management
+49.00% directly and indirectly
+Investment management
+2,231
+211
+2014
+Listed in mainland, PRC
+Unlisted
+Total
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+79,438
+88,843
+126,097
+126,140
+145,824
+146,027
+152,130
+155,700
+503,489
+516,710
+61,916
+68,199
+Debt securities
+2015
+Total
+Corporate bonds
+RMB million
+RMB million
+27,044
+766
+23,976
+2,800
+268
+27,810
+27,044
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(e) Held-to-maturity securities
+Debt securities
+Government bonds
+Government agency bonds
+Subordinated bonds/debts
+441,573
+The fair value of investment properties of the Company as at 31 December 2015 amounted to RMB2,415
+million (as at 31 December 2014: RMB2,231 million), which was estimated by the Company having regards
+to valuations performed by an independent appraiser. The investment properties were classified as Level 3 in
+the fair value hierarchy.
+China Life Insurance Company Limited Annual Report 2015
+100.00% indirectly
+100.00% directly
+Jersey Island
+PRC
+Rui Chong Company
+King Phoenix Tree Limited
+Investment
+Financial service
+Asset management
+Investment in
+retirement properties
+Fund management
+Not Applicable
+100.00% directly
+Hong Kong, PRC
+Golden Phoenix Tree Limited
+RMB200 million
+100.00% indirectly
+PRC
+CL Wealth
+RMB588 million
+85.03% indirectly
+Not Applicable
+PRC
+Investment
+Investment
+44,538
+Investment management
+RMB867 million
+CL AMP Zunxiang Bond Securities 30.68% directly and indirectly
+Principal activities
+Funds/trust received
+Percentage of shares held
+Name
+(ii) The table below presents the basic information of the Company's consolidated structured entities as at
+31 December 2015:
+Investments in subsidiaries (continued)
+(c)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+210
+Non-controlling interests in subsidiaries are not significant to the Company.
+RMB6,800 million
+209
+CL AMP
+100.00% directly
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+11,705
+11,843
+RMB million
+RMB million
+31 December
+2014
+2015
+31 December
+As at
+As at
+Unlisted investments at cost
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investments in subsidiaries
+39
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+2015:
+Not applicable
+RMB300 million
+Place of
+incorporation
+and operation
+PRC
+Suzhou Pension Company
+50.00% indirectly
+Hong Kong, PRC
+AMC HK
+and indirectly
+Asset management
+Pension and annuity
+RMB4,000 million
+RMB3,400 million
+74.27% directly
+PRC
+Pension Company
+60.00% directly
+PRC
+AMC
+Principal activities
+Registered capital
+Percentage of
+equity interest held
+Name
+394,035
+448,511
+516,710
+RMB million
+25,258
+25,913
+145,399
+138,487
+205,149
+205,620
+19,298
+22,798
+4,706
+1,217
+Subtotal
+399,810
+394,035
+Equity securities
+Funds
+162,563
+Others (i)
+82,714
+Subordinated bonds/debts
+Government bonds
+Contractual maturity schedule:
+Within one year
+After one year but within five years
+Total
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+300
+5,353
+5,653
+5,653
+5,653
+Insurance companies in China are required to deposit an amount that equals to 20% of their registered
+capital with banks in conformity with regulations of the CIRC. These funds may not be used for any
+purpose, other than to pay off debts during liquidation proceedings.
+Available-for-sale securities
+As at 31
+December 2015
+As at 31
+December 2014
+RMB million
+Available-for-sale securities, at fair value
+Debt securities
+Government agency bonds
+(i)
+Common stocks
+71,592
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Available-for-sale securities (continued)
+(i)
+(i) Other available-for-sale securities mainly include unlisted equity investments and private equity
+funds, etc. The Company did not guarantee or provide any financing support for other available-for-
+sale securities, and considers that the carrying value of other available-for-sale securities represents its
+maximum risk exposure.
+Debt securities
+Listed in mainland, PRC
+Listed in Singapore
+Unlisted
+Subtotal
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+41,549
+266
+45,707
+260
+357,995
+348,068
+China Life Insurance Company Limited Annual Report 2015
+74,592
+605,245
+15,259
+Preferred stocks
+18,712
+3,000
+Wealth management products
+50,053
+21,038
+Others (i)
+40,310
+17,607
+Subtotal
+346,230
+195,951
+Available-for-sale securities, at cost
+Equity securities
+Others (i)
+Total
+214
+20,759
+766,799
+503,489
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(h) Statutory deposits – restricted
+year
+503,489
+516,710
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+39
+(f) Loans
+Policy loans
+Other loans
+Total
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+84,959
+73,654
+118,193
+212
+92,259
+Total
+248,127
+The estimated fair value of all held-to-maturity securities was RMB550,199 million as at 31 December 2015
+(as at 31 December 2014: RMB525,949 million).
+Unlisted debt securities include those traded on the Chinese interbank market.
+Debt securities - Contractual maturity schedule
+Maturing:
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+Within one year
+2,000
+11,816
+After one year but within five
+years
+86,072
+70,477
+After five years but within ten years
+167,290
+149,837
+After ten years
+284,580
+ended 31 December 2015
+203,152
+As at 31
+Maturing:
+Within one year
+After one year but within five
+years
+After five years but within ten years
+179,965
+195,529
+380,842
+463,442
+26,500
+Total
+560,807
+685,471
+213
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+As at 31
+December 2014
+RMB million
+165,913
+As at 31
+December 2015
+RMB million
+203,152
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+Maturing:
+Within one year
+90,102
+80,137
+After one year but within five
+years
+80,311
+53,665
+After five years but within ten years
+24,039
+32,111
+After ten years
+8,700
+Total
+(g) Term deposits
+165,913
+RMB257 million
+217
+68.4
+Total
+in total
+in total
+RMB Thousand
+Yang Mingsheng
+486.7
+1,072.4
+1,559.1
+536.2
+contribution
+302.5
+1,960.3
+536.2
+1,424.1
+Wan Feng
+109.5
+241.3
+350.8
+120.6
+70.1
+98.7
+in kind
+income salary income
+bonuses
+40 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
+ended 31 December 2014 are as follows:
+year
+Deferred
+Deferred
+Performance
+Subtotal
+payment
+Pension
+payment
+Actual paid
+related
+of salary
+included in
+Benefits
+scheme
+included
+included
+Name
+Basic salaries
+23.6
+For the year ended 31 December 2015
+444.5
+323.9
+250.0
+70.0
+320.0
+Anthony Francis Neoh
+250.0
+50.0
+300.0
+320.0
+320.0
+Bruce Douglas Moore
+300.0
+Tang Jianbang
+Su Hengxuan
+216.6
+477.2
+693.8
+238.6
+135.3
+49.0
+878.1
+300.0
+Sun Changji
+Wang Sidong
+Zhang Xiangxian
+Lin Dairen
+436.8
+962.4
+1,399.2
+481.2
+275.0
+95.9
+1,770.1
+481.2
+1,288.9
+Liu Yingqi
+108.3
+238.6
+346.9
+119.3
+69.7
+23.5
+440.1
+119.3
+320.8
+Miao Jianmin
+120.6
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+224
+(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 2015 are as follows:
+Name
+Remuneration
+paid Benefits in kind
+Pension scheme
+contributions
+Total
+RMB Thousand
+Yang Mingsheng
+The total compensation package for these directors, supervisors, chief executive and senior management for the
+year ended 31 December 2015 has not yet been finalised in accordance with regulations of the relevant PRC
+authorities. The amount of the compensation not provided for is not expected to have a significant impact on
+the Group's 2015 consolidated financial statements. The final compensation will be disclosed in a separate
+announcement when determined.
+435.2
+105.4
+601.9
+Lin Dairen
+397.8
+213.4
+100.6
+711.8
+Miao Jianmin
+Zhang Xiangxian
+61.3
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION
+ended 31 December 2015
+year
+(iii) 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
+Later than five years
+years
+Total
+223
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+272
+222
+261
+389
+13
+17
+546
+628
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+Wang Sidong
+Bruce Douglas Moore (i)
+133.3
+133.3
+196.7
+63.8
+51.9
+312.4
+Liu Jiade (vi)
+Robinson Drake Pike (vii)
+160.0
+160.0
+(i)
+Bruce Douglas Moore retired as independent director on 28 May 2015.
+(ii)
+Su Hengxuan resigned as executive director on 8 May 2015.
+(iii)
+Miao Ping retired as executive director on 28 May 2015.
+(iv)
+Huang Yiping resigned as independent director on 26 August 2015. The resignation became effective on 7 March
+2016, pursuant to the CIRC's approval on the qualification of a newly appointed independent director.
+(v)
+Xu Hengping and Xu Haifeng were appointed as executive directors on 11 July 2015.
+(vi)
+Liu Jiade was appointed as non-executive director on 11 July 2015.
+(vii) Robinson Drake Pike was appointed as independent director on 11 July 2015.
+Xu Haifeng (v)
+238.6
+314.6
+68.2
+Su Hengxuan (ii)
+131.1
+99.0
+32.7
+262.8
+Anthony Francis Neoh
+300.0
+300.0
+Miao Ping (iii)
+196.7
+145.3
+49.2
+391.2
+Chang Tso Tung Stephen
+320.0
+320.0
+Huang Yiping (iv)
+320.0
+320.0
+Xu Hengping (v)
+196.7
+49.7
+1,194
+639.5
+216.6
+62.5
+62.5
+62.5
+Yang Cuilian
+615.5
+472.6
+1,088.1
+291.2
+90.2
+12.5
+1,469.5
+Li Xuejun
+589.8
+480.2
+1,070.0
+285.3
+88.7
+1,444.0
+1,444.0
+Xiong Junhong
+1,469.5
+50.0
+Luo Zhongmin
+1,508.8
+Total
+in total
+in total
+RMB Thousand
+Xia Zhihua
+433.1
+954.4
+1,387.5
+477.2
+275.6
+95.9
+1,759.0
+477.2
+1,281.8
+Shi Xiangming
+615.5
+514.4
+1,129.9
+288.4
+90.5
+1,508.8
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2014 were
+restated based on the finalised amounts determined during 2015.
+in kind contribution
+The supervisors received the compensation amounts disclosed above during their term of office in 2015 and
+226
+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
+5
+25
+For the year ended 31 December 2015, no emoluments have been 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 as compensation for loss of office (for the year ended 31 December 2014: Nil).
+The emoluments of the five highest paid individuals are the total emoluments paid to them during the year.
+2014
+There was no arrangement under which a director, chief executive or supervisor waived or agreed to waive
+any remuneration during the year.
+On 29 February 2016, the Company entered into an acquisition agreement with Citigroup Inc. (“Citigroup”)
+and a tripartite share transfer agreement with IBM Credit LLC (“IBM Credit”) and Citigroup. According to
+the agreements, the Company will acquire 3,648,276,645 shares of CGB from Citigroup and IBM Credit
+(3,080,479,452 shares from Citigroup and 567,797,193 shares from IBM Credit) with a total consideration
+of RMB23.3 billion at RMB6.39 per share. Upon the completion of this transaction, the Company will hold
+6,728,756,097 shares of CGB, a 43.686% ownership interest. This transaction will not render CGB a consolidated
+subsidiary of the Company. Up to the approval date of these consolidated financial statements, this transaction is
+still pending approval of the relevant regulatory departments.
+227
+China Life Insurance Company Limited Annual Report 2015
+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 can be provided
+by the embedded value method. 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 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.
+EVENTS AFTER THE REPORTING PERIOD
+Number of individuals
+2015
+The emoluments fell within the following bands:
+9,046
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+(c) Five highest paid individuals
+The five individuals whose emoluments were the highest in the Company include five supervisors (2014:
+three directors and one supervisor).
+41
+Details of remuneration of the five highest paid individuals are as follows:
+2015
+2014
+RMB
+RMB
+Thousand
+Thousand
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+7,347
+8,557
+476
+489
+Total
+7,823
+2014.
+included
+included
+scheme
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2015
+40 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
+2015 are as follows:
+year
+225
+ended 31 December
+Remuneration
+paid
+Benefits in kind
+Pension scheme
+contributions
+Total
+RMB Thousand
+Xia Zhihua (i)
+229.5
+155.9
+Name
+In addition to the directors' emoluments disclosed above, certain directors of the Company receive
+emoluments from CLIC, the amounts of which have not been apportioned between their services to the
+Company and their services to CLIC.
+The directors and chief executive received the compensation amounts disclosed above during their term of
+office in 2015 and 2014.
+year ended 31
+477.2
+693.8
+238.6
+135.3
+49.0
+878.1
+238.6
+639.5
+Chang Tso Tung Stephen
+62.5
+17.5
+80.0
+80.0
+80.0
+Huang Yiping
+62.5
+17.5
+80.0
+80.0
+80.0
+The compensation amounts disclosed above for these directors and the chief executive for the
+December 2014 were restated based on the finalised amounts determined during 2015.
+57.6
+443.0
+Shi Xiangming
+1,261.4
+88.7
+47.8
+695.6
+(i)
+Xia Zhihua, Yang Cuilian and Li Xuejun retired as supervisors on 11 July 2015.
+(ii)
+Miao Ping was appointed as supervisor on 11 July 2015, and was appointed as the chairman of board of supervisors
+on 24 July 2015.
+(iii)
+Zhan Zhong and Wang Cuifei were appointed as supervisors on 11 July 2015.
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December
+2014 are as follows:
+Performance
+related
+Subtotal
+Name
+Basic salaries
+bonuses
+Deferred
+payment
+of salary
+included in
+income salary income
+Deferred
+Pension
+payment
+Actual paid
+Benefits
+559.1
+Miao Ping
+Wang Cuifei (iii)
+49.8
+245.6
+96.5
+1,603.5
+Yang Cuilian (i)
+677.6
+163.9
+54.3
+895.8
+Li Xuejun (i)
+732.8
+161.0
+53.8
+947.6
+Xiong Junhong
+Miao Ping (ii)
+196.7
+51.6
+316.7
+Zhan Zhong (iii)
+684.3
+87.7
+821.8
+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.
+1,159
+20
+comprehensive income
+(Charged)/credited to other
+4,349
+142
+534
+3,673
+(Charged)/credited to net profit
+(19,023)
+930
+(11,637)
+(8,316)
+As at 1 January 2015
+(19,023)
+930
+- Available-for-sale securities
+(11,637)
+As at 31 December 2014
+2,759
+2,759
+policyholders
+attributable to participating
+(15,762)
+10
+(1,337)
+(62)
+(1,827)
+(4,683)
+992
+5,952
+(11,627)
+552
+(8,316)
+(5,401)
+(5,401)
+- Portion of fair value changes on
+6,134
+11,800
+1,929
+2,553
+4,205
+9,247
+As at 31
+December 2014
+RMB million
+As at 31
+December 2015
+RMB million
+Subtotal
+- deferred tax assets to be recovered within 12 months
+- deferred tax assets to be recovered after 12 months
+Deferred tax assets:
+is as follows:
+year
+(ii) The analysis of deferred tax assets and deferred tax liabilities during the
+Taxation (continued)
+(p)
+available-for-sale securities
+attributable to participating
+policyholders
+3,192
+3,192
+As at 31 December 2015
+(1,451)
+Total
+RMB million
+(16,504)
+(16,883)
+220
+China Life Insurance Company Limited Annual Report 2015
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+1,072
+Deferred tax liabilities:
+Others
+RMB million
+Investments
+634
+Payable to constructors
+1,025
+845
+Stock appreciation rights (Note 31)
+1,044
+1,045
+Interest payable of subordinated debts
+761
+1,117
+Agent deposits
+1,919
+2,598
+Commission and brokerage payable
+778
+4,006
+Salary and welfare payable
+5,008
+6,410
+Interest payable to policyholders
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+RMB million
+(o) Other liabilities
+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 2015, the carrying value of securities deposited in the collateral pool was RMB66,027
+million (as at 31 December 2014: RMB49,308 million). The collateral is restricted from trading during the
+period of the repurchase transaction.
+As at 31 December 2015, bonds with a carrying value of RMB28,185 million (as at 31 December 2014:
+RMB42,131 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.
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(n) Securities sold under agreements to repurchase (continued)
+For the year ended 31 December 2015
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+4,561
+Tax payable
+484
+693
+Insurance
+RMB million
+available-for-sale securities
+- Portion of fair value changes on
+- Available-for-sale securities
+comprehensive income
+(Charged)/credited to other
+(Charged)/credited to net profit
+As at 1 January 2014
+Deferred tax assets/(liabilities)
+(i) The movements in deferred tax assets and liabilities during the year are as follows:
+(p) Taxation
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+Others
+5,488
+4,197
+Total
+Current
+Non-current
+RMB million
+Total
+23,182
+19,431
+23,182
+19,431
+23,182
+19,431
+219
+- deferred tax liabilities to be settled after 12 months
+(15,762)
+(23,709)
+39
+389
+440
+RMB million
+As at 31
+December 2014
+December 2015
+RMB million
+As at 31
+222
+Pending lawsuits
+The following is a summary of the significant contingent liabilities:
+Provisions and contingencies
+161,672
+25,027
+24,787
+China Life Insurance Company Limited Annual Report 2015
+28,191
+53,860
+As at 31 December 2015
+10,036
+3,438
+3,160
+3,438
+6,630
+6,630
+income for the year
+Appropriation to reserves
+Other comprehensive
+145,006
+21,589
+21,627
+24,753
+29,807
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2015
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+690
+644
+494
+495
+RMB million
+RMB million
+As at 31
+December 2014
+As at 31
+December 2015
+(26,500)
+Later than five years
+Later than one year but not later than five years
+Not later than one year
+The future minimum lease payments under non-cancellable operating leases are as follows:
+33,903
+36,199
+87
+9,887
+(t) Commitments
+(i) Capital commitments
+Capital commitments of the Company relating to property development projects and investments:
+(ii)
+Contracted, but not provided for
+Investments
+23,177
+Property, plant and equipment
+Total
+Operating lease commitments - as lessee
+As at 31
+December 2015
+RMB million
+As at 31
+December 2014
+RMB million
+31,314
+4,851
+34
+23,929
+Others
+53,860
+Total
+145,006
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(r) Reserves
+ended 31 December 2015
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2015
+221
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company
+for the year ended 31 December 2015. As at 31 December 2015, there were no accumulated distributions
+unpaid attributable to other equity instruments holders of the Company.
+268,536
+268,536
+7,791
+296,312
+304,103
+Equity attributable to other equity instruments holders of the Company
+Equity attributable to ordinary equity holders of the Company
+Equity attributable to equity holders of the Company
+RMB million
+As at 1 January 2015
+- deferred tax liabilities to be settled within 12 months
+(2,183)
+(1,448)
+Subtotal
+(28,683)
+(s)
+(25,157)
+(16,883)
+(19,023)
+(q) Other equity instruments
+As at 31
+December 2015
+As at 31
+December 2014
+RMB million
+Net deferred tax liabilities
+Unrealised
+gains/(losses)
+from
+228
+Share premium
+97,205
+39,011
+39,011
+3,160
+2,470
+3,160
+Appropriation to reserves
+8,790
+As at 31 December 2014
+53,860
+24,753
+21,627
+available-for-sale
+21,589
+18,429
+19,157
+23,177
+(15,834)
+21,593
+Discretionary
+reserve fund
+reserve
+RMB million
+RMB million
+General
+RMB million
+53,860
+RMB million
+As at 1 January 2014
+Other comprehensive
+income for the year
+Statutory
+reserve fund
+Total
+RMB million
+securities
+RMB million
+Using 2014 EV assumptions
+Note: Taxable income is based on earnings calculated using solvency reserves for Scenarios 1 to 16.
+31,338
+possible scenario
+Treatment Related to Insurance Contracts" under one
+in accordance to the "Provisions on the Accounting
+Taxable income based on the accounting profit
+17.
+32,291
+297,864
+234
+292,818
+32,395
+29,388
+269,973
+Solvency margin at 150% of statutory minimum
+15.
+291,947
+10% decrease in claim ratio of short term business
+14.
+30,662
+291,150
+13. 10% increase in claim ratio of short term business
+China Life Insurance Company Limited Annual Report 2015
+Embedded Value
+31,704
+16.
+TOWERS WATSON'S REVIEW OPINION REPORT ON EMBEDDED VALUE
+Based on the scope of work above, we have concluded that:
+China Life Insurance Company Limited (“China Life") has prepared embedded value results for the financial year ended
+31 December 2015 ("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.
+The cover photo of the printed version of this report was photographed by
+Mr. Wu Chang, a retired employee of CLIC.
+In case of any discrepancy between the Chinese version and the English version of
+this report, the Chinese version shall prevail; in case of any discrepancy between
+the printed version and the website version of this report, the website version shall
+prevail.
+◎ 国家
+236
+Wesley Cui
+23rd March 2016
+Michael Freeman
+For and on behalf of Towers Watson
+the EV Results have been prepared, in all material respects, in accordance with the methodology and assumptions
+set out in the Embedded Value section.
+no changes have been assumed to the treatment of tax, but some sensitivity results relating to tax have been shown
+by China Life; and
+the operating assumptions used by China Life have been set with appropriate regard to past, current and expected
+future experience;
+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 embedded value methodology used by China Life is consistent with the requirements of the “Life Insurance
+Embedded Value Reporting Guidelines" issued by the CIRC. It is noted that the China Risk Oriented Solvency
+System ("C-ROSS”) requirements have not been considered in the embedded value results as of 31 December
+2015, as updated Chinese EV guidance under C-ROSS has not been released. The methodology applied by China
+Life is a common methodology used to determine embedded values of life insurance companies in China at the
+current time;
+294,595
+Opinion
+Embedded Value
+China Life Insurance Company Limited Annual Report 2015
+235
+In carrying out our review, we have relied on the accuracy of audited and unaudited data and information provided by
+China Life.
+a review of the results of China Life's calculation of the EV Results.
+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 2015;
+a review of the methodology used to develop the embedded value and value of one year's sales as at 31 December
+2015, in the light of the requirements of the “Life Insurance Embedded Value Reporting Guidelines” issued by the
+China Insurance Regulatory Commission (“CIRC”) in September 2005;
+scope of work covered:
+Our
+•
+Scope of work
+China Life has engaged Towers Watson Management Consulting (Shenzhen) Co. Ltd. Beijing Branch ("WTW") 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.
+To The Directors of China Life Insurance Company Limited
+10% decrease in morbidity rates
+10% decrease in mortality rate for non-annuity products
+31,355
+4.
+37,274
+338,279
+10% increase in investment return
+3.
+33,222
+306,029
+Risk discount rate of 10.5%
+2.
+29,953
+278,043
+Risk discount rate of 11.5%
+245,077
+1.
+291,549
+Base case scenario
+VALUE OF ONE YEAR'S
+SALES AFTER COST OF
+SOLVENCY MARGIN
+RMB million
+SOLVENCY MARGIN
+VALUE OF IN-FORCE
+BUSINESS AFTER COST OF
+Sensitivity Results
+Table 4
+Sensitivity testing was 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
+Embedded Value
+(4,155)
+31,528
+25,789
+5.
+10% increase in
+288,533
+10% increase in morbidity rates
+11.
+32,029
+292,199
+10% decrease in lapse rates
+10.
+30,959
+290,806
+10% increase in lapse rates
+9.
+31,669
+293,398
+and 10% increase in mortality rate for annuity products
+8.
+31,388
+289,720
+and 10% decrease in mortality rate for annuity products
+10% increase in mortality rate for non-annuity products
+7.
+33,685
+294,454
+10% decrease in expenses
+6.
+29,372
+288,643
+expenses
+12.
+10% decrease in investment return
+(3,380)
+ITEM
+44,956
+454,906
+Embedded Value as at 31 December 2015 (sum A through J)
+K
+Other
+J
+Shareholder Dividend Distribution and Capital Injection
+H
+Value of One Year's Sales after Cost of Solvency Margin (F + G)
+31,528
+23,253
+Notes: 1) Numbers may not be additive due to rounding.
+2) Taxable incomes in embedded value and the value of one year's sales are based on earnings calculated using solvency reserves.
+231
+China Life Insurance Company Limited Annual Report 2015
+Embedded Value
+VALUE OF ONE YEAR'S SALES BY CHANNEL
+31,528
+The value of one year's sales by channel is shown below:
+2,685
+(5,602)
+F
+Compares actual with expected investment returns during 2015.
+E
+Reflects the difference between actual operating experience in 2015 (including mortality, morbidity, lapse, and expenses
+etc.) and the assumptions.
+D
+Value of new business sales in 2015.
+C
+worth.
+Reflects expected impact of covered business, and the expected return on investments supporting the 2015 opening net
+Notes: 1) Numbers may not be additive due to rounding.
+B
+2) Items B through J are explained below:
+560,277
+(34)
+(3,699)
+745
+14,199
+20,591
+Table 2
+Value of One Year's Sales by Channel
+Channel
+Table 3
+Analysis of Embedded Value Movement in 2015
+RMB million
+I
+AB
+Embedded Value at Start of Year
+В Expected Return on Embedded Value
+Value of New Business in the Period
+C
+D
+Operating Experience Variance
+E
+Investment Experience Variance
+F
+Methodology, Model and Assumption Changes
+G
+Market Value and Other Adjustments
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period.
+MOVEMENT ANALYSIS
+China Life Insurance Company Limited Annual Report 2015
+Embedded Value
+23,253
+Exclusive Individual Agent Channel
+Group Insurance Channel
+Bancassurance Channel
+Total
+Notes: 1) Numbers may not be additive due to rounding.
+2) Taxable income is based on earnings calculated using solvency reserves.
+232
+RMB million
+Reflects the effect of projection method, model enhancements and assumption changes.
+31 December
+2015
+2014
+28,851
+21,740
+371
+464
+2,306
+1,048
+31,528
+31 December
+H
+G
+H
+194,236
+268,729
+Adjusted Net Worth
+A
+31 December
+2014
+2015
+31 December
+ITEM
+RMB million
+Components of Embedded Value and Value of One Year's Sales
+Table 1
+The embedded value as at 31 December 2015 and the value of one year's sales for the 12 months to 31 December 2015,
+and their corresponding results as at 31 December 2014 are shown below:
+SUMMARY OF RESULTS
+China Life Insurance Company Limited Annual Report 2015
+Embedded Value
+230
+Other operating assumptions such as mortality, morbidity, lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+The calculations are based upon assumed corporate tax rate of 25% for all years. The investment returns are assumed
+to be grading from 5.1% to 5.5% by 0.1% every year (remaining level thereafter). 12% grading to 16% by 1% every
+year (remaining level thereafter) of the investment return is assumed to be exempt from income tax. These 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 11%.
+B
+Economic assumptions:
+Value of In-Force Business before Cost of Solvency Margin
+300,712
+G
+26,633
+35,684
+Value of One Year's Sales before Cost of Solvency Margin
+F
+454,906
+560,277
+Embedded Value (A + D)
+E
+260,670
+291,549
+Value of In-Force Business after Cost of Solvency Margin (B + C)
+D
+(40,042)
+(43,951)
+Cost of Solvency Margin
+C
+335,500
+Change in the market value adjustment from the beginning of year 2015 to 31 December 2015 and other related
+adjustments.
+ASSUMPTIONS
+The embedded value and the value of one year's sales were prepared by China Life Insurance Company Limited in
+accordance with “Life Insurance Embedded Value Reporting Guidelines" issued by China Insurance Regulatory
+Commission. The China Risk Oriented Solvency System ("C-ROSS") requirements have not been considered in the
+embedded value results as of 31 December 2015, as updated Chinese EV guidance under C-ROSS has not been released.
+Towers Watson, an international firm of consultants, performed a review of China Life's embedded value. The review
+statement from Towers Watson is contained in the "Towers Watson's review opinion report on embedded value"
+section.
+Reflects the gains or losses due to changes in exchange rate.
+I
+J
+Reflects dividends distributed to shareholders and issuance of Core Tier 2 Capital Securities during 2015.
+Other miscellaneous items.
+233
+China Life Insurance Company Limited Annual Report 2015
+On 15 May 2012, the Ministry of Finance and the State Administration of Taxation issued the "Notice on Corporate
+Income Tax Deduction of Reserves for Insurance Companies" (Cai Shui [2012] No. 45), requiring the taxation basis
+to be based on accounting profits. Based on the above regulation, in preparing the 2015 embedded value report, the
+adjusted net worth has reflected the tax treatment in accordance with accounting profits. When calculating the value of
+in-force business and value of one year's sales, as there is uncertainty in the accounting liability assumptions in future
+valuation periods (such as valuation interest rates), correspondingly, numerous scenarios could be possible as to future
+accounting profits. Consequently, we have adopted the profits based on the solvency liability in projecting future tax
+payable in the base scenario. We also disclose the value of in-force business and value of one year's sales calculated using
+tax payable based on the accounting profits in accordance to the “Provisions on the Accounting Treatment Related to
+Insurance Contracts" under one possible scenario in the table 4 of "SENSITIVITY RESULTS".
+Cost of Solvency Margin
+China Life Insurance Company Limited Annual Report 2015
+Embedded Value
+DEFINITIONS OF EMBEDDED VALUE AND VALUE OF ONE YEAR'S SALES
+Exchange Gains or Losses
+"Adjusted net worth" is equal to the sum of:
+Net assets, defined as assets less PRC solvency policy reserves and other liabilities; and
+Net-of-tax adjustments for relevant differences between the market value and the book value of assets, together
+with relevant net-of-tax adjustments to certain liabilities.
+PREPARATION AND REVIEW
+Embedded Value
+China Life Insurance Company Limited Annual Report 2015
+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.
+229
+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/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 "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 after-tax distributable profits for existing in-force business at the valuation date and for one
+year's sales in the 12 months immediately preceding the valuation date. Distributable profits arise after allowance for
+PRC solvency reserves and solvency margins at the required regulatory minimum level.
+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 capital supporting a company's desired solvency margin.
+RMB million
+As at
+20
+(2)
+Major Liabilities
+Insurance contracts
+Securities sold under agreements to repurchase
+Policyholder dividends payable
+Annuity and other insurance balances payable
+Interest-bearing loans and borrowings
+Bonds payable
+Deferred tax liabilities
+Other liabilities
+Insurance Contracts
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+As at
+Investment contracts
+Total
+Cash, cash equivalents and others include cash and cash equivalents, and securities purchased under agreements to
+resell.
+31 December 2015 31 December 2014
+7.41%
+169,485
+Funds
+4.52%
+94,933
+4.87%
+111,516
+Common stocks
+11.23%
+236,030
+17.99%
+411,623
+Equity investments
+5.31%
+111,475
+6.60%
+150,753
+Other fixed-maturity investments²
+2.97%
+62,348
+67,569
+Insurance asset management products
+44.77%
+940,619
+43.55%
+83,620
+3.98%
+Other equity investments³
+130,622
+4.
+Other equity investments include private equity funds, unlisted equities, preference stocks, equity investment
+plans, wealth management products, etc.
+3.
+Other fixed-maturity investments include policy loans, trust schemes, statutory deposits - restricted, etc.
+2.
+Insurance asset management products under fixed-maturity investments include infrastructure and real estate debt
+investment plans and project asset-backed plans.
+100.00%
+2,100,870
+100.00%
+2,287,639
+1.
+Notes:
+20
+Total
+58,959
+4.27%
+97,599
+Cash, cash equivalents and others
+0.06%
+1,283
+0.05%
+1,237
+Investment properties
+2.73%
+57,477
+5.71%
+2.81%
+1,715,985
+1.
+84,106
+For the
+(3) Consolidated Cash Flows
+22
+22
+We believe that our sources of liquidity are sufficient to meet our current cash requirements.
+Our principal cash outflows primarily relate to the payables for the liabilities associated with our various life
+insurance, annuity, accident insurance and health insurance products, operating expenses, income taxes and
+dividends that may be declared and paid to our equity holders. Cash outflows arising from our insurance
+activities primarily relate to benefit payments under these insurance products, as well as payments for policy
+surrenders, withdrawals and loans.
+Liquidity Uses
+(2)
+IV
+Our investment portfolio also provides us with a source of liquidity to meet unexpected cash outflows.
+We are also subject to market liquidity risk due to the large size of our investments in some of the markets
+in which we invest. In some circumstances, some of our holdings of investment securities may be large
+enough to have an influence on the market value. These factors may adversely affect our ability to sell these
+investments or sell them at a fair price.
+Our cash and bank deposits can provide us with a source of liquidity to meet normal cash outflows. As at the
+end of the Reporting Period, the amount of cash and cash equivalents was RMB76,096 million. In addition,
+substantially all of our term deposits with banks allow us to withdraw funds on deposit, subject to a penalty
+interest charge. As at the end of the Reporting Period, the amount of term deposits was RMB562,622
+million.
+Our principal cash inflows come from insurance premiums, deposits from investment contracts, proceeds
+from sales and maturity of investment assets, and investment income. The primary liquidity risks with
+respect to these cash inflows are the risk of early withdrawals by contract holders and policyholders, as well
+as the risks of default by debtors, interest rate changes and other market volatilities. We closely monitor and
+manage
+these risks.
+Liquidity Sources
+(1)
+ANALYSIS OF CASH FLOWS
+year
+ended 31 December
+Net cash inflow/(outflow) from operating activities
+Net cash inflow/(outflow) from investing activities
+Net cash inflow/(outflow) from financing activities
+Foreign exchange gains on cash and cash equivalents
+China Life Insurance Company Limited Annual Report 2015
+Risks relating to macro trends
+25,704
+29,062
+Net increase in cash and cash equivalents
+V
+16,704
+10
+241
+As at the end of the Reporting Period, equity holders' equity was RMB322,492 million, a 13.5% increase
+year-on-year. This was primarily due to the combined effect of an increase in the fair value of available-for-
+sale financial assets and the profit earned during the Reporting Period.
+(19,415)
+67,047
+78,247
+(18,811)
+2014
+2015
+RMB million
+Management Discussion and Analysis
+(69,257)
+Equity Holders' Equity
+As at the end of the Reporting Period, deferred tax liabilities decreased by 12.5% year-on-year. This was
+primarily due to an increase in the deductible temporary differences.
+Deferred Tax Liabilities
+2,122,101
+47,077
+65,200
+19,375
+16,953
+67,989
+67,994
+1,959,236
+2,623
+25,617
+30,092
+74,745
+107,774
+46,089
+31,354
+72,275
+2,643
+1,603,446
+As at the end of the Reporting Period, insurance contracts liabilities increased by 7.0% year-on-year. This
+was primarily due to the accumulation of insurance liabilities from new insurance business and renewal
+business. As at the date of the statement of financial position, the Company's insurance contracts reserves
+passed liability adequacy testing.
+Investment Contracts
+As at the end of the Reporting Period, bonds payable remained stable compared to the end of 2014. This
+was primarily due to the fact that no subordinated debts were issued by the Company in 2015.
+Bonds Payable
+(3)
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2015
+21
+As at the end of the Reporting Period, interest-bearing loans and borrowings remained stable compared to
+the end of 2014, and there were no new loans and borrowings in 2015. In June 2014, to meet the needs
+of overseas investment, one of the Company's subsidiaries applied for a fixed-interest rate bank loan of
+GBP275 million with a term of five years. As at the end of the Reporting Period, the loan balance was
+equivalent to RMB2,643 million.
+996,236
+Interest-bearing Loans and Borrowings
+Annuity and Other Insurance Balances Payable
+As at the end of the Reporting Period, policyholder dividends payable increased by 44.2% year-on-year. This
+was primarily due to an increase in investment yields of participating products.
+Policyholder Dividends Payable
+As at the end of the Reporting Period, securities sold under agreements to repurchase decreased by 32.0%
+year-on-year. This was primarily due to the needs for liquidity management.
+Securities Sold under Agreements to Repurchase
+year.
+As at the end of the Reporting Period, account balance of investment contracts increased by 16.4% year-on-
+This was primarily due to an increase in the scale of certain investment contracts.
+As at the end of the Reporting Period, annuity and other insurance balances payable increased by 17.5%
+year-on-year. This was primarily due to an increase in maturities payable.
+Bonds
+2.95%
+690,156
+2.
+pace
+The global economy is experiencing profound changes with insufficient momentum for recovery; the
+growth of international trade is sluggish; the volatility is seen in the financial and bulk commodity markets;
+the geopolitical risks are mounting; and the instabilities and uncertainties in the external environment are
+increasing. The impact of all the above factors on China's development cannot be underestimated. Domestic
+conflicts and risks that have been building up over the years become more obvious. With the change of
+in economic growth, the difficulties associated with structural adjustments, and the interwoven problems
+arising from the transformation of the drivers of growth, the downward pressure on the economy is growing.
+Changes in international and domestic markets will be transferred to the insurance industry through
+multiple channels such as the real economy, financial markets and consumer demands, which will in turn
+affect the business development, use of funds and solvency in various aspects.
+We have established a cash flow testing system. We conduct regular tests to monitor the cash inflows and
+outflows under various changing circumstances and adjust accordingly the asset portfolio to ensure sufficient
+sources of liquidity. During the Reporting Period, the change of net cash flow from operating activities was
+primarily due to an increase in securities at fair value through profit or loss. The change of net cash flow
+from investing activities was primarily due to the needs for investment management. The change in net cash
+flow from financing activities was primarily due to the needs for liquidity management.
+SOLVENCY RATIO
+The solvency ratio of an insurance company is a measure of capital adequacy, which is calculated by dividing the
+actual capital of the company (which is its admitted assets less admitted liabilities, determined in accordance with
+relevant regulatory rules) by the minimum required capital. The following table shows our solvency ratio as at the
+end of the Reporting Period:
+Actual capital
+Minimum capital
+Solvency ratio
+RMB million
+As at
+Risks relating to our business
+As at
+282,820
+85,676
+330.10%
+236,151
+80,193
+294.48%
+The increase in the Company's solvency ratio was primarily due to a significant increase in the comprehensive
+income during the Reporting Period and the issue of Core Tier 2 Capital Securities.
+23
+23
+China Life Insurance Company Limited Annual Report 2015
+In 2016, the Company will strengthen its in-depth analysis of macro-economic trends and complex risk factors to
+maintain its continuous and healthy growth. The major risk factors which may have an impact on the Company's
+future development strategy and business objectives include:
+32.85%
+Management Discussion and Analysis
+31 December 2015 31 December 2014
+3.
+As the financial reform steadily moves forward within a certain period of time in future, the effects from
+the further implementation of the exchange rate reform and the falling of the risk-free interest rate etc.
+will become increasingly apparent. Further, the market-oriented reform of premium rate for life insurance,
+the intensified market competition and the application of new technologies, etc. will bring about various
+challenges and uncertainties to the business development of the Company. Generally affected by these
+factors, the Company is experiencing more difficulties in maintaining steady business growth, as well
+as facing more uncertainties and complexities. Due to factors such as investment income and the cost
+of liabilities, there may be higher possibility of fluctuation of the Company's profits. In addition, the
+operational and financial risks of associated enterprises and the fluctuation in their profitability may
+undermine the expected returns on investment, which would have an impact on the Company's profitability.
+Risks relating to investments
+Huang Yiping
+Chang Tso Tung Stephen
+Bruce Douglas Moore
+Anthony Francis Neoh
+Miao Jianmin
+Zhang Xiangxian
+Wang Sidong
+Liu Jiade
+Xu Hengping
+Xu Haifeng
+Miao Ping
+Su Hengxuan
+Independent Directors
+Non-executive Directors
+Lin Dairen
+Yang Mingsheng (Chairman)
+Executive Directors
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+Mr. Yang Mingsheng, Mr. Miao Jianmin, Mr. Zhang Xiangxian, Mr. Wang Sidong, Mr. Liu Jiade,
+Mr. Robinson Drake Pike, Mr. Anthony Francis Neoh
+2,931
+From left to right:
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+27
+In 2016, under the guidance of the “innovation-driven development strategy", and with adherence to the
+business philosophy of “focusing on value, enhancing personnel, optimizing structure, maintaining growth
+and guarding against risks", the Company will focus on breakthroughs and strengthen benchmarking,
+and pay more attention to the acceleration of its development, sales transformation, team quality
+improvement, market benchmarking, as well as reform and innovation, in order to improve the Company's
+core competitiveness and sustainable development capability as a whole and to lay a solid foundation for
+achieving the Company's development objectives of the “13th Five-Year Plan”. Given the above mentioned
+risk factors, the Company will firmly adhere to its core development objectives, and fine-tune its business
+development objectives in accordance with market trends to an appropriate degree, so as to efficiently
+respond to challenges from market competitors and changes in the external environment. Meanwhile, the
+Company will focus on innovation in mechanisms, building of sales force, innovation in products, services
+and technology, in order to constantly enhance its vitality, creativity, competitiveness and capacity for
+sustainable development. The Company believes that it will have sufficient capital to meet its insurance
+business expenditures and general new investment needs in 2016. At the same time, if there is any further
+capital demand, the Company will make corresponding arrangements based on capital market conditions to
+further implement its future business development strategies.
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+26
+Given that the interest rate in China maintains at a low level, the investment yield of the newly allocated
+fixed income assets may decline, the difficulty of asset allocation may increase, and the risk relating to
+asset misallocation may increase. In light of the complexity of the domestic and international economies,
+as well as the greater volatility of the financial markets, the market risk relating to investment portfolios
+and credit risk may go up. In the meanwhile, the Company may develop new investment channels, utilize
+new investment vehicles or appoint new investment managers. All of the above may considerably affect the
+Company's investment income and the book value of its assets, and thus result in a greater fluctuation of the
+Company's profits. Moreover, some of the Company's assets are held in foreign currencies, which may be
+adversely affected by exchange rate movements.
+FUTURE PROSPECT AND RISK ANALYSIS
+Details of structured entities controlled by the Company is set out in Note 39(c) in the Notes to the Consolidated
+Financial Statements in this annual report.
+STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+XI
+IX
+During the Reporting Period, there was no sale of material assets and equity of the Company.
+BUSINESS OPERATIONS OF OUR MAIN SUBSIDIARIES AND AFFILIATES
+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 businesses
+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 CIRC
+Property loss insurance; liability insurance; credit
+insurance and bond insurance; short-term health
+insurance and accident insurance; reinsurance
+of the above insurance businesses; businesses for
+the use of insurance funds that are permitted
+by applicable PRC laws and regulations; other
+businesses permitted by the CIRC
+25
+RMB million
+Registered
+Capital
+4,000
+Shareholding
+Percentage Total Assets
+60% 7,608
+Net Assets
+Net Profit
+6,940
+1,096
+3,400
+70.74% is held
+3,440
+VIII SALES OF MATERIAL ASSETS AND EQUITY
+Robinson Drake Pike
+Tang Xin
+During the Reporting Period, there was no other material equity investment or non-equity investment with a total
+investment amount of more than 10% of the Company's audited net asset as at the end of last year.
+Investment business is one of the principal businesses of the Company, among which, equity investment consists
+of listed equities, unlisted equities and private equity funds, etc; non-equity investment consists of bank deposits,
+bonds and financial assets such as debt investment plans, trust schemes and wealth management products, etc.
+X
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2015
+2,258
+19,531
+65,634
+40%
+15,000
+held by AMC
+and 3.53% is
+by the Company,
+17
+VI
+ANALYSIS OF CORE COMPETITIVENESS
+The Company has the advantage of very strong brand recognition. It is the only life insurance company in China
+with shares listed on the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the New York Stock
+Exchange. It is also a core member of China Life Insurance (Group) Company which is one of the “Fortune
+Global 500" and the "World's 500 Most Influential Brands". In 2015, the brand of China Life has been ranked
+as one of the "World's 500 Most Influential Brands" published by World Brand Lab for nine consecutive years.
+The brand was also ranked as No.5 on the "China's 500 Most Valuable Brands” list, with brand value estimated at
+RMB182,272 million, ranking No.1 in the insurance industry.
+The Company has an extensive services and distribution network in China, with its business outlets and
+services counters covering both urban and rural areas. The 979,000 exclusive individual agents, 45,000 direct
+sales representatives, 56,000 intermediary bancassurance outlets and 131,000 sales representatives at those
+bancassurance outlets form a unique distribution and services network in China, and make the Company the life
+insurance service provider closest to the customers. Making use of internationally leading information technology
+and expanding telephone, Internet, email and other electronic service channels, the Company strives to meet
+customer demand for purchasing insurance products through multiple channels.
+The Company has the most extensive customer base. As at 31 December 2015, the Company had approximately
+216 million long-term individual and group life insurance policies, annuity contracts and long-term health
+insurance policies in force.
+The Company possesses great financial strength. As at 31 December 2015, the registered capital and the total
+assets of the Company were RMB28,265 million and RMB2,448,315 million, respectively, which ranked No.1
+in China's life insurance industry. As at the end of 2015, the total market capitalization of the Company was
+US$114,921 million, which ranked No.2 among all listed insurance companies in the world.
+The Company is one of the largest institutional investors in China, and through its controlling shareholding
+in China Life Asset Management Company Limited, the Company is the largest insurance asset management
+company in China. As at 31 December 2015, the investment assets reached RMB2,287,639 million, an increase of
+8.9% from the end of 2014.
+The Company has rich experience in life insurance management. The predecessor of China Life was the first
+enterprise to underwrite life insurance business in China, and played the role of an explorer and pioneer in China's
+life insurance industry. During the long course of its development, the Company has accumulated a wealth of
+experience in operation and management, has a stable, professional management team, and has become well versed
+in the art of management in China's life insurance market. The Company's key management team and 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, qualified underwriting personnel, actuaries and experienced
+investment managers, etc. During the Reporting Period, there was no movement of these personnel which might
+have material impacts on the Company.
+24
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+VII MAJOR INVESTMENTS
+On 8 December 2015, the Company and Postal Savings Bank of China Co., Ltd. ("Postal Savings Bank”) entered
+into the Share Subscription Agreement, pursuant to which, Postal Savings Bank conditionally agreed to allot and
+issue, and the Company conditionally agreed to subscribe for, 3,341,900,000 shares of Postal Savings Bank for a
+total consideration of RMB12,999,991,000. Upon the completion of the transaction on 17 December 2015, the
+Company holds no more than 5% of the enlarged issued share capital of Postal Savings Bank. For details, please
+refer to the announcement published by the Company on the website of the SSE and the HKExnews website of the
+Hong Kong Exchanges and Clearing Limited on 8 December 2015.
+(resigned with effect from 8 May 2015)
+Mr. Tang Xin, Mr. Chang Tso Tung Stephen, Mr. Xu Haifeng, Mr. Xu Hengping, Mr. Lin Dairen,
+(appointed as Director with effect from 11 July 2015)
+Held-to-Maturity Securities
+As at the end of the Reporting Period, term deposits decreased by 18.5% year-on-year. This was primarily
+due to a decrease in the allocation of negotiated deposits.
+2,246,567
+2,448,315
+Term Deposits
+Total
+145,697
+160,676
+1,283
+1,237
+6,153
+As at the end of the Reporting Period, held-to-maturity securities decreased by 2.6% year-on-year. This was
+primarily due to a decrease in the allocation of treasury bonds.
+6,333
+Investment properties
+Statutory deposits - restricted
+166,453
+207,267
+47,034
+76,096
+11,925
+21,503
+Securities purchased under agreements to resell
+53,052
+137,990
+Other assets
+Available-for-Sale Securities
+As at the end of the Reporting Period, available-for-sale securities increased by 26.8% year-on-year. This was
+primarily due to an increase in the allocation of funds, wealth management products and unlisted equities in
+light of market conditions in a timely manner.
+Securities at Fair Value through Profit or Loss
+24.59%
+562,622
+Term deposits
+85.90%
+1,804,598
+77.69%
+1,777,180
+Fixed-maturity investments
+Percentage
+As at 31 December 2014
+Amount
+As at 31 December 2015
+Amount
+Percentage
+RMB million
+classes:
+As at the end of the Reporting Period, our investment assets are categorized as below in terms of asset
+As at the end of the Reporting Period, investment properties decreased by 3.6% year-on-year. This was
+primarily due to the depreciation of the investment properties.
+Investment Properties
+As at the end of the Reporting Period, loans increased by 24.5% year-on-year. This was primarily due to an
+increase in the scale of policy loans and trust schemes, etc.
+Loans
+As at the end of the Reporting Period, cash and cash equivalents increased by 61.8% year-on-year. This was
+primarily due to the needs for liquidity management.
+Cash and Cash Equivalents
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2015
+19
+loss.
+As at the end of the Reporting Period, securities at fair value through profit or loss increased by 160.1%
+year-on-year. This was primarily due to an increase in the allocation of bonds at fair value through profit or
+(retired upon expiry of the term with effect from 28 May 2015)
+(appointed as Director with effect from 11 July 2015)
+607,531
+117
+Available-for-sale securities
+504,075
+690,156
+562,622
+2,100,870
+2,287,639
+Loans
+Cash and cash equivalents
+Securities at fair value through profit or loss
+China Life Insurance Company Limited Annual Report 2015
+Management Discussion and Analysis
+Held-to-maturity securities
+Term deposits
+Investment assets
+31 December 2015 31 December 2014
+RMB million
+As at
+As at
+517,283
+(1) Major Assets
+III ANALYSIS OF MAJOR ITEMS OF CONSOLIDATED STATEMENT OF FINANCIAL
+POSITION
+(appointed as Director with effect from 11 July 2015)
+(retired upon expiry of the term with effect from 28 May 2015)
+(resigned with effect from 7 March 2016)
+(appointed as Director with effect from 11 July 2015)
+(appointed as Director with effect from 7 March 2016)
+28
+770,516
+equity holders of
+the Company in
+the consolidated
+2014
+Year in which
+2015
+statements
+financial
+dividends were
+the year in which in the consolidated
+financial
+statements for
+of the Company
+dividends were
+distributed
+Amount of
+Transfer of
+public reserve
+Number of
+Percentage of
+amount of cash
+dividends per
+bonus stocks
+per
+ten shares (shares)
+ten shares (RMB)
+Unit: RMB million
+Amount of
+cash dividends
+(inclusive of tax)
+(inclusive of tax) ten shares (shares)
+Net profit
+attributable to
+dividends
+in net profit
+attributable to
+equity holders
+into share
+capital per
+11,871
+2013
+34,699
+34%
+11,306
+32,211
+35%
+8,479
+24,765
+33
+34%
+China Life Insurance Company Limited Annual Report 2015
+Report of the Board of Directors
+5.
+6.
+7.
+CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+The changes in accounting policies and estimates of the Company during the Reporting Period are set out in Note
+2 and Note 3 in the Notes to the Consolidated Financial Statements in this annual report.
+RESERVES
+Details of the reserves of the Company are set out in Note 36 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
+RMB99 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.
+8.
+SHARE CAPITAL
+9.
+33
+3.0
+4.0
+4.2
+distributed
+4.
+China Life Insurance Company Limited Annual Report 2015
+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 8 June 2015 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 28 May 2015 for the information on income tax in respect of the dividend
+distributed to H Share shareholders during the Reporting Period.
+3.
+Currently, the fifth session of the Supervisory Committee comprises Mr. Miao Ping, Mr. Shi Xiangming,
+Ms. Xiong Junhong, Mr. Zhan Zhong and Ms. Wang Cuifei, with Mr. Miao Ping acting as the Chairman
+of the Supervisory Committee. Of the members of the Supervisory Committee, Mr. Miao Ping, Mr. Shi
+Xiangming and Ms. Xiong Junhong are Non Employee Representative Supervisors, and Mr. Zhan Zhong
+and Ms. Wang Cuifei are Employee Representative Supervisors.
+Attending meetings of the Supervisory Committee 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 Supervisory Committee Meetings" of the Company, and in accordance with the
+work arrangement of the Supervisory Committee, the Supervisory Committee 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. In 2015, the fourth and the fifth sessions
+of the Supervisory Committee held 6 meetings, 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.
+Attending and participating in corporate governance meetings and actively exercising their supervisory
+role. In 2015, the Supervisory Committee attended the 2014 Annual General Meeting and the First
+Extraordinary General Meeting 2015 of the Company, and participated in the regular meetings of the
+Board. All members of the Supervisory Committee participated in the meetings of the Nomination and
+Remuneration Committee, the Risk Management Committee, and the Strategy and Investment Decision
+Committee, respectively, in accordance with the work allocation among Supervisors determined by the
+Supervisory Committee, with a focus on the meetings of the Audit Committee. 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.
+88
+38
+Service/Nature
+Remuneration paid by China Life Insurance Company Limited to the auditors in 2015 was as follows:
+Remuneration paid by the Company to the auditors is subject to 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.
+Resolutions were passed at the 2014 Annual General Meeting to engage Ernst & Young Hua Ming LLP and Ernst
+& Young as the PRC and international auditors of the Company for the year 2015, respectively. Ernst & Young
+Hua Ming LLP and Ernst & Young have been serving as the Company's auditors for three consecutive years.
+25. AUDITORS
+Report of the Board of Directors
+36
+Period.
+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
+2.
+24. COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
+1.
+ACTIVITIES OF THE SUPERVISORY COMMITTEE
+The dividend distribution of the Company for the recent 3 years is as follows:
+Fees (RMB million)
+Financial report audit fee
+Internal control audit fee
+46.00
+11.50
+Ernst & Young Hua Ming LLP and Ernst & Young have been re-appointed as the PRC and international auditors
+of the Company for the year 2016 at the First Extraordinary General Meeting 2015 held on 29 December 2015.
+By Order of the Board
+Yang Mingsheng
+Chairman
+Beijing, China
+23 March 2016
+37
+China Life Insurance Company Limited Annual Report 2015
+Report of the Supervisory Committee
+From left to right:
+Ms. Wang Cuifei, Ms. Xiong Junhong,
+Mr. Miao Ping, Mr. Shi Xiangming,
+Mr. Zhan Zhong
+1.
+Based on the information publicly available to the Company and within the knowledge of the Directors as at the
+Latest Practicable Date (23 March 2016), 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.
+23. SUFFICIENCY OF PUBLIC FLOAT
+During the Reporting Period, 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.
+16. DISCLOSURE OF INTERESTS OF DIRECTORS, SUPERVISORS AND THE CHIEF
+EXECUTIVE IN THE SHARES OF THE COMPANY
+No arrangements to which the Company or its controlling shareholder or any of their respective subsidiaries 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.
+15. DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+14. 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.
+None of the Directors or Supervisors has entered into any service contract 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).
+13. DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+34
+Details of the Board meetings and the Board's performance of its duties during the Reporting Period are set out in
+the section “Corporate Governance" in this annual report.
+12. DAY-TO-DAY OPERATIONS OF THE BOARD
+No H Share Stock Appreciation Rights of the Company were granted or exercised in 2015. The Company will
+deal with such rights and related matters in accordance with the relevant PRC governmental policies.
+11. H SHARE STOCK APPRECIATION RIGHTS
+During the Reporting Period, save for the issue of Core Tier 2 Capital Securities by the Company as disclosed
+in "V. Miscellaneous" under the section of “Significant Events" in this annual report, the Company and its
+subsidiaries did not purchase, sell or redeem any of the Company's listed securities.
+10. PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S SECURITIES
+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 Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (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 observation of the Model Code and the
+Company's own code of conduct in the year of 2015.
+17. 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.
+18. MANAGEMENT CONTRACTS
+22. MAJOR CUSTOMERS
+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 2015.
+21. BOARD'S STATEMENT ON INTERNAL CONTROL
+20. RESPONSIBILITY STATEMENT OF DIRECTORS ON FINANCIAL REPORTS
+the Company has expressly provided in its Articles of Association the level of authority required for
+approving external guarantees and the approval procedures.
+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
+guarantee;
+Details of the movement in share capital of the Company are set out in Note 34 in the Notes to the Consolidated
+Financial Statements in this annual report.
+(3)
+(1) during the Reporting Period, the Company did not provide any external
+Independent Directors of the Company have rendered their independent opinions on the Company's external
+guarantees, and are of the view that:
+19. MATERIAL GUARANTEES
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+35
+No management or administration contracts for the whole or substantial part of any business of the Company
+were entered into during the Reporting Period.
+(2)
+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 systems. Small- and medium-sized
+shareholders of the Company have sufficient opportunities to express their opinions 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.
+(I)
+No public reserve capitalization is provided for in the profit distribution plan for the current financial
+The Company actively promoted the construction of a democratic management system with an employee
+representative meeting as its basic form to protect the democratic rights of employees and to facilitate the
+joint development between employees and enterprise. Its head office and branches have fully established the
+system of employee representative meetings, organized their respective employees to perform democratic
+management and supervisory role according to law, and inspected and monitored the implementation of any
+resolutions adopted by employee representative meetings, thus carrying out the supervisory and performing
+functions of proposals in a serious manner and constantly improving democratic management.
+The Company entered into labor contracts with employees in a timely manner to actively create a
+harmonious labor relationship according to law. Taking into account the moldability of new employees, the
+Company specifically designed a method to cultivate new employees and adopted measures including tutor
+counseling, internship rotation and follow-up appraisal, etc. for cultivation purpose. It also expanded the
+career development path for employees, conducted regular job rotation, two-way selection, communication
+and practice, education and training, and performance counseling, and implemented base platform exercises
+and cultivation of professional leaders and talents, etc. to facilitate the career development of employees at
+all levels. The Company implemented a mechanism for the determination of individual remuneration based
+on the principle of “salary determined by post and performance” so as to enable its employees to obtain
+labor remuneration in full that is commensurate with their responsibilities and performance. The Company
+protected the rights of employees to have rest days and annual leave as conferred by laws and regulations
+in a practical manner to fully reflect its humanistic concern about employees, and encouraged employees
+to arrange rest days and annual leave in a scientific way in an attempt to maintain a reasonable work-life
+balance.
+(V) Relationship between the Company and its employees
+3.
+China Life Insurance Company Limited Annual Report 2015
+Report of the Board of Directors
+30
+In 2015, the Company launched a number of services and activities for developing and improving customer
+relations in response to the customers' diversified characteristics and demands, including the global
+emergency services and VIP services for all long-term policyholders that covered multi-layer and various
+classes of the global emergency, health consultation and VIP care services. The Company constantly stepped
+up its efforts to offer care to customers by regularly carrying out a variety of sports activities and seminars
+on health topics, and set up platforms of health services. The Company was also concerned about the
+growth of teenagers and children, and organized over 6,300 activities, including customer festivals, such as
+"Hand-in-Hand" series of activities, and “Little Painters of China Life" activities, covering nearly 3 million
+customers. By innovating new form of services, taking full advantage of Internet technology and adopting
+mobile communication tools such as WeChat, the Company made its communication with customers more
+convenient. The Company steadily promoted return visits via WeChat to improve customers' experience.
+In addition, the Company enhanced its protection of the rights and interests of insurance customers, by
+establishing a mechanism for protection, and intensified its supervisory function through assessment. In
+2015, the number of customer complaints in all systems of the Company decreased by 14% from 2014.
+It is the core mission of an enterprise to provide high quality services to its customers. The Company
+regards customer satisfaction and customer experience as the basic standards for assessing its services, and
+established a customer-oriented business model in order to take customer resources as the engine to create
+value for the Company. As at the end of the Reporting Period, the Company provided commercial insurance
+protection services for more than 400 million customers and offered supplementary major medical insurance
+and policy-oriented insurance such as New Village Cooperative Medical Insurance for nearly 400 million
+customers. The results of the overall customer satisfaction and customer loyalty increased by 1.2% and
+4.8%, respectively, from 2014.
+(IV) Relationship between the Company and its customers
+Under the guidance of the industry's core values of “being trustworthy, assuming risks, emphasizing on
+services and being legal compliant" all along, the Company stuck to the business compliance concepts of
+"being compliant from the top level, having responsibility for all to be compliant, and creating value from
+compliance”, strictly observed and effectively implemented applicable laws and regulations and regulatory
+requirements, such as the Insurance Law, the Company Law, the “Regulations for the Administration
+of Insurance Companies", the "Measures for the Administration of Insurance Clauses and Insurance
+Premium Rates of Personal Insurance Companies”, and the “Interim Measures for the Administration of
+Utilization of Insurance Funds”, seriously applied the decision made by the National People's Congress for
+the amendment to the Insurance Law with respect to the disqualification of insurance sales practitioners,
+and actively put into practice the “Judicial Interpretation (3)” of the Insurance Law promulgated by
+the Supreme People's Court. The Company also sorted out, assessed, revised and improved the existing
+business procedures, invoices and vouchers, medical and insurance products, as well as ancillary practices,
+etc., pushed forward the “Interim Measures for the Supervision of the Internet Insurance Business” issued
+by the CIRC in a practical manner to further regulate the business conduct of Internet insurance, and
+voluntarily undertook the social responsibilities of mitigating burdens and serving medical reforms to enable
+more people to enjoy preferential policies of the PRC government. The Company tried hard to construct a
+compliance management system covering the whole process of operation and management, such as corporate
+governance, investment management, sales management and insurance policy services, with a view to fully
+serving and safeguarding the business development of the Company and its reform and innovation.
+(III) Compliance by the Company with the relevant laws and regulations that have a significant impact
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+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
+"Directors, Supervisors, Senior Management and Employees" in this annual report.
+29
+The Company formulated and released the “Provisional Measures for the Administration of Energy Saving
+and Emission Reduction" in 2015 to further regulate the utilization of energy throughout all systems of the
+Company. It also requested all branches to submit and report to the head office regularly the attainment of
+environmental indicators each year, established a statistics mechanism for the collection of environmental
+information, and regulated the utilization, repair and retirement of measuring instruments and equipment
+for water, electricity, gas, heating and other supplies of the Company.
+The Company actively responded to the call from the PRC government for energy saving and emission
+reduction, carried out all staff actions on energy saving and environmental protection in great depth, and
+cut down energy consumption and carbon emission in each operational aspect through the saving of energy,
+reduction of wastage, optimization of procedures, and utilization of new types of environmental protection
+materials.
+(II) Environmental policies and performance of the Company
+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 section of “Management Discussion and
+Analysis" in this annual
+report.
+(I) Overall operation of the Company during the Reporting Period
+BUSINESS REVIEW
+The Company is the largest life insurance company in China's life insurance market and possesses the most
+extensive distribution network in China, comprising exclusive agents, direct sales representatives as well as
+dedicated and non-dedicated agencies. The Company provides 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 is China's largest insurance asset management company through its controlling shareholding in China Life
+Asset Management Company Limited. The Company also has controlling shareholding in China Life Pension
+Company Limited.
+PRINCIPAL BUSINESS
+2.
+1.
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+year.
+In 2015, the Company continued to conscientiously adopt the working style of diligence and thrift,
+to actively create the corporate culture of all being thrifty in every aspect, and to cut down energy
+consumption through the optimization of procedures, innovation of technologies and utilization of new
+types of environmental protection materials. The Company lowered its costs by reducing the number of
+meetings and activities, scaling down the size of meetings, and cutting down the number of documents to
+be issued. Office automation was fully implemented. Electronization of meeting proposals, remote review of
+proposals, remote handling of meeting affairs and enquiries of meeting files were achieved at the meetings
+of the Board, the Supervisory Committee and the special committees. Through the establishment of the
+Research & Development Center and Data Center to construct a centralized operational services system,
+the Company achieved the centralization of research, development, operation and maintenance, as well as
+the standardization of services. The daily average approved operations amounted to over 100 million. As a
+result, the Company lowered carbon emissions while enhancing its efficiency. The Company cut down the
+use of advertising paper materials as much as possible and effectively saved the paper consumption resulting
+from paper cheques, letters and insurance policies through the adoption of new electronic services, such as
+electronic invoices, electronic insurance policies, WeChat, official websites and mobile apps.
+FORMULATION AND IMPLEMENTATION OF PROFIT DISTRIBUTION POLICY
+In accordance with Article 211 of the Articles of Association, the basic principles of the Company's profit
+distribution are as follows:
+The Directors are responsible for overseeing the 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 flow 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.
+2.
+1.
+In accordance with the profit distribution plan for the year 2015 approved by the Board on 23 March
+2016, with the appropriation to its discretionary surplus reserve fund of RMB3,438 million (10%
+of the net profit for 2015), the Company, based on 28,264,705,000 shares in issue, proposed to
+distribute cash dividends amounting to RMB11,871 million to all shareholders of the Company at
+RMB0.42 per
+share (inclusive of tax). The foregoing profit distribution plan is subject to the approval
+by the 2015 Annual General Meeting to be held on 30 May 2016 (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 accordance with 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.
+year
+Profit distribution plan or public reserves capitalization plan for the
+1.
+Report of the Board of Directors
+China Life Insurance Company Limited Annual Report 2015
+(IV) Profit distribution plan and public reserves capitalization plan
+2.
+32
+The Company's profit distribution proposal shall be reviewed by the Board of Directors. The Board of
+Directors shall have a sufficient discussion of the 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 small- and medium-sized shareholders, and give timely reply to concerns of small- and
+medium-sized shareholders.
+(III) In accordance with Article 213 of the Articles of Association, the procedures of reviewing the Company's
+profit distribution proposal is as follows:
+above are satisfied.
+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
+of 2015
+Profit distribution modes: The Company may 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.
+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. If the
+Company's solvency ratio is less than a hundred percent (100%) of the regulatory requirement, the
+Company shall not distribute profits to its shareholders. If the Company's solvency ratio is less than
+one hundred and fifty percent (150%) of the regulatory requirement, the lower of the following two
+factors shall be the basis for profit distribution: (1) the distributable profit as ascertained under the
+Accounting Standards for Business Enterprises; (2) the residual overall income ascertained pursuant to
+the rules for the preparation of the Company's solvency report.
+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;
+3.
+The Company shall give priority to cash dividends as its profit distribution manner.
+31
+China Life Insurance Company Limited Annual Report 2015
+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;
+(II)
+In accordance with Article 212 of the Articles of Association, the Company's profit distribution policy is as
+follows:
+1.
+2.
+3.
+Report of the Board of Directors
+During the Reporting Period, the following continuing connected transactions were carried out by the
+Company under Chapter 14A of the Listing Rules, including the framework agreements entered into by
+AMP with the Company, Pension Company, CLIC and CLP&C, respectively. These continuing connected
+transactions were subject to the reporting, announcement, annual review and independent shareholders'
+approval requirements under the Listing Rules. Such agreements and the transactions thereunder have been
+approved by the shareholders' general meeting of the Company held on 29 May 2014. AMP is a non-wholly
+owned subsidiary of AMC and is therefore a connected subsidiary of the Company.
+During the Reporting Period, the following continuing connected transactions were carried out by the
+Company pursuant to Rule 14A.76(2) of 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, and the framework
+agreements entered into by CLWM with the Company, CLIC, CLP&C, China Life Insurance (Overseas)
+Company Limited (“CLO”) and CLI, respectively. 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 CLO and
+CLI. Therefore, each of CLIC, CLP&C, CLO and CLI 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. CLWM is a subsidiary of AMC, and is therefore a connected subsidiary of the
+Company.
+(I) Continuing Connected Transactions
+MAJOR CONNECTED TRANSACTIONS
+II.
+I.
+Significant Events
+During the Reporting Period, the Company also entered into certain continuing connected transactions,
+including the asset management agreement between CLIC and AMC, which were exempt from the
+reporting, announcement, annual review and independent shareholders' approval requirements under
+Chapter 14A of the Listing Rules.
+China Life Insurance Company Limited Annual Report 2015
+During the Reporting Period, the Company was not involved in any material litigation or arbitration.
+In addition, the asset management agreement for alternative investments and the transactions thereunder
+entered into between the Company and CLI during the Reporting Period were subject to the reporting,
+announcement and annual review requirements but were exempt from the independent shareholders'
+approval requirement under the Listing Rules. However, such agreement was subject to approval by the
+shareholders' general meeting of the Company under the SSE Listing Rules. Such agreement and the
+transactions thereunder have been approved by the shareholders' general meeting of the Company held on
+29 December 2015.
+2.
+41
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+1.
+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 2014.
+The Company and CLIC entered into the 2015 policy management agreement on 29 December 2014,
+with a term from 1 January 2015 to 31 December 2017. Pursuant to the 2015 policy management
+agreement, the Company agreed to provide policy administration services to CLIC relating to the
+non-transferred policies. The Company acts as a service provider under the agreement and does not
+acquire any rights or assume any obligations as an insurer under the non-transferred policies. For
+details as to the method of calculation of the service fee, please refer to Note 33 in the Notes to the
+Consolidated Financial Statements. The annual cap for each of the three years ending 31 December
+2017 is RMB1,037 million.
+For the year ended 31 December 2015, the service fee paid by CLIC to the Company amounted to
+RMB950 million.
+Asset Management Agreements
+(1) Asset Management Agreement between the Company and AMC
+Since 30 November 2003, the Company has from time to time entered into asset management
+agreements with AMC. The renewed asset management agreement between the parties
+expired on 31 December 2012. On 27 December 2012, the Company entered into the 2012
+asset management agreement with AMC, which was for a term of two years effective from 1
+January 2013 and has been extended to 31 December 2015 pursuant to the automatic renewal
+clause. Pursuant to the 2012 asset management 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 asset management fee, please refer to Note 33
+in the Notes to the Consolidated Financial Statements. The annual cap for each of the three
+years ended 31 December 2015 was RMB1,200 million. On 29 December 2015, the Company
+entered into the 2016 asset management agreement with AMC, which was for a term of three
+years from 1 January 2016 to 31 December 2018. Pursuant to the 2016 asset management
+agreement, AMC will continue to invest and manage assets entrusted to it by the Company. The
+annual cap for each of the three years ending 31 December 2018 is RMB1,500 million.
+23 March 2016
+The Company has complied with the disclosure requirements under Chapter 14A of the Listing Rules in
+respect of the above continuing connected transactions. When conducting the above continuing connected
+transactions during the year, the Company has followed the pricing policies and guidelines formulated at the
+time when such transactions were entered into.
+Beijing, China
+The Company's operational compliance with the law. During the Reporting Period, the Company's
+operations were in compliance with the law. 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 Supervisory Committee 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.
+Miao Ping
+China Life Insurance Company Limited Annual Report 2015
+Report of the Supervisory Committee
+2.
+4.
+Strengthening training and enhancing duty performance of the Supervisors. In April 2015, Ms. Xiong
+Junhong attended the training courses for new directors, supervisors and senior management of insurance
+companies and insurance asset management companies in 2015 organized by the General Office of the
+CIRC. In 2015, all members of the Supervisory Committee attended the training courses on the PRC
+insurance market of 2014, which gave them a general review and analysis of the overall situation of the
+PRC insurance market in 2014 from various aspects, including insurance regulation, industry development
+and horizontal competition. According to the requirements of the CIRC, members of the Supervisory
+Committee attended the training course on the "Analysis of China Risk Oriented Solvency System" to
+ensure the truthfulness, accuracy, completeness and compliance of the solvency report submitted by the
+Company, and to enhance the solvency of the Company, its risk management capability and the level of
+public disclosure of its solvency to external parties. To comply with the regulatory requirements, members
+of the Supervisory Committee have studied training materials relating to anti-money laundering for the
+purpose
+of understanding the latest regulatory system in a timely manner.
+INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON CERTAIN
+MATTERS
+During the Reporting Period, the Supervisory Committee 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 Supervisory Committee Meetings".
+1.
+2.
+For the year ended 31 December 2015, the Company paid AMC an asset management fee of
+RMB1,020 million.
+The authenticity of the financial report. The Company's annual financial report truly and completely
+reflected the Company's financial position and its operating results. Ernst & Young Hua Ming LLP and
+Ernst & Young have performed audits and have issued unqualified Independent Auditors' Report on the
+consolidated financial statements for the year ended 2015 in accordance with the China Standards on
+Auditing of PRC Certified Public Accountants and the International Standards on Auditing, respectively.
+39
+China Life Insurance Company Limited Annual Report 2015
+Report of the Supervisory Committee
+3.
+4.
+5.
+Acquisition and sale of assets. During the Reporting Period, the prices for acquisition and sale of assets were
+fair and reasonable. The Supervisory Committee is not aware of any insider trading, any acts harming the
+interests of shareholders or incurring any loss to the Company's assets.
+Connected transactions. During the Reporting Period, the connected transactions of the Company were
+on commercial terms. The Supervisory Committee is not aware of any acts harming the interests of the
+Company.
+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 Supervisory Committee of the Company reviewed the self-evaluation report on the Company's
+internal control systems and did not raise any objection against the self-evaluation report of the Board
+regarding the Company's internal control systems.
+40
+By Order of the Supervisory Committee
+Chairman of the Supervisory Committee
+42
+MATERIAL LITIGATIONS OR ARBITRATIONS
+(2) Asset Management Agreement between CLIC and AMC
+year ended 31 December 2015, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB0 million, the redemption price and
+corresponding redemption fee for the redemption of fund products was RMB0 million, the sales
+commission fee and client maintenance fee paid by AMP were RMB0 million, and the fees for
+other daily transactions were RMB0 million.
+(3) Framework Agreement between CLIC and AMP
+As approved at the thirteenth meeting of the fourth session of the Board and the 2013 Annual
+General Meeting, CLIC and AMP entered into the “Framework Agreement in relation to
+Subscription and Redemption of Fund Products" on 30 May 2014. The agreement became
+effective upon signing by the parties and will expire on 31 December 2016. Pursuant to
+the agreement, CLIC and AMP will enter into transactions in relation to the subscription
+and redemption of fund products. Pricing of the transactions under the agreement shall be
+determined by the parties through arm's length negotiations with reference to the industry
+practices. For the three years ending 31 December 2016, the annual caps of the subscription
+price and corresponding subscription fee for the subscription of fund products are RMB5,000
+million, RMB10,000 million and RMB10,000 million, respectively; and the annual caps of the
+redemption price and corresponding redemption fee for the redemption of fund products are
+RMB5,000 million, RMB10,000 million and RMB10,000 million, respectively.
+For the year ended 31 December 2015, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB6,250.00 million, and the redemption
+price and corresponding redemption fee for the redemption of fund products was RMB555.47
+million.
+46
+5.
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+(4) Framework Agreement between CLP&C and AMP
+As approved at the thirteenth meeting of the fourth session of the Board and the 2013 Annual
+General Meeting, CLP&C and AMP entered into the "Cooperation Framework Agreement"
+on 6 June 2014. The agreement became effective upon signing by the parties and will expire on
+31 December 2016. Pursuant to the agreement, CLP&C and AMP will enter into certain daily
+transactions, including subscription and redemption of fund products, sales agency 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 the industry practices. For the three years ending 31 December 2016, the annual caps of
+the subscription price for the fund products are RMB5,000 million, RMB10,000 million and
+RMB10,000 million, respectively; the annual caps of the redemption price for the fund products
+are RMB5,000 million, RMB10,000 million and RMB10,000 million, respectively; the annual
+caps of the subscription fee for the fund products are RMB50 million, RMB100 million and
+RMB100 million, respectively; the annual caps of the redemption fee for the fund products are
+RMB50 million, RMB100 million and RMB100 million, respectively; the annual caps of the
+sales commission fee and client maintenance fee payable by AMP are RMB50 million, RMB100
+million and RMB100 million, respectively; and the annual caps of the fees for other daily
+transactions are RMB50 million, RMB100 million and RMB100 million, respectively.
+For the
+year ended 31 December 2015, 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 RMBO
+million, the sales commission fee and client maintenance fee paid by AMP were RMB0 million,
+and the fees for other daily transactions were RMB0.03 million.
+Framework Agreements with CLWM
+For the
+(1) Framework Agreement between the Company and CLWM
+48
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+For the year ended 31 December 2015, the management fee paid by the Company for the asset
+management services was RMB0 million; the fees in connection with the sale agency services
+paid by CLWM, including the sales commission fee, client maintenance fee, handling fee and
+intermediary fee were RMB0 million; the fees for other daily transactions were RMB0 million.
+(2) Framework Agreement between CLIC and CLWM
+As approved at the fourth meeting of the fifth session of the Board, CLIC and CLWM entered
+into the "Framework Agreement in relation to Asset Management Services" on 26 January 2016.
+The
+agreement became effective upon signing by the parties and will expire on 31 December
+2017. Pursuant to the agreement, CLIC will subscribe for the asset management products, in
+respect of which CLWM acts as the manager, according to its needs of asset allocation. Pricing
+of the transactions under the agreement shall be determined by the parties through arm's length
+negotiations with reference to the industry practices. For the three years ending 31 December
+2017, the annual caps of the management fee payable by CLIC for the asset management
+services are RMB40 million, RMB70 million and RMB80 million, respectively.
+For the year ended 31 December 2015, the management fee paid by CLIC for the asset
+management services was RMB0 million.
+(3) Framework Agreement between CLP&C and CLWM
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+As approved at the fourth meeting of the fifth session of the Board, CLP&C and CLWM
+entered into the “Framework Agreement in relation to Asset Management Services and Other
+Daily Transactions" on 9 March 2016. The agreement became effective upon signing by
+the parties and will expire on 31 December 2017. Pursuant to the agreement, CLP&C and
+CLWM will enter into certain daily transactions, including asset management services, sale
+agency services for asset management products 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 the industry practices. For the
+three years ending 31 December 2017, the annual caps of the management fee payable by
+CLP&C for the asset management services are RMB5 million, RMB180 million and RMB300
+million, respectively; the annual caps of fees in connection with the sale agency services payable
+by CLWM, including the sales commission fee, client maintenance fee, handling fee and
+intermediary fee are RMB2 million, RMB150 million and RMB200 million, respectively; the
+annual caps of the fees for other daily transactions are RMB5 million, RMB50 million and
+RMB50 million, respectively.
+For the year ended 31 December 2015, the management fee paid by CLP&C for the asset
+management services was RMB0 million; the fees in connection with the sale agency services
+paid by CLWM, including the sales commission fee, client maintenance fee, handling fee and
+intermediary fee were RMB0 million; the fees for other daily transactions were RMB0 million.
+As approved at the fourth meeting of the fifth session of the Board, the Company and CLWM
+entered into the “Framework Agreement in relation to Asset Management Services and Other
+Daily Transactions" on 30 December 2015. The agreement became effective upon signing by
+the parties and will expire on 31 December 2017. Pursuant to the agreement, the Company
+and CLWM will enter into certain daily transactions, including asset management services,
+sale agency services for asset management products 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 the industry practices. For
+the three years ending 31 December 2017, the annual caps of the management fee payable
+by the Company for the asset management services are RMB55 million, RMB180 million
+and RMB240 million, respectively; the annual caps of fees in connection with the sale agency
+services payable by CLWM, including the sales commission fee, client maintenance fee,
+handling fee and intermediary fee are RMB25 million, RMB50 million and RMB100 million,
+respectively; the annual caps of the fees for other daily transactions are RMB25 million, RMB50
+million and RMB100 million, respectively.
+As approved at the thirteenth meeting of the fourth session of the Board and the 2013 Annual
+General Meeting, Pension Company and AMP entered into the "Framework Agreement in
+relation to Subscription and Redemption of Fund Products, Sale of Funds and Other Daily
+Transactions" on 4 September 2014. The agreement became effective upon signing by the
+parties and will expire on 31 December 2016. Pursuant to the agreement, Pension Company
+and AMP will enter into certain daily transactions, including subscription and redemption
+of fund products, sales agency 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 the industry practices. For the three
+years ending 31 December 2016, the annual caps of the subscription price and corresponding
+subscription fee for the subscription of fund products are RMB5,000 million, RMB10,000
+million and RMB10,000 million, respectively; the annual caps of the redemption price and
+corresponding redemption fee for the redemption of fund products are RMB5,000 million,
+RMB10,000 million and RMB10,000 million, respectively; the annual caps of the sales
+commission fee and client maintenance fee payable by AMP are RMB50 million, RMB100
+million and RMB100 million, respectively; and the annual caps of the fees for other daily
+transactions are RMB50 million, RMB100 million and RMB100 million, respectively.
+47
+the management fee paid by the Company for the asset management for specific clients was
+RMB1.49 million, and the fees for other daily transactions were RMB0.42 million.
+For the year ended 31 December 2015, CLIC paid AMC an asset management fee of RMB133
+million.
+(3) 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. As approved at the seventeenth meeting
+of the fourth session of the Board and the Second Extraordinary General Meeting 2014,
+the Company and CLI entered into the 2015 asset management agreement for alternative
+investments on 31 December 2014, with a term of one year from 1 January 2015 to 31
+December 2015. Pursuant to the 2015 asset management agreement for alternative investments,
+CLI will invest and manage assets entrusted to it by the Company, on a discretionary basis,
+within the scope of utilization of insurance funds as specified by the CIRC and in accordance
+with the requirements of applicable laws and regulations and the investment guidelines of
+the Company. The entrusted assets include equity, real estate, related financial products and
+securitization financial products. The Company will pay CLI the investment management
+service fee and performance incentive fee in respect of the investment and management
+services provided by CLI to the Company under this agreement. For details as to the method
+of calculation of the investment management fee and performance incentive fee, please refer
+to Note 33 in the Notes to the Consolidated Financial Statements. For the year ended 31
+December 2015, the investment management service fee and performance incentive fee
+payable by the Company to CLI would not exceed RMB500 million. The contractual amount
+of the assets entrusted by the Company to CLI for investment and management would not
+exceed RMB150,000 million or its equivalent in foreign currency (including the contractual
+amount already entrusted prior to the execution of the agreement and the contractual amount
+to be entrusted during the term of the agreement) as at the expiry date of the agreement.
+The aforesaid contractual amount shall include the contractual amount of the assets newly
+entrusted by the Company in its co-investment with CLIC and CLP&C, which shall not exceed
+(2) Framework Agreement between Pension Company and AMP
+Since 30 November 2003, CLIC has from time to time entered into asset management
+agreements with AMC. The renewed asset management agreement between the parties expired
+on 31 December 2014. On 31 December 2014, CLIC and AMC entered into the 2015 asset
+management agreement, and the entrustment term was from 1 January 2015 to 31 December
+2015. Pursuant to the 2015 asset management 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 asset management fee, please
+refer to Note 33 in the Notes to the Consolidated Financial Statements. The annual cap for
+the year
+ended 31 December 2015 was RMB320 million. On 30 December 2015, CLIC and
+AMC entered into the 2016 asset management agreement, and the entrustment term is from 1
+January 2016 to 31 December 2018. Pursuant to the 2016 asset management agreement, AMC
+will continue to invest and manage assets entrusted to it by CLIC. The annual caps for the three
+years ending 31 December 2018 are RMB320 million, RMB310 million and RMB300 million,
+respectively.
+43
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+As approved at the third meeting of the fifth session of the Board and the First Extraordinary
+General Meeting 2015, the Company and CLI entered into the 2016 asset management
+agreement for alternative investments on 3 February 2016, with a term from 1 January 2016 to
+30 June 2017. Pursuant to the 2016 asset management agreement for alternative investments,
+CLI will continue to invest and manage assets entrusted to it by the Company (including
+equity, real estate, related financial products and securitization financial products), and the
+Company will pay CLI investment management service fee and performance incentive fee in
+this regard. During the term of the agreement, the investment management service fee and
+performance incentive fee payable by the Company to CLI will not exceed RMB1,000 million
+or its equivalent in foreign currency, in particular, the investment management service fee and
+performance incentive fee for the year of 2016 will not exceed RMB590 million or its equivalent
+in foreign currency, and the investment management service fee and performance incentive
+fee for the first half of 2017 will not exceed RMB410 million or its equivalent in foreign
+currency. The contractual amount of assets entrusted by the Company to CLI for investment
+and
+management will not exceed RMB250,000 million or its equivalent in foreign currency
+(including the contractual amount already entrusted prior to the execution of the agreement
+and the contractual amount to be entrusted during the term of the agreement) as at the expiry
+date of the agreement, in particular, the contractual amount as at 31 December 2016 will not
+exceed RMB200,000 million or its equivalent in foreign currency, and the contractual amount
+as at 30 June 2017 will not exceed RMB250,000 million or its equivalent in foreign currency;
+the contractual amount to be entrusted during the term of the agreement will not exceed
+RMB150,000 million or its equivalent in foreign currency (including the contractual amount
+to be entrusted during the year of 2016 of no more than RMB100,000 million or its equivalent
+in foreign currency, and the contractual amount to be entrusted during the first half of 2017
+of no more than RMB50,000 million or its equivalent in foreign currency). The contractual
+amount of the assets to be entrusted by the Company in its co-investments with CLIC and
+CLP&C during the term of the agreement will not exceed RMB40,000 million or its equivalent
+in foreign currency, in particular, the contractual amount of the co-investments to be entrusted
+by the Company during the year of 2016 will not exceed RMB23,500 million or its equivalent
+in foreign currency, and the contractual amount of the co-investments to be entrusted by the
+Company during the first half of 2017 will not exceed RMB16,500 million or its equivalent in
+foreign currency.
+For the
+year ended 31 December 2015, the Company paid CLI investment management service
+fee and performance incentive fee of RMB167 million in total. As at 31 December 2015,
+the contractual amount of the assets entrusted by the Company to CLI for investment and
+management amounted to RMB98,445 million, among which, the contractual amount of the
+assets newly entrusted by the Company in its co-investment with CLIC and CLP&C was RMBO
+million.
+44
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+RMB40,000 million or its equivalent in foreign currency. The co-investments of the Company,
+CLIC and CLP&C shall be limited to cash contribution at the same price in the same related
+financial products and securitization financial products, and the benefits enjoyed by each of
+them shall be in proportion to their respective investment amount.
+4.
+Significant Events
+China Life Insurance Company Limited Annual Report 2015
+45
+3.
+As approved at the thirteenth meeting of the fourth session of the Board and the 2013 Annual
+General Meeting, 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 became
+effective upon signing by the parties and will expire on 31 December 2016. Pursuant to
+the agreement, the Company and AMP will enter into certain daily transactions, including
+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 the industry practices. For the three years ending 31 December
+2016, the annual caps of the subscription price and corresponding subscription fee for the
+subscription of fund products are RMB30,000 million, RMB66,000 million and RMB72,600
+million, respectively; the annual caps of the redemption price and corresponding redemption
+fee for the redemption of fund products are RMB30,000 million, RMB66,000 million and
+RMB72,600 million, respectively; the annual caps of the sales commission fee and client
+maintenance fee payable by AMP are RMB100 million, RMB300 million and RMB400 million,
+respectively; the annual caps of the management fee payable by the Company for the asset
+management for specific clients are RMB10 million, RMB20 million and RMB20 million,
+respectively; and the annual caps of the fees for other daily transactions are RMB50 million,
+RMB100 million and RMB100 million, respectively.
+(1) Framework Agreement between the Company and AMP
+For the year ended 31 December 2015, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB3,910.01 million, the redemption price
+and corresponding redemption fee for the redemption of fund products was RMB5,817.71
+million, the sales commission fee and client maintenance fee paid by AMP were RMB0 million,
+Framework Agreements with AMP
+For the year ended 31 December 2015, CLP&C paid the Company an agency service fee of
+RMB1,464 million, which has slightly exceeded the annual cap for the year of 2015. For further
+details, please refer to the announcement of the Company dated 23 March 2016.
+On 18 November 2008, the Company and CLP&C entered into the 2008 insurance sales framework
+agreement, which expired on 17 November 2011. On 8 March 2012, the Company and CLP&C
+entered into the 2012 insurance sales framework agreement for a term of two years, which has been
+extended to 7 March 2015 pursuant to the automatic renewal clause of the agreement. On 8 March
+2015, the Company and CLP&C entered into the 2015 insurance sales framework agreement, with
+a term of two years effective from 8 March 2015. The agreement will automatically be extended for
+another year after its expiry unless terminated by either party by giving the other party a written notice
+within 30 days prior to its expiry. Pursuant to the above agreement, CLP&C entrusted the Company
+to act as an agent to sell selected insurance products within the authorized regions, and agreed to
+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 33 in the Notes to the
+Consolidated Financial Statements. The annual caps for the three years ending 31 December 2017 are
+RMB1,386 million, RMB1,738 million and RMB2,222 million, respectively.
+Insurance Sales Framework Agreement
+Xu Hengping
+Male
+Executive Director
+Executive Director
+Xu Haifeng
+No
+11.79
+56
+19.67
+0
+Since 11 July 2015
+57
+Male
+31.46
+Since 11 July 2015
+0
+11.57
+0
+No
+Since 24 July 2012
+60
+Non-executive Director Male
+Zhang Xiangxian
+0
+0
+0
+0
+Since 27 October 2008
+51
+Non-executive Director Male
+Miao Jianmin
+31.24
+19.67
+71.18
+Gender Age Term
+39.78
+changes
+the year
+the year
+Position
+Name
+connected
+thousands
+ten thousands
+RMB ten
+beginning of at the end of Reason for
+from the
+Company Period in RMB
+paid/fee in
+0
+in RMB ten
+thousands
+(before tax)
+parties
+0
+0
+Male 57 Since 27 October 2008
+Executive Director
+Lin Dairen
+No
+60.19
+16.67
+43.52
+0
+0
+Since 22 May 2012
+Male 60
+Chairman,
+Executive Director
+Yang Mingsheng
+31.40
+0
+According to the “Procedural Rules for Board of Directors 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.
+Non-executive Director
+Yes
+Yes
+Yes
+No
+2 3 3 3 3 3 2 3
+0
+Yes
+0
+0
+0
+44 Since 7 March 2016
+Male
+Independent Director
+Tang Xin
+0
+Yes
+Yes
+No
+58
+According to the requirements of the relevant PRC policies, the final amount of emoluments of the Chairman and
+Executive Directors is currently subject to review and approval. The result of the review will be disclosed when the
+final amount is confirmed.
+With the approval given at the 2014 Annual General Meeting held on 28 May 2015, the fifth session of the Board
+of Directors of the Company was elected, and on the same date, the first meeting of the fifth session of the Board
+of Directors was held, which elected Mr. Yang Mingsheng as the Chairman of the fifth session of the Board of
+Directors of the Company. With the approval given at the 2014 Annual General Meeting and the approval from
+the CIRC, Mr. Xu Hengping, Mr. Xu Haifeng, Mr. Liu Jiade and Mr. Robinson Drake Pike were appointed as the
+Directors with effect from 11 July 2015. With the approval given at the First Extraordinary General Meeting 2015
+and the approval from the CIRC, Mr. Tang Xin was appointed as a Director with effect from 7 March 2016.
+4.
+3.
+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.
+held at the shares held
+2.
+1.
+Notes:
+272.07
+0
+0
+Total
+Yes
+16.00
+0
+16.00
+0
+Independent Director
+Anthony Francis Neoh
+0
+0
+0
+0
+0
+Since 11 July 2015
+53
+Male
+Non-executive Director
+0
+Since 24 July 2012
+54
+Male
+Male
+Wang Sidong
+Liu Jiade
+69
+0
+64 Since 11 July 2015
+Male
+Independent Director
+Robinson Drake Pike
+32.00
+0
+32.00
+Since 20 October 2014
+67
+Male
+Independent Director
+Chang Tso Tung Stephen
+30.00
+0
+30.00
+Since 21 June 2010
+emolument
+housing
+paid by the
+Total number of
+shares held as at
+the end of the
+Reporting Period
+Percentage of
+shareholding
+Nature of shareholder
+Name of shareholder
+Unit: Shares
+report
+No. of H Share shareholders:
+30,639
+No. of A Share shareholders:
+154,287
+Total number of ordinary
+share shareholders as at the
+No. of H Share shareholders: end of the month prior to
+the disclosure of this annual
+30,651
+No. of A Share shareholders:
+143,316
+Particulars of top ten shareholders of the Company
+Total number of
+ordinary share
+shareholders as at
+the end of the
+Reporting Period
+Total number of shareholders and their shareholdings
+1.
+3.
+INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+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.
+ISSUE AND LISTING OF SECURITIES
+During the Reporting Period, there was no change in the total number of shares and the share capital of the
+Company.
+CHANGES IN SHARE CAPITAL
+2.
+1.
+Changes in Ordinary Shares and Shareholders Information
+China Life Insurance Company Limited Annual Report 2015
+53
+53
+Increase/decrease
+Number of shares
+during the
+Reporting Period
+subject to selling
+China International Television Corporation
+China National Nuclear Corporation³
+Allocation of Consumption and
+Vitality of Hybrid Securities Investment Fund²
+Limited-China Southern Flexible
++34,367,716
+34,367,716
++119,719,900
+119,719,900
+0.42%
+0.12%
+Other
+Industrial and Commercial Bank of China
+State-owned legal person
+Central Huijin Asset Management Limited
+On 29 February 2016, the Company entered into the Share Purchase Agreement with Citigroup Inc.
+("Citigroup") and the Equity Transfer Agreement with IBM Credit LLC (“IBM Credit") and Citigroup.
+Pursuant to such agreements, the Company will purchase from Citigroup and IBM Credit an aggregate of
+3,648,276,645 shares of China Guangfa Bank Co., Ltd. (“CGB") at a price of RMB6.39 per share for a
+total consideration of RMB23,312,487,761.55. Upon the closing of the transaction, the Company will hold
+6,728,756,097 shares of CGB, representing 43.686% of the issued share capital of CGB. For details, please
+refer to the announcement published by the Company on the website of the SSE and the HKExnews website
+of the Hong Kong Exchanges and Clearing Limited on 29 February 2016.
++19,573,721
+520,692,410 +489,145,438
+State-owned legal person
+China Securities Finance Corporation Limited
+7,314,012,229
+25.88%
+Overseas legal person
+HKSCC Nominees Limited
+19,323,530,000
+68.37%
+State-owned legal person
+China Life Insurance (Group) Company
+pledged or frozen
+restrictions
+Number of shares
+1.84%
+The Company issued the US$1,280 million Core Tier 2 Capital Securities at an initial distribution rate
+of 4.00% by way of debt issues to professional investors only. The securities (Stock Code: 5540) were
+permitted for listing and trading on the HKSE on 6 July 2015.
+2.
+1.
+50
+50
+except for the agency service fee of RMB1,464 million paid by CLP&C to the Company in 2015
+under the 2015 insurance sales framework agreement, which exceeded the annual cap of RMB1,386
+million, the amounts of the above transactions have not exceeded the relevant annual caps.
+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)
+(3)
+(2) the transactions were conducted on normal commercial terms;
+(1) the transactions were entered into in the ordinary and usual course of business of the Company;
+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:
+Confirmation by Independent Directors
+except for the agency service fee of RMB1,464 million paid by CLP&C to the Company in 2015
+under the 2015 insurance sales framework agreement, which exceeded the annual cap of RMB1,386
+million, nothing has come to the auditors' attention that causes them to believe that the amounts
+of the continuing connected transactions have exceeded the annual caps disclosed in the previous
+announcements of the Company.
+(4)
+(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 with the relevant agreements governing such
+transactions; and
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+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;
+(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;
+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:
+Confirmation by auditor
+Significant Events
+China Life Insurance Company Limited Annual Report 2015
+49
+For the year ended 31 December 2015, the management fee paid by CLI for the asset
+management services was RMB0.40 million; the fees in connection with the sale agency services
+paid by CLWM, including the sales commission fee, client maintenance fee, handling fee and
+intermediary fee were RMB0 million; the fees for other daily transactions were RMB0 million.
+As approved at the fourth meeting of the fifth session of the Board, CLI and CLWM entered
+into the “Framework Agreement in relation to Asset Management Services and Other Daily
+Transactions" on 3 February 2016. The agreement became effective upon signing by the parties
+and will expire on 31 December 2017. Pursuant to the agreement, CLI and CLWM will enter
+into certain daily transactions, including asset management services, sale agency services for asset
+management products 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 the industry practices. For the three years ending 31 December
+2017, the annual caps of the management fee payable by CLI for the asset management services
+are RMB20 million (including the management fee in an amount of RMB0.4 million paid by
+CLI to CLWM for the provision of asset management services prior to the execution of the
+framework agreement), RMB30 million and RMB50 million, respectively; the annual caps
+of fees in connection with the sale agency services payable by CLWM, including the sales
+commission fee, client maintenance fee, handling fee and intermediary fee are RMB10 million,
+RMB40 million and RMB80 million, respectively; the annual caps of the fees for other daily
+transactions are RMB10 million, RMB40 million and RMB80 million, respectively.
+(5) Framework Agreement between CLI and CLWM
+For the year ended 31 December 2015, the management fee paid by CLO for the asset
+management services was RMB0 million; the fees in connection with the sale agency services
+paid by CLWM, including the sales commission fee, client maintenance fee, handling fee and
+intermediary fee were RMB0 million; the fees for other daily transactions were RMB0 million.
+As approved at the fourth meeting of the fifth session of the Board, CLO and CLWM entered
+into the "Framework Agreement in relation to Asset Management Services and Other Daily
+Transactions" on 30 December 2015. The agreement became effective upon signing by the
+parties and will expire on 31 December 2017. Pursuant to the agreement, CLO and CLWM
+will enter into certain daily transactions, including asset management services, sale agency
+services for asset management products 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 the industry practices. For the three years
+ending 31 December 2017, the annual caps of the management fee payable by CLO for the asset
+management services are RMB10 million, RMB30 million and RMB50 million, respectively;
+the annual caps of fees in connection with the sale agency services payable by CLWM, including
+the sales commission fee, client maintenance fee, handling fee and intermediary fee are RMB5
+million, RMB5 million and RMB10 million, respectively; the annual caps of the fees for other
+daily transactions are RMB5 million, RMB5 million and RMB10 million, respectively.
+(4) Framework Agreement between CLO and CLWM
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+(2)
+State-owned legal person
+(II) Other Major Connected Transactions
+2.
+MISCELLANEOUS
+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.
+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 Commission
+of the State Council ("SASAC”), and 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.
+China Life Insurance Company Limited Annual Report 2015
+Significant Events
+V.
+52
+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.
+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.
+IV. 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
+Except otherwise disclosed in this annual report, the Company had no other material contracts during the
+Reporting Period.
+Entrusted cash asset investment during the Reporting Period or any investment occurred in previous periods
+but subsisted during the Reporting Period: Investment is one of the principal businesses of the Company.
+The Company has adopted the mode of 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
+The internal managers
+supports.
+include AMC and its subsidiaries, and 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 guidelines, asset entrustment and
+performance appraisals. The Company also adopted risk control measures in respect of specific investments
+based on the characteristics of different managers and investment products.
+The Company neither gave external guarantees nor provided guarantees to its subsidiaries during the
+Reporting Period.
+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 for 10% or more of the Company's profits for the Reporting Period, nor were there any such
+matters that occurred in previous periods but subsisted during the Reporting Period.
+1.
+4.
+2.
+1.
+III. MATERIAL CONTRACTS AND THEIR PERFORMANCE
+Significant Events
+China Life Insurance Company Limited Annual Report 2015
+51
+During the Reporting Period, the Company was not involved in claims, debt transactions or guarantees with
+connected parties outside the course of its business.
+(III) Statement on Claims, Debt Transactions and Guarantees etc. with Connected Parties
+outside the Course of its Business
+Of the above connected transactions, the transaction in relation to the acquisition of properties from
+CLI by the Company was subject to the reporting and announcement requirements but was exempt
+from the independent shareholders' approval requirement pursuant to Rule 14A.76(2) of the Listing
+Rules. The Company has complied with the disclosure requirements under Chapter 14A of the Listing
+Rules in respect of such connected transaction.
+Entrustment of Enterprise Annuity Funds and Account Management Agreement
+Since 27 July 2009, the Company, CLIC and AMC have from time to time entered into the
+entrustment of enterprise annuity funds and account management agreements with Pension Company.
+The renewed agreement between the parties expired on 1 December 2013. On 22 March 2014,
+the Company, CLIC, AMC and Pension Company entered into a new “Entrustment of Enterprise
+Annuity Funds and Account Management Agreement of China Life Insurance (Group) Company
+(including Supplemental Terms for Account Management and Investment Management)”, with a
+term from 2 December 2013 to 31 December 2016. As a trustee, account manager and investment
+manager, Pension Company provides trusteeship, account management services and investment
+management services for the enterprise annuity funds of the Company, CLIC and AMC, and charges
+trustee management fees, account management fees and investment management fees in accordance
+with the agreement.
+The framework agreement expired on 26 June 2015. As at the expiry date of the agreement, 40
+properties had been transferred, with a total transaction amount of RMB331 million.
+On 27 June 2012, the Company and CLI entered into the “Property Transfer Framework Agreement",
+which was for a term of three years. Pursuant to the framework agreement, the Company proposed
+to acquire from CLI properties for use by the Company's branches as office premises, which consist
+of 1,198 properties with a total gross floor area of approximately 803,424.09 square meters. The
+properties shall be transferred in batches with standalone agreement to be entered into for each
+transfer. The actual purchase price of each property shall be valued and determined by the qualified
+intermediaries agreed upon by the parties with reference to prevailing market price. The total
+consideration for the property purchase is expected to be no more than RMB1,700 million. The
+parties shall
+cooperate with each other to complete the transfer of ownership and deliver the properties
+if standalone property transfer agreements in respect of such properties have been signed prior to the
+expiry of the framework agreement. The parties shall not transfer any properties under the framework
+agreement if standalone property transfer agreements in respect of such properties have not been
+signed prior to the expiry of the framework agreement.
+Acquisition of Properties from CLI
+3.
+Reporting
+0.07%
+State-owned legal person
+6.15%
+457,721,642 (L)
+H Shares
+Interest in controlled corporation
+BlackRock, Inc.
+(Note 2)
+1.13%
+4.27%
+318,375,062 (P)
+0.34%
+1.27%
+94,911,965 (S)
+1.94%
+7.38%
+549,486,256 (L)
+H Shares
+Beneficial owner, investment
+manager, trustee and custodian
+corporation/approved lending agent
+(Note 1)
+68.37%
+92.80%
+A Shares 19,323,530,000 (L)
+Beneficial owner
+China Life Insurance (Group)
+Company
+JPMorgan Chase & Co.
+of shares issued
+Percentage of
+the total number
+Percentage of
+the respective
+class of shares
+Number of
+shares held
+1.62%
+The letter "L" denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interest in a lending pool.
+56
+China Life Insurance Company Limited Annual Report 2015
+Remuneration
+of shares Number of
+received
+during the
+annuity fund
+Number
+Whether
+the Company
+and enterprise
+received from
+provident fund
+emoluments
+Total
+Class of shares
+social insurance,
+1.
+I
+CURRENT DIRECTORS
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+52
+57
+Save as disclosed above, the Directors, Supervisors and the chief executive of the Company are not aware that there
+is any party who, as at 31 December 2015, had an interest or short position in the shares and underlying shares of
+the Company which were recorded in the register required to be kept by the Company pursuant to Section 336 of
+the SFO.
+(Note 2): BlackRock, Inc. was interested in a total of 457,721,642 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 and BlackRock
+Asset Management (Schweiz) AG were interested in 2,767,315 H shares, 1,733,000 H shares, 106,339,385 H shares,
+166,381,000 H shares, 216,000 H shares, 8,566,352 H shares, 2,397,165 H shares, 953,000 H shares, 23,232,127 H
+shares, 2,919,000 H shares, 59,540,161 H shares, 3,022,700 H shares, 45,276,186 H shares, 14,313,000 H shares,
+15,954,251 H shares, 363,000 H shares, 3,202,000 H shares, 244,000 H shares, 266,000 H shares and 36,000 H
+shares respectively. All of these entities are either controlled or indirectly controlled subsidiaries of BlackRock, Inc. Of
+these 457,721,642 H shares, 561,000 H shares were cash settled unlisted derivatives.
+JPMorgan Chase & Co. held by way of attribution a short position as defined under Part XV of the SFO in
+94,911,965 H shares (1.27%). Of these 94,911,965 H shares, 18,090,240 H shares were physically settled listed
+derivatives, 22,997,300 H shares were cash settled listed derivatives, 58,131 H shares were physically settled unlisted
+derivatives and 53,346,794 H shares were cash settled unlisted derivatives.
+Included in the 549,486,256 H shares are 318,375,062 H shares (4.27%), 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 549,486,256 H shares, 19,857,255 H shares were physically settled listed derivatives, 248,000
+H shares were cash settled listed derivatives, 3,474,035 H shares were physically settled unlisted derivatives and
+43,193,173 H shares were cash settled unlisted derivatives.
+Changes in Ordinary Shares and Shareholders Information
+Other benefits,
+Capacity
+Name of substantial shareholder
+So far as is known to the Directors, Supervisors and the chief executive of the Company, as at 31 December 2015,
+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 Securities and Futures Ordinance (Chapter
+571 of the Laws of Hong Kong) (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 HKSE:
+Changes in Ordinary Shares and Shareholders Information
+China Life Insurance Company Limited Annual Report 2015
+1.
+54
+Securities Investment Fund²
+Limited-SSE 50 Exchange Traded Index
++1,675,837
+11,996,529
+0.04%
+Other
+Industrial and Commercial Bank of China
+Equity Securities Investment Fund
+Credit Suisse Internet Plus Stock
+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.
++12,903,409
+0.05%
+Other
+Bank of Communications Co., Ltd - ICBC
+2
+Tianfu Bull No. 53 Asset Management Plan
+- Industrial and Commercial Bank of
+China Limited-China Universal -
++15,015,845
+15,015,845
+0.05%
+Other
+China Universal Asset Management Co., Ltd
+18,452,300
+0.07%
+12,903,409
+20,000,000
+2.
+2.
+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
+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.
+China Life Insurance Company Limited
+4.
+68.37%
+China Life Insurance (Group) Company
+100%
+Ministry of Finance of the PRC
+The effective controller of the Company is the Ministry of Finance of the People's Republic of China. The
+equity and controlling relationship between the Company and its effective controller is set out below:
+Changes in Ordinary Shares and Shareholders Information
+China Life Insurance Company Limited Annual Report 2015
+55
+55
+Details of shareholders
+As at 31 December 2015, CLIC held 1,785,098,644 shares (H shares) of Town
+Health International Medical Group Limited, representing 23.90% of its total
+shares.
+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 CIRC in 2003, China Life Insurance Company was restructured as
+CLIC.)
+Yang Mingsheng
+China Life Insurance (Group) Company
+subsidiaries and affiliates listed
+in China or abroad during the
+Reporting Period
+Shareholdings in other
+Major businesses
+Date of incorporation
+Legal representative
+Name of company
+The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
+Information relating to the Controlling Shareholder and Effective Controller
+Both Industrial and Commercial Bank of China Limited-China Southern Flexible Allocation of Consumption and Vitality of Hybrid Securities
+Investment Fund and Industrial and Commercial Bank of China Limited-SSE 50 Exchange Traded Index Securities Investment Fund have
+Industrial and Commercial Bank of China Limited as their fund depositary. 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. 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.
+China National Nuclear Corporation and China International Television Corporation became the top 10 shareholders of the Company through
+the strategic placement during the initial public offering of A Shares of the Company in December 2006. The trading restriction period of the
+shares from the strategic placement was from 9 January 2007 to 9 January 2008.
+3.
+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
+management business permitted by national laws and regulations or approved by
+the State Council of the PRC; other businesses approved by insurance regulatory
+agencies.
+(Note 1): JPMorgan Chase & Co. was interested in a total of 549,486,256 H shares in accordance with the provisions of Part
+XV of the SFO. Of these shares, J.P. Morgan Securities LLC, J.P. Morgan Clearing Corp, J.P. Morgan Investment
+Management Inc., J.P. Morgan GT Corporation, J.P. Morgan Trust Company of Delaware, J.P. Morgan Whitefriars
+Inc., J.P. Morgan Securities plc, JPMorgan Chase Bank, N.A., J.P. Morgan Chase Bank Berhad and JPMorgan Asset
+Management (UK) Limited were interested in 16,807,782 H shares, 1,467,859 H shares, 629,000 H shares, 1,500,000
+H shares, 6,240 H shares, 136,758,345 H shares, 66,721,185 H shares, 318,378,337 H shares, 6,913,508 H shares
+and 304,000 H shares respectively. All of these entities are either controlled or indirectly controlled subsidiaries of
+JPMorgan Chase & Co.
+0
+Mr. Li became the Vice President of the Company in November 2014. He became the Chief
+Actuary of the Company in March 2012. Mr. Li joined the Company in 1996 and subsequently
+served as Deputy Director, Director, Assistant to the General Manager of the Product
+Development Department, Responsible Actuary of the Company and General Manager of the
+Actuarial Department. He graduated from Shanghai Jiaotong University majoring in Computer
+Science with a Bachelor's degree 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 Special Executive of the Board of Directors of the Insurance
+Institute of China.
+received
+during the
+annuity fund
+Number
+Whether
+the Company
+and enterprise
+received from
+provident fund
+emoluments
+housing
+Total
+social insurance,
+Other benefits,
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+CURRENT SUPERVISORS
+2.
+30.44
+69.78
+No
+Xu Haifeng
+Vice President
+of shares Number of
+Remuneration
+paid by the
+Reporting
+0
+0
+Male 57 Since 11 July 2015
+Chairman of the
+Miao Ping
+parties
+(before tax)
+thousands
+thousands
+changes
+the year the year
+Male 56 Since November 2014
+Gender Age Term
+Name
+connected
+in RMB ten ten thousands
+RMB ten
+Reason for
+beginning of at the end of
+from the
+Company Period in RMB
+paid/fee in
+held at the shares held
+emolument
+Position
+0
+0
+39.34
+47
+Since July 2015
+0
+0
+18.35
+14.71
+33.06
+No
+Board Secretary
+Male
+53
+Male
+Since June 2013
+0
+36.69
+34.66
+71.35
+No
+0
+0
+456.20
+Notes:
+1.
+2.
+0
+19.67
+Assistant President
+No
+30.86
+70.20
+No
+Li Mingguang
+Vice President,
+Male 46 As Vice President since
+0
+0
+39.34
+30.69
+70.03
+Xiao Jianyou
+Zheng Yong
+Total
+No
+November 2014 and
+Chief Actuary since
+March 2012
+Yang Zheng
+Vice President
+Male 45 Since November 2014
+0
+0
+39.34
+31.26
+70.60
+Chief Actuary
+3.
+12.00
+No
+from the
+Company Period in RMB
+Remuneration
+held at the share held at
+emolument
+Reporting
+paid by the
+of share Number of
+received
+during the
+annuity fund
+Number
+Whether
+the Company
+and enterprise
+provident fund received from
+emoluments
+housing
+Total
+Other benefits,
+social insurance,
+3. CURRENT SENIOR MANAGEMENT
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+beginning of
+the end of
+Reason for paid in RMB
+in RMB ten
+0
+Since November 2014
+Male 57
+Vice President
+Xu Hengping
+No
+71.18
+31.40
+39.78
+Since April 2014
+Male 57
+59
+President
+parties
+(before tax)
+thousands
+changes ten thousands
+the year
+the year
+Gender Age Term
+Position
+Name
+connected
+ten thousands
+Lin Dairen
+59
+According to the requirements of the relevant PRC policies, the final amount of emoluments of the Chairman of
+the Supervisory Committee is currently subject to review and approval. The result of the review will be disclosed
+when the final amount is confirmed.
+With the approval given at the 2014 Annual General Meeting held on 28 May 2015, the fifth session of the
+Supervisory Committee of the Company was elected. With the approval given at the 2014 Annual General Meeting
+and the approval from the CIRC, Mr. Miao Ping was appointed as a Non Employee Representative Supervisor of
+the Company with effect from 11 July 2015. With the approval given at the first meeting of the second session of
+the Employee Representative Meeting of the Company and the approval from the CIRC, Mr. Zhan Zhong and
+Ms. Wang Cuifei were appointed as Employee Representative Supervisors of the Company with effect from 11 July
+2015. The first meeting of the fifth session of the Supervisory Committee was held on 24 July 2015, which elected
+Mr. Miao Ping as the Chairman of the fifth session of the Supervisory Committee of the Company.
+Employee Representative
+Zhan Zhong
+Yes
+0
+0
+0
+0
+0
+Since 20 October 2014
+Female 47
+Supervisor
+Male 47
+Xiong Junhong
+160.35
+34.21
+126.14
+0
+0
+Since 25 May 2009
+56
+Male
+Supervisor
+Shi Xiangming
+Supervisory Committee
+No
+31.67
+Since 11 July 2015
+68.43
+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.
+Pursuant to the Articles of Association, Supervisors serve for a term of three years and may be re-elected.
+4.
+3.
+2.
+1.
+343.76
+0
+0
+Notes:
+Total
+0
+Supervisor
+69.56
+13.65
+55.91
+0
+0
+Employee Representative Female 52 Since 11 July 2015
+Wang Cuifei
+Supervisor
+No
+82.18
+13.75
+No
+68
+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.
+With the approval given at the first meeting of the fifth session of the Board of Directors of the Company and the
+approval from the CIRC, Mr. Xiao Jianyou was appointed as an Assistant President of the Company with effect
+from 21 July 2015.
+Female 48
+December 2014 -
+February 2016
+0
+36.69
+35.85
+72.54
+No Retired due to the expiration of session of the
+Supervisory Committee
+Yes Resigned due to adjustment of work
+arrangements
+No Retired due to adjustment of work
+arrangements
+Total
+0
+2,000
+429.98
+61
+China Life Insurance Company Limited Annual Report 2015
+Directors, Supervisors, Senior Management and Employees
+DIRECTORS
+Mr. Yang Mingsheng, born in 1955, Chinese
+Mr. Yang became the Chairman and an Executive Director of the Company in May 2012.
+He has been the Chairman of China Life Insurance (Group) Company since March 2012, the
+Chairman of China Life Property and Casualty Insurance Company Limited since March 2012,
+the Chairman of China Life Insurance (Overseas) Company Limited since January 2013, and
+the Chairman of China Life Asset Management Company Limited since December 2013. Mr.
+Yang has many years of experience in financial industry. He acted as the Vice Chairman of China
+Insurance Regulatory Commission from 2007 to 2012, and worked in Agricultural Bank of China
+from 1980 to 2007, where he held various positions such as the Vice President of Shenyang
+Branch, Head of Industrial Credit Department and President of Tianjin Branch. He was
+appointed as the Vice President of Agricultural Bank of China in 1997 and was then promoted to
+the President of Agricultural Bank of China in 2003. Mr. Yang, a Senior Economist, graduated
+from the Faculty of Finance of Nankai University, majoring in Monetary Banking with a Master's
+degree in Economics.
+Mr. Lin Dairen, born in 1958, Chinese
+Mr. Lin became an Executive Director of the Company in October 2008, and was appointed as
+the President of the Company by the Board in March 2014. He serves concurrently as a Non-
+executive Director of China Life Property and Casualty Insurance Company Limited, China Life
+Pension Company Limited and China Life Asset Management Company Limited. He served as
+the Vice President of the Company from 2003 to March 2014, and an Executive Director and
+the President of China Life Pension Company Limited from November 2006 to March 2014.
+Mr. Lin graduated with a Bachelor's degree in Medicine from Shandong Province Changwei
+Medical Institute in 1982. Mr. Lin, a Senior Economist, has over 30 years of experience in the
+operation of the life insurance business and insurance management, and was awarded special
+allowance by the State Council. He is currently the Chairman of the China Life Foundation,
+the Vice Chairman of the Insurance Institute of China and the Insurance Association of China,
+the Director of the Life Insurance Committee of the Insurance Association of China and a Non-
+executive Director of China's Insurance Protection Fund Co., Ltd.
+662
+Financial
+Controller
+Huang Xiumei
+18.07
+8.23
+21.82
+89.58
+No Retired due to the expiration of session of the
+Supervisory Committee
+No Retired due to the expiration of session of the
+Supervisory Committee
+Li Xuejun
+Employee
+Representative
+Supervisor
+Male 45 24 July 2012 -
+11 July 2015
+0
+2,000 Bought from
+the secondary
+73.28
+China Life Insurance Company Limited Annual Report 2015
+39
+94.76
+45
+market
+Liu Anlin
+Vice President
+Male
+52
+March 2013-
+March 2015
+0
+0
+9.84
+21.48
+Directors, Supervisors, Senior Management and Employees
+2
+Mr. Xu Hengping, born in 1958, 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 the Listed Companies Association of the PRC, and an Independent Director of
+each of Harvest Fund Management Co., Ltd., GF Securities Co., Ltd., and Oriza Holdings 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.
+66
+China Life Insurance Company Limited Annual Report 2015
+Directors, Supervisors, Senior Management and Employees
+SUPERVISORS
+Mr. Miao Ping, born in 1958, Chinese
+Mr. Miao became the Chairman of the Supervisory Committee of the Company in July 2015.
+He has been an Executive Director of the Company since July 2014, the Vice President of the
+Company since December 2009, the General Manager of the Company's Jiangsu Branch since
+September 2006, the General Manager of the Company's Jiangxi Branch since September 2004,
+and the Deputy General Manager of the Company's Jiangsu Branch since April 2002. Mr.
+Miao graduated from the Correspondence College of Yangzhou University in 1996, majoring in
+Economics and Management. Mr. Miao, a Senior Economist, has over 30 years of experience in
+the operation of life insurance business and the management of insurance business.
+Mr. Shi Xiangming, born in 1959, Chinese
+Mr. Shi became a Supervisor of the Company in May 2009, and has been the General Manager
+of the Supervisory Department of the Company since September 2008. Mr. Shi served as Deputy
+General Manager of the Human Resources Department and Office Director of the Company
+from September 2003 to September 2008. From March 2002 to August 2003, Mr. Shi served as
+the Deputy General Manager of the Supervisory Department of China Life Insurance Company.
+Mr. Shi graduated from the Chemistry School of the first branch college of Peking University
+with a Bachelor of Science degree.
+Ms. Xiong Junhong, born in 1968, Chinese
+Ms. Xiong became a Supervisor of the Company in October 2014. She is a Senior Economist
+with a PhD in Finance from Nankai University. From July 1993 to August 2003, Ms. Xiong
+worked at the Banking Department and Trust Department of China People's Insurance Trust
+and Investment Company, and the Assets Management Department of China Life Insurance
+Company. Ms. Xiong has been the Director of the Assets Management Department of China
+Life Insurance (Group) Company since September 2003, the Senior Manager of the Strategic
+Planning Department of China Life Insurance (Group) Company since August 2006, an
+Assistant to the General Manager of the Strategic Planning Department of China Life Insurance
+(Group) Company since September 2008, an Assistant to the General Manager (equivalent to
+the rank of departmental deputy general manager of China Life Insurance (Group) Company)
+of the Company's Hebei Branch since December 2010, and the Deputy General Manager of the
+Strategic Planning Department of China Life Insurance (Group) Company since June 2013. Ms.
+Xiong has many years of experience in strategic management and investment research, and has
+extensive working experience in assets preservation, risk management, management of retained
+assets, investment research and strategic planning.
+Mr. Tang Xin, born in 1971, Chinese
+67
+Directors, Supervisors, Senior Management and Employees
+e
+Mr. Zhan Zhong, born in 1968, Chinese
+Mr. Zhan became a Supervisor of the Company in July 2015. He has been the General Manager
+of the Individual Insurance Division of the Company (general manager level of provincial
+branches) since July 2014. Mr. Zhan served as the General Manager of the Company's Qinghai
+Branch from January 2014 to June 2014. Mr. Zhan joined the Company in November 1994,
+and has successively served as the General Manager of the Individual Insurance Division of the
+Company's Guangdong Branch, Assistant to the General Manager of the Company's Guangdong
+Branch, Deputy General Manager (responsible for daily operation) and General Manager of the
+Individual Insurance Division of the Company and Deputy Secretary of the Party Committee
+and Deputy General Manager (responsible for daily operation) of the Company's Qinghai
+Branch. Mr. Zhan graduated from Kunming Institute of Technology with a Bachelor's degree in
+Computer and Automation.
+Ms. Wang Cuifei, born in 1964, Chinese
+Ms. Wang became a Supervisor of the Company in July 2015. She has been the General Manager
+of the Customer Services Department of the Company since September 2014. Ms. Wang served
+as the General Manager of the Sales Inspection Department of the Company from March 2009 to
+August 2014. She joined the Company in July 2001, and has served successively as the person-in-
+charge (deputy director level) and General Manager (division level) of the Training Management
+Division of the Brokerage Agency Department, Deputy General Manager of the Bancassurance
+Department and General Manager of the Sales Inspection Department of the Company. Ms.
+Wang graduated from the Party School of the Central Committee of CPC with a Bachelor's
+degree in Economic Management.
+SENIOR MANAGEMENT
+Mr. Lin Dairen, please see the section "Directors" for his profile.
+Mr. Xu Hengping, please see the section “Directors” for his profile.
+Mr. Xu Haifeng, please see the section “Directors” for his profile.
+Mr. Li Mingguang, born in 1969, Chinese
+China Life Insurance Company Limited Annual Report 2015
+67.76
+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. From July 2000 to December 2006, he
+was the Senior Vice President of Lehman Brothers and the Deputy Head and Head of Asia Credit
+Risk Management of Lehman Brothers. Mr. Pike currently sits on the four-member Committee
+of Inspection of Peregrine Fixed Income Limited. He 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 of Arts degree in Chinese Language and Literature from Yale University and a Master of
+Public Affairs degree in development economics from Princeton University's Woodrow Wilson
+School.
+Directors, Supervisors, Senior Management and Employees
+Mr. Xu became an Executive Director of the Company in July 2015. He has been the Vice
+President of the Company since November 2014, the Chief Operating Officer of the Company
+since August 2010, the General Manager of the Company's Fujian Branch since April 2007, the
+Deputy General Manager of the Company's Fujian Branch since December 2002, an Assistant
+to the General Manager of the Company's Fujian Branch since September 1998, and a Director
+of Personal Insurance Division of the Company's Fujian Branch since July 1996. Mr. Xu once
+served as the General Manager of the Sales Department and General Manager of Longyan Branch
+of Fuzhou Life Insurance Company Limited. Mr. Xu graduated from Hunan University, majoring
+in Finance. Mr. Xu, a Senior Economist, has over 30 years of experience in operation of the life
+insurance business and insurance management.
+Mr. Xu Haifeng, born in 1959, Chinese
+Mr. Xu became an Executive Director of the Company in July 2015. He has been the Vice
+President of the Company since November 2014. He has been the Business Controller of the
+Company since February 2014, and concurrently serves as the General Manager of Hebei Branch
+of the Company. Mr. Xu served as the General Manager of Beijing Branch and the General
+Manager of Hebei Branch of the Company from 2006 to 2014. Prior to that, Mr. Xu served
+as the Deputy General Manager and General Manager of Linyi Branch in Shandong Province
+and the General Manager of the Sales Management Department in Shandong Branch of the
+Company, the General Manager of Jinan Branch and the Deputy General Manager of Beijing
+Branch of the Company. Mr. Xu graduated from Linyi Foreign Language Normal University in
+1982, from Shandong Provincial Party School majoring in Economic Management in 1996, and
+obtained a Master's degree in Business Administration from Zhongnan University of Economics
+and Law in 2007. Mr. Xu, a Senior Economist, has over 30 years of experience in the operation of
+life insurance business and insurance management.
+Mr. Miao Jianmin, born in 1965, Chinese
+Mr. Miao became a Non-executive Director of the Company in October 2008. He is the Vice
+Chairman and President of China Life Insurance (Group) Company. He is concurrently a
+Director of China Life Asset Management Company Limited, a Director of China World Trade
+Center Co., Ltd., and an Executive Director of China Finance 40 Forum. He was awarded special
+allowance by the State Council. In 2009, he was named as a "State-level Candidate for the New
+Century Talents Project” and one of the “60 People in China Insurance Industry in the 60-
+year History of New China". Mr. Miao graduated from the Central University of Finance and
+Economics with a Doctorate in Economics. Before that, Mr. Miao graduated from the post-
+graduate division of the People's Bank of China with a Master's degree in Money and Banking,
+and the Central University of Finance and Economics with a Bachelor's degree in Insurance. Mr.
+Miao is a Senior Economist.
+63
+69
+China Life Insurance Company Limited Annual Report 2015
+Directors, Supervisors, Senior Management and Employees
+Mr. Zhang Xiangxian, born in 1955, Chinese
+Mr. Zhang became a Non-executive Director of the Company in July 2012. He has been the
+Secretary of Commission for Disciplinary Inspection of China Life Insurance (Group) Company
+since October 2006, and the Vice President of China Life Insurance (Group) Company since
+August 2008. Mr. Zhang has many years of experience in the insurance industry and held various
+positions from 1993 to 2006, including the Director of the Promotion Division of General Office
+and Deputy General Manager of General Office of the People's Insurance Company of China,
+the Office Director of the CIRC, the Deputy Office Director (responsible for daily operation) of
+Shenzhen office of the CIRC, and the Director of Administrative Department of Representative
+Agencies of the CIRC. Mr. Zhang is a Senior Editor and obtained a Master's degree in Business
+Administration for senior management from Zhongnan University of Economics and Law.
+Mr. Robinson Drake Pike, born in 1951, American
+Mr. Wang Sidong, born in 1961, Chinese
+Mr. Liu Jiade, born in 1963, Chinese
+Mr. Liu became a Non-executive Director of the Company in July 2015. He is the Vice President
+of China Life Insurance (Group) Company and the Chairman of China Life Pension Company
+Limited. Mr. Liu has been a Director of China Guangfa Bank Co., Ltd. since December 2006
+and a Supervisor of Sinopec Sales Company Limited since March 2015. He served as the Deputy
+Director and the Director of the Trade and Finance Department of the Ministry of Finance,
+the Deputy County Magistrate (as a titular position) of Guantao County People's Government
+in Hebei Province, and the Deputy Director of the Finance Department of the Ministry of
+Finance. Mr. Liu served as the Vice President of the Company from 2003 to March 2014, and
+also concurrently served as a Director of China Life Asset Management Company Limited, a
+Director of China Life Property and Casualty Insurance Company Limited, and a Director of
+China Life Franklin Asset Management Company Limited. He is currently a member of the
+Accounting Informatization Committee of the Ministry of Finance. Mr. Liu, a Senior Economist,
+graduated from the Central Finance College (now known as the Central University of Finance
+and Economics) majoring in Finance with a Bachelor's degree in Economics.
+64
+China Life Insurance Company Limited Annual Report 2015
+Directors, Supervisors, Senior Management and Employees
+Mr. Anthony Francis Neoh, born in 1946, Chinese
+Mr. Neoh became an Independent Director of the Company in June 2010. He currently serves
+as a member of the International Consultation Committee of the CSRC. He previously served as
+Chief Advisor to the CSRC, a member of the Basic Law Committee of the Hong Kong Special
+Administrative Region under the Standing Committee of the National People's Congress of
+China, and the Chairman of the Hong Kong Securities and Futures Commission, etc. From 1996
+to 1998, he was the Chairman of the Technical Committee of the International Organization of
+Securities Commissions. He was appointed as Queen's Counsel (since retitled as Senior Counsel)
+in Hong Kong in 1990. Mr. Neoh graduated from the University of London with a Bachelor's
+degree in Law in 1976. He is a barrister of England and Wales and admitted to the State Bar
+of California. In 2003, he was conferred the Doctorate in Laws, honoris causa, by the Chinese
+University of Hong Kong. He was elected Honorary Fellow of the Hong Kong Securities Institute
+and Academician of the International Euro-Asian Academy of Sciences in 2009. Mr. Neoh was a
+Non-executive Director of Global Digital Creations Holdings Limited from November 2002 to
+December 2005, and the Manager of the Link Real Estate Investment Trust and an Independent
+Non-executive Director of the Link Management Limited from September 2004 to March 2006.
+He served as an Independent Non-executive Director of Bank of China Limited from August
+2004 to September 2013. Since December 2014, he has been an Independent Non-executive
+Director of CITIC Limited. Since April 2015, he has been an Independent Non-executive
+Director of the Industrial and Commercial Bank of China Co., Ltd.
+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 China Cinda Asset Management Co., Ltd., 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
+of Science degree from the University of London, and is a fellow member of the Institute of
+Chartered Accountants in England and Wales.
+65
+China Life Insurance Company Limited Annual Report 2015
+Mr. Wang became a Non-executive Director of the Company in July 2012. He has been the Vice
+President of China Life Insurance (Group) Company, the Chairman of China Life Investment
+Holding Company Limited, and a Director of China Life Pension Company Limited since
+June 2004. Mr. Wang worked for the Ministry of Foreign Economic Relations and Trade, the
+Xinhua News Agency Hong Kong Branch, and the Hong Kong Chinese Enterprises Association.
+He served as the Deputy Director of the General Office of China Life Insurance Company, the
+Deputy General Manager of its Zhejiang Branch and the Deputy Director of the Shares Reform
+Office of China Life from 2000. Mr. Wang was the Director of the General Office of China Life
+Insurance (Group) Company in 2003. Mr. Wang, a Senior Economist, graduated from Shandong
+University with a Bachelor's degree in Arts, majoring in Chinese Language and Literature.
+According to the requirements of the relevant PRC policies, 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.
+0
+Female 51 24 July 2012-
+11 July 2015
+connected
+Name
+Previous Position Gender Age Term
+of the year
+year
+changes
+thousands
+thousands
+(before tax)
+parties
+Reason for changes
+Su Hengxuan
+Executive Director Male
+53
+1 July 2014-
+0
+0
+13.11
+13.17
+26.28
+Yes Resigned due to adjustment of work
+8 May 2015
+arrangements
+in RMB ten ten thousands
+RMB ten
+Reason for
+the beginning the end of the
+60
+4.
+China Life Insurance Company Limited Annual Report 2015
+Directors, Supervisors, Senior Management and Employees
+RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND
+SENIOR MANAGEMENT
+Other
+benefits, social
+insurance,
+Total
+housing emoluments
+provident fund received from
+and enterprise the Company
+Vice President
+Whether
+during the
+received
+Number of Number of
+Remuneration
+paid by the
+Reporting
+emolument
+share held at share held at
+paid/fee in
+Company Period in RMB
+from the
+annuity fund
+August 2008-
+8 May 2015
+Miao Ping
+0
+32.00
+0
+32.00
+No Retired due to the expiration of session of the
+Board
+Retired due to adjustment of work
+arrangements
+No Retired due to the expiration of session of the
+Board
+No Resigned according to relevant policies
+7 March 2016
+Xia Zhihua
+0
+Chairperson of
+the Supervisory
+Committee
+16 March 2006 -
+11 July 2015
+001
+25
+22.95
+21.35
+44.30
+430
+Yang Cuilian
+Employee
+Representative
+Supervisor
+Female 61
+0
+20 October 2014 -
+Male
+Executive Director Male
+57 1 July 2014-
+0
+0
+19.67
+19.45
+39.12
+28 May 2015
+Vice President
+December 2009-
+May 2015
+52
+Bruce Douglas
+Moore
+Male
+66
+4 June 2009-
+0
+13.33
+333
+0
+13.33
+28 May 2015
+Huang Yiping
+Independent
+Director
+Independent
+Director
+39.34
+2
+Mr. Zheng became the Board Secretary of the Company in June 2013. He previously held
+positions as the Department Head of the Ministry of Justice of the PRC, a practicing lawyer
+of Beijing Longan Law Firm, China Legal Service Ltd. (Hong Kong) and Beijing DeHeng
+Law Offices, the Deputy General Manager of the Department of Legal Affairs, the Company
+Secretary, and the General Manager of the Legal and Compliance Department of the Company,
+and an Executive Director and Vice President of China Guangfa Bank Co., Ltd. Mr. Zheng
+received his LL.B. degree from Peking University, and LL.M. degrees from the China University
+of Political Science and Law and University of Essex (UK). Mr. Zheng was a visiting researcher
+at Harvard Law School and Harvard Kennedy School of Government in the United States from
+August 1996 to October 1997. Mr. Zheng is a Senior Economist.
+Board Secretary
+Board Secretariat/Company Secretary
+Decision Committee
+Strategy and
+Investment
+Risk
+Management
+Committee
+Nomination and
+Remuneration
+Committee
+Audit Committee
+Supervisory
+Committee
+Board of Directors
+Shareholders'
+General Meeting
+The Company implements good corporate governance policies and strongly believes that through fostering sound
+corporate governance, further enhancing its transparency and establishing 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.
+OVERVIEW OF CORPORATE GOVERNANCE
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+72
+(Corporate Governance Structure Chart)
+72
+Training Plans
+3.
+The Company has established a remuneration and incentive system with reference to employee's positions,
+the Company's performance and market conditions.
+Remuneration Policy
+98,823
+5,240
+2,921
+34,918
+52,264
+Number of Employees
+Total
+Others
+Secondary School
+College Diploma
+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 2015, the Company pushed forward employees' training to local branches and frontline
+business management teams for further in-depth development under the direction of its “innovation-driven
+growth" strategy. With the aim of transforming training results into operating performance, the annual
+training plan is designed to strengthen training support for key personnel of the Company, including local
+management teams, sales management teams and key personnels in all professional sectors, increase training
+resources for companies in key cities and working units with faster business development, and focus on
+the training of the pool of talents of companies at all levels, thus increasing the value of training for the
+purposes of improving operating performance and achieving business targets. The Company's education and
+training departments at all levels actively broadened their horizon for training and offered innovative ways
+of training, which improved the training resources protection system for the entire career development of
+employees. Through the implementation of a series of training programs with prominent themes and clear
+objectives, the education and training departments effectively promoted the relevant work of the Company
+in business development, team building, culture cultivation, service improvement, efficiency optimization
+and risk prevention in 2015.
+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.
+1.
+2.
+Date of publication
+of resolutions
+28 May 2015
+2014 Annual General Meeting
+Index for websites on which
+resolutions were published
+Date of the meeting
+Session of the meeting
+1. Shareholders' general meetings convened during the Reporting Period are as follows:
+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 and the
+Supervisory Committee, 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 MEETING
+The Company actively organized Directors and Supervisors to attend various training courses. In 2015, Directors
+and Supervisors of the Company attended a training course on the PRC insurance market of 2014 and a training
+course on the "Analysis of China Risk Oriented Solvency System" pursuant to the regulatory requirements. They
+also attended training courses relating to anti-money laundering pursuant to the regulatory requirements so as to
+understand the latest anti-money laundering rules and regulations and the working situation of the Company on
+anti-money laundering, and to enhance the capability of Directors and Supervisors to prevent against any risks of
+money laundering.
+9.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+74
+The Board of the Company conducted extensive investigation and research activities. Mr. Anthony Francis Neoh,
+Mr. Chang Tso Tung Stephen and Mr. Robinson Drake Pike, all of whom were Independent Directors, carried
+out investigation and research on local branches of the Company in Xilin Gol and Chifeng for the purpose of
+understanding the business development, and the risk prevention and control of the local branches. Through
+investigation and research, all Directors comprehended the working situation of local branches in great depth and
+examined the effectiveness of the Board in implementing its decisions, thus enhancing the legal compliance and
+risk prevention of the Company in an efficient and practical manner.
+The Company has continued to optimize its system relevant to the corporate governance. In accordance with the
+latest amendments to the Corporate Governance Code as contained in Appendix 14 to the Listing Rules of the
+HKSE, as well as the requirements of the CIRC with respect to the risk assessment on C-ROSS, the Company
+revised its Articles of Association, the "Procedural Rules for Board of Directors Meetings" and the "Procedural
+Rules for Risk Management Committee Meetings” with reference to its actual operation. The major amendments
+included the change of business scope of the Company, the increase of duties of the Board with respect to the
+systems of risk management and internal control, as well as the increase of duties of the Risk Management
+Committee with respect to the risk management of solvency, etc.
+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 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 Supervisory Committee
+meetings of the Company have been functioning independently and in a coordinated manner.
+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 the 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 businesses. They
+have devoted sufficient time in 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 strategy 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.
+73
+China Life Insurance Company Limited Annual Report 2015
+Corporate Governance
+3.
+Bachelor
+4.
+6.
+7.
+8.
+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, the Board has established four specialized Board
+committees, i.e. the Audit Committee, the Nomination and Remuneration Committee, the Risk Management
+Committee, and the Strategy and Investment Decision 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 Supervisory Committee of the Company has carried out its work and performed its duties in accordance
+with the Articles of Association and the “Procedural Rules for Supervisory Committee Meetings". Members
+of the Supervisory Committee attended the shareholders' general meetings and the Supervisory Committee
+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.
+During the Reporting period, the Company successfully completed the change of members of the new sessions of
+the Board and the Supervisory Committee, as well as the procedures relating to the resignation and appointment
+of Directors and Supervisors in compliance with the regulatory requirements of its listed jurisdictions and
+the provisions of its Articles of Association. In the course of this process, the Company strictly carried out all
+procedures and elected all members of the fifth sessions of the Board of Directors and the Supervisory Committee
+at the shareholders' general meeting and employee representative meeting through widespread solicitation of
+opinions, stringent selections and sufficient deliberation.
+5.
+First Extraordinary General
+Meeting 2015
+Master or above
+(2) Education Level
+Deputy General Manager
+of Strategic Planning
+Department
+Since August 2008
+Since October 2013
+Vice Chairman, President
+Vice President
+Vice President
+Vice President
+Since March 2012
+Term
+Position
+Chairman
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+Name of shareholders
+Name
+Yang Mingsheng
+Miao Jianmin
+Zhang Xiangxian
+Wang Sidong
+Liu Jiade
+Xiong Junhong
+II POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT IN SHAREHOLDERS OF THE COMPANY
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+770
+Since June 2004
+Since August 2014
+Since June 2013
+70
+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 10 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 China Fire
+Safety Enterprise Group Limited, Lee & Man Chemical Company Limited, Matrix Holdings
+Limited and Lee & Man Handbags Holding Limited, all of which are listed on the main board of
+Mr. Heng Victor Ja Wei, born in 1977, British
+COMPANY SECRETARY
+Mr. Zheng Yong, born in 1962, Chinese
+3
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+69
+Mr. Xiao became an Assistant to the President of the Company in July 2015. He has been a
+Non-executive Director of China Life Property and Casualty Insurance Company Limited since
+September 2015, and the General Manager of the Company's Jiangsu Branch since January 2014.
+From April 2013 to January 2014, he was the Deputy General Manager (responsible for daily
+operation) of the Company's Jiangsu Branch. From 2006 to 2013, he held various positions at
+the Company, including the Deputy General Manager, Assistant to the General Manager and
+Marketing Director of Jiangsu Branch and General Manager and Deputy General Manager of
+Taizhou Branch in Jiangsu Province. Before that, Mr. Xiao held various other positions at the
+Company's Jiangsu Branch, including Deputy Manager of the Sales Management Department,
+Assistant to the General Manager, Deputy General Manager (responsible for daily operation)
+and General Manager of the Individual Insurance Department. Mr. Xiao, a Senior Economist,
+graduated from Jiangxi Traditional Chinese Medicine College in 1991 with a Bachelor's degree,
+and received double Bachelor's degrees in Medicine and Law from Jiangxi Traditional Chinese
+Medicine College and Nanjing University, respectively.
+Mr. Xiao Jianyou, born in 1968, Chinese
+Mr. Yang became the Vice President of the Company in November 2014. He became the Chief
+Financial Officer of the Company since April 2013. He served as the Qualified Accountant
+of the Company since 2006, and an Assistant to the General Manager, the Deputy General
+Manager and the General Manager of the Finance Department of the Company since 2005.
+Mr. Yang has been a Director of China Life Asset Management Company Limited since 2009
+and a Director of Sino-Ocean Land Holdings Limited since 2011, and a Director of China Life
+Franklin Asset Management Co., Limited since 2014. From 2000 to 2005, Mr. Yang was the
+Senior Financial Analyst of MOLEX in the United States. Mr. Yang graduated from Beijing
+University of Technology in 1993 with a Bachelor's degree in Engineering. He obtained a
+MBA from Northeastern University in the United States in 2000. Mr. Yang is a member of the
+American Institute of Certified Public Accountants (AICPA) and the Association of Chartered
+Certified Accountants (ACCA). He is currently a member of the eighth session of the Board of
+the Accounting Society of China, a member of the National Accounting Informatization and
+Standardization Technical Committee, the third session of China Insurance Solvency Regulatory
+Standard Committee and the China Accounting Standards Committee of the Ministry of Finance
+of the PRC, respectively.
+Mr. Yang Zheng, born in 1970, Chinese
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+the HKSE.
+III
+EMPLOYEES
+1.
+2.
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2015
+98,823
+4,469
+2,674
+29,330
+5,373
+33,036
+23,941
+Number of Employees
+71
+Total
+Others
+Other expertise and technicians
+Insurance verification, claim processing and customer services
+Finance and auditing
+Employees
+Number of employees of the Company
+97,607
+Number of employees of the Company's major subsidiaries
+1,216
+Employees in total
+Education Level
+98,823
+As at the end of the Reporting Period, the composition of the employees of the Company and its major
+subsidiaries is as follows:
+(1)
+Structure of Expertise
+Class of Expertise
+Management and administration
+Sales and sales management
+Retired employees of the Company and its major subsidiaries for which extra costs have to be incurred
+29 December 2015
+3,480
+29 May 2015
+Stephen
+50%
+1
+0
+0
+1
+2
+Independent Director
+Chang Tso Tung
+100%
+0
+0
+0
+2
+2
+Independent Director
+Anthony Francis Neoh
+2
+1
+0
+0
+1
+50%
+Huang Yiping
+Liu Jiade
+1
+1
+0
+0
+0
+100%
+Non-executive Director
+Non-executive Director
+Independent Director
+0
+78
+The Company has continued to optimize its system relevant to the corporate governance. In accordance with the latest
+amendments to the Corporate Governance Code as contained in Appendix 14 to the Listing Rules of the HKSE, as well
+as the requirements of the CIRC with respect to the risk assessment on C-ROSS, the Company revised its Articles of
+Association, the "Procedural Rules for Board of Directors Meetings" and the “Procedural Rules for Risk Management
+Committee Meetings” in 2015 with reference to its actual operation. The major amendments included the change of
+business scope of the Company, the increase of duties of the Board with respect to the systems of risk management
+and internal control, as well as the increase of duties of the Risk Management Committee with respect to the risk
+management of solvency, etc.
+At present, the fifth session of the Board comprises the following members: Mr. Yang Mingsheng, Mr. Lin Dairen, Mr.
+Xu Hengping and Mr. Xu Haifeng, all being Executive Directors, Mr. Miao Jianmin, Mr. Zhang Xiangxian, Mr. Wang
+Sidong and Mr. Liu Jiade, all being Non-executive Directors, and Mr. Anthony Francis Neoh, Mr. Chang Tso Tung
+Stephen, Mr. Robinson Drake Pike and Mr. Tang Xin, all being Independent Directors, with Mr. Yang Mingsheng as
+the Chairman of the Board. Mr. Miao Ping and Mr. Bruce Douglas Moore retired from their position as Director due
+to the expiry of the term of the fourth session of the Board, Mr. Su Hengxuan resigned as Director due to adjustment of
+working arrangements, and Mr. Huang Yiping resigned as Director pursuant to the relevant policies.
+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 by any Director.
+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.
+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 Supervisory Committee, more than two Independent Directors, the Chairman
+or the President. 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
+Board meeting need not be convened and such resolution in writing shall become an effective resolution.
+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
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+77
+In 2015, 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.
+Currently, the Board comprises 12 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 Listing Rules of the HKSE. 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 Board members, members of the
+Supervisory Committee or senior management members, including between the Chairman, Mr. Yang Mingsheng and the
+President, Mr. Lin Dairen.
+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, and assessing the internal control systems of the Company. 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.
+BOARD
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+76
+0
+0
+2
+0
+Robinson Drake Pike
+Independent Director
+2
+1
+0
+0
+1
+0
+Note: Mr. Su Hengxuan resigned as Director on 8 May 2015 due to adjustment of working arrangements, whereas Mr. Miao
+Ping and Mr. Bruce Douglas Moore retired from their position as Director on 28 May 2015 due to the change of session
+of the Board. The above Directors did not attend any shareholders' general meeting of the Company during the Reporting
+Period.
+76
+0
+Wang Sidong
+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 and a notice is
+given to all Directors 14 days before such meetings. Agendas and related documents are sent to the Directors at least
+three days prior to such meetings. In 2015, 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.
+2
+2
+100%
+0
+0
+0
+2
+Executive Director
+Executive Director
+Yang Mingsheng
+Lin Dairen
+rate
+absent
+by proxies
+telephony
+attended
+meetings Attendance
+attended
+Number of
+meetings
+0
+30 December 2015
+24 proposals including: the “Proposal in relation to the Report of the Board of Directors of the Company for
+the Year 2014”, the “Proposal in relation to the Report of the Supervisory Committee of the Company for the
+Year 2014", the "Proposal in relation to the Financial Report of the Company for the Year 2014”, the “Proposal
+in relation to the Profit Distribution Plan of the Company for the Year 2014", the “Proposal in relation to the
+Remuneration of Directors and Supervisors of the Company”, the “Proposal in relation to the Remuneration of
+Auditors of the Company for the Year 2014 and the Appointment of Auditors of the Company for the Year 2015",
+the “Proposal in relation to the Election of Mr. Yang Mingsheng as an Executive Director of the Fifth Session
+of the Board of Directors of the Company”, the “Proposal in relation to the Election of Mr. Miao Ping as a Non
+Employee Representative Supervisor of the Fifth Session of the Supervisory Committee of the Company", and
+the "Proposal in relation to the Overseas Issue by the Company of RMB Debt Instruments for Replenishment of
+Capital", etc. were considered and approved by way of on-site and online voting, and the “Duty Report of the
+Independent Directors of the Fourth Session of the Board of Directors of the Company for the Year 2014” and
+the “Report on the Status of Connected Transactions and the Execution of Connected Transactions Management
+System of the Company for the Year 2014” were received and reviewed at the 2014 Annual General Meeting held
+in Beijing on 28 May 2015.
+75
+Corporate Governance
+Six proposals including: the “Proposal in relation to the Election of Mr. Tang Xin as an Independent Director
+of the Fifth Session of the Board of Directors of the Company”, the “Proposal in relation to the Appointment
+of Auditors of the Company for the Year 2016", the "Proposal in relation to the Entrusted Investment and
+Management Agreement for Alternative Investments with Insurance Funds between the Company and China
+Life Investment Holding Company Limited”, the “Proposal in relation to the Capital Debt Financing of the
+Company”, and the “Proposal in relation to the Overseas Issue of Senior Bonds by the Company”, etc. were
+considered and approved by way of on-site and online voting at the First Extraordinary General Meeting 2015
+held in Beijing on 29 December 2015.
+1
+Attendance records of Directors at the shareholders' general meetings convened during the Reporting Period:
+2.
+Name of Director
+Type of Director
+shareholders'
+general meetings
+the Director was
+required to attend
+during the year
+Number of Number of Number of
+meetings meetings
+physically attended by
+Number of
+0
+China Life Insurance Company Limited Annual Report 2015
+1
+0
+0
+0
+Non-executive Director
+Zhang Xiangxian
+50%
+1
+0
+0
+1
+2
+Non-executive Director
+Miao Jianmin
+100%
+2
+0
+50%
+0
+Xu Hengping
+Executive Director
+1
+1
+0
+0
+0
+1
+0
+Executive Director
+Xu Haifeng
+0
+100%
+Attendance rate
+4/4
+Zhan Zhong
+Wang Cuifei
+100%
+Shi Xiangming
+Miao Ping
+Name of Supervisor
+In 2015, 4 meetings were held by the fifth session of the Supervisory Committee. Attendance records of individual
+Supervisors are as follows:
+Note: At the seventeenth meeting of the fourth session of the Supervisory Committee held on 28 April 2015, Ms. Yang Cuiliain
+gave written authorization for Mr. Shi Xiangming to act as her proxy to attend and vote at the meeting.
+100%
+2/2
+Number of meetings attended
+Xiong Junhong
+50%
+2/2
+1/2
+Note
+100%
+2/2
+2/2
+Attendance rate
+Number of meetings attended
+Xiong Junhong
+Li Xuejun
+3/4
+Yang Cuilian
+Shi Xiangming
+Xia Zhihua
+100%
+100%
+At the third meeting of the fifth session of the Supervisory Committee held on 28 October 2015, Mr. Shi Xiangming gave
+written authorization for Mr. Zhan Zhong to act as his proxy to attend and vote at the meeting;
+75%
+Name of member
+Position
+Name of Supervisor
+In 2015, 2 regular meetings were held by the Audit Committee of the fourth session of the Board. Attendance
+records of individual members are as follows:
+Meetings and attendance
+1.
+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.
+The Company established its Audit Committee on 30 June 2003. In 2015, the Audit Committee comprised only
+Independent Directors of the Company. At present, the Audit Committee of the fifth session of the Board comprises
+Mr. Robinson Drake Pike, Mr. Chang Tso Tung Stephen and Mr. Tang Xin, with Mr. Robinson Drake Pike acting
+as the Chairman. Mr. Bruce Douglas Moore retired from his position as the Chairman of the Audit Committee of the
+Company due to the expiry of the term of the Audit Committee of the fourth session of the Board. Mr. Huang Yiping
+resigned from his position as a member of the Audit Committee of the fifth session of the Board of the Company
+pursuant to the relevant policies.
+AUDIT COMMITTEE
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+83
+For the activities carried out by the Supervisory Committee during the Reporting Period, please refer to the
+"Report of the Supervisory Committee” in this annual report.
+Note 1
+Activities of the Supervisory Committee during the Reporting Period
+At the second meeting of the fifth session of the Supervisory Committee held on 26 August 2015, Ms. Wang Cuifei gave
+written authorization for Mr. Zhan Zhong to act as her proxy to attend and vote at the meeting.
+2.
+1.
+3.
+2.
+Notes:
+75%
+3/4
+Note 2
+100%
+4/4
+100%
+4/4
+The Supervisory Committee had no objection in respect of any matters under its supervision
+during the Reporting Period.
+In 2015, 2 meetings were held by the fourth session of the Supervisory Committee. Attendance records of
+individual Supervisors are as follows:
+At the third meeting of the fifth session of the Board held on 28 October 2015, Mr. Yang Mingsheng, the Chairman, gave
+written authorization for Mr. Lin Dairen to act as his proxy to attend, vote and chair the meeting;
+1.
+5.
+4.
+3.
+2.
+1.
+Notes:
+No
+100%
+0
+0
+0
+3
+3
+6.
+Independent Director
+No
+75%
+0
+2
+4
+Note 7
+Note 6
+Independent Director
+Huang Yiping
+No
+100%
+0
+Number of meetings attended
+Robinson Drake Pike
+Meetings and attendance
+7.
+At the first meeting of the fifth session of the Board held on 28 May 2015, Mr. Zhang Xiangxian gave written
+authorization for Mr. Wang Sidong to act as his proxy to attend and vote at the meeting; at the second meeting of the
+fifth session of the Board held on 26 August 2015, Mr. Zhang Xiangxian gave written authorization for Mr. Wang Sidong
+to act as his proxy to attend and vote at the meeting;
+The fifth session of the Supervisory Committee of the Company comprises Mr. Miao Ping, Mr. Shi Xiangming and Ms.
+Xiong Junhong, all being Non Employee Representative Supervisors, and Mr. Zhan Zhong and Ms. Wang Cuifei, both
+being Employee Representative Supervisors, with Mr. Miao Ping acting as the Chairman of the Supervisory Committee.
+Ms. Xia Zhihua, Ms. Yang Cuilian and Mr. Li Xuejun retired from their position as Supervisor due to the expiry of the
+term of the fourth session of the Supervisory Committee.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+82
+Meetings of the Supervisory Committee are convened by the Chairman of the Supervisory Committee. According to
+the Articles of Association, the Company formulated the “Procedural Rules for Supervisory Committee Meetings” and
+established protocols for Supervisory Committee meetings. Supervisory Committee 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 periodical reports, and examine the financial conditions and
+internal control of the Company. Ad-hoc meetings are convened when necessary.
+The Supervisory Committee is accountable to the 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.
+The Supervisory Committee consists of Non Employee Representative Supervisors, such as shareholder representatives,
+and Employee Representative Supervisors, of which the Employee Representative Supervisors shall not be less than one-
+third of the Supervisory Committee. 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.
+Pursuant to the Company Law and the Articles of Association, the Company has established a Supervisory Committee.
+The Supervisory Committee performs the following duties in accordance with the Company Law, the Articles of
+Association and the “Procedural Rules for Supervisory Committee 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' general meetings and to perform any other duties
+under the laws, regulations and regulatory rules of the Company's listed jurisdictions.
+SUPERVISORY COMMITTEE
+During the Reporting Period, Mr. Yang Mingsheng served as the Chairman of the Board of Directors of the Company.
+The Chairman 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 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,
+promoting a culture of openness and debate, convening special meetings with Non-executive Directors and Independent
+Directors, and exercising other rights conferred on him by the Board. The Chairman is accountable to and reports to the
+Board. Mr. Lin Dairen was the President of the Company. The President is responsible for the day-to-day operations
+of the Company, 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 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.
+CHAIRMAN AND PRESIDENT
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+At the second meeting of the fifth session of the Board held on 26 August 2015, Mr. Miao Jianmin gave written
+authorization for Mr. Liu Jiade to act as his proxy to attend and vote at the meeting; at the third meeting of the fifth
+session of the Board held on 28 October 2015, Mr. Miao Jianmin gave written authorization for Mr. Zhang Xiangxian to
+act as his proxy to attend and vote at the meeting;
+81
+From 19 to 24 August 2015, Mr. Anthony Francis Neoh, Mr. Chang Tso Tung Stephen and Mr. Robinson Drake
+Pike, all of whom were Independent Directors, carried out investigation and research on local branches of the
+Company in Xilin Gol and Chifeng, listened to the work reports of local branches in Inner Mongolia, Xilin Gol
+and Chifeng, held in-depth conferences with their respective key management, conducted an on-site investigation
+and research on counters of the business department of Chifeng local branch for the purpose of understanding
+the business development, and the risk prevention and control of the local branches. Through investigation and
+research, all Directors comprehended the working situation of local branches in great depth and examined the
+effectiveness of the Board in implementing its decisions, thus enhancing the legal compliance and risk prevention
+of the Company in a practical manner.
+In 2015, the Independent Directors of the Company and the representatives from the external auditors (Ernst &
+Young Hua Ming LLP and Ernst & Young) convened a special meeting to discuss various matters including the
+audit for the year 2014, the annual financial reports, and the impact of the implementation of the C-ROSS on the
+Company, and also discussed the work relating to the audit of the Company.
+All Independent Directors diligently fulfilled their responsibilities and faithfully performed their duties by
+attending meetings of the Board and the specialized Board committees in 2015, examining and approving
+the Company's business development, 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 the relevant personnel, understanding
+the daily operation 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 among the Chairman, Non-executive
+Directors and Independent Directors, all Independent Directors made recommendations in various aspects, such
+as the development of the global capital market, return on investment and balance of risks, and gave constructive
+advice on corporate governance, team building and marketing method. 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. In 2015, the Company provided various materials to the
+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.
+In 2015, all Independent Directors of the Company possessed extensive experience in various fields, such as
+macro-economics, finance and insurance, legal compliance, accounting and auditing. They satisfied the criteria
+for Independent Directors under the regulatory rules of the Company's listed jurisdictions. The 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.
+Performance of duties by Independent Directors
+2.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+80
+At the fourth meeting of the fifth session of the Board held on 22 December 2015, Mr. Huang Yiping gave written
+authorization for Mr. Anthony Francis Neoh to act as his proxy to attend and vote at the meeting.
+At the first meeting of the fifth session of the Board held on 28 May 2015, Mr. Huang Yiping attended the meeting by
+way of telephony;
+At the fourth meeting of the fifth session of the Board held on 22 December 2015, Mr. Liu Jiade gave written
+authorization for Mr. Zhang Xiangxian to act as his proxy to attend and vote at the meeting;
+At the fourth meeting of the fifth session of the Board held on 22 December 2015, Mr. Wang Sidong gave written
+authorization for Mr. Miao Jianmin to act as his proxy to attend and vote at the meeting;
+During the Reporting Period, no Independent Director has raised any objection against the proposals and matters
+considered by the Board of the Company.
+Attendance rate
+2
+Independent Director, Chairman of the Audit
+Committee of the fourth session of the Board
+2/2
+Attendance rate
+Number of meetings attended
+Chang Tso Tung Stephen Independent Director, Chairman of the
+Position
+Name of member
+In 2015, 2 regular meetings were held by the Nomination and Remuneration Committee of the fifth session of the
+Board. Attendance records of individual members are as follows:
+of the fourth session of the Board
+Nomination and Remuneration Committee
+100%
+2/2
+Non-executive Director, member of the
+Miao Jianmin
+100%
+of the fourth session of the Board
+100%
+2/2
+Independent Director, member of the
+Bruce Douglas Moore
+of the fourth session of the Board
+Nomination and Remuneration Committee
+100%
+2/2
+Attendance rate
+Number of meetings attended
+Chang Tso Tung Stephen Independent Director, Chairman of the
+Position
+Name of member
+Nomination and Remuneration Committee
+In 2015, 2 regular meetings were held by the Nomination and Remuneration Committee of the fourth session of
+the Board. Attendance records of individual members are as follows:
+Nomination and Remuneration Committee
+Robinson Drake Pike
+0
+RISK MANAGEMENT COMMITTEE
+Carrying out the performance appraisal of senior management officers. The Nomination and Remuneration
+Committee reviewed the results of performance appraisal of senior management officers for 2014 and the
+performance target contract for 2015, and made recommendations to the Board in respect of matters such as
+the determination of performance target, performance appraisal procedures and results.
+Proposed 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 management, strategic investment decisions, and corporate governance management and
+control, carefully examined and determined the specific 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. According to the requirements of the CIRC, the Nomination and Remuneration Committee
+reviewed and approved the report for the management of the Company's annual remuneration, conducted
+a self-assessment on the remuneration management system of the Company and agreed to submit such
+proposal to the Board for approval.
+(3)
+(2)
+(1) Proposed appointment of Directors and senior management officers of the Company. In accordance with
+the "Procedural Rules for Nomination and Remuneration Committee Meetings" and the “Board Diversity
+Policy", the Nomination and Remuneration Committee carefully 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), selected and recommended a list of
+candidates for members of the fifth session of the Board, fully reviewed the professional qualifications and
+industrial background of the Director candidates and the members of the specialized Board committees, and
+the independence of the Independent Directors, etc. 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 so as to ensure that the candidates met the requirements set by the Company.
+The Nomination and Remuneration Committee also issued a review opinion to the Board and agreed to
+submit such proposals to the Board for approval.
+In 2015, the Nomination and Remuneration Committee reviewed the proposal on the remuneration of Directors,
+Supervisors and senior management officers, candidates for Directors, nomination of senior management officers,
+business objectives and appraisal results. Pursuant to the requirements of the procedural rules for meetings, the
+Nomination and Remuneration Committee reviewed the report on the duty performance of the Audit Committee
+and the Nomination and Remuneration Committee. During meetings of the Nomination and Remuneration
+Committee, all members actively participated in discussions and gave professional opinions on the proposals
+considered and discussed at the meetings.
+Performance of duties by the Nomination and Remuneration Committee
+2.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+88
+of the fifth session of the Board
+87
+Note: At the second meeting of the Nomination and Remuneration Committee of the fifth session of the Board held on 26
+August 2015, Mr. Miao Jianmin gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend
+of the fifth session of the Board
+Nomination and Remuneration Committee
+50%
+Note
+1/2
+Non-executive Director, member of the
+Miao Jianmin
+of the fifth session of the Board
+Nomination and Remuneration Committee
+100%
+1/1
+Independent Director, member of the
+and vote at the meeting.
+Meetings and attendance
+1.
+The Nomination and Remuneration Committee determines, with delegated responsibility, the remuneration packages of
+all Executive Directors and senior management officers. The fixed salary of the Executive Directors and other members
+of senior 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.
+Independent Director, member of the Audit
+Huang Yiping
+Committee of the fifth session of the Board
+100%
+3/3
+Chang Tso Tung Stephen Independent Director, member of the Audit
+100%
+3/3
+Independent Director, Chairman of the Audit
+Committee of the fifth session of the Board
+Robinson Drake Pike
+Attendance rate
+Number of meetings attended
+Position
+Note
+Name of member
+Committee of the fourth session of the Board
+100%
+2/2
+42
+Independent Director, member of the Audit
+Huang Yiping
+Committee of the fourth session of the Board
+100%
+2/2
+22
+Chang Tso Tung Stephen Independent Director, member of the Audit
+100%
+2/2
+In 2015, 3 regular meetings were held by the Audit Committee of the fifth session of the Board. Attendance
+records of individual members are as follows:
+2/3
+67%
+Committee of the fifth session of the Board
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+86
+The Nomination and Remuneration Committee, as an advisor to the Board on the nomination of Directors, shall
+first discuss and agree on the list of candidates to be nominated as new Directors, 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 industry,
+and the candidates' commitment to the Company. As to the nomination of Independent Directors, the Nomination and
+Remuneration Committee will give special consideration to the independence of the relevant candidates.
+At present, the Nomination and Remuneration Committee of the fifth session of the Board comprises Mr. Chang Tso
+Tung Stephen and Mr. Robinson Drake Pike, the Independent Directors, and Mr. Miao Jianmin, a Non-executive
+Director, with Mr. Chang Tso Tung Stephen acting as the Chairman. Mr. Bruce Douglas Moore retired from his
+position as a member of the Nomination and Remuneration Committee due to the expiry of the term of the Nomination
+and Remuneration Committee of the fourth session of the Board.
+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. 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 criteria of Directors and
+senior management. The committee is also responsible for formulating training and remuneration policies for the senior
+management of the Company.
+NOMINATION AND REMUNERATION COMMITTEE
+Conducting investigation and research of local branches. From 19 to 24 August 2015, Mr. Robinson Drake
+Pike, the Chairman of the Audit Committee, and Mr. Chang Tso Tung Stephen, a member of the Audit
+Committee, carried out investigation and research on local branches of the Company in Xilin Gol and
+Chifeng, and gave constructive advice on the differentiated financial policies formulated by the Company
+taking into account local conditions.
+Examining the internal audit functions of the Company. The Audit Committee reviewed proposals
+including the "Proposal on the 2014 Internal Audit Summary and the 2015 Internal Audit Work Plan
+and Budget of the Costs of the Company" and the “Proposal on the Internal Audit Summary for the First
+Half of 2015 and the Internal Audit Work Plan for the Second Half of 2015", in order to facilitate the
+communication between the Company's internal audit department and the independent auditors, and
+confirmed that the Company's internal audit function was effective.
+(6)
+(5)
+(4) Assessing the effectiveness of internal control and monitoring the operation of the Company to be in
+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 the work in compliance with laws
+and regulations pursuant to the relevant requirements of the CIRC and the SSE. 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.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+85
+85
+Supervising and assessing the work of and strengthening communications with external auditors. Besides
+regular meetings, the Audit Committee convened communication meetings in advance with the relevant
+departments of the Company and external auditors for several times so as to discuss the annual audit plan
+of the Company, determine the service scope of the annual audit and to 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.
+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.
+Reviewing connected transactions. In 2015, the Audit Committee reviewed the “Proposal on the Connected
+Transactions under the Asset Management Agreement for Alternative Investments between the Company
+and China Life Investment Holding Company Limited”, and submitted it to the Board and shareholders'
+general meeting 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 conscientiously
+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.
+Reviewing and approving financial reports. The Audit Committee, according to its duties, reviewed and
+approved annual, interim and quarterly financial reports, as well as solvency report 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 reports, 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 identified during the audit.
+(3)
+(2)
+(1)
+In 2015, the Audit Committee performed its relevant duties and functions in strict compliance with the
+"Procedural Rules for Audit Committee Meetings”. All members of the Audit Committee attended meetings in
+a timely manner for the purpose of reviewing 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.
+Performance of duties by the Audit Committee
+2.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+84
+Note: At the third meeting of the Audit Committee of the fifth session of the Board held on 21 December 2015, Mr. Huang
+Yiping gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote at the meeting.
+Bruce Douglas Moore
+0
+0
+Independent Director
+No
+50%
+0
+1
+0
+1
+Note 4
+No
+100%
+0
+0
+0
+2
+Bruce Douglas Moore
+22
+Non-executive Director
+No
+50%
+0
+1
+0
+1
+2
+Note 3
+Non-executive Director
+Wang Sidong
+Miao Jianmin
+Zhang Xiangxian
+No
+Non-executive Director
+100%
+Independent Director
+0
+0
+0
+2
+2
+Independent Director
+No
+100%
+0
+0
+0
+2
+2
+Independent Director
+2
+Chang Tso Tung Stephen
+Huang Yiping
+100%
+0
+0
+0
+2
+2
+Independent Director
+Anthony Francis Neoh
+4
+No
+100%
+0
+0
+No
+0
+0
+0
+proxies
+telephony
+attended
+the year
+Type of Director
+Name of Director
+consecutive
+meetings
+Attendance
+meetings
+Number of
+meetings
+attended by
+attended by
+physically
+absent
+meetings
+to attend two
+Number of
+Number of
+Number of
+Whether the
+Director failed
+meetings the
+Director was
+required to
+attend during
+Number of
+In 2015, 2 regular Board meetings were held by the fourth session of the Board, both of which were physical
+meetings. The attendance records of individual Directors are as follows:
+Meetings and attendance
+1.
+During 2015, members of the Board of the Company attended a training course on the PRC insurance market of
+2014, which gave them a general review and analysis of the overall situation of the PRC insurance market of 2014 from
+various aspects, including insurance regulation, industry development and horizontal competition. According to the
+requirements of the CIRC, members of the Board attended a training course on the "Analysis of China Risk Oriented
+Solvency System”, to enhance their capability of risk management on the Company's solvency and the level of public
+disclosure of the Company's solvency to external parties. Directors also attended training courses relating to anti-
+money laundering pursuant to the regulatory requirements so as to understand the latest anti-money laundering rules
+and regulations and the working situation of the Company on anti-money laundering, and to enhance the capability of
+Directors to prevent against any risks of money laundering.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+meetings
+0
+rate
+Note 1
+2
+No
+50%
+0
+1
+0
+1
+Note 2
+No
+100%
+0
+0
+0
+in person
+2
+50%
+0
+1
+0
+1
+2222
+Executive Director
+Miao Ping
+Executive Director
+Su Hengxuan
+Executive Director
+Executive Director
+Yang Mingsheng
+Lin Dairen
+No
+100%
+88
+Notes:
+0
+100%
+No
+Xu Hengping
+Executive Director
+3
+0
+0
+0
+100%
+No
+Xu Haifeng
+Executive Director
+0
+3
+0
+0
+0
+100%
+No
+Miao Jianmin
+Note 2
+Non-executive Director
+4
+2
+0
+2
+0
+3
+50%
+0
+4
+No
+Number of
+consecutive
+meetings Attendance
+meetings
+Name of Director
+Type of Director
+the year
+attended
+telephony
+proxies
+absent
+rate
+4
+in
+Note 1
+Yang Mingsheng
+Executive Director
+4
+3
+0
+1
+0
+75%
+meetings
+attended by
+No
+Lin Dairen
+Executive Director
+person
+Yes
+3
+Zhang Xiangxian
+0
+0
+100%
+No
+Chang Tso Tung Stephen
+attended by
+physically
+attend during
+meetings
+meetings
+required to
+to attend two
+Number of
+Number of
+Number of
+Whether the
+Director failed
+Number of
+meetings the
+Director was
+In 2015, 4 regular Board meetings were held by the fifth session of the Board, of which 3 were physical meetings
+and 1 was combined physical and telephony meeting. The attendance records of individual Directors are as
+follows:
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2015
+79
+At the twentieth meeting of the fourth session of the Board held on 28 April 2015, Mr. Wang Sidong gave written
+authorization for Mr. Zhang Xiangxian to act as his proxy to attend and vote at the meeting.
+At the nineteenth meeting of the fourth session of the Board held on 10 March 2015, Mr. Miao Jianmin gave written
+authorization for Mr. Zhang Xiangxian to act as his proxy to attend and vote at the meeting;
+Note 3
+At the twentieth meeting of the fourth session of the Board held on 28 April 2015, Mr. Yang Mingsheng, the Chairman,
+gave written authorization for Mr. Lin Dairen to act as his proxy to attend, vote and chair the meeting;
+4.
+3.
+2.
+1.
+0
+4
+At the twentieth meeting of the fourth session of the Board held on 28 April 2015, Mr. Su Hengxuan gave written
+authorization for Mr. Miao Ping to act as his proxy to attend and vote at the meeting;
+Independent Director
+4
+Non-executive Director
+4
+2
+2
+The Company established its Risk Management Committee on 30 June 2003. The Risk Management Committee is
+mainly responsible for formulating the Company's system of risk control benchmarks, assisting the management in
+establishing and improving the Company's internal control system, formulating the operational risk management policy
+of the Company, reviewing the assessment reports in relation to the Company's operational risk and internal control,
+and coordinating the handling of sudden and significant risks or crises.
+50%
+Yes
+Wang Sidong
+Note 4
+Non-executive Director
+4
+3
+0
+0
+0
+No
+1
+0
+0
+2
+67%
+3
+75%
+No
+Note 5
+Anthony Francis Neoh
+Non-executive Director
+Liu Jiade
+Ernst & Young
+Prominent
+principal
+business
+and solid
+financial
+strength
+Long
+history
+and
+excellent
+brand
+Well-
+established
+network
+and leading
+technologies
+Core Competitiveness
+China Life Insurance Company Limited Annual Report 2017
+Profound
+and extensive
+customer base
+6
+Avenue, Central, Hong Kong
+Address: 22/F, CITIC Tower, 1 Tim Mei
+Prelude
+Name of the Signing
+Debevoise & Plimpton LLP
+Address: 60 Wall Street, New York, NY 10005
+Auditors: Zhang Xiaodong,
+Wu Jun
+Ernst & Young Hua Ming LLP
+Address: Level 16, Ernst
+& Young Tower, Oriental
+Plaza, No.1 East Changan
+Avenue, Dongcheng
+District, Beijing, P.R.
+China
+Latham & Watkins
+Domestic Auditor
+King & Wood Mallesons
+Deutsche Bank
+Address: Shops 1712-1716, 17th Floor, Hopewell
+Centre, 183 Queen's Road East, Wanchai, Hong
+Kong
+The predecessor of the Company, one of the first batch of enterprises to underwrite insurance
+business in China, was approved by the Central 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 at 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. The Company is a key member of China Life Insurance
+(Group) Company, which is enlisted in Fortune "Global 500" and "The World's 500 Most
+Influential Brands”. 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 31
+December 2017, the brand of China Life has been ranked as one of the "The World's 500 Most
+Influential Brands" published by World Brand Lab for eleven consecutive years, and was again
+ranked No. 4 on the 2017 (the 14th session) “China's 500 Most Valuable Brands" list published
+by World Brand Lab.
+Computershare Hong Kong
+Investor Services Limited
+International Auditor
+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, the Company has solid financial strength
+comparable to world-class enterprises in the world. As at 31 December 2017, the Company's total
+assets amounted to RMB2,897,591 million, ranking No. 1 in 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 2017, the total market capitalization
+of the Company was USD120,834 million, which ranked No. 1 among all listed life insurance
+companies in the world.
+a year-on-year increase of 18.9%
+The Company has an extensive customer base. As at 31 December 2017, the Company had
+approximately 268 million long-term individual and group life insurance policies, annuity
+contracts and long-term health insurance policies in force, offering insurance services for over 500
+million customers.
+Auditors of the Company
+8 China Life Insurance Company Limited Annual Report 2017
+a year-on-year increase of 28.9%
+RMB288,106 million
+Renewal premiums
+a year-on-year increase of 28.5%-
+RMB66,003 million
+First-year regular premiums with ten
+years or longer payment duration
+a year-on-year increase of 20.4%
+RMB113,121 million
+First-year regular premiums
+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 total
+number of sales force of the Company across all channels was 2.025 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
+vigorously promotes the upgrade of “Online China Life", "Intelligent China Life” and “Digital
+China Life" by taking advantages of mobile internet technologies, 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 sociable features, and leverages
+technologies to provide convenient insurance services to the public.
+$
+Gross written premiums
+S
+Business Highlights
+Prelude
+7
+Annual Report 2017
+China Life Insurance Company Limited
+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 change of these personnel which might have a material
+impact on the Company.
+core team
+and stable
+Professional
+RMB511,966 million
+International Legal Advisers
+Stock Code
+Depositary of ADR
+China Life Insurance Company Limited and its subsidiaries
+RMB
+China or PRC
+Articles of Association
+Securities Law
+Insurance Law
+Company Law
+SSE
+HKSE
+CSRC
+CIRC
+CLI
+CLP&C
+CLWM
+AMP
+China Life Insurance (Group) Company, the controlling shareholder of the
+Company
+Pension Company
+China Life Asset Management Company Limited, a non-wholly owned
+subsidiary of the Company
+China Life AMP Asset Management Company Limited, an indirect non-
+wholly owned subsidiary of the Company
+Company Profile
+China Life Insurance Company Limited Annual Report 2017
+4
+Except for "the Company" referred to in the Consolidated Financial Statements.
+The Company has stated in this report the details of its existing risks including risks relating to business and risks
+relating to investments and profitability. Please refer to the analysis of the risks which the Company may face in its
+future development in the section headed “Management Discussion and Analysis".
+Material Risk Alert:
+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
+Renminbi Yuan
+Articles of Association of China Life Insurance Company Limited
+Securities Law of the People's Republic of China
+Company Law of the People's Republic of China
+Insurance Law of the People's Republic of China
+China Securities Regulatory Commission
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+China Insurance Regulatory Commission
+China Life Investment Holding Company Limited, a wholly-owned
+subsidiary of CLIC
+China Life Property and Casualty Insurance Company Limited, a non-
+wholly owned subsidiary of CLIC
+China Life Wealth Management Company Limited, an indirect non-wholly
+owned subsidiary of the Company
+China Life Pension Company Limited, a non-wholly owned subsidiary of
+the Company
+AMC
+CLIC
+The Company'
+52
+Significant Events
+44
+Embedded Value
+19
+Management Discussion and Analysis
+11
+Chairman's Statement
+3
+Prelude
+Contents
+Annual Report 2017
+Stock Code: 2628
+China Life Insurance Company Limited
+中国人寿保险股份有限公司
+Corporate Governance
+70
+Other Information
+135
+In this annual report, unless the context otherwise requires, the following expressions have the following meanings:
+Definitions and Material Risk Alert
+Prelude
+10
+8
+7
+Financial Summary
+Prelude
+Business Highlights
+Company Profile
+5
+4
+Definitions and Material Risk Alert
+Prelude
+142
+Financial Report
+Core Competitiveness
+The Company is a life insurance company established in Beijing, China on 30 June 2003 according to the Company
+Law and 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 2017, the Company had approximately 268 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.
+www.sse.com.cn
+China Securities Journal, Shanghai Securities News, Securities Times
+The Company's Annual
+Reports may be obtained at
+The Company's H Share
+Disclosure Websites
+Website for the Company's
+Annual Report Disclosure
+CSRC's Designated
+A Share Disclosure
+Media for the Company's
+III. INFORMATION DISCLOSURE AND PLACE FOR OBTAINING THE REPORT
+Prelude
+5
+China Life Insurance Company Limited Annual Report 2017
+*Ms. Li Yinghui, Securities Representative
+of the Company, is also the main contact
+person of the external Company Secretary
+engaged by the Company
+liyh@e-chinalife.com
+86-10-66575112
+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
+IV. STOCK INFORMATION
+Stock Type
+Transfer Office
+H Share Registrar and
+V. OTHER RELEVANT INFORMATION
+LFC
+2628
+China Life
+The Stock Exchange of
+Hong Kong Limited
+New York Stock
+Exchange
+86-10-63631191
+601628
+Shanghai Stock Exchange
+Stocks are Listed
+Stock Short Name
+Exchanges on which the
+ADR
+H Share
+A Share
+China Life
+Domestic Legal Adviser
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Securities Representative
+Email
+Fax
+Telephone
+Office Address
+Name
+Fax
+Telephone
+Hong Kong Office Address
+Email
+Website
+Fax
+Telephone
+Postal Code
+Current Office Address
+Registered Name in English
+Legal Representative
+Registered Office Address
+Postal Code
+I. BASIC INFORMATION
+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”)
+Yang Mingsheng
+ir@e-chinalife.com
+86-10-66575112
+86-10-63631241
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Li Mingguang
+Board Secretary
+II. CONTACT INFORMATION
+Li Yinghui
+852-29192638
+16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
+Hung Hom, Kowloon, Hong Kong
+ir@e-chinalife.com
+www.e-chinalife.com
+86-10-66575722
+86-10-63633333
+16 Financial Street, Xicheng District, Beijing, P.R. China
+100033
+16 Financial Street, Xicheng District, Beijing, P.R. China
+100033
+852-29192628
+Registered Name in Chinese
+Robinson Drake Pike
+Remuneration
+21.66 135.06
+No
+Xu Haifeng
+Vice President
+Male
+May 1959
+Since November 2014
+0
+0
+113.40
+113.40
+135.06
+No
+Li Mingguang
+Vice President,
+Male
+July 1969
+Appointed as Vice
+113.40
+21.84 135.24
+21.66
+0
+0
+November 1958 Since November 2014
+at the end
+for
+Remuneration
+enterprise during the received
+annuity fund Reporting emolument
+paid by the Period in from
+paid Company RMB ten connected
+in RMB ten in RMB ten thousands parties of
+thousands thousands (before tax) the Company
+Name
+Position
+Gender Date of Birth
+Term
+of the year
+of the year changes
+Lin Dairen
+President
+Male
+June 1958
+Since April 2014
+140.00
+21.88 161.88
+No
+Xu Hengping
+Vice President
+Male
+No
+share held Reason
+Chief Actuary,
+Board Secretary
+Since March 2018
+0
+0
+26.25
+5.54
+31.79
+No
+Refer to the Notes
+0
+No
+98.00 29.94 127.94
+(his qualification is
+subject to the
+approval of CIRC)
+Zhan Zhong
+Marketing Director
+Yang Hong
+Operation Director
+Male
+April 1968
+Female February 1967
+Since August 2017
+No
+133.71
+21.71
+112.00
+2014, Chief Actuary
+since March 2012, Board
+Secretary since June 2017
+Zhao Lijun
+Vice President
+Male
+Xiao Jianyou
+Zhao Peng
+Vice President
+Vice President
+Male
+Ruan Qi
+Vice President
+Male
+July 1963
+Male September 1968
+April 1972
+July 1966
+Since July 2016
+113.40
+21.71
+135.11
+No
+Since October 2016
+0
+President since November
+0
+the beginning
+mally
+Male
+April 1958
+Since 11 July 2015
+0
+0
+114.80
+21.66
+136.46
+No
+Chairman of the
+Supervisory Committee
+Supervisor
+Male
+November 1959 Since 25 May 2009
+0
+125.37
+32.24
+157.61
+No
+Luo Zhaohui
+Wang Cuifei
+Shi Xiangming
+Miao Ping
+Company
+thousands thousands (before tax)
+fund paid
+Reporting
+from
+Name
+Position
+Gender Date of Birth
+Term
+Number of Number of
+shares held at shares held
+the beginning at the end
+of the year of the year changes
+Annual Report 2017
+by the
+Period in
+connected
+Reason
+paid/fee
+Company
+RMB ten
+parties
+for
+in RMB ten in RMB ten
+thousands
+of the
+Supervisor
+Number of Number of
+share held at
+Male
+Since 11 February 2018
+459.65
+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.
+China Life Insurance Company Limited Annual Report 2017
+3.
+4.
+0
+According to the requirements of the relevant remuneration policies of the Company, the final amount of
+emoluments of the Chairman of the Supervisory Committee and the Supervisors is currently subject to review and
+approval. The result of the review will be disclosed when the final amount is confirmed.
+(III) Current Senior Management
+Corporate Governance
+Other
+benefits,
+social
+insurance,
+Total
+housing emoluments
+provident received
+fund from the
+and Company Whether
+Following the election at the First Extraordinary General Meeting 2017 of the Company and upon the approval
+by the CIRC, the appointment of Mr. Luo Zhaohui as a Supervisor of the Company became effective from 11
+February 2018. Following the election at the Sixth Extraordinary Meeting of the Second Session of the Employee
+Representative Meeting of the Company and upon the approval by the CIRC, the appointment of Mr. Song Ping
+as a Supervisor of the Company became effective from 15 March 2018.
+0
+Total
+90
+0
+0
+0
+0
+0
+Yes
+Song Ping
+Employee Representative Female January 1964
+Supervisor
+Employee Representative Male
+Supervisor
+Since 11 July 2015
+0
+0
+134.17
+31.41
+165.58
+No
+June 1964
+Since 15 March 2018
+0
+0
+No
+90
+March 1974
+annuity during the emolument
+0
+27
+of work
+-12 January 2018
+0
+0
+0
+0
+December 1961 24 July 2012
+Non-executive Male
+Director
+Wang Sidong
+arrangements
+Yes Resigned due
+to adjustment
+-7 April 2017
+Director
+27 October 2008
+Non-executive Male January 1965
+Miao Jianmin
+Company changes
+thousands thousands (before tax)
+of the year changes
+of the year
+00/000 Ye
+Yes Resigned due
+to adjustment
+of work
+to adjustment
+Yes Resigned due
+arrangements
+of work
+adjustment
+0
+0
+0
+-23 February 2018
+Xiong Junhong Supervisor Female December 1968 20 October 2014
+-8 August 2017
+Director
+Yes Resigned
+0
+0
+0
+0
+0
+Non-executive Male Feburary 1963 11 July 2015
+Liu Jiade
+arrangements
+Term
+of work
+Gender Date of Birth
+thousands
+Whether
+from the
+fund and
+provident received
+housing emolument
+Total
+insurance,
+Other
+benefits, social
+(IV) Resignation and Retirement of Directors, Supervisors and Senior Management
+enterprise Company
+China Life Insurance Company Limited Annual Report 2017
+With the approval given at the twelfth meeting of the fifth session of the Board of Directors of the Company
+and the approval by the CIRC, Mr. Li Mingguang was appointed as the Board Secretary of the Company with
+effect from 28 June 2017. With the approval given at the fourteenth meeting of the fifth session of the Board
+of Directors of the Company, Mr. Zhan Zhong was appointed as the Marketing Director of the Company with
+effect from 24 August 2017. With the approval given at the fourteenth meeting of the fifth session of the Board
+of Directors of the Company and the approval of the CIRC, Mr. Zhao Peng was appointed as an Assistant to the
+President of the Company with effect from 12 October 2017. With the approval given at the nineteenth meeting of
+the fifth session of the Board of Directors of the Company, Mr. Zhao Peng was appointed as the Vice President of
+the Company with effect from 2 March 2018, Mr. Ruan Qi was appointed as the Vice President of the Company
+(his qualification as the Vice President of the Company is subject to the approval of the CIRC), and Ms. Yang
+Hong was appointed as the Operation Director of the Company with effect from 2 March 2018.
+3.
+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.
+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.
+1.
+Notes:
+Corporate Governance
+91
+92
+received
+annuity
+during the emolument
+in RMB ten in RMB ten
+for
+at the end
+the beginning
+Previous
+Position
+Name
+parties
+RMB ten
+Company
+paid
+Reason
+share held
+share held at
+from
+connected
+Period in
+Remuneration paid by the
+Number of
+Number of
+Reporting
+fund
+Salary/
+of the Reason for
+32.67
+arrangements
+11 July 2015
+Mr. Chang Tso Tung Stephen, born in 1948, Chinese
+Mr. Yin became a Non-executive Director of the Company in July 2017. He has been
+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. Yin Zhaojun, born in 1965, Chinese
+China Life Insurance Company Limited Annual Report 2017
+96
+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.
+Mr. Liu Huimin, born in 1965, 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. Yuan Changqing, born in 1961, 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 China Cinda Asset
+Management Co., Ltd., 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.
+Corporate Governance
+Annual Report 2017
+China Life Insurance Company Limited
+Mr. Xu became an Executive Director of the Company in July 2015. He has been the Vice
+President of the Company since November 2014 and a Non-executive Director of China
+Life Asset Management Company Limited since September 2015. He served as a Non-
+executive Director of China Life E-commerce Company Limited from January 2015 to
+January 2017. He served as the Business Controller of the Company from February to
+November 2014, during which he concurrently served as the General Manager of Hebei
+Branch of the Company. Mr. Xu served as the General Manager of Beijing Branch and
+the General Manager of Hebei Branch of the Company from 2006 to 2014. Prior to that,
+Mr. Xu served as the Deputy General Manager and General Manager of Linyi Branch in
+Shandong Province and the General Manager of the Business Management Department in
+Shandong Branch of the Company, the General Manager of Jinan Branch and the Deputy
+General Manager of Beijing Branch of the Company. Mr. Xu graduated from Linyi
+Foreign Language Normal University in 1982, from Shandong Provincial Party School
+majoring in economic management in 1996, and obtained a master's degree in business
+administration from Zhongnan University of Economics and Law in 2007. Mr. Xu, a
+senior economist, has over 30 years of experience in the operation of life insurance business
+and insurance management.
+Mr. Xu Haifeng, born in 1959, Chinese
+Corporate Governance
+Mr. Xu became an Executive Director of the Company in July 2015. He has been the
+Vice President of the Company since November 2014, the Chief Operating Officer of
+the Company since August 2010, the General Manager of the Company's Fujian Branch
+since April 2007, the Deputy General Manager of the Company's Fujian Branch since
+December 2002, an Assistant to the General Manager of the Company's Fujian Branch
+since September 1998, and the Division Chief of the Personal Insurance Division of the
+Company's Fujian Branch since July 1996. Mr. Xu served as the General Manager of the
+Sales Department and the General Manager of Longyan Branch of Fuzhou Life Insurance
+Company Limited. Mr. Xu graduated from Hunan University, majoring in finance. Mr.
+Xu, a senior economist, has over 35 years of experience in operation of the life insurance
+business and insurance management.
+Mr. Xu Hengping, born in 1958, Chinese
+China Life Insurance Company Limited Annual Report 2017
+94
+95
+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.
+Since March 2018
+0
+0
+Total
+0
+0
+10.33
+43.00
+No
+No
+1,038.79
+China Life Insurance Company Limited Annual Report 2017
+98
+98
+Ms. Leung Oi-Sie Elsie became an Independent Director of the Company in July 2016.
+She was the first Secretary for Justice of Hong Kong, as well as a member of the Executive
+Council of Hong Kong. She is currently the Deputy Director of the Hong Kong Basic Law
+Committee of the Standing Committee of the 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. She has been an Independent Non-executive Director
+of PetroChina Company Limited since June 2017.
+Ms. Leung Oi-Sie Elsie, born in 1939, 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 the China Association for Pubic
+Companies, and an Independent Director of each of Harvest Fund Management Co.,
+Ltd., GF Securities Co., Ltd. and Oriza Holdings 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.
+Mr. Tang Xin, born in 1971, Chinese
+Corporate Governance
+97
+China Life Insurance Company Limited Annual Report 2017
+94
+Zhan Zhong Employee Male April 1968
+Mr. Lin became an Executive Director of the Company in October 2008, and was
+appointed as the President of the Company by the Board in March 2014. He serves
+concurrently as a Non-executive Director of China Life Property and Casualty Insurance
+Company Limited, China Life Pension Company Limited and China Life Asset
+Management Company Limited. He served as the Vice President of the Company from
+2003 to March 2014, and an Executive Director and the President of China Life Pension
+Company Limited from November 2006 to March 2014. Mr. Lin graduated with a
+bachelor's degree in medicine from Shandong Province Changwei Medical Institute in
+1982. Mr. Lin, a senior economist, has over 30 years of experience in the operation of the
+life insurance business and insurance management, and was awarded special allowance by
+the State Council. He is currently the Chairman of the China Life Foundation, the Vice
+Chairman of the Insurance Institute of China and the Insurance Association of China, a
+Non-executive Director of China Insurance Security Fund Co., Ltd., the Deputy Director
+of the Life Insurance Committee of the Insurance Association of China and the Director
+of the Insurance Institutional Investors Professional Committee of the Insurance Asset
+Management Association of China.
+Mr. Yang became an Executive Director and the Chairman of the Company in May 2012.
+He has been the Chairman of China Life Insurance (Group) Company since March 2012,
+the Chairman of China Life Property and Casualty Insurance Company Limited since
+March 2012, the Chairman of China Life Insurance (Overseas) Company Limited since
+January 2013, the Chairman of China Life Asset Management Company Limited since
+December 2013, and the Chairman of China Guangfa Bank Co., Ltd. since September
+2016. Mr. Yang has many years of experience in financial industry. He acted as the Vice
+Chairman of China Insurance Regulatory Commission from 2007 to 2012, and worked
+for Agricultural Bank of China from 1980 to 2007, where he held various positions such
+as the Vice President of Shenyang Branch, Head of the Industrial Credit Department of
+the head office and President of Tianjin Branch. He was appointed as the Vice President
+of Agricultural Bank of China in 1997 and was then promoted to the President of
+Agricultural Bank of China in 2003. Mr. Yang, a senior economist, graduated from the
+Faculty of Finance of Nankai University, majoring in monetary banking with a master's
+degree in economics.
+Zheng Yong Board Secretary Male
+-2 January 2018
+Representative
+Director
+49.39
+11.47
+37.92
+0
+0
+31 August 2017
+November 1962 5 June 2013
+Male April 1965
+Li Guodong
+Director
+-21 August 2017
+Representative
+No Resigned due
+100.49
+20.82
+79.67
+0
+Employee
+00/35.00
+10.39
+45.39
+Mr. Yang Mingsheng, born in 1955, Chinese
+DIRECTORS
+Corporate Governance
+93
+Annual Report 2017
+China Life Insurance Company Limited
+Corporate Governance
+195.27
+arrangements
+of work
+to adjustment
+No Resigned due
+arrangements
+of work
+to adjustment
+arrangements
+No Resigned due
+of work
+to adjustment
+0
+Total
+-27 April 2017
+Mr. Lin Dairen, born in 1958, Chinese
+enterprise Company received
+China Life Insurance Company Limited
+4.
+Since 20 October 2014
+32.00
+0
+32.00
+Yes
+Independent Director
+Male
+Directors, Supervisors, Senior Management and Employees
+October 1951
+32.00
+0
+32.00
+No
+Tang Xin
+Independent Director
+Male
+Since 11 July 2015
+I. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+(I) Current Directors
+Other
+of shares Number of
+Reporting from
+fund paid
+Number
+annuity during the emolument
+received
+enterprise Company
+Whether
+the
+fund and
+from
+provident
+received
+housing
+insurance, emoluments
+social Total
+benefits,
+September 1971
+Since 7 March 2016
+32.00
+0
+China Life Insurance Company Limited Annual Report 2017
+69
+89
+Corporate Governance |
+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.
+Following the election at the 2016 Annual General Meeting of the Company and upon the approval by the CIRC,
+the appointment of Mr. Liu Huimin and Mr. Yin Zhaojun as Directors of the Company became effective from 31
+July 2017. Following the election at the First Extraordinary General Meeting 2017 of the Company and upon the
+approval by the CIRC, the appointment of Mr. Yuan Changqing as a Director of the Company became effective
+from 11 February 2018.
+(II) Current Supervisors
+Other
+benefits,
+social Total
+insurance, emoluments
+housing received
+provident
+fund and
+from
+the Whether
+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.
+Remuneration
+According to the “Procedural Rules for 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.
+1.
+32.00
+Yes
+Leung Oi-Sie Elsie
+Independent Director
+Female
+April 1939
+Since 20 July 2016
+0
+30.00
+0
+30.00
+Yes
+Total
+0
+0
+558.00
+Notes:
+2.
+by the
+Corporate Governance
+connected
+0
+Period in
+September 1961
+No
+21.66 135.06
+113.40
+0
+Since 11 July 2015
+May 1959
+Male
+Executive Director
+Non-executive Director Male
+No
+21.66 135.06
+113.40
+0
+Since 11 July 2015
+No
+0
+0
+Yes
+Liu Huimin
+November 1948
+Male
+Chang Tso Tung Stephen Independent Director
+Yes
+0
+0
+0
+0
+21.88 161.88
+Since 31 July 2017
+Non-executive Director Male
+Yin Zhaojun
+Yes
+0
+0
+Since 31 July 2017
+June 1965
+Non-executive Director Male
+July 1965
+140.00
+Since 11 February 2018
+0
+thousands
+of the year of the year changes
+Term
+Gender Date of Birth
+Position
+Name
+of the
+thousands
+thousands
+for
+parties
+RMB ten
+Company
+paid/fee
+0
+held at the shares held
+beginning at the end
+in RMB ten in RMB ten
+(before tax)
+Reason
+Yang Mingsheng
+Company
+Since 27 October 2008
+Male
+Executive Director
+Xu Hengping
+Xu Haifeng
+Yuan Changqing
+Male
+Executive Director
+Lin Dairen
+Executive Director
+June 1958
+November 1958
+0
+0
+0
+0
+Since 22 May 2012
+August 1955
+Yes
+Chairman of the Board, Male
+SENIOR MANAGEMENT
+Mr. Lin Dairen, please see the section “Directors” for his profile.
+Mr. Xu Hengping, please see the section “Directors” for his profile.
+Mr. Xu Haifeng, please see the section “Directors” for his profile.
+Mr. Li Mingguang, born in 1969, Chinese
+Mr. Li became the Vice President of the Company in November 2014. He has been
+the Chief Actuary of the Company since March 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, a Special Executive of the Board of Directors of the Insurance Institute of
+China and a member of the China National Master of Insurance Education Supervisory
+Committee.
+Mr. Zhao Lijun, born in 1963, Chinese
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2017
+101
+Mr. Xiao Jianyou, born in 1968, Chinese
+Mr. Xiao became the Vice President of the Company in October 2016. He has been an
+Assistant to the President of the Company since July 2015 and a Non-executive Director
+of China Life Property and Casualty Insurance Company Limited since September 2015.
+He served as the General Manager of the Company's Jiangsu Branch from January 2014
+and the Deputy General Manager (responsible for daily operation) of the Company's
+Jiangsu Branch from April 2013 to January 2014. From 2006 to 2013, he successively
+served as the Deputy General Manager, an Assistant to the General Manager and the
+Marketing Director of Jiangsu Branch and the General Manager and the Deputy General
+Manager of Taizhou Branch in Jiangsu Province. Before that, Mr. Xiao held various
+other positions at the Company's Jiangsu Branch, including the Deputy Manager of
+the Marketing Department and Management Department, an Assistant to the General
+Manager, the Deputy General Manager (responsible for daily operation) and the General
+Manager of the Personal Insurance Department. Mr. Xiao, a senior economist, graduated
+from Jiangxi Traditional Chinese Medicine College in 1991 with a bachelor's degree,
+and received the double bachelor's degrees in medicine and law from Jiangxi Traditional
+Chinese Medicine College and Nanjing University, respectively.
+102
+Mr. Zhao became the Vice President of the Company in March 2018. He has been an
+Assistant to the President of the Company since October 2017 and the General Manager
+of Zhejiang Branch of the Company since January 2015. From 2014 to 2015, he had
+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.
+Corporate Governance
+Mr. Zhao Peng, born in 1972, Chinese
+Mr. Zhao became the Vice President of the Company in July 2016. He served as the Chief
+Financial Officer and the General Manager of the Finance Department of China Life
+Insurance (Group) Company from May 2014 to April 2016. From 2012 to 2014, Mr.
+Zhao successively served as the Deputy General Manager (responsible for daily operation)
+and the General Manager of the Data Center of the Company. From 2010 to 2012,
+Mr. Zhao served as the General Manager of the Legal and Compliance Department of
+the Company. From 2008 to 2010, Mr. Zhao served as the Deputy General Manager of
+Shandong branch of the Company. From 2003 to 2008, Mr. Zhao successively served as
+an Assistant to the General Manager and the General Manager of the Finance Department
+of the Company. Prior to that, he successively served as a cadre in the Planning & Finance
+Department of the People's Insurance Company of China, the Director and Deputy
+Manager of the Planning & Finance Department of China Reinsurance Corporation in
+Hong Kong, the Deputy Manager and Manager of the Planning & Finance Department
+of China Insurance H.K. (Holdings) Company Limited, the Deputy Division Chief,
+the Division Chief and an Assistant to the General Manager of the Planning & Finance
+Department of China Life Insurance Company. Mr. Zhao graduated from the Accounting
+Department of Anhui Finance & Trade College with a bachelor's degree in industrial
+accounting and finance in 1987, and from Tsinghua University with an EMBA in 2010.
+Mr. Zhao is a senior accountant.
+China Life Insurance Company Limited Annual Report 2017
+China Life Insurance Company Limited Annual Report 2017
+Mr. Song Ping, born in 1964, Chinese
+China Life Insurance Company Limited Annual Report 2017
+Mr. Heng Victor Ja Wei, born in 1977, British
+SUPERVISORS
+Mr. Miao Ping, born in 1958, Chinese
+Mr. Miao became the Chairman of the Supervisory Committee of the Company in July
+2015. He served as an Executive Director of the Company from July 2014 to May 2015
+and the Vice President of the Company from December 2009 to May 2015. Mr. Miao
+served as the General Manager of the Company's Jiangsu Branch from September 2006,
+the General Manager of the Company's Jiangxi Branch from September 2004, and the
+Deputy General Manager of the Company's Jiangsu Branch from April 2002. Mr. Miao
+graduated from the Correspondence College of Yangzhou University in 1996, majoring in
+economics and management. Mr. Miao, a senior economist, has over 30 years of experience
+in the operation of life insurance business and the management of insurance business.
+Corporate Governance
+Mr. Shi Xiangming, born in 1959, Chinese
+Mr. Song became a Supervisor of the Company in March 2018. He has been the General
+Manager of the Administration Office of the Company since January 2017. From 2006 to
+2017, he successively served as an Assistant to the General Manager of the Development
+and Reform Department, an Assistant to the General Manager of Beijing Branch,
+the Deputy General Manager of the Legal and Compliance Department, the Deputy
+General Manager of the Human Resources Department, and the General Manager of the
+E-Commence Department of the Company. From 1999 to 2006, he successively served
+as the Division Chief of the Agents Management Department, the Individual Insurance
+Department and the Group Insurance Department of the Company. Mr. Song graduated
+from Peking University in July 1987, majoring in Chinese language and literature with a
+bachelor's degree of arts.
+Mr. Shi became a Supervisor of the Company in May 2009, and has been the General
+Manager of the Supervisory Department of the Company since September 2008. Mr.
+Shi served as the Deputy General Manager of the Human Resources Department and the
+Office Director of the Company from September 2003 to September 2008. From March
+2002 to August 2003, Mr. Shi served as the Deputy General Manager of the Supervisory
+Department of China Life Insurance Company. Mr. Shi graduated from the Chemistry
+School of the first branch college of Peking University with a bachelor's degree of science.
+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
+of the Strategic Planning Department of China Life Insurance (Group) Company in July
+2016. 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.
+99
+96
+Corporate Governance
+Ms. Wang Cuifei, born in 1964, Chinese
+Ms. Wang became a Supervisor of the Company in July 2015. She has been the General
+Manager of the Work Department of the Trade Union of the Company since January
+2018. Ms. Wang served as the General Manager of the Customer Services Department
+of the Company from September 2014 to February 2018 and the General Manager of
+the Sales Inspection Department of the Company from March 2009 to August 2014.
+She joined the Company in July 2001, and served successively as the person-in-charge
+(at the deputy director level) and the Manager of the Training Management Division of
+the Brokerage Agency Department, the Deputy General Manager of the Bancassurance
+Department and the General Manager of the Sales Inspection Department of the
+Company. Ms. Wang graduated from the Party School of the Central Committee of CPC
+with a bachelor's degree in economic management.
+100
+Mr. Luo Zhaohui, born in 1974, Chinese
+Mr. Ruan Qi, born in 1966, Chinese
+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 10 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 China Fire Safety Enterprise Group 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.
+Corporate Governance
+2,347
+31,861
+59,810
+4,219
+Total
+Others
+Secondary School
+College Diploma
+Bachelor
+Master or above
+Number of Employees
+Education Level
+4,060
+Education Level
+3,943
+4,106
+27,960
+5,122
+38,859
+22,307
+Number of Employees
+China Life Insurance Company Limited Annual Report 2017
+Total
+Others
+Other expertise and technicians
+Insurance verification, claim processing and customer services
+102,297
+102,297
+(II) Remuneration Policy for Employees
+The Company has established a remuneration and incentive system with reference to employee's positions,
+the Company's performance and market conditions.
+As approved by the nineteenth meeting of the fifth session of the Board of Directors of
+the Company held in March 2018, Mr. Ruan was appointed as the Vice President of
+the Company (whose qualification is subject to the approval of the CIRC). He has been
+the Chief Information Technology Officer of the Company since October 2016 and
+the General Manager (at the general manager level of the provincial branches) of the
+Information Technology Department of the Company since March 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 operation) 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.
+China Life Insurance Company Limited Annual Report 2017
+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 businesses. They have devoted sufficient time in 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.
+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
+Supervisory Committee meetings of the Company have been functioning independently and coordinately.
+2.
+1.
+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.
+(Corporate Governance Structure Chart)
+Board Secretariat/Company Secretary
+Board Secretary
+Strategy and
+Investment
+Decision Committee
+108
+Risk
+Management
+Committee
+Nomination and
+Remuneration
+Committee
+Audit Committee
+Supervisory Committee
+Board of Directors
+Shareholders'
+General Meeting
+The Company implements good corporate governance policies and strongly believes that through fostering sound
+corporate governance, further enhancing its transparency and establishing 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.
+OVERVIEW OF CORPORATE GOVERNANCE
+I.
+Corporate Governance
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2017 107
+Corporate Governance
+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 2017, the Company implemented the work requirements of “close to the frontline,
+close to the practice and adapt to the era” in great depth, and pushed forward employees' trainings to local
+branches and frontline business management teams for further in-depth development under the direction
+of its "speedy development, transformation and upgrade, and risk prevention and control" strategy. The
+Company also strengthened training supports for its key personnel (including local management teams,
+sales management teams and key personnel in all professional sectors), and focused on personnel reserve and
+education of companies at all levels, thus facilitating the transformation of training results into operating
+performance. The Company actively broadened its horizon for trainings, enriched training methods, injected
+training resources and introduced advanced training technologies, which constantly improved the training
+system for the entire career development of employees. Through the implementation of a series of training
+programs with prominent themes and clear objectives, the Company effectively promoted its relevant work
+in business development, team building, cultural cultivation, service improvement, efficiency optimization
+and risk prevention in 2017.
+(III) Training Plans
+Finance and auditing
+Sales and sales management
+2.
+Class of Expertise
+Since March 2012
+Since May 2017
+Vice Chairman, President
+Vice President
+Vice President
+Deputy General Manager of
+Strategic Planning Department
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+Luo Zhaohui
+Yin Zhaojun
+Term
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+Liu Huimin
+Yuan Changqing
+Name of shareholder
+Name
+Yang Mingsheng
+Since September 2013
+POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+IN SHAREHOLDERS OF THE COMPANY
+China Life Insurance Company Limited Annual Report 2017
+Mr. Zhan Zhong, born in 1968, Chinese
+Management and administration
+COMPANY SECRETARY
+104
+Ms. Yang became the Operation Director in March 2018. She has been 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 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.
+Ms. Yang Hong, born in 1967, Chinese
+Corporate Governance
+103
+China Life Insurance Company Limited Annual Report 2017
+Mr. Zhan became the Marketing Director of the Company in August 2017 He has been
+the General Manager (as the general manager level of the provincial branches) of the
+Individual Insurance Division of the Company since July 2014. 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 Division of the Company. From 2005
+to 2009, he had successively served as the General Manager of the Individual Insurance
+Division 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 the Chengdu High-tech Sub-branch of
+Zhongbao Life Insurance Company, an Assistant to the Manager and the Manager of the
+Marketing Department of the Chengdu Branch, and the Deputy General Manager of the
+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.
+II.
+Since October 2016
+Since July 2016
+Position
+Chairman
+1.
+102,297
+Corporate Governance
+Retired employees of the Company and its major subsidiaries for which extra costs have to be incurred
+14
+Number of employees of the Company's major subsidiaries
+100,920
+As at the end of the Reporting Period, the composition of the employees of the Company and its major
+subsidiaries is as follows:
+Number of employees of the Company
+106
+(I) Employees
+1,377
+IV. EMPLOYEES
+Corporate Governance
+105
+Annual Report 2017
+Structure of Expertise
+China Life Insurance Company Limited
+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 RMB18.1971
+million. In accordance with the relevant requirements of the 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 2017 has not yet been
+determined.
+Basis for determination of the remuneration of Directors, Supervisors and senior management: The
+remuneration of Directors, Supervisors and senior management 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.
+3.
+2.
+III. 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 shall be approved by shareholders at general meetings, whereas
+the remuneration of senior management shall be approved by the Board of Directors.
+1.
+Employees in total
+83%
+Tang Xin
+No
+6
+0
+1
+Independent Director
+6
+100%
+0
+0
+No
+Leung Oi-Sie Elsie
+Independent Director
+6
+0
+0
+5
+6
+6
+5
+4
+Note 7
+Independent Director
+Chang Tso Tung Stephen
+No
+67%
+China Life Insurance Company Limited Annual Report 2017
+Note 8
+118
+Activities of the Supervisory Committee during the Reporting Period
+2
+0
+0
+100%
+No
+Robinson Drake Pike
+Independent Director
+For the activities carried out by the Supervisory Committee during the Reporting Period, please refer to the
+"Report of the Supervisory Committee” in this annual report.
+1 Note 9
+Notes:
+0
+In 2017, five meetings were held by the fifth session of the Supervisory Committee. Attendance records of
+individual Supervisors are as follows:
+Meetings and attendance
+1.
+The fifth session of the Supervisory Committee of the Company comprises Mr. Miao Ping, Mr. Shi Xiangming
+and Mr. Luo Zhaohui, all being Non-employee Representative Supervisors, Ms. Wang Cuifei and Mr. Song
+Ping, being Employee Representative Supervisors, with Mr. Miao Ping acting as the Chairman of the Supervisory
+Committee. In August 2017, Mr. Zhan Zhong resigned from his position as an Employee Representative
+Supervisor due to adjustment of work arrangements. Mr. Li Guodong resigned from his position as an Employee
+Representative Supervisor due to adjustment of work arrangements in January 2018. Ms. Xiong Junhong resigned
+from her position as a Non-employee Representative Supervisor due to adjustment of work arrangements in
+February 2018.
+Corporate Governance
+117
+Name of Supervisor
+necessary.
+The Supervisory Committee is accountable to the 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.
+The Supervisory Committee consists of Non-employee Representative Supervisors, such as shareholder
+representatives, and Employee Representative Supervisors, of which the Employee Representative Supervisors
+shall not be less than one-third of the Supervisory Committee. 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.
+Pursuant to the Company Law and the Articles of Association, the Company has established a Supervisory
+Committee. The Supervisory Committee performs the following duties in accordance with the Company
+Law, the Articles of Association and the “Procedural Rules for Supervisory Committee 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' general meetings and to perform any other duties under the laws, regulations and regulatory rules of
+the Company's listed jurisdictions.
+SUPERVISORY COMMITTEE
+0
+During the Reporting Period, Mr. Yang Mingsheng 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 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. Mr. Lin Dairen was the President of the Company. The
+President is responsible for the day-to-day operations of the Company, 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 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.
+Meetings of the Supervisory Committee are convened by the Chairman of the Supervisory Committee. According
+to the Articles of Association, the Company formulated the "Procedural Rules for Supervisory Committee
+Meetings" and established protocols for Supervisory Committee meetings. Supervisory Committee 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
+V.
+Miao Ping
+Xiong Junhong
+Wang Cuifei
+100%
+2/2
+60%
+3/5 Note 3
+80%
+4/5 Note 2
+Shi Xiangming
+80%
+4/5M
+100%
+5/5
+Attendance rate
+Number of meetings attended
+Li Guodong
+Note 1
+Notes:
+IV. CHAIRMAN AND PRESIDENT
+China Life Insurance Company Limited Annual Report 2017
+Notes:
+Yes
+33%
+0
+2
+1
+1.
+0
+Non-executive Director
+Note 2
+Note 1
+No
+100%
+0
+3
+Corporate Governance
+2.
+At the eleventh meeting of the fifth session of the Board held on 23 March 2017, Mr. Liu Jiade attended the
+meeting by telephony.
+116
+During the Reporting Period, no Independent Director has raised any objection against the proposals and
+matters considered by the Board of the Company.
+According to the arrangement of the Board for annual training courses, Mr. Chang Tso Tung Stephen, Mr.
+Robinson Drake Pike, Mr. Tang Xin and Ms. Leung Oi-Sie Elsie, all being Independent Directors of the
+Company, attended the internal training on the business development and the regulations on connected
+transactions of the Company as organized by nine departments of the Company including the Strategy and
+Marketing Department and the Legal and Compliance Department in Beijing from 31 May to 1 June 2017.
+From 14 to 16 February 2017, Mr. Robinson Drake Pike, Mr. Tang Xin and Ms. Leung Oi-Sie Elsie,
+all being Independent Directors of the Company, carried out investigation and research on CGB for the
+purpose of understanding the insurance-banking collaboration and the risk control of CGB; from 31
+July to 4 August 2017, Mr. Chang Tso Tung Stephen, Mr. Robinson Drake Pike and Mr. Tang Xin, all
+being Independent Directors of the Company, carried out investigation and research on local branches of
+the Company in Guizhou Province for the purpose of understanding the business development, financial
+control, remuneration and incentive measures, and risk control of the local branches.
+In 2017, the Independent Directors of the Company and the representatives from the external auditors
+(Ernst & Young Hua Ming LLP and Ernst & Young) convened one special meeting to discuss on matters
+including the audit for the year 2016, the annual financial reports, and the impact of the implementation of
+the C-ROSS on the Company, and also discussed the work relating to the audit of the Company.
+All Independent Directors diligently fulfilled their responsibilities and faithfully performed their duties by
+attending meetings of the Board and the specialized Board committees in 2017, examining and approving
+the Company's business development, its financial management and connected transactions, focusing on
+the necessity and compliance of the Company's connected transactions and the fairness of their pricing
+when reviewing the proposals in relation to the 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 operation
+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. 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. In 2017, the Company provided various materials 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.
+Corporate Governance
+In 2017, all Independent Directors of the Company possessed extensive experience in various fields, such
+as macro-economics, finance and insurance, legal compliance, accounting and auditing. They satisfied the
+criteria for Independent Directors under the regulatory rules of the Company's listed jurisdictions. The
+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.
+2.
+Corporate Governance
+115
+Annual Report 2017
+China Life Insurance Company Limited
+At the twelfth meeting of the fifth session of the Board held on 27 April 2017, Mr. Liu Jiade gave written
+authorisation for Mr. Xu Hengping to act as his proxy to attend and vote at the meeting; at the thirteenth meeting
+of the fifth session of the Board held on 14 July 2017, Mr. Liu Jiade gave written authorisation for Mr. Wang
+Sidong to act as his proxy to attend and vote at the meeting.
+Performance of duties by Independent Directors
+1.
+2.
+3.
+At the fifteenth meeting of the fifth session of the Board held on 26 October 2017, Mr. Yin Zhaojun gave written
+authorisation for Mr. Liu Huimin to act as his proxy to attend and vote at the meeting.
+At the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Mr. Chang Tso Tung Stephen
+attended the meeting by telephony; at the fourteenth meeting of the fifth session of the Board held on 24 August
+2017, Mr. Chang Tso Tung Stephen attended the meeting by telephony.
+At the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Mr. Robinson Drake Pike gave
+written authorisation for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
+At the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Ms. Leung Oi-Sie Elsie attended
+the meeting by telephony.
+In 2017, the attendance records of the resigned Directors at the Board Meetings are as follows:
+Number of
+meetings
+the Director
+was required
+to attend
+At the eleventh meeting of the fifth session of the Board held on 23 March 2017, Mr. Wang Sidong gave written
+authorisation for Mr. Miao Jianmin to act as his proxy to attend and vote at the meeting; at the twelfth meeting of
+the fifth session of the Board held on 27 April 2017, Mr. Wang Sidong gave written authorisation for Mr. Chang
+Tso Tung Stephen to act as his proxy to attend and vote at the meeting.
+Whether
+failed to
+Number of
+Number of
+Number of
+attend two
+during
+the Director
+Name of Director
+At the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Mr. Wang Sidong attended the
+meeting by telephony.
+9.
+100%
+No
+1.
+2.
+At the eleventh meeting of the fifth session of the Board held on 23 March 2017, Mr. Yang Mingsheng, the
+Chairman of the Board, gave written authorisation for Mr. Lin Dairen to act as his proxy to attend, vote at
+and chair the meeting; at the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Mr.
+Yang Mingsheng, the Chairman of the Board, gave written authorisation for Mr. Lin Dairen to act as his proxy
+to attend, vote at and chair the meeting; at the sixteenth meeting of the fifth session of the Board held on 19
+December 2017, Mr. Yang Mingsheng, the Chairman of the Board, gave written authorisation for Mr. Lin Dairen
+to act as his proxy to attend, vote at and chair the meeting.
+At the eleventh meeting of the fifth session of the Board held on 23 March 2017, Mr. Xu Hengping gave written
+authorisation for Mr. Xu Haifeng to act as his proxy to attend and vote at the meeting; at the fifteenth meeting of
+the fifth session of the Board held on 26 October 2017, Mr. Xu Hengping gave written authorisation for Mr. Xu
+Haifeng to act as his proxy to attend and vote at the meeting.
+At the thirteenth meeting of the fifth session of the Board held on 14 July 2017, Mr. Xu Haifeng gave written
+authorisation for Mr. Xu Hengping to act as his proxy to attend and vote at the meeting.
+114
+3.
+4.
+5.
+6.
+7.
+8.
+China Life Insurance Company Limited Annual Report 2017
+Type of Director
+the year
+meetings
+physically
+attended
+0
+3.
+The Supervisory Committee had no objection in respect of any matters under its
+supervision during the Reporting Period.
+2.
+100%
+2/2
+0
+Zhan Zhong
+Number of meetings attended
+Name of Supervisor
+During the Reporting Period, the attendance records of the resigned Supervisor at the Supervisory
+Committee Meetings are as follows:
+At the tenth meeting of the fifth session of the Supervisory Committee held on 23 March 2017, Ms. Wang
+Cuifei gave written authorisation for Mr. Zhan Zhong to act as her proxy to attend and vote at the meeting; at
+the fourteenth meeting of the fifth session of the Supervisory Committee held on 19 December 2017, Ms. Wang
+Cuifei i gave written authorisation for Mr. Shi Xiangming to act as her proxy to attend and vote at the meeting.
+At the twelfth meeting of the fifth session of the Supervisory Committee held on 24 August 2017, Ms. Xiong
+Junhong gave written authorisation for Mr. Shi Xiangming to act as her proxy to attend and vote at the meeting.
+At the thirteenth meeting of the fifth session of the Supervisory Committee held on 26 October 2017, Mr. Shi
+Xiangming gave written authorisation for Ms. Wang Cuifei to act as his proxy to attend and vote at the meeting.
+Attendance rate
+1
+1
+Non-executive Director
+meetings
+attended by
+meetings
+Number of
+consecutive
+attended
+meetings
+Attendance
+meetings
+telephony
+by proxies
+absent
+rate
+in
+person
+Miao Jianmin
+Liu Jiade
+0
+1
+Corporate Governance
+2
+2
+0
+0
+0
+2
+0
+Non-executive Director
+Liu Huimin
+1
+0
+0
+0
+1
+0
+Non-executive Director
+Yin Zhaojun
+Wang Sidong
+1
+Xu Hengping
+Executive Director
+2
+1
+0
+0
+50%
+1
+Xu Haifeng
+Executive Director
+2
+1
+0
+0
+50%
+Non-executive Director
+1
+1
+Tang Xin
+Independent Director
+2
+2
+0
+0
+50%
+0
+Leung Oi-Sie Elsie
+Independent Director
+2
+0
+0
+50%
+100%
+1
+0
+0
+0
+0
+0
+100%
+Chang Tso Tung Stephen Independent Director
+2
+2
+0
+0
+0
+100%
+Robinson Drake Pike
+Independent Director
+2
+1
+100%
+0
+0
+0
+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 and
+the Supervisory Committee, 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.
+1. 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
+During the Reporting Period, the Company was named by the CIRC as a “high-quality” company in its
+corporate governance on-site evaluation. It also won the "Hong Kong Corporate Governance Excellence
+Award (Main Board Companies - Hang Seng Composite Index Constituent Companies)" in the “Hong
+Kong Corporate Governance Excellence Awards 2017” jointly organized by the Chamber of Hong Kong
+Listed Companies and the Centre for Corporate Governance and Financial Policy, Hong Kong Baptist
+University.
+Date of publication
+of resolutions
+31 May 2017
+First Extraordinary
+20 December 2017
+General Meeting 2017
+110
+China Life Insurance Company Limited Annual Report 2017
+2016 Annual General Meeting 31 May 2017
+The Company has actively organized Directors and Supervisors to attend various training courses and
+examinations. All Independent Directors of the Company attended internal training courses on the
+business development and the regulations on the connected transactions of the Company as organized
+by the departments of the Company such as the Strategy and Marketing Department and the Legal
+and Compliance Department. Pursuant to the regulatory requirements of the CIRC, all Directors and
+Supervisors attended training programs on anti-money laundering. The members of the Supervisory
+Committee attended the seminar of 2017 for the chairmen of the supervisory committees of listed
+companies as organized by China Association for Public Companies and special training courses of 2017
+for directors and supervisors of listed companies within the territory of Beijing as organized by the Listed
+Companies Association of Beijing, etc. The new Directors and Supervisors of the Company sat for the
+examinations of the CIRC regarding the approval of qualifications of new directors, supervisors and senior
+management officers of insurance institutions as organized by the CIRC. They attended training courses for
+a total of 11 person-times.
+9.
+8.
+Corporate Governance
+3.
+4.
+5.
+6.
+7.
+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, the Board has established four specialized
+Board committees, i.e. the Audit Committee, the Nomination and Remuneration Committee, the Risk
+Management Committee, and the Strategy and Investment Decision 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 Supervisory Committee of the Company has carried out its work and performed its duties in accordance
+with the Articles of Association and the “Procedural Rules for Supervisory Committee Meetings". Members
+of the Supervisory Committee attended the shareholders' general meetings and the Supervisory Committee
+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 carried out the procedures relating to the resignation, retirement and appointment of
+Directors, Supervisors and senior management in compliance with the regulatory requirements of its listed
+jurisdictions and the provisions of its Articles of Association. Mr. Miao Jianmin, Mr. Wang Sidong and
+Mr. Liu Jiade resigned from the Board due to adjustment of work arrangements. Mr. Zhan Zhong and
+Mr. Li Guodong resigned from their positions as Employee Representative Supervisors due to adjustment
+of work arrangements. The Board considered and approved the proposals in relation to the nomination of
+Mr. Li Mingguang as the Board Secretary of the Company, nomination of Mr. Zhao Peng as an Assistant
+to the President of the Company, nomination of Mr. Zhan Zhong as the Marketing Director of the
+Company, nomination of Mr. Zhao Peng as the Vice President of the Company, nomination of Mr. Ruan
+Qi as the Vice President of the Company and nomination of Ms. Yang Hong as the Operation Director
+of the Company. Following the election at the 2016 Annual General Meeting of the Company and upon
+the approval by the CIRC, the appointment of Mr. Liu Huimin and Mr. Yin Zhaojun as Directors of the
+Company became effective from 31 July 2017. Following the election at the First Extraordinary General
+Meeting 2017 and upon the approval by the CIRC, the appointment of Mr. Yuan Changqing as a Director
+and Mr. Luo Zhaohui as a Supervisor became effective from 11 February 2018. Following the election at
+the Sixth Extraordinary Meeting of the Second Session of the Employee Representative Meeting of the
+Company and upon the approval by the CIRC, the appointment of Mr. Song Ping as a Supervisor of the
+Company became effective from 15 March 2018.
+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 Board and the Supervisory Committee of the Company have conducted extensive investigation and
+research activities. The members of the Board subsequently carried out investigation and research on China
+Guangfa Bank Co., Ltd. (“CGB") and local branches of the Company in Guizhou Province for the purpose
+of understanding the operation of the local branches and their implementation of decisions of the Board
+and the management. The members of the Supervisory Committee carried out investigation and research on
+local branches of the Company in Guangxi Zhuang Autonomous Region for the purpose of examining the
+effectiveness of the implementation of decisions of the Board and the management, which thus enhanced the
+legal compliance and risk prevention of the Company in a practical manner.
+China Life Insurance Company Limited Annual Report 2017
+109
+Corporate Governance
+II.
+http://www.sse.com.cn
+China Life Insurance Company Limited
+http://www.hkexnews.hk
+http://www.e-chinalife.com
+http://www.sse.com.cn
+http://www.hkexnews.hk
+http://www.e-chinalife.com
+2.
+by proxies
+absent
+rate
+Yang Mingsheng
+Lin Dairen
+Executive Director
+2
+telephony
+0
+0
+2
+0
+Executive Director
+2
+2
+0
+Attendance
+meetings
+attended
+Eleven proposals including: the “Proposal in relation to the Report of the Board of Directors of the
+Company for the Year 2016”, the “Proposal in relation to the Report of the Supervisory Committee of the
+Company for the Year 2016”, the “Proposal in relation to the Financial Report of the Company for the Year
+2016", the "Proposal in relation to the Profit Distribution Plan of the Company for the Year 2016", the
+"Proposal in relation to the Remuneration of Directors and Supervisors of the Company”, the “Proposal in
+relation to the Election of Mr. Liu Huimin as a Non-executive Director of the Fifth Session of the Board
+of Directors of the Company”, the “Proposal in relation to the Election of Mr. Yin Zhaojun as a Non-
+executive Director of the Fifth Session of the Board of Directors of the Company”, the “Proposal in relation
+to the Remuneration of Auditors of the Company for the Year 2016 and the Appointment of Auditors of the
+Company for the Year 2017”, the “Proposal in relation to the 'Framework Agreement for Daily Connected
+Transactions between the Company and Chongqing International Trust Inc.”, the “Proposal in relation
+to the ‘Entrusted Investment and Management Agreement for Alternative Investments with Insurance
+Funds' between the Company and China Life Investment Holding Company Limited” and the “Proposal in
+relation to the General Mandate for the Issuance of H Shares by the Company", etc. were considered and
+approved by a combination of on-site and online voting, and the “Duty Report of the Independent Directors
+of the Fifth Session of the Board of Directors of the Company for the Year 2016" and the "Report on the
+Status of Connected Transactions and the Execution of Connected Transactions Management System of
+the Company for the Year 2016" were received and reviewed at the 2016 Annual General Meeting held in
+Beijing on 31 May 2017.
+Two proposals including: the “Proposal in relation to the Election of Mr. Yuan Changqing as a Non-executive
+Director of the Fifth Session of the Board of Directors of the Company” and the “Proposal in relation to
+the Election of Mr. Luo Zhaohui as a Non-employee Representative Supervisor of the Fifth Session of the
+Supervisory Committee of the Company" were considered and approved by a combination of on-site and
+online voting at the First Extraordinary General Meeting 2017 held in Beijing on 20 December 2017.
+Attendance records of Directors at the shareholders' general meetings convened during the Reporting
+Period:
+Number of
+shareholders'
+Corporate Governance
+general
+meetings the
+Director was
+required to
+attend during
+Number of
+Name of Director
+Type of Director
+the year
+meetings
+physically
+attended
+Number of
+meetings
+attended by
+Number of
+meetings
+Number of
+20 December 2017
+0
+Annual Report 2017
+Corporate Governance
+6
+6
+0
+0
+0
+100%
+Executive Director
+No
+Executive Director
+6
+4
+Note 2
+0
+2
+Xu Hengping
+0
+Lin Dairen
+50%
+telephony
+proxies
+absent
+rate
+in
+person
+No
+Yang Mingsheng
+6
+Note 1
+3
+0
+3
+0
+Executive Director
+67%
+No
+Xu Haifeng
+Yes
+Liu Huimin
+Non-executive Director
+3
+3
+0
+67%
+0
+100%
+No
+Yin Zhaojun
+Non-executive Director
+3
+Note 6
+0
+0
+2
+1
+Executive Director
+Note 3
+6
+5
+0
+1
+0
+83%
+No
+Wang Sidong
+Non-executive Director
+Note 4
+6
+Note 5
+3
+attended
+111
+the year
+Name of Director
+meetings Attendance
+absent
+rate
+Miao Jianmin
+Liu Jiade
+Non-executive Director
+Non-executive Director
+0
+0
+by proxies
+0
+0
+0
+1
+0
+0
+0
+0
+telephony
+attended
+the year
+Attendance records of the resigned Directors at the shareholders' general meetings convened during the
+Reporting Period:
+Number of
+shareholders'
+general
+meetings the
+Director was
+Number of Number of
+Number of
+required to
+attend during
+meetings
+physically attended by
+meetings
+meetings
+Number of
+attended
+Name of Director
+Type of Director
+1
+0
+III. 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.
+Directors
+failed to
+Number of
+Number of
+meetings
+attend during
+physically
+meetings
+attended by
+Number of
+meetings
+attended by
+attend two
+Number of
+consecutive
+meetings
+Attendance
+meetings
+Number of
+meetings the
+Director was
+required to
+Type of Director
+Whether the
+Meetings and attendance
+Currently, the Board comprises eleven members, including four Executive Directors, three 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 Listing Rules of the HKSE. 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, the Supervisory Committee or the senior
+management (including between the Chairman of the Board, Mr. Yang Mingsheng, and the President of the
+Company, Mr. Lin Dairen).
+China Life Insurance Company Limited Annual Report 2017
+112
+In 2017, 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 three days prior to such meetings. In 2017, 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.
+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 Supervisory Committee, 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 fifth session of the Board comprises the following members: Mr. Yang Mingsheng, Mr. Lin Dairen,
+Mr. Xu Hengping and Mr. Xu Haifeng, all being Executive Directors, Mr. Yuan Changqing, Mr. Liu Huimin and
+Mr. Yin Zhaojun, 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. Yang Mingsheng as
+the Chairman of the Board. Mr. Miao Jianmin, Mr. Wang Sidong and Mr. Liu Jiade resigned from their positions
+as Directors due to adjustment of work arrangements.
+China Life Insurance Company Limited
+Annual Report 2017
+113
+Corporate Governance |
+During 2017, all Independent Directors of the Company attended internal training on the business development
+and the regulations on the connected transactions of the Company as organized by the departments of the
+Company such as the Strategy and Marketing Department and the Legal and Compliance Department. Pursuant
+to the regulatory requirements of the CIRC, all members of the Board attended training programs on anti-money
+laundering for the purpose of understanding the latest anti-money laundering rules and regulations and the
+Company's work on anti-money laundering, and enhancing the capability of Directors to safeguard against the risk
+of money laundering.
+1.
+In 2017, six regular Board meetings were held by the fifth session of the Board, all of which were physical
+meetings. The attendance records of individual Directors are as follows:
+China Life Insurance Company Limited Annual Report 2017
+124
+The Risk Management Committee is mainly responsible for formulating the Company's system of risk
+control benchmarks, discussing with the management and assisting them in establishing well-developed risk
+management and internal control systems, examining and reviewing the Company's risk preference and risk
+tolerance, formulating the Company's risk management policy, 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, and dealing with major risk emergency events or crisis events or major disagreement in risk management.
+The Company established its Audit Committee on 30 June 2003. In 2017, the Audit Committee comprised
+only Independent Directors of the Company. Currently, the Audit Committee of the fifth session of the Board
+comprises Mr. Robinson Drake Pike, Mr. Chang Tso Tung Stephen and Mr. Tang Xin, all being Independent
+Directors, with Mr. Robinson Drake Pike acting as the Chairman.
+China Life Insurance Company Limited Annual Report 2017
+In 2017, attendance records of the resigned Director at the Risk Management Committee meetings are as
+follows:
+Name of member
+Position
+Liu Jiade
+Non-executive Director, member of the
+Risk Management Committee of the fifth
+session of the Board
+Number of
+meetings attended
+Attendance rate
+1/2 Note
+50%
+Corporate Governance
+2.
+Note: At the seventh meeting of the Risk Management Committee of the fifth session of the Board held on 26 April
+2017, Mr. Liu Jiade gave written authorisation for Mr. Xu Hengping to act as his proxy to attend and vote at the
+meeting.
+Performance of duties by the Risk Management Committee
+In 2017, the Risk Management Committee performed its duties and functions in strict compliance with the
+"Procedural Rules for Risk Management 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 in compliance with law. During meetings of the Risk Management
+Committee, all members actively participated in discussions and gave guiding opinions on the proposals
+considered and discussed at the meetings.
+(1) Reviewing the risk analysis on major matters concerning the business operation and management
+of the Company. In 2017, the Risk Management Committee reviewed the risk analysis on major
+matters concerning the business operation and management of the Company, reviewed and approved
+the "Proposal in relation to the Financial Budget of the Company for the Year 2018”, the “Proposal
+in relation to the Risk Analysis on the Investment Plan of the Company for the Year 2018" and the
+"Proposal in relation to the Risk Compliance Analysis on the 'Strategic Asset Allocation Plan of the
+Company for the Years from 2018 to 2020" and gave guiding opinions on risk control for major
+matters concerning the business operation and management of the Company such as the financial
+budget of the Company for the year 2018 and the investment plan of the Company for the
+in accordance with the regulatory requirements of the CIRC on C-ROSS.
+(2)
+2018
+Providing its opinions for the review of the proposals on risk management to the Board. In 2017, the
+Risk Management Committee closely monitored and controlled and effectively prevented internal
+and external risks of the Company, assisted the Board in improving an internal control system of the
+Company, formulated an operational risk management policy of the Company, and reviewed 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 Committee provided its opinions for
+the review of the proposals on risk management such as the work summary on anti-money laundering
+for the year 2016 and the work plan for the year 2017, the report on the rectification of issues
+identified during the anti-money laundering on-site enforcement inspection of the Company for
+the year 2016 and the rectification plan in relation thereto, the statement of the Company on risk
+preference for the year 2017, and the audit report on the solvency risk management system of the
+Company for the year 2017, which offered professional support to the Board's decision-making in a
+scientific manner.
+China Life Insurance Company Limited Annual Report 2017
+125
+Corporate Governance
+(3)
+(4)
+Receiving the report on the prevention against and control over misleading sales practices for the year
+2017. In 2017, the Risk Management Committee received and reviewed the “Report on the Prevention
+Against and Control Over Misleading Sales Practices for the Year 2017” and gave guiding opinions on
+the commencement of anti-money laundering rectification measures by the Company in accordance with
+the regulatory authorities for the purpose of enhancing the Company' sales service level, improving its
+reputation and social image and further strengthening the risk control over misleading sales practices.
+At the ninth meeting of the Risk Management Committee of the fifth session of the Board held on 26 October
+2017, Mr. Yin Zhaojun gave written authorisation for Mr. Liu Huimin to act as his proxy to attend and vote at the
+meeting.
+At the sixth meeting of the Risk Management Committee of the fifth session of the Board held on 22 March 2017,
+Mr. Xu Hengping gave written authorisation for Ms. Leung Oi-Sie Elsie to act as his proxy to attend and vote at
+the meeting; at the ninth meeting of the Risk Management Committee of the fifth session of the Board held on
+26 October 2017, Mr. Xu Hengping gave written authorisation for Ms. Leung Oi-Sie Elsie to act as his proxy to
+attend and vote at the meeting;
+2.
+1.
+In 2017, five regular meetings were held by the Risk Management Committee of the fifth session of the
+Board. Attendance records of individual members are as follows:
+Name of member
+Position
+Leung Oi-Sie Elsie
+Independent Director, Chairperson of the
+Risk Management Committee of the fifth
+session of the Board
+Number of
+meetings attended
+Attendance rate
+515
+100%
+Xu Hengping
+Executive Director, member of the Risk
+3/5 Note
+Conducting investigation and research on local branches. From 14 to 16 February 2017, Ms. Leung Oi-
+Sie Elsie, the chairperson of the Risk Management Committee, carried out investigation and research on
+CGB and received a special report given by Mr. Liu Jiade, the president of CGB, in respect of the current
+development and future plan for the purpose of understanding the risk control of CGB. She also made
+an on-site visit to Nanhai Financial Center of CGB and studied major investigation findings on risk
+management and internal control matters and the management's response to these findings.
+1
+Management Committee of the fifth
+session of the Board
+Liu Huimin
+Non-executive Director, member of the Risk
+3/3
+100%
+Management Committee of the fifth
+session of the Board
+Yin Zhaojun
+Non-executive Director, member of the Risk
+Management Committee of the fifth
+session of the Board
+Note 2
+2/3
+67%
+Notes:
+60%
+Meetings and attendance
+IX. STRATEGY AND INVESTMENT DECISION COMMITTEE
+The Strategy and Investment Decision Committee is mainly responsible for the drawing-up of long-term
+development strategies and significant investment or financing plans of the Company, proposing significant
+projects of capital operation and assets management, and conducting studies and making recommendations on
+other important matters affecting the development of the Company.
+0
+and Investment Decision Committee of the
+fifth session of the Board
+Corporate Governance
+2.
+Note: At the tenth meeting of the Strategy and Investment Decision Committee of the fifth session of the Board held on
+22 March 2017, Mr. Wang Sidong gave written authorisation for Mr. Lin Dairen to act as his proxy to attend and
+vote at the meeting.
+Performance of duties by the Strategy and Investment Decision Committee
+In 2017, all members of the Strategy and Investment Decision Committee attended meetings in a timely
+manner, reviewed the proposals on the application of the Company's insurance capital, annual investments,
+major strategic projects and annual related reports. Members of the Strategy and Investment Committee
+diligently performed their duties. During meetings of the Strategy and Investment Decision Committee,
+all members actively participated in discussions and gave professional advices on proposals considered and
+discussed at the meetings.
+(1) Reviewing annual investment plans and entrusted investments of the Company. In 2017, the Strategy
+and Investment Decision Committee carefully reviewed the proposals on investment plans such as the
+annual investment plan of the Company and the annual investment plan of the Company for self-
+use real estate, the proposals on authorisation of investments such as the annual authorisation by the
+Company of investment in non self-use real estate, the annual authorisation of investment entrusted
+by the Company in connection with Renminbi liberalization and the annual authorisation 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 AMC, Franklin Asset Management
+Company Limited and CLI under the entrustment of the Company. The Strategy and Investment
+Decision Committee fully reviewed the above proposals and submitted its opinions to the Board in
+this regard.
+ล
+Discussing major strategic projects of the Company. In 2017, the Strategy and Investment Decision
+Committee reviewed major strategic projects of the Company, such as the strategic asset allocation
+plan of the Company for the years from 2018 to 2020, and investments by the Company in Jinxiu
+Project, Jinhou Project and Jinhong Project, fully discussed the necessity, feasibility and risks of the
+project proposals and made recommendations to the Board.
+China Life Insurance Company Limited
+Annual Report 2017
+127
+X.
+(3) Finalizing the Company's development plans and reports, and revising the measures for the
+administration of investment of the Company. In 2017, the Strategy and Investment Decision
+Committee discussed and reviewed proposals including the "Proposal in relation to the 'Assessment
+Report for the Outline of the 13th Five-year Development Plan for the Year 2016"", and submitted
+its opinions to the Board. Given that the CIRC subsequently rolled out a number of regulatory
+requirements to expand the market scope for the application of insurance capital and the types of
+investment and to set higher requirements for the management method and level of management of
+insurance capital investments, the Strategy and Investment Decision Committee carefully reviewed
+the "Proposal in relation to the Amendments to the 'Measures for the Administration of Investment
+of the Company" after taking into account the establishment of internal departments of the Company
+and the adjustment of their duties and functions.
+(4)
+Conducting investigation and research on local branches. From 14 to 16 February 2017, Mr. Tang
+Xin, the Chairman of the Strategy and Investment Decision Committee, and Ms. Leung Oi-Sie Elsie,
+a member of the Strategy and Investment Decision Committee, carried out investigation and research
+on CGB for the purpose of understanding the implementation of insurance-banking collaboration;
+from 31 July to 4 August 2017, Mr. Tang Xin, the Chairman of the Strategy and Investment
+Decision Committee, carried out investigation and research on local branches of the Company in
+Guizhou Province for the purpose of understanding the business development of the local branches,
+supervising, evaluating and examining major issues such as the implementation of the Company's
+strategy and use of funds.
+INDEPENDENCE OF THE COMPANY FROM ITS CONTROLLING SHAREHOLDER
+Employees: The Company is independent in the aspects of employment, human resources and remuneration
+management.
+Assets: The Company owns all assets relating to 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 and the Supervisory Committee operate separately. There is no subordinate relationship between
+such internal bodies and the functional departments of the Company's controlling shareholder.
+Business operations: The Company independently 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 insurance administrative and regulatory authorities of the PRC. The Company currently possesses the
+“Insurance Company Legal Person Permit” (Number: 000005) issued by the CIRC. 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.
+Corporate Governance
+128
+China Life Insurance Company Limited Annual Report 2017
+VI. AUDIT COMMITTEE
+0/1 Note
+Non-executive Director, member of the Strategy
+Wang Sidong
+Attendance rate
+1.
+Meetings and attendance
+In 2017, five regular meetings were held by the Strategy and Investment Decision Committee of the fifth
+session of the Board. Attendance records of individual members are as follows:
+Name of member
+Position
+Tang Xin
+Lin Dairen
+Xu Haifeng
+Leung Oi-Sie Elsie
+Independent Director, Chairman of the Strategy
+and Investment Decision Committee of the
+fifth session of the Board
+Executive Director, member of the Strategy
+and Investment Decision Committee of
+the fifth session of the Board
+Executive Director, member of the Strategy
+and Investment Decision Committee of
+the fifth session of the Board
+Independent Director, member of the Strategy
+and Investment Decision Committee of
+the fifth session of the Board
+126
+China Life Insurance Company Limited Annual Report 2017
+Number of
+meetings attended
+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. Currently, the Strategy and Investment Decision
+Committee of the fifth session of the Board comprises Mr. Tang Xin and Ms. Leung Oi-Sie Elsie, the Independent
+Directors, Mr. Lin Dairen and Mr. Xu Haifeng, the Executive Directors, with Mr. Tang Xin acting as the
+Chairman.
+Attendance rate
+100%
+5/5
+100%
+4/5 Note
+80%
+5/5
+100%
+Note: At the tenth meeting of the Strategy and Investment Decision Committee of the fifth session of the Board held on
+22 March 2017, Mr. Xu Haifeng gave written authorisation for Mr. Tang Xin to act as his proxy to attend and vote
+at the meeting.
+In 2017, attendance records of the resigned Director at the Strategy and Investment Decision Committee
+meetings are as follows:
+Number of
+Name of member
+Position
+meetings attended
+5/5
+1.
+year
+Attendance rate
+In 2017, four regular meetings were held by the Nomination and Remuneration Committee of the fifth
+session of the Board. Attendance records of individual members are as follows:
+Meetings and attendance
+122
+1.
+Corporate Governance
+121
+Name of member
+China Life Insurance Company Limited Annual Report 2017
+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 fifth session of the Board comprises Mr. Chang Tso Tung
+Stephen and Mr. Robinson Drake Pike, the Independent Directors, and Mr. Yuan Changqing, a Non-executive
+Director, with Mr. Chang Tso Tung Stephen acting as the Chairman. In April 2017, Mr. Miao Jianmin resigned
+from his position as a member of the Nomination and Remuneration Committee of the fifth session of the Board
+due to adjustment of work arrangements, and Mr. Wang Sidong was appointed as a member of the Nomination
+and Remuneration Committee. In January 2018, Mr. Wang Sidong resigned from his position as a member of the
+Nomination and Remuneration Committee of the fifth session of the Board due to adjustment of work arrangements.
+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
+criteria of Directors and senior management. The 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 of
+candidates to be nominated as new Directors, 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 industry, and the
+candidates' commitment to the Company. As to the nomination of Independent Directors, the Nomination and
+Remuneration Committee will give special consideration to the independence of the relevant candidates.
+VII. NOMINATION AND REMUNERATION COMMITTEE
+(6) Conducting investigation and research of local branches. From 14 to 16 February 2017, Mr. Robinson
+Drake Pike, the Chairman of the Audit Committee, and Mr. Tang Xin, a member of the Audit
+Committee, carried out investigation and research on CGB for the purpose of understanding the
+insurance-banking collaboration. From 31 July to 4 August 2017, Mr. Robinson Drake Pike, the
+Chairman of the Audit Committee, together with Mr. Chang Tso Tung Stephen and Mr. Tang Xin,
+members of the Audit Committee, carried out investigation and research on local branches of the
+Company in Guizhou Province for the purpose of reviewing the financial control and internal control
+system of the local branches, including the implementation of the recommendations given by the
+internal audit department of the Company and the external independent auditors in the local branches
+at different levels.
+including the "Proposal on the 2016 Internal Audit Summary and the 2017 Internal Audit Work
+Plan and Budget of the Costs of the Company" and the "Proposal on the Internal Audit Summary for
+the First Half of 2017 and the Internal Audit Work Plan for the Second Half of 2017", in order to
+facilitate the communication between the Company's internal audit department and the independent
+auditors, and confirmed that the Company's internal audit function was effective.
+(5) Examining the internal audit functions of the Company. The Audit Committee reviewed proposals
+Corporate Governance
+The Nomination and Remuneration Committee determines, with delegated responsibility, the remuneration
+packages of all Executive Directors and senior management officers. The fixed salary of the Executive Directors
+and other members of senior 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.
+120
+Chang Tso Tung Stephen Independent Director, Chairman of the
+meetings attended
+3/3
+Non-executive Director, member of the
+Wang Sidong
+of the fifth session of the Board
+Nomination and Remuneration Committee
+100%
+Number of
+4/4
+Robinson Drake Pike
+of the fifth session of the Board
+Nomination and Remuneration Committee
+100%
+4/4 Note
+Attendance rate
+Independent Director, member of the
+100%
+Corporate Governance
+(4) Assessing the effectiveness of internal control and monitoring the operation of the Company to be in
+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 CIRC, 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.
+Chang Tso Tung Stephen Independent Director, member of the
+Audit Committee of the fifth session of the Board
+Independent Director, Chairman of the
+Robinson Drake Pike
+100%
+4/4
+Tang Xin
+meetings attended
+Position
+Name of member
+In 2017, four regular meetings were held by the Audit Committee of the fifth session of the Board.
+Attendance records of individual members are as follows:
+Meetings and attendance
+1.
+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.
+Number of
+China Life Insurance Company Limited Annual Report 2017
+Audit Committee of the fifth session of the Board
+Independent Director, member of the Audit
+Committee of the fifth session of the Board
+4/4
+(3) Assessing the work of and strengthening communications with external auditors. Besides regular
+meetings, the Audit Committee convened communication meetings in advance with the relevant
+departments of the Company and 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 review the work arrangement for the selection and engagement of auditors for the years
+from 2018 to 2020. 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.
+(2) Reviewing connected transactions. In 2017, the Audit Committee reviewed the "Proposal in relation
+to the 'Framework Agreement for Daily Connected Transactions' between the Company and
+Chongqing International Trust Inc.", and the “Proposal in relation to the Entrusted Investment and
+Management Agreement for Alternative Investments with Insurance Funds between the Company
+and China Life Investment Holding Company Limited", and submitted them to the Board and
+shareholders' general meeting 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.
+and approved annual, interim and quarterly financial reports. 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 reports, 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 arising during the audit.
+(1) Reviewing and approving financial reports. The Audit Committee, according to its duties, reviewed
+119
+China Life Insurance Company Limited Annual Report 2017
+Note
+Corporate Governance
+Performance of duties by the Audit Committee
+Note: At the eleventh meeting of the Audit Committee of the fifth session of the Board held on 24 August 2017, Mr.
+Chang Tso Tung Stephen attended the meeting by telephony.
+2.
+100%
+4/4
+100%
+In 2017, the Audit Committee performed its relevant duties and functions in strict compliance with the
+"Procedural Rules for Audit Committee Meetings". All members of the Audit Committee performed their
+obligations in a responsible manner and reviewed 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 proposals
+considered and discussed at the meetings.
+Nomination and Remuneration Committee
+Position
+Note: At the tenth meeting of the Nomination and Remuneration Committee of the fifth session of the Board held on 24
+August 2017, Mr. Chang Tso Tung Stephen attend the meeting by telephony.
+of the fifth session of the Board
+The Company established its Risk Management Committee on 30 June 2003. Currently, the Risk Management
+Committee of the fifth session of the Board comprises Ms. Leung Oi-Sie Elsie, an Independent Director, Mr.
+Xu Hengping, an Executive Director, and Mr. Liu Huimin and Mr. Yin Zhaojun, the Non-executive Directors,
+with Ms. Leung Oi-Sie Elsie acting as the Chairperson. In August 2017, Mr. Liu Jiade resigned from his position
+as a member of the Risk Management Committee of the fifth session of the Board due to adjustment of work
+arrangements.
+VIII. RISK MANAGEMENT COMMITTEE
+Corporate Governance
+123
+China Life Insurance Company Limited Annual Report 2017
+(3) Carrying out the performance appraisal of senior management officers. The Nomination and
+Remuneration Committee reviewed the “Proposal on the Remuneration of Directors and Supervisors
+of the Company”, the “Proposal on the Remuneration of Senior Management Officers of the
+Company”, the “Proposal on the Results of Performance Appraisal of Senior Management Officers
+for 2016" and the "Proposal on the Performance Target Contract of Senior Management Officers for
+2017”, and made recommendations to the Board in respect of matters such as the determination of
+performance target, performance appraisal procedures and results.
+Proposed 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 management, strategic investment decisions, and corporate governance
+management and control, carefully examined and determined the specific 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.
+with the "Procedural Rules for Nomination and Remuneration Committee Meetings" and the Board
+diversity policy, the Nomination and Remuneration Committee carefully 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, examined
+and approved the proposal in relation to the nomination of Mr. Yuan Changqing as a Non-executive
+Director of the fifth session of the Board of Directors of the Company 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 meet the
+requirements set by the Company, examined and approved the proposals in relation to the nomination
+of Mr. Li Mingguang as the Board Secretary of the Company, nomination of Mr. Zhao Peng as an
+Assistant to the President of the Company, nomination of Mr. Zhan Zhong as the Marketing Director
+of the Company and nomination of Ms. Zhang Jun as the responsible person of the Company for
+audit, etc, and submitted a review opinion to the Board.
+(2)
+(1) Proposed appointment of Directors and senior management officers of the Company. In accordance
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2017
+(4) Conducting investigation and research on local branches. From 14 to 16 February 2017, Mr.
+Robinson Drake Pike, a member of the Nomination and Remuneration Committee, carried out
+investigation and research on CGB for the purpose of understanding the remuneration and incentive
+system of CGB. From 31 July to 4 August 2017, Mr. Chang Tso Tung Stephen, 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 local branches
+of the Company in Guizhou Province for the purpose of understanding the remuneration standard
+and appraisal incentive measures of the local branches and their sub-branches.
+Performance of duties by the Nomination and Remuneration Committee
+In 2017, the Nomination and Remuneration Committee performed its relevant duties and functions in
+strict compliance with the "Procedural Rules for Nomination and Remuneration Committee Meetings". All
+members of the Nomination and Remuneration Committee 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 Committee, all members
+actively participated in discussions and gave guiding opinions on the proposals considered and discussed at
+the meetings.
+In 2017, the attendance records of the resigned Director at the Nomination and Remuneration Committee
+Meetings are as follows:
+Number of
+Name of member
+meetings attended
+Attendance rate
+Position
+Non-executive Director, member of the Nomination
+and Remuneration Committee of the fifth session
+of the Board
+1/1
+100%
+2.
+Miao Jianmin
+16
+-
+2017/4/7
+China Life Insurance Company Limited
+Announcement on Changes in Accounting Estimates
+2017/3/23
+17
+Announcement - Resignation of Non-Executive Director
+2017/4/11
+20
+List of Directors and Their Role and Function
+2017/4/7
+19
+Annual Report 2016
+2017/4/11
+21
+Overseas Regulatory Announcement
+Reports of The Board & Supervisory Committee, Financial Report & Profit
+Distribution Plan, Remuneration of Directors & Supervisors, Election of Directors,
+Remuneration of Auditors & Appointment of Auditors, Continuing Connected
+Transactions, General Mandate to Issue H Shares, Duty Report of the Independent
+Directors of the Board of Directors, Report on the Status of Connected Transactions
+& Execution of the Connected Transactions Management System & Notice of AGM
+Notice of Annual General Meeting
+18
+2017/3/23
+Announcement
+15
+2017/3/10
+2017/3/14
+10 Announcement of Results for the year ended 31 December 2016
+2017/3/23
+11
+Announcement on Supplementary Information regarding the Compensation of
+Directors, Supervisors and Senior Management Members in 2015
+2017/3/23
+2017/5/15
+China Life Insurance Company Limited 2016 Corporate Social Responsibility Report
+12
+Renewal of Continuing Connected Transactions in relation to the
+Entrusted Investment and Management Agreement for Alternative Investments with
+Insurance Funds
+2017/3/23
+13
+Announcement - Continuing Connected Transactions with Chongqing Trust
+2017/3/23
+14
+Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of
+2016)
+2017/3/23
+Announcement
+Announcement of Premium Income
+29
+2017/4/27
+26
+Notification Letter and Request Form to Non-Registered Shareholders
+25
+Notification Letter and Change Request Form to Registered Shareholders
+Reply Slip of H Share Shareholders
+24
+23
+No.
+Announcement of Premium Income
+Date of disclosure
+Serial
+Other Information
+China Life Insurance Company Limited Annual Report 2017
+136
+2017/4/11
+Form of Proxy of H Share Shareholders for use at the Annual General Meeting of the
+Company to be held on Wednesday, 31 May 2017
+2017/2/15
+22
+Items
+33
+27
+2017/4/11
+2017/4/27
+Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2017)
+Overseas Regulatory Announcement China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+32
+2017/4/11
+31
+2017/4/27
+-
+Overseas Regulatory Announcement – 2017 First Quarter Report
+Announcement - Change of Composition of Board Committees
+30
+Notice of Board Meeting
+2017/4/13
+List of Directors and Their Role and Function
+28
+2017/4/13
+2017/4/13
+2017/4/11
+2017/4/11
+2017/4/13
+Announcement of Premium Income
+During the Reporting Period, no amendment was made to the Articles of Association by the Company.
+China Life Insurance Company Limited Annual Report 2017
+Announcement of Premium Income
+1.
+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 CIRC, the Company has carried out a lot of work on its internal control system
+establishment, rules implementation and risk management by strictly following its corporate governance
+structure. The Company has also formulated and issued the “Internal Control Implementation Manual
+of China Life Insurance Company Limited (2017 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 2017 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 2017 annual report. 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 2017 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 2017 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 opinion on the effectiveness of its internal control in relation to financial reporting
+as at 31 December 2017. 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 Supervisory Committee supervises the internal control
+assessments performed by the Board. The Company has established the Risk Management Department
+in its headquarters and branches. The Company also conducts tests on the management 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.
+China Life Insurance Company Limited Annual Report 2017
+131
+Corporate Governance
+Corporate Governance
+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, health insurance and e-commerce. This internal control system regulates the relevant
+authorisations and operational workflows, and effectively adopts the measures to prevent and manage
+risks relating to the operation of exclusive agents. The Company has promulgated clear regulations for
+the workflows and authorisations relating to the insurance underwriting, insurance claims settlement
+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 2017, there had no material 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 the “System of Internal Reporting of Material Information
+of China Life Insurance Company Limited”. 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 early 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.
+132
+China Life Insurance Company Limited Annual Report 2017
+Corporate Governance
+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, authorisation mechanism and specific decision-making
+procedures for investment management. All major investment decisions shall be approved at an appropriate
+level and their actual implementation shall be in strict compliance with the relevant requirements of the
+investment management system. The Investment Decisions Committee is a standing 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 mechanism focusing on centralized review and publication, periodic
+inspection and continuous improvement. By conducting internal control measures such as the inspection
+of system implementation, 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 an information safety system, and formulated and implemented a series of
+effective information safety control measures at various stages including the request for construction of the
+system, its design, development, testing, publication and arrangement, thereby strengthening the Company's
+information safety protection capability and effectively ensuring the successful commencement of its work.
+The Risk Management Department, Audit Department and Supervision Department of the Company
+are responsible for the supervision and inspection of its internal control measures. The Risk Management
+Department 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, enhances legal compliance and pursues responsible persons. In 2017, with the active
+adaption to the stringent regulatory environment in the financial industry and after taking into account the
+requirements of the regulatory regime, the Company adjusted the organizational structure of internal audit,
+improved its internal audit system, strengthened the mechanism construction of internal audit organizations,
+actively exerted the functions of internal audit supervision, and carried out the economic responsibility
+audit on managers at all levels, anti-money laundering audit, and a variety of ad-hoc audits with a focus on
+connected transactions, solvency risk management system, capital management, reimbursement or deduction
+of commissions, supplementary medical fund business and lapsed insurance policies for the purpose of
+implementing the stringent internal audit supervision. The Company has also constantly improved its
+supervision and remedial mechanisms for identifying issues in internal audit, thus effectively exerting the
+value of internal audit and 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 Supervision 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 Supervision 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 CIRC and internal policies
+such as the "Implementing Rules for Responsibility Attribution of Cases". In 2017, the Company further
+refined and optimized the “Rules for Handling the Violation of Laws, Disciplinary Rules and Regulations by
+Employees" and the “Implementing Rules for Responsibility Attribution of Cases"
+pursuant to the standards
+for administration of cases of insurance institutions promulgated by the competent authorities in charge
+of supervision of the insurance industry. In order to actively adapt to the new developments of external
+regulatory environment, the Company has established a sound compliance management system, clearly
+defined the responsibilities of compliance management, built up a well-developed compliance management
+regime, promoted the establishment of compliance culture, and actively prevented against and dissolved
+compliance risks.
+In compliance with regulatory requirements and having considered the characteristics of its business and
+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 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.
+China Life Insurance Company Limited Annual Report 2017
+The Company has consistently complied with the regulatory requirements of relevant regulatory authorities, such
+as the SSE, the HKSE and the U.S. Securities and Exchange Commission (the “SEC”), with respect to corporate
+internal control.
+Corporate Governance
+XIV. CHANGES OF THE ARTICLES OF ASSOCIATION
+In the assessment and selection of the “China Securities Golden Bauhinia Awards 2017” held by Hong Kong Ta
+Kung Wen Wei Media Group, the Company was awarded the title of the “Best Investment Value Award for Listed
+Companies". In the assessment and selection of the “Hong Kong Corporate Governance Excellence Awards 2017”,
+the Company was awarded the title of the “Hong Kong Corporate Governance Excellence Award (the Main Board
+Companies - Hang Seng Composite Index Constituent Companies)".
+In 2017, the Company continuously improved and strengthened its relations with investors, which mainly
+included holding the Annual General Meeting, 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 attached great importance to the innovation of investor relations, and kept abreast with
+the development pace of technology era. In March 2017, the Company created a WeChat official account for
+investor relations and investors could obtain the latest news of the Company, check announcements, view results
+briefings, attend conference calls and online roadshows, etc. from their mobile phones. Looking back to 2017,
+the Company communicated with more than 3,000 investors and analysts through different channels, including
+communicating with more than 900 investors who attended results briefings physically, by conference calls or
+internet broadcast, holding over 140 meetings with approximately 1,200 investors and analysts who visited the
+Company, communicating with more than 1,000 institutional investors by participating in 29 investors' meetings
+held locally or internationally, and meeting and visiting more than 130 investors in roadshows. In addition, the
+Company kept in close contact with investors by phone and email, communicated with them through more than
+1,500 emails, and answered their calls and emails for more than 300 person-times.
+In 2017, 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, and
+increased the readability of periodic reports by adding charts and pictures. The Company extended the scope and
+depth of information disclosure of periodic reports and announcements to ensure investors to obtain timely and
+accurate information affecting their decisions. The Company also regularly organized internal training courses
+relating to information disclosure, carried out timely study and promotion of new regulatory rules of its listed
+jurisdictions in the PRC and overseas, and explained the key points and difficulties of information disclosure. The
+Company strictly implemented the registration and filing procedures of persons who have knowledge of inside
+information, strengthened the confidentiality of the Company's inside information, and safeguarded the legitimate
+rights and interests of investors, with a view to maintaining the fairness, impartiality and openness of the
+information disclosure of the Company. The Company received the highest grade “A Grade” in the information
+disclosure work assessment conducted by the SSE in 2017.
+The Company has established a well-developed 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.
+XIII. INFORMATION DISCLOSURE AND INVESTOR RELATIONS
+Corporate Governance
+129
+XV. INTERNAL CONTROL AND RISK MANAGEMENT
+Annual Report 2017
+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.
+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.
+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 Supervisory Committee 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.
+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.
+XII. SHAREHOLDERS' INTERESTS
+The remuneration for senior management mainly comprises position compensation, performance rewards, welfare
+benefits and medium and long term incentives.
+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.
+XI. PERFORMANCE APPRAISAL AND INCENTIVES FOR SENIOR MANAGEMENT
+China Life Insurance Company Limited
+Notice of Board Meeting
+133
+-
+2
+Election of Language and Means of Receipt of Corporate Communication
+2017/1/20
+3
+Reply Form
+2017/1/20
+4
+Announcement on Estimated Profit Decrease for the year 2016
+2017/1/17
+2017/1/25
+Announcement - Forfeiture of Unclaimed Dividends
+2017/2/8
+6
+Change of Principal Place of Business in Hong Kong
+2017/2/15
+7
+8
+9
+5
+Corporate Governance
+Announcement of Premium Income
+No.
+130
+The Company has established a 5-tier organizational structure with the ultimate responsibility assumed
+by the Board, under the direct leadership of the management, having reliance on the risk management
+departments and with the close cooperation among the relevant functional departments. The first tier is the
+corporate governance level, including the Board, the Supervisory Committee, and the Risk Management
+Committee and the Audit Committee under the Board. The second tier is the headquarter level. The
+President's Office of the Company has set up the Risk Management Committee, under which several
+functional departments, such as the Risk Management Department, the Legal and Compliance Department,
+the Supervision Department, the Audit Department, and the departments in charge of finance and business
+administration, are established. The third tier is the provincial branches level. The General Manager's Office
+of the Company has set up the Risk Management Committee, under which several functional departments,
+such as the Risk Management Department, the Supervision Department, and the departments in charge
+of finance and business administration, are established. The fourth tier is the local or city branches level,
+including Supervision (Legal and Compliance) Departments and related functional departments. The fifth
+tier is the county sub-branches level, the persons responsible for internal control and risk management of
+which have been determined. 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.
+Pursuant to the requirements of the CIRC on the China Risk Oriented Solvency System (C-ROSS),
+the Company pushed forward the establishment of a solvency risk management system, reinforced the
+mechanism of formation, transmission and application of the risk preference system, and implemented key
+risk monitoring and risk pre-warning classification management, in order to enhance its ability of solvency
+risk management. The Company conducts a self-assessment on solvency risk management capability every
+year so as to assess all work in relation to risk management at two levels: the soundness of the system and the
+effectiveness of its implementation. The Company persists with its target as the leader of the industry and is
+fully recognised by regulatory authorities. The Company was named by the CIRC as a unit exempted from
+inspection in 2017. The Company conducts the risk assessments on seven types of risks (including insurance
+risk, market risk, credit risk, operational risk, strategic risk, reputational risk and liquidity risk) at least once
+every six months, and reports the same to its senior management. Based on the assessments, the overall risk
+of the Company is within a controllable range.
+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 transaction data. Meanwhile, pursuant to external regulatory requirements, the Company
+conducted special governance on illegal fund raising activities and carried out the review and rectification in
+key risk areas, which improved the Company's precaution capability in key risk areas.
+For an analysis and management of the major risk factors of the Company, please refer to Note 4 in the
+Notes to the Consolidated 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.
+134
+China Life Insurance Company Limited Annual Report 2017
+1
+Other Information
+Honors and Awards
+136
+140
+Information Disclosure Index
+Other Information
+Serial
+Items
+Date of disclosure
+Announcement Index
+Resolutions Passed at the Annual General Meeting and Distribution
+2017/8/24
+2017/5/31
+Overseas Regulatory Announcement – 2017 Third Quarter Report
+2017/10/26
+57
+Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of
+2017)
+2017/10/26
+58
+Announcement Renewal of Continuing Connected Transactions under the Policy
+Management Agreement
+2017/10/26
+59
+Announcement Renewal of Continuing Connected Transactions between the
+Company and CLWM
+2017/10/26
+60
+60
+Announcement - Continuing Connected Transactions between AMP and CLI
+2017/10/26
+56
+61
+2017/10/20
+55
+50
+Notification Letter and Change Request Form to Registered Shareholders
+2017/9/8
+51
+Notification Letter and Request Form to Non-Registered Shareholders
+2017/9/8
+52
+Announcement of Premium Income
+2017/9/14
+53
+Announcement of Premium Income
+2017/10/16
+54
+Notice of Board Meeting
+2017/10/16
+Announcement on Estimated Profit Increase for the First Three Quarters of 2017
+2017/9/8
+Announcement - Proposed Acquisition of Properties jointly with CLP&C
+62
+2017/11/2
+69
+Announcement of Premium Income
+2017/11/13
+70 Announcement of Premium Income
+2017/12/12
+71
+Announcement - Premium Income exceeding RMB500 Billion
+2017/12/15
+72
+Announcement - Connected Transaction – Formation of Partnership
+2017/12/19
+138
+China Life Insurance Company Limited Annual Report 2017
+34
+Notification Letter and Request Form to Non-Registered Shareholders
+2017/10/26
+68
+Notification Letter and Change Request Form to Registered Shareholders
+Overseas Regulatory Announcement China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+2017/10/26
+63
+Election of Mr. Yuan Changqing as a Non-Executive Director of the Fifth Session
+of the Board of Directors, Election of Mr. Luo Zhaohui as a Non-Employee
+Representative Supervisor of the Fifth Session of the Supervisory Committee and
+Notice of the First Extraordinary General Meeting 2017
+2017/11/2
+64
+Notice of the First Extraordinary General Meeting 2017
+2017/11/2
+65
+Form of Proxy of Holders of H Shares for use at the First Extraordinary General
+Meeting 2017 of The Company to be held on Wednesday, 20 December 2017
+2017/11/2
+66
+Reply Slip of Holders of H Shares
+2017/11/2
+67
+2017/11/2
+2017 Interim Report
+Risk Management
+No.
+42
+2017/8/14
+Notice of Board Meeting
+35
+Announcement of Premium Income
+2017/6/14
+36
+49
+Announcement of Premium Income
+2017/7/14
+37
+Announcement - Election of Employee Representative Supervisor
+2017/7/20
+Announcement - Approval of Qualification as Directors by the CIRC and Resignation
+38
+2017/8/10
+of Final Dividend
+of Director
+39
+List of Directors and Their Role and Function
+2017/8/10
+40
+Announcement of Premium Income
+Announcement - Resignation of Supervisor
+2017/8/22
+43
+Announcement of Unaudited Interim Results for the six months ended 30 June 2017
+Date of disclosure
+Items
+Serial
+Other Information
+137
+Annual Report 2017
+China Life Insurance Company Limited
+2017/9/7
+48 Announcement - Approval of Qualification As Supervisor by the CIRC
+2017/8/24
+Overseas Regulatory Announcement China Life Insurance Company Limited
+Announcement on Changes in Accounting Estimates
+41
+47
+2.
+46
+Nomination of Non-Executive Director and Non Employee
+Announcement
+2017/8/24
+Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of
+2017)
+45
+2017/8/24
+Announcement - Connected Transaction – Formation of Partnership
+44
+2017/8/24
+Representative Supervisor
+2017/8/14
+Independent Auditor's Report (continued)
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+Fair value of financial assets
+Key audit matter
+KEY AUDIT MATTERS (continued)
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+145
+China Life Insurance Company Limited Annual Report 2017
+We assessed the objectivity and capability of the external
+valuer. We compared the selling prices of development
+properties and rentals of investment properties with
+the historical business performance of Sino-Ocean and
+industry data to review the assumptions used in the cash
+flow projection.
+Financial Report
+Calculating the Weighted Average Cost of Capital
+using the Capital Asset Pricing Model.
+In our audit, our internal valuation specialists were
+involved to review the technique and the discount rate
+used in the impairment test with reference to valuation
+guidelines and industry practices, and our procedures
+included:
+How our audit addressed the key audit matter
+Disclosure of the impairment of this investment is
+disclosed in Note 8.
+The Group held 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 RMB13.63 billion as
+at 31 December 2017. As the quoted market price of
+this investment had been below its carrying value for
+more than one year, the Group performed impairment
+tests with the assistance from an external valuer in prior
+years, based on which an accumulated impairment loss
+of RMB1.01 billion was recorded as at 31 December
+2016. During 2017, the quoted market price of this
+investment was still below its carrying value, and the
+Group performed an impairment test with the assistance
+from an external valuer at the year end of 2017 as well,
+with the result that no further impairment loss was needed
+to be recorded. In the assessment of the value in use of
+this investment, business assumptions for the projection
+of future cash flows and the determination of the discount
+rate were made by management based on their analysis
+of the historical operating results and the estimation of
+future expectations.
+The impairment test for investment in an associate
+Key audit matter
+KEY AUDIT MATTERS (continued)
+Assessing the comparable companies selected to
+generate certain inputs in calculating the Weighted
+Average Cost of Capital by reference to the financial
+and operational information of those companies and
+Sino-Ocean; and
+Independent Auditor's Report (continued)
+Establishing models independently to test the
+valuation of liabilities for selected insurance
+products; and
+144
+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.
+China Life Insurance Company Limited Annual Report 2017
+143
+Independent 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
+Valuation of insurance contract liabilities
+The Group had significant insurance contract liabilities
+stated at RMB2,025.13 billion as at 31 December 2017,
+representing 78.73% of the Group's total liabilities.
+This is an area that involves significant judgement over
+uncertain future outcomes, including primarily the timing
+and amount of ultimate full settlement of policyholder
+liabilities. Actuarial models are used to support the
+calculation of insurance contract liabilities. The
+complexity of the models may give rise to errors as a result
+of inaccurate/incomplete data or the design or application
+of the models. Assumptions used in actuarial models,
+such as mortality, morbidity, lapse rates, discount rates,
+expense assumptions, and so on, are set up by applying
+estimates and judgements based on the experience analysis
+and future expectations by management.
+The Group's disclosures about valuation of insurance
+contract liabilities are included in Note 3.1, which
+specifically explains the uncertainty of key assumptions
+applied in the valuation. Please also refer to Note 4.1.3
+for the sensitivity analysis of the impact of changes in key
+assumptions on the performance of the Group.
+How our audit addressed the key audit matter
+In our audit, we involved our internal actuarial specialists
+to perform the following audit procedures in this area,
+which included among others:
+•
+•
+Assessing the design and testing the operating
+effectiveness of internal controls over the insurance
+contract liabilities valuation processes including
+management's determination and approval processes
+for experience analysis and setting of assumptions,
+calculation processes for actuarial estimation and
+actual result, and so on;
+Assessing the assumptions by reference to the
+industry data, and considering both historical
+experience and business expectation of the Group;
+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 and securities at
+fair value through profit or loss with the total amount
+of RMB147.10 billion as at 31 December 2017. These
+investments are classified as level 3 in the fair value
+hierarchy, as their fair values are measured using valuation
+techniques with unobservable significant inputs. Fair
+value measurement can be a subjective area and more so
+for areas of the market reliant on model based valuation
+or with weak liquidity and price discovery. The selection
+of valuation techniques for these financial assets can be
+subjective and is so for assumptions. The use of different
+valuation techniques and assumptions could produce
+significantly different estimates of fair value.
+Analysing the movement of these liabilities
+considering the changes in actuarial assumptions of
+the reporting period.
+We tested the underlying data used in the valuation of
+these liabilities, and compared it with original documents.
+By applying our insurance industry knowledge and
+experience, we compared the methodology, models
+and assumptions used by the Group against recognised
+actuarial practices.
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+Note 4.3 discloses the balance of these investments,
+the valuation techniques and significant unobservable
+inputs used in the measurement of the fair value of these
+investments.
+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.
+In our audit, our internal valuation specialists were
+involved to assess the valuation techniques against
+industry practice and valuation guidelines, compare
+assumptions used against industry benchmarks, investigate
+significant differences and perform our own independent
+valuations where applicable.
+147
+Independent 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)
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
+related disclosures made by the directors.
+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.
+China Life Insurance Company Limited Annual Report 2017
+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.
+communication.
+Financial Report
+The engagement partner on the audit resulting in this independent auditor's report is Ng Chi Keung.
+Ernst & Young
+Certified Public Accountants
+Hong Kong
+22 March 2018
+148
+China Life Insurance Company Limited Annual Report 2017
+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
+KEY AUDIT MATTERS
+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.
+part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+We tested the valuation, verification and model approval
+processes, and evaluated the design and operating
+effectiveness of the internal controls over those processes.
+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.
+Financial Report
+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.
+146
+China Life Insurance Company Limited Annual Report 2017
+Independent Auditor's Report (continued)
+Financial Report
+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
+How our audit addressed the key audit matter
+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.
+141
+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 2017, 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.
+Annual Report 2017
+139
+Other Information
+Honors and Awards
+Forbes
+"2017 Forbes Global 2000", ranking No. 52
+BASIS FOR OPINION
+"2017 China Securities Golden Bauhinia Award -
+Best Investment Value Award for Listed Companies"
+21st Century Business Herald - "Assessment and Selection of the Competitiveness of
+Asian Financial Enterprises in the 21st Century"
+"2017 Best Life Insurance Company in Asia"
+Financial Times - "Gold Medal List of Chinese Financial Institutions"
+-
+"Golden Dragon Award – 2017 Best Life Insurance Company"
+"Hong Kong Corporate Governance Excellence Awards 2017” jointly organized by the Chamber of Hong Kong Listed
+Companies and the Centre for Corporate Governance and Financial Policy, Hong Kong Baptist University
+"Hong Kong Corporate Governance Excellence Award (Main Board Companies -
+Hang Seng Composite Index Constituent Companies)"
+China Life Insurance Company Limited
+140
+Other Information
+Announcement – Resolutions Passed at the First Extraordinary General Meeting 2017
+Serial
+No.
+Items
+Date of disclosure
+73
+Announcement - Renewal of Continuing Connected Transactions under the Insurance
+Sales Framework Agreement
+2017/12/19
+74
+Announcement - Continuing Connected Transactions with CLWM
+2017/12/19
+Announcement
+75
+2017/12/19
+Chongqing Trust
+76
+2017/12/20
+China Life Insurance Company Limited Annual Report 2017
+"China Securities Golden Bauhinia Awards" jointly organized by Hong Kong Ta Kung Wen Wei Media Group, the
+Listed Companies Association of Beijing, the Hong Kong Chinese Enterprises Association, Chinese Financial Association
+of Hong Kong, Chinese Securities Association of Hong Kong, the Hong Kong Institute of Chartered Secretaries and
+Hong Kong Securities Professionals Association
+“2017 Global Top 100 Companies by Market Capitalization”, ranking No. 84
+Consolidated Statement of
+Changes in Equity
+153
+Consolidated Statement of
+Cash Flows
+154
+Notes to the Consolidated
+Financial Statements
+Stone Business Review - "Global Top 100 Companies by Market Capitalization (Year-end edition)"
+Independent Auditor's Report
+Financial Report
+EY安永
+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 149 to 268, which comprise the consolidated statement of financial
+position as at 31 December 2017, 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.
+151
+Comprehensive Income
+156
+149
+Consolidated Statement of
+Jointly published by China Enterprise Research Centre of Tsinghua University and National Business Daily
+“2017 Chinese Listed Companies with Brand Value”, ranking No. 12
+"2017 Annual Conference for the Management of Assets and Liabilities of the PRC insurance Industry” organized by
+Securities Times and the Insurance Asset Management Association of China
+"Ark Prize for Trustworthy Insurance Company in 2017"
+National Business Daily – the “2017 China Financial Development Forum and Golden Tripod Award
+"Golden Tripod Award
+-
+(the 8th Session)"
+Continuing Connected Transactions between CLWM and
+Other Information
+the Insurance Company with the Most Social Responsibility of 2017”
+Consolidated Statement of
+143
+Financial Position
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+Independent Auditor's Report
+325,310
+4,027
+Yang Mingsheng
+Director
+4,377
+303,621
+320,933
+Director
+Lin Dairen
+Approved and authorised for issue by the Board of Directors on 22 March 2018.
+145,675
+139,202
+145,007
+36
+7,791
+7,791
+35
+28,265
+34
+122,558
+28,265
+ended 31 December 2017
+2,897,591
+Profit before income tax
+5,855
+7,143
+8
+(522,794)
+(608,827)
+(1,048)
+(1,068)
+20
+20
+(4,859)
+(6,426)
+Share of profit of associates and joint ventures, net
+27
+Total benefits, claims and expenses
+Other expenses
+(31,854)
+(35,953)
+Administrative expenses
+(4,767)
+(4,601)
+26
+Finance costs
+(52,022)
+(64,789)
+Underwriting and policy acquisition costs
+(15,883)
+(21,871)
+Statutory insurance fund contribution
+Policyholder dividends resulting from participation in profits
+41,671
+Income tax
+Other comprehensive income
+2,389,303
+year
+For the
+Consolidated Statement of Comprehensive Income (continued)
+Financial Report
+151
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+RMB0.66
+RMB1.13
+23,842
+30
+19,127
+32,253
+499
+19,585
+32,752
+share
+Basic and diluted earnings per
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to:
+Net profit
+(4,257)
+(8,919)
+28
+458
+307,648
+(5,316)
+25
+426,230
+506,910
+(2,510)
+(1,395)
+428,740
+508,305
+(1,758)
+(3,661)
+430,498
+511,966
+RMB million
+RMB million
+Notes
+Investment income
+2016
+Net premiums earned
+Net change in unearned premium reserves
+Net written premiums
+Less: premiums ceded to reinsurers
+Gross written premiums
+REVENUES
+ended 31 December 2017
+year
+For the
+Consolidated Statement of Comprehensive Income
+China Life Insurance Company Limited Annual Report 2017
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+2,696,951
+2017
+(8,076)
+Net realised gains on financial assets
+222
+(126,619)
+(172,517)
+24
+(27,269)
+(33,818)
+24
+22
+Investment contract benefits
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+(253,157)
+(259,708)
+24
+Life insurance death and other benefits
+Net fair value gains through profit or loss
+Other income
+BENEFITS, CLAIMS AND EXPENSES
+Insurance benefits and claims expenses
+540,781
+643,355
+6,460
+7,493
+(7,094)
+6,183
+23
+6,038
+42
+22
+109,147
+122,727
+21
+Total revenues
+2,572,281
+149
+Total equity
+9.8
+Accrued investment income
+43,538
+36,185
+9.7
+Securities purchased under agreements to resell
+50,641
+209,124
+9.6
+Securities at fair value through profit or loss
+766,423
+810,734
+9.5
+Available-for-sale securities
+136,809
+55,945
+Premiums receivable
+11
+2,897,591
+67,046
+48,586
+22,013
+33,952
+13
+2,134
+3,046
+12
+Total assets
+Cash and cash equivalents
+Other assets
+Reinsurance assets
+13,421
+14,121
+6,333
+6,333
+9.4
+Statutory deposits - restricted
+42,707
+69
+Investment properties
+Property, plant and equipment
+RMB million
+RMB million
+Notes
+2016
+31 December
+31 December
+2017
+As at
+As at
+ASSETS
+As at 31 December 2017
+Consolidated Statement of Financial Position
+30,389
+2,696,951
+3,064
+Investments in associates and joint ventures
+538,325
+449,400
+9.3
+226,573
+383,504
+9.2
+Term deposits
+Loans
+594,730
+717,037
+9.1
+Held-to-maturity securities
+119,766
+161,472
+8
+1,191
+Total liabilities and equity
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+Annual Report 2017
+19
+229
+28
+35,252
+18,505
+Statutory insurance fund
+47,430
+Current income tax liabilities
+Other liabilities
+Premiums received in advance
+39,038
+44,820
+Annuity and other insurance balances payable
+81,088
+Deferred tax liabilities
+36,836
+4,871
+7,768
+Non-controlling interests
+Attributable to equity holders of the Company
+Retained earnings
+Reserves
+Other equity instruments
+Share capital
+Equity
+Total liabilities
+150
+491
+282
+20
+20
+1,214
+6,198
+87,309
+18
+Securities sold under agreements to repurchase
+2,031
+14
+Insurance contracts
+Liabilities
+LIABILITIES AND EQUITY
+2016
+RMB million
+RMB million
+Notes
+31 December
+31 December
+2017
+As at
+As at
+As at 31 December 2017
+Consolidated Statement of Financial Position (continued)
+Financial Report
+Other comprehensive income that may be reclassified to
+2,025,133
+Financial Report
+1,847,986
+15
+2,529
+Financial liabilities at fair value through profit or loss
+37,998
+17
+16,170
+18,794
+16
+675
+Bonds payable
+Interest-bearing loans and borrowings
+87,725
+83,910
+Policyholder dividends payable
+195,706
+232,500
+Investment contracts
+profit or loss in subsequent periods:
+China Life Insurance Company Limited
+Amount transferred to net profit from other comprehensive income
+Portion of fair value changes on available-for-sale securities
+Total transactions with owners
+Others
+interests
+Dividends to non-controlling
+Dividends paid (Note 32)
+Appropriation to reserves (Note 36)
+Transactions with owners
+24,826
+485
+32,253
+(7,912)
+As at 31 December 2017
+Total comprehensive income
+(14)
+(7,912)
+Other comprehensive income
+32,752
+499
+32,253
+Net profit
+307,648
+4,027
+122,558
+145,007
+(7,926)
+8,445
+(8,445)
+(7,164)
+CASH FLOWS FROM OPERATING ACTIVITIES
+ended 31 December 2017
+year
+For the
+Consolidated Statement of Cash Flows
+Financial Report
+153
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+325,310
+4,377
+139,202
+145,675
+7,791
+28,265
+(7,164)
+(135)
+(15,609)
+8,580
+135
+135
+(135)
+(135)
+(7,164)
+7,791
+28,265
+As at 1 January 2017
+307,648
+(25,774)
+(25,776)
+(2)
+(25,774)
+19,585
+458
+19,127
+326,214
+3,722
+123,055
+163,381
+7,791
+(Note 36)
+(Note 35)
+28,265
+(Note 34)
+RMB million
+RMB million
+earnings
+RMB million
+RMB million
+Reserves
+Retained
+Total
+Non-controlling
+interests
+RMB million
+19,127
+Profit before income tax
+456
+Total comprehensive income
+4,027
+122,558
+145,007
+7,791
+28,265
+As at 31 December 2016
+(12,375)
+(151)
+(19,624)
+7,400
+Total transactions with owners
+33
+33
+Others
+(151)
+(151)
+interests
+Dividends to non-controlling
+(12,257)
+(12,257)
+Dividends paid (Note 32)
+(7,367)
+7,367
+Appropriation to reserves (Note 36)
+Transactions with owners
+(6,191)
+instruments
+2017
+RMB million
+(7,164)
+1,539
+38,967
+124,466
+(4,473)
+(9,331)
+4,497
+5,465
+778
+526
+Net cash inflows/(outflows) from operating activities
+931
+CASH FLOWS FROM INVESTING ACTIVITIES
+Disposals of debt investments
+200,990
+89,098
+Maturities of debt investments
+Disposals of equity investments
+Property, plant and equipment
+Purchases:
+Debt investments
+Equity investments
+30,540
+10,447
+Disposals and maturities:
+(76,318)
+76,378
+Interest received – securities at fair value through profit or loss
+Dividends received - securities at fair value through profit or loss
+23,842
+Adjustments for:
+Investment income
+(122,727)
+(109,147)
+Net realised and unrealised (gains)/losses on financial assets
+(6,225)
+1,056
+Insurance contracts
+176,148
+131,354
+Depreciation and amortisation
+2,240
+2,083
+Foreign exchange (gains)/losses
+(52)
+(582)
+Share of profit of associates and joint ventures, net
+(7,143)
+(5,855)
+Changes in operating assets and liabilities:
+Securities at fair value through profit or loss
+Financial liabilities at fair value through profit or loss
+Receivables and payables
+Income tax paid
+142,845
+50,101
+506,306
+508,476
+(11)
+Net cash inflows/(outflows) from investing activities
+(173,676)
+(104,703)
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+154
+China Life Insurance Company Limited Annual Report 2017
+Consolidated Statement of Cash Flows (continued)
+For the
+year
+ended 31 December 2017
+2017
+2016
+RMB million
+RMB million
+CASH FLOWS FROM FINANCING ACTIVITIES
+Increase/(decrease) in securities sold under agreements to repurchase, net
+Interest paid
+Dividends paid to equity holders of the Company
+6,228
+49,999
+(5,671)
+Fair value gains/(losses) on available-for-sale securities
+41,671
+RMB million
+(399)
+2016
+Cash paid related to other investing activities
+(15,515)
+103
+114
+(516,051)
+(173,628)
+(500,737)
+(537,012)
+Property, plant and equipment
+(9,619)
+(5,310)
+Capital contribution to associates and joint ventures
+(37,304)
+(65,158)
+Decrease/(increase) in term deposits, net
+92,148
+37,515
+Decrease/(increase) in securities purchased under agreements to resell, net
+6,981
+(22,035)
+Interest received
+98,012
+78,891
+Dividends received
+29,014
+20,390
+Decrease/(increase) in policy loans, net
+(7,483)
+(4,891)
+(12,257)
+RMB million
+Recognition of Deferred Tax Assets for
+Unrealised Losses
+Disclosure of Interests in Other Entities
+1 January 2017
+1 January 2017
+Financial Report
+156
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+Disclosure Initiative
+For the year ended 31 December 2017
+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 2017 (continued)
+IAS 7 Amendments - Disclosure Initiative
+Amendments to IAS 7 Statement of Cash Flows require an entity to provide disclosures that enable users of
+financial statements to evaluate changes in liabilities arising from financing activities, including both changes
+arising from cash flows and non-cash changes. Disclosure of the changes in liabilities arising from financing
+activities is provided in Note 37 to the financial statements.
+IAS 12 Amendments - Recognition of Deferred Tax Assets for Unrealised Losses
+Amendments to IAS 12 clarify that an entity, when assessing whether taxable profits will be available
+against which it can utilise a deductible temporary difference, needs to consider whether tax law restricts the
+sources of taxable profits against which it may make deductions on the reversal of that deductible temporary
+difference. Furthermore, the amendments provide guidance on how an entity should determine future
+taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets
+for more than their carrying amount. The Group applied the amendments retrospectively. However, their
+application has no impact on the Group's financial position and performance, as the accounting treatment
+of the Group for the previous period was consistent with the clarification in these amendments.
+IFRS 12 Amendments – Disclosure of Interests in Other Entities
+Financial Report
+Amendments to IFRS 12 clarify that the disclosure requirements in IFRS 12, other than those disclosure
+requirements in paragraphs B10 to B16 of IFRS 12, apply to an entity's interest in a subsidiary, a joint
+venture or an associate, or a portion of its interest in a joint venture or an associate that is classified as held
+for sale or included in a disposal group classified as held for sale. The amendments have had no impact on
+the Group's consolidated financial statements as the Group has no interest in a subsidiary, a joint venture or
+an associate that is classified as held for sale.
+Content
+IAS 7 Amendments
+IAS 12 Amendments
+China Life Insurance Company Limited Annual Report 2017
+155
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2017
+1
+2
+ORGANIZATION 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.
+IFRS 12 Amendments
+included in Annual
+Improvements to IFRSS
+2014-2016 Cycle
+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.
+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 2017
+Effective for annual periods
+beginning on or after
+1 January 2017
+Standards/Amendments
+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 22 March 2018.
+Financial Report
+2.1.2 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 2017
+IFRS 2 Amendments
+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.
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+IFRS 9 requires that the Group classifies debt instruments based on the combined effect of application
+of business model (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 (sole payments of
+principal and interest on the principal amount outstanding or not). Debt instruments not giving rise to
+cash flows that are sole payments of principal and interest on the principal amount outstanding would
+be measured at fair value through profit and loss. Other debt instruments giving rise to cash flows that
+are sole 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 ("FVTPL”), based on their respective business model. The Group is in the process of analysing the
+contractual cash flow characteristics of financial assets and assessing the application of the business model.
+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 elect 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
+Classification and measurement
+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 the adoption of IFRS 9 will have a material impact on the Group's
+consolidated financial statements.
+IFRS 9 Financial Instruments
+1 January 2021
+Classification and Measurement of Share-based Payment Transactions
+In June 2016, the IASB issued amendments to IFRS 2 Share-based Payment that address three main areas:
+the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;
+the classification of a share-based payment transaction with net settlement features for withholding a
+certain amount in order to meet an employee's tax obligation associated with the share-based payment;
+and accounting where a modification to the terms and conditions of a share-based payment transaction
+changes its classification from cash-settled to equity-settled. The amendments clarify that the approach
+used to account for vesting conditions when measuring equity-settled share-based payments also applies to
+cash-settled share-based payments. The amendments introduce an exception so that a share-based payment
+transaction with net share settlement features for withholding a certain amount in order to meet the
+employee's tax obligation is classified in its entirety as an equity-settled share-based payment transaction
+when certain conditions are met. Furthermore, the amendments clarify that if the terms and conditions of a
+cash-settled share-based payment transaction are modified, with the result that it becomes an equity-settled
+share-based payment transaction, the transaction is accounted for as an equity-settled transaction from the
+date of the modification. On adoption, entities are required to apply the amendments without restating
+prior periods, but retrospective application is permitted if they elect to adopt for all three amendments and
+other criteria are met. The Group will adopt the amendments from 1 January 2018. The amendments are
+not expected to have any significant impact on the Group's consolidated financial statements.
+2.1.2 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 2017 (continued)
+2.1 Basis of preparation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+For the year ended 31 December 2017
+Other equity
+Notes to the Consolidated Financial Statements (continued)
+157
+IFRS 2 Amendments
+Standards/Amendments
+1 January 2019
+1 January 2018
+IFRS 9
+China Life Insurance Company Limited Annual Report 2017
+158
+IFRS 4 Amendments
+IFRS 15
+IFRS 15 Amendments
+IAS 40 Amendments
+IFRS 16
+IFRS 17
+1 January 2018
+IFRS 10 and IAS 28
+Amendments
+Classification and Measurement of
+Share-based Payment Transactions
+Financial Instruments
+Applying IFRS 9 Financial Instruments
+with IFRS 4 Insurance Contracts
+Revenue from Contracts with Customers
+Clarifications to IFRS 15 Revenue from
+Contracts with Customers
+Transfers of Investment Property
+Leases
+Insurance Contracts
+Sale or Contribution of Assets between an
+Investor and its Associate or Joint Venture
+Effective for annual period
+beginning on or after
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2018
+Content
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+investment cost.
+1,142
+(7,926)
+(25,776)
+Total comprehensive income for the year, net of tax
+(6,191)
+Attributable to:
+- Equity holders of the Company
+- Non-controlling interests
+24,341
+(6,647)
+485
+456
+152
+The notes on pages 156 to 268 form an integral part of these consolidated financial statements.
+China Life Insurance Company Limited Annual Report 2017
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2017
+As at 1 January 2016
+Net profit
+Other comprehensive income
+Share capital
+RMB million
+Attributable to equity holders
+of the Company
+Other comprehensive income for the year, net of tax
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods
+(25,776)
+(7,926)
+attributable to participating policyholders
+2017
+2016
+Note
+RMB million
+(15,003)
+(42)
+(44,509)
+(6,038)
+5,605
+17,372
+Dividends paid to non-controlling interests
+Share of other comprehensive income of associates and joint
+ventures under the equity method
+(864)
+Exchange differences on translating foreign operations
+64,364
+2,682
+(865)
+21
+Income tax relating to components of other comprehensive income
+28
+2,359
+8,242
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+20
+(135)
+24,826
+Cash received from borrowings
+Cash at banks and in hand
+Analysis of balances of cash and cash equivalents
+48,586
+year
+(45,595)
+6,270
+Foreign exchange gains/(losses) on cash and cash equivalents
+(179)
+47,444
+285
+76,096
+67,046
+Beginning of the year
+Cash and cash equivalents
+(9,050)
+(18,460)
+(151)
+Net decrease in cash and cash equivalents
+End of the
+Short-term bank deposits
+67,046
+2,939
+13,831
+4,034
+(38,000)
+(30,000)
+Cash paid related to other financing activities
+(8,008)
+(13,200)
+3,121
+Net cash inflows/(outflows) from financing activities
+Capital injected into subsidiaries by non-controlling interests
+Cash repaid to lenders
+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.
+2.2 Consolidation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+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.
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Transactions with non-controlling interests
+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.
+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.
+164
+Financial Report
+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
+annually 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.
+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.
+163
+2.3 Associates and joint ventures
+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.
+Investments in associates and joint ventures are accounted for using the equity method of accounting and are
+initially recognised at cost.
+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.
+China Life Insurance Company Limited Annual Report 2017
+recognises the fair value of the consideration received;
+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.
+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.
+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
+power over the investee (i.e., existing rights that give it the current ability to direct the relevant
+activities of the investee);
+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.
+162
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+2
+China Life Insurance Company Limited Annual Report 2017
+•
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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.
+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
+recognises any surplus or deficit in profit or loss; and
+Financial Report
+recognises the fair value of any investment retained;
+•
+•
+derecognises the cumulative translation differences recorded in equity;
+•
+derecognises the carrying amount of any non-controlling interests;
+•
+derecognises the assets (including goodwill) and liabilities of the subsidiary;
+•
+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:
+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.
+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.
+Notes to the Consolidated Financial Statements (continued)
+Leasehold improvements
+Financial Report
+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.
+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 Investment properties
+Investment properties are interests in land 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.
+166
+Over the shorter of the remaining term of
+the lease and the useful lives
+China Life Insurance Company Limited Annual Report 2017
+For the year ended 31 December 2017
+Financial Report
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.7 Investment properties (continued)
+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.
+2.8 Financial assets
+2.8.a Classification
+for
+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
+which the assets are acquired. The Group's investments in securities fall into the following four categories:
+Securities at fair value through profit or loss
+(i)
+(ii)
+Notes to the Consolidated Financial Statements (continued)
+4 to 8 years
+3 to 11 years
+15 to 35 years
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.3 Associates and joint ventures (continued)
+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.
+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.
+China Life Insurance Company Limited Annual Report 2017
+165
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.6 Property, plant and equipment (continued)
+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:
+Financial Report
+Buildings
+Office equipment, furniture and fixtures
+Motor vehicles
+The consolidated financial statements include the financial statements of the Company and its subsidiaries
+for the year ended 31 December 2017. 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:
+Estimated useful lives
+For the year ended 31 December 2017
+2.2 Consolidation
+160
+now.
+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.
+(iv) Available-for-sale securities
+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.
+(iii) Loans and receivables
+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.
+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.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+2
+2.8.b Recognition and measurement
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1.2 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 2017 (continued)
+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 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
+In addition, besides the amendments to IFRS 12, which are effective for annual periods beginning on
+or after 1 January 2017, the Annual Improvements 2014-2016 Cycle issued in December 2016 set out
+amendments to IFRS 1 and IAS 28, which are effective for annual periods beginning on or after 1 January
+2018. The Annual Improvements 2015-2017 Cycle issued in December 2017 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 is no material impact on the accounting policies of the Group as a result of these amendments.
+IFRS 4 Amendments - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
+Amendments to IFRS 4 address issues arising from the different effective dates of IFRS 9 and IFRS 17.
+The amendments introduce two alternative options that allow entities issuing contracts within the scope of
+IFRS 4 for the adoption of IFRS 9, notably a temporary exemption and an overlay approach. The temporary
+exemption enables eligible entities to defer the implementation date of IFRS 9 until the effective date of
+IFRS 17. The amendments clarify that an insurer may apply the temporary exemption from IFRS 9 if: (i)
+it has not previously applied any version of IFRS 9, other than only the requirements for the presentation
+of gains and losses on financial liabilities designated as FVTPL; and (ii) its activities are predominantly
+connected with insurance on its annual reporting date that immediately precedes 1 April 2016. The overlay
+approach allows entities applying IFRS 9 from 2018 onwards to remove from profit or loss the effects arising
+from the adoption of IFRS 9 and reclassify the amounts to OCI for designated financial assets. An entity can
+apply the temporary exemption from IFRS 9 for annual periods beginning on or after 1 January 2018, or
+apply the overlay approach when it applies IFRS 9 for the first time.
+During 2016, the Group performed an assessment of the amendments and reached the conclusion that
+its activities are predominantly connected with insurance as at 31 December 2015. There had been no
+significant change in the activities of the Group since then that requires reassessment, and the Group
+considered that it continues to meet the criteria of applying the temporary exemption. The Group decides to
+apply the temporary exemption from IFRS 9 and, therefore, continue to apply IAS 39 to its financial assets
+and liabilities in its reporting period starting on 1 January 2018.
+IFRS 15 - Revenue from Contracts with Customers and IFRS 15 Amendments
+IFRS 15, issued in May 2014, establishes a new five-step model to account for revenue arising from
+contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration
+to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
+The principles in IFRS 15 provide a more structured approach for measuring and recognising revenue.
+The standard also introduces extensive qualitative and quantitative disclosure requirements, including
+disaggregation of total revenue, information about performance obligations, changes in contract asset and
+liability account balances between periods and key judgements and estimates. The standard will supersede
+all current revenue recognition requirements under IFRSs. Either a full retrospective application or a
+modified retrospective adoption is required on the initial application of the standard. In April 2016, the
+IASB issued amendments to IFRS 15 to address the implementation issues on identifying performance
+obligations, application guidance on principal-versus-agent consideration, licences of intellectual property,
+and transition. The amendments are also intended to help ensure a more consistent application when entities
+adopt IFRS 15 and decrease the cost and complexity of applying the standard. IFRS 15 and the amendments
+are effective for annual periods beginning on or after 1 January 2018, and early adoption is permitted.
+China Life Insurance Company Limited Annual Report 2017
+2.1 Basis of preparation (continued)
+159
+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.
+Annual Report 2017
+China Life Insurance Company Limited Annual Report 2017
+168
+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.
+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
+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 disappearance of an active market for that financial asset because of financial difficulties.
+it becomes probable that the issuer or debtor will enter into bankruptcy or other financial
+reorganisation; and
+a breach of contract, such as a default or delinquency in payments;
+significant financial difficulty of the issuer or debtor;
+2.8.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:
+China Life Insurance Company Limited
+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 lended
+money is outstanding. In the event of default by the counterparty, the Group has the right to the underlying
+securities held by the clearing house.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at
+amortised cost.
+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.
+2.8.b Recognition and measurement (continued)
+2.8 Financial assets (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Financial Report
+2
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+167
+Loans are carried at amortised cost, net of allowance for impairment.
+Notes to the Consolidated Financial Statements (continued)
+The Group does not apply the hedge accounting currently, so the new hedge accounting model under IFRS
+9 has no impact on the Group's consolidated financial statements.
+2
+•
+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 (CSM) 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 CSM 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 other comprehensive
+income, determined by an accounting policy choice;
+For the year ended 31 December 2017
+Amounts that the policyholder will always receive, regardless of whether an insured event happens
+(non-distinct investment components) are not presented in the income statement, but are recognised
+directly on the balance sheet;
+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.
+IFRS 17 is effective for annual reporting periods beginning on or after 1 January 2021, with comparative
+figures required. 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. However, if full retrospective
+application for a group of insurance contracts is impracticable, then the entity is required to choose either a
+modified retrospective approach or a fair value approach.
+The Group is currently assessing the impact of the standard upon adoption.
+China Life Insurance Company Limited Annual Report 2017
+161
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+2
+Financial Report
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.2 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 2017 (continued)
+IFRS 10 and IAS 28 Amendments
+Joint Venture
+Sale or Contribution of Assets between an Investor and its Associate or
+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 amendments
+are to be applied prospectively. The previous mandatory effective date of amendments to IFRS 10 and IAS
+28 was removed and a new mandatory effective date will be determined after the completion of a broader
+review of accounting for associates and joint ventures. However, the amendments are available for adoption
+•
+•
+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;
+•
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.2 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 2017 (continued)
+IFRS 15 - Revenue from Contracts with Customers and IFRS 15 Amendments (continued)
+•
+IAS 40 Amendments - Transfers of Investment Property
+Amendments to IAS 40, issued in December 2016, clarify when an entity should transfer property, including
+property under construction or development into, or out of investment property. The amendments state that
+a change in use occurs when the property meets, or ceases to meet, the definition of investment property and
+there is evidence of the change in use. A mere change in management's intentions for the use of a property
+does not provide evidence of a change in use. The amendments are to be applied prospectively, and shall
+be applied to the changes that occurred, during or after the financial year when it applies amendments for
+the first time. An entity should reassess the classification of property held at the date that it first applies
+the amendments and, if applicable, reclassify property to reflect the conditions that exist at that date.
+Retrospective application is only permitted if it is possible without the use of hindsight. The Group expects
+to adopt the amendments from 1 January 2018. The amendments are not expected to have any significant
+impact on the Group's consolidated financial statements.
+IFRS 16 Leases
+IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRS Interpretations Committee
+Interpretation No.4 Determining whether an Arrangement contains a Lease, Standing Interpretations
+Committee ("SIC”) Interpretation No.15 Operating Leases – Incentives and SIC-27 Evaluating the Substance
+of Transactions Involving the Legal Form of a Lease. IFRS 16 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 similar to the accounting for finance leases under IAS 17. The standard includes
+two recognition exemptions for lessees-leases of low-value assets and short-term leases (i.e., leases with a
+lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to
+make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset
+during the lease term (i.e., the right-of-use asset). The right-of-use asset is subsequently measured at cost
+less accumulated depreciation and any impairment losses unless the right-of-use asset meets the definition
+of investment property in IAS 40, or relates to a class of property, plant and equipment to which the
+revaluation model is applied. The lease liability is subsequently increased to reflect the interest on the lease
+liability and reduced for the lease payments. Lessees will be required to separately recognise the interest
+expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also
+required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease
+term, a change in future lease payments resulting from a change in an index or rate used to determine those
+payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as
+an adjustment to the right-of-use asset. Lessor accounting under IFRS 16 is substantially unchanged from
+today's accounting under IAS 17. Lessors will continue to classify all leases using the same classification
+principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also
+requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for
+annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity
+applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified
+retrospective approach. The standard's transition provisions permit certain reliefs. The Group is assessing
+the impact of IFRS 16 on its consolidated financial statements.
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+The Group will adopt IFRS 15 from 1 January 2018 and plans to adopt the modified retrospective
+approach. Given insurance contracts are scoped out of IFRS 15, the main impact of the new standard is on
+the accounting treatment of income from administrative and investment management services. The Group
+does not expect any significant impact on the Group's consolidated financial statement.
+Financial Report
+For the year ended 31 December 2017
+•
+The main features of the new accounting model for insurance contracts are, as follows:
+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.
+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.
+Held-to-maturity securities
+2.1.2 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 2017 (continued)
+2.1 Basis of preparation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+IFRS 17 Insurance Contracts
+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.
+China Life Insurance Company Limited Annual Report 2017
+178
+Financial Report
+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.
+4.1.1 Types of insurance risks
+4.1 Insurance risk
+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 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 2017, the Group has consolidated some fund products issued and
+managed by the Company's subsidiary, China Life AMP Asset Management Company ("CL AMP"), some
+debt investment schemes issued and managed by the Company's subsidiary, China Life Asset Management
+Company Limited (“CL AMC”) and some trust schemes and debt investment schemes issued and managed
+by third parties in the consolidated financial statements. Please refer to Note 40(c) for the details.
+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 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.
+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.
+3.3 Impairment of investments in associates and joint ventures
+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.
+3.4 Income tax
+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.
+For the year ended 31 December 2017
+Policy fee income
+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.
+Premiums
+Turnover of the Group represents the total revenues which include the following:
+2.19 Revenue recognition
+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 unfavorable 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.
+2.18 Other equity instruments
+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.
+2.17 Share capital
+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 is included in administrative
+expenses and changes after the vesting period is included in net fair value gains through profit or loss in net
+profit. The related liability is included in other liabilities.
+Stock appreciation rights
+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.
+Housing 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.
+Pension benefits
+2.16 Employee benefits
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+173
+Revenue from investment contracts is recognised as policy fee income, which consists of various fee incomes
+(policy 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 deferred as unearned revenue and amortised over the
+expected life of the contracts. Policy fee income is recognised in revenue as part of other income.
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+175
+Annual Report 2017
+China Life Insurance Company Limited
+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.
+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.
+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 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.
+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.
+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.
+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.
+2.21 Current and deferred income taxation
+Interest expenses for bonds payable, securities sold under agreements to repurchase and interest-bearing
+loans and borrowings are recognised within finance costs in net profit using the effective interest rate
+method.
+2.20 Finance costs
+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.
+Investment income
+2.19 Revenue recognition (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+Financial Report
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+174
+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).
+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. Fair values are obtained from quoted market prices in active market, taking into
+consideration of recent market transactions or valuation techniques, including discounted cash flow models
+and option pricing models, as appropriate. All derivatives are carried as assets when fair value is positive and
+as liabilities when fair value is negative.
+2.15 Derivative instruments
+2.11.2.b Liability adequacy test
+The insurance components are accounted for as insurance contracts; and the non-insurance
+components are accounted for as investment contracts (Note 2.11.3), which are stated in the
+investment contract liabilities.
+non-insurance components
+insurance components
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+•
+(iii) Universal life contracts and unit-linked contracts
+2.11.2.a Recognition and measurement (continued)
+2.11.2 Insurance contracts (continued)
+2.11 Insurance contracts and investment contracts (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017 171
+contracts.
+The Group has considered the impact of time value on the reserve calculation for insurance
+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)
+(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.
+Notes to the Consolidated Financial Statements (continued)
+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.
+2.11.2.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.
+Bonds payable primarily include subordinated debts. Subordinated debts 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.
+2.14 Bonds payable
+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.
+2.13 Securities sold under agreements to repurchase
+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.
+2.12 Financial liabilities at fair value through profit or loss
+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.
+2.11.4 DPF in long-term insurance contracts and investment contracts
+2.11 Insurance contracts and investment contracts (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Notes to the Consolidated Financial Statements (continued)
+2
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+172
+Financial Report
+Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment
+contracts are carried at amortised cost.
+contracts.
+Revenue from investment contracts with or without DPF is recognised as policy fee income, which consists
+of various fee incomes (policy fees, handling fees and management fees, etc.) during the period. Policy fee
+income net of acquisition cost is deferred as unearned revenue and amortised over the expected life of the
+2.11.3 Investment contracts
+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.
+Financial Report
+For the year ended 31 December 2017
+3.5 Determination of control over investee
+2
+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.
+2.11.2 Insurance contracts
+2.11.2.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:
+170
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.11 Insurance contracts and investment contracts (continued)
+2.11.2 Insurance contracts (continued)
+2.11.2.a Recognition and measurement (continued)
+2.11.1 Classification
+2.11 Insurance contracts and investment contracts
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+Financial Report
+Financial Report
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.8 Financial assets (continued)
+2.8.c Impairment of financial assets other than securities at fair value through profit or loss
+(continued)
+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.
+2.9 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
+(ii)
+in the absence of a principal market, in the most advantageous market for the asset or liability.
+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 4.3, 7, 10 and 40(b) based on the lowest
+level input that is significant to the fair value measurement as a whole.
+2.10 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.
+China Life Insurance Company Limited Annual Report 2017
+169
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+The principal or the most advantageous market must be accessible to 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.
+Long-term insurance contracts (continued)
+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.
+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:
+China Life Insurance Company Limited Annual Report 2017
+176
+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, and expense 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.
+contracts
+3.1 Estimate of future benefit payments and premiums arising from long-term insurance
+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.
+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.
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+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.
+2.24 Dividend distribution
+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.
+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.
+additional non-guaranteed benefits, such as policyholder dividends; and
+2.23 Provisions and contingencies
+Where the Group is the lessee, rentals payable under operating leases are charged to the consolidated
+statement of comprehensive income on the straight-line basis over the lease terms. The aggregate benefit of
+incentives provided by the lessor is recognised as a reduction in rental expenses over the lease terms on the
+straight-line basis.
+Where the Group is the lessor, assets leased by the Group under operating leases are included in investment
+properties and rentals receivable under such operating leases are credited to the consolidated statement of
+comprehensive income on the straight-line basis over the lease terms.
+Leases where substantially all the risks and rewards of ownership of assets remain with the lessor company
+are accounted for as operating leases.
+2.22 Operating leases
+(a)
+3
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+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.
+3
+4
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+guaranteed benefits based on contractual terms, including payments for deaths,
+disabilities, diseases, survivals, maturities and surrenders;
+Financial Report
+3
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+For the description of valuation techniques, please refer to Note 4.3. Using different valuation techniques
+and parameter assumptions may lead to some differences of fair value estimations.
+fair value of other loans are obtained from valuation techniques.
+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.
+177
+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.
+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:
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+3.1 Estimate of future benefit payments and premiums arising from long-term insurance
+contracts (continued)
+The Group considers a wide range of factors in the impairment assessment as described in Note 2.8.c.
+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.
+3.2 Financial instruments
+The impact of the various assumptions and their changes are described in Note 14.
+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.
+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, and
+expenses assumption) 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.
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+6,968
+19,907
+148
+- Securities at fair value
+through profit or loss
+Others
+1,115
+3,906
+128
+12,791
+EUR
+3,901
+HK dollar
+Financial liabilities
+Interest-bearing loans and
+2,475
+other borrowings
+12,480
+Total
+12,480
+2,413
+2,413
+3,901
+18,794
+18,794
+Financial Report
+As at 31 December 2016
+US dollar
+GB pound
+1,135
+Total
+Debt securities
+4,961
+20,177
+15,002
+1,274
+2,517
+1,305
+40,275
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+13,100
+Total
+13,100
+2,339
+59,772
+9
+8,759
+39
+2,083
+- Held-to-maturity securities
+164
+164
+- Securities at fair value
+through profit or loss
+348
+14
+3
+13
+378
+Term deposits
+6,106
+6,106
+Cash and cash equivalents
+2,685
+145
+1,206
+EUR
+1,388
+4.2.1 Market risk (continued)
+(iii) Currency risk (continued)
+The following table summarises financial assets and financial liabilities denominated in currencies
+other than RMB as at 31 December 2017 and 2016, expressed in RMB equivalent:
+As at 31 December 2017
+US dollar HK dollar
+GB pound
+731
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+8,697
+28,859
+37,556
+4.2 Financial risk (continued)
+- Securities at fair value
+RISK MANAGEMENT (continued)
+For the year ended 31 December 2017
+Financial Report
+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 largely
+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 2017, 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 RMB3,341
+million or RMB5,393 million (as at 31 December 2016: RMB3,263 million or RMB3,400 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 RMB23,423 million or RMB32,651 million (as at 31 December 2016: RMB24,999 million or
+RMB28,153 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.
+184
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+4
+2,823
+through profit or loss
+146
+5
+463
+Term deposits
+7,744
+7,744
+Cash and cash equivalents
+1,246
+185
+282
+128
+3
+1,844
+Total
+25,165
+29,190
+5
+4,707
+18
+profit or loss
+1,088
+2,690
+1,198
+9,829
+Debt securities
+- Held-to-maturity securities
+155
+155
+- Loans
+952
+952
+- Available-for-sale securities
+1,229
+1,229
+- Securities at fair value through
+435
+16,170
+As at 31 December 2017
+731
+48,586
+Subtotal
+2,653,350
+409,528
+522,250
+604,552
+471,293
+1,372,041
+Financial and insurance liabilities
+Expected cash outflows
+Insurance contracts
+Investment contracts
+2,025,133
+16,319
+221,905
+48,586
+47,109
+Cash and cash equivalents
+14,121
+Statutory deposits-restricted
+6,333
+4,084
+734
+2,106
+Securities purchased under
+agreements to resell
+36,185
+36,185
+Accrued investment income
+50,641
+44,789
+5,602
+250
+Premiums receivable
+14,121
+1,240,465
+128,753
+2,823
+232,500
+(29,981)
+(18,557)
+Subtotal
+2,411,085
+(2,529)
+(132,358)
+173,367
+20,217
+(4,195,862)
+Net cash inflows/(outflows)
+242,265
+406,999
+389,892
+777,919
+491,510
+(2,823,821)
+(1,240)
+(15,308)
+18,794
+Interest-bearing loans and
+(26,892)
+(3,807,542)
+(388,320)
+Contractual cash outflows
+Securities sold under agreements
+to repurchase
+87,309
+(87,309)
+Financial liabilities at fair value
+through profit or loss
+2,529
+(2,529)
+Annuity and other insurance
+balances payable
+44,820
+(44,820)
+other borrowings
+133,013
+252,571
+104,976
+186
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+Financial Report
+4.2 Financial risk (continued)
+4.2.2 Credit risk (continued)
+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 2017,
+99.9% (as at 31 December 2016: 99.0%) 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 2017, 99.9% (as at 31 December
+2016: 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 2017, 99.8% (as at 31 December 2016: 99.5%) 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 will not cause a material impact on the Group's
+consolidated financial statements as at 31 December 2017 and 2016.
+The credit risk associated with securities purchased under agreements to resell, policy loans and most of
+premium receivables will not cause a material impact on the Group's consolidated financial statements
+taking into consideration their collateral held and maturity terms of no more than one year as at 31
+December 2017 and 2016.
+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.
+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.
+In the normal course of business, the Group attempts to match the maturity of financial assets to the
+maturity of insurance and financial liabilities.
+Collateral and other credit enhancements
+Credit risk exposure
+16,170
+China Life Insurance Company Limited Annual Report 2017
+185
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+4
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.1 Market risk (continued)
+(iii) Currency risk (continued)
+As at 31 December 2017, 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 RMB308 million (as at 31 December 2016: RMB420 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 RMB3,541 million (as at 31 December 2016:
+RMB1,743 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 gains in 2017
+were RMB52 million (2016: exchange gains of RMB582 million).
+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 Insurance Regulatory
+Commission ("CIRC”) and a significant portion of the portfolio is in government bonds, government
+agency bonds 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.
+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 2017 and 2016.
+China Life Insurance Company Limited Annual Report 2017
+187
+Financial Report
+Equity securities
+409,528
+409,528
+Debt securities
+1,255,052
+127,830
+240,582
+271,538
+Loans
+383,504
+141,679
+105,063
+64,386
+Term deposits
+449,400
+Contractual cash inflows
+Financial assets
+Later than
+5 years
+than 3 years
+but not later
+than 5 years
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+The following tables set forth the contractual and expected undiscounted cash flows for financial assets and
+liabilities and insurance liabilities:
+2,339
+Contractual and expected cash flows (undiscounted)
+Carrying
+value
+Without
+maturity
+Not later
+Later
+than 1 year
+but not later
+Later
+than 1 year
+than 3 years
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+21,262
+China Life Insurance Company Limited Annual Report 2017
+China Life Insurance Company Limited
+Annual Report 2017
+179
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+4
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+As at 31 December 2017
+RMB million
+%
+As at 31 December 2016
+RMB million
+%
+RISK MANAGEMENT (continued)
+100.00%
+179,902
+100.00%
+29.96%
+73,261
+40.72%
+Hong Tai Endowment (e)
+41,271
+24.83%
+25,093
+13.95%
+Others (f)
+62,926
+37.85%
+77,255
+42.94%
+Total
+166,224
+Liabilities of long-term insurance contracts
+New Xin Feng Endowment (Type A) (a)
+69,280
+3.47%
+0.84%
+57,356
+3.14%
+Others (f)
+1,554,071
+77.73%
+1,361,761
+74.58%
+Total
+1,999,066
+100.00%
+1,825,956
+100.00%
+(a)
+(b)
+16,730
+49,796
+Hong Tai Endowment (e)
+117,946
+43,794
+2.40%
+Xin Fu Ying Jia Annuity (b)
+19,771
+0.99%
+987
+0.05%
+Kang Ning Whole Life (c)
+268,708
+13.44%
+244,112
+13.37%
+Hong Ying Participating Endowment (d)
+70,506
+3.53%
+6.46%
+Hong Ying Participating Endowment (d)
+2.20%
+3,949
+%
+Premiums of long-term insurance
+contracts
+New Xin Feng Endowment (Type A) (a)
+59,636
+12.83%
+38,059
+9.75%
+Xin Fu Ying Jia Annuity (b)
+40,588
+8.73%
+1,626
+0.42%
+Kang Ning Whole Life (c)
+21,435
+RMB million
+4.61%
+%
+2016
+188
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+4.1 Insurance risk (continued)
+4.1.1 Types of insurance risks (continued)
+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.
+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:
+Product name
+For the year ended 31 December
+2017
+RMB million
+(c)
+22,420
+Hong Ying Participating Endowment (d)
+Insurance benefits of long-term
+insurance contracts
+New Xin Feng Endowment (Type A) (a)
+78
+0.05%
+67
+0.04%
+Xin Fu Ying Jia Annuity (b)
+7,956
+4.79%
+277
+0.15%
+Kang Ning Whole Life (c)
+4,197
+2.52%
+100.00%
+5.74%
+390,438
+464,898
+3,019
+0.65%
+4,968
+1.27%
+Hong Tai Endowment (e)
+166
+0.04%
+203
+0.05%
+Others (f)
+340,054
+73.14%
+323,162
+82.77%
+Total
+100.00%
+New Xin Feng is an endowment insurance contract with single premium. Its insured period is 5
+years. This product is applicable to healthy policyholders between 18-year-old and 70-year-old. Both
+maturity and death benefits are paid at the basic sum insured. Accident death benefit is paid at 300%
+of the basic sum insured.
+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, 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.
+Kang Ning 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. Both death and disability benefits are
+paid at 300% of the basic sum insured less any critical illness benefits paid.
+20,359
+26,897
+33,700
+1 year later
+11,743
+17,127
+27,107
+2 years later
+11,645
+16,589
+21,259
+11,645
+16,589
+11,645
+3 years later
+16,379
+4 years later
+11,331
+Total
+(21,404)
+(97,374)
+Unpaid claims
+expenses
+1,256
+12,522
+13,778
+The following table indicates the claim development for short-term insurance contracts taking into account
+the impacts of ceded business:
+Short-term insurance contracts (accident year)
+Estimated claims expenses
+2013
+2014
+2015
+2016
+2017
+Year end
+(26,047)
+Estimated accumulated
+11,645
+For the year ended 31 December 2017
+4
+Financial Report
+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 9.
+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 2017, 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 RMB35 million lower or higher
+(as at 31 December 2016: RMB160 million higher or lower), 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 RMB11,463
+million or RMB8,306 million (as at 31 December 2016: RMB6,948 million or RMB6,948 million)
+lower or higher, as a result of a decrease or increase in the fair value of available-for-sale securities.
+Notes to the Consolidated Financial Statements (continued)
+claims expenses
+China Life Insurance Company Limited Annual Report 2017
+12,427
+16,589
+21,259
+27,107
+33,700
+110,300
+Accumulated claims
+expenses paid
+(11,645)
+(16,589)
+(21,259)
+(25,860)
+(21,273)
+(96,626)
+Unpaid claims expenses
+1,247
+13,674
+183
+(21,422)
+(11,775)
+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 RMB1,940 million or RMB1,989 million (as at 31
+December 2016: RMB2,823 million or RMB2,953 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 RMB70,732 million or RMB80,152
+million (as at 31 December 2016: RMB57,591 million or RMB65,427 million) higher or lower,
+respectively.
+China Life Insurance Company Limited
+Annual Report 2017
+181
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+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 RMB445 million (as at 31 December 2016: RMB372 million)
+lower or higher, respectively.
+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 RMB19,731 million
+or RMB20,559 million (as at 31 December 2016: RMB16,746 million or RMB17,492 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:
+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.
+4.1.3 Sensitivity analysis
+180
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+Financial Report
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+(d)
+(e)
+(f)
+Hong Ying 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 300% of the basic sum insured for a single premium policy or
+300% of the basic sum insured multiplied by the number of years of premium payments 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 200% of the basic sum insured for a single premium policy or 200% of the basic sum
+insured multiplied by the number of years of premium payments for a regular premium policy.
+Hong Tai is long-term individual participating endowment insurance contract with options for single
+premium or regular premium of 10 years, designed for healthy policyholders of age between 30-day-
+old and 75-year-old. Insured period can be 5 years, 6 years or 10 years. Maturity benefit for single
+premium is paid at 100% of basic sum insured. Maturity benefit for regular premium is paid at basic
+sum insured multiplied by number of year of premium payments. Disease death benefit incurred
+within first year is paid at premium received (without interest). All other death benefits incurred
+are paid at basic sum insured or basic sum insured multiplied by the number of year of premium
+payments for single premium and regular premium, respectively.
+Others consist of various long-term insurance contracts with no significant concentration.
+Sensitivity analysis of long-term insurance contracts
+(16,726)
+182
+2013
+3 years later
+11,775
+16,726
+4 years later
+11,775
+Estimated accumulated
+claims expenses
+11,775
+16,726
+21,422
+27,303
+33,926
+111,152
+Accumulated claims
+expenses paid
+21,422
+Estimated claims expenses
+16,726
+2 years later
+2015
+Short-term insurance contracts (accident year)
+2014
+2016
+2017
+Total
+Year end
+11,476
+16,499
+20,497
+27,120
+33,926
+1 year later
+11,872
+17,265
+27,303
+11,775
+21,427
+China Life Insurance Company Limited Annual Report 2017
+year-on-year.
+percentage
+point
+Gross investment yield (%)
+5.16
+4.61
+6.47
+5.42
+4.97
+0.55
+percentage
+point
+Notes:
+1.
+2.
+3.
+4.
+5.
+6.
+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.
+Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities +
+Held-to-maturity securities + Term deposits + Securities purchased under agreements to resell + Loans + Statutory deposits-
+restricted + Investment properties
+In calculating “Earnings per share (basic and diluted)", the tail differences of the basic figures have been taken into account.
+Ratio of assets and liabilities = Total liabilities/Total assets
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase)/
+((Investment assets at the beginning of the period - Securities sold under agreements to repurchase at the beginning of the period
++ Investment assets at the end of the period – Securities sold under agreements to repurchase at the end of the period)/2)
+The figures as at the end of the past years were adjusted on the same basis.
+10
+China Life Insurance Company Limited Annual Report 2017
+Chairman's Statement
+0.18
+Chairman's Statement
+88.72
+86.68
+7.80
+Net cash inflows/(outflows) from operating activities
+per
+share
+7.11
+3.15
+125.6%
+(0.67)
+2.77
+2.42
+Major financial ratio
+Weighted average ROE (%)
+10.49
+6.16
+increase of
+11.56
+12.83
+11.22
+4.33
+percentage
+points
+Ratio of assets and liabilities*(%)
+88.77
+88.59
+increase of
+87.21
+10.05
+12
+將藥局將藏傳 藏傳 藏傳
+有世書世世書世書世書世
+for
+Respecting market rules to ensure healthy business
+development and safeguard against various risks.
+A company who manages risks must ensure its own
+safety first. We consciously acted in accordance with
+the highest international internal control standards,
+strictly complied with the regulatory rules for listed
+companies, and carried out our businesses in compliance
+with various laws and regulations. Under the stringent
+supervision, we considered compliances and external
+supervision as opportunities for making the Company's
+development sound and stable, and promoted transition
+of risk prevention and control system from "remedy
+afterwards" to "forestalling beforehand” through building
+a long-acting risk control system and management
+mechanism and enhancing audit supervision and risk
+pre-warning. With sufficient cash flow and the solvency
+ratio as high as over 270%, the Company firmly held
+the bottom line of risk management, and maintained
+stable and healthy development for the Company as well
+as the industry, and therefore, the Company was praised
+as the "stabilizer" and "firm rock" of the industry.
+With the past yet to be fading and the future already
+unfolding, we shall catch up with the time, strive
+to overcome inherent inertia, embrace changes and
+transformation, and become the pioneer of the era.
+China Life Insurance Company Limited
+Annual Report 2017
+15
+Chairman's Statement
+Closely following “changes" in the information
+era and building "Technology-driven China Life".
+Technology is an important pillar for the Company's
+operation and management. Since 2015, we have
+accelerated our pace in building "Technology-driven
+China Life", and basically completed the development
+of a "New Generation of Integrated Business Processing
+System" with the objectives of “being customer-
+centered, featured with Internet and artificial
+intelligence, quick response and safe and reliable
+architecture". We developed an advanced business
+structure, rebuilt and optimized the business processes
+with an end-to-end and scenario-based approach, and
+independently designed and built a fully open cloud
+architecture, based on which, we greatly facilitated
+transformation and upgrade of the Company's
+operation and management. As online platforms
+for agents and customers, "China Life E-store" and
+"China Life E-Bao", through interconnections,
+significantly supported customer relations and sales
+force management and provided customers with various
+application functions such as insurance policy services
+and purchase. “China Life E-store” had average monthly
+active users of 1.242 million. "China Life E-Bao"
+had 24.01 million new registered users. 95% policy-
+related services of the Company were available online.
+We rolled out 25,000 digital field offices. Besides, we
+launched the "China Life Health Platform". Smarter
+customer services were provided by introducing
+the loop-locked digital information operation and
+management system and customer family unified view.
+Keeping a close eye on “changes" in the insurance
+market and giving full play to internal potentials.
+Being market-oriented, we initiated to take global
+best practices as the benchmark to actively develop
+a market-oriented performance assessment matrix
+and remuneration mechanism, put great efforts in
+facilitating development of individual insurance business
+and markets in large and medium-sized cities and rural
+areas, based on which, the Company's inner vitality
+has been put into full play and market expanding
+capabilities have been improved significantly. In 2017,
+the Company maintained a market leading position in
+terms of gross written premiums and business and sales
+force of the exclusive individual agent channel, and the
+core competitiveness of the Company was continuously
+enhanced.
+Taking advantage of sales model “changes" and
+enhancing growth dynamic. With rapid expansion of
+the Company's sales force and in response to market
+changes, we actively learned from advanced experiences
+at home and abroad, and pushed forward transformation
+of our sales management model by actively developing a
+professional operation and management system for the
+exclusive individual agent channel. While enhancing
+the Company's professional management and supports,
+we also improved our appraisal and compensation
+mechanism, put more efforts in improving the
+capabilities and quality of our sales force, and gradually
+enhanced the dominant role of agent managers at all
+levels in daily operation and management of their teams,
+thereby further strengthened the Company's growth
+dynamic.
+16
+China Life Insurance Company Limited Annual Report 2017
+Chairman's Statement
+SEEKING PROGRESS UNDER THE PREMISE
+OF STABILITY AND EXCELLING IN HIGH-
+QUALITY DEVELOPMENT
+In the near future, the main characteristic of China's
+economic development will turn from fast growth to
+high-quality development, and the insurance industry
+will play a more important role than ever before in risk
+protection and risk management. Changes in major
+groups of insurance consumers and their purchase
+habits, diversification of product demands and high
+requirements of service quality, along with the stringent
+and strengthened supervision which led to ongoing
+industry transformations, not only put forward
+challenges for the industry but also present new room
+for the Company's development. Despite the challenges
+and pressures in a short term, in general, there will be
+long-term benefits for the Company which has long
+been upholding a prudent and value-oriented strategy.
+2018 is the first year for the Company to enter the era
+of high-quality development. We will actively adapt to
+changes in customer needs and regulatory requirements
+in the new era, deepen the construction of supply
+system, investment system, innovation system, talent
+system and risk control system and spare no efforts to
+complete the five major tasks of “transforming sales
+management model, adjusting business structure,
+revitalizing and taking lead in large and medium-
+sized cities, building technology-driven China Life
+and preventing and controlling risks" by sticking to
+the general keynote of “making steady progress" and
+satisfying the fundamental requirements of high-quality
+development. We will also actively seek to build a
+"customer-oriented, extensive service-supported and
+digitalization-featured" operation and management
+system, transform the Company from a leader in size
+to a leader in quality, provide customers with better
+services, create more value for shareholders and make
+more contributions to the society.
+In 2018, we will reembark on our journey with high-
+quality development, from now and from here.
+By Order of the Board
+£12 £
+Yang Mingsheng
+Chairman
+Beijing, China
+22 March 2018
+China Life Insurance Company Limited
+Annual Report 2017
+17
+Upholding social responsibilities and caring for
+people's well-being. We focused on our principal
+business and enhanced our expertise to exert the
+function of insurance in long-term risk management
+and protection. We worked hard to build a protection
+network for people's well-being. In particular, we have
+provided claims settlement services to more than 43
+million people on an accumulative basis since 2013,
+with a benefit payment of RMB110,000 million for
+commercial insurances; we made maturity payment of
+RMB505,300 million. By implementing the "Healthy
+China" initiative, we undertook over 260 supplementary
+major medical expenses insurance programs covering
+420 million people and paid more than RMB40,000
+million on an accumulative basis to over 17 million
+people in relation to supplementary major medical
+expenses insurance. We carried out administration for
+over 400 basic social healthcare programs entrusted by
+local governments which provided medical coverage
+to more than 68 million people. By implementing
+the national targeted poverty alleviation initiative, we
+provided insurance coverage of RMB2.4 trillion to more
+than 22 million registered poverty-stricken persons
+and supported more than 1,200 poverty alleviation
+working sites. We also provided insurance coverage of
+RMB1.5 trillion for micro-insurance business, with
+the number of insured for micro-insurance business
+reaching nearly 100 million. We strengthened people-
+oriented management, promoted the culture of "Success
+you, success by you", shared interests and shouldered
+responsibilities to build the Company into a spiritual
+and career homeland for our employees, agents and
+sales representatives, so that the working enthusiasm of
+employees was stimulated and a positive atmosphere of
+integrity and harmony was created, which paved the way
+for the prosperity and bright future of the Company.
+Chairman's Statement
+Chairman's Statement
+14
+e
+1000
+6444
+China Life Insurance Company Limited Annual Report 2017
+Yang Mingsheng, Chairman
+PHOTO ALBUM
+Chairman's Statement
+As the spring thunder awakens the land, the gorgeous
+clouds welcome the spring back. In this beautiful season
+where the whole world is flourishing and thriving, I,
+on behalf of the Company's board of directors, hereby
+report to shareholders and the public the Company's
+achievements made in 2017 and illuminate our
+blueprint in the new era.
+OUTSTANDING RESULTS ACHIEVED IN 2017
+WITH CONSISTENT EFFORTS
+In 2017, we achieved outstanding operating results
+by adhering to the operating guideline of “prioritizing
+value, strengthening sales force, optimizing business
+structure, achieving stable growth and safeguarding
+against risks", putting great efforts in implementing
+the overall "innovation-driven development strategy"
+and consistently pushing forward the three key tasks of
+"accelerated development, transformation and upgrade,
+and risk prevention and control” in a coordinated way.
+Business development reached a new high. In 2017,
+on the high base of 2016, the Company maintained a
+strong growth in business development and achieved
+gross written premiums of RMB511,966 million, an
+increase of 18.9% year-on-year, as a result of which,
+the Company became the first insurance company
+in China achieving premiums over RMB500,000
+million. In particular, gross written premiums from
+the exclusive individual agent channel amounted to
+RMB353,668 million, an increase of 25.4% year-on-
+year. First-year regular premiums were RMB113,121
+million, an increase of 20.4% year-on-year, exceeding
+RMB100,000 million for the first time; first-year regular
+premiums with ten years or longer payment duration
+reached RMB66,003 million, an increase of 28.5%
+year-on-year; renewal premiums were RMB288,106
+million, an increase of 28.9% year-on-year; and short-
+term insurance premiums were RMB47,068 million, an
+increase of 17.5% year-on-year.
+Business value and profitability were improved
+significantly. The Company put great efforts to
+constantly improve its business value which was the
+strategic focus. In 2017, the value of one year's sales of
+the Company reached RMB60,117 million, an increase
+of 21.9% year-on-year. Seizing the opportunity of
+interest rate hike, the Company increased its allocation
+in fixed income assets, leveraged the opportunities
+in equity market and optimized its assets structure,
+through which, the Company's gross investment yield
+reached 5.16% and its comprehensive investment yield
+reached 4.55%, an increase of 0.55 percentage point
+and 2.12 percentage points year-on-year, respectively.
+By strengthening the control of administrative
+expenses, the Company's administrative expense ratio²
+dropped to 5.59% from 5.89% in the corresponding
+period of 2016, indicating the expense structure
+being continuously optimized and cost control being
+constantly effective. Due to the impact of a fairly fast
+increase in investment income and the update on the
+discount rate assumption for reserves of traditional
+insurance contracts, net profit attributable to equity
+holders of the Company during the Reporting Period
+was RMB32,253 million, a significant increase of 68.6%
+Business structure was further optimized. In 2017, the
+Company further accelerated the development of regular
+premium business. During the Reporting Period, the
+percentage of first-year regular premiums in long-term
+first-year premiums was 63.99% and the percentage
+of first-year regular premiums with ten years or longer
+payment duration in first-year regular premiums was
+58.35%, an increase of 7.71 percentage points and
+3.66 percentage points year-on-year, respectively.
+The percentage of renewal premiums in gross written
+premiums was 56.27%, an increase of 4.35 percentage
+points year-on-year. The Company emphasized playing
+the due role of insurance in protection, further pushed
+forward its product diversification strategy and achieved
+rapid growth of its protection-oriented businesses.
+2
+Administrative expense ratio = Administrative expenses/Total revenues
+China Life Insurance Company Limited Annual Report 2017 13
+Chairman's Statement
+Development foundation was strengthened effectively.
+While maintaining the steady growth in its size, the
+quality of the Company's sales force was notably
+improved. In 2017, the Company's total sales force
+across all channels reached 2.025 million, a net increase
+of 0.211 million year-on-year. The average productive
+agents on a quarterly basis in the exclusive individual
+agent channel increased by 29.8% year-on-year. The
+Company introduced new measures in customer relation
+management and actively expanded its customer base, as
+a result of which, the number of new customers of long-
+term individual insurance business increased by 18.9%
+year-on-year.
+GRASPING THE “CHANGE" AND
+"UNCHANGE” IN LIFE INSURANCE
+OPERATION BY PROACTIVE THINKING AND
+DILIGENT PRACTICING
+The life insurance industry is a traditional industry
+engraved with a history of several hundred years,
+and also a sunrise industry embracing positive
+restructuring. In the face of changing economic and
+social conditions, diversification and globalization of
+the industry development and increasingly fierce market
+competition, I, together with other members of the
+Company's board of directors, have navigated China
+Life, a flagship in the industry, at a resolute and steady
+pace, and gained a better understanding on the "change"
+and "unchange" in the operation of life insurance.
+Everything has its inherent rule, so is a company's
+development. We shall unremittingly pursue our
+original aspiration, abide by rules, uphold social
+responsibilities and care for people's well-being, respect
+regulations and strive for accelerated development while
+maintaining stability and resilience.
+Observing the rule of life insurance operation and
+maintaining strategic consistency. We emphasized
+playing the due role of insurance in protection, adhered
+to the value-oriented principle, made great efforts in
+developing protection-oriented and long-term savings
+insurance products, accelerated the development of mid-
+to-long-term regular businesses, optimized the business
+structure and continuously enhanced development
+sustainability and value-creation capability. We attached
+great importance to management of assets and liabilities
+and upheld the philosophies of "long-term investment,
+value-oriented investment and safe investment”,
+supplying long-term funds, riding on industry trends
+and discovering long-term value. We committed to
+supporting the real economy and allocated assets in the
+backdrop of national economic development to achieve
+asset appreciation and returns on investments.
+Continuously improving service quality and putting
+customers' needs in priority. We are dedicated to
+provide every customer with our high-quality services.
+We pushed forward the systematic and diversified
+product development and introduced competitive
+products such as the “Xin” series, the “Shengshi” series
+and the "Guoshoufu" series through our extended
+service network, covering more than 500 million people
+in both urban and rural areas. We enhanced quality
+management and upgraded the quality and efficiency
+of our basic services. We provided individualized and
+differentiated services to middle-and high-end customers
+by way of categorized management. We attached great
+importance to the management of customer complaints,
+effectively protected interests of customers, and fulfilled
+our commitment of "Life-time promise, life-long
+partner" by carrying forward integrity and sincerity
+culture. In 2017, the Company achieved a record-high
+level of customer satisfaction.
+China Life Insurance Company Limited Annual Report 2017
+11.41
+increase of
+10.74
+2017
+20166
+Change
+2015
+2014
+2013
+643,355
+540,781
+19.0%
+507,449
+440,766
+417,883
+506,910
+426,230
+18.9%
+362,301
+330,105
+324,813
+Benefits, claims and
+expenses
+608,827
+522,794
+16.5%
+463,492
+404,275
+Net premiums earned
+391,557
+Total revenues
+For the year
+Gross investment income
+RMB129,021 million
+a year-on-year increase of 19.3%
+Prelude
+Gross investment yield
+5.16%
+an increase of 0.55 percentage point ◆
+Value of one year's sales
+RMB60,117 million
+a year-on-year increase of 21.9%
+العالم
+Embedded value
+RMB734,172 milli
+a year-on-year increase of 12.6%
+Net profit attributable to
+equity holders of the Company
+RMB32,253 mil
+million
+a year-on-year increase of 68.6%
+China Life Insurance Company Limited Annual Report 2017
+9
+Prelude
+5.7%
+RMB million
+Under International Financial Reporting Standards (IFRS)
+Major Financial Data¹
+ended
+Insurance benefits and claims expenses
+Financial Summary
+407,045
+125.6%
+(18,811)
+78,247
+68,292
+As at 31 December
+Total assets
+Investment assets²
+Total liabilities
+Total equity holders' equity
+Per share (RMB)
+2,897,591 2,696,951
+2,591,652 2,453,283
+2,572,281 2,389,303
+320,933
+7.4%
+5.6%
+89,098
+2,448,315 2,246,567 1,972,941
+5.7%
+2,287,639 2,100,870 1,848,681
+2,122,101 1,959,236 1,750,356
+322,492 284,121 220,331
+Earnings per share (basic and diluted)³
+1.13
+0.66
+70.1%
+1.22
+1.14
+0.88
+Equity holders' equity per share
+11.35
+466,043
+7.7%
+200,990
+303,621
+24,765
+14.5%
+Net cash inflows/(outflows) from operating activities
+352,219
+315,294
+312,288
+Profit before income tax
+41,671
+74.8%
+45,931
+40,402
+29,451
+Net profit attributable to equity holders of the Company
+32,253
+23,842
+31,873
+34,514
+19,127
+70.1%
+18,741
+Net profit attributable to ordinary share holders of the Company
+32,211
+24,765
+32,211
+34,699
+68.6%
+1,914,597
+2,897,591
+Liabilities
+Insurance contracts
+42,707
+35,713
+232,500
+218,436
+8,346
+2,025,133
+Investment contracts
+14,064
+81,163
+Total
+Securities sold under agreements to repurchase
+102,190
+Others
+Later
+2,819,171
+Without
+Not later
+3,832
+Carrying
+value
+As at 31 December 2016
+than 1 year
+Later
+Contractual and expected cash flows (undiscounted)
+4.2.3 Liquidity risk (continued)
+4.2 Financial risk (continued)
+RISK MANAGEMENT (continued)
+4
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+199,894
+Property, plant and equipment
+321
+Health
+87,309
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+5
+SEGMENT INFORMATION (continued)
+Life
+For the year ended 31 December 2016
+Accident
+RMB million
+Others
+Elimination
+Total
+Revenues
+Gross written premiums
+361,905
+but not later
+54,010
+197
+1,993
+Financial Report
+2,572,281
+Others
+41,888
+3,123
+21,323
+66,558
+Segment liabilities
+2,256,084
+123,209
+8,891
+23,316
+2,411,500
+Unallocated
+Others
+Total
+160,781
+China Life Insurance Company Limited Annual Report 2017
+than 3 years
+but not later
+9,942
+than 1 year
+1,078,038
+347,781
+537,596
+700,129
+421,383
+2,521,458
+Subtotal
+67,046
+67,046
+Cash and cash equivalents
+13,421
+13,421
+Premiums receivable
+123
+11,100
+Financial and insurance liabilities
+44,722
+Expected cash outflows
+Investment contracts
+14,583
+(81,088)
+81,088
+to repurchase
+Securities sold under agreements
+Contractual cash outflows
+(3,229,394)
+(259,905)
+(33,128)
+(34,147)
+(15,880)
+195,706
+35,088
+97,236
+(43,322)
+1,847,986
+Insurance contracts
+maturity
+55,945
+43,538
+Loans
+1,014,074
+188,740
+214,105
+210,589
+1,148,894
+Debt securities
+421,383
+421,383
+Equity securities
+Contractual cash inflows
+Financial assets
+Later than
+5 years
+than 5 years
+than 3 years
+226,573
+Accrued investment income
+119,247
+41,697
+43,538
+agreements to resell
+Securities purchased under
+209
+4,720
+1,909
+6,333
+Statutory deposits-restricted
+8,858
+117,012
+260,065
+199,657
+538,325
+Term deposits
+55,106
+47,606
+430,498
+(522,794)
+3,871
+890
+(4,859)
+Including: inter-segment expenses
+(853)
+(34)
+(3)
+890
+Statutory insurance fund contribution
+(804)
+(138)
+(106)
+(1,048)
+Segment benefits, claims and expenses
+(451,372)
+(52,681)
+(1,360)
+(13,540)
+(467)
+(3,666)
+(2,216)
+(52,022)
+Finance costs
+(4,395)
+(174)
+(17)
+(181)
+(4,767)
+Administrative expenses
+(22,248)
+(4,373)
+(2,899)
+(2,334)
+(31,854)
+Other expenses
+(256)
+(4,441)
+(6,091)
+Financial liabilities at fair value
+to equity holders of the Company
+(23,433)
+(930)
+(91)
+(1,320)
+(25,774)
+Depreciation and amortisation
+1,490
+257
+196
+140
+2,083
+198
+China Life Insurance Company Limited Annual Report 2017
+122,194
+Other comprehensive income attributable
+890
+458
+- Non-controlling interests
+Share of profit of associates and joint ventures, net
+5,855
+5,855
+Segment results
+14,732
+2,093
+852
+6,165
+23,842
+Income tax
+(4,257)
+Net profit
+19,585
+Attributable to
+- Equity holders of the Company
+19,127
+- Term life
+(6,906)
+Underwriting and policy acquisition costs
+231
+23
+(39)
+6,038
+Net fair value gains through profit or loss
+(6,436)
+(255)
+(25)
+(378)
+(7,094)
+Other income
+1,345
+86
+5,919
+(890)
+5,823
+6,460
+Net realised gains on financial assets
+899
+- Whole life
+29,524
+- Endowment
+- Annuity
+188,415
+140,095
+Net premiums earned
+361,649
+50,590
+13,991
+426,230
+Investment income
+103,723
+4,122
+403
+109,147
+(38,459)
+Including: inter-segment revenue
+(890)
+(27,269)
+Increase in insurance contract liabilities
+(109,767)
+(16,578)
+(274)
+(126,619)
+Investment contract benefits
+(5,091)
+(225)
+(5,316)
+Policyholder dividends resulting from
+participation in profits
+(15,787)
+(96)
+(15,883)
+(5,311)
+890
+(21,958)
+Accident and health claims and claim
+Segment revenues
+466,104
+54,774
+14,392
+6,401
+(890)
+540,781
+Benefits, claims and
+expenses
+Insurance benefits and claims expenses
+Life insurance death and other benefits
+(251,155)
+(1,977)
+(25)
+(253,157)
+adjustment expenses
+through profit or loss
+224
+(2,031)
+Life insurance business relates primarily to the sale of life insurance policies, including those life
+insurance policies without significant insurance risk transferred.
+Life insurance business (Life)
+(i)
+The Group operates in four operating segments:
+Operating segments
+5.3
+5.2
+5.1
+SEGMENT INFORMATION
+As at 31 December 2017 and 2016, unobservable inputs such as the weighted average cost of capital and
+liquidity discount were used in the valuation of assets at fair value classified as Level 3. The fair value was
+not significantly sensitive to reasonable changes in these unobservable inputs.
+For the years ended 31 December 2017 and 2016, 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.
+For the assets and liabilities measured at fair value, during the year ended 31 December 2017, RMB19,275
+million (2016: RMB8,932 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB9,652 million (2016: RMB8,668 million) debt securities were transferred
+from Level 2 to Level 1. No material equity securities were transferred between Level 1 and Level 2.
+The assets whose fair value measurements are classified under Level 3 above do not have material impact on
+the profit or loss of the Group.
+Financial Report
+5
+Fair value hierarchy (continued)
+4.3
+RISK MANAGEMENT (continued)
+4
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+194
+91,239
+1,061
+76,445
+13,733
+Depreciation and amortisation
+1,513
+(ii) Health insurance business (Health)
+351
+Health insurance business relates primarily to the sale of health insurance policies, including those
+health insurance policies without significant insurance risk transferred.
+Accident insurance business relates primarily to the sale of accident insurance policies.
+36,496
+- Whole life
+4,110
+- Term life
+511,966
+14,436
+67,708
+429,822
+Gross written premiums
+Revenues
+Total
+Elimination
+Others
+For the year ended 31 December 2017
+Accident
+RMB million
+Health
+Life
+SEGMENT INFORMATION (continued)
+5
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+195
+China Life Insurance Company Limited Annual Report 2017
+Financial assets and securities sold under agreements to repurchase 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.
+Allocation basis of assets and liabilities
+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.
+Allocation basis of income and expenses
+Other businesses relate primarily to income and cost of the agency business in respect of transactions
+with CLIC, etc., as described in Note 33, net share of profit of associates and joint ventures, income
+and expenses of subsidiaries, and unallocated income and expenditure of the Group.
+(iv) Other businesses (Others)
+(iii) Accident insurance business (Accident)
+216
+160
+2,240
+(67)
+(67)
+(3,938)
+(1,884)
+(2,054)
+2,454
+1,128
+1,326
+26,032
+12,499
+64,728
+1,884
+62,343
+501
+13,533
+RMB million
+RMB million
+Equity securities
+Equity securities
+RMB million
+Debt securities
+RMB million
+Total
+value through
+profit or loss
+Available-for-sale securities
+(2,043)
+(12)
+(2,031)
+Closing balance
+Maturity
+other comprehensive income
+Total gains/(losses) recorded in
+2,331
+2,331
+(301)
+(301)
+196
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+5
+SEGMENT INFORMATION (continued)
+Life
+Health
+As at 31 December 2017
+Accident
+RMB million
+Others
+Elimination
+Total
+Assets
+Financial assets (including cash
+- Endowment
+and cash equivalents)
+114,045
+9,390
+38,422
+Others
+8,402
+8,149
+552
+161,472
+2,640,596
+178,575
+Segment assets
+Unallocated
+2,487,141
+2,031
+327
+2,478,739
+- Annuity
+Net premiums earned
+198,418
+Statutory insurance fund contribution
+1,126
+(4)
+(51)
+(1,071)
+Including: inter-segment expenses
+(6,426)
+1,126
+(1,521)
+(147)
+(376)
+(5,508)
+Other expenses
+(35,953)
+(2,629)
+(3,423)
+(5,615)
+(24,286)
+Administrative expenses
+(4,601)
+(431)
+(16)
+(187)
+(3,967)
+Finance costs
+(64,789)
+(2,949)
+(4,565)
+(8,494)
+(777)
+(180)
+(111)
+(1,068)
+(31)
+(370)
+(7,838)
+to equity holders of the Company
+Other comprehensive income attributable
+499
+32,253
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+32,752
+Net profit
+(8,919)
+Income tax
+(48,781)
+41,671
+528
+3,246
+29,315
+Segment results
+7,143
+7,143
+Share of profit of associates and joint ventures, net
+(608,827)
+1,126
+(7,530)
+(14,271)
+(65,877)
+(522,275)
+Segment benefits, claims and expenses
+8,582
+in profit or loss
+Underwriting and policy acquisition costs
+(123)
+Including: inter-segment revenue
+7,493
+(1,126)
+7,268
+75
+1,276
+Other income
+6,183
+201
+23
+269
+5,690
+Net fair value gains through profit or loss
+42
+(1)
+2
+41
+Net realised gains on financial assets
+122,727
+1,501
+456
+5,454
+115,316
+Investment income
+506,910
+14,320
+63,323
+429,267
+190,798
+1,126
+(1,126)
+Segment revenues
+551,590
+(21,748)
+participation in profits
+Policyholder dividends resulting from
+(8,076)
+(278)
+(7,798)
+Investment contract benefits
+(172,517)
+(158)
+(20,249)
+(152,110)
+Increase in insurance contract liabilities
+(33,818)
+(5,826)
+(21,871)
+(27,992)
+Accident and health claims and claim
+(259,708)
+(25)
+(2,383)
+(257,300)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+expenses
+Benefits, claims and
+643,355
+(1,126)
+8,969
+14,799
+69,123
+adjustment expenses
+Total gains/(losses) recorded
+(7,912)
+Transferred into Level 3
+Level 2
+Level 3
+RMB million
+RMB million
+RMB million
+RMB million
+Available-for-sale securities
+- Equity securities
+Level 1
+196,673
+- Debt securities
+46,898
+350,893
+89,111
+57,333
+334,773
+455,124
+Securities at fair value through
+profit or loss
+- Equity securities
+48,989
+inputs
+inputs
+markets
+As at 31 December 2017, assets classified as Level 2 accounted for approximately 51.20% 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.
+At 31 December 2017, assets classified as Level 3 accounted for approximately 15.87% 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 market
+comparison approach, etc.
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see
+Note 3.2.
+192
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+4.3 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 2017:
+Assets measured at fair value
+Fair value measurement using
+Total
+Quoted prices
+in active
+Significant
+observable
+Significant
+unobservable
+52,300
+- Debt securities
+9,301
+963
+73,590
+Equity securities
+Equity securities
+RMB million
+RMB million
+RMB million
+Opening balance
+Purchases
+13,733
+76,445
+1,061
+47,909
+15,197
+91,239
+63,106
+Transferred into Level 3
+2,842
+695
+3,537
+Transferred out of Level 3
+(5,598)
+(1,059)
+Debt securities
+RMB million
+As at 31 December 2017, assets classified as Level 1 accounted for approximately 32.93% 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.
+Total
+Available-for-sale securities
+655
+53,918
+82,891
+Total
+305,172
+474,435
+147,099
+926,706
+Liabilities measured at fair value
+Financial liabilities at fair value
+through profit or loss
+Investment contracts at fair value
+through profit or loss
+(2,529)
+(12)
+Total
+(2,541)
+The following table presents the changes in Level 3 assets for the year ended 31 December 2017:
+Securities at fair
+(2,529)
+(12)
+(2,541)
+value through
+profit or loss
+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 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.
+4.3 Fair value hierarchy (continued)
+RISK MANAGEMENT (continued)
+584,526
+349,741
+(2,411,261)
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+189
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+4
+RISK MANAGEMENT (continued)
+Financial Report
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+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.
+The liquidity analysis above does not include policyholder dividends payable amounting to RMB83,910
+million as at 31 December 2017 (as at 31 December 2016: RMB87,725 million). As at 31 December 2017,
+declared dividends of RMB68,731 million (as at 31 December 2016: RMB64,623 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 were surrendered immediately, it would cause a cash outflow of RMB56,709 million
+and RMB173,557 million, respectively for the year ended 31 December 2017 (2016: RMB53,271 million
+and RMB140,565 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 CIRC, 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
+subordinated bonds and Core Tier 2 Capital Securities according to the relevant laws and the approval of the
+relevant authorities.
+480,631
+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 9.4, Note 20 and Note 36, respectively.
+419,352
+Net cash inflows/(outflows)
+Annuity and other insurance
+balances payable
+39,038
+(39,038)
+Interest-bearing loans and
+other borrowings
+16,170
+(1,138)
+(16,159)
+Bonds payable
+37,998
+(39,032)
+Subtotal
+2,220,017
+(2,031)
+(219,498)
+46,930
+1,960
+(3,489,299)
+301,441
+(6,657)
+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.
+China Life Insurance Company Limited Annual Report 2017
+297%
+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 CIRC
+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 Cai Kuai Bu Han [2017] No.1510 Notification of the Evaluation Results of Integrated Risk
+Rating (Classification Regulation) for the Third Quarter of 2017, released by the CIRC, the latest Integrated
+Risk Rating result of the Company was Category A.
+4.3 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.
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+191
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+4
+278%
+190
+280%
+228,080
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+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 2017
+RMB million
+As at 31
+December 2016
+RMB million
+706,516
+639,396
+706,623
+677,768
+254,503
+278%
+Transferred out of Level 3
+Total gains/(losses) recorded
+(42)
+154,406
+Total
+301,746
+561,725
+954,710
+Liabilities measured at fair value
+Financial liabilities at fair value
+through profit or loss
+Investment contracts at fair value
+through profit or loss
+(2,031)
+(12)
+Total
+(2,043)
+The following table presents the changes in Level 3 assets for the year ended 31 December 2016:
+Securities at fair
+Opening balance
+Purchases
+RMB million
+RMB million
+117,234
+RMB million
+37,172
+Available-for-sale securities
+- Equity securities
+in profit or loss
+183,222
+86,161
+- Debt securities
+28,562
+357,463
+76,445
+13,733
+345,828
+399,758
+Securities at fair value through
+profit or loss
+- Equity securities
+52,790
+867
+1,061
+54,718
+- Debt securities
+RMB million
+91,239
+Level 2
+147,099
+655
+89,111
+57,333
+Closing balance
+(3,790)
+(3,790)
+Maturity
+(90)
+(90)
+Disposals
+(204)
+Level 3
+(519)
+other comprehensive income
+Total gains/(losses) recorded in
+(42)
+Financial Report
+China Life Insurance Company Limited
+315
+193
+Significant
+unobservable
+inputs
+Annual Report 2017
+Level 1
+markets
+observable
+Significant
+Quoted prices
+in active
+Total
+Fair value measurement using
+inputs
+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 2016:
+4.3 Fair value hierarchy (continued)
+RISK MANAGEMENT (continued)
+4
+For the year ended 31 December 2017
+Financial Report
+Assets measured at fair value
+Notes to the Consolidated Financial Statements (continued)
+5,855
+7,143
+68,387
+37,110
+47,175
+2016
+RMB million
+RMB million
+2017
+As at 31 December
+Other equity movements
+Declared dividends
+Share of profit or loss
+119,766
+(1,862)
+Accounting
+(831)
+161,472
+119,766
+Movement
+As at
+31 December
+Change
+of the
+Share of
+Other
+profit
+Declared
+equity
+Provision
+of
+As at 1 January
+Change of the cost
+(820)
+8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+As at 31 December 2016
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+4,629
+2,201
+3,064
+1,191
+As at 31 December 2017
+As at 1 January 2017
+Fair value
+As at 31 December 2017
+As at 1 January 2017
+Net book value
+method
+(302)
+(58)
+Notes to the Consolidated Financial Statements (continued)
+(244)
+1,931
+1,435
+Buildings
+RMB million
+202
+As at 31 December 2017
+Accumulated depreciation
+As at 1 January 2017
+Charge for the year
+As at 31 December 2017
+Additions
+As at 1 January 2017
+Cost
+7 INVESTMENT PROPERTIES
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+3,366
+For the year ended 31 December 2017
+7 INVESTMENT PROPERTIES (continued)
+Cost
+Financial Report
+203
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+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.
+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.
+The fair value of investment properties of the Group as at 31 December 2017 amounted to RMB4,629 million
+(as at 31 December 2016: RMB2,201 million), which was estimated by the Group having regards to valuations
+performed by an independent appraiser. The investment properties were classified as Level 3 in the fair value
+hierarchy.
+As at 31 December 2017, the net book value of investment properties which are in process to obtain title
+certificates is RMB1,872 million (31 December 2016: Nil).
+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.
+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.
+2,201
+2,238
+1,191
+1,237
+(244)
+(46)
+(198)
+As at 1 January 2016
+Additions
+As at 31 December 2016
+Accumulated depreciation
+As at 1 January 2016
+Charge for the year
+As at 31 December 2016
+For the year ended 31 December 2017
+Net book value
+As at 31 December 2016
+Fair value
+As at 1 January 2016
+Buildings
+RMB million
+1,435
+1,435
+As at 1 January 2016
+(685)
+Accumulated depreciation
+Financial Report
+16,696
+627
+42,707
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+6 PROPERTY, PLANT AND EQUIPMENT (continued)
+Cost
+Buildings
+Office
+equipment,
+furniture and
+fixtures
+Motor
+vehicles
+Assets under
+Leasehold
+construction improvements
+448
+Total
+As at 1 January 2016
+24,253
+6,616
+1,387
+7,565
+1,308
+41,129
+Transfers upon completion
+1,176
+(1,438)
+256
+(6)
+Additions
+37
+RMB million
+653
+1,751
+As at 31 December 2017
+Cost
+(955)
+(1,068)
+(181)
+46
+(15,311)
+(1,910)
+693
+(1,203)
+(16,528)
+200
+Impairment
+As at 1 January 2017
+(24)
+Charge for the
+year
+23,185
+| |
+Transfers into investment
+properties
+Disposals
+As at 31 December 2017
+(24)
+(24)
+Net book value
+As at 1 January 2017
+17,027
+1,903
+426
+10,548
+485
+30,389
+(24)
+177
+4,896
+16
+(4,934)
+(998)
+(1,068)
+(15,311)
+Impairment
+As at 1 January 2016
+(24)
+(24)
+Charge for the year
+Disposals
+As at 31 December 2016
+(24)
+(24)
+Net book value
+(8,311)
+As at 1 January 2016
+1,878
+382
+7,565
+366
+26,974
+As at 31 December 2016
+17,027
+1,903
+426
+10,548
+485
+30,389
+As at 31 December 2017, the net book value of buildings above which are in process to obtain title certificates is
+RMB6,209 million (31 December 2016: Not significant).
+China Life Insurance Company Limited Annual Report 2017
+16,783
+As at 31 December 2016
+621
+22
+5,779
+Disposals
+(104)
+(432)
+(140)
+(475)
+(27)
+(1,178)
+As at 31 December 2016
+25,362
+6,837
+1,424
+10,548
+1,553
+45,724
+As at 1 January 2016
+(7,446)
+(1,801)
+(148)
+(14,131)
+(942)
+137
+426
+201
+36
+(130)
+(622)
+(901)
+Charge for the year
+(1,005)
+(4,738)
+Disposals
+2016
+Listed in Hong Kong, PRC
+or loss
+37,231
+11,287
+72,773
+151,265
+2,047,592
+Total assets
+million
+million
+million
+million
+million
+million
+Sanya
+Company
+RMB
+Company
+RMB
+RMB
+RMB
+RMB
+RMB
+Futures
+CLP&C
+CGB Sino-Ocean
+Pipeline
+COFCO
+The following table illustrates the financial information of the Group's major associates and joint venture as at 31
+December 2016 and for the year ended 31 December 2016:
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+799
+8
+Total liabilities
+101,935
+adjustments
+of the associates and joint ventures after
+Total equity attributable to equity holders
+(1,576)
+3,163
+Total adjustments (i)
+591
+32,217
+2,496
+19,823
+43,999
+105,974
+of the associates and joint ventures
+Total equity attributable to equity holders
+591
+32,217
+2,577
+19,823
+49,330
+105,974
+Total equity
+208
+5,014
+8,710
+52,950
+1,941,618
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+21,347
+1,466
+8,185
+13,626
+53,459
+Net carrying value of the investments
+(1,010)
+Impairment
+291
+51.00%
+571
+135,393
+10.56%
+21,783
+2,631 35,985
+35.00% 43.86%
+1,466 21,347
+20,463
+40.00%
+8,185
+14,636
+53,459
+Gross carrying value of the investments
+45,885
+43.686% 29.79%
+Proportion of the Group's ownership
+116,113
+ventures after adjustments
+holders of the associates and joint
+Total equity attributable to equity
+676
+(2,617)
+21,783
+291
+Total revenues
+50,531
+206
+(20)
+1,454
+3,055
+135
+785
+7,171
+7,872
+Total comprehensive income
+(230)
+(35)
+912
+109,137
+(2,332)
+(20)
+1,684
+3,055
+135
+820
+6,259
+10,204
+Net profit/(loss)
+5,644 274,829
+399
+61,142
+49,236
+Other comprehensive income
+42,423
+19,823
+Proportion of the Group's ownership
+144
+136
+64,192
+91,631
+594,730
+717,037
+150,089
+148,494
+178,444
+200,869
+169,001
+241,808
+97,196
+125,866
+RMB million
+December 2016
+As at 31
+As at 31
+December 2017
+RMB million
+Total
+Unlisted
+Listed in Singapore
+(5,122)
+Listed in Mainland, PRC
+Debt securities
+Total
+19
+20
+625,251
+530,374
+China Life Insurance Company Limited Annual Report 2017
+594,730
+717,037
+Total
+260,846
+293,113
+After ten years
+231,608
+288,496
+After five years but within ten years
+71,661
+112,932
+Subordinated bonds/debts
+years
+30,615
+22,496
+Within one year
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+Maturing:
+Debt securities - Contractual maturity schedule
+Unlisted debt securities include those traded on the Chinese interbank market.
+The estimated fair value of all held-to-maturity securities was RMB692,984 million as at 31 December 2017
+(as at 31 December 2016: RMB619,152 million).
+594,730
+717,037
+After one year but within five
+2,267
+Government bonds
+Government agency bonds
+Corporate bonds
+208
+375
+55,728
+37,748
+55,276
+Total revenues
+301
+20,000
+1,419
+7,929
+12,680
+50,229
+Net carrying value of the investments
+(1,010)
+Impairment
+301
+51.00%
+591
+2,496 32,217
+35.00% 43.86%
+1,419 20,000
+7,929
+13,690
+50,229
+Gross carrying value of the investments
+40.00%
+29.991%
+43.686%
+2,339
+1
+Net profit/(loss)
+9,504
+9.1 Held-to-maturity securities
+FINANCIAL ASSETS
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+207
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+Including adjustments for the difference of accounting policies, fair value and others.
+(i)
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2017 and 31
+December 2016. The Group had a capital contribution commitment of RMB20.996 billion with a joint venture
+as at 31 December 2017 (31 December 2016: RMB2,991 million). The capital contribution commitment amount
+has been included in the capital commitments in Note 39.
+Debt securities
+631
+631
+4,282
+8,434
+(526)
+(164)
+(1,070)
+Total comprehensive income
+Other comprehensive income
+631
+66
+1,157
+4,446
+66
+cost
+Total adjustments (i)
+135,393
+China Life (Sanya) Health
+Joint ventures
+(1,010)
+129,598
+(1,418) (1,139)
+21,829 7,662
+102,523 102,664
+Subtotal
+9,732
+567 (776) (466)
+9,948 10,407
+Equity Method
+Others (iv)
+("China Unicom") (iii)
+Communications Limited
+10.56%
+21,783
+(28)
+1
+(18)
+21,829
+21,829
+Note
+Equity Method
+China United Network
+Equity Method
+Company")
+306
+291
+Note: Including the amount originally held by the Company.
+(1,010)
+161,472
+(685)
+(1,862)
+7,143
+136,178 119,766 37,110
+Total
+31,874
+454
+(444)
+(519)
+33,655 17,102 15,281
+Subtotal
+31,583
+454
+(444)
+(509)
+16,801 15,281
+33,349
+Equity Method
+Others (iv)
+("Sanya Company")
+Investments Co., Ltd
+51.00%
+301
+Co., Ltd. ("Pipeline
+China Gas Pipeline
+43.86%
+Limited ("Sino-Ocean") (ii)
+(1,010)
+29.79%
+13,626
+298
+(553)
+1,201
+12,680
+11,245
+Equity Method
+Sino-Ocean Group Holding
+43.686%
+53,459
+(956)
+4,186
+50,229
+32,162
+Equity Method
+China Guangfa Bank
+Co., Ltd. ("CGB") (i)
+Associates
+interest impairment
+of equity amount of
+Percentage Accumulated
+As at 31
+December
+2017
+dividends movements impairment
+China Life Property &
+Equity Method
+6,000
+7,929
+21,347
+16
+20
+(20)
+1,351
+20,000
+20,000
+Equity Method
+Sinopec Sichuan to East
+Futures")
+Limited ("COFCO
+35.00%
+204
+1,466
+1,419
+1,339
+Equity Method
+COFCO Futures Company
+("CLP&C")
+Company Limited
+Casualty Insurance
+8,185 40.00%
+(3)
+(69)
+28
+328
+47
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+Total assets
+RMB
+million
+Sanya
+Company
+China
+Unicom
+RMB
+million
+million
+million
+COFCO Pipeline
+Futures Company
+RMB
+RMB
+RMB
+million
+million
+RMB
+RMB
+million
+CLP&C
+CGB Sino-Ocean
+The following table illustrates the financial information of the Group's major associates and joint venture as at 31
+December 2017 and for the year ended 31 December 2017:
+51.00%
+43.86%
+35.00%
+40.00%
+29.991%
+43.686%
+Percentage of equity interest held
+51.00%
+10.56%
+43.86%
+2,072,915
+191,894
+79,601
+10,651
+35,309
+2,631
+48,502 20,463
+113,846
+joint ventures
+holders of the associates and
+Total equity attributable to equity
+571
+307,018
+35,309
+2,631
+20,463
+35.00%
+58,728
+Total equity
+317
+266,599
+934
+8,020
+59,138
+133,166
+1,959,069
+Total liabilities
+888
+573,617
+36,243
+113,846
+571
+40.00%
+43.686%
+COFCO Futures
+CLP&C
+Sino-Ocean
+CGB
+Associates
+Name
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+As at 31 December 2017, the major associates and joint venture of the Group are as follows:
+8
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+205
+Annual Report 2017
+China Life Insurance Company Limited
+Except for a 36-month restricted period of the investment in China Unicom, as mentioned in (iii), the
+Group has no restrictions to transact other investments in associates and joint ventures.
+(v)
+£
+(iv) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
+(iii) On 16 August 2017, the Company entered into an agreement to acquire 3,177,159,590 non-public offering
+of A ordinary shares of China Unicom, with a total consideration of RMB21.7 billion to participate
+into the Mixed Ownership Reform of China Unicom. Upon the completion of the transaction as at 31
+October 2017, the Group's share percentage of China Unicom increased from 0.08% to 10.56%, making
+the Company the second largest shareholder of China Unicom. In accordance with the articles of China
+Unicom, the Company is entitled to nominate candidates for the Board of Directors and Supervisors. The
+candidate of Board of Directors nominated by the Company was approved in the General Meeting of China
+Unicom on 8 February 2018. The management considered that the Group can exert significant influence
+upon China Unicom, and therefore accounted for it as an associate. On 29 December 2017 (the last trading
+day in 2017), the stock price of China Unicom was RMB6.33 per share. As at 31 December 2017, the
+Company had not yet completed the valuation for fair value of the identifiable net assets of China Unicom.
+Sino-Ocean, the Group's associate is listed in Hong Kong. On 29 December 2017 (the last trading day in
+2017), the stock price of Sino-Ocean was HKD5.39 per share. As at 31 December 2017, an impairment loss
+of RMB1.01 billion for the investment in Sino-Ocean had been made by the Group. The Group performed
+an impairment test to this investment on 31 December 2017. The recoverable amount of this investment
+valued by the Group approximated to the carrying amount and therefore no impairment loss was made for
+this investment in 2017.
+(ii) The 2016 final dividend of HKD0.12 in cash per ordinary share was approved and declared in the Annual
+General Meeting of Sino-Ocean on 18 May 2017. The Company received a cash dividend amounting
+to RMB239 million. The 2017 interim dividend of HKD0.167 in cash per ordinary share was approved
+and declared by the board of directors of Sino-Ocean on 23 August 2017. The Company received a cash
+dividend amounting to RMB314 million.
+The Company proposed to subscribe for 1,869,586,305 additional shares offering of CGB at no more than
+RMB7.01 per share, with a total consideration of RMB13.2 billion. The specific subscription price and
+quantity will be subject to the adjustment based on the valuation result filed to state-owned assets authority.
+Upon the completion of transaction, the Company will hold 43.686% of CGB's ownership interest,
+unchanged from prior to the transaction. As at 31 December 2017, the transaction has been reviewed and
+approved by the Board of Directors of the Company, and the relevant parties of the transaction have not
+entered into the contracts.
+(i)
+INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)
+8
+Pipeline Company
+China Unicom
+Joint venture
+Sanya Company
+PRC
+PRC
+PRC
+PRC
+Hong Kong, PRC
+PRC
+Country of incorporation
+Sanya Company
+Joint venture
+Pipeline Company
+COFCO Futures
+CLP&C
+29.79%
+Sino-Ocean
+Associates
+Name
+As at 31 December 2016, the major associates and joint venture of the Group are as follows:
+Percentage of equity interest held
+PRC
+PRC
+PRC
+PRC
+PRC
+Hong Kong, PRC
+PRC
+Country of incorporation
+CGB
+(9,248)
+For the year ended 31 December 2017
+187
+2,696,951
+Liabilities
+Insurance contracts
+1,762,363
+77,837
+7,786
+Investment contracts
+183,773
+11,933
+1,847,986
+195,706
+Securities sold under agreements to repurchase
+77,649
+3,081
+302
+23,064
+56
+Others
+73,277
+3,563
+338
+18,194
+95,372
+Segment liabilities
+2,097,062
+96,414
+8,426
+18,250
+2,220,152
+Unallocated
+Others
+81,088
+30,389
+Total
+Others
+As at 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+5
+SEGMENT INFORMATION (continued)
+Life
+Health
+As at 31 December 2016
+Accident
+RMB million
+Others
+Elimination
+Total
+Assets
+Financial assets (including cash
+and cash equivalents)
+2,379,782
+92,220
+8,906
+27,392
+Property, plant and equipment
+Unallocated
+Segment assets
+2,643,498
+147,158
+9,397
+169,151
+98,996
+2,508,300
+135,198
+119,766
+491
+6,776
+8,165
+Others
+2,387,947
+Total
+For the year ended 31 December 2017
+2,389,303
+16,454
+Transfers into investment
+properties
+(1,931)
+(1,931)
+Disposals
+(48)
+(463)
+(195)
+(148)
+(48)
+(902)
+As at 31 December 2017
+32,457
+6,873
+1,403
+16,696
+444
+China Life Insurance Company Limited
+Disposals
+(144)
+(632)
+(953)
+13
+Charge for the year
+(4,934)
+(8,311)
+As at 1 January 2017
+Accumulated depreciation
+59,259
+1,830
+(998)
+15,747
+16
+450
+174
+Annual Report 2017
+199
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+6 PROPERTY, PLANT AND EQUIPMENT
+Cost
+Buildings
+Financial Report
+Motor
+vehicles
+Assets under
+Leasehold
+construction improvements
+Total
+Office
+equipment,
+furniture
+and fixtures
+As at 1 January 2017
+70
+RMB million
+(86)
+312
+(7,520)
+49
+7,073
+Additions
+45,724
+1,553
+10,548
+1,424
+25,362
+6,837
+Transfers upon completion
+449,400
+538,325
+449,400
+538,325
+6,333
+6,333
+6,333
+789,897
+745,586
+789,897
+745,586
+6,333
+375,899
+RMB million
+383,504
+619,152
+692,984
+594,730
+717,037
+Available-for-sale securities, at fair value
+Statutory deposits-restricted
+Term deposits
+Loans (iii)
+Held-to-maturity securities (ii)
+As at 31
+December 2016
+RMB million
+Estimated fair value (i)
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+December 2017
+226,573
+Securities at fair value through profit or loss
+(232,500)
+209,124
+Interest-bearing loans and borrowings
+Carrying value
+As at 31
+(38,204)
+(37,998)
+Bonds payable (iii)
+(81,088)
+(87,309)
+(81,088)
+(87,309)
+Securities sold under agreements to repurchase
+(2,031)
+(2,529)
+(2,031)
+(2,529)
+Financial liabilities at fair value through profit or loss
+(192,373)
+(229,222)
+136,809
+209,124
+Securities purchased under agreements to resell
+36,185
+43,538
+36,185
+136,809
+43,538
+48,586
+67,046
+48,586
+67,046
+Investment contracts (iii)
+(195,706)
+Cash and cash equivalents
+investment contracts:
+43,518
+20
+10 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+9.8 Accrued investment income
+Total
+After 30 but within 90 days
+Within 30 days
+Maturing:
+9.7 Securities purchased under agreements to resell
+FINANCIAL ASSETS (continued)
+214
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+China Life Insurance Company Limited Annual Report 2017 213
+Financial Report
+As at 31
+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.
+136,809
+Total
+54,718
+53,918
+Subtotal
+10,746
+7,210
+Unlisted
+6,284
+7,187
+74
+79
+Listed overseas
+(18,794)
+209,124
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+December 2017
+RMB million
+36,055
+130
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+55,945
+50,641
+Total
+11,223
+5,852
+Non-current
+44,722
+44,789
+Current
+55,945
+50,641
+As at 31
+December 2016
+RMB million
+Total
+4,276
+17,642
+21,423
+35,763
+24,942
+Others
+Debt securities
+Bank deposits
+RMB million
+As at 31
+December 2016
+December 2017
+RMB million
+As at 31
+43,538
+36,185
+2,540
+(16,170)
+6,201
+(16,170)
+As at 31 December 2016
+As at 31 December 2017
+(ii)
+Financial Report
+4.85%
+Discount rate assumptions
+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:
+reserves.
+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
+(i)
+(a) Process used to decide on assumptions
+14 INSURANCE CONTRACTS
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+4.45%-4.85%
+22,013
+6,348
+8,019
+15,665
+25,933
+22,013
+33,952
+3,217
+5,140
+6,571
+403
+927
+987
+1,718
+2,705
+33,952
+2,814
+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:
+Discount rate assumptions
+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.
+(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 flow. 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.
+(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.
+0.90%
+0.90%
+15.00
+25.00
+0.85%-0.90%
+0.85% 0.90%
+45.00
+37.00-45.00
+As at 31 December 2017
+As at 31 December 2016
+% of Premium
+RMB Per Policy
+% of Premium
+RMB Per Policy
+Group Life
+As at 31 December 2017
+As at 31 December 2016
+Individual Life
+Process used to decide on assumptions (continued)
+(a)
+14 INSURANCE CONTRACTS (continued)
+Financial Report
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+217
+China Life Insurance Company Limited Annual Report 2017
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+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.
+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 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.
+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.
+3.31%-4.86%
+3.23%-4.68%
+(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 considers risk
+margin for expense assumptions based on information obtained at the end of each reporting period.
+Components of expense assumptions include the cost per policy and percentage of premium as
+follows:
+3,050
+5,855
+Listed in Hong Kong, PRC
+64
+1,783
+2,351
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+Total
+Ceded unearned premiums (Note 14)
+Claims recoverable from reinsurers (Note 14)
+Due from reinsurance companies
+Long-term insurance contracts ceded (Note 14)
+REINSURANCE ASSETS
+As at 31 December 2017, the carrying value of premiums receivable within one year was RMB14,079 million (as
+at 31 December 2016: RMB13,346 million).
+PREMIUMS RECEIVABLE
+123
+12
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+215
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+The fair value of policy loans approximated its carrying value. The fair values of other loans, investment
+contracts at amortised cost and bonds payable 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, and bonds payable were classified as Level 3.
+their fair value was classified as Level 1.
+(iii) Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore,
+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 4.3. The fair value of held-to-maturity securities under Level
+1 was RMB55,137 million and that under Level 2 was 637,847 million as at 31 December 2017 (as at 31
+December 2016: Level 1 RMB76,299 million and Level 2 RMB542,853 million).
+The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+(ii)
+(i)
+11
+527
+125
+104
+911
+15,466
+RMB million
+December 2016
+December 2017
+RMB million
+As at 31
+As at 31
+2,134
+3,046
+1,783
+2,351
+351
+695
+2,134
+3,046
+China Life Insurance Company Limited Annual Report 2017
+Total
+103
+Current
+Non-current
+Total
+13 OTHER ASSETS
+216
+(18,794)
+Investments receivable
+Land use rights
+Disbursements
+Due from related parties
+Prepaid to constructors
+Others
+Total
+Current
+Non-current
+Automated policy loans
+37,614
+After ten years
+Listed in Mainland, PRC
+9.5 Available-for-sale securities
+FINANCIAL ASSETS (continued)
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+210
+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 CIRC. These funds may not be used for any purpose other
+than for paying off debts during liquidation proceedings.
+6,333
+6,333
+4,613
+2,400
+1,720
+3,933
+Available-for-sale securities, at fair value
+Total
+After one year but within five
+Within one year
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+Contractual maturity schedule:
+9.4 Statutory deposits - restricted
+On 6 December 2017, New Fortune Wisdom Limited and New Capital Wisdom Limited, subsidiaries of the
+Company's subsidiary, Ningbo Meishan Bonded Port Area Guo Yang Guo Sheng Investment Partnership
+("Guo Yang Guo Sheng”), entered into a loan agreement with a subsidiary of the Agricultural Bank of
+China. Guo Yang Guo Sheng arranged overseas borrowings backed by domestic deposit transactions with the
+Beijing Xicheng branch of the Agricultural Bank of China. As at 31 December 2017, the amounts of term
+deposits and current deposits are RMB2,000 million and RMB1,247 million, respectively.
+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 the 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 the Agricultural Bank of
+China. As at 31 December 2017, the Company arranged overseas borrowings backed by domestic term
+deposit transactions with the Beijing Xicheng branch of the Agricultural Bank of China with amounts of
+RMB6,861 million, RMB7,080 million and RMB750 million, respectively.
+As at 31 December 2017, term deposits of RMB16.691 billion (2016: RMB13.2 billion) deposited in banks
+for overseas borrowings backed by domestic deposits business are restricted to use.
+538,325
+449,400
+7,700
+344,790
+years
+185,835
+Debt securities
+As at 31
+December 2017
+129,424
+Common stocks
+105,290
+91,344
+Funds
+Equity securities
+399,758
+455,124
+Subtotal
+15,429
+61,669
+Others (i)
+11,321
+430
+Government bonds
+Wealth management products
+13,495
+Subordinated bonds/debts
+188,337
+197,133
+Corporate bonds
+146,310
+157,765
+Government agency bonds
+21,653
+24,632
+RMB million
+December 2016
+As at 31
+RMB million
+16,708
+97,076
+349,524
+2,800
+RMB million
+RMB million
+As at 31
+226,573
+383,504
+134,131
+275,547
+92,442
+107,957
+RMB million
+RMB million
+December 2016
+December 2017
+As at 31
+As at 31
+(i)
+As at 31
+Total
+After five but within ten years
+years
+years
+After one year but within five
+Within one year
+Maturing:
+Total
+Other loans (i)
+Policy loans
+9.2 Loans
+FINANCIAL ASSETS (continued)
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+After ten years
+December 2017
+December 2016
+RMB million
+As at 31
+December 2016
+December 2017
+As at 31
+Total
+After five years but within ten years
+years
+After one year but within five
+Within one year
+Maturing:
+9.3 Term deposits
+FINANCIAL ASSETS (continued)
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+209
+Financial Report
+RMB million
+128,856
+112,592
+132,575
+70,978
+90,556
+100,131
+25,503
+17,500
+383,504
+226,573
+Other loans mainly consisted of different types of asset management products. As at 31 December
+2017, asset management products of RMB44,835 million (as at 31 December 2016: RMB37,679
+million) were owned by the Group, which are issued by CL AMC (including its subsidiaries), a
+subsidiary of the Company. The total assets of those products were RMB62,015 million (as at 31
+December 2016: RMB114,499 million). Meanwhile, the Group also owned asset management
+products of RMB202,255 million (as at 31 December 2016: RMB77,999 million) issued by other
+financial institutions. Asset management products 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. The Group did not guarantee or provide any financing support for other loans, and
+considers that the carrying value of other loans represents its maximum risk exposure.
+During the year ended 31 December 2017, the Group's investment income from the above asset
+management products was RMB10,150 million (2016: RMB6,820 million), and the related asset
+management fee received by AMC (including its subsidiaries) for all asset management products it
+issued was RMB222 million (2016: RMB236 million).
+China Life Insurance Company Limited Annual Report 2017
+31,517
+39,442
+Preferred stocks
+27,880
+As at 31
+As at 31
+Subtotal
+Common stocks
+Funds
+Equity securities
+Subtotal
+Others
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+9.6 Securities at fair value through profit or loss
+FINANCIAL ASSETS (continued)
+December 2017
+RMB million
+9
+Notes to the Consolidated Financial Statements (continued)
+399,758
+455,124
+108,275
+91,532
+113,779
+167,552
+144,443
+153,630
+33,261
+42,410
+As at 31
+December 2016
+RMB million
+As at 31
+December 2017
+RMB million
+China Life Insurance Company Limited Annual Report 2017
+For the year ended 31 December 2017
+Total
+December 2016
+2,081
+Equity securities
+Subtotal
+154,406
+82,891
+19,512
+89
+134,805
+55,823
+Unlisted
+292
+Listed overseas
+26,776
+Listed in Mainland, PRC
+Debt securities
+Total
+209,124
+RMB million
+136,809
+53,918
+40,035
+44,026
+14,683
+9,892
+154,406
+82,891
+3,133
+4,811
+144,131
+66,915
+6,762
+9,084
+380
+54,718
+218
+After five years but within ten years
+After one year but within five years
+Debt securities
+9.5 Available-for-sale securities (continued)
+FINANCIAL ASSETS (continued)
+212
+9
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+211
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+Other available-for-sale securities mainly include unlisted equity investments, private equity funds and
+trust schemes. The Group did not guarantee or provide any financing support for other available-for-
+sale securities, and considered that the carrying value of other available-for-sale securities represents its
+maximum risk exposure.
+(i)
+766,423
+Listed in Mainland, PRC
+810,734
+20,837
+Total
+Others (i)
+Equity securities
+Available-for-sale securities, at cost
+345,828
+334,773
+Subtotal
+30,673
+42,027
+Others (i)
+81,854
+40,327
+Wealth management products
+20,837
+Unlisted
+Subtotal
+Equity securities
+Within one year
+Maturing:
+Debt securities - Contractual maturity schedule
+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 and wealth management products.
+766,423
+810,734
+366,665
+355,610
+250,388
+220,587
+232
+132
+25,034
+41,507
+91,011
+93,384
+399,758
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+Total
+31,651
+As at 31
+As at 31
+December 2016
+RMB million
+44,929
+37,163
+410,195
+362,595
+455,124
+December 2017
+RMB million
+China Life Insurance Company Limited Annual Report 2017
+231,005
+NET REALISED GAINS ON FINANCIAL ASSETS
+Financial liabilities at fair value through profit or loss
+Total
+INSURANCE BENEFITS AND CLAIMS EXPENSES
+(1,542)
+(918)
+8,179
+(6,319)
+Stock appreciation rights
+(179)
+(275)
+(48)
+6,183
+(7,094)
+Gross
+Ceded
+Net
+191
+Equity securities
+Debt securities
+24
+5,992
+42
+6,038
+Total
+Net realised gains on financial assets are from available-for-sale securities.
+During the year ended 31 December 2017, the Group recognised an impairment charge of RMB619 million
+(2016: RMB1,615 million) of available-for-sale funds, an impairment charge of RMB2,024 million (2016:
+RMB898 million) of available-for-sale common stocks, and an impairment charge of RMB114 million (2016:
+RMB143 million) of available-for-sale debt securities, for which the Group determined that objective evidence of
+impairment existed.
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+225
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+23
+NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+For the year ended 31 December
+2017
+RMB million
+2016
+RMB million
+RMB million
+165
+RMB million
+For the year ended 31 December 2017
+27,519
+(250)
+27,269
+Increase in insurance contract liabilities
+127,156
+(537)
+126,619
+Accident and health claims and claim adjustment expenses
+Total
+(1,454)
+407,045
+25
+INVESTMENT CONTRACT BENEFITS
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+26
+FINANCE COSTS
+408,499
+253,157
+(667)
+253,824
+Life insurance death and other benefits
+260,853
+(1,145)
+259,708
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+34,101
+(283)
+33,818
+173,085
+(568)
+172,517
+Total
+468,039
+(1,996)
+466,043
+For the year ended 31 December 2016
+Life insurance death and other benefits
+RMB million
+(2,513)
+(2,643)
+8,505
+STATUTORY INSURANCE FUND
+47,430
+36,836
+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 to the CIRC 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.
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Total
+21 INVESTMENT INCOME
+- 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
+-held-to-maturity securities
+224
+20
+36,836
+1,611
+Stock appreciation rights (Note 31)
+833
+654
+Tax payable
+689
+657
+Interest payable of debt instruments
+Others
+127
+813
+9,553
+7,628
+Total
+Current
+Non-current
+47,430
+36,836
+47,430
+Securities purchased under agreements to resell
+Total
+For the year ended 31 December
+2017
+2016
+RMB million
+Debt securities
+Realised gains
+Impairment
+Subtotal
+Equity securities
+Realised gains
+Impairment
+Subtotal
+For the year ended 31 December
+2017
+RMB million
+2016
+RMB million
+(9)
+(114)
+189
+(143)
+(123)
+46
+2,808
+22
+Interest expenses for bonds payable
+For the year ended 31 December 2017, the interest income included in investment income was RMB94,788
+million (2016: RMB88,876 million). All interest income was accrued using the effective interest method.
+122,727
+RMB million
+30,669
+24,854
+19,608
+17,499
+3,618
+5,683
+27,019
+19,744
+920
+527
+23,827
+27,851
+16,320
+12,018
+746
+971
+109,147
+1,906
+Interest expenses for securities sold under agreements to repurchase
+Interest expenses for interest-bearing loans and borrowings
+226
+(i)
+(ii)
+(iii)
+(1,451)
+(16,686)
+1,184
+(614)
+Total
+RMB million
+1,126
+(16,953)
+943
+12,639
+12,639
+(4,343)
+(4,343)
+- Others
+(54)
+431
+Others
+RMB million
+Investments
+RMB million
+RMB million
+China Life Insurance Company Limited
+Annual Report 2017
+227
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+28 TAXATION (continued)
+(c)
+As at 31 December 2017 and 2016, deferred income tax was calculated in full on temporary differences
+under the liability method using the principal tax rate of 25%. The movements in deferred income tax assets
+and liabilities during the year are as follows:
+Deferred tax assets/(liabilities)
+As at 1 January 2016
+(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
+Insurance
+(54)
+Financial Report
+As at 31 December 2016
+(2,975)
+- Others
+(1,401)
+1
+As at 31 December 2017
+(i)
+(6,737)
+(494)
+2,360
+(1,401)
+(4,871)
+(iii)
+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.
+The deferred tax arising from the investments category is mainly related to the temporary differences of unrealised
+gains/(losses) on available-for-sale securities and securities at fair value through profit or loss, and others.
+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 RMB607 million as at 31 December 2017(as
+at 31 December 2016: RMB807 million). Unrecognised deductible temporary differences of the Group
+amounted to RMB243 million as at 31 December 2017 (as at 31 December 2016: RMB219 million).
+228
+China Life Insurance Company Limited Annual Report 2017
+(ii)
+attributable to participating
+policyholders
+available-for-sale securities
+- Portion of fair value changes on
+1,615
+(7,768)
+As at 1 January 2017
+(6,408)
+(2,975)
+1,615
+(7,768)
+(Charged)/credited to net profit
+1,072
+(1,279)
+745
+538
+(Charged)/credited to other
+comprehensive income
+- Available-for-sale securities
+3,759
+3,759
+(6,408)
+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 brokerages, commissions,
+donations and other expenses that do not meet the criteria for deduction according to the relevant tax regulations.
+4,257
+8,919
+ΤΑΧΑΤΙΟΝ
+For the year ended 31 December
+2017
+2016
+RMB million
+RMB million
+18,741
+15,955
+Remuneration in respect of audit services provided by auditors
+933
+2,357
+1,798
+2,240
+2,083
+(52)
+(582)
+59
+838
+Foreign exchange (gains)/losses
+Depreciation and amortisation
+Contribution to the defined contribution pension plan
+China Life Insurance Company Limited Annual Report 2017
+For the year ended 31 December
+2017
+RMB million
+2016
+RMB million
+1,033
+3,144
+3,126
+1,460
+424
+181
+4,601
+4,767
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+27 PROFIT BEFORE INCOME TAX
+Profit before income tax is stated after charging/(crediting) the following:
+28
+Employee salaries and welfare costs
+Housing benefits
+58
+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:
+For the year ended 31 December
+2017
+RMB million
+2016
+RMB million
+41,671
+23,842
+10,418
+5,961
+(7,847)
+(6,080)
+6,105
+4,259
+6
+58
+(15)
+(49)
+252
+108
+(i)
+Total
+Income tax at the effective tax rate
+Tax losses utilised from previous periods
+Current taxation - Enterprise income tax
+Deferred taxation
+Total tax charges
+For the year ended 31 December
+2017
+RMB million
+2016
+RMB million
+9,457
+5,200
+(538)
+(943)
+8,919
+4,257
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC
+(2016: 25%) is as follows:
+Profit before income tax
+Tax computed at the statutory tax rate
+Non-taxable income (i)
+Expenses not deductible for tax purposes (i)
+Unused tax losses
+Others
+Agent deposits
+Debt securities
+2,668
+Ceded
+Net
+Gross
+Ceded
+Net
+As at 1 January
+10,492
+Gross
+(125)
+7,944
+(87)
+7,857
+Increase
+12,289
+(527)
+11,762
+10,367
+RMB million
+2016
+2017
+RMB million
+27,120
+178
+391
+- Claims arising in prior years
+Total as at 31 December - Gross
+Notified claims
+Incurred but not reported
+Total as at 31 December - Gross
+The table below presents movements in unearned premium reserves:
+13,778
+11,538
+2,672
+2,085
+11,106
+9,453
+13,778
+11,538
+10,492
+(125)
+10,367
+Release
+Accretion of interest
+Change in assumptions
+- Change in discount rates
+- Change in other assumptions (ii)
+2017
+RMB million
+1,825,956
+464,898
+2016
+RMB million
+(379,262)
+1,698,773
+390,438
+(353,048)
+78,232
+73,644
+6,599
+14,262
+2,424
+474
+219
+Release of liabilities (i)
+33,926
+As at 1 January
+Premiums
+(d) Movements in liabilities of long-term insurance contracts
+(10,492)
+125
+(10,367)
+(7,944)
+87
+(7,857)
+As at 31 December
+12,289
+1,032
+11,762
+10,492
+(125)
+10,367
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+14 INSURANCE CONTRACTS (continued)
+The table below presents movements in the liabilities of long-term insurance contracts:
+1,413
+- Claims arising in current year
+(8,877)
+1,847,986
+Recoverable from reinsurers
+Long-term insurance contracts (Note 12)
+(2,351)
+(1,783)
+Short-term insurance contracts
+- Claims and claim adjustment expenses (Note 12)
+2,025,133
+(104)
+- Unearned premiums (Note 12)
+(527)
+(125)
+Total, ceded
+(2,982)
+(2,011)
+Net
+(103)
+10,492
+12,289
+11,538
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+14 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
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+1,999,066
+1,825,956
+13,778
+Long-term insurance contracts
+1,996,715
+1,824,173
+Short-term insurance contracts
+2017
+2016
+RMB million
+RMB million
+2,085
+1,748
+9,453
+7,520
+11,538
+9,268
+Total as at 1 January - Gross
+Cash paid for claims settled
+Cash paid for current year claims
+(21,404)
+(16,364)
+-Cash paid for prior year claims
+(10,460)
+Notified claims
+Incurred but not reported
+Claims incurred
+220
+(c) Movements in liabilities of short-term insurance contracts
+- Claims and claim adjustment expenses
+13,674
+11,435
+- Unearned premiums
+11,762
+10,367
+Total, net
+2,022,151
+1,845,975
+China Life Insurance Company Limited
+Financial Report
+Annual Report 2017
+219
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+14 INSURANCE CONTRACTS (continued)
+The table below presents movements in claims and claim adjustment expense reserve:
+Other movements
+(527)
+(i)
+Total
+China Life Insurance Company Limited Annual Report 2017
+38,000
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+17
+18
+5 November 2022
+BONDS PAYABLE (continued)
+Subordinated bonds are measured at amortised cost as described in Note 2.14.
+SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+Interbank market
+Stock exchange market
+Total
+Maturing:
+Within 30 days
+As at 31 December
+5 November 2012
+29 June 2022
+29 June 2012
+EURIBOR + 3.8% (i)
+3,121
+18,794
+16,170
+(i)
+3.8% when EURIBOR is negative.
+17
+BONDS PAYABLE
+As at 31 December 2017, the carrying value of bonds payable is nil (as at 31 December 2016: the carrying value
+and
+par
+value are RMB37,998 million and RMB38,000 million, respectively).
+Issue date
+Par value
+Maturity date
+Interest rate p.a.
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+4.70%
+4.58%
+28,000
+10,000
+Total
+6 December 2020
+As at 31
+December 2017
+RMB million
+75,002
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+Salary and welfare payable
+10,129
+7,234
+Interest payable to policyholders
+OTHER LIABILITIES
+9,614
+Payable to third party holders of consolidated trust schemes and debt investment schemes
+6,252
+5,488
+Brokerage and commission payable
+5,659
+3,713
+Payable to constructors
+8,006
+19
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+65,479
+12,307
+15,609
+87,309
+81,088
+87,309
+81,088
+87,309
+81,088
+As at 31 December 2017, bonds with a carrying value of RMB79,543 million (as at 31 December 2016:
+RMB76,207 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
+2017, the carrying value of securities deposited in the collateral pool was RMB139,727 million (as at 31 December
+2016: RMB81,280 million). The collateral is restricted from trading during the period of the repurchase
+transaction.
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+223
+Financial Report
+As at 31
+December 2016
+RMB million
+780
+The Company issued the above two subordinated bonds with a maturity term of 10 years to qualified investors
+who met the relevant regulatory requirements. The Company has the right to call the subordinated bonds at
+par at the end of the fifth year after issuance. If the Company does not exercise the call option, the coupon rate
+per annum for the remaining five years are 6.70% and 6.58%, respectively. On 29 June 2017 and 6 November
+2017, the Company exercised the option right to redeem the subordinated bonds issued on 29 June 2012 and 5
+November 2012, and redeemed all of the subordinated bonds registered on the record dates of redemption, with
+the amounts of RMB28,000 million and RMB10,000 million, respectively.
+11 January 2018
+195,706
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+221
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+232,500
+For the year ended 31 December 2017
+The table below presents movements of investment contracts with DPF:
+16
+222
+As at 1 January
+Deposits received
+Deposits withdrawn, payments on death and other benefits
+Policy fees deducted from account balances
+15 INVESTMENT CONTRACTS (continued)
+12
+142,006
+175,335
+12
+(ii)
+1,999,066
+1,825,956
+The release of liabilities mainly consists of release due to death or other termination and related
+expenses, release of residual margin and change of reserves for claims and claim adjustment expenses.
+For the year ended 31 December 2017, the change in other assumptions was mainly caused by
+the change in morbidity rate assumptions of certain products, which increased insurance contract
+liabilities by RMB1,718 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 RMB706 million.
+For the year ended 31 December 2016, the change in other assumptions was mainly caused by
+the change in morbidity rate assumptions of certain products, which increased insurance contract
+liabilities by RMB464 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 RMB10 million.
+15 INVESTMENT CONTRACTS
+Investment contracts with DPF at amortised cost
+1.495%
+At amortised cost
+- At fair value through profit or loss
+Total
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+57,153
+53,688
+Interest credited
+As at 31 December
+Investment contracts without DPF
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+Credit loans
+As at 31
+December 2016
+RMB million
+17 June 2019
+3.54%
+2,413
+2,339
+27 September 2019
+2.30%
+6,338
+6,579
+30 September 2019
+6,142
+6,521
+9 June 2017
+1.50%
+731
+INTEREST-BEARING LOANS AND BORROWINGS
+As at 31
+December 2017
+RMB million
+Interest rate
+2.40%
+53,688
+Maturity date
+2017
+2016
+RMB million
+Total
+53,688
+50,295
+4,829
+RMB million
+(2,510)
+(2,357)
+(37)
+(36)
+1,183
+1,106
+4,680
+57,153
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the
+Transactions between Pension Company and the Company
+Distribution of profits from AMC
+Payment of an asset management fee to AMC
+Transactions between AMC and the Company
+Transaction between other associates and joint
+Distribution of profits from other associates and
+ventures and the Group
+236
+For the year ended 31 December 2017
+(g) Transactions with significant related parties (continued)
+joint ventures to the Group
+year
+2017
+1,154
+Notes
+RMB million
+2016
+RMB million
+1,240
+437
+(ii.e) (viii)
+1,081
+187
+215
+Rental received from Pension Company
+Agency fee received from Pension Company for
+Notes to the Consolidated Financial Statements (continued)
+Marketing fee income for promotion of annuity
+entrusted sales of annuity funds
+ended 31 December
+Financial Report
+ཚུག
+Annual Report 2017
+business from Pension Company
+37
+Property leasing income received from CLI
+Payment of a business management service fee to
+CL Ecommerce
+38
+(vi)
+64
+56
+Transactions between CGB and the Group
+Interest on deposits received from CGB
+Commission expenses charged by CGB
+1,382
+(v)
+92
+685
+235
+42
+Project management fee paid to Sino-Ocean
+Transactions between EAP and the Group
+Contribution to EAP
+553
+248
+252
+27
+38
+55
+60
+368
+700
+337
+Financial Report
+China Life Insurance Company Limited
+Transactions between Sino-Ocean and the Group
+Cash dividend from Sino-Ocean (Note 8)
+Interest payment of corporate bonds received
+from Sino-Ocean
+43
+(2,213)
+(vii)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+Financial Report
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Transactions with significant related parties (continued)
+Notes (continued):
+(ii.a) On 30 December 2015, 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 2016 to 31 December
+2018. 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 and payable on a monthly 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 debt and equity investment schemes, project asset-backed schemes, the principal
+and interests of customised non-standard products) at the beginning and the end of any given month by the rate of
+0.05%, divided by 12. 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) On 28 June 2017, CL Overseas renewed an investment management agreement with AMC HK, effective from
+1 January 2016 to 31 December 2016. 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 yield 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. On 15 December 2017, CL Overseas renewed the agreement with
+AMC HK, effective to the next year when the contract is signed and sealed. The terms are applied in 2017. The
+agreement was subject to an automatic one-year renewal if no objections were raised by both parties with written
+consent in 5 years.
+a
+(1,381)
+(ii.d) On 3 February 2016, the Company and CLI renewed a management agreement of alternative investment of
+insurance funds, which was effective from 1 January 2016 to 30 June 2017. In accordance with the agreement, the
+Company entrusted CLI to engage in specialised 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 0.05%-0.6% according to different ranges of returns and
+without a performance-related bonus; for non-fixed-income projects, the management fee rate was 0.3% and the
+performance-related bonus was linked to the return on comprehensive investment upon expiry of the project. On
+30 June 2017, the Company and CLI renewed a management agreement of alternative investment of insurance
+funds, which is retrospectively effective from 1 January 2017 to 31 December 2018. The management fee rates
+of fixed-income projects and non-fixed-income projects remain the same as those in the previous agreement.
+In addition, the Company adjusts the investment management fees for fixed-income projects and non-fixed-
+income projects based on the annual evaluation results to CLI's performance. The adjustment amount (variable
+management fee) ranges from negative 10% to positive 15% of the investment management fee in the current
+period.
+China Life Insurance Company Limited Annual Report 2017
+237
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+For the year ended 31 December 2017
+Transactions with significant related parties (continued)
+Notes (continued):
+(ii.e) On 29 December 2015, the Company and AMC renewed a renewable agreement for the management of insurance
+funds, effective from 1 January 2016 to 31 December 2018. In accordance with the agreement, the Company
+entrusted AMC to manage and make investments for its insurance funds and paid AMC a fixed service fee and a
+variable service fee. The fixed annual service fee was calculated and payable on a monthly basis, by multiplying
+the average net value of the assets under management by the rate of 0.05%; the variable service fee was payable
+annually, based on the results of performance evaluation, at 20% of the fixed service fee per annum. The service
+fees were determined by the Company and AMC based on an analysis of the cost of service, market practice and the
+size and composition of the asset pool to be managed. Asset management fees charged to the Company by AMC are
+eliminated in the consolidated statement of comprehensive income.
+(ii.f) On 18 September 2016, the Company and AMC HK renewed the offshore investment management service
+agreement, which is effective from 19 September 2016 to 31 December 2018. 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. The asset management fee was calculated at a fixed rate of 0.40% of the portfolio asset value
+and a performance bonus capped at 0.15% of the portfolio asset value for assets managed on a discretionary basis.
+Management fees on assets managed on a non-discretionary basis are calculated at 0.05% of the portfolio asset
+value. The above management fee was calculated based on the net value of the entrusted asset from the monthly
+reports provided by the trustee, without deducting the monthly management fee payable. The fixed management
+fee was calculated monthly and payable quarterly. A performance bonus was calculated and payable on an annual
+basis. Asset management fees charged to the Company by AMC HK are eliminated in the consolidated statement of
+comprehensive income.
+(iii)
+(iv)
+On 8 March 2015, the Company and CLP&C signed a new 2-year 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
+was subject to an automatic one-year renewal if no objections were raised by both parties upon expiry. On 8 March
+2017, the agreement was automatically renewed for one year.
+On 8 March 2015, the Company and CLP&C signed a new 2-year framework insurance agency agreement,
+whereby the Company entrusted CLP&C to act as an agent to sell designated life insurance products in certain
+authorised jurisdictions. The brokerage fee was determined based on market practice. The agreement was subject
+to an automatic one-year renewal if no objections were raised by both parties upon expiry. On 8 March 2017, the
+agreement was automatically renewed for one year.
+On 31 December 2014, the Company signed a property leasing agreement with CLI, effective till 31 December
+2017, pursuant to which CLI leased to the Company certain owned buildings. 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.
+Financial Report
+238
+China Life Insurance Company Limited Annual Report 2017
+298
+Notes to the Consolidated Financial Statements (continued)
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+34
+On 29 December 2014, the Company and CLIC signed a renewable insurance agency agreement, effective from
+1 January 2015 to 31 December 2017. The agreement was subject to an automatic three-year renewal if no
+objections were raised by both parties. 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-transferrable 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 RMB8.00 per policy and (2)
+2.50% 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.
+(i)
+42
+31
+10
+14
+Transactions between AMC HK and the Company
+Payment of an investment management fee to AMC HK
+(ii.f)
+14
+14
+Transactions between Suzhou Pension Company and the Company
+Capital contribution to Suzhou Pension Company
+260
+526
+Transactions between Rui Chong Company and the Company
+to the Company
+Capital contribution to Rui Chong Company
+Transaction between other associates and joint ventures
+and the Company
+Distribution of profits from other associates and joint
+ventures to the Company
+203
+134
+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 Group's other subsidiaries
+3,944
+443
+70
+Notes:
+601
+396
+(ii.c) In 2015, CLP&C signed an agreement for the management of insurance funds with AMC, entrusting AMC to
+manage and make investments for its insurance funds. The agreement was effective from 1 January 2015 to 31
+December 2016. The agreement was subject to an automatic one-year renewal if no objections were raised by
+both parties upon expiry. On 1 January 2017, the agreement was automatically renewed to 31 December 2017. In
+accordance with the agreement, CLP&C paid AMC a fixed service fee and a variable service fee. The fixed service
+fee was calculated and payable on a monthly 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 linked to investment performance.
+Payment of an asset management fee to CLI
+Equity Investment Fund
+Management Co., Limited
+RMB1,730
+RMB1,730
+("Franklin Shenzhen Company")
+(i)
+(ii)
+USD2
+USD2
+In March 2017, the Company completed a RMB260 million capital contribution to Suzhou Pension
+Company, after which the paid-in capital of Suzhou Pension Company increased from RMB1,326
+million to RMB1,586 million. As at 31 December 2017, Suzhou Pension Company completed its
+business registration modification procedure for the registered capital with the amount increased from
+RMB1,060 million to RMB1,991 million.
+In March and July 2017 respectively, the Company completed RMB370 million and RMB231 million
+capital contributions to Rui Chong Company, after which the paid-in capital of Rui Chong Company
+increased from RMB6,199 million to RMB6,800 million.
+(iii) For those subsidiaries which were not set up or invested in Mainland China or incorporated as
+partnership, the legal definition of registered capital is not applicable for them.
+232
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 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 2016
+Amount
+million
+China Life Franklin (Shenzhen)
+("CL Health")
+Management Co., Limited
+China Life (Beijing) Health
+RMB4,600
+RMB4,000
+RMB4,000
+Limited ("Pension Company")
+RMB3,400
+RMB3,400
+China Life (Suzhou) Pension
+and Retirement Investment
+Company Limited
+("Suzhou Pension Company”) (i)
+RMB1,060
+Percentage
+of holding
+RMB931
+CL AMP
+RMB588
+RMB588
+CL Wealth
+RMB200
+RMB200
+Shanghai Rui Chong
+Investment Co., Limited
+("Rui Chong Company") (ii)
+RMB6,800
+RMB6,800
+RMB1,991
+RMB4,600
+Increase
+million
+As at 31 December 2017
+Amount
+million
+RMB2,746
+directly
+74.27%
+directly
+and indirectly
+and indirectly
+China Life Franklin Asset
+HKD130
+50.00%
+HKD130
+50.00%
+Management Company
+indirectly
+indirectly
+Limited ("AMC HK")
+Suzhou Pension Company
+RMB1,326
+100.00%
+RMB260
+RMB1,586
+100.00%
+directly
+directly
+CL AMP
+74.27%
+RMB2,746
+Pension Company
+directly
+Percentage
+of holding
+CLIC
+RMB19,324
+68.37%
+RMB19,324
+68.37%
+Financial Report
+Subsidiaries
+As at 31 December 2016
+Amount
+Percentage
+Decrease
+million
+million
+Increase
+million
+Decrease
+million
+Amount
+AMC
+RMB1,680
+60.00%
+directly
+As at 31 December 2017
+Percentage
+of holding
+million
+RMB1,680
+60.00%
+of holding
+RMB500
+China Life Pension Company
+CLIC
+(14,418)
+Net deferred tax liabilities
+(4,871)
+(7,768)
+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 RMB25,550 million (2016: RMB14,014 million).
+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 2017 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 (2016:
+28,264,705,000 ordinary shares).
+Financial Report
+China Life Insurance Company Limited Annual Report 2017 229
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+31 STOCK APPRECIATION RIGHTS
+32
+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. The exercise prices of stock appreciation rights were the average
+closing price of the shares in the five trading days prior to the date of the 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.
+All the stock appreciation rights awarded were fully vested as at 31 December 2017. As at 31 December 2017,
+there were 55.01 million units outstanding and exercisable (as at 31 December 2016: 55.01 million units). As at
+31 December 2017, the amount of intrinsic value for the vested stock appreciation rights was RMB820 million (as
+at 31 December 2016: RMB641 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 20% to 32%, an expected dividend yield of
+no higher than 3% and a risk-free interest rate ranging from 0.51% to 1.02%.
+The Company recognised a loss of RMB179 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 2017
+(2016: fair value gains of RMB191 million). RMB820 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 2017 (as at 31 December 2016: RMB641 million and RMB13 million), respectively. There was no
+unrecognised compensation cost for the stock appreciation rights as at 31 December 2017 (as at 31 December
+2016: Nil).
+DIVIDENDS
+Pursuant to the shareholders' approval at the Annual General Meeting on 31 May 2017, a final dividend of
+RMB0.24 (inclusive of tax) per ordinary share totalling RMB6,784 million in respect of the year ended 31
+December 2016 was declared and paid in 2017. The dividend has been recorded in the consolidated financial
+statements for the year ended 31 December 2017.
+A distribution of RMB380 million (inclusive of tax) to the holders of Core Tier 2 Capital Securities was approved
+by management in 2017 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 22 March 2018, a final dividend of
+RMB0.40 (inclusive of tax) per ordinary share totalling approximately RMB11,306 million for the year ended
+31 December 2017 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 2017.
+(11,344)
+Subtotal
+(ii.d) (viii)
+- deferred tax liabilities to be settled within 12 months
+For the year ended 31 December 2017
+28 TAXATION (continued)
+(d)
+The analysis of deferred tax assets and deferred tax liabilities is as follows:
+29
+30
+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:
+Financial Report
+As at 31
+As at 31
+December 2016
+RMB million
+1,980
+3,024
+4,493
+3,626
+6,473
+6,650
+- deferred tax liabilities to be settled after 12 months
+(9,131)
+(13,037)
+December 2017
+RMB million
+AMC
+230
+Notes to the Consolidated Financial Statements (continued)
+China Life Investment Holding Company
+Under common control of CLIC
+Limited ("CLI")
+China Life Ecommerce Company Limited
+("CL Ecommerce")
+China Life Enterprise Annuity Fund (“EAP”)
+A pension fund jointly set up by the Company and others
+Under common control of CLIC
+Financial Report
+China Life Insurance Company Limited Annual Report 2017 231
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e) Registered capital of related parties with control relationship and changes during the year
+Name of related party
+As at 31
+December 2016
+Increase
+million
+million
+Decrease
+million
+As at 31
+December 2017
+million
+Under common control of CLIC
+China Life Insurance (Overseas) Company Limited
+Under common control of CLIC
+China Life Real Estate Co., Limited ("CLRE")
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+CLIC
+Location of
+registration Principal business
+Beijing, Insurance services including receipt
+China 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.
+Relationship with
+the Company
+Nature of
+ownership
+China Life Insurance Company Limited Annual Report 2017
+Legal
+Immediate and
+ultimate holding
+company
+State-owned
+Yang
+Mingsheng
+(b) Subsidiaries
+Refer to Note 40(c) for the basic and related information of subsidiaries.
+(c) Associates and joint ventures
+Refer to Note 8 for the basic and related information of associates and joint ventures.
+(d) Other related parties
+Significant related parties
+Relationship with the Company
+representative
+85.03%
+("CL Overseas")
+85.03%
+(Limited Partnership)
+234
+("Wan Sheng") (i)
+Ningbo Meishan Bonded
+(i)
+Port Area Bai Ning
+Investment Partnership
+("Bai Ning") (i)
+RMB1,680
+RMB1,680
+99.98%
+directly
+Guo Yang Guo Sheng, New Capital Wisdom Limited, New Fortune Wisdom Limited, Wisdom Forever Limited
+Partnership, Yuan Shu Yuan Jiu, Yuan Shu Yuan Pin, Wan Sheng, and Bai Ning are new subsidiaries set up or
+invested by the Company in 2017.
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+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
+2017
+2016
+Notes
+RMB million
+directly
+Partnership
+99.998%
+RMB3,900
+USD447
+USD447
+100.00%
+Partnership (i)
+indirectly
+Shanghai Yuan Shu Yuan Jiu
+RMB606
+RMB606
+99.98%
+Investment Management
+directly
+RMB million
+Partnership
+("Yuan Shu Yuan Jiu”) (i)
+Shanghai Yuan Shu Yuan Pin
+RMB606
+RMB606
+Investment Management
+99.98%
+directly
+Partnership
+(Limited Partnership)
+(“Yuan Shu Yuan Pin”) (i)
+Shanghai Wansheng Industry
+RMB3,900
+(Limited Partnership)
+Wisdom Forever Limited
+Transactions with CLIC and its subsidiaries
+(i) (viii)
+Asset management fee received from CLI
+81
+78
+RMB500
+(iv)
+44
+50
+Payment of rental, project fee and other expenses to CLRE
+Property leasing expenses charged by CLI
+135
+69
+Cash dividend from CLP&C (Note 8)
+43
+59
+Rental and a service fee received from CLP&C
+2
+1
+(iii)
+Payment of an agency fee to CLP&C
+2,337
+3,030
+(iii) (viii)
+18
+Agency fee received from CLP&C
+9
+13
+Payment to CLI for purchase of fixed assets
+141
+740
+869
+fee received from CLIC
+(ii.a)
+107
+124
+Payment of dividends from the Company to CLIC
+Distribution of profits from AMC to CLIC
+Asset management fee received from CL Overseas
+4,638
+8,116
+125
+143
+Policy management fee received from CLIC
+(ii.b)
+74
+Asset management
+Payment of insurance premium to CLP&C
+fee received from CLP&C
+(ii.c)
+14
+36
+44
+49
+Claim and other payments received from CLP&C
+16
+119
+indirectly
+Asset management
+New Fortune Wisdom Limited (i)
+New Aldgate Limited
+RMB1,167
+100.00%
+RMB1,167
+100.00%
+directly
+directly
+Glorious Fortune
+100.00%
+100.00%
+Forever Limited
+indirectly
+directly
+CL Hotel Investor, L.P.
+100.00%
+100.00%
+directly
+directly
+Golden Bamboo Limited
+RMB1,734
+100.00%
+100.00%
+directly
+directly
+directly
+Sunny Bamboo Limited
+indirectly
+RMB200
+directly
+directly
+100.00%
+100.00%
+RMB6,800
+RMB601
+100.00%
+RMB6,199
+Rui Chong Company
+indirectly
+indirectly
+CL Wealth
+100.00%
+King Phoenix Tree Limited
+directly
+directly
+100.00%
+100.00%
+Golden Phoenix Tree Limited
+indirectly
+indirectly
+100.00%
+RMB200
+100.00%
+100.00%
+RMB1,632
+RMB1,734
+RMB1,632
+directly
+100.00%
+indirectly
+directly
+USD0.6
+100.00%
+indirectly
+China Life Insurance Company Limited Annual Report 2017
+233
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+100.00%
+(f) Percentages of holding of related parties with control relationship and changes during the
+year (continued)
+As at 31 December 2016
+Amount
+million
+Percentage
+of holding
+Increase
+million
+Decrease
+million
+million
+As at 31 December 2017
+Amount Percentage
+of holding
+Guo Yang Guo Sheng (i)
+RMB3,250
+RMB3,250
+New Capital Wisdom Limited (i)
+99.997%
+directly
+100.00%
+indirectly
+Subsidiaries (continued)
+Franklin Shenzhen Company
+USD0.6
+100.00%
+indirectly
+RMB2,176
+100.00%
+directly
+directly
+China Century Core
+USD894
+Fund Limited
+Fortune Bamboo Limited
+USD2
+USD896
+100.00%
+100.00%
+indirectly
+CL Health
+RMB1,730
+100.00%
+directly
+directly
+100.00%
+RMB1,730
+100.00%
+("Century Core Fund")
+RMB2,176
+The future minimum lease payments under non-cancellable operating leases are as follows:
+As at 31
+December
+1
+91,784
+45,079
+2016
+(b) Operating lease commitments - - as lessee
+As at 31
+December
+5,462
+5,202
+39,616
+86,582
+RMB million
+RMB million
+2017
+As at 31
+December
+463
+Later than one year but not later than five years
+Total
+China Life Insurance Company Limited Annual Report 2017
+As at 31
+December
+2017
+2016
+RMB million
+RMB million
+254
+Later than five years
+186
+267
+76
+10
+741
+Total
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+411
+Not later than one year
+Later than one year but not later than five years
+As at 31
+December
+Later than five years
+Total
+As at 31
+December
+2017
+2016
+RMB million
+RMB million
+784
+Not later than one year
+632
+764
+44
+27
+1,929
+1,423
+The operating lease payments charged to profit before income tax for the year ended 31 December 2017
+were RMB1,204 million (2016: RMB994 million).
+(c) Operating lease commitments - as lessor
+The future minimum rentals receivable under non-cancellable operating leases are as follows:
+1,101
+Property, plant and equipment
+Others
+239
+Contracted, but not provided for
+Financial Report
+240
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 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 are
+non-interest-bearing, unsecured and have no fixed repayment dates except for deposits with CGB, interbank
+certificates of deposits of CGB, wealth management products 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
+(viii) 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.
+Amount due from CLI
+Amount due from CLRE
+Amount deposited with CGB
+Interbank certificates of deposits of CGB
+Wealth management products 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
+Statement of financial position
+The resulting balances due from and to subsidiaries of the Company
+Amount due from Pension Company
+As at 31
+Amount due to CLI
+Investments
+(vii) On 28 November 2016, the Company and Pension Company signed a new agency agreement for the distribution
+and customer service of enterprise annuity funds, the pension management business and the occupational pension
+management business. The agreement was effective from 28 November 2016 and expired on 31 December
+2017. The agreement is subject to an automatic one-year renewal if no objections were raised by either party
+upon expiry. 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 service, 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 is, 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 is 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 is in accordance with the provision of annual promotional plans, which should be determined
+by both parties on a separate occasion. The commissions charged to the Company by Pension Company are
+eliminated in the consolidated statement of the comprehensive income of the Group.
+Transactions with significant related parties (continued)
+investments:
+246
+The Group had the following capital commitments relating to property development projects and
+(a) Capital commitments
+39 COMMITMENTS
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+245
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+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 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
+2017 and 2016, 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.
+Notes to the Consolidated Financial Statements (continued)
+Notes (continued):
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Transactions with significant related parties (continued)
+Notes (continued):
+(v)
+(vi)
+On 12 August 2016, 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, and 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 withdrawn policy
+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 for two years starting from the signing date and is subject to an automatic
+one-year renewal with no limitation of times if no objections were raised by either party upon expiry.
+On 23 March 2016, the Company and CGB signed another insurance agency agreement to distribute group
+insurance products. The group insurance products suitable for distribution through bancassurance channels
+are included in the agreement. CGB provides agency services, including the sale of group insurance products,
+collecting premiums and paying benefits, and so on. 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
+withdrawn policy premiums in the hesitation period, by the responding fixed commission rate. The commission
+rates for various insurance products sold by CGB are agreed by referring to comparable quoted market prices
+of independent third-parties. The commissions are payable on a monthly basis. The agreement is effective on 1
+January 2016 for two years and is subject to an automatic one-year renewal if no objections were raised by either
+party upon expiry.
+On 26 October 2016, the Company and CL Ecommerce renewed a one year agreement for managing the regional
+telemarketing centre, which was effective from 1 January 2016 and expired on 31 December 2016. The agreement
+is subject to an automatic one-year renewal if no objections are raised by both parties. On 1 January 2017, the
+agreement was automatically renewed for one year. Pursuant to the agreement, the Company entrusted CL
+Ecommerce to manage the operation of its telemarketing centre, and paid the management fee accordingly. The
+total amount of the management fee is not expected to exceed RMB100 million, but is still pending for negotiation
+between the two parties based on the actual circumstance.
+China Life Insurance Company Limited
+Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Financial Report
+As at 31 December 2017
+Policyholder dividends payable
+As at 31
+December 2017
+17
+37,998
+Securities sold under agreements to repurchase
+40(n)
+85,316
+81,039
+Bonds payable
+Annuity and other insurance balances payable
+39,038
+Premiums received in advance
+18,505
+35,252
+Other liabilities
+40(0)
+44,820
+87,725
+83,910
+195,706
+Statement of financial position (continued)
+As at 31 December 2017
+As at 31
+December 2017
+Notes
+RMB million
+As at 31
+December 2016
+RMB million
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+14
+2,025,133
+1,847,986
+Investment contracts
+15
+232,500
+39,678
+30,556
+Deferred tax liabilities
+40(p)
+7,791
+Reserves
+40(r)
+144,240
+144,116
+Retained earnings
+110,863
+100,840
+Total equity
+291,159
+281,012
+Total liabilities and equity
+2,831,375
+December 2017
+RMB million
+2,645,487
+28,265
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+28,265
+7,791
+Other equity instruments
+3,991
+7,543
+6,081
+1,141
+20
+282
+491
+Current income tax liabilities
+Statutory insurance fund
+Total liabilities
+Equity
+2,540,216
+2,364,475
+Share capital
+34
+40(q)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+40(e)
+716,346
+594,054
+Loans
+40(f)
+381,253
+221,535
+Term deposits
+40(g)
+444,279
+535,361
+Statutory deposits-restricted
+40(h)
+5,653
+5,653
+Held-to-maturity securities
+Available-for-sale securities
+76,427
+40(d)
+Notes
+RMB million
+As at 31
+December 2016
+RMB million
+Property, plant and equipment
+40(a)
+36,313
+29,722
+Investment properties
+40(b)
+1,401
+Investments in subsidiaries
+40(c)
+39,662
+27,353
+Investments in associates and joint ventures
+104,039
+ASSETS
+40(i)
+758,802
+Total assets
+12
+3,046
+2,134
+40(m)
+30,480
+14,252
+44,186
+62,606
+2,831,375
+2,645,487
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+247
+Cash and cash equivalents
+797,108
+Other assets
+13,421
+Securities at fair value through profit or loss
+40(j)
+127,544
+204,046
+Securities purchased under agreements to resell
+40(k)
+35,761
+43,100
+Accrued investment income
+40(1)
+50,183
+55,774
+Premiums receivable
+11
+14,121
+Reinsurance assets
+As at 31
+December 2016
+RMB million
+1,927
+529
+3,218
+Appropriation to reserves
+(7,912)
+(847)
+21
+(7,086)
+3,300
+Other comprehensive income for the year
+7
+27,241
+28,225
+30,166
+(738)
+5,100
+145,007
+8,445
+Others
+135
+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 RMB3,218 million for the year ended 31 December 2017 (2016:
+RMB1,927 million).
+(c)
+(b)
+145,675
+(840)
+30,541
+30,152
+33,384
+(717)
+(1,986)
+1,281
+53,860
+(a)
+As at 31 December 2017
+135
+1,146
+53,860
+As at 1 January 2017
+145,007
+Other comprehensive income for the year
+163,381
+25,239
+24,787
+28,239
+180
+29,963
+1,113
+53,860
+As at 1 January 2016
+(c)
+(b)
+(a)
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+Total
+(24,863)
+Approved at the Annual General Meeting in May 2017, the Company appropriated RMB1,927 million to the
+discretionary reserve fund for the year ended 31 December 2016 based on net profit under CAS (2016: RMB3,438
+million).
+(918)
+Appropriation to reserves
+27,241
+28,225
+30,166
+(738)
+5,100
+1,146
+53,860
+As at 31 December 2016
+33
+33
+Others
+7,367
+2,002
+3,438
+1,927
+(25,774)
+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 2017, the Company appropriated 10% of net profit under CAS
+which amounted to RMB3,218 million to the general reserve for future uncertain catastrophes, which cannot be used for
+dividend distribution or conversion to share capital increment (2016: RMB1,927 million). In addition, pursuant to the
+CAS, the Group appropriated RMB82 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2016: RMB75 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 subsequent years.
+244
+of consolidated structured entities
+Changes arising from losing control
+(497)
+(497)
+Foreign exchange movement
+(33,558)
+(5,671)
+764
+6,228
+(38,000)
+3,121
+Changes from financing cash flows
+141,557
+813
+5,488
+Interest expense
+81,088
+2
+18,794
+248
+588
+493
+As at 31
+December
+2016
+RMB million
+RMB million
+As at 31
+December
+2017
+Pending lawsuits
+The following is a summary of the significant contingent liabilities:
+PROVISIONS AND CONTINGENCIES
+112,482
+127
+6,252
+87,309
+4,987
+4,985
+At 31 December 2017
+operations
+37,998
+At 1 January 2017
+Other liability -
+and debt
+trust schemes
+consolidated
+holders of
+liability -
+payable to
+third party
+Other
+Securities
+Interest-
+38
+Changes in liabilities arising from financing activities
+37 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+interest payable
+related to
+16,170
+bearing
+loans and
+RMB million
+RMB million
+RMB million
+Total
+activities
+schemes
+repurchase
+RMB million
+RMB million
+RMB million
+payable
+borrowings
+financing
+investment
+agreements to
+Bonds
+sold under
+reserve
+fund
+fund
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+241
+Financial Report
+China Life Insurance Company Limited Annual Report 2017
+The total compensation package for the Company's key management personnel for the year ended 31
+December 2017 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 2016 has been approved by the relevant authorities. The total compensation of 2016 was RMB28 million,
+including a deferred payment about RMB6 million.
+28
+18
+Salaries and other benefits
+RMB million
+RMB million
+2016
+ended 31 December
+year
+2017
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the
+(j)
+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.
+Owned by other equity holders
+Owned by CLIC (i)
+As at 31 December 2017, the Company's share capital was as follows:
+28,265
+28,264,705,000
+28,265
+28,264,705,000
+Ordinary shares of RMB1 each
+Registered, authorised, issued and fully paid
+RMB million
+As at 31 December 2016
+No. of shares
+RMB million
+As at 31 December 2017
+No. of shares
+34 SHARE CAPITAL
+As at 31 December 2017, 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 2017, a large portion of its group insurance business of the Group were 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.
+Transactions with state-owned enterprises
+Including: Domestic listed
+(i) Key management personnel compensation
+(604)
+330
+199
+26,342
+33,385
+2
+2
+(206)
+(265)
+12
+9
+(6)
+332
+428
+47
+122
+1,041
+(4)
+365
+592
+(207)
+(17)
+(19)
+47
+57
+Amount due to AMC HK
+Amount due to AMC
+Amount due to Pension Company
+(66)
+(17)
+མྱེ❁པུË
+(78)
+6
+8
+643
+(31)
+420
+Overseas listed (ii)
+(i)
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+China Life Insurance Company Limited Annual Report 2017 243
+Financial Report
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company
+for the year ended 31 December 2017. As at 31 December 2017, there were no accumulated distributions
+unpaid attributable to other equity instrument holders of the Company.
+4,027
+4,377
+4,027
+4,377
+7,791
+7,791
+295,830
+313,142
+303,621
+320,933
+For the year ended 31 December 2017
+As at 31
+December 2016
+RMB million
+36 RESERVES
+Share of other
+foreign
+General
+reserve
+reserve
+the equity
+method
+for-sale
+securities
+reserves
+Other
+Share
+premium
+translating
+Statutory Discretionary
+under
+available-
+Exchange
+differences on
+Unrealised comprehensive
+gains/
+income
+of investees
+(losses) from
+Total
+As at 31
+December 2017
+RMB million
+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
+242
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock
+Exchange.
+28,265
+28,264,705,000
+7,441
+7,441,175,000
+1,500
+1,500,000,000
+8,941
+8,941,175,000
+19,324
+19,323,530,000
+As at 31 December 2017
+RMB million
+No. of shares
+All shares owned by CLIC are domestic listed shares.
+China Life Insurance Company Limited Annual Report 2017
+Equity attributable to ordinary equity holders of non-controlling interests
+Notes to the Consolidated Financial Statements (continued)
+35 OTHER EQUITY INSTRUMENTS
+Equity attributable to equity holders of the Company
+(b) Equity attributable to equity holders
+The Company issued Core Tier 2 Capital Securities at par with the nominal value of USD1,280 million on
+3 July 2015, and obtained an approval to list such securities on the Stock Exchange of Hong Kong Limited,
+effective on 6 July 2015. The Securities are 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. The initial distribution rate for the first five
+interest-bearing years is 4.00%, and the Company may redeem the securities at its option at the end of the
+fifth year after issuance. If the Company does not exercise this option, the rate of distribution will be reset
+based on comparable US treasury yield plus a margin of 2.294% at the end of the fifth year and every five
+years thereafter.
+7,791
+7,791
+7,791
+Total
+7,791
+Core Tier 2 Capital Securities
+As at 31
+December 2017
+RMB million
+Decrease
+RMB million
+Increase
+RMB million
+December 2016
+RMB million
+As at 31
+(a) Basic information
+For the year ended 31 December 2017
+China Life Insurance Company Limited Annual Report 2017
+1,247
+2,415
+After one year but within five years
+Within one year
+Contractual maturity schedule:
+(h) Statutory deposits - restricted
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+As at 31 December 2017, the term deposits of RMB14.691 billion (2016: RMB13.2 billion) applying for an
+overseas borrowing backed by domestic deposits business are restricted to use. Please refer to Note 9.3 for
+the details.
+535,361
+444,279
+7,700
+Total
+344,790
+95,155
+346,324
+2,800
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+221,535
+381,253
+17,500
+31,517
+24,303
+90,350
+69,753
+130,913
+182,871
+As at 31
+December 2017
+As at 31
+December 2016
+RMB million
+Wealth management products
+16,708
+13,495
+Subordinated bonds/debts
+187,287
+195,244
+Corporate bonds
+146,310
+157,689
+Government agency bonds
+21,198
+24,230
+As at 31
+December 2016
+RMB million
+December 2017
+RMB million
+As at 31
+Government bonds
+Debt securities
+Available-for-sale securities, at fair value
+(i) Available-for-sale securities
+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 CIRC. These funds may not be used for any
+purpose other than for paying off debts during liquidation proceedings.
+5,653
+5,653
+4,053
+2,100
+1,600
+3,553
+RMB million
+109,979
+128,473
+RMB million
+RMB million
+(g)
+256
+(f) Loans
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+255
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+594,054
+716,346
+260,547
+292,913
+231,391
+288,260
+71,502
+112,788
+30,614
+22,385
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+Total
+After ten years
+After five years but within ten years
+Policy loans
+11,000
+Other loans
+Maturing:
+December 2016
+As at 31
+221,535
+As at 31
+December 2017
+381,253
+129,093
+273,296
+92,442
+107,957
+RMB million
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+Total
+After five years but within ten years
+years
+After one year but within five
+Within one year
+Maturing:
+Term deposits
+Total
+After ten years
+years
+After five but within ten years
+years
+After one year but within five
+Within one year
+Total
+years
+Others (i)
+11,683
+32,941
+41,765
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+China Life Insurance Company Limited Annual Report 2017
+Total
+After ten years
+After five years but within ten years
+years
+After one year but within five
+Within one year
+149,895
+Maturing:
+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 and wealth management products.
+758,802
+797,108
+364,616
+353,905
+248,594
+218,917
+232
+132
+25,034
+41,507
+90,756
+Debt securities - Contractual maturity schedule
+143,840
+163,319
+113,161
+The fair value of investment properties of the Company as at 31 December 2017 amounted to RMB2,688
+million (as at 31 December 2016: RMB2,377 million), which was estimated by the Company having regards
+to valuations performed by an independent appraiser. The investment properties were classified as Level 3 in
+the fair value hierarchy.
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investments in subsidiaries
+Unlisted investments at cost
+As at
+31 December
+2017
+As at
+31 December
+2016
+RMB million
+RMB million
+39,662
+27,353
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2017:
+Place of incorporation
+Name
+and operation
+Percentage of
+equity interest held
+Registered capital
+Principal activities
+AMC
+394,186
+443,203
+104,244
+88,224
+93,349
+394,186
+443,203
+357,495
+20,759
+20,759
+Others (i)
+Equity securities
+Available-for-sale securities, at cost
+343,857
+333,146
+Subtotal
+29,885
+41,123
+Others (i)
+81,544
+40,119
+Wealth management products
+27,880
+31,651
+Preferred stocks
+100,116
+129,388
+Common stocks
+104,432
+90,865
+Funds
+Equity securities
+394,186
+443,203
+Subtotal
+Total
+52,545
+797,108
+Financial Report
+398,875
+36,691
+44,328
+As at 31
+December 2016
+RMB million
+RMB million
+As at 31
+December 2017
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+Unlisted
+Listed in Mainland, PRC
+Debt securities
+258
+Other available-for-sale securities mainly include unlisted equity investments and private equity
+funds, etc. The Company did not guarantee or provide any financing support for other available-for-
+sale securities, and considers that the carrying value of other available-for-sale securities represents its
+maximum risk exposure.
+(i)
+(i) Available-for-sale securities (continued)
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+Annual Report 2017 257
+China Life Insurance Company Limited
+758,802
+2,377
+After one year but within five
+Maturing:
+Not applicable
+100.00% indirectly
+The British Virgin Islands
+The British Virgin Islands
+New Capital Wisdom Limited
+New Fortune Wisdom Limited
+Wisdom Forever Limited
+Partnership
+Investment
+Not applicable
+99.997% directly
+PRC
+Investment
+USD2 million
+100.00% indirectly
+PRC
+Investment
+Health management
+100.00% directly
+PRC
+Franklin Shenzhen Company
+Guo Yang Guo Sheng
+CL Health
+Investment
+Not applicable
+100.00% indirectly
+The British
+Cayman Islands
+Century Core Fund
+Investment
+Not applicable
+100.00% directly
+RMB1,730 million
+100.00% indirectly
+Not applicable
+Investment
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+Non-controlling interests in subsidiaries are not significant to the Company.
+Investment
+Not applicable
+99.98% directly
+PRC
+Bai Ning
+Investment
+Not applicable
+99.998% directly
+PRC
+Wan Sheng
+Investment
+Not applicable
+99.98% directly
+PRC
+Yuan Shu Yuan Pin
+Investment
+Not applicable
+99.98% directly
+PRC
+Yuan Shu Yuan Jiu
+Investment
+Not applicable
+100.00% indirectly
+The British
+Cayman Islands
+The British Virgin Islands
+Investment
+Not applicable
+100.00% directly
+100.00% directly
+Hong Kong, PRC
+Golden Phoenix Tree Limited
+Investment in
+retirement properties
+Fund management
+Financial service
+Asset management
+Asset management
+Pension and annuity
+RMB200 million
+Not applicable
+RMB1,991 million
+100.00% indirectly
+PRC
+CL Wealth
+RMB588 million
+85.03% indirectly
+PRC
+CL AMP
+100.00% directly
+PRC
+Suzhou Pension Company
+50.00% indirectly
+Hong Kong, PRC
+AMC HK
+and indirectly
+RMB3,400 million
+74.27% directly
+PRC
+Pension Company
+RMB4,000 million
+Not applicable
+253
+Investment
+The British Jersey Island
+The British Virgin Islands
+Investment
+Not applicable
+100.00% directly
+The British Virgin Islands
+Investment
+Not applicable
+100.00% directly
+USA
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+Glorious Fortune
+Forever Limited
+CL Hotel Investor, L.P.
+Golden Bamboo Limited
+Sunny Bamboo Limited
+Fortune Bamboo Limited
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+Investment
+RMB6,800 million
+100.00% directly
+PRC
+New Aldgate Limited
+Rui Chong Company
+Investment
+Not applicable
+100.00% indirectly
+King Phoenix Tree Limited
+Within one year
+Financial Report
+For the year ended 31 December 2017
+Debt securities
+(e) Held-to-maturity securities
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+76,427
+104,039
+48,617
+27,612
+27,810
+76,427
+RMB million
+Government bonds
+RMB million
+2017
+China Life Insurance Company Limited Annual Report 2017
+254
+As at 31 December
+Investments in associates and joint ventures
+As at 1 January
+(d) Investments in associates and joint ventures
+Investment management
+RMB5,000 million
+99.98% directly
+Jiao Yin Guo Xin CLI – China
+Nonferrous Metal Collective
+Fund Trust Scheme
+Group Loan Collective Fund
+Trust Scheme
+2016
+Government agency bonds
+Corporate bonds
+Subordinated bonds/debts
+Debt securities-Contractual maturity schedule
+Unlisted debt securities include those traded on the Chinese interbank market.
+The estimated fair value of all held-to-maturity securities was RMB692,282 million as at 31 December 2017
+(as at 31 December 2016: RMB618,436 million).
+594,054
+716,346
+529,862
+624,715
+64,192
+91,631
+594,054
+716,346
+150,089
+148,494
+177,768
+200,178
+169,001
+241,808
+97,196
+125,866
+RMB million
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+Total
+Listed in Mainland, PRC
+Unlisted
+Debt securities
+Total
+Investment management
+RMB5,000 million
+99.98% directly
+Kun Lun Trust • Jizhong Energy
+RMB10,000 million
+99.99% directly
+Jiao Yin Guo Xin China Aluminium
+Debt-to-Equity Swap Investment
+Scheme
+Investment management
+RMB10,000 million
+100.00% directly
+Investment management
+RMB10,000 million
+100.00% directly
+China Life-China Hua Neng
+Trust Loan Collective Funds
+Trust Scheme
+Communications Construction
+No. 1 Collective Fund Trust Scheme
+Shan Guo Tou Jing Tou Corporate
+Investment management
+RMB10,001 million
+99.99% directly
+Investment management
+RMB11,099 million
+88.02% directly
+Shang Xin-Ningbo Wu Lu Si Qiao
+PPP Collective Fund Trust Scheme
+Kun Lun Trust Tianjin Urban
+Trust/investments received
+Percentage of shares held
+Name
+Principal activities
+(ii) The table below presents the basic information of the Company's major consolidated structured
+entities as at 31 December 2017:
+(c) Investments in subsidiaries (continued)
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Investment management
+Notes to the Consolidated Financial Statements (continued)
+Co., Ltd. Supply-side Reform
+Collective Fund Trust Scheme
+Jiao Yin Guo Xin Shaanxi Coal and
+Chemical Industry Group Co., Ltd.
+Debt-to-Equity Swap Collective
+RMB10,000 million
+Trust Scheme
+Rights Investment Collective Fund
+Investment management
+RMB5,400 million
+99.98% directly
+CITIC Trust CGB Trust Beneficial
+Debt Investment Scheme
+Investment management
+RMB6,000 million
+100.00% directly
+China Life - Yanzhou Coal Mining
+Trust Scheme
+Group Loans Collective Fund
+Investment management
+RMB6,000 million
+100.00% directly
+Zhong Xin Jing Cheng Tianjin Port
+Fund Trust Scheme
+Debt-to-Equity Swap Collective
+Qing Hai Yellow River
+Investment management
+RMB8,000 million
+100.00% directly
+Chongqing Trust Fund⚫ China Life
+Fund Trust Scheme
+and indirectly
+Investment management
+75.00% directly
+60.00% directly
+PRC
+1,296
+1,694
+22,606
+As at 31 December 2017
+29,722
+477
+10,387
+422
+1,860
+16,576
+As at 1 January 2017
+Net book value
+(24)
+(24)
+As at 31 December 2017
+Disposals
+year
+Charge for the
+(24)
+(24)
+As at 1 January 2017
+Impairment
+(16,107)
+(1,179)
+(940)
+(4,990)
+(8,998)
+As at 31 December 2017
+691
+46
+443
+(14,941)
+(1,857)
+10,951
+36,313
+(8)
+256
+(1,438)
+1,174
+Transfers upon completion
+40,262
+1,282
+7,544
+1,368
+6,481
+23,587
+As at 1 January 2016
+RMB million
+Total
+construction improvements
+Leasehold
+Assets
+under
+Motor
+vehicles
+fixtures
+Buildings
+Office
+equipment
+furniture and
+Cost
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+249
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+619
+Additions
+(1,048)
+(177)
+444
+170
+416
+70
+Additions
+(86)
+312
+(7,365)
+49
+6,918
+Transfers upon completion
+44,687
+1,525
+10,387
+1,247
+6,682
+24,688
+As at 1 January 2017
+RMB million
+Total
+construction improvements
+Leasehold
+Assets
+under
+Motor
+vehicles
+Office
+equipment
+furniture and
+fixtures
+Buildings
+Cost
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+8,280
+186
+9
+Transfers into investment
+15
+Disposals
+(143)
+(612)
+(925)
+year
+Charge for the
+(983)
+(4,822)
+(8,088)
+As at 1 January 2017
+Accumulated depreciation
+52,444
+1,798
+10,951
+1,383
+6,684
+31,628
+As at 31 December 2017
+(897)
+(48)
+(146)
+(192)
+(463)
+(48)
+Disposals
+(205)
+(205)
+properties
+8,945
+31
+1,405
+177
+1,247
+(317)
+(51)
+(266)
+1,718
+1,513
+205
+Buildings
+RMB million
+As at 31 December 2017
+As at 1 January 2017
+Fair value
+As at 31 December 2017
+As at 1 January 2017
+Net book value
+As at 31 December 2017
+year
+As at 1 January 2017
+Charge for the
+Accumulated depreciation
+As at 31 December 2017
+Additions
+As at 1 January 2017
+Cost
+(b) Investment properties
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+250
+29,722
+477
+1,401
+10,387
+2,377
+Financial Report
+631
+(266)
+(49)
+(217)
+1,513
+1,513
+Buildings
+RMB million
+As at 31 December 2016
+Fair value
+As at 31 December 2016
+As at 1 January 2016
+Net book value
+As at 31 December 2016
+year
+Charge for the
+As at 1 January 2016
+Accumulated depreciation
+As at 31 December 2016
+Additions
+As at 1 January 2016
+Cost
+252
+(b) Investment properties (continued)
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+251
+China Life Insurance Company Limited Annual Report 2017
+2,688
+422
+As at 1 January 2016
+16,576
+(129)
+(596)
+(875)
+year
+Charge for the
+(13,817)
+(926)
+(990)
+(4,652)
+(7,249)
+As at 1 January 2016
+Accumulated depreciation
+44,687
+1,525
+10,387
+1,405
+6,682
+24,688
+As at 31 December 2016
+(1,173)
+(26)
+(473)
+(140)
+(430)
+Disposals
+5,606
+13
+1,860
+4,754
+(144)
+(1,744)
+(104)
+36
+Disposals
+As at 31 December 2016
+356
+26,421
+378
+1,829
+16,314
+As at 1 January 2016
+Net book value
+(24)
+(24)
+As at 31 December 2016
+Disposals
+year
+7,544
+(24)
+Charge for the
+136
+620
+As at 31 December 2016
+(8,088)
+(4,822)
+22
+426
+(1,048)
+(14,941)
+Impairment
+As at 1 January 2016
+(983)
+(24)
+1,148.0
+Miao Ping
+RMB thousand
+in total
+Pension
+scheme
+Total
+included
+Actual paid
+1,148.0
+payment
+included
+in total
+in kind contributions
+688.8
+688.8
+125.6
+119.2
+2,540.8
+1,852.0
+Shi Xiangming
+571.6
+786.5
+1,358.1
+190.2
+110.1
+2,296.0
+Benefits
+1,655.8
+payment
+87.6
+1,658.4
+1,364.6
+1,253.7
+195.2
+127.2
+1,576.1
+796.7
+129.0
+79.2
+1,004.9
+1,341.7
+379.2
+196.4
+117.7
+46.8
+493.9
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December
+2016 are as follows:
+Deferred
+Deferred
+Basic
+Performance
+related
+Name
+salaries
+bonuses
+Subtotal of
+salary
+income salary income
+included in
+1,658.4
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+Zhan Zhong
+The emoluments fell within the following bands:
+RMB0RMB1,000,000
+RMB1,000,001 - RMB2,000,000
+RMB2,000,001 - RMB3,000,000
+RMB3,000,001 - RMB4,000,000
+RMB4,000,001 - RMB4,500,000
+2017
+RMB thousand
+2016
+RMB thousand
+7,060
+508
+6,861
+565
+7,568
+7,426
+Number of individuals
+For the year ended 31 December
+2017
+2016
+5
+5
+For the year ended 31 December 2017, no emoluments have been 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 as compensation for loss of office (2016: 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.
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+129.0
+Total
+Xiong Junhong
+268
+For the year ended 31 December 2017, the five individuals whose emoluments were the highest in the
+Company include one director and three supervisors (2016: one director and four supervisors).
+593.6
+1,007.0 1,600.6
+189.8
+114.7
+1,905.1
+1,905.1
+Wang Cuifei
+527.5
+640.4
+1,167.9
+191.4
+101.5
+1,460.8
+1,460.8
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2016 were
+restated based on the finalised amounts determined during 2017.
+The supervisors received the compensation amounts disclosed above during their term of office in 2017 and
+2016.
+Financial Report
+China Life Insurance Company Limited
+Annual Report 2017
+267
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+41 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+(c) Five highest paid individuals
+Details of the remuneration of the five highest paid individuals are as follows:
+1,148.0
+320.0
+Total
+2,800
+840.0
+125.7
+119.9
+3,045.6
+840.0
+2,205.6
+Miao Jianmin
+Zhang Xiangxian
+Wang Sidong
+Anthony Francis Neoh
+125.0
+25.0
+150.0
+150.0
+150.0
+Chang Tso Tung Stephen
+250.0
+70.0
+320.0
+320.0
+Huang Yiping
+41.7
+11.6
+53.3
+1,400.0
+53.3
+1,400.0
+Yang Mingsheng
+For the year ended 31 December 2017
+41 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
+ended 31 December 2016 are as follows:
+year
+Basic
+Performance
+related
+Subtotal of
+salary
+Deferred
+payment
+included in
+Pension
+Deferred
+payment
+Actual paid
+Benefits
+scheme
+included
+included
+Name
+salaries
+bonuses
+income salary income
+in kind contributions
+Total
+in total
+in total
+RMB thousand
+Lin Dairen
+RMB thousand
+53.3
+1,134.0
+266.7
+266.7
+Leung Oi-Sie Elsie
+125.0
+25.0
+150.0
+150.0
+150.0
+266
+The compensation amounts disclosed above for these directors and the chief executive for the year ended 31
+December 2016 were restated based on the finalised amounts determined during 2017.
+The directors and chief executive received the compensation amounts disclosed above during their term of
+office in 2017 and 2016.
+In addition to the directors' emoluments disclosed above, certain directors of the Company receive
+emoluments from CLIC, the amounts of which have not been apportioned between their services to the
+Company and their services to CLIC.
+China Life Insurance Company Limited Annual Report 2017
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2017
+41 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 2017 are as
+follows:
+Name
+Miao Ping
+Shi Xiangming
+Xiong Junhong
+Zhan Zhong
+Wang Cuifei
+Li Guodong
+Remuneration
+paid
+Benefits in kind
+Pension scheme
+contributions
+266.7
+Xu Hengping
+58.4
+Tang Xin
+1,134.0
+2,268.0
+680.4
+125.6
+119.2
+2,512.8
+680.4
+1,832.4
+Xu Haifeng
+1,134.0
+1,134.0
+2,268.0
+680.4
+125.3
+116.5
+2,509.8
+680.4
+1,829.4
+Liu Jiade
+Robinson Drake Pike
+250.0
+70.0
+320.0
+320.0
+320.0
+208.3
+Financial Report
+67.9
+For the year ended 31 December 2017
+Appropriation to reserves
+(24,848)
+(24,848)
+161,672
+25,027
+24,787
+28,191
+29,807
+53,860
+income for the year
+Other comprehensive
+As at 1 January 2016
+RMB million
+1,927
+RMB million
+reserve
+reserve fund
+RMB million
+General
+Discretionary
+Statutory
+reserve fund
+RMB million
+securities
+RMB million
+premium
+RMB million
+Share available-for-sale
+Unrealised
+gains/(losses)
+from
+(r) Reserves
+Refer to Note 32 for the information of distribution to other equity instruments holders for the year ended
+31 December 2017. As at 31 December 2017, there were no accumulated distributions unpaid attributable
+to other equity instruments holders.
+7,791
+273,221
+Total
+7,791
+3,438
+7,292
+30,152
+33,336
+(3,280)
+53,860
+As at 31 December 2017
+8,363
+3,218
+1,927
+3,218
+Appropriation to reserves
+(8,239)
+(8,239)
+income for the year
+1,927
+Other comprehensive
+26,954
+28,225
+30,118
+4,959
+53,860
+As at 1 January 2017
+144,116
+26,954
+28,225
+30,118
+4,959
+53,860
+As at 31 December 2016
+144,116
+283,368
+Equity attributable to other equity instruments holders of the Company
+Equity attributable to ordinary equity holders of the Company
+- deferred tax assets to be recovered within 12 months
+- deferred tax assets to be recovered after 12 months
+Deferred tax assets:
+The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
+(3,991)
+2,266
+(1,401)
+4,148
+480
+4,148
+(6,737)
+(1,401)
+(ii)
+Subtotal
+As at 31 December 2017
+available-for-sale securities
+- Portion of fair value changes on
+- Available-for-sale securities
+comprehensive income
+(Charged)/credited to other
+805
+731
+(998)
+1,072
+(Charged)/credited to net profit
+(7,543)
+1,535
+(2,670)
+attributable to participating
+policyholders
+As at 31
+December 2017
+RMB million
+As at 31
+December 2016
+RMB million
+Equity attributable to equity holders of the Company
+281,012
+291,159
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(q) Other equity instruments
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited Annual Report 2017
+262
+(7,543)
+(3,991)
+Net deferred tax liabilities
+(13,862)
+(10,116)
+Subtotal
+(1,310)
+(2,133)
+(12,552)
+(7,983)
+- deferred tax liabilities to be settled after 12 months
+- deferred tax liabilities to be settled within 12 months
+Deferred tax liabilities:
+6,319
+6,125
+3,561
+4,410
+2,758
+1,715
+30,172
+(6,408)
+144,240
+Provisions and contingencies
+Liu Huimin (iii)
+Liu Jiade (ii)
+Miao Jianmin (i)
+1,618.8
+87.6
+131.2
+1,400.0
+Lin Dairen
+Yang Mingsheng
+RMB thousand
+Total
+Pension scheme
+contributions
+Benefits in kind
+Yin Zhaojun (iv)
+paid
+Name
+year
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the
+ended 31 December 2017 are as follows:
+(a) Directors' and chief executive's emoluments
+The total compensation package for the directors, supervisors, chief executive and senior management for the year
+ended 31 December 2017 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 2017 consolidated financial statements. The final compensation will be disclosed in a
+separate announcement when determined.
+41 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+542
+344
+10
+9
+324
+Remuneration
+177
+Wang Sidong
+320.0
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+(iv) Yin Zhaojun was appointed as non-executive director on 31 July 2017.
+(iii) Liu Huimin was appointed as non-executive director on 31 July 2017.
+Liu Jiade resigned as non-executive director on 8 August 2017.
+(ii)
+(i) Miao Jianmin resigned as non-executive director on 7 April 2017.
+300.0
+300.0
+Leung Oi-Sie Elsie
+320.0
+Chang Tso Tung Stephen
+320.0
+320.0
+320.0
+Robinson Drake Pike
+1,350.6
+87.6
+129.0
+1,134.0
+Xu Haifeng
+1,350.6
+87.6
+129.0
+1,134.0
+320.0
+Tang Xin
+208
+158
+RMB million
+As at 31
+December 2016
+RMB million
+As at 31
+December 2017
+RMB million
+Operating lease commitments - as lessee
+Total
+Others
+Property, plant and equipment
+Investments
+Contracted, but not provided for
+Capital commitments of the Company relating to property development projects and investments:
+(ii)
+(i) Capital commitments
+264
+(t) Commitments
+265
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+263
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+588
+493
+As at 31
+December 2016
+RMB million
+December 2017
+RMB million
+As at 31
+Pending lawsuits
+The following is a summary of the significant contingent liabilities:
+For the year ended 31 December 2017
+86,926
+40,804
+4,588
+As at 31
+December 2016
+As at 31
+December 2017
+RMB million
+China Life Insurance Company Limited Annual Report 2017
+Total
+Later than one year but not later than five years
+Later than five years
+Not later than one year
+The future minimum rentals receivable under non-cancellable operating leases are as follows:
+1,379
+1,873
+27
+44
+761
+1,080
+591
+749
+RMB million
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+(iii) Operating lease commitments - as lessor
+Total
+years
+Later than one year but not later than five
+Later than five years
+Not later than one year
+The future minimum lease payments under non-cancellable operating leases are as follows:
+45,053
+91,514
+1
+4,248
+(s)
+As at 1 January 2017
+Xu Hengping
+1,535
+Disbursements
+Automated policy loans
+Land use rights
+Investments receivable
+(m) Other assets
+Total
+Current
+Non-current
+Total
+Others
+Debt securities
+Bank deposits
+Accrued investment income
+Total
+Due from related parties
+After 90 days
+Maturing:
+(1)
+(k) Securities purchased under agreements to sell
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+259
+China Life Insurance Company Limited Annual Report 2017
+Financial Report
+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.
+204,046
+127,544
+Within 30 days
+50,092
+Others
+Current
+Non-current
+11,142
+5,822
+44,632
+44,361
+55,774
+50,183
+2,528
+4,116
+17,613
+21,288
+35,633
+24,779
+RMB million
+Total
+RMB million
+December 2017
+As at 31
+43,100
+35,761
+43,100
+35,631
+130
+RMB million
+RMB million
+As at 31
+December 2016
+As at 31
+December 2017
+China Life Insurance Company Limited Annual Report 2017
+260
+Total
+As at 31
+December 2016
+50,699
+10,395
+6,587
+8,682
+153,954
+76,845
+3,133
+4,323
+143,871
+61,516
+6,578
+8,985
+372
+2,021
+RMB million
+RMB million
+14,093
+As at 31
+December 2016
+Common stocks
+Funds
+Equity securities
+Subtotal
+Others
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+Securities at fair value through profit or loss
+(j)
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(7,543)
+Subtotal
+42,017
+35,999
+50,699
+6,284
+7,187
+74
+79
+33,339
+36,846
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+153,954
+76,845
+89
+134,379
+51,579
+Unlisted
+292
+Listed overseas
+19,486
+24,974
+Listed in Mainland, PRC
+Debt securities
+Total
+204,046
+127,544
+50,092
+50,183
+55,774
+As at 31
+December 2017
+RMB million
+Financial Report
+261
+Annual Report 2017
+China Life Insurance Company Limited
+Financial Report
+30,556
+39,678
+Total
+30,556
+39,678
+Non-current
+Current
+30,556
+Notes to the Consolidated Financial Statements (continued)
+39,678
+7,652
+9,046
+Others
+810
+78
+Interest payable of debt instruments
+620
+639
+Tax payable
+654
+833
+Stock appreciation rights (Note 31)
+1,611
+Total
+For the year ended 31 December 2017
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(p) Deferred tax liabilities
+(2,670)
+(6,408)
+As at 31
+December 2017
+As at 31 December 2016
+(4,343)
+(4,343)
+policyholders
+available-for-sale securities
+- Portion of fair value changes on
+12,626
+12,626
+- Available-for-sale securities
+comprehensive income
+(16,883)
+1,057
+463
+1,208
+1,072
+(16,504)
+(1,451)
+(614)
+Total
+RMB million
+Others
+RMB million
+Investments
+RMB million
+Insurance
+RMB million
+(Charged)/credited to other
+(Charged)/credited to net profit
+As at 1 January 2016
+Deferred tax assets/(liabilities)
+The movements in deferred tax assets and liabilities during the year are as follows:
+(i)
+1,906
+Agent deposits
+attributable to participating
+2,633
+Stock exchange market
+Interbank market
+40 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(n) Securities sold under agreements to repurchase
+For the year ended 31 December 2017
+Notes to the Consolidated Financial Statements (continued)
+14,252
+30,480
+5,768
+5,694
+8,484
+24,786
+14,252
+30,480
+Total
+2,320
+846
+876
+1,718
+2,704
+2,814
+3,050
+5,671
+5,605
+15,466
+As at 31
+1,024
+December 2016
+RMB million
+2,779
+Maturing:
+883
+Total
+Payable to constructors
+6,466
+3,713
+9,270
+8,006
+Within 30 days
+9,614
+Salary and welfare payable
+Interest payable to policyholders
+As at 31
+December 2016
+RMB million
+As at 31
+December 2017
+RMB million
+(o) Other liabilities
+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 2017, the carrying value of securities deposited in the collateral pool was RMB139,314
+million (as at 31 December 2016: RMB81,280 million). The collateral is restricted from trading during the
+period of the repurchase transaction.
+Brokerage and commission payable
+As at 31 December 2017, bonds with a carrying value of RMB78,140 million (as at 31 December 2016:
+RMB76,157 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.
+65,430
+85,316
+81,039
+85,316
+81,039
+85,316
+15,609
+11,633
+81,039
+73,683
+RMB million
+RMB million
+5,659
+As at 31
+December 2016
+As at 31
+December 2017
+Mr. Cui Yu.
+The cover photo of the printed version of this report was photographed by
+成己为人
+In case of any discrepancy between the Chinese version and the English version of
+this report, the Chinese version shall prevail; in case of any discrepancy between
+成人达己
+the printed version and the website version of this report, the website version shall
+prevail.
+80
+4,368
+Single
+811
+1,064
+First-year business of long-term insurance
+15,191
+18,586
+Other Channels¹
+18,782
+20,840
+Short-term insurance business
+703
+Single
+999
+Renewal business
+859
+943
+First-year regular
+3,425
+90
+4,571
+5,430
+First-year regular
+Exclusive Individual Agent Channel. During the Reporting Period, the exclusive individual agent
+channel maintained a strong growth with its business structure continuously optimized and the
+quality of its sales force further enhanced. Gross written premiums from the exclusive individual
+agent channel amounted to RMB353,668 million, an increase of 25.4% year-on-year. In particular,
+first-year regular premiums from the exclusive individual agent channel increased by 21.1% year-
+on-year, first-year regular premiums with ten years or longer payment duration increased by 26.9%
+year-on-year, and the percentages of first-year regular premiums with five years or longer payment
+duration and first-year regular premiums with ten years or longer payment duration in first-year
+regular premiums were 86.50% and 65.16%, respectively. Short-term insurance premiums increased
+721
+0
+28,193
+2016
+First-year business of long-term insurance
+11.5%
+31,444
+2017
+(RMB million)
+exclusive individual agent channel
+First-year regular premiums from the
+by 26.1% year-on-year. Renewal premiums from the exclusive individual agent channel increased
+by 26.9% year-on-year, which significantly drove gross written premiums from this channel. With
+adherence to the development strategy of improving the quality and expanding the size of its sales
+force, the Company upgraded its system of cultivation for new agents and agent managers and put
+more efforts in the improvement of their quality while maintaining the steady growth of its sales
+force. As at the end of the Reporting Period, the number of exclusive individual agents reached 1.578
+million, a 5.6% increase from the end of 2016, and the average productive agents on a quarterly basis
+in the exclusive individual agent channel increased by 29.8% year-on-year, showing a positive trend
+for the quality of its sales force.
+China Life Insurance Company Limited Annual Report 2017
+Other channels mainly include supplementary major medical expenses insurance business, tele-sales, etc.
+The Company's channel premium breakdown was presented based on the separate groups of sales personnels
+including exclusive individual agent team, group insurance sales representatives, bancassurance sales team
+and other distribution channels.
+430,498
+511,966
+2.
+1.
+Notes:
+Total
+13,220
+15,881
+Short-term insurance business
+1,160
+1,641
+Renewal business
+984
+24,915
+74,813
+Group Insurance Channel
+Single
+90,629
+First-year business of long-term insurance
+282,136
+353,668
+Exclusive Individual Agent Channel
+2016
+2017
+RMB million
+For the year ended 31 December
+Gross written premiums categorized by channel
+2.
+24
+Management Discussion
+and Analysis
+23
+Annual Report 2017
+Management Discussion
+and Analysis
+China Life Insurance Company Limited
+80,000
+70,000
+10,000
+60,000
+50,000
+389
+26,207
+283
+90,240
+561
+894
+Short-term insurance business
+21,813
+31,880
+Renewal business
+17,835
+20,954
+First-year regular
+68,047
+59,777
+Single
+85,882
+80,731
+First-year business of long-term insurance
+108,256
+113,505
+Bancassurance Channel
+7,497
+9,453
+Short-term insurance business
+199,826
+253,586
+Renewal business
+74,530
+First-year regular
+20,000
+100,000
+26.9%
+20,000
+15,000
+10,000
+5,000
+0
+Group Insurance Channel. By closely following national
+strategies, the group insurance channel actively played
+the role in offering services for people's livelihood,
+consistently promoted the diversification of business
+development, and effectively pushed forward the steady
+development of its various businesses. During the
+Reporting Period, gross written premiums from the
+group insurance channel amounted to RMB26,207
+million, an increase of 5.2% year-on-year. Short-
+term insurance premiums from the group insurance channel amounted to RMB20,840 million, an
+increase of 11.0% year-on-year. As at the end of the Reporting Period, the number of direct sales
+representatives reached over 0.104 million, an increase of 21.4% from the end of 2016.
+6,133
+18,782
+12.5%
+11.0%
+5,367
+25,000
+20,840
+Gross written premiums from the
+group insurance channel
+2016
+2017
+Bancassurance Channel. In 2017, the bancassurance
+channel put more efforts in business transformation.
+While further controlling the scale of single premium
+business, the Company strengthened the development
+of regular premium business to improve the value
+contributed by bancassurance channel. During the
+Reporting Period, gross written premiums from the
+bancassurance channel were RMB113,505 million,
+an increase of 4.8% year-on-year. In particular, single
+premiums were RMB59,777 million, a decrease of
+12.2% year-on-year, first-year regular premiums were RMB20,954 million, an increase of 17.5%
+year-on-year, and renewal premiums were RMB31,880 million, an increase of 46.2% year-on-year.
+First-year regular premiums with ten years or longer payment duration were RMB6,139 million,
+an increase of 46.3% year-on-year. The percentage of first-year regular premiums with five years or
+longer payment duration in first-year regular premiums was 55.9%. The value of one year's sales of
+the bancassurance channel increased by 150.4% year-on-year, with a rise of 5.6 percentage points
+of its proportion in the value of one year's sales of the Company. The bancassurance channel kept
+on expanding the electronic bank sales channels, such as online banking, self-service terminals and
+mobile banking, etc., to enhance its service network, as a result of which the regular premium business
+operated through the channels of major banks and postal offices achieved a fast growth. As at the end
+of the Reporting Period, the number of sales representatives in the bancassurance channel reached
+0.339 million, an increase of 43.9% from the end of 2016. The average active insurance planners on a
+monthly basis in the bancassurance channel increased by 11.3% year-on-year.
+■Single premiums ■First-year regular premiums ■Renewal premiums
+120,000
+80,000
+17,835 21,813
+46.2%
+17.5%
+60,000
+(RMB million)
+30.000
+Short-term insurance premiums
+■Long-term insurance premiums
+Comprehensive
+investment yield
+40.000
+Net
+investment yield
+Gross
+investment yield
+0.00%
+2.43%
+1.00%
+2.00%
+3.00%
+4.00%
+4.55%
+4.66%
+4.61%
+5.00%
+4.91%
+5.16%
+Investment yield
+6.00%
+In 2017, the global economy continued to recover with ongoing expansion and mild inflation in general,
+and the developed economies were inclined to tighten their monetary policies. The Chinese economy
+maintained a stable growth with its structure continuously optimized and both quality and efficiency
+further improved. In the context of preventing risks and deleveraging in the financial industry, the Chinese
+government maintained a prudent and moderate monetary policy and intensely introduced a variety of
+regulatory policies. Bond yield increased significantly, and A Share market experienced obvious structural
+differentiation. In 2017, the Company seized the opportunity of the interest rate hike and increased its
+allocation in bonds with long duration and debt-type financial products. The Company maintained its
+allocation in equity investment in the open market at a reasonable level and seized structural opportunities,
+and also attached great importance to the value of allocation of stocks in the Hong Kong market. The
+Company actively pursued good investment opportunities, such as infrastructure, supply-side reforms and
+debt-to-equity swap, etc., to broaden the sources of its incomes. As at the end of the Reporting Period, the
+Company's investment assets reached RMB2,591,652 million, an increase of 5.6% from the end of 2016. In
+2017, the Company's gross investment income reached RMB129,021 million, an increase of RMB20,870
+million from 2016 and an increase of 19.3% year-on-year; and the gross investment yield was 5.16%, an
+increase of 0.55 percentage point from 2016; the net investment yield was 4.91%, an increase of 0.25
+percentage point from 2016; the gross investment yield including net share of profit of associates and joint
+ventures was 5.16%, an increase of 0.47 percentage point from 2016; the comprehensive investment yield
+taking into account the current net fair value changes of available-for-sale securities recognised in other
+comprehensive income³ was 4.55%, an increase of 2.12 percentage points from 2016.
+(III) Asset Management
+and Analysis
+Management Discussion
+China Life Insurance Company Limited Annual Report 2017
+26
+26
+Other Business Channels. During the Reporting Period, gross written premiums from other channels were
+RMB18,586 million, an increase of 22.3% year-on-year. The Company actively and steadily developed its
+supplementary major medical expenses insurance business and basic social healthcare programs entrusted
+by local governments, maintaining its leading position in the market. In particular, 31 branches at the
+provincial level carried out more than 260 supplementary major medical expenses insurance programs,
+providing services to 420 million urban and rural residents, and carried out administration for over 400
+basic social healthcare programs, covering more than 90 million people. The Company actively responded
+to the pilot long-term care insurance programs and won the bids for seven projects. In addition, the
+Company actively promoted the pilot program of tax-advantaged health insurance throughout China and
+carried out online sales with the premiums and number of policies from internet sales increasing rapidly.
+40,000
+58,796
+20,000
+68,047
+■First-year regular premiums with payment
+duration less than 5 years
+■First-year regular premiums with payment
+■First-year regular premiums with 10 years or longer payment
+duration
+65.16%
+62.17%
+24.03%
+2016
+13.80%
+21.34% 2017
+13.50%
+duration from 5 to 9 years
+agent
+Structure breakdown of first-year regular
+■First-year regular premiums with 10 years or longer payment
+duration
+100,000
+90.000
+80,000
+■First-year regular premiums with payment
+duration less than 10 years
+60.000 70,000
+50.000
+40,000
+30,000
+46,337
+premiums from the exclusive individual
+channel
+Size expansion and quality improvement of the
+exclusive individual agents
+2017
+12.2%
+31,880
+20,954
+59,777
+(RMB million)
+bancassurance channel
+Long-term premiums from the
+2016
+2017
+Management Discussion
+and Analysis
+25
+Management Discussion
+and Analysis
+China Life Insurance Company Limited Annual Report 2017
+quarterly basis in the exclusive
+individual agent channel increased
+by 29.8% year-on-year
+the average productive agents on a
+increased by 5.6%
+the number of exclusive
+individual agents
+21.1%
+1.578 million in total
+Company was
+agents of the
+exclusive individual
+the number of
+0
+30,000
+652,057
+2.46
+10,000
+Policy Persistency Rate (14 months) (%)
+Policy Persistency Rate (26 months) (%)
+375
+410
+2,610
+6,536
+Group insurance channel
+Bancassurance channel
+46,326
+53,170
+channel
+agent
+Note 2
+Including: Exclusive individual
+60,117
+Value of one year's sales Note 1
+19,127
+32,253
+Net profit attributable to equity holders of the Company
+108,151
+129,021
+Gross investment income
+51,378
+66,003
+years or longer payment duration
+49,311
+Note 2
+90.90
+90.20
+Continuous improvement in business value. In
+2017, the value of one year's sales of the Company
+was RMB60,117 million, an increase of 21.9% year-
+on-year. As at 31 December 2017, the embedded
+value of the Company was RMB734,172 million,
+an increase of 12.6% year-on-year; the Company
+had approximately 268 million long-term insurance
+policies in-force, an increase of 8.9% year-on-year;
+and the surrender rate was 4.13%, an increase
+of 0.59 percentage point year-on-year. During
+the Reporting Period, the Policy Persistency Rate (14 months and 26 months) reached 90.90% and 85.70%,
+respectively.
+21.9%
+60,117
+Value of one year's sales
+(RMB million)
+2017
+Management Discussion
+and Analysis
+21
+Annual Report 2017
+China Life Insurance Company Limited
+Management Discussion
+and Analysis
+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.
+734,172
+2.68
+31 December 2017 31 December 2016
+As at
+As at
+2.
+Numbers may not be additive due to rounding.
+1.
+Notes:
+Number of in-force policies (hundred million)
+Embedded value
+85.90
+85.70
+First-year regular premiums with ten
+Constant optimization in premiums structure.
+During the Reporting Period, out of the premiums
+from new policies, first-year regular premiums
+amounted to RMB113,121 million, an increase of
+93,945
+Including: First-year regular premiums
+3
+In 2017, facing the complicated and changing external environment and fierce market competition, the Company
+actively implemented an innovation-driven development strategy, adhered to the value-oriented principle, adopted
+multiple measures, sped up business development and promoted transformation and upgrade by adhering to the
+operating guideline of “prioritizing value, strengthening sales force, optimizing business structure, achieving stable
+growth and safeguarding against risks". The Company operated in a generally sound and prudent manner, with
+its business maintaining a rapid growth and its sales force expanding with better quality. During the Reporting
+Period, the Company's gross written premiums were RMB511,966 million, an increase of 18.9% year-on-year.
+The Company's market share³ was approximately 19.7%, maintaining the first place in life insurance industry in
+China. With the investment yield growing steadily and the business value and profitability improving significantly,
+the Company achieved sound and fast development.
+From left to right: Mr. Zhan Zhong, Mr. Zhao Peng, Mr. Zhao Lijun, Mr. Xu Haifeng, Mr. Lin Dairen, Mr. Xu Hengping,
+Mr. Li Mingguang, Mr. Xiao Jianyou, Mr. Ruan Qi, Ms. Yang Hong
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Management Discussion
+and Analysis
+42
+Future Prospect and Risk Analysis
+42
+Social Responsibility
+Performance of the Corporate
+2017
+40
+31
+20
+20
+Other Analysis
+Statements
+Consolidated Financial
+Analysis of Major Items of the
+Operations in 2017
+Review of Business
+Management
+Discussion and Analysis
+■2016 ■2017
+40
+2016
+Gross written premiums
+(RMB million)
+511,966
+206,996
+223,860
+Premiums from new policies
+430,498
+511,966
+Gross written premiums
+2016
+2017
+RMB million
+(I) Key Performance Indicators
+REVIEW OF BUSINESS OPERATIONS IN 2017
+I.
+China Life Insurance Company Limited Annual Report 2017
+20
+20
+Calculated according to the premium data of life insurance companies in 2017 released by the CIRC.
+18.9%
+600,000
+500,000
+400,000
+300.000
+200.000
+100,000
+0
+430,498
+113,121
+2016
+49,311
+0
+21,869
+26,863
+Renewal business
+6,289
+7,721
+First-year regular
+25,852
+33,124
+Single
+32,141
+40,845
+Accident Insurance Business
+First-year business
+67,708
+Health Insurance Business
+201,315
+260,913
+Renewal business
+87,617
+105,256
+First-year regular
+72,973
+63,653
+160,590
+54,010
+14,436
+14,583
+First-year business
+0
+25.4%
+54,010
+67,708
+2016
+2017
+(RMB million)
+insurance business
+Gross written premiums from the health
+During the Reporting Period, gross written premiums from the life insurance business of the
+Company amounted to RMB429,822 million, an increase of 18.8% year-on-year. In particular,
+first-year regular premiums were RMB105,256 million, an increase of 20.1% year-on-year, and the
+percentage of first-year regular premiums in first-year premiums was 62.32%, an increase of 7.76
+percentage points year-on-year. Single premiums were RMB63,653 million, a decrease of 12.8% year-
+on-year, and renewal premiums were RMB260,913 million, an increase of 29.6% year-on-year. Gross
+written premiums from the health insurance business amounted to RMB67,708 million, an increase
+of 25.4% year-on-year. Gross written premiums from the accident insurance business amounted to
+RMB14,436 million, basically remaining at the same level of 2016.
+Note: Single premiums in the above table include premiums from short-term insurance business.
+430,498
+511,966
+Total
+318
+330
+Renewal business
+39
+144
+First-year regular
+14,226
+13,962
+Single
+14,265
+14,106
+168,909
+361,905
+429,822
+Single
+20.4% year-on-year, and single premiums amounted
+to RMB63,671 million, a decrease of 12.8% year-
+on-year. First-year regular premiums with ten years
+or longer payment duration reached RMB66,003
+million, an increase of 28.5% year-on-year. Renewal
+premiums amounted to RMB288,106 million, an
+increase of 28.9% year-on-year. The percentage of first-year regular premiums in long-term first-year premiums,
+the percentage of first-year regular premiums with ten years or longer payment duration in first-year regular
+premiums and the percentage of renewal premiums in gross written premiums increased by 7.71, 3.66 and 4.35
+percentage points, respectively. The first-year regular business and renewal business became stronger driving forces,
+which further optimized the premium structure and reinforced the sustainable development of the Company.
+Single premiums
+■First-year regular premiums with 10 years or longer payment
+duration
+Short-term premiums
+Renewal premiums
+350,000
+300,000
+250,000
+200.000
+150,000
+100,000
+50.000
+450,000
+First-year regular premiums with payment
+duration less than 10 years
+500,000
+400.000
+28.9%
+288,106
+223,502
+72,991 40,060 42,567 51,378
+28.5%
+12.8% 17.5% 10.7%
+0
+2016
+63,671 47,068 47,118 66,003
+2017
+Gross written premiums structure
+(RMB million)
+10,000 20,000 30,000 40,000 50,000 60,000 70,000
+2017
+20.000
+Gross investment income
+(RMB million)
+19.3%
+First-year business
+Life Insurance Business
+2016
+2017
+RMB million
+year ended 31 December
+For the
+1.
+Gross written premiums categorized by business
+(II) Insurance Business
+China Life Insurance Company Limited Annual Report 2017
+22
+22
+Surrender rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premium
+income of long-term insurance contracts during the period)
+140,000
+120,000
+100,000
+80,000
+60,000
+40,000
+20,000
+0
+108,151
+2016
+Significant increase in the Company's profit. In
+2017, interest income from investment portfolios
+achieved a stable growth, and the net fair value
+gains through profit or loss increased greatly.
+The Company's gross investment income was
+RMB129,021 million, an increase of 19.3% year-
+on-year. Due to the impact of a fairly fast increase
+in investment income and the update on the
+discount rate assumption for reserves of traditional insurance contracts, net profit attributable to equity holders of
+the Company during the Reporting Period was RMB32,253 million, an increase of 68.6% year-on-year.
+129,021
+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 beginning of the period - Securities sold under agreements to repurchase at the beginning of the period + Investment assets
+at the end of the period - Securities sold under agreements to repurchase at the end of the period)/2)
+94,515
+27
+0.05%
+1,191
+0.12%
+3,064
+Investment properties
+3.23%
+79,390
+3.64%
+Other equity investments
+3.34%
+81,854
+1.56%
+40,327
+products
+Bank wealth management
+4.89%
+119,973
+3.91%
+101,236
+Funds⭑
+5.71%
+Cash and others
+140,166
+84,771
+110,584
+China Life Insurance Company Limited Annual Report 2017
+China Life Insurance Company Limited Annual Report 2017
+Cash and others include cash, cash at banks, short-term bank deposits and securities purchased under
+agreements to resell.
+Other equity investments include private equity funds, unlisted equities, preference shares, equity
+investment plans, and specialized asset management plans, etc.
+million, respectively.
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money
+market funds as at 31 December 2017 and 31 December 2016 were RMB6,942 million and RMB13,609
+Other fixed-maturity investments include policy loans, statutory deposits-restricted, bank wealth
+management products, and interbank certificates of deposits, etc.
+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.
+The figures as at the end of last year were adjusted on the same basis.
+6.
+5.
+4.
+3.
+2.
+1.
+Notes:
+100.00%
+2,453,283
+100.00%
+2,591,652
+4.51%
+3.27%
+6.69%
+Total
+Common stocks
+Term deposits
+78.27%
+1,920,125
+80.81%
+2,094,289
+Fixed-maturity investments
+Percentage
+Amount
+Percentage
+Amount
+As at 31 December 2017
+RMB million
+Investment category
+As at the end of the Reporting Period, our investment assets categorized by investment object are set
+out as below:
+Investment Portfolios
+1.
+28
+Management Discussion
+and Analysis
+173,450
+22
+449,400
+17.34%
+As at 31 December 2016¹
+21.94%
+17.17%
+421,383
+538,325
+15.80%
+409,528
+Equity investments
+5.32%
+5.96%
+154,522
+investments³
+Other fixed-maturity
+130,532
+5.38%
+131,880
+11.65%
+301,761
+Debt-type financial products²
+45.63%
+1,119,388
+45.86%
+1,188,606
+Bonds
+4.
+3.
+2.
+Notes:
+5.16%
+and Analysis
+Management Discussion
+4.69%
+Gross investment yield including net share
+of profit of associates and joint ventures
+5.
+4.61%
+6.
+China Life Insurance Company Limited Annual Report 2017
+The figures for the same period of last year were adjusted on the same basis.
+Net investment income includes interest income from debt investments, interest income from deposits,
+dividend and bonus from equity investments, interest income from loans, and net income from investment
+properties, etc.
+Gross investment income = Net investment income + Net realized gains on financial assets + Net fair value
+gains through profit or loss
+Gross investment income including net share of profit of associates and joint ventures = Gross investment
+income + Net share of profit of associates and joint ventures
+-
+Net investment yield = (Net investment income Interest paid for securities sold under agreements to
+repurchase)/((Investment assets at the beginning of the period
+Securities sold under agreements to
+repurchase at the beginning of the period + Investment assets at the end of the period – Securities sold under
+agreements to repurchase at the end of the period)/2)
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements
+to repurchase)/((Investment assets at the beginning of the period - Securities sold under agreements to
+repurchase at the beginning of the period + Investment assets at the end of the period – Securities sold under
+agreements to repurchase at the end of the period)/2)
+Gross investment yield including net share of profit of associates and joint ventures = (Gross investment
+income + Net share of profit of associates and joint ventures – Interest paid for securities sold under
+agreements to repurchase)/((Investment assets at the beginning of the period + Investments in associates
+and joint ventures at the beginning of the period - Securities sold under agreements to repurchase at
+the beginning of the period + Investment assets at the end of the period + Investments in associates and
+joint ventures at the end of the period - Securities sold under agreements to repurchase at the end of the
+period)/2)
+29
+and Analysis
+5.16%
+Management Discussion
+7.
+Gross investment yield
+2017
+4.91%
+3.
+6,333
+In 2017, by seizing the opportunity of the interest rate hike, the Company increased its allocation
+in fixed income assets and increased moderately in stock investments. Among the major types of
+investments, the percentage of investment in bonds increased to 45.86% from 45.63% as at the end
+of 2016, the percentage of term deposits changed to 17.34% from 21.94% as at the end of 2016, the
+percentage of investment in stocks and funds (excluding money market funds) increased to 10.33%
+from 10.05% as at the end of 2016, and the percentage of investment in debt-type financial products
+increased to 11.65% from 5.38% as at the end of 2016.
+2.
+Investment Income
+For the year ended 31 December
+RMB million
+2016¹
+Net investment income²
+122,796
+109,207
++Net realized gains on financial assets
+42
+6,038
++Net fair value gains through profit or loss
+6,183
+(7,094)
+Gross investment income³
+129,021
+108,151
++Net share of profit of associates and joint ventures
+7,143
+5,855
+Gross investment income including net share
+of profit of associates and joint ventures
+136,164
+114,006
+Net investment yield'
+4.66%
+The balances of the Company's fixed income investment and equity investment increased along
+with the continuous expansion of its investment scale. In 2017, the interest income from investment
+portfolios grew steadily, the net fair value gains through profit or loss increased, and the gross
+investment income increased by 19.3% from 2016. During the Reporting Period, the Company's net
+investment income was RMB122,796 million, an increase of RMB13,589 million from 2016, and the
+net investment yield was 4.91%, an increase of 0.25 percentage point from 2016; the gross investment
+income was RMB129,021 million, an increase of RMB20,870 million from 2016, and the gross
+investment yield was 5.16%, an increase of 0.55 percentage point from 2016; the
+gross investment
+(7,094)
+Major Investments
+14,320
+13,991
+2.4%
+business
+Investment income*
+122,727
+Net realised gains
+42
+109,147
+6,038
+12.4%
+-99.3%
+on financial assets
+Please refer to the table below
+A decrease in spread income of
+stocks and funds in available-for-
+sale securities
+Accident insurance
+Net fair value gains through
+6,333
+N/A
+profit or loss
+Other income
+7,493
+6,460
+16.0%
+An increase in spread income and
+fair value of stocks in securities at
+fair value through profit or loss
+An increase in commission fees
+earned from CLP&C
+China Life Insurance Company Limited
+and Analysis
+Management Discussion
+Annual Report 2017
+6,183
+oriented businesses
+Rapid development in protection-
+25.2%
+During the Reporting Period, there was no material equity investment or non-equity investment of the
+Company that is subject to disclosure requirements.
+(IV) Operational Support and Customer Services
+Adhering to the “customer-oriented” operating concept, the Company has consistently pushed forward the
+product diversification development strategy and made greater efforts in developing protection-oriented and
+long-term saving products so as to meet multifarious insurance demands of customers. In 2017, through
+construction of the “New Generation of Integrated Business Processing System”, the Company focused
+on the critical needs of customer service and key problems restricting the improvement of management
+efficiency, optimized 159 sub-processes, established a customer experience management system and greatly
+pushed forward transformation of its operational service system into a more digitalized and intelligent one.
+The efficiency and convenience of customer services was significantly improved. 95% of policy services
+could be processed online and the percentage of policy conservation through online channels increased
+by 15 percentage points year-on-year. Mobile claims settlements were available at all service centers, with
+the number of the claims settled increased by nearly 10 times year-on-year. As the Company adopted fast-
+track claims settlement, the number of claims settled increased by 4.5 times year-on-year. The use of the
+"Smart Voice Navigation” system has shortened customers' waiting time by 65%, and the launch of “Smart
+Customer Service" system enabled quick responses to customer service requests. 19.16 million return visits
+were made by customers via WeChat or “China Life E-Bao”, which replaced 50.3% of return visits by
+telephone, and 15.98 million policy receipts were sent via WeChat, which replaced 86% of receipts delivered
+by agents. The Company actively participated in the offsite settlement and reimbursement for medical
+services across provinces under the New Village Cooperative Medical Scheme launched by the National
+Health and Family Planning Commission, facilitating offsite settlement for patients by building a unified
+settlement platform. The Company continued to introduce various services to customers. It took the lead
+in the industry in rolling out intelligent robots to provide various smart services to customers at counter,
+which integrated insurance services with artificial intelligence. The Company put more efforts in carrying
+out activities of customer care services by building the “China Life Health Platform”, launching new services
+such as chronic disease management, in-patient and out-patient consulting and health consulting services,
+and organizing nearly 20,000 online and offline activities on a variety of topics such as health, sports and
+parents-children relationship. In addition, the Company continued to broaden the scope for the global
+emergency assistance services and VIP services in order to satisfy the multi-layer and personalized demands
+of customers.
+30
+China Life Insurance Company Limited Annual Report 2017
+II. ANALYSIS OF MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS
+(I) Analysis of Major Items of the Consolidated Statement of Comprehensive Income
+1. Revenues
+For the
+year ended 31 December
+RMB million
+2017
+2016
+Change
+Main Reasons for Change
+Net premiums earned
+506,910
+426,230
+Life insurance business
+429,267
+361,649
+18.9%
+18.7%
+-
+Fast growth in renewals and first-
+year regular premiums
+Health insurance business
+63,323
+50,590
+yield including net share of profit of associates and joint ventures was 5.16%, an increase of 0.47
+percentage point from 2016; the comprehensive investment yield taking into account the current
+net fair value changes of available-for-sale securities recognised in other comprehensive income was
+4.55%, an increase of 2.12 percentage points from 2016.
+0
+Dividends paid to policyholders
+Investment properties
+31 December
+As at
+RMB million
+31 December
+2017
+As at
+Note
+Including: Residual margin^
+Total of insurance contracts
+Accident insurance
+Health insurance
+Life insurance
+Insurance Contracts
+2016
+*
+36
+Interest-bearing loans and other borrowings include a five-year bank loan of GBP275 million with a
+maturity date on 17 June 2019, a three-year bank loan of USD970 million with a maturity date on 27
+September 2019, a three-year bank loan of USD940 million with a maturity date on 30 September 2019
+and a one-month bank loan of EUR100 million with a maturity date on 11 January 2018. All the above
+are fixed rate loans. A three-year loan of EUR400 million with a maturity date on 6 December 2020,
+which is floating rate loan.
+Note:
+Affected by a decrease in the
+fair value of available-for-sale
+securities
+-37.3%
+7,768
+4,871
+Deferred tax liabilities
+debts
+Redemptions of subordinated
+N/A
+37,998
+China Life Insurance Company Limited Annual Report 2017
+1,914,597
+102,190
+8,346
+1,762,363
+77,837
+China Life Insurance Company Limited Annual Report 2017
+38
+We believe that our sources of liquidity are sufficient to meet our current cash requirements.
+Our principal cash outflows primarily relate to the payables for the liabilities associated with our
+various life insurance, annuity, accident insurance and health insurance products, operating expenses,
+income taxes and dividends that may be declared and paid to our equity holders. Cash outflows arising
+from our insurance activities primarily relate to benefit payments under these insurance products, as
+well as payments for policy surrenders, withdrawals and policy loans.
+Liquidity Uses
+2.
+Our investment portfolio also provides us with a source of liquidity to meet unexpected cash outflows.
+We are also subject to market liquidity risk due to the large size of our investments in some of the
+markets in which we invest. In some circumstances, some of our holdings of investment securities
+may be large enough to have an influence on the market value. These factors may adversely affect our
+ability to sell these investments or sell them at a fair price.
+Our cash and bank deposits can provide us 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 RMB48,586 million.
+In addition, the vast majority of our term deposits in banks allow us 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 RMB449,400 million.
+Our cash inflows mainly come from insurance premiums, income from non-insurance contracts,
+interest income, dividend and bonus, and proceeds from sales 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. We closely monitor and manage these risks.
+Liquidity Sources
+1.
+(III) Analysis of Cash Flows
+Management Discussion
+and Analysis
+Annual Report 2017 37
+China Life Insurance Company Limited
+Management Discussion
+and Analysis
+As at the end of the Reporting Period, equity holders' equity was RMB320,933 million, a 5.7%
+increase from the end of 2016. This was primarily due to the combined impact of total comprehensive
+income and profit distribution during the Reporting Period.
+Equity Holders' Equity
+3.
+As at the date of the statement of financial position, the reserves of various insurance contracts of the
+Company passed the liability adequacy test.
+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.
+515,374
+1,847,986
+2,025,133
+607,941
+7,786
+Bonds payable
+restricted
+An increase in borrowings in
+foreign currency
+other borrowings
+1,847,986
+2,025,133
+Insurance contracts*
+Main Reasons for Change
+Change
+As at 31
+December
+2016
+December
+2017
+As at 31
+RMB million
+Major Liabilities
+2.
+Management Discussion
+9.6%
+and Analysis
+35
+Annual Report 2017
+China Life Insurance Company Limited
+New investments in associates
+and joint ventures
+34.8%
+119,766
+161,472
+Investments in associates
+and joint ventures
+An increase in investment
+properties
+157.3%
+1,191
+3,064
+55
+The accumulation of insurance
+Investment contracts
+232,500
+16.2%
+16,170
+18,794
+Interest-bearing loans and
+balances payable
+An increase in maturities payable
+14.8%
+39,038
+44,820
+Annuity and other insurance
+dividends payable
+31
+-4.3%
+87,725
+83,910
+Policyholder
+management
+An increase in the scale of certain
+investment contract accounts
+The needs for liquidity
+business and renewal business
+liabilities from new insurance
+agreements to repurchase
+7.7%
+81,088
+87,309
+Securities sold under
+18.8%
+195,706
+Note
+and Analysis
+1.
+32
+business
+RMB million
+Main Reasons for Change
+The impact of a fairly fast
+increase in investment income
+and the update on the discount
+rate assumption for reserves of
+traditional insurance contracts
+An increase in investment income
+Health insurance
+business
+3,246
+2,093
+55.1%
+Accident insurance
+528
+852
+-38.0%
+business
+Fluctuation in claims expenses of
+certain businesses
+Other businesses
+8,582
+6,165
+39.2%
+Affected by an increase in net
+share of profit of associates and
+joint ventures
+4.
+Income Tax
+5.
+During the Reporting Period, income tax of the Company was RMB8,919 million, a year-on-
+year increase of 109.5%. This was primarily due to the combined impact of the taxable income and
+deferred tax.
+Net Profit
+During the Reporting Period, net profit attributable to equity holders of the Company was
+RMB32,253 million, a year-on-year increase of 68.6%. This was primarily due to the impact of a
+fairly fast increase in investment income and the update on the discount rate assumption for reserves
+of traditional insurance contracts.
+China Life Insurance Company Limited Annual Report 2017
+99.0%
+(II) Analysis of Major Items of the Consolidated Statement of Financial Position
+14,732
+Life insurance
+1,068
+1,048
+1.9%
+fund contribution
+An increase in investment yield
+from participating accounts
+An increase in underwriting costs
+for regular premium business due
+to the growth of the Company's
+business and the optimization of
+its business structure
+A decrease in interest paid due
+to redemptions of subordinated
+debts
+The growth of business
+Payable to third party holders
+of consolidated structured
+entities and the change of foreign
+exchange rates applicable to the
+currency for foreign assets and
+liabilities
+The growth of insurance business
+China Life Insurance Company Limited
+Annual Report 2017
+33
+and Analysis
+Management Discussion
+34
+3.
+Profit before Income Tax
+For the year ended 31 December
+2017
+2016
+Change
+Profit before income tax
+41,671
+23,842
+74.8%
+29,315
+1.
+Major Assets
+RMB million
+profit or loss
+Securities purchased
+36,185
+43,538
+-16.9%
+A decrease in the scale of
+commercial papers
+fair value through profit or loss
+The needs for liquidity
+in bonds at
+under agreements
+management
+to resell
+Cash and cash
+48,586
+67,046
+-27.5%
+The needs for liquidity
+equivalents
+management
+Loans
+383,504
+226,573
+69.3%
+An increase in the allocation of
+trust schemes in loans
+Statutory deposits -
+value through
+-34.6%
+209,124
+136,809
+As at 31
+December
+2017
+As at 31
+December
+2016
+Change
+Main Reasons for Change
+Investment assets
+2,591,652
+Term deposits
+449,400
+2,453,283
+538,325
+5.6%
+-16.5%
+The maturity of certain term
+deposits
+Held-to-maturity
+Statutory insurance
+717,037
+20.6%
+securities
+Management Discussion
+Available-for-sale
+810,734
+766,423
+5.8%
+An increase in the allocation
+securities
+of stocks in available-for-sale
+securities
+and Analysis
+Management Discussion
+Securities at fair
+594,730
+32.2%
+An increase in the allocation of
+financial bonds
+16,320
+2.
+Management Discussion
+and Analysis
+China Life Insurance Company Limited Annual Report 2017
+12.4%
+109,147
+122,727
+Total
+-23.2%
+971
+746
+Other investment income
+from loans
+35.8%
+12,018
+Investment income
+from bank deposits
+Benefits, Claims and Expenses
+-14.4%
+For the year ended 31 December
+2017
+25.0%
+40,513
+50,624
+Health insurance business
+An increase in the scale of life
+13.4%
+360,922
+409,410
+Life insurance business
+claims expenses
+14.5%
+407,045
+466,043
+Insurance benefits and
+Main Reasons for Change
+Change
+2016
+RMB million
+An increase in the scale of health
+insurance business
+27,851
+Investment income
+An increase in dividend
+profit or loss
+A decrease in interest income
+resulting from the reducing
+scale of commercial papers in
+bonds at fair value through
+Main Reasons for Change
+RMB million
+through profit or loss
+securities at fair value
+-26.9%
+6,210
+4,538
+Investment income from
+Change
+2016
+2017
+For the year ended 31 December
+Investment Income
+*
+income from available-for-sale
+equity investment
+23,827
+An increase in interest income
+resulting from the growth of
+allocation in financial bonds
+An increase in interest income
+securities
+held-to-maturity
+23.4%
+24,854
+30,669
+Investment income from
+securities
+available-for-sale
+25.2%
+37,243
+46,627
+Investment income from
+agreements to resell
+securities purchased under
+A decrease in the scale of
+trust schemes
+from the increasing scale of
+A decrease in interest income
+resulting from the reducing
+scale of deposits
+Accident insurance
+insurance business
+5,610
+52,022
+24.5%
+policy acquisition costs
+Finance costs
+4,601
+4,767
+64,789
+-3.5%
+35,953
+31,854
+12.9%
+6,426
+4,859
+6,009
+Administrative expenses
+Underwriting and
+Other expenses
+resulting from
+participation in profits
+business
+8,076
+5,316
+51.9%
+Fluctuation in claims expenses of
+Investment contract benefits
+An increase in the scale of
+37.7%
+certain businesses
+15,883
+7.1%
+Policyholder dividends
+investment contracts
+21,871
+Net assets, defined as assets less corresponding policy liabilities and other liabilities valued; and
+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 can be provided
+by the embedded value method. 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.
+“Adjusted net worth” is equal to the sum of:
+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.
+Net-of-tax adjustments for relevant differences between the market value and the book value of assets, together
+with relevant net-of-tax adjustments to certain liabilities.
+Embedded Value
+45
+China Life Insurance Company Limited Annual Report 2017
+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.
+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.
+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.
+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.
+DEFINITIONS OF EMBEDDED VALUE AND VALUE OF ONE YEAR'S SALES
+E
+Embedded Value
+Embedded Value
+43
+Value of In-Force Business after Cost of Required Capital (B+ C)
+363,673
+302,530
+Embedded Value (A + D)
+734,172
+652,057
+F
+Value of One Year's Sales before Cost of Required Capital
+64,627
+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.
+53,952
+BACKGROUND
+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.
+2017
+PREPARATION AND REVIEW
+G
+(29,787)
+(35,050)
+Cost of Required Capital
+C
+332,317
+D
+398,723
+Value of In-Force Business before Cost of Required Capital
+B
+349,528
+370,500
+Adjusted Net Worth
+A
+2016
+31 December
+31 December
+ITEM
+RMB million
+Components of Embedded Value and Value of One Year's Sales
+Table 1
+The embedded value as at 31 December 2017 and the value of one year's sales for the 12 months ended 31 December
+2017, the corresponding results as at 31 December 2016 are shown below:
+SUMMARY OF RESULTS
+China Life Insurance Company Limited Annual Report 2017
+46
+Other operating assumptions such as mortality, morbidity, lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+Economic assumptions: The calculations are based upon assumed corporate tax rate of 25% for all years. The investment
+return is assumed to be 5%. 13% grading to 17% (remaining level thereafter) of the investment return is assumed to be
+exempt from income tax. These 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%.
+ASSUMPTIONS
+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.
+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/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.
+Cost of Required Capital
+2017
+(4,641)
+Table 3
+New Business Margin of One Year's Sales by Channel
+48
+Channel
+Exclusive Individual Agent Channel
+Bancassurance Channel
+Group Insurance Channel
+By FYP
+By APE
+31 December
+31 December
+31 December
+31 December
+2017
+2016
+2017
+2016
+47.2%
+51.1%
+47.3%
+51.2%
+8.0%
+3.0%
+23.2%
+10.2%
+1.1%
+1.0%
+1.1%
+1.1%
+The new business margin of one year's sales for the 12 months ended 31 December 2017 by channel is shown below:
+(4,510)
+410
+60,117
+375
+H
+Value of One Year's Sales after Cost of Required Capital (F + G)
+60,117
+49,311
+Note: Numbers may not be additive due to rounding.
+Embedded Value
+China Life Insurance Company Limited
+Annual Report 2017
+47
+Embedded Value
+VALUE OF ONE YEAR'S SALES BY CHANNEL
+The value of one year's sales for the 12 months ended 31 December 2017 by channel is shown below:
+China Life Insurance Company Limited Annual Report 2017
+Table 2
+Value of One Year's Sales by Channel
+Channel
+RMB million
+31 December
+2017
+31 December
+2016
+Exclusive Individual Agent Channel
+Bancassurance Channel
+Group Insurance Channel
+Total
+Note: Numbers may not be additive due to rounding.
+53,170
+46,326
+6,536
+2,610
+49,311
+It is expected that the Company will have sufficient capital to meet its insurance business expenditures
+and new investment needs in general in 2018. At the same time, if there is any further capital demand, the
+Company will make corresponding financing arrangements based on capital market conditions to further
+implement its future business development strategies.
+RMB million
+Secondly, risks relating to investments and profitability. In the event that the domestic and international
+economies do not develop as expected, the volatility of financial markets may become greater and the
+market risks relating to investment portfolios and credit risk may rise. The Company may develop new
+investment channels, utilize new investment vehicles or appoint new investment managers, which may
+expose the Company to new risks. All of the above factors may affect the Company's investment income
+and the book value of its assets. Moreover, some of the Company's assets are held in foreign currencies,
+which may give rise to the risk of exchange gains and losses arising from exchange rate fluctuations. In
+addition, the operational and financial risks of associated enterprises and the fluctuation in their profitability
+may undermine the expected returns on investment, which may have certain impacts on the Company's
+profitability.
+and Analysis
+Management Discussion
+III. OTHER ANALYSIS
+(I) 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
+RMB million
+As at 31 December As at 31 December
+2017
+2016
+For the year ended 31 December
+Management Discussion
+39
+and Analysis
+3. Consolidated Cash Flows
+706,516
+639,396
+706,623
+677,768
+254,503
+228,080
+277.61%
+280.34%
+277.65%
+297.16%
+Comprehensive solvency ratio
+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.
+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.
+Annual Report 2017
+China Life Insurance Company Limited
+104.0%
+2016
+Change
+Main Reasons for Change
+Net cash inflows/(outflows)
+from operating activities
+200,990
+89,098
+125.6%
+The change in the scale of
+Net cash inflows/(outflows)
+(173,676)
+(104,703)
+65.9%
+from investing activities
+Net cash inflows/(outflows)
+(45,595)
+6,270
+N/A
+from financing activities
+securities at fair value through
+profit or loss
+The adjustment of investment
+asset structure and an increase in
+the allocation of bonds with long
+duration and debt-type financial
+products
+Change in account balance of
+securities sold under agreements
+to repurchase from time to
+time as a result of liquidity
+management activities
+Foreign exchange gains/
+(losses) on cash and
+cash equivalents
+Net decrease in cash
+and cash equivalents
+(179)
+285
+N/A
+(18,460)
+(9,050)
+As at the end of the Reporting Period, the Company's comprehensive solvency ratio decreased by 19.51
+percentage points from the end of 2016. The decrease in the Company's solvency ratio was due to the
+impact of various factors, including the development of the Company's insurance business and the
+redemptions of subordinated debts.
+(II) Sale of Material Assets and Equity
+During the Reporting Period, there was no sale of material assets and equity of the Company.
+40
+Management Discussion
+China Guangfa Bank
+Co., Ltd.
+The businesses approved by the China Banking
+Regulatory Commission including commercial
+banking businesses such as public and private
+deposits, loans, payment and settlement, and
+capital business
+15,402
+43.686% 2,072,915 113,846
+10,204
+Note: For details, please refer to Note 8 and Note 33(e) in the Notes to the Consolidated Financial Statements in this
+annual report.
+(IV) Structured Entities Controlled by the Company
+Details of structured entities controlled by the Company is set out in the Note 40(c) to the Consolidated
+Financial Statements in this annual report.
+China Life Insurance Company Limited Annual Report 2017
+41
+and Analysis
+Management Discussion
+IV. PERFORMANCE OF THE CORPORATE SOCIAL RESPONSIBILITY
+V.
+For the performance by the Company of its corporate social responsibility during the Reporting Period, please
+refer to the 2017 Corporate Social Responsibility Report 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).
+FUTURE PROSPECT AND RISK ANALYSIS
+(I) Market environment
+The
+year 2018 marks the 40th anniversary of China's reform and opening-up. With the focus on changes in
+major social contradiction, China will promote changes in quality, efficiency and motivation according to
+the requirement of high-quality development. It is expected that China's economic development will remain
+stable in general with structures becoming more balanced. In particular, it is expected that China will make
+steady progresses in prevention and mitigation of major risks, targeted poverty alleviation and pollution
+prevention and control, and achieve a healthy social and economic development, which will provide a
+stable and good development environment for the insurance industry. In the new era, people's demands
+for insurance protections and wealth management increase rapidly, with their focus on more diversified
+insurance products. Online and offline purchases are further integrated, and more differentiated and
+personalized services are required with people's increased demands on their service experiences. The Chinese
+government highly values the development of modern service industries such as pension and health, attaches
+more importance to the use of insurance mechanism to support and supplement public services, increases the
+protection level of supplementary major medical expenses insurance and basic medical insurances, actively
+promotes tax preferential health insurances, and carries out pilot long-term care insurance programs and
+pilot individual income tax deferred pension insurance programs, which enables the insurance industry
+to play a more important role in economic improvement in terms of quality and efficiency, people's well-
+being protection and social governance. Aiming to serve the real economy, safeguard against risks and push
+forward in-depth reforms, the regulatory authorities strive to promote the development of market standards
+in an orderly manner and to constantly improve the capabilities of the industry to better serve economic and
+social development by strengthening supervision and promoting transformation.
+(II) Development strategies and business plans
+In 2018, the Company will firmly stick to the general keynote of “making steady progress" and the due role
+of insurance in protection. With the “13th Five-Year Plan” of the Company as its guideline, the Company
+will adhere to the operating guideline of “prioritizing value, strengthening sales force, optimizing business
+structure, achieving stable growth and safeguarding against risks” in accordance with the requirement of
+high-quality development, and implement the innovation-driven development strategy. The Company will
+push forward the “Three Strategies” in relation to the development of individual insurance and markets in
+large-and medium-sized cities and rural areas, and make great efforts to accomplish the five major tasks of
+"transforming sales management model, adjusting business structure, revitalizing and taking lead in large
+and medium-sized cities, building technology-driven China Life and preventing and controlling risks”, so as
+to achieve all the targets set for the year. The Company will seek to maintain steady business development
+and its leading market position, achieve a fast growth of protection-oriented products, and further optimize
+its business structure. The Company will strive to achieve a steady growth in the number of productive
+agents with the quality of sales force further improved, continuously improve the operational and service
+capabilities with deepened technology innovation, and ensure stable and healthy operation by effectively
+preventing and controlling risks, thus facilitating the Company's progress in all aspects with high-quality
+development.
+China Life Insurance Company Limited Annual Report 2017
+42
+and Analysis
+Management Discussion
+(III) Major potential risks and measures in relation thereto
+In 2018, the Company will consistently strengthen its analysis of macro-economic trends and complex risk
+factors, and strive to maintain its continuous and healthy growth. The major risk factors which may have an
+impact on the Company's future development strategy and business objectives are set below:
+Firstly, risks relating to business. Since 2016, the Chinese financial regulatory authorities launched a
+series of stringent regulations to deal with irregularities with unprecedented efforts. In long term, the
+“stringent supervision” will further regulate the industry and create a favorable environment for the healthy
+development of the industry; in short term, the Company will face greater pressure in its transformation
+and risk prevention and control. With the market interest rate remaining at a high level and cross-sector
+competition existing in the financial market, the competitiveness of savings-type insurance products will
+decline. The Company will be under certain pressures in maintaining a faster business growth, and may face
+more uncertainties and complexities.
+and Analysis
+As such, the Company will keep a close eye on market development, maintain its strategic consistency
+and tactical flexibility, consider development as its first priority, put more efforts in pushing forward
+transformation and upgrade and consolidating its development foundation, conduct its business in strict
+compliance with laws and regulations, and properly address challenges from all aspects, so as to ensure a
+stable and healthy development of the Company.
+20
+79,601 20,463
+China Life Insurance Company Limited Annual Report 2017
+(III) Business Operations of Our Main Subsidiaries and Affiliates
+Company Name
+Major Business Scope
+RMB million
+Registered
+Capital
+Shareholding
+Total
+Assets Net Assets Net Profit
+4,000
+60%
+9,237
+8,339
+1,126
+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 CIRC
+Property loss insurance; liability insurance; credit
+insurance and bond 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 CIRC
+3,400
+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.
+3,922
+3,086
+14
+held by the
+Company, and
+3.53% is held
+by AMC
+15,000
+40%
+820
+China Life Insurance Company Limited Annual Report 2017
+70.74% is
+3.
+Investment return -50bps
+4.
+68,690
+425,453
+Investment return +50bps
+3.
+302,186
+62,964
+Risk discount rate -50bps
+2.
+57,470
+347,884
+Risk discount rate +50bps
+1.
+380,622
+60,117
+51,558
+10% increase in expenses
+and 10% increase in mortality rate for annuity products
+10% decrease in mortality rate for non-annuity products
+8.
+59,400
+361,113
+and 10% decrease in mortality rate for annuity products
+5.
+10% increase in mortality rate for non-annuity products
+63,356
+368,460
+10% decrease in expenses
+6.
+56,878
+358,884
+7.
+363,673
+Base case scenario
+Required Capital
+Reflects the gains or losses due to changes in exchange rate.
+H
+Change in the market value adjustment from the beginning of year 2017 to 31 December 2017 and other
+adjustments.
+G
+Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
+F
+I
+Compares actual with expected investment returns during 2017.
+Reflects the difference between actual operating experience in 2017 (including mortality, morbidity, lapse, and
+expenses etc.) and the assumptions.
+D
+Value of one year's sales for the 12 months ended 31 December 2017.
+C
+Reflects expected impact of covered business, and the expected return on investments supporting the 2017 opening
+net worth.
+734,172
+E
+Reflects dividends distributed to shareholders during 2017.
+J
+Other miscellaneous items.
+Sales after Cost of
+Required Capital
+Value of One Year's
+Value of In-Force
+Business after Cost of
+RMB million
+Sensitivity Results
+Table 5
+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
+50
+50
+Embedded Value
+49
+Embedded Value
+China Life Insurance Company Limited Annual Report 2017
+366,227
+(1,625)
+60,835
+10% increase in lapse rates
+China Life Insurance Company Limited Annual Report 2017
+56
+For the year ended 31 December 2017, the investment management service fee, floating
+management fee and performance-based bonus paid by the Company to CLI amounted to
+RMB395.82 million. As at 31 December 2017, the contractual amount of the assets entrusted
+by the Company to CLI for investment and management was RMB246,193.00 million, among
+which, for the year of 2017, the contractual amount of the assets newly entrusted by the
+Company was RMB112,267.00 million (including the contractual amount of RMB0 million
+for the subscription of the related financial products, and the contractual amount of the
+assets newly entrusted by the Company of RMB0 million in its co-investment with CLIC and
+CLP&C).
+The contractual amount of the assets entrusted by the Company to CLI for investment and
+management will not exceed RMB550,000 million or its equivalent in foreign currency
+(including the contractual amount of the assets already entrusted prior to the execution of
+the agreement and the contractual amount of the assets newly entrusted during the term of
+the agreement) as at the expiry date of the agreement. In particular, the annual cap on the
+contractual amount of the assets newly entrusted for investment and management for 2017
+is RMB200,000 million or its equivalent in foreign currency (including the annual cap of
+RMB80,000 million or its equivalent in foreign currency for the subscription of the related
+financial products, and the annual cap of RMB100,000 million or its equivalent in foreign
+currency in respect of the contractual amount of the assets newly entrusted by the Company
+in its co-investments with CLIC and CLP&C), and the annual cap on the amount of the
+investment management service fee, floating management fee and performance-based bonus
+is RMB630 million or its equivalent in foreign currency; the annual cap on the contractual
+amount of the assets newly entrusted for investment and management for 2018 is RMB200,000
+million or its equivalent in foreign currency (including the annual cap of RMB80,000 million
+or its equivalent in foreign currency for the subscription of the related financial products, and
+the annual cap of RMB100,000 million or its equivalent in foreign currency in respect of the
+contractual amount of the assets newly entrusted by the Company in its co-investments with
+CLIC and CLP&C), and the annual cap on the amount of the investment management service
+fee, floating management fee and performance-based bonus is RMB990 million or its equivalent
+in foreign currency.
+Significant Events
+China Life Insurance Company Limited Annual Report 2017 55
+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 30 June 2017. As approved by the 2016 Annual General Meeting of the
+Company, the Company and CLI entered into the 2017-2018 asset management agreement
+for alternative investments on 30 June 2017, with retrospective effect from 1 January 2017
+until 31 December 2018. 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
+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 an investment management service fee, a floating management fee
+and a performance-based bonus. For details as to the method of calculation of the investment
+management service fee, floating management fee and performance-based bonus, please refer to
+Note 33 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
+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
+2015. On 30 December 2015, CLIC and AMC entered into the 2016 asset management
+agreement, with an entrustment term from 1 January 2016 to 31 December 2018. 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 33 in the Notes to the Consolidated
+Financial Statements. The annual caps for the three years ending 31 December 2018 are
+RMB320 million, RMB310 million and RMB300 million, respectively.
+(3)
+(2) Asset Management Agreement between CLIC and AMC
+Significant Events
+China Life Insurance Company Limited Annual Report 2017
+year ended 31 December 2017, CLIC paid AMC a service fee of RMB106.79 million.
+54
+4.
+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 2015.
+On 8 March 2015, the Company and CLP&C entered into the 2015 insurance sales framework
+agreement, with a term of two years from 8 March 2015. The agreement was automatically extended
+for another year after its expiry in accordance with its terms. Pursuant to the agreement, CLP&C
+entrusted the Company to act as an agent to sell selected insurance products within the authorized
+regions, and agreed to 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
+33 in the Notes to the Consolidated Financial Statements. The original annual caps for the three
+years ended 31 December 2017 were RMB1,386 million, RMB1,738 million and RMB2,222
+million, respectively. With the approval given at the eighth meeting of the fifth session of the Board,
+the Company revised the annual caps for the two years ended 31 December 2017 under the 2015
+insurance sales framework agreement to RMB3,000 million and RMB5,000 million, respectively. 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. The annual caps for the three years ending 31 December 2020 were
+RMB4,260 million, RMB5,540 million and RMB7,050 million, respectively.
+For the year
+ended 31 December 2017, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB534.07 million, the redemption price and
+corresponding redemption fee for the redemption of fund products was RMB1,750.70 million,
+the sales commission fee and client maintenance fee paid by AMP was RMB0 million, the
+management fee and performance-based fee paid by Pension Company for the asset management
+for specific clients was RMB0 million, and the fees for other daily transactions were RMBO
+million.
+China Life Insurance Company Limited Annual Report 2017
+(2)
+For the year ended 31 December 2017, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB10,310.12 million, the redemption price and
+corresponding redemption fee for the redemption of fund products was RMB12,017.20 million,
+the sales commission fee and client maintenance fee paid by AMP was RMB0 million, the
+management fee and performance-based fee paid by the Company for the asset management for
+specific clients was RMB23.45 million, and the fees for other daily transactions were RMB0.68
+million.
+58
+58
+Insurance Sales Framework Agreement
+Significant Events
+China Life Insurance Company Limited Annual Report 2017
+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 will continue to conduct certain daily transactions, including
+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 the industry practices. For the three years ending 31 December
+2019, 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 and 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.
+Framework Agreement between the Company and AMP
+(1)
+Framework Agreements with AMP
+For the year ended 31 December 2017, CLP&C paid the Company an agency service fee of
+RMB3,030.41 million.
+57
+For the year ended 31 December 2017, the Company paid AMC a service fee of RMB1,153.58
+million.
+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
+2015. On 29 December 2015, the Company and AMC entered into the 2016 asset management
+agreement, with a term of three years from 1 January 2016 to 31 December 2018. 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 33 in the Notes to the Consolidated Financial Statements. The
+annual cap for each of the three years ending 31 December 2018 is RMB1,500 million.
+Asset Management Agreement between the Company and AMC
+61,235
+368,448
+10% decrease in morbidity rates
+12.
+58,997
+358,936
+13.
+10% increase in morbidity rates
+61,030
+364,137
+10% decrease in lapse rates
+10.
+59,149
+363,021
+11.
+Using 2016 EV appraisal assumptions
+357,052
+60,114
+(1)
+Asset Management Agreements
+For the year ended 31 December 2017, the service fee paid by CLIC to the Company amounted to
+RMB739.56 million.
+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
+2014. On 29 December 2014, the Company and CLIC entered into the 2015 policy management
+agreement, with a term from 1 January 2015 to 31 December 2017. Pursuant to the agreement, the
+Company agreed to provide policy administration services to CLIC relating to the non-transferred
+policies. The Company acted as a service provider under the agreement and did not acquire any
+rights or assume any obligations as an insurer under the non-transferred policies. For details as to
+the method of calculation of the service fee, please refer to Note 33 in the Notes to the Consolidated
+Financial Statements. The annual cap for each of the three years ended 31 December 2017 was
+RMB1,037 million. 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. The annual cap for each of the three years ending 31
+December 2020 is RMB708 million.
+Policy Management Agreement
+2.
+1.
+scope
+Our
+Scope of work
+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.
+China Life Insurance Company Limited (“China Life") has prepared embedded value results as at 31 December 2017
+("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.
+To The Directors of China Life Insurance Company Limited
+WILLIS TOWERS WATSON'S REVIEW OPINION REPORT ON EMBEDDED VALUE
+China Life Insurance Company Limited Annual Report 2017
+9.
+Pension Company and AMP entered into the “Framework Agreement in relation to
+Subscription and Redemption of Fund Products, Sale of Funds and Other Daily 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 will continue to conduct certain daily transactions, including 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 the industry practices. For the three years ending 31 December 2019, 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 sales
+commission fee and client maintenance fee payable by AMP is RMB100 million; the annual cap
+of the management fee and performance-based fee payable by Pension Company for the asset
+management for specific clients is RMB100 million; and the annual cap of the fees for other
+daily transactions is RMB100 million.
+(7,164)
+(11,549)
+(459)
+Undertakings
+53
+53
+68
+69
+Restriction on Major Assets
+69
+Their Performance
+Significant Events
+I.
+MATERIAL LITIGATIONS OR ARBITRATIONS
+During the Reporting Period, the Company was not involved in any material litigation or arbitration.
+II. MAJOR CONNECTED TRANSACTIONS
+(I) 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 the Company,
+CLIC, CLP&C, China Life Insurance (Overseas) Company Limited (“CLO”) and CLI, respectively, and
+the framework agreement between CLI and AMP. 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 CLO and
+CLI. Therefore, each of CLIC, CLP&C, CLO and CLI 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.
+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 International Trust Inc. (“"Chongqing Trust”). Such agreements and the transactions thereunder
+have been approved by the independent shareholders 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.
+During the Reporting Period, the Company also carried out certain continuing connected transactions,
+including the asset management agreement between CLIC and AMC, which were exempt from the
+reporting, announcement, annual review and independent shareholders' approval requirements under
+Chapter 14A of the Listing Rules.
+Significant Events
+The Company has complied with the disclosure requirements under Chapter 14A of the Listing Rules in
+respect of the above continuing connected transactions. When conducting the above continuing connected
+transactions during the Reporting Period, the Company has followed the pricing policies and guidelines
+formulated at the time when such transactions were entered into.
+Material Contracts and
+Material Litigations or Arbitrations
+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
+2017, in accordance with the "CAA Standards of Actuarial Practice: Appraisal of Embedded Value" issued by the
+China Association of Actuaries ("CAA") in November 2016;
+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 2017;
+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.
+Embedded Value
+Opinion
+Based on the scope of work above, we have concluded that:
+Major Connected Transactions
+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 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
+Michael Freeman
+22 March 2018
+Benjamin Chen
+China Life Insurance Company Limited Annual Report 2017 51
+Significant Events
+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;
+China Life Insurance Company Limited Annual Report 2017 53
+Framework Agreement between Pension Company and AMP
+In addition, after the Reporting Period, the Company also carries out certain continuing connected
+transactions, including the framework agreements entered into by CLWM with Pension Company and
+China Life E-commerce Company Limited ("CLEC”), respectively, and the framework
+652,057
+RMB million
+B
+Items B through J are explained below:
+2)
+Methodology, Model and Assumption Changes
+Notes: 1)
+Embedded Value as at 31 December 2017 (sum A through J)
+52,472
+Shareholder Dividend Distribution and Capital Injection
+Other
+J
+I
+Exchange Gains or Losses
+H
+Market Value and Other Adjustments
+G
+Significant Events
+K
+60,117
+Numbers may not be additive due to rounding.
+(4,280)
+agreement between
+CLWM and Chongqing Trust, which are subject to the reporting, announcement and annual review
+requirements but are exempt from the independent shareholders' approval requirement under the Listing
+Rules. As CLIC holds the entire equity interest in CLEC, CLEC is a connected person of the Company.
+529
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
+Table 4
+Analysis of Embedded Value Movement in 2017
+ITEM
+A
+Embedded Value at the Start of Year
+B
+MOVEMENT ANALYSIS
+C
+Value of New Business in the Period
+D
+Operating Experience Variance
+E
+Investment Experience Variance
+F
+Expected Return on Embedded Value
+(5,926)
+transactions.
+China Life Insurance Company Limited Annual Report 2017
+67
+(III) Statement on Claims, Debt Transactions and Guarantees etc. with Connected Parties
+outside the Course of its Business
+During the Reporting Period, the Company was not involved in claims, debt transactions or guarantees with
+connected parties outside the course of its business.
+III. MATERIAL CONTRACTS AND THEIR PERFORMANCE
+1. 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 for 10% or more of the Company's profits for the Reporting Period, nor were there any such
+matters that occurred in previous periods but subsisted during the Reporting Period.
+4.
+The Company neither gave external guarantees nor provided guarantees to its non-wholly owned subsidiaries
+during the Reporting Period.
+3. 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
+Company. The Company has adopted the mode of 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
+managers include AMC and its subsidiaries, and 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 guidelines, asset
+entrustment and performance 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.
+Significant Events
+68
+China Life Insurance Company Limited Annual Report 2017
+Each of Fund GP and China Life Properties is an associate of CLIC and therefore a connected
+person of the Company. The transactions regarding the formation of the 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 Company has complied with the
+disclosure requirements under Chapter 14A of the Listing Rules in respect of such connected
+2.
+The Company (as the limited partner) and China Life Properties (as the general partner) entered
+into the partnership agreement on 19 December 2017 for the formation of Shanghai Wansheng
+Industrial Partnership (Limited Partnership) (the “Partnership”). The total capital amount of the
+Partnership is RMB4,160.1 million, of which RMB4,160 million is contributed by the Company and
+RMB0.1 million is contributed by China Life Properties. The capital raised by the Partnership will
+be used to acquire 21.4% equity interest in Shanghai Rui Hong Xin Cheng Co., Ltd. from Hollyfield
+Holdings Limited, through which the Partnership will obtain 49.5% interest in the land use rights
+corresponding to Lot 10, Lot 3 shopping mall (Hall of the Moon), Lot 6 shopping mall (Hall of the
+Stars) and phase II shopping mall within the territory of the Rui Hong Xin Cheng Project held by
+Shanghai Rui Hong Xin Cheng Co., Ltd.
+(3)
+The Company (as the limited partner) entered into the special fund partnership agreement and
+its supplemental agreement with Fund GP (as the general partner) on 27 November 2017 for
+the formation of Ningbo Meishan Bonded Port Area Baining Investment Partnership (Limited
+Partnership) (the “Special Fund Partnership”). The total capital amount raised by the Special Fund
+Partnership from the limited partner is RMB5,600 million, all of which is contributed by the
+Company. Following the establishment of the Special Fund Partnership, the Special Fund Partnership
+and Baidu, Inc. (each as a limited partner) entered into the Baidu fund partnership agreement with
+Fund GP (as the general partner) on 27 November 2017 for the formation of Ningbo Meishan
+Bonded Port Area Baishan Investment Management Partnership (Limited Partnership) (the "Baidu
+Fund Partnership”). The total capital of the Special Fund Partnership will be invested in the Baidu
+Fund Partnership. The Baidu Fund Partnership will primarily make equity investment or quasi equity
+investment in private equity projects at the middle to later stages in the internet sector, including
+internet, mobile internet, artificial intelligence, internet finance, consumption upgrade, and internet+.
+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 will 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 the industry practices. For
+each of the two years ending 31 December 2019, the annual cap of the subscription amount of
+the trust products is 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 is RMB150 million; the annual
+cap of the advisory fee for the advisory services is RMB150 million; and the annual cap of the
+fees for other daily transactions is RMB100 million.
+Framework Agreement between CLWM and Chongqing Trust
+For the year ended 31 December 2017, the subscription amount of the trust products was
+RMB8,174.00 million, the redemption amount of the trust products was RMB0 million, and
+the fees for other daily transactions were RMB0 million.
+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 will expire on 31 December 2019. Pursuant
+to the agreement, the Company and Chongqing Trust will 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 the industry practices. For the three years ending 31 December 2019, the annual
+сар of the subscription amount of the trust products is 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
+is RMB4,500 million; and the annual cap of the fees for other daily transactions is RMB100
+million.
+Framework Agreement between the Company and Chongqing Trust
+(2)
+(1)
+CLEC and CLWM entered into the "Framework 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. 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.
+Framework Agreement between CLEC and CLWM
+(7)
+6.
+Significant Events
+China Life Insurance Company Limited Annual Report 2017
+64
+Pension Company and CLWM intended to enter into the “Framework Agreement in relation
+to Daily Connected Transactions”, pursuant to which CLI 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. 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.
+Framework Agreement between Pension Company and CLWM
+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 RMBO
+million.
+China Life Insurance Company Limited Annual Report 2017
+Formation of Partnership with China Life Properties Investment Management Company Limited
+("China Life Properties")
+65
+Confirmation by auditor
+1. Formation of Partnership with Ningbo Meishan Bonded Port Area Baiyi Investment Management
+Partnership (Limited Partnership) ("Fund GP")
+(II) Other Major Connected Transactions
+Significant Events
+China Life Insurance Company Limited Annual Report 2017
+66
+(4) the amounts of the above transactions have not exceeded the relevant annual caps.
+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
+(2) the transactions were conducted on normal commercial terms;
+(1) the transactions were entered into in the ordinary and usual course of business of the Company;
+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:
+Confirmation by Independent Directors
+(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.
+(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 with the relevant agreements governing such
+transactions; and
+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;
+(2)
+(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;
+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:
+Significant Events
+Framework Agreements with Chongqing Trust
+2.
+(3)
+(2)
+(3)
+Framework Agreement between CLIC and CLWM
+CLIC and CLWM entered into the “Framework Agreement in relation to Asset Management
+Services" on 26 January 2016. The agreement became effective upon signing by the parties
+and expired on 31 December 2017. Pursuant to the agreement, CLIC subscribed for the asset
+management products, in respect of which CLWM acted as the manager, according to its
+needs of asset allocation. Pricing of the transactions under the agreement was determined by
+the parties through arm's length negotiations with reference to the industry practices. For the
+three years ended 31 December 2017, the annual caps of the management fee payable by CLIC
+for the asset management services were RMB40 million, RMB70 million and RMB80 million,
+respectively. CLIC and CLWM entered into the 2018 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. 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 2017, the management fee paid by CLIC for the asset
+management services was RMB0.73 million.
+Framework Agreement between CLP&C and CLWM
+CLP&C and CLWM entered into the "Framework Agreement in relation to Asset Management
+Services and Other Daily Transactions" on 9 March 2016. The agreement became effective
+upon signing by the parties and expired on 31 December 2017. Pursuant to the agreement,
+CLP&C and CLWM entered into certain daily transactions, including asset management
+services, sales agency services for asset management products and other daily transactions
+permitted by laws and regulations. Pricing of the transactions under the agreement was
+determined by the parties through arm's length negotiations with reference to the industry
+practices. For the three years ended 31 December 2017, the annual caps of the management
+fee payable by CLP&C for the asset management services were RMB5 million, RMB180
+million and RMB300 million, respectively; the annual caps 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, were RMB2 million, RMB150 million and RMB200
+million, respectively; and the annual caps of the fees for other daily transactions were RMB5
+million, RMB50 million and RMB50 million, respectively. CLP&C and CLWM entered
+into the 2018 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. 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.
+62
+China Life Insurance Company Limited Annual Report 2017
+Significant Events
+(4)
+For the year ended 31 December 2017, the management fee paid by CLP&C for the asset
+management services was RMB5.83 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 RMB0.04
+million.
+Framework Agreement between CLO and CLWM
+CLO and CLWM entered into the “Framework Agreement in relation to Asset Management
+Services and Other Daily Transactions" on 30 December 2015. The agreement became effective
+upon signing by the parties and expired on 31 December 2017. Pursuant to the agreement,
+CLO and CLWM entered into certain daily transactions, including asset management services,
+sales agency services for asset management products and other daily transactions permitted
+by laws and regulations. Pricing of the transactions under the agreement was determined by
+the parties through arm's length negotiations with reference to the industry practices. For
+the three years ended 31 December 2017, the annual caps of the management fee payable by
+CLO for the asset management services were RMB10 million, RMB30 million and RMB50
+million, respectively; the annual caps 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, were RMB5 million, RMB5 million and RMB10 million, respectively; and
+the annual caps of the fees for other daily transactions were RMB5 million, RMB5 million and
+RMB10 million, respectively.
+For the year ended 31 December 2017, there was no relevant transaction between CLO and
+CLWM.
+China Life Insurance Company Limited
+Annual Report 2017
+63
+Significant Events
+(5)
+(6)
+Framework Agreement between CLI and CLWM
+CLI and CLWM entered into the “Framework Agreement in relation to Asset Management
+Services and Other Daily Transactions” on 3 February 2016. The agreement became effective
+upon signing by the parties and expired on 31 December 2017. Pursuant to the agreement, CLI
+and CLWM entered into certain daily transactions, including asset management services, sales
+agency services for asset management products and other daily transactions permitted by laws
+and regulations. Pricing of the transactions under the agreement was determined by the parties
+through arm's length negotiations with reference to the industry practices. For the three years
+ended 31 December 2017, the annual caps of the management fee payable by CLI for the asset
+management services were RMB20 million (including the management fee in an amount of
+RMB0.4 million paid by CLI to CLWM for the provision of asset management services prior to
+the execution of the framework agreement), RMB30 million and RMB50 million, respectively;
+the annual caps 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,
+were RMB10 million, RMB40 million and RMB80 million, respectively; and the annual caps of
+the fees for other daily transactions were RMB10 million, RMB40 million and RMB80 million,
+respectively. CLI and CLWM entered into the 2018 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. 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 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 2017, the management fee paid by CLI for the asset
+management services was RMB1.15 million; the fees in connection with the sales
+Significant Events
+61
+Significant Events
+For the year ended 31 December 2017, the management fee paid by the Company for the asset
+management services was RMB1.80 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 RMB5.49
+million.
+For the
+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 will expire on 31 December 2019. Pursuant to the agreement, CLI and AMP
+will 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 the industry practices. For the three
+years ending 31 December 2019, the annual caps of the subscription price and corresponding
+subscription fee for the subscription of fund products are RMB5,000 million, RMB7,000
+million and RMB7,000 million, respectively; the annual caps of the redemption price and
+corresponding redemption fee for the redemption of fund products are 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 is
+RMB50 million; and the annual cap of the fees for other daily transactions is RMB50 million.
+Framework Agreement between CLI and AMP
+For the year ended 31 December 2017, the subscription price for the fund products was RMBO
+million, the redemption price for the fund products was RMB66.61 million, the subscription
+fee for the fund products was RMB0 million, the redemption fee for the fund products was
+RMB0.10 million, the sales commission fee and client maintenance fee paid by AMP was
+RMB0 million, the management fee and performance-based fee paid by CLP&C for the asset
+management for specific clients was RMB2.30 million, and the fees for other daily transactions
+were RMB0.07 million.
+Significant Events
+59
+Annual Report 2017
+China Life Insurance Company Limited
+CLP&C and AMP entered into the “Cooperation 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 will continue to conduct
+certain daily transactions, including 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 the industry practices. For the
+three years ending 31 December 2019, 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 sales commission fee and client maintenance fee payable by AMP is RMB100
+million; the annual cap of the management fee and 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.
+Framework Agreement between CLP&C and AMP
+For the year ended 31 December 2017, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB4,082.23 million, the redemption price and
+corresponding redemption fee for the redemption of fund products was RMB7,617.19 million,
+and the management fee and performance-based fee paid by CLIC for the asset management for
+specific clients was RMB20.41 million.
+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 will continue to conduct certain daily transactions, including
+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 the industry practices. For the three years ending 31 December
+2019, 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 and performance-based fee payable by CLIC for the
+asset management for specific clients is RMB100 million.
+(4)
+China Life Insurance Company Limited Annual Report 2017
+Framework Agreement between CLIC and AMP
+Framework Agreements with CLWM
+Framework Agreement between the Company and CLWM
+(1)
+Significant Events
+5.
+China Life Insurance Company Limited Annual Report 2017
+60
+management
+ended 31 December 2017, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB688.02 million, the redemption price and
+corresponding redemption fee for the redemption of fund products was RMB0 million, the
+management fee and performance-based fee paid by CLI for the asset management for specific
+clients was RMB0 million, and the fees for other daily transactions were RMB0 million.
+year
+The Company and CLWM entered into the “Framework Agreement in relation to Asset
+Management Services and Other Daily Transactions" on 30 December 2015. The agreement
+became effective upon signing by the parties and expired on 31 December 2017. Pursuant to
+the agreement, the Company and CLWM entered into certain daily transactions, including
+asset management services, sales agency services for asset management products and other daily
+transactions permitted by laws and regulations. Pricing of the transactions under the agreement
+was determined by the parties through arm's length negotiations with reference to the industry
+practices. For the three years ended 31 December 2017, the annual of the
+caps
+fee payable by the Company for the asset management services were RMB55 million, RMB180
+million and RMB240 million, respectively; the annual caps 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, were RMB25 million, RMB50 million and RMB100 million,
+respectively; and the annual caps of the fees for other daily transactions were RMB25 million,
+RMB50 million and RMB100 million, respectively. The Company and CLWM entered into
+the 2018 framework agreement on 28 December 2017, pursuant to which the Company will
+continue to conduct certain transactions with CLWM during the period from 1 January 2018
+to 31 December 2020, including the asset management services, the sales agency services for
+asset management products and other daily transactions permitted by laws and regulations. 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.
+Mr. Tang Xin, Mr. Chang Tso Tung Stephen, Mr. Xu Haifeng, Mr. Xu Hengping, Mr. Lin Dairen, Mr. Yang Mingsheng,
+Mr. Yuan Changqing, Mr. Liu Huimin, Mr. Yin Zhaojun, Mr. Robinson Drake Pike, Ms. Leung Oi-Sie Elsie
+From left to right:
+Report of the Board of Directors
+71
+55
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+85
+82
+Non-executive Directors
+Independent Directors
+Yuan Changqing
+Miao Jianmin
+108
+Xu Haifeng
+Yang Mingsheng (Chairman)
+Lin Dairen
+Xu Hengping
+Corporate Governance
+Executive Directors
+89
+3.
+Management and Employees
+V.
+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 Commission
+of the State Council (“SASAC”), and 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 legally practicable measures to resolve the issue and will bear 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.
+China Life Insurance Company Limited
+Wang Sidong
+Annual Report 2017
+69
+Corporate
+Governance
+Report of the Board of Directors
+Report of the Supervisory
+Committee
+Changes in Ordinary Shares
+and Shareholders Information
+Directors, Supervisors, Senior
+Corporate Governance
+Liu Jiade
+(appointed as Director with effect from 31 July 2017)
+(appointed as Director with effect from 31 July 2017)
+Chang Tso Tung Stephen
+Robinson Drake Pike
+Tang Xin
+By deeply exploring customers' requirements, the Company optimized basic services and made innovation in
+value-added services to consistently improve customer experience. In 2017, the Company further promoted
+the global VIP care services, and constantly improved the services including the international travel and
+medical emergency services, domestic medical emergency services, 12-hour health consultation hotlines
+and global VIP benefit services. The Company organized the 11th “Hand-in-Hand with China Life” value-
+added service activities, holding nearly 20,000 online and on-site activities with the theme of health, sports,
+and parent-child activities. By organizing a variety of outdoor running and hiking activities, the Company
+provided its customers with scientific activities to help them better enjoy healthy life; by organizing the
+7th “Little Painters of China Life” activities, the Company was consistently concerned about the growth
+of teenagers and children; by conducting the China Life customer festival activities on 16 June 2017, the
+Company promoted the application of intelligent services and upgraded its customer experience. The
+Company also broadened its service scope and deepened the customers' understanding through a variety of
+value-added service activities, thus maintaining good interaction with its customers.
+The Company was committed to offering convenient and professional services to its customers by adopting
+innovative form of customer services and actively applying technologies such as artificial intelligence and big
+data, in a bid to enhance the intelligent service capability of the contact center, increase its service efficiency
+and optimize customer experience. In addition, the Company enhanced its protection of the rights and
+interests of insurance customers by consistently improving a mechanism for protection of such rights and
+interests, and intensified its supervisory function through assessment.
+(V) 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 result-
+oriented, adopts vertical assessment and horizontal ranking, 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 facilitated the career development of
+employees through various means, such as education and training, mentoring, job rotation and exchange
+of opinions, practice at local branches, assessment of competent staff, base platform training, and talent
+cultivation under the Spark Program. 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.
+Corporate Governance
+74
+China Life Insurance Company Limited Annual Report 2017
+Corporate Governance
+3.
+The Company actively promoted the construction of a democratic management system with employee
+representative meetings as its basic form to protect the democratic rights of employees and to facilitate
+the joint development between employees and enterprise. Its head office and provincial branches have
+fully established the system of employee representative meetings, organized their respective employees to
+perform democratic management and supervisory role according to law, and inspected and monitored
+the implementation of resolutions adopted by employee representative meetings, thus carrying out the
+supervisory functions in a serious manner and constantly improving democratic management. The second
+meeting of the second session of the Employee Representative Meeting of the Company was held in Beijing
+on 18 April 2017. According to the spirit of alleviating poverty proposed at the Central Poverty Alleviation
+and Development Conference, the Company consistently implemented the special plan for warm homes for
+2016-2018 in great depth. In particular, 34 warm homes meeting the criteria of provincial branches and 185
+warm homes meeting the criteria of local branches were preliminarily approved for establishment in 2017.
+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
+"Directors, Supervisors, Senior Management and Employees” in this annual report.
+FORMULATION AND IMPLEMENTATION OF PROFIT DISTRIBUTION POLICY
+In accordance with Article 211 of the Articles of Association, the basic principles of the Company's profit
+distribution are as follows:
+(I)
+(II)
+1.
+2.
+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;
+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 212 of the Articles of Association, the Company's profit distribution policy is as
+follows:
+1. Profit distribution modes: The Company may 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;
+China Life Insurance Company Limited Annual Report 2017
+75
+73
+China Life Insurance Company Limited Annual Report 2017
+With regard to "1+4” series of documents released by the CIRC, “1” stands for the “Circular of the CIRC on Further
+Strengthening Insurance Regulation and Maintaining the Stable and Healthy Development of the Insurance Industry”, which
+represents the overall concept of the current regulatory work; “4” stands for four implementing documents, namely, the
+"Circular of the CIRC on Further Strengthening Risk Prevention and Control for the Insurance Industry", the "Circular of the
+CIRC on Strengthening Insurance Regulation, Clamping Down on Illegalities and Violations and Governing Irregular Practices
+in the Market”, the “Circular of the CIRC on Remedying Regulatory Deficiencies and Establishing a Stringent and Effective
+Insurance Regulatory System", and the “Guiding Opinions of the CIRC on Supporting the Development of Real Economy by
+the Insurance Industry".
+6
+Leung Oi-Sie Elsie
+(appointed as Director with effect from 11 February 2018)
+(resigned with effect from 7 April 2017 due to adjustment
+of working arrangements)
+(resigned with effect from 12 January 2018 due to adjustment
+of working arrangements)
+(resigned with effect from 8 August 2017 due to adjustment
+of working arrangements)
+China Life Insurance Company Limited Annual Report 2017 71
+1.
+2.
+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 China Life Asset Management Company Limited. The
+Company also has controlling shareholding in China Life Pension Company Limited.
+BUSINESS REVIEW
+(I) 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 section headed “Management Discussion
+and Analysis" in this annual report. These discussions form part of the “Report of the Board of Directors".
+Liu Huimin
+Yin Zhaojun
+(II) Environmental policies and performance of the Company
+The Company strictly complied with 15 national and local laws and regulations, including the "Energy
+Conservation Law of the People's Republic of China” and the “13th Five-Year' Energy Saving and Emission
+Reduction Comprehensive Work Plan", and formulated the "Provisional Measures for the Administration
+of Energy Saving and Emission Reduction of China Life Insurance Company Limited” to define the duties
+and functions of the Company's energy management committee with “strengthening the awarenesses on
+efficiency and costs" as the starting point, in order to comprehensively draw up the Company's overall plan
+for the work of energy saving and emission reduction.
+The Company launched an electronic office reviewing resolutions, dealing with affairs to be considered at
+meetings and checking meeting files online, and also put online all ordinary electronic invoices for value-
+added tax. The Company developed an electronic service platform to provide convenient services to its
+customers while slashing the consumption of paper materials as much as possible. As at the end of 2017, the
+Company had issued over 130 million electronic invoices on a cumulative basis. The launch of electronic
+services helped reduce approximately 1,453.25 tonnes of paper. Through the adoption of electronic
+insurance policies, the Company cut down its consumption of paper materials by approximately 1,420
+million pages for the year. "China Life E-Bao”, as the intelligent service platform vigorously developed by
+China Life, has adopted a highly efficient model designed for paperless services. Information technology has
+made outstanding contribution to green energy saving and environmental protection. The adoption of a new
+type of standard electronic equipment for energy saving and consumption reduction enabled the Company
+to reduce its power consumption by approximately 165 million KWh for the
+year.
+IV. UNDERTAKINGS OF THE COMPANY, SHAREHOLDERS, EFFECTIVE CONTROLLERS,
+72
+China Life Insurance Company Limited Annual Report 2017
+Corporate Governance
+With the integration of functions such as data processing, research and development, and educational
+training, China Life Science and Technology Park adopts various technologies and measures on energy
+saving and consumption reduction, including an energy storage air-conditioning system, photovoltaic
+thermal system, rainwater collection system, reclaimed water treatment system, LED lighting and control,
+natural lighting and planted roof, which will significantly reduce its operating costs. It is expected that the
+running costs will be saved by a range between 20% and 30% as compared to similar ordinary buildings.
+(III) 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", adopted the business compliance concepts of “starting from the top
+level, having responsibility for all to be compliant, and creating value from compliance", and strictly
+observed and effectively implemented applicable laws and regulations and regulatory requirements,
+such as the Insurance Law, the Company Law and the “Regulations for the Administration of Insurance
+Companies". The Company strictly implemented the requirements of “1+4” series of documents released by
+the CIRC and major regulatory documents on product development and design, retrospective administration
+of sales practices and investment supervision, etc., strictly implemented the requirements of the CIRC with
+respect to the special action of “combating sales chaos and cracking down upon illegal business” relating to
+personal insurance, conducted rectifications in great depth with a focus on sales, channel and product chaos
+as well as illegal business activities, so as to consolidate the foundation for the Company's development and
+prevent systemic risks. The Company constantly improved the relevant rules and mechanisms concerning
+product design, business operation and risk control, and offered full cooperation, support and protection for
+the three strategic missions of the Company - speedy development, transformation and upgrade, and risk
+prevention and control.
+(IV) Relationship between the Company and its customers
+While actively performing its obligations to insurance policies, the Company bears in mind the core
+mission of an enterprise to provide high quality services to its customers. The Company regards customer
+satisfaction and customer experience as the basic standards for assessing its services, and pushes forward
+the establishment of a customer-oriented business model in order to create value for its customers. The
+Company has provided insurance services for more than 500 million customers. The evaluation results of
+customer satisfaction and customer loyalty increased by 2.03% and 3.25% year-on-year, respectively.
+The ecological environment relates to the future of our race and people's well-being. The Company, based
+on its features of energy consumption, strived to cut down its energy consumption and carbon emissions
+at each operating segment by means of electronic office processing system, technological innovation and
+adoption of new environment-friendly materials. The Company actively promoted and applied the spirits
+of diligence and thrift to consistently increase the awareness of its employees on performing energy saving
+measures, with a view to making contribution to the speedy reform for the system of ecological civilization
+and the construction of a beautiful China.
+Corporate Governance
+Significant Events
+The total amount of charitable donations made by the Company during the Reporting Period was approximately
+RMB171 million.
+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.
+CHANGES IN ACCOUNTING ESTIMATES
+34%
+34,699
+11,871
+35%
+19,127
+6,784
+35%
+32,253
+11,306
+statements
+cash dividends
+(including tax)
+(shares)
+Amount of
+consolidated
+to equity
+holders of the
+Company in the
+Percentage of
+amount of
+cash dividends
+in net profit
+attributable
+for the year in
+statements
+Company in the
+consolidated
+RESERVES
+6.
+7.
+Details of the reserves of the Company are set out in Note 36 in the Notes to the Consolidated Financial
+Statements in this annual report.
+China Life Insurance Company Limited Annual Report 2017
+78
+Corporate Governance
+14. 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.
+None of the Directors or Supervisors has entered into any service contract with the Company and its subsidiaries
+that is not terminable within one year or can only be terminated by the Company with payment of compensation
+(other than statutory compensation).
+13. DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS
+Details of the Board meetings and the Board's performance of its duties during the Reporting Period are set out in
+the section headed "Corporate Governance” in this annual report.
+12. DAY-TO-DAY OPERATIONS OF THE BOARD
+No H Share Stock Appreciation Rights of the Company were granted or exercised in 2017. The Company will
+deal with such rights and related matters in accordance with the PRC governmental policies.
+11. H SHARE STOCK APPRECIATION RIGHTS
+holders of the
+During the Reporting Period, the Company and its subsidiaries did not purchase, sell or redeem any of the
+Company's listed securities.
+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 PRC, the Enterprise Income Tax Law of the PRC, 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 12 June 2017 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 31
+May 2017 for the information on income tax in respect of the dividend distributed to H Share shareholders during
+the Reporting Period.
+Details of the movement in share capital of the Company are set out in Note 34 in the Notes to the Consolidated
+Financial Statements in this annual report.
+9.
+8. SHARE CAPITAL
+77
+China Life Insurance Company Limited Annual Report 2017
+Corporate Governance
+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.
+PROPERTY, PLANT AND EQUIPMENT
+CHARITABLE DONATIONS
+10. PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S SECURITIES
+to equity
+which dividends
+were distributed
+4.2
+4.
+China Life Insurance Company Limited Annual Report 2017
+76
+76
+year.
+No public reserve capitalization is provided for in the profit distribution plan for the current financial
+In accordance with the profit distribution plan for the year 2017 approved by the Board on 22 March
+2018, with the appropriation to its discretionary surplus reserve fund of RMB3,218 million (10%
+of the net profit for 2017), the Company, based on 28,264,705,000 shares in issue, proposed to
+distribute cash dividends amounting to RMB11,306 million to all shareholders of the Company at
+RMB0.40 per share (inclusive of tax). The foregoing profit distribution plan is subject to the approval
+by the 2017 Annual General Meeting to be held on 6 June 2018 (Wednesday). 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.
+5.
+of 2017
+1. Profit distribution plan or public reserves capitalization plan for the
+(IV) Profit distribution plan and public reserves capitalization plan
+Corporate Governance
+Net profit
+attributable
+(III) In accordance with Article 213 of the Articles of Association, the procedures of reviewing the Company's
+profit distribution proposal is as follows:
+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 CIRC 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.
+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.
+year
+2.
+The Company's profit distribution proposal shall be reviewed by the Board of Directors. The Board of
+Directors shall have a sufficient discussion of the 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 small-and medium-sized shareholders, and give timely reply to concerns of small-and medium-
+sized shareholders.
+The dividend distribution of the Company for the recent 3 years is as follows:
+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 sufficient opportunities to express their opinions 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.
+2.4
+4.0
+2015
+2017
+share capital
+per ten shares
+reserve into
+Amount of Transfer of public
+dividends
+per ten shares
+(RMB)
+(including tax)
+2016
+(shares)
+distributed
+Number of
+bonus stocks
+per ten shares
+were
+Year in which
+dividends
+Unit: RMB million
+100%
+Major businesses
+Shareholdings in other
+subsidiaries and affiliates listed
+in China or abroad during the
+Reporting Period
+China Life Insurance (Group) Company
+Yang Mingsheng
+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 CIRC in 2003, China Life Insurance Company was restructured as
+CLIC).
+86
+As at 31 December 2017, CLIC held 1,785,098,644 H shares of Town Health
+International Medical Group Limited, representing 23.7% of its total shares.
+Ministry of Finance of the PRC
+China Life Insurance Company Limited Annual Report 2017
+The effective controller of the Company is the Ministry of Finance of the People's Republic of China. The
+equity and controlling relationship between the Company and its effective controller is set out in below:
+Date of incorporation
+68.37%
+China Life Insurance (Group) Company
+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 insurance regulatory agencies.
+Legal representative
+85
+Annual Report 2017
+Name of
+China Life Insurance Company Limited
+China International Television Corporation and China National Nuclear Corporation became the top 10 shareholders of the Company through the strategic
+placement during the initial public offering of A Shares of the Company in December 2006. The trading restriction period of the shares from the strategic
+placement was from 9 January 2007 to 9 January 2008.
+Industrial and Commercial Bank of China Limited - China Southern Flexible Allocation of Consumption and Vitality of Hybrid Securities Investment
+Fund and Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Index Securities Investment Fund have Industrial and Commercial
+Bank of China Limited as their fund depositary. 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. 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.
+(II) Information relating to the Controlling Shareholder and Effective Controller
+3.
+Details of shareholders
+2.
+company
+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.
+Corporate Governance
+55
+China Life Insurance Company Limited
+Corporate Governance
+0
+12,400,000
+The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
+1.
+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.
+7.27%
+So far as is known to the Directors, Supervisors and the chief executive of the Company, as at 31 December 2017,
+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:
+1.91%
+Save as disclosed above, the Directors, Supervisors and the chief executive of the Company are not aware that there
+is any party who, as at 31 December 2017, had an interest or short position in the shares and underlying shares of
+the Company which were recorded in the register required to be kept by the Company pursuant to Section 336 of
+the SFO.
+BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 4,209,000 H
+Shares (0.06%). Of these 4,209,000 H Shares, 1,448,000 H Shares were cash settled unlisted derivatives.
+BlackRock, Inc. was interested in a total of 541,161,285 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 and BlackRock Asset Management (Schweiz) AG were interested in 3,711,000 H Shares, 4,697,000 H
+Shares, 104,470,234 H Shares, 178,053,000 H Shares, 1,618,000 H Shares, 42,351,491 H Shares, 893,000 H
+Shares, 3,709,000 H Shares, 30,752,026 H Shares, 1,074,000 H Shares, 5,247,389 H Shares, 3,347,700 H Shares,
+53,517,031 H Shares, 43,306,825 H Shares, 28,510,653 H Shares, 477,000 H Shares, 23,795,364 H Shares,
+11,026,572 H Shares, 562,000 H Shares and 42,000 H Shares respectively. All of these entities are either controlled
+or indirectly controlled subsidiaries of BlackRock, Inc. Of these 541,161,285 H Shares, 850,595 H Shares were cash
+settled unlisted derivatives.
+(Note 1):
+Corporate Governance
+Corporate Governance
+888
+87
+Annual Report 2017
+China Life Insurance Company Limited
+The letter "L" denotes a long position. The letter “S” denotes a short position.
+0.01%
+0.06%
+541,161,285 (L)
+4,209,000 (S)
+0.04%
+H Shares
+Interest in controlled
+corporation
+(Note 1)
+Class of
+Name of substantial shareholder
+Capacity
+shares
+Number of shares held
+Percentage of
+the respective
+class of shares
+Percentage of the
+total number of
+IV. 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
+shares in issue
+Beneficial owner
+A Shares
+19,323,530,000 (L)
+92.80%
+68.37%
+(Group) Company
+BlackRock, Inc.
+China Life Insurance
+State-owned legal
+person
+From left to right:
+China National Nuclear
+Currently, the fifth session of the Supervisory Committee comprises Mr. Miao Ping, Mr. Shi Xiangming,
+Mr. Luo Zhaohui, Ms. Wang Cuifei and Mr. Song Ping, with Mr. Miao Ping acting as the Chairman
+of the Supervisory Committee. Of the members of the Supervisory Committee, Mr. Miao Ping, Mr. Shi
+Xiangming and Mr. Luo Zhaohui are Non-employee Representative Supervisors, and Ms. Wang Cuifei
+and Mr. Song Ping are Employee Representative Supervisors. In August 2017, Mr. Zhan Zhong resigned
+from his position as an Employee Representative Supervisor due to adjustment of work arrangements. In
+January 2018, Mr. Li Guodong resigned from his position as an Employee Representative Supervisor due
+to adjustment of work arrangements. In February 2018, Ms. Xiong Junhong resigned from her position
+Non-employee Representative Supervisor due to adjustment of work arrangements.
+(I)
+I.
+ACTIVITIES OF THE SUPERVISORY COMMITTEE
+Mr. Song Ping, Mr. Luo Zhaohui,
+Mr. Miao Ping, Mr. Shi Xiangming,
+Ms. Wang Cuifei
+Corporate Governance
+Report of the Supervisory Committee
+81
+as a
+Annual Report 2017
+22 March 2018
+Beijing, China
+By Order of the Board
+Yang Mingsheng
+Chairman
+At the 2017 Annual General Meeting to be held on 6 June 2018, the Board will propose a resolution to continue
+to appoint Ernst & Young Hua Ming LLP as the PRC auditor and the auditor for US Form 20-F of the Company
+for the year 2018, and Ernst & Young as the Hong Kong auditor of the Company for the year 2018.
+60.27
+1.66
+11.14
+58.61
+China Life Insurance Company Limited
+Fees (RMB million)
+(II) Attending meetings of the Supervisory Committee 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 Supervisory Committee Meetings" of the Company, and in accordance with the
+work arrangement of the Supervisory Committee, the Supervisory Committee 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. In 2017, the fifth session of the Supervisory
+Committee held five meetings, 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.
+China Life Insurance Company Limited Annual Report 2017
+Corporate Governance
+(V) 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 Supervisory Committee of the Company reviewed the self-evaluation report on the Company's
+internal control systems and did not raise any objection against the self-evaluation report of the Board
+regarding the Company's internal control systems.
+(IV) Connected transactions. During the Reporting Period, the connected transactions of the Company were
+on commercial terms. The Supervisory Committee is not aware of any acts harming the interests of the
+Company.
+(III) Acquisition and sale of assets. During the Reporting Period, the prices for acquisition and sale of assets were
+fair and reasonable. The Supervisory Committee is not aware of any insider trading, any acts harming the
+interests of shareholders or incurring any loss to the Company's assets.
+(II) The authenticity of the financial report. The Company's annual financial report truly and completely
+reflected the Company's financial position and operating results. Ernst & Young Hua Ming LLP and
+Ernst & Young have performed audits and have issued unqualified auditors' reports for the year ended
+2017 in accordance with the China Standards on Auditing of PRC Certified Public Accountants and the
+International Standards on Auditing, respectively.
+The Company's operational compliance with the law. During the Reporting Period, the Company's
+operations were in compliance with the law. 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 Supervisory Committee 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.
+(I)
+During the Reporting Period, the Supervisory Committee 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 Supervisory Committee Meetings”.
+82
+INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON CERTAIN MATTERS
+333
+83
+China Life Insurance Company Limited Annual Report 2017
+(VI) Actively participating in the meetings and activities organized by China Association for Public Companies.
+In 2017, Mr. Miao Ping, the Chairman of the Supervisory Committee, was the vice chairman of the
+professional committee of the second session of the supervisory committee of China Association for Public
+Companies and attended the meeting for the change of members of the professional committee of the second
+session of the supervisory committee of China Association for Public Companies in Shanghai, during which,
+the "Work Plan of the Second Session of the Supervisory Committee” and the “2017 Work Plan of the
+Supervisory Committee”, etc. were discussed. In order to strengthen the internal control compliance, audit
+supervision and risk management of the Company, the Supervisory Committee of the Company participated
+in the activity of the "Subject Study of the Supervisory Committees of Listed Companies" organized by
+China Association for Public Companies, and submitted the "Study on the Issues Concerning the Work
+Allocation between the Supervisory Committee and Independent Directors” as its subject of the study.
+(V) Attending training courses and constantly enhancing duty performance of the Supervisors. In 2017, the
+members of the Supervisory Committee attended the first and sixth special training courses of 2017 for
+directors and supervisors of listed companies within the territory of Beijing as organized by the Listed
+Companies Association of Beijing and the first seminar of 2017 for the chairmen of the supervisory
+committees of listed companies as organized by China Association for Public Companies, which gave them
+the opportunity to learn and understand the regulatory overview of listed companies within the territory of
+Beijing, the latest regulatory policies of listed companies and the analysis of cases in relation thereto.
+(IV) Actively conducting research and investigation activities and examining and understanding the business
+operation of local branches. Mr. Miao Ping, the Chairman of the Supervisory Committee, together with Ms.
+Xiong Junhong and Ms. Wang Cuifei, the members of the Supervisory Committee, carried out investigation
+and research on local branches of the Company in Guangxi Province. The investigation and research team
+successively listened to business reports from the local branches in Guangxi and Liuzhou and the local sub-
+branch of the Company in Luzhai, held in-depth conferences with their respective key management, visited
+field offices and communicated with the frontline employees at counters of the customer service center of
+Liuzhou branch and Luzhai sub-branch. Through investigation and research, all Supervisors comprehended
+the working situation of local branches in great depth and examined the effectiveness of the implementation
+of decisions of the Board and the management, thus further enhancing the legal compliance and risk
+prevention of the Company in a practical manner.
+(III) Attending and participating in corporate governance meetings and actively exercising their supervisory
+role. In 2017, the Supervisory Committee attended the 2016 Annual General Meeting and the First
+Extraordinary General Meeting 2017 of the Company, and participated in the regular meetings of the
+Board. All members of the Supervisory Committee participated in the meetings of the Nomination and
+Remuneration Committee, the Risk Management Committee, and the Strategy and Investment Decision
+Committee, respectively, in accordance with the work allocation among Supervisors determined by the
+Supervisory Committee, with a focus on the meetings of the Audit Committee. 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.
+Corporate Governance
+II.
+Total
+Non-audit services fee
+Including: Internal control audit fee
+the Company has expressly provided in its Articles of Association the level of authority required for
+approving external guarantees and the approval procedures.
+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.
+2.
+during the Reporting Period, the Company did not provide any external guarantee;
+1.
+Independent Directors of the Company have rendered their independent opinions on the Company's external
+guarantees, and are of the view that:
+19. MATERIAL GUARANTEES
+China Life Insurance Company Limited Annual Report 2017
+No management or administration contracts for the whole or substantial part of any business of the Company
+were entered into during the Reporting Period.
+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.
+17. PRE-EMPTIVE RIGHTS AND ARRANGEMENTS FOR SHARE OPTIONS
+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 observation of the Model Code
+and the Company's own code of conduct in the year of 2017.
+16. DISCLOSURE OF INTERESTS OF DIRECTORS, SUPERVISORS AND THE CHIEF
+EXECUTIVE IN THE SHARES OF THE COMPANY
+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.
+15. DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+Corporate Governance
+88
+18. MANAGEMENT CONTRACTS
+79
+20. RESPONSIBILITY STATEMENT OF DIRECTORS ON FINANCIAL REPORTS
+The Directors are responsible for overseeing the 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.
+Audit, review and agreed-up procedures fee
+Service/Nature
+Corporate Governance
+Remuneration paid by the Company to the auditors in 2017 was as follows:
+Remuneration paid by the Company to the auditors is subject to 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.
+A resolution was passed at the 2016 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 2017, and Ernst & Young as the Hong
+Kong auditor of the Company for the year 2017, who will hold office until the conclusion of the 2017 Annual
+General Meeting. Ernst & Young Hua Ming LLP and Ernst & Young have been serving as the Company's auditors
+for five consecutive years.
+25. AUDITORS
+China Life Insurance Company Limited Annual Report 2017
+80
+80
+Corporate Governance
+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.
+24. COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
+Based on the information publicly available to the Company and within the knowledge of the Directors as at the
+Latest Practicable Date (22 March 2018), 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.
+23. SUFFICIENCY OF PUBLIC FLOAT
+In 2017, 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.
+22. MAJOR CUSTOMERS
+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 2017.
+21. BOARD'S STATEMENT ON INTERNAL CONTROL
+84
+Corporation
+China Life Insurance Company Limited Annual Report 2017
+Miao Ping
+0.08%
+Overseas legal person
+Hong Kong Securities Clearing
+Company Limited
+Industrial and Commercial Bank of
+China Limited China Southern Flexible
+Allocation of Consumption and Vitality
+of Hybrid Securities Investment Fund
+-4,398,849
+54,985,761
+0.19%
+Other
+22,976,187
+0
+0.42%
+State-owned legal person
++22,190,586
+594,502,502
+2.10%
+State-owned legal person
+China Securities Finance Corporation Limited
+Central Huijin Asset Management Limited
++5,220,506
+119,719,900
+-4,314,048
+China International Television Corporation
+State-owned legal person
+Securities Investment Fund
+Limited SSE 50 Exchange Traded Index
++440,300
+12,788,337
+0.05%
+Other
+Industrial and Commercial Bank of China
+No. 53 Asset Management Plan
+Universal - Tianfu Bull
+Bank of China Limited - China
+Co., Ltd Industrial and Commercial
+0
+15,015,845
+0.05%
+Other
+China Universal Asset Management
+0
+18,452,300
+0.07%
+7,319,236,460
+By Order of the Supervisory Committee
+25.90%
+HKSCC Nominees Limited
+No. of A Share
+shareholders: 120,420
+No. of H Share
+shareholders: 28,825
+Period
+end of the Reporting
+shareholders as at the
+ordinary share
+Total number of
+(I) Total number of shareholders and their shareholdings
+III. INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+Particulars of top ten shareholders of the Company
+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.
+During the Reporting Period, there was no change in the total number of shares and the share capital of the
+Company.
+CHANGES IN SHARE CAPITAL
+II.
+I.
+Changes in Ordinary Shares and Shareholders Information
+22 March 2018
+Beijing, China
+Chairman of the Supervisory Committee
+ISSUE AND LISTING OF SECURITIES
+Overseas legal person
+Total number of ordinary
+share shareholders as at
+the end of the month
+prior to the disclosure of
+this annual report
+Unit: Shares
+0
+19,323,530,000
+68.37%
+State-owned legal person
+China Life Insurance (Group) Company
+Number of
+shares pledged
+or frozen
+restrictions
+to selling
+No. of A Share
+shareholders: 138,231
+No. of H Share
+shareholders: 28,362
+the Reporting
+Period
+Percentage of
+shareholding
+shareholder
+Name of shareholder
+Nature of
+shares subject
+Number of
+Increase/
+decrease during
+as at the end of
+Number of
+shares held
+the Reporting
+Period
+China Life Insurance Company Limited Annual Report 2017
+Supervisors
+Changes in Ordinary
+In the calculation of the investment yield of the year 2023, the average investment assets as the denominator exclude the fair value changes of investment
+in debt instruments at fair value through other comprehensive income, so as to reflect the strategic intention of the Company for the management of assets
+and liabilities. In the calculation of the investment yield of the year 2022, the data of investment businesses related to IFRS 17 - Insurance Contracts has
+been restated, while the data of investment businesses related to IFRS 9 - Financial Instruments has not been restated. The formula used for calculating
+the investment yield of the year 2022 is the same as that of previous years.
+Report of the Board of
+52
+08 Annual Report 2023 | Prelude
+Note: The items significantly affected by IFRS 9 - Financial Instruments are not presented because of no comparability with the same items last year.
+The Company actively balanced long-term
+value and short-term benefits, continued
+to strengthen cost control and
+underwriting management. However, due
+to the combined impact of changes of
+accounting standards and the continued
+low performance of the equity market, the
+net profit of the Company decreased
+Due to the combined effect of changes in
+profit before income tax and non-taxable
+income
+An increase in the net profits of certain
+associates and joint ventures
+equity holders of the
+Company
+-30.7%
+66,680
+46,181
+Net profit attributable to
+N/A
+1,948
+(2,971)
+Income tax
+associates and joint
+ventures
+RMB million
+103.0%
+3,979
+8,079
+Investment income from
+Main reasons for change
+43
+Report of the Board of
+Directors
+GOVERNANCE
+CORPORATE
+122
+Financial Position
+Alleged Violation of Laws
+42
+and Regulations, Penalties
+Consolidated Statement of
+124
+Imposed and Rectification
+Comprehensive Income
+Restriction on Major Assets
+42
+Change
+Consolidated Statement of
+Changes in Equity
+Other Matters
+42
+Consolidated Statement of
+127
+Cash Flows
+Notes to the Consolidated
+129
+43
+Financial Statements
+06
+126
+2022
+2023
+comprehensive income
+-47.0%
+46,126
+24,431
+Deferred tax assets.
+Main reasons for change
+Change
+31 December
+2022
+2023
+financial position
+31 December
+consolidated statement of
+A decrease in deductible temporary
+differences
+As at
+Major items of the
+RMB million
+MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS WITH
+CHANGE OF OVER 30% AND THE REASONS FOR CHANGE Note
+07
+Annual Report 2023 | Prelude
+In calculating the percentage changes 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.
+Gearing ratio = Total liabilities/Total assets
+In 2023, the net profit attributable to equity holders of the Company under IFRSS was RMB46,181 million, an increase of
+RMB25,071 million comparing with the data under ASBE. As at 31 December 2023, the equity holders' equity under IFRSS
+was RMB477,093 million, an increase of RMB16,983 million comparing with the data under ASBE.
+366,021
+23,819
+(93,967)
+N/A
+As at
+Consolidated Statement of
+Financial assets purchased
+38,533
+consolidated statement of
+Major items of the
+comprehensive income and profit
+distribution during the Reporting Period
+Due to the combined impact of changes
+of accounting standards, total
+For the year ended 31 December
+30.3%
+366,021
+477,093
+Equity holders' equity
+An increase in the scale of commercial
+pension products of subsidiaries
+value through profit or loss
+19,759
+315.0%
+13,878
+Financial liabilities at fair
+agreements to repurchase
+The needs for liquidity management
+45.6%
+148,958
+216,851
+Financial assets sold under
+under agreements to resell
+The needs for liquidity management
+-48.7%
+3,344
+436,169
+41
+116
+4.
+5.
+There is no need for the Company to restate and present any comparative information for the years from 2019 to 2021 in accordance with IFRS 9 -
+Financial Instruments and IFRS 17 - Insurance Contracts.
+As at 31 December 2023, Investment assets = Cash and cash equivalents + Financial assets at fair value through profit or loss + Investment in debt
+instruments at fair value through other comprehensive income + Investment in equity instruments at fair value through other comprehensive income +
+Investment in debt instruments at amortised cost + Term deposits + Financial assets purchased under agreements to resell + Statutory deposits-restricted
++ Investment properties + Investments in associates and joint ventures. As at 31 December 2022, Investment assets = Cash and cash equivalents +
+Securities at fair value through profit or loss + Available-for-sale securities + Held-to-maturity securities + Term deposits + Financial assets purchased
+under agreements to resell + Loans (excluding policy loans) + Statutory deposits-restricted + Investment properties + Investments in associates and joint
+ventures
+C
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Stock Code 2628
+CASAS H
+私諧中國
+20
+S
+ωρ
+2
+3
+Annual
+Report
+The Company was 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
+overseas in December 2003 and returned to the
+domestic market as an A-share listed company in
+January 2007. 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 2023, the
+Company had approximately 328 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
+PRELUDE
+3.
+2.
+1.
+Notes:
+11.3%
+10.13
+10.76
+10.12
+activities per share³
+Major financial ratios
+Weighted average ROE (%)
+9.65
+17.26 A decrease
+10.92
+11.81
+Core Competitiveness
+Honors and Awards
+Business Highlights
+16.46
+Gearing ratio (%)
+91.61
+Gross investment yield 5 (%)
+2.43
+92.52 A decrease
+of 0.91
+percentage
+point
+3.90 A decrease
+of 1.47
+percentage
+points
+90.04
+89.24
+89.00
+4.98
+5.30
+5.24
+of 7.61
+percentage
+points
+2
+235
+Financial Summary
+55
+Information on Delisting and
+Deregistration of American
+Depositary Shares
+55
+35
+Basic Information of the
+Company
+110
+Index of Information
+112
+Disclosure Announcements
+Definitions and Material
+115
+35
+Risk Alert
+35
+55
+Arbitrations
+Major Connected Transactions
+35
+08 FINANCIAL REPORT
+116
+Material Contracts and Their
+41
+Performance
+Independent Auditor's Report
+Material Litigations or
+Undertakings
+SIGNIFICANT EVENTS
+110
+6
+02
+CHAIRMAN'S
+STATEMENT
+9
+03
+DISCUSSION AND
+ANALYSIS
+12
+MANAGEMENT
+Review of Business
+Operations
+12
+Business Analysis
+05
+15
+24
+27
+Technology Capabilities,
+Operations and Services
+Future Prospect
+06
+28
+28
+04
+EMBEDDED VALUE
+29
+07
+OTHER INFORMATION
+Analysis of Specific Items
+12.22
+(4,307)
+477,093
+460,110
+1,260,567
+Embedded value
+EXT
+|Ж
+million
+5,659,250
+Investment
+assets
+million
+5,802,086
+Total assets
+million
+641,380
+Gross written
+premiums
+(
+Ж
+BUSINESS HIGHLIGHTS
+Annual Report 2023 | Prelude
+04
+"2023 China Corporate ESG 'Golden Responsibility Award""
+Sina Finance
+"Best Insurance Company for
+Responsible Investment"
+"Assessment and Selection of the 3rd Investment Golden Bull Awards for China's Insurance Industry"
+China Securities Journal
+million
+Value of one
+year's sales
+36,860
+million
+Change
+2022
+2023
+Major financial data
+Under International Financial Reporting Standards (IFRSS)
+RMB million
+MAJOR FINANCIAL DATA AND INDICATORS FOR THE PAST FIVE YEARS¹
+The Company has prepared the annual report in accordance with International Financial Reporting Standards ("IFRSS"),
+amendments to IFRSS and interpretations issued by the International Accounting Standards Board. Since 1 January 2023,
+the Company has adopted IFRS 9 - Financial Instruments and IFRS 17 - Insurance Contracts. The Company has restated
+and presented the comparative information of the previous year associated with insurance contracts in accordance with
+IFRS 17 Insurance Contracts, and there is no need to restate and present any comparative information of the previous
+year associated with financial instruments in accordance with IFRS 9 - Financial Instruments.
+FINANCIAL SUMMARY
+05
+Annual Report 2023 | Prelude
+for the Insurance Industry"
+hundred million
+Number of long-term
+in-force policies
+million
+49.522
+First-year regular premiums
+with a payment duration of
+ten years or longer
+million
+112,573
+First-year
+regular premiums
+Ж
++K
+218.54%
+Comprehensive
+solvency ratio
+3.28
+"Investment Golden Bull Award
+Chinatimes.net.cn
+"2023 Financial Institution with High-quality Development"
+02
+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 the Company's senior management, experienced underwriting personnel, insurance
+actuaries, investment managers and risk management teams. During the Reporting Period, there was no
+change of the above personnel which might have a material impact on the Company. The Company has
+been pushing forward the reform of the market-oriented remuneration system, continuously stimulating
+its internal vitality, and building a talent team that matches its high-quality development.
+stable core
+team
+Professional
+and
+The Company implements the "Technology-driven China Life" development strategy in great depth by
+adhering to the leading concept of technological innovation. The Company has established digital platforms
+closely integrating online and offline resources with teams and outlets as the support and industry-leading
+hybrid clouds as the base, creating an open, win-win and diversified digital insurance ecosystem, facilitating
+the Company's digital transformation in all aspects, and accelerating the replacement of old growth drivers
+with new ones, through which the Company's business operation is empowered in all aspects, and the
+Company is able to provide smart, convenient, efficient and well-targeted comprehensive financial and
+insurance services to the public.
+Leading
+technologies
+and
+innovation
+empowerment
+The Company adheres to the service concept of "honest and trustworthy, professional and efficient,
+customer-oriented, and first-class experience", develops the operation model of "multiple accesses at
+the front-end, intelligent centralisation at the headquarters, and comprehensive sharing for operations",
+and has established a customer-oriented digital operation and service system. The Company keeps
+considering and catering to demands of its customers, devoting itself to improve customer experience,
+and providing customers with "convenient, quality and caring" services. The Company also adheres to
+the concept of “people-oriented, caring for life, creating value and serving the community", with the aim
+to consistently contribute to the protection of people's good life.
+Convenient
+services
+and superb
+customer
+experience
+The Company sticks to the original role of insurance and further explores the huge potentials of the life
+insurance market. The Company has a sound institutional and services network, with its business outlets
+and services counters covering both urban and rural areas across China, which forms a powerful distribution
+and services network and through which the Company maintains its leading position in China's life insurance
+market and becomes the life insurance service provider within the reach of customers. Through the long-term
+development and accumulation, China Life has solid financial strength comparable to world-class enterprises
+in the world, with its total assets ranking No. 1 in 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.
+Prominent
+principal
+business
+and sound
+financial
+strength
+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. After the restructuring
+and reorganisation, the Company was successively listed overseas and domestically. The Company has
+been playing the role of an explorer and pioneer in China's life insurance industry, and 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.
+Annual Report 2023 | Prelude
+Long history
+and
+excellent
+brand
+Governance
+33
+73
+Report of Corporate
+Employees
+Senior Management and
+59
+Directors, Supervisors,
+Information
+Shares and Shareholders
+56
+CORE COMPETITIVENESS
+2021
+HONORS AND AWARDS
+Forbes
+Wind
+"2023 Top 100 Chinese Listed Companies with ESG Best
+Practices selected by Wind"
+China Corporate Governance Experts 50 Forum
+Chinese Listed Company Governance"
+"2023 Top 50 List of
+"2023 Assessment and Selection of the 'Golden Wealth Management""
+Shanghai Securities News
+"Annual Protection-oriented Insurance Product Award"
+"Annual Insurance Service Award"
+"Annual Insurance Protection Brand Award"
+03
+Annual Report 2023 | Prelude
+"2023 Forbes Global 2000", ranking 62nd
+"2023 Forbes China ESG Innovative Enterprise"
+"2023 China Golden Tripod Awards"
+"Excellent Life Insurance Company
+of the Year"
+"2023 Excellent Insurance Company"
+"2023 Digital Transformation Institution"
+21st Century Business Herald
+"Assessment and Selection of the Ark Prizes for China's Insurance
+Industry in 2023"
+Securities Times
+"Ark Prize for Innovation in the Insurance Industry in 2023"
+"Ark Prize for Excellent Social Responsibility in the Insurance
+Industry in 2023"
+"Ark Prize for Insurance Company with High-quality
+Development in 2023"
+"2023 Gold Medal List of Chinese Financial Institution
+- Golden Dragon Award"
+Financial Times
+"Best Listed Insurance Company of the Year"
+Fortune China
+"2023 Fortune China 500 List”, ranking 12th
+National Business Daily
+198,144
+(176,854)
+2020
+For the year ended
+RMB million
+The reconciliations of net profit attributable to equity holders of the Company for the years 2023 and 2022 and equity
+holders' equity as at 31 December 2023 and 31 December 2022 from the consolidated financial statements prepared under
+ASBE to those under IFRSS are as follows:
+Under Accounting Standards for Business Enterprises ("ASBE"), the Company adopts the transition plan for the new
+accounting standards for insurance contracts. In 2023, the Company continued to apply ASBE No. 25 - Direct Insurance
+Contracts (Caikuai [2006] No. 3), ASBE No. 26 - Reinsurance Contracts (Caikuai [2006] No. 3), Regulations regarding the
+Accounting Treatment of Insurance Contracts (Caikuai [2009] No. 15), ASBE No. 22 - Recognition and Measurement of
+Financial Instruments (Caikuai [2006] No. 3), ASBE No. 23 - Transfer of Financial Assets (Caikuai [2006] No. 3), ASBE No.
+24-Hedging (Caikuai [2006] No. 3), ASBE No. 37 - Presentation of Financial Instruments (Caikuai [2014] No. 23) and other
+relevant accounting standards.
+INFORMATION ON THE DIFFERENCE BETWEEN THE FINANCIAL STATEMENTS
+PREPARED UNDER ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES
+AND INTERNATIONAL FINANCIAL REPORTING STANDARDS
+Annual Report 2023 | Prelude
+Net cash inflow/(outflow) from operating
+per share³
+14.03
+15.95
+16.95
+30.3%
+12.95
+16.88
+Ordinary share holders' equity
+14.31
+15.95
+16.95
+30.3%
+12.95
+16.88
+Equity holders' equity per share³
+2.05
+1.77
+2023
+2022
+Net profit attributable to equity holders of the Company under ASBE
+Reconciling items:
+21,110
+Equity holders' equity under IFRSS
+Deferred tax effects
+Adjustment related to IFRS 17
+Adjustment related to IFRS 9
+Reconciling items:
+Equity holders' equity under ASBE
+2022
+31 December
+31 December
+2023
+As at
+As at
+1.80
+66,680
+Net profit attributable to equity holders of the Company under IFRSS
+(11,415)
+(7,837)
+46,013
+39,593
+Deferred tax effects
+Adjustment related to IFRS 17
+N/A
+(6,685)
+Adjustment related to IFRS 9
+32,082
+46,181
+-30.7%
+2.36
+1.63
+46,181
+Net profit attributable to ordinary
+holders of the Company
+58,251
+50,221
+50,766
+-30.7%
+66,680
+46,181
+Net profit attributable to equity
+59,758
+66,680
+54,440
+-36.4%
+70,060
+44,576
+Profit before income tax
+729,503
+805,049
+824,933
+-7.0%
+370,861
+344,746
+Total revenue
+50,340
+2019
+-30.7%
+50,020
+Earnings per share (basic and diluted)³
+Per share (RMB)
+404,448
+450,688
+479,061
+30.3%
+366,021
+477,093
+Equity holders' equity
+15.8% 4,892,480 4,253,544 3,727,686
+17.6% 4,716,420 4,095,541 3,573,257
+14.7% 4,405,346 3,795,975 3,317,658
+4,635,095
+50,766
+5,659,250 4,811,893
+5,315,052
+Including: Investment assets²
+5,802,086 5,010,068
+Total assets
+As at 31 December
+286,008
+303,990
+286,446
+11.3%
+384,366 345,284
+share holders of the Company
+Net cash inflow/(outflow) from
+operating activities
+57,857
+Total liabilities
+13.60
+attend
+Number of
+One proposal, namely the "Report on the Situation Relevant to the
+Assets and Liabilities Management of the Company for the Year
+2022", was considered and approved.
+Five proposals, including the "Proposal in relation to the Business
+Plan of the Company for the Years from 2023 to 2025", were
+considered and approved.
+Description
+Fifteenth meeting of the Strategy and Assets
+and Liabilities Management Committee of
+the seventh session of the Board
+14 December 2023
+Fourteenth meeting of the Strategy and Assets
+and Liabilities Management Committee of
+the seventh session of the Board
+Four proposals, including the "Proposal in relation to the Results of
+Performance Appraisal of the Company for the Year 2022", were
+considered and approved.
+22 November 2023
+25 October 2023
+Twelfth meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the seventh session of the Board
+22 August 2023
+Eleventh meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the seventh session of the Board
+26 April 2023
+Tenth meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the seventh session of the Board
+Thirteenth meeting of the Strategy and Assets
+and Liabilities Management Committee of
+the seventh session of the Board
+28 March 2023
+One proposal, namely the "Proposal in relation to the Amendments to
+the 'Measures for the Administration of Investments of the Company'
+and the 'Measures for the Administration of Asset Allocation of the
+Company", was considered and approved.
+Eight proposals, including the "Proposal in relation to the Management
+Guidelines on the Investment by China Life Investment Management
+Company Limited under the Entrustment of the Company for the
+Year 2024", were considered and approved.
+Name of member
+During the Reporting Period, five meetings were held by the Connected Transactions Control Committee of the Board of
+the Company. Attendance records of individual members are as follows:
+Meetings and Attendance
+94 Annual Report 2023 | Corporate Governance
+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, fairness and necessity of connected
+transactions, which provide an important basis for the Board's
+decision-making in connected transactions management.
+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 and approved at the twentieth meeting of
+the sixth 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 seventh session of
+the Board comprises Ms. Chen Jie, Mr. Lam Chi Kuen, Mr.
+Zhai Haitao and Mr. Huang Yiping, all being Independent
+Directors, with Ms. Chen Jie acting as the Chairperson.
+Two proposals, namely the "Proposal in relation to Project Huizhi"
+and the "Proposal in relation to the Issue of Capital Supplementary
+Bonds by the Company", were considered and approved.
+CONNECTED TRANSACTIONS CONTROL
+COMMITTEE
+Discussing the Company's development plans and major
+strategic projects. The Strategy and Assets and Liabilities
+Management Committee reviewed the proposals on the
+medium- and long-term development plan and sustainable
+development strategy of the Company, including the
+business plan of the Company for the years from 2023 to
+2025, evaluation report on the outline of the "14th Five-
+Year" development plan of the Company for the year 2022,
+and the environmental, social and governance (ESG) and
+social responsibility report, as well as the proposals on
+Project Huizhi and the issue of capital supplementary bonds
+by the Company.
+Reviewing annual asset allocation plan and entrusted
+investments of the Company. The Strategy and Assets and
+Liabilities Management Committee reviewed the proposals
+on the asset allocation plans of the Company, including
+the investment plan for self-use real estate for the year
+2023 and related authorisation, the management guidelines
+on the investment by CLI under the entrustment of the
+Company for the year 2024, the authorisation of investment
+in financial products for the year 2024, the authorisation of
+investment in equity investment funds for the year 2024,
+the authorisation of investment in non self-use real estate
+for the year 2024, the authorisation of investment in single
+asset management plan for the year 2024, and the overseas
+investment plan for the year 2024 and related authorisation
+of investment.
+In 2023, the Strategy and Assets and Liabilities Management
+Committee of the Board of the Company performed its
+relevant duties and functions in strict compliance with the
+"Procedural Rules for the Strategy and Assets and Liabilities
+Management Committee Meetings". All members of the
+Strategy and Assets and Liabilities Management Committee
+proactively performed their obligations, reviewed the
+proposals on the three-year business plan of the Company,
+annual investment plan and authorisation, major investment
+projects, relevant rules on assets and liabilities management,
+and sustainable development strategies (including ESG
+and social responsibility report), and listened to the annual
+report on the situation relevant to the assets and liabilities
+management. 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 the proposals considered and discussed at the meetings.
+Performance of Duties by the Strategy and Assets
+and Liabilities Management Committee
+93
+Annual Report 2023 | Corporate Governance
+Reviewing the systems of the Company concerning assets
+and liabilities management. The Strategy and Assets and
+Liabilities Management Committee assisted the Board
+in optimising the systems of the Company concerning
+investments and asset allocation, reviewed and approved
+the proposals on the statement of the Company on risk
+preference for the year 2023, the amendments to the rules
+on enterprise-wide risk management of the Company, the
+amendments to the measures for the administration of asset
+allocation of the Company, the amendments to the measures
+for the administration of assets and liabilities management of
+the Company, and the formulation of the measures for the
+administration of risk preference system of the Company,
+etc., and submitted its review opinions to the Board.
+Meetings convened
+The meetings convened are as follows:
+Annual Report 2023 | Corporate Governance
+Name of member
+Attendance record of the resigned Director at meetings is as follows:
+Non-executive Director, member of the Strategy
+and Assets and Liabilities Management Committee
+of the seventh session of the Board
+Wang Junhui
+2/3
+Executive Director, member of the Strategy and
+Assets and Liabilities Management Committee of
+the seventh session of the Board
+Zhao Peng
+Li Mingguang
+4/6
+0/6
+6/6
+required to
+attend
+meetings
+attended by
+proxies/Number
+of meetings
+Number of
+2/6
+Notes:
+13
+1/3
+92
+Directors who were unable to attend any meeting of specialised Board committees authorised other Directors to attend and vote at the meeting on their
+behalf.
+4.
+The number of meetings attended in person includes meetings attended on-site and by way of telephone or video conference.
+3.
+Mr. Li Mingguang became a member of the Strategy and Assets and Liabilities Management Committee in September 2023.
+2.
+1. Mr. Zhao Peng ceased to be a member of the Strategy and Assets and Liabilities Management Committee from August 2023.
+1/2
+1/2
+Number of meetings
+attended by proxies/
+Number of meetings
+required to attend
+Number of meetings
+attended in person/
+Number of meetings
+required to attend
+46
+4/6
+2/6
+Position
+Chen Jie
+Independent Director, Chairperson of the
+Connected Transactions Control Committee of the
+seventh session of the Board
+Number of
+Approving framework agreements for daily connected
+transactions. The Connected Transactions Control Committee
+reviewed the proposals on the framework agreements for
+daily connected transactions, such as the execution of the
+"Agreement for Entrusted Investment and Management
+and Operating Services with respect to Alternative
+Investments with Insurance Funds" between the Company
+and CLI, the execution of the "Cooperation Agreement for
+Business Current Deposits" and the "Agreement Deposit
+Contract for RMB" between the Company and CGB, the
+termination by the Company of the "Cooperation Agreement
+for Concurrent Insurance Agency Business (Package
+Transactions Agreement)" with CGB, and the execution of
+the "Agreement for Package Transactions in relation to the
+Entrustment of the Company as an Agent to Sell Property
+and Casualty Insurance Products" between the Company
+and CLP&C, and fully reviewed the necessity, compliance
+and fairness of the daily connected transactions of the
+Company, which offered professional support to the Board's
+decision-making in a scientific manner.
+Approving connected transactions. The Connected
+Transactions Control Committee reviewed the proposals
+on major connected transactions, such as the investment by
+the Company in CLI – Xingan No. 1 Equity Investment Plan,
+the investment by the Company in CLI – Beijing MTR Equity
+Investment Plan, the investment by the Company in Project
+Huacang, and the capital reduction of National Pipe Network
+Group Sichuan East Natural Gas Transmission Pipeline
+Co., Ltd. by the Company, fully discussed the necessity,
+feasibility and major risks of the connected transactions,
+and made recommendations to the Board in respect thereof.
+-
+Confirming connected parties of the Company. The
+Connected Transactions Control Committee reviewed the
+"Report on Confirming the List of Connected Parties of the
+Company as of 31 December 2022" and the "Report on
+Confirming the List of Connected Parties of the Company
+as of 30 June 2023", and reported to the Board in respect
+thereof.
+In 2023, the Connected Transactions Control Committee
+performed its duties and functions in strict compliance
+with the "Procedural Rules for the Connected 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.
+Performance of Duties by the Connected
+Transactions Control Committee
+Reviewing the implementation of the system for connected
+transactions management. The Connected Transactions
+Control Committee reviewed the implementation of the
+Company's system for connected transactions management
+and the report on connected transactions, and reviewed the
+report on the overall status of connected transactions of the
+Company for the year 2022.
+96 Annual Report 2023 | Corporate Governance
+Fourteenth meeting of the Connected
+Transactions Control Committee of the
+seventh session of the Board
+14 December 2023
+One report, namely the "Report on Confirming the List of Connected
+Parties of the Company as of 30 June 2023", was debriefed.
+Thirteenth meeting of the Connected
+Transactions Control Committee of the
+seventh session of the Board
+22 August 2023
+Three proposals, including the "Proposal in relation to the Execution of
+the 'Cooperation Agreement for Business Current Deposits' between
+the Company and China Guangfa Bank Co. Ltd." and the "Proposal
+in relation to the Execution of the 'Agreement Deposit Contract for
+RMB' between the Company and China Guangfa Bank Co. Ltd.", were
+considered and approved.
+One proposal, namely the "Proposal in relation to the Execution of the
+'Agreement for Package Transactions in relation to the Entrustment
+of the Company as an Agent to Sell Property and Casualty Insurance
+Products' between the Company and China Life Property and Casualty
+Insurance Company Limited", was considered and approved.
+INDEPENDENCE OF THE COMPANY FROM ITS
+CONTROLLING SHAREHOLDER
+Employees: The Company is independent in the aspects
+of employment, human resources and remuneration
+management.
+Assets: The Company owns all assets relating to 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.
+98 Annual Report 2023 | Corporate Governance
+The Company has set up the "Investor Relations" section
+on its official website at www.e-chinalife.com to facilitate
+investors to access announcements, operating results
+materials and other information for public disclosure as
+published by the Company on the stock exchanges of its listed
+jurisdictions in the PRC and overseas. In addition, investors
+may call the investor relations hotline of the Company at 86-
+10-63631241 or email to the investor relations email address
+at ir@e-chinalife.com if they have any further inquiries. The
+Company will respond to such inquiries in a timely manner.
+The Company has established a well-developed, effective
+and practical information disclosure management system in
+strict compliance with the regulatory laws and regulations,
+relevant rules and self-regulatory requirements of its
+listed jurisdictions and the insurance industry, focused on
+enhancing the quality of information disclosure on the basis
+of strict compliance with laws and regulations, and continued
+to improve the effectiveness of information disclosure, so
+as to ensure that domestic and overseas investors obtain
+true, accurate and complete information in a compliant
+and effective manner. The Company has attached great
+importance to its contact and communication with domestic
+and overseas investors, and proactively developed investor
+relations by offering various channels to facilitate such
+investors to keep abreast of any major business development
+of the Company in a timely manner.
+INFORMATION DISCLOSURE AND INVESTOR
+RELATIONS
+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.
+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.
+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.
+SHAREHOLDERS' INTERESTS
+The remuneration for senior management mainly comprises
+position compensation, performance rewards, welfare
+benefits and medium- and long-term incentives. A mechanism
+for the recovery and deduction of performance-based
+remuneration is also established to balance the relationships
+between the current and long-term needs as well as the
+revenue and risk by making full use of remuneration tools.
+The Company implements a term-of-service and target-
+related responsibility system for senior management.
+Performance target contracts are 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.
+PERFORMANCE APPRAISAL AND INCENTIVES
+FOR SENIOR MANAGEMENT
+Annual Report 2023 | Corporate Governance 97
+Business operations: The Company independently develops
+personal insurance businesses, including life insurance, health
+insurance and accident insurance businesses; reinsurance
+relating to the above insurance businesses; funds application
+business permitted by applicable PRC laws and regulations
+or approved by 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 approved by the insurance administrative and
+regulatory authorities of the PRC. The Company currently
+possesses the "Insurance Permit" (institution number:
+000005) issued by an insurance administrative and regulatory
+authority. 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.
+Organisation: The Company has established a well-developed
+organisational 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.
+Finance: The Company has established a separate financial
+department, and developed 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.
+Three proposals, including the "Proposal in relation to the Execution
+of the 'Agreement for Entrusted Investment and Management and
+Operating Services with respect to Alternative Investments with
+Insurance Funds' between the Company and China Life Investment
+Management Company Limited", were considered and approved.
+meetings
+attended in
+person/Number
+of meetings
+required to
+Four proposals, including the "Proposal in relation to the Investment
+by the Company in CLI - Xingan No. 1 Equity Investment Plan", were
+considered and approved, and one report, namely the "Report on
+Confirming the List of Connected Parties of the Company as of 31
+December 2022", was debriefed.
+Twelfth meeting of the Connected
+Transactions Control Committee of the
+seventh session of the Board
+0/5
+5/5
+Independent Director, member of the Connected
+Transactions Control Committee of the seventh
+session of the Board
+Zhai Haitao
+0/5
+5/5
+Huang Yiping
+Independent Director, member of the Connected
+Transactions Control Committee of the seventh
+session of the Board
+0/5
+5/5
+required to
+attend
+meetings
+attended by
+proxies/Number
+of meetings
+Number of
+meetings
+attended in
+person/Number
+of meetings
+required to
+attend
+Lam Chi Kuen
+Independent Director, member of the Connected
+Transactions Control Committee of the seventh
+session of the Board
+4/5
+1/5
+28 June 2023
+Eleventh meeting of the Connected
+Transactions Control Committee of the
+seventh session of the Board
+26 April 2023
+Tenth meeting of the Connected
+Transactions Control Committee of the
+seventh session of the Board
+28 March 2023
+Meetings convened
+The meetings convened are as follows:
+95
+Annual Report 2023 | Corporate Governance
+Directors who were unable to attend any meeting of specialised Board committees authorised other Directors to attend and vote at the meeting on their
+behalf.
+The number of meetings attended in person includes meetings attended on-site and by way of telephone or video conference.
+2.
+1.
+Notes:
+15
+Description
+Independent Director, member of the Strategy and
+Assets and Liabilities Management Committee of
+the seventh session of the Board
+Meetings convened
+During the Reporting Period, five meetings were held by the Risk Management and Consumer Rights Protection Committee
+of the Board of the Company. Attendance records of individual members are as follows:
+Non-executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+0/4
+Chen Jie
+Independent Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+5/5
+0/5
+Notes:
+1.
+2.
+3.
+4.
+Mr. Li Mingguang ceased to be a member of the Risk Management and Consumer Rights Protection Committee from September 2023. During the period
+when Mr. Li Mingguang served as a member of the Risk Management and Consumer Rights Protection Committee in 2023, the Risk Management and
+Consumer Rights Protection Committee convened two meetings and Mr. Li Mingguang attended the two meetings in person.
+Ms. Zhuo Meijuan became a member of the Risk Management and Consumer Rights Protection Committee in June 2023.
+The number of meetings attended in person includes meetings attended on-site and by way of telephone or video conference.
+Directors who were unable to attend any meeting of specialised Board committees authorised other Directors to attend and vote at the meeting on their
+behalf.
+Zhuo Meijuan
+Annual Report 2023 | Corporate Governance
+4/5
+1/5
+Meetings and Attendance
+Independent Director, Chairman of the Strategy
+and Assets and Liabilities Management Committee
+of the seventh session of the Board
+Name of member
+Position
+Huang Yiping
+Independent Director, Chairman of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Number of
+meetings
+attended in
+person/Number
+of meetings
+required to
+attend
+Number of
+meetings
+attended by
+proxies/Number
+of meetings
+required to
+attend
+3/5
+2/5
+Wang Junhui
+Non-executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+15
+89
+4/4
+28 March 2023
+Reviewing the risk analysis on major matters concerning
+the business operations and management of the Company.
+The Risk Management and Consumer Rights Protection
+Committee reviewed the risk analysis on major matters
+concerning the business operations and management of
+the Company, and reviewed and approved the proposals in
+relation to, among others, the business plan of the Company
+for the years from 2023-2025, the risk analysis on the issue
+of capital supplementary bonds by the Company and the
+authorisation for investment for the year 2024, and gave
+guiding opinions on risk control for major matters concerning
+the business operations and management of the Company
+in accordance with the regulatory requirements of the NFRA
+on the China Risk Oriented Solvency System (C-ROSS).
+Reviewing the assessment reports on business risk and
+internal control of the Company. The Risk Management and
+Consumer Rights Protection Committee closely monitored
+and controlled and effectively prevented internal and external
+risks of the Company, and assisted the Board in reviewing
+the assessment reports on business risk and internal control
+of the Company, according to the national and international
+regulatory requirements. The Risk Management and
+Consumer Rights Protection Committee reviewed in advance
+the reports on risk management such as the annual and
+quarterly reports on the enterprise-wide risk management
+of the Company, work summary on anti-money laundering
+for the year 2022 and the work plan for the year 2023, the
+report on case prevention for the year 2022, the reputational
+risk management report for the year 2022, the statement
+on risk preference for the year 2023, the audit report on
+the solvency risk management system for the year 2023
+and the work report on fraud risk management for the year
+2023, which offered professional support to the Board's
+decision-making in a scientific manner.
+Reviewing the reports in relation to consumer rights protection
+on a regular basis. In accordance with the "Guiding Opinions
+of the China Banking and Insurance Regulatory Commission
+on Banking and Insurance Institutions Strengthening the
+Building of Working Systems and Mechanisms for Protection
+of Consumer Rights and Interests", the Risk Management
+and Consumer Rights Protection Committee reviewed the
+report on the consumer rights protection of the Company
+for the year 2022 and the work proposal for consumer rights
+protection of the Company for the year 2023.
+Optimising the system of the Company in relation to internal
+control and risk management. The Risk Management and
+Consumer Rights Protection Committee assisted the Board in
+optimising the system of the Company in relation to internal
+control and risk management, considered the proposals in
+relation to seven amendment rules on risk management
+such as the rules on enterprise-wide risk management
+of the Company, the formulation of the measures for the
+administration of risk preference system of the Company
+and the formulation of the measures for the administration
+of internal control of the Company. Further, the Company
+regularly notified the Risk Management and Consumer
+Rights Protection Committee of its integrated risk rating
+results given by the NFRA.
+STRATEGY AND ASSETS AND LIABILITIES
+MANAGEMENT COMMITTEE
+The Strategy and Assets and Liabilities Management
+Committee of the Company 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, major strategic
+investment decisions and major asset strategic allocation
+plan, and making recommendations in respect thereof.
+Annual Report 2023 | Corporate Governance
+91
+Meetings and Attendance
+During the Reporting Period, six meetings were held by the Strategy and Assets and Liabilities Management Committee
+of the Board of the Company. Attendance records of individual members are as follows:
+Name of member
+Position
+Zhai Haitao
+The meetings convened are as follows:
+Huang Yiping
+In 2023, the Risk Management and Consumer Rights
+Protection Committee of the Board of the Company.
+performed its duties and functions in strict compliance
+with the "Procedural Rules for the Risk Management
+and Consumer Rights Protection Committee Meetings".
+All members of the Risk Management and Consumer
+Rights Protection Committee performed their obligations
+in a responsible manner and reviewed the proposals in
+relation to the internal control system of the Company, its
+risk management and consumer rights protection. During
+meetings of the Risk Management and Consumer Rights
+Protection Committee, all members actively participated
+in discussions and gave guiding opinions on the proposals
+considered and discussed at the meetings.
+Performance of Duties by the Risk Management and
+Consumer Rights Protection 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
+seventh session of the Board comprises Mr. Zhai Haitao and
+Mr. Huang Yiping, both being Independent Directors, Mr. Li
+Mingguang, an Executive Director, and Mr. Wang Junhui,
+a Non-executive Director, with Mr. Zhai Haitao acting as
+the Chairman.
+Eight proposals, including the "Proposal in relation to the Authorisation
+for the Company's Investment in Financial Products for the Year 2024",
+were considered and approved, and one report, namely the "Audit
+Report on the Solvency Risk Management System of the Company
+for the Year 2023", was debriefed.
+Ninth meeting of the Risk Management
+and Consumer Rights Protection Committee
+of the seventh session of the Board
+90 Annual Report 2023 | Corporate Governance
+Eleven proposals, including the "Proposal in relation to the Business
+Plan of the Company for the Years from 2023 to 2025", the "Proposal
+in relation to the Amendments to the 'Measures for the Administration
+of Liquidity Risks of the Company'" and the "Proposal in relation to
+the 'Work Report on Consumer Rights Protection of the Company for
+the Year 2022'", were considered and approved, and three reports,
+including the "Report on the Case Prevention of the Company for the
+Year 2022", were debriefed.
+22 August 2023
+Tenth meeting of the Risk Management
+and Consumer Rights Protection Committee
+of the seventh session of the Board
+25 October 2023
+Eleventh meeting of the Risk Management
+and Consumer Rights Protection Committee
+of the seventh session of the Board
+Description
+Twelfth meeting of the Risk Management
+and Consumer Rights Protection Committee
+of the seventh session of the Board
+14 December 2023
+Thirteenth meeting of the Risk Management
+and Consumer Rights Protection Committee
+of the seventh session of the Board
+Three proposals, including the "Proposal in relation to the Amendments
+to the 'Measures for the Administration of Strategic Risks of the
+Company'", were considered and approved.
+Two proposals, including the "Proposal in relation to the Amendments to
+the 'Measures for the Administration of Market Risks of the Company"",
+were considered and approved.
+Two proposals, namely the "Proposal in relation to Project Huizhi"
+and the "Proposal in relation to the Risk Analysis on the Issue of
+Capital Supplementary Bonds by the Company", were considered
+and approved.
+22 November 2023
+Strategic risk refers to the risk of mismatch between
+strategies, market conditions and capabilities of the Company
+arising from ineffective formulation or implementation of
+strategies or changes in operational environment.
+The Company set up a relatively well-developed system for
+strategic risk management, and established an organisational
+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.
+The Company also optimised the work mechanism and
+process for strategic study, formulation, implementation
+and assessment. By taking into full account various factors
+such as market conditions, risk preference, capital position
+and its own capabilities, the Company made planning for
+its medium- and long-term development and put the same
+into practice in annual business plan and work plans, so as
+to strengthen the formulation, approval, implementation and
+evaluation of whole process management of strategic and
+development planning. Meanwhile, the Company equipped
+with a professional team of talents and developed a scientific
+and efficient system for performance appraisal to strengthen
+the management of both business and investment strategies.
+The Company also created an indicator system for the daily
+monitoring of strategic risks to monitor and analyse strategic
+risks on a regular basis, which ensured an effective execution
+of the Company's strategic risk management. In 2023, the
+soundness of the Company's strategic risk management
+system and the effectiveness of its implementation were
+maintained, and the strategic risks were controllable in
+general.
+106 Annual Report 2023 | Corporate Governance
+Reputational Risk
+Reputational risk refers to the risk of negative comments on
+the Company from stakeholders, the public and the media
+as a result of the behaviours of the Company's divisions at
+all levels, practitioners or external events, thereby causing
+losses, damaging brand value, being detrimental to the
+normal operation of the Company, and even affecting
+market and social stability. Reputational risk may exist in any
+aspect of the Company's operation and management. The
+Company highly values its reputation and has incorporated
+reputational risk management into the corporate governance
+and comprehensive risk management system to prevent
+reputational risk.
+In 2023, the Company made further improvement to its
+system for reputational risk management to enhance the
+standard of reputational risk management on an ongoing
+basis. For the improvement of systems and mechanisms, the
+measures for the administration of reputational risks of the
+Company was optimised to strengthen the system for the
+evaluation and responsibility attribution of reputational risks
+and to consolidate the main management responsibilities.
+By practising the reputational risk management concept
+focusing on precaution, the Company conducted the source
+control over reputational risk, and mitigated reputational
+risks and hidden dangers in an active and effective manner,
+which avoided the occurrence of significant reputational risk
+incidents. The Company regularly reviewed and reported on
+reputational risk management by conducting evaluations
+and inspections on a rolling basis with more sophisticated
+management methods, and advanced the development of
+whole-process management online through the introduction
+of tech-empowered management tools, thus contributing
+to an improvement of reputational risk management in
+both quality and efficiency. The Company constantly
+proceeded with all tasks throughout the process, such as
+the identification, evaluation and disposal of reputational risk,
+so as to properly address and dispose of any reputational
+incidents and effectively protect brand reputation. The
+Company also offered training courses and exercises on
+reputational risk management in all aspects to cultivate a
+culture of reputational risk management.
+Liquidity Risk
+Information safety risk refers to the operational, legal and
+reputational risks caused by natural factors, human factors,
+technological loopholes or management defects in the
+process of applying information technology in the Company.
+The Company established a system for liquidity risk
+management to define the organisational 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 organised
+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 provisions to ensure the performance of its obligation
+to give insurance benefits as scheduled.
+Information Safety Risk
+Annual Report 2023 | Corporate Governance 107
+The Company attached great importance to information safety
+risk management. Firstly, the Company set up organisations
+to offer protection for information safety. It established
+an internet security and informationisation commission as
+the body for leading and organising the development of
+internet security and informationisation of the Company in
+all aspects. An information safety professional committee
+was set up under the internet security and informationisation
+commission to take the lead in the risk management of
+information safety of the Company. A working group of
+information safety was established at the headquarters
+level for the daily operation of information safety of the
+Company, whereas a leading group and working group
+of information safety were established at the level of
+branches and the divisions directly under the Company
+for the specific implementation of information safety. By
+assigning the duties of information safety to its different
+levels for implementation, the Company consolidated the
+responsibility of maintaining information safety at each
+level. Secondly, the Company developed various systems
+and strictly implemented such systems to ensure the
+standardisation of information management. Thirdly, the
+Company optimised the safety management requirements
+for the full life cycle of its IT system. By conducting safety
+tests and quality checks on the IT system before and after
+it was put online, the Company consistently enhanced
+the safety of such system. The Company also formulated
+contingency plans of the IT system for regular exercises to
+enhance its emergency response capability to address cyber
+attacks or safety accidents. Through the application of new
+cutting-edge technologies such as cloud computing and big
+data in all aspects, the Company built a security situational
+awareness platform and developed an automatic joint control
+mechanism focusing on joint prevention and coordination for
+the entire network with the help from the enterprise general
+control center, thus achieving the centralised analysis and
+coordinated disposal of various safety risks. In addition,
+the Company constantly stepped up efforts on, among
+others, awareness training, promotion and education, and
+phishing simulation for the information safety awareness of
+employees to foster a corporate culture of "everyone places
+emphasis on safety". In 2023, there was no circumstance
+where the Company's operation was affected due to the
+breakdown of computers or security breach.
+In 2023, the Company actively implemented the legal
+provisions of national laws such as the "Data Security
+Law" and the "Personal Information Protection Law" to
+strictly protect major data and personal information, so as to
+safeguard the legitimate rights and interests of customers.
+It continued to optimise its data governance structure and
+data management system and mechanism, refined the
+responsibilities of divisions at all levels for data management,
+established the unified standards for the management of
+data classification and categorisation and a strategy for data
+security protection to define the targets to be protected for
+data security and the key areas for protection, implemented
+the classified security protection measures for the full life
+cycle such as the collection, transmission and storage of data
+in an efficient manner, and developed a 3-dimensional data
+security protection system. Moreover, with the increased
+efforts on developing its data management capability, the
+Company was awarded the highest level certification under
+the Data Management Capability Maturity Assessment Model
+(DCMM), and consistently strengthened the management
+and control of data security, in order to ensure that the data
+of the Company was manageable and controllable.
+ESG Risk
+Strategic 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.
+operational risks and taking relevant control measures against
+them; (4) conducting self-assessments on operational risks
+and their control measures on a regular basis and identifying
+any areas in the management and control of operational
+risks that were vulnerable, with a view to constantly
+increasing the capability of the Company in operational risk
+management; and (5) fostering a culture of operational risk
+management by organising and conducting training courses
+on operational risk management. In 2023, the operational
+risk management of the Company was satisfactory, and
+losses from operational risks were controllable. As the
+management foundation of the Company for operational
+risks was consistently solidified, the quality and efficiency
+of its risk management were further enhanced.
+Insurance risk refers to the risk that exposes insurance
+companies to unexpected losses due to the adverse deviation
+of the actual situation from the projections of assumptions
+such as loss ratio, expense rate and lapse rate.
+Operational risk refers to the risk of losses arising from
+the issues found in internal procedures, employees and IT
+systems, as well as external events.
+The Company assesses ESG material issues once a year in
+view of the external economic, social and macro environment
+as well as its own development strategy, discusses and
+determines the risks and opportunities faced by it in relation
+to ESG, and regards the management and escalation of key
+issues as its priority of work in ESG for the year. The Board
+reviews and confirms the assessment results, taking into
+consideration the key issues as part of its formulation of an
+overall strategy, and supervising the management of such
+issues and their performance. In 2023, the Company further
+strengthened its ESG risk management, through which
+top five ESG risks were identified as follows: information
+safety, climate change, corruption, human resources and
+customer relationship management, and talent attraction
+and retention. The Company has devised the management
+strategy against the above risks in order to keep track with
+the risk development trend in a timely manner.
+The Company assessed and monitored insurance risks
+through sensitivity analysis and other actuarial appraisal
+methods, with a focus on the impact of mortality rate,
+morbidity rate, lapse rate, expense 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 organisational
+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) effectively
+guarding against adverse selection 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;
+(5) transferring and mitigating insurance risks through a
+scientific and reasonable reinsurance arrangement; and
+(6) strengthening expenses management and enhancing
+efficiency in resource utilisation. In 2023, the 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
+further enhance its capability of managing insurance risks.
+104 Annual Report 2023 | Corporate Governance
+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 analyses and stress
+tests to measure the risk losses to the Company under
+stress scenarios, gave pre-warning of market risks and
+formulated contingency plans for emergencies. Currently,
+the proportion of each investment asset is in line with the
+requirements of the NFRA and the internal management
+provisions of the Company. According to the results of the
+risk indicator monitoring and stress tests, the market risk
+of the Company was within a normal controllable range.
+The Company primarily adopted the following risk control
+measures in 2023: (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
+categories and the characteristics of their returns on a
+regular basis, so as to constantly optimise the model of asset
+allocation; (3) carrying out the effective management of open
+market equity exposure and making reasonable allocations;
+(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;
+(5) facilitating the advancement of systems to improve risk
+monitoring and pre-warning functions and simultaneously
+strengthening the emergency response mechanism for major
+emergencies in investment management; and (6) reinforcing
+efforts to identify and monitor investment concentration risk
+and diversifying risks in a reasonable manner.
+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
+organisational structure of credit risk management,
+and constantly optimised 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 enhanced
+the standard of quantitative analysis on credit risks and
+diversified the methods used for risk management and
+control. The Company primarily adopted the following
+measures in 2023: (1) further improving the centralised credit
+rating process and system functions to enhance the credit
+risk management standard; (2) optimising the credit risk limit
+management system in multiple dimensions to improve the
+mechanism for prevention of credit risks prior to investment;
+(3) strengthening the 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) deepening efforts on
+the research of key industries and the credit risk outlook to
+enhance the capability of the Company in risk management
+and control during and after investment.
+Annual Report 2023 | Corporate Governance 105
+Reinsurance Credit 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
+assessments on reinsurers through internal rating to select
+reinsurers that have higher credit standing to mitigate credit
+risks.
+Operational Risk
+The Company consistently implemented regulatory
+requirements and its operational risk management strategies,
+optimised the operational risk management system, and
+regulated the operational risk management processes,
+so as to enhance the effectiveness of operational risk
+management on an ongoing basis. The Company established
+an operational risk management system that combines three
+management tools, namely self-assessment of operational
+risk and its control, loss database for operational risks, and
+key risk indicators, and further reinforced the operational risk
+management at all levels of branches, in order to facilitate
+the vertical expansion of operational risk management
+network and achieve the integration of operational risk
+management and control with its business development. The
+operational risk control measures adopted by the Company
+mainly included the following: (1) developing an operational
+risk management process and method 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 database 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 conduct regular monitoring of the key indicators for
+108 Annual Report 2023 | Corporate Governance
+The major risks of the Company in the course of business
+operation and management include insurance risk, market
+risk, credit risk, operational risk, strategic risk, reputational
+risk, liquidity risk, information safety risk, ESG risk and
+fraud risk.
+In 2023, the Company vigorously promoted the informatisation
+of risk management, actively applied the latest advanced
+technologies such as big data and artificial intelligence,
+and further optimised and upgraded the intelligent
+application of anti-money laundering in great depth, thus
+making significant progress in the intelligent identification
+of illegal fund-raising risks, monitoring of sales risk pre-
+warning, and integrated risk management platform. The
+informatisation and intellectualisation of risk management
+improved significantly, and the risk management capability
+of the Company was enhanced on an ongoing basis, which
+provided a strong support to the high-quality development
+of the Company.
+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 its 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, conducting tests on the management level,
+assessing the effectiveness of the establishment and
+implementation of internal control systems in accordance
+with the regulatory requirements of the jurisdictions where
+the Company is listed, and reporting to the Board, the Audit
+Committee and the management.
+Pursuant to the requirements of the "Notice on the
+Proper Preparation for Disclosure of 2023 Annual Reports
+of Companies Listed on the Main Board" and the "Self-
+Regulatory Guide for Listed Companies No. 2 — Business
+Process" promulgated by the SSE, the Company shall release
+an internal control self-assessment report simultaneously
+with the publication of its 2023 annual report. The Company
+has completed internal control self-assessment as required
+by the SSE for the year ended 31 December 2023. Such
+assessment is conducted on an annual basis and in two
+stages, namely, interim assessment and supplementary
+test. The Company has confirmed after the assessment
+that the relevant internal controls were effective. The
+Company has also received from its independent auditors
+an unqualified opinion on the effectiveness of its internal
+controls in relation to financial reporting as at 31 December
+2023. The Company's assessment report and the report of
+its independent auditors will be included as an attachment
+to its annual report to be submitted to the SSE.
+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 the "Standard Regulations on Corporate
+Internal Control", the "Implementation Guidelines for
+Corporate Internal Control", 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 NFRA, the Company has carried
+out a lot of work on its internal control system establishment,
+rules implementation and risk management by centering on
+its corporate governance structure. The Company has also
+formulated and issued the "Internal Control Implementation
+Manual of China Life Insurance Company Limited (2023
+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.
+Internal Control
+INTERNAL CONTROL AND RISK MANAGEMENT
+The Company has consistently proceeded with tasks in
+compliance with the regulatory requirements of relevant
+regulatory authorities, such as the SSE and the HKSE, with
+respect to corporate internal control.
+Mr. Heng Victor Ja Wei, the Company Secretary, took no
+less than 15 hours of relevant professional training in 2023,
+satisfying the requirements under the Listing Rules.
+In compliance with regulatory requirements and having
+considered the characteristics of its business and
+management requirements, the Company has established
+and implemented a series of internal control measures and
+procedures with respect to currency and funds, insurance
+business, 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.
+TRAINING OF COMPANY SECRETARY
+CHANGES OF THE ARTICLES OF ASSOCIATION
+99
+Annual Report 2023 | Corporate Governance
+In 2023, the Company won various awards, including
+the "Best Practice of 2022 Annual Report Presentation
+Meetings" by the China Association for Public Companies,
+the "Top 50 in the Market Capitalisation List (Full List) of
+Chinese Listed Companies" and the "Top 5 of the Insurance
+Industry" by Wind, and the "Best Investor Relations Project"
+and the "Best Leader Award" in the 7th Excellent IR in
+China.
+The Company developed investor relations in a proactive
+Iway with its stringent attitude and innovative thinking. It
+kept abreast of the pace of technological development 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 works conducted by the Company for
+investor relations mainly included holding shareholders'
+general meetings, results briefings and investor presentation
+meetings, organising open days for the Company, embarking
+on global non-deal roadshows, holding online and offline
+conferences with investors and analysts, attending investors'
+meetings, frequently updating information on its investor
+relations website, and timely responding to enquiries from
+investors and analysts. In 2023, the Company communicated
+with more than 3,700 investors and analysts, including nearly
+1,200 investors who attended results briefings online and
+offline. The Company held 247 online and offline meetings
+with more than 2,500 investors and analysts for the year,
+attended a total of 51 offline investors' meetings, and
+convened 39 onsite investigation and research meetings and
+50 telephone or video conferences. It also communicated
+with investors by holding 107 offline roadshow meetings
+during the non-deal roadshows for annual and interim
+results. In addition, the Company focused on the protection
+of medium and small investors, actively responded to any
+enquiries from them, kept in close contact with investors
+by various means such as email, phone and internet, and
+recorded a clickthrough rate of over 150,000 person-times for
+the live video streaming of results briefings. The Company
+reviews its policy for communication with shareholders once
+a year and considers that such policy remains effective based
+on the feedbacks received from investors and the capital
+market on investor relations.
+In 2023, the Company continued to improve the effectiveness
+of disclosure and the transparency of information. For the
+disclosure of provisional announcements, the Company
+promptly fulfilled its obligation of information disclosure
+by publishing timely announcements with respect to the
+progress of such matters as significant matters, major
+investments and connected transactions on the websites
+of the stock exchanges in its listed jurisdictions, the media
+satisfying the conditions prescribed by the CSRC, the official
+website of the Company and the website of Insurance
+Association of China, etc. For the disclosure of periodic
+reports, the Company continued to deeply engage in making
+disclosure of information that had significant impacts on
+investors' value judgment and investment decisions,
+enriched the contents of information for voluntary disclosure
+with its focus primarily on investor concerns, and provided
+the capital market and investors with simple and clear,
+more targeted and effective information, for the purpose of
+facilitating investors, especially medium and small investors,
+to better understand the Company's strategies and business
+highlights. The Company also regularly organised training
+courses and promotion activities relating to the relevant
+rules of information disclosure and corporate governance.
+It properly arranged information disclosure on the basis that
+the differences between the laws and regulations of its listed
+jurisdictions in the PRC and overseas, and the differences
+between the regulatory requirements of its listed jurisdictions
+and the insurance industry, are well defined. 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 law,
+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. In 2023,
+the Company was awarded Grade A in the assessment by
+the SSE of information disclosure of listed companies for
+the year of 2022-2023.
+During the Reporting Period, no amendment was made to
+the Articles of Association by the Company.
+Risk Identification and Control
+100 Annual Report 2023 | Corporate Governance
+-
+Annual Report 2023 | Corporate Governance 103
+The Company followed the requirements under anti-
+money laundering laws and regulations, kept on improving
+the system for money-laundering risk management and
+performed the anti-money laundering obligations under the
+law, with a view to enhancing both the quality and efficiency
+of its anti-money laundering work. Meanwhile, pursuant to
+external 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 effectively improved the Company's precaution
+capability in key risk areas.
+Pursuant to the requirements of the NFRA 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, reputational 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 consistently reinforced the mechanism for
+formation, transmission and application of the risk preference
+system, creating a system for the normal 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 enhanced its risk management
+standard in all aspects. In the SARMRA under the C-ROSS
+(Phase II) Regulation conducted by the NFRA, the Company's
+capability of solvency risk management ranked among the
+top of life insurance companies.
+Work in relation to Risk Management
+The Company has established an organisational system
+for comprehensive risk management with the ultimate
+responsibility assumed by the Board, under the direct
+leadership of the management, having reliance on the risk
+management departments and with the close cooperation
+among the relevant functional departments, and developed a
+5-tier organisational 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 as the Risk Management Committee and the Risk
+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,
+the Office of the Discipline Inspection Committee 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 organise and commence any
+work in relation to risk management. By establishing the
+organisational 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.
+Risk Management System
+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 authorisations and operational workflows, and
+effectively adopts the measures to prevent and manage risks
+relating to the operation of exclusive agents. The Company
+has promulgated clear regulations for the workflows and
+authorisations 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.
+Risk Management
+audits closely related to the Company's business objectives,
+and conducted a variety of special audits on anti-money
+laundering, connected transactions, assets and liabilities
+management, solvency risk management system, application
+of funds, protection of consumers' rights and interests,
+reputational risk management, risk management of financial
+derivative transactions, compliance of intermediary business,
+and insurance fraud risk management pursuant to regulatory
+requirements. Meanwhile, the Company has put more efforts
+on the application of audit results, consistently strengthened
+the supervision and direction of rectification measures
+for any issues identified in audit, handover of the issues
+concerned and the responsibility attribution, proceeded with
+the integration of rectification measures, further improved
+the closed-loop management of internal audits, and facilitated
+its standardised management and compliance operation. The
+Company has constantly optimised three lines of defense
+for compliance management to vigorously establish a
+sound and effective compliance management system and
+to improve a mechanism for compliance management on an
+ongoing basis, with a view to identifying, guarding against
+and mitigating material compliance risks. The Company
+has also played an active role in advocating the business
+philosophy of "creating value from compliance" and made
+a serious effort towards fostering the corporate culture of
+"being compliant on a proactive basis, starting from the
+top level and having responsibility for all to be compliant",
+thus successfully obtaining the national standard GB/T
+35770-2022 and the international standard ISO 37301:2021
+compliance management system certificates at the end
+of 2023. The Company will continue to deeply engage in
+building a law-based company by upholding the compliance
+objective of managing itself according to law and practising
+the compliance philosophy of good faith business operations,
+strengthen systems management and construction with
+enhanced management and control of compliance risks,
+and introduce multiple measures concurrently to further
+reinforce an internal impetus to compliance operation, for
+the purpose of ensuring the achievement of its goal of high-
+quality development.
+The Risk Management Department, the Audit Department
+and the Legal and Compliance Department of the Company
+are responsible for the supervision and inspection of the
+Company's 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 accountability. In 2023, 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 organisational structure of internal audit, and further
+strengthened the mechanism for internal audit management,
+which effectively performed the supervisory role of audit.
+The Company carried out the economic responsibility audit
+on its key responsible persons at all levels and the senior
+management audit on deputy heads of its branches at the
+provincial level, organised and performed a series of special
+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
+centralised 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 facilitated the
+effective implementation of the system and enhanced the
+standardisation and normalisation of various IT work. Further,
+the Company has constantly promoted the construction
+of the systems of information safety and risk control, and
+formulated and implemented a series of effective information
+safety control measures at various stages of the life cycle
+of the IT system, thereby effectively ensuring the safe and
+steady operation of the Company. In 2023, the Company
+conducted several internal and external risk assessments
+to promote construction by inspection, with a view to
+consistently enhancing its capability in management and
+control of information safety risks.
+Annual Report 2023 | Corporate Governance 101
+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, authorisation
+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 created a rigorous information disclosure
+system with well-developed workflows, including the
+provisions governing the basic responsibilities of periodic
+report disclosures, the major errors in periodic report
+disclosures and the responsibility attribution as set forth in
+the "Measures for the Administration of the Accountability
+System for Major Errors in Periodic Report Disclosures of
+China Life Insurance Company Limited". As at 31 December
+2023, there was no major error in periodic report disclosures
+of the Company. The "Measures for the Administration of
+Registration of Persons Who Have Knowledge of Inside
+Information of China Life Insurance Company Limited" has
+been introduced to enhance the confidentiality of inside
+information of the Company and to register and submit
+information concerning persons who have knowledge of
+inside information. The relevant requirements under the
+"System of Internal Reporting of Material Information of China
+Life Insurance Company Limited" have been incorporated
+into the indicator system under the internal control report
+of the Company. Persons responsible for reporting material
+information 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.
+In accordance with relevant laws and regulations such as
+the "Accounting Law of the People's Republic of China" and
+the "Enterprise Accounting Standards Basic Standards"
+and specific 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.
+102 Annual Report 2023 | Corporate Governance
+Insurance Risk
+We focus on the valuation of the liabilities for remaining
+coverage for insurance contracts not using the premium
+allocation approach as this requires significant management
+judgement in the selection and application of complex
+methodologies. These liabilities also require management's
+significant judgements in determining the assumptions
+related to mortality rates, morbidity rates, lapse rates,
+coverage unit, discount rates, expense assumptions and
+policy dividend assumptions. Changes in these assumptions
+could have significant effects on the above liabilities and
+revenue being recognised. As part of our audit, we also
+focus on the transition of IFRS 17 for the liabilities for
+remaining coverage insurance contracts not using the
+premium allocation approach.
+The insurance revenue recognition for insurance contracts
+not using the premium allocation approach relies primarily
+on the measurement of significant components of the
+related liabilities, including estimates of the present value
+of future cash flows, risk adjustment for non-financial risk
+and contractual service margin.
+Material Risk Alert:
+Notification Letter and Request Form to Non-registered Shareholders
+2023/5/23
+39
+Announcement of Premium Income
+2023/6/9
+40
+Announcement - Resignation of Supervisor
+2023/6/21
+41
+41
+Announcement - Resolutions Passed at the Annual General Meeting and Distribution of
+Final Dividend
+2023/6/28
+42
+43
+23
+Announcement - Approval of Qualification as Director and Supervisor by the NFRA
+2023/6/28
+38
+44
+2023/5/23
+37
+33
+Briefing on IFRS17 & IFRS9 Updates
+Announcement of Premium Income
+Date of disclosure
+2023/5/8
+2023/5/10
+-
+34
+Announcement Election of Employee Representative Supervisor
+Reports of Board of Directors & Board of Supervisors for 2022, Financial Report
+& Profit Distribution Plan for 2022, Remuneration of Directors & Supervisors,
+Appointment of Auditors for 2023, Formulation of the Provisional Measures of
+Performance-Based Remuneration of Directors, Supervisors, Senior Management
+& Personnel in Key Positions, CCT under the Agreement for Entrusted Investment
+& Management & Operating Services with respect to Alternative Investments with
+Insurance Funds & Notice of AGM
+2023/5/12
+2023/5/23
+35
+Notice of Annual General Meeting
+2023/5/23
+36
+Form of Proxy of Holders of H Shares for use at the Annual General Meeting of the
+Company to be held on Wednesday, 28 June 2023
+2023/5/23
+Notification Letter and Change Request Form to Registered Shareholders
+45
+46
+47
+62
+Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of
+2023)
+2023/8/23
+53
+Announcement of Premium Income
+2023/9/11
+54
+2023 Interim Report
+2023/9/13
+55
+Notification Letter and Change Request Form to Registered Shareholders
+2023/9/13
+56
+57
+58
+Notification Letter and Request Form to Non-registered Shareholders
+Announcement - Change of Composition of the Special Committees of the Board
+Announcement of Premium Income
+52
+2023/8/23
+Announcement of Unaudited Interim Results for the Six Months Ended 30 June 2023
+51
+Final Dividend for the Year Ended 31 December 2022 (Updated)
+Announcement - Resignation of Supervisor
+Announcement of Premium Income
+Announcement - Change of President and Chief Actuary
+Announcement - Nomination of Directors
+2023/6/28
+2023/6/29
+2023/8/4
+32
+2023/8/4
+Announcement of Premium Income
+2023/8/9
+49
+Notice of Board Meeting
+2023/8/10
+50
+Voluntary Announcement - Convening of 2023 Interim Results Briefing
+2023/8/15
+48
+2023/9/13
+31
+112 Annual Report 2023 | Other Information
+Announcement of Results for the Year Ended 31 December 2022
+2023/3/29
+13
+China Life Insurance Company Limited 2022 Environmental, Social and Governance &
+Social Responsibility Report
+2023/3/29
+14
+-
+15
+Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of 2022)
+Announcement
+Investment Plan
+2023/3/29
+Connected Transaction - Investment in Partnership through Equity
+2023/3/29
+16
+Overseas Regulatory Announcement - China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+2023/3/29
+17
+Final Dividend for the Year Ended 31 December 2022
+12
+2023/3/29
+2023/3/20
+11
+2023/2/1
+2023/2/13
+Announcement - Approval of Qualification of Person in Charge of Finance by the
+60
+2023/3/3
+CBIRC
+7
+8
+Announcement - Change of Board Secretary and Authorised Representative
+Announcement of Premium Income
+2023/3/3
+2023/3/13
+9
+Clarification Announcement in relation to Premium Income
+2023/3/13
+10
+Notice of Board Meeting
+2023/3/14
+Voluntary Announcement - Convening of 2022 Annual Results Briefing
+18
+Announcement of Premium Income
+2023/4/10
+26
+Announcement Connected Transaction - Investment in Partnership through Equity
+Investment Plan
+2023/4/27
+27
+27
+Announcement - Connected Transaction - Investment in Partnership through Equity
+Investment Plan
+2023/4/27
+28
+Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2023)
+2023/4/27
+29
+29
+Overseas Regulatory Announcement - China Life Insurance Company Limited.
+Announcement on Changes in Accounting Estimates
+2023/4/27
+30
+Announcement in relation to Relevant Representation on the Implementation of IFRS17
+& IFRS9
+2023/5/8
+-
+26
+2023/4/27
+Announcement - Continuing Connected Transactions under the Agreement for
+Entrusted Investment and Management and Operating Services with respect to
+Alternative Investments with Insurance Funds
+19
+Notice of Board Meeting
+2023/4/17
+22222
+20
+Annual Report 2022
+2023/4/19
+21
+Serial No. Items
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-registered Shareholders
+2023/4/19
+23
+24
+Voluntary Announcement - Convening of 2023 First Quarter Results Briefing
+2023 First Quarter Report
+2023/4/19
+2023/4/27
+25
+25
+2023/4/19
+2023/9/21
+2023/10/11
+59
+China Life Investment Management Company Limited, a wholly-owned subsidiary of
+CLIC
+China Life Capital Investment Company Limited, an indirect wholly-owned subsidiary
+of CLIC
+Ministry of Finance of the People's Republic of China
+National Financial Regulatory Administration, the predecessor of which is China
+Banking and Insurance Regulatory Commission
+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 of China Life Insurance Company Limited
+Solvency Regulatory Rules II for Insurance Companies
+Solvency Aligned Risk Management Requirements and Assessment
+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
+Environmental, Social and Governance
+Renminbi Yuan
+The risks faced by the Company primarily include risks relating to macro trends, insurance risk, market risk, credit risk,
+operational risk, strategic risk, reputational risk, liquidity risk, information safety risk, ESG risk and fraud risk, etc. The Company
+has adopted various measures to manage and control different risks effectively. For details, 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 report.
+6
+Except for "the Company" referred to in the Consolidated Financial Statements.
+China Life Property and Casualty Insurance Company Limited, a non-wholly owned
+subsidiary of CLIC
+Annual Report 2023 | Other Information 115
+China Guangfa Bank Co., Ltd., an associate of the Company
+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
+CLP&C
+CLI
+China Life Capital
+Ministry of Finance
+NFRA
+CSRC
+HKSE
+SSE
+Company Law
+Insurance Law
+Securities Law
+Articles of Association
+C-ROSS (Phase II) Regulation
+SARMRA
+China or PRC
+ESG
+RMB
+China Life Insurance Company Limited and its subsidiaries
+China Life Pension Company Limited, a non-wholly owned subsidiary of the Company
+China Life AMP Asset Management Company Limited, an indirect non-wholly owned
+subsidiary of the Company
+Independent Auditor's Report
+FINANCIAL
+REPORT
+pwc
+We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including
+International Independence Standards) issued by the International Ethics Standards Board for Accountants ("IESBA Code"),
+and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
+KEY AUDIT MATTERS
+Key audit matters are those matters that, in our professional judgment, 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.
+Key audit matters identified in our audit are summarised as follows:
+•
+Valuation of liabilities for remaining coverage and insurance revenue recognition for insurance contracts not using the
+premium allocation approach
+Fair value of level 3 financial assets
+Annual Report 2023 Financial Report
+117
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+Key Audit Matter
+Valuation of liabilities for remaining coverage and insurance
+revenue recognition for insurance contracts not using the
+premium allocation approach
+Refer to Notes 2.8, 14 and 20 to the consolidated financial
+statements.
+IFRS 17 "Insurance contracts" sets out the requirements in
+accounting for insurance contracts issued and reinsurance
+contracts held. Starting from 1 January 2023, the Group
+has adopted IFRS 17 with comparatives restated from 1
+January 2022 (the transition date). This is a new standard
+which requires significant judgements in the use of complex
+methodologies and assumptions in particular for valuation
+of liabilities for remaining coverage.
+At 31 December 2023, the Group had liabilities for remaining
+coverage for insurance contracts not using the premium
+allocation approach of RMB4,790.02 billion, accounting for
+90.12% of the Group's total liabilities. In 2023, the amount
+of insurance revenue recognised for contracts not using
+the premium allocation approach is RMB160.30 billion,
+accounting for 46.50% of the Group's total revenue.
+The Group uses the discounted cash flow method to
+estimate the above liabilities, including estimates of the
+present value of future cash flows, risk adjustment for
+non-financial risk, contractual service margin and loss
+component.
+Independence
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). 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.
+BASIS FOR OPINION
+To the Shareholders of China Life Insurance Company Limited
+(incorporated in the People's Republic of China with limited liability)
+OPINION
+What we have audited
+The consolidated financial statements of China Life Insurance Company Limited (the "Company") and its subsidiaries (the
+"Group") which are set out on pages 122 to 272, comprise:
+•
+the consolidated statement of financial position as at 31 December 2023;
+•
+the consolidated statement of comprehensive income for the year then ended;
+CGB
+the consolidated statement of changes in equity for the year then ended;
+Independent Auditor's Report (continued)
+OPINION (continued)
+What we have audited (continued)
+•
+the consolidated statement of cash flows for the year then ended; and
+• the notes to the consolidated financial statements, comprising material accounting policy information and other explanatory
+information.
+Our opinion
+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 2023, and of its consolidated financial performance and its consolidated cash flows for the
+year then ended in accordance with IFRS Accounting Standards and have been properly prepared in compliance with the
+disclosure requirements of the Hong Kong Companies Ordinance.
+116 Annual Report 2023 | Financial Report
+China Life AMP
+Pension Company
+AMC
+2023/10/30
+99
+66
+Materials for the China Life 2023 Corporate Day: Progress Intergration Prospects -
+Individual Sales System Reform
+2023/10/30
+67
+67
+Election of Ms. Liu Hui and Mr. Ruan Qi as Executive Directors of the Seventh Session
+of the Board of Directors, Election of Mr. Li Bing as a Non-Executive Director of the
+Seventh Session of the Board of Directors and Notice of the First Extraordinary General
+Meeting 2023
+2023/11/8
+68
+Notice of the First Extraordinary General Meeting 2023
+2023/11/8
+69
+Form of Proxy of Holders of H Shares for use at the First Extraordinary General
+Meeting 2023 of the Company to be held on Friday, 15 December 2023
+2023/11/8
+70
+71
+Materials for the China Life 2023 Corporate Day: Insurance + Senior Care Make Life
+Better China Life's Distinctive Senior Care Ecosystem
+-
+65
+2023/10/30
+Notice of Board Meeting
+2023/10/13
+60
+61
+Voluntary Announcement - Convening of 2023 Third Quarter Results Briefing
+2023 Third Quarter Report
+2023/10/18
+2023/10/26
+62
+237
+Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of 2023)
+Annual Report 2023 | Other Information 113
+Serial No. Items
+63
+Announcement in relation to the Disclosure of Relevant Representation on the 2023
+Corporate Day
+Date of disclosure
+2023/10/30
+64
+Materials for the China Life 2023 Corporate Day: Past Experiences Herald a Promising
+Future - China Life 2023 Corporate Day
+2023/10/26
+Forfeiture of Unclaimed Dividends
+72
+2023/11/8
+80
+Announcement
+-
+Resolutions Passed at the First Extraordinary General Meeting 2023
+2023/12/15
+81
+Announcement - Renewal of Continuing Connected Transactions under the Insurance
+Sales Framework Agreement
+2023/12/15
+62
+82
+Announcement - Supplementary Information regarding Compensation of Directors,
+Supervisors and Senior Management Members in 2022
+2023/12/15
+114 Annual Report 2023 | Other Information
+DEFINITIONS AND MATERIAL RISK ALERT
+In this report, unless the context otherwise requires, the following expressions have the following meanings:
+China Life, the Company
+CLIC
+2023/12/11
+Announcement of Premium Income
+79
+NFRA
+2023/11/8
+2023/11/9
+73
+74
+Announcement - Approval of Qualification as President of the Company by the NFRA
+Supplemental Notice of the First Extraordinary General Meeting 2023
+2023/11/10
+2023/11/29
+75
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-registered Shareholders
+Announcement of Premium Income
+75
+67
+76
+Supplemental Form of Proxy of Holders of H Shares for use at the First Extraordinary
+General Meeting 2023 of the Company to be held on Friday, 15 December 2023
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-registered Shareholders
+Announcement - Approval of Qualification as Chief Actuary of the Company by the
+2023/11/29
+2023/11/29
+2023/11/29
+78
+2023/12/1
+77
+2023/1/16
+2023/7/10
+2023/1/13
+86-10-63633333
+100033
+16 Financial Street, Xicheng District, Beijing, P.R. China
+Bai Tao
+China Life Insurance Company Limited ("China Life")
+中國人壽保險股份有限公司(簡稱「中國人壽」)
+Telephone
+Hong Kong office address
+Email
+Website
+Fax
+Customer service hotline
+Investor relations hotline
+Telephone
+Postal code
+Registered name in Chinese
+Registered name in English
+Legal representative
+Registered office address/
+Current office address
+BASIC INFORMATION OF THE COMPANY
+INFORMATION
+OTHER
+=
+Annual Report 2023 | Corporate Governance 109
+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.
+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 Consolidated
+Financial Statements of this annual report.
+and control of the Company was effectively improved.
+The Company promoted the fraud risk management on
+an ongoing basis, played an active role in increasing the
+awareness of fraud risk prevention, and proceeded with all
+tasks against frauds in an effective manner. The Company
+has established an organisational system for fraud risk
+management with the ultimate responsibility assumed by
+the Board, under the direct leadership of fraud risk managers
+and with the close cooperation among the functional
+departments. With its implementation of comprehensive
+risk management, the Company identified control points
+in a variety of business activities for fraud risks. The
+Company also proceeded with all tasks against frauds in
+active cooperation with regulatory authorities and industry
+associations, and attached great importance to fostering
+anti-fraud culture through education on anti-fraud alert and
+promotion. As a result, the capability of fraud risk prevention
+86-10-66575112
+ir@e-chinalife.com
+86-10-63631241
+Securities Representative
+95519
+www.e-chinalife.com
+Fraud Risk
+118 Annual Report 2023 | Financial Report
+Based on the above procedures, we found the methodologies,
+significant assumptions and judgements used in relation to
+the valuation of liabilities recorded for remaining coverage
+and insurance revenue recognised for insurance contracts not
+using the premium allocation approach were supportable by
+the evidence we gathered.
+Performing an independent actuarial modelling and
+recalculation of the estimates of the present value of
+future cash flows, risk adjustment for non-financial risk,
+contractual service margin, loss component and insurance
+revenue recognised in the current period on a sample basis
+and comparing our results to the results from the Group's
+actuarial models.
+Testing the relevance, completeness and accuracy of the
+underlying insurance policy data used in the valuation and
+measurement on a sample basis;
+Assessing the reasonableness of the significant actuarial
+assumptions by considering the Group's rationale for the
+actuarial judgements applied along with comparison to
+industry data and historical experience;
+Assessing the reasonableness of methodologies used by
+the Group;
+•
+.
+.
+With the assistance of our internal actuarial experts, we
+performed the following audit procedures for the valuation
+of liabilities for remaining coverage, including those at the
+transition date, and insurance revenue recognition for insurance
+contracts not using the premium allocation approach:
+We obtained an understanding, evaluated the design and tested
+the key internal controls over the valuation of the Group's
+liabilities for remaining coverage and insurance revenue
+recognition for insurance contracts not using the premium
+allocation approach, including controls over management's
+review of the actuarial methodologies, the actuarial models,
+the actuarial assumptions and the data inputs used.
+How our audit addressed the Key Audit Matter
+2023/1/16
+86-10-63631241
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Board Secretary
+Email
+Fax
+Telephone
+Office address
+Name
+CONTACT INFORMATION
+110 Annual Report 2023 | Other Information
+852-29192628
+16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
+Hung Hom, Kowloon, Hong Kong
+ir@e-chinalife.com
+86-10-66575722
+Li Yinghui
+Zhao Guodong
+86-10-63631191
+Computershare Hong Kong
+Investors Services Limited
+King & Wood Mallesons
+Latham & Watkins LLP
+Domestic auditor
+PricewaterhouseCoopers
+Zhong Tian LLP
+Address: 11/F,
+PricewaterhouseCoopers Center,
+2 Link Suqare, 202 Hubin Road,
+Huangpu District, Shanghai, PRC
+Name of the Signing Auditors:
+Zhou Xing, Huang Chen
+Address: Shops 1712-1716, 17th Floor,
+Hopewell Centre, 183 Queen's Road
+East, Wanchai, Hong Kong
+Debevoise & Plimpton LLP
+Overseas auditor
+PricewaterhouseCoopers
+Address: 22/F, Prince's Building,
+Central, Hong Kong
+Name of the Certified Auditor:
+Yip Siu Foon, Linda
+Announcement
+Annual Report 2023 | Other Information
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Date of disclosure
+Election of Language and Means of Receipt of Corporate Communication
+Reply Form
+Announcement of Premium Income
+5
+4
+3
+2
+1
+Serial No. Items
+INDEX OF INFORMATION DISCLOSURE ANNOUNCEMENTS
+Announcement of Premium Income
+Auditors of the Company
+International legal advisers
+111
+H Share registrar and
+transfer office
+The Company's website at www.e-chinalife.com
+HKExnews website of Hong Kong Exchanges and
+Clearing Limited at www.hkexnews.hk
+Domestic legal adviser
+www.sse.com.cn
+Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing,
+P.R. China
+Shanghai Securities News (www.cnstock.com)
+Securities Times (www.stcn.com)
+Securities Daily (www.zqrb.cn)
+The Company's annual report
+may be obtained at
+The Company's H Share
+disclosure websites
+Media and websites for the
+Company's A Share disclosure
+INFORMATION DISCLOSURE AND PLACE FOR OBTAINING THE REPORT
+STOCK INFORMATION
+* Ms. Li Yinghui, Securities Representative of
+the Company, is also the main contact person
+of the external Company Secretary engaged by
+the Company
+liyh@e-chinalife.com
+CSRC's designated website for the
+Company's annual report disclosure
+A Share
+2628
+Stock type
+The Stock Exchange of Hong Kong
+Limited
+601628
+Shanghai Stock Exchange
+China Life
+OTHER RELEVANT INFORMATION
+Stock short name
+Exchanges on which the stocks
+are listed
+H Share
+86-10-66575112
+Stock code
+China Life
+1,366
+Basic and diluted earnings per share
+1,432
+Consolidated Statement of Financial Position
+46,181
+27 March 2024
+Annual Report 2023 Financial Report
+121
+As at 31 December 2023
+30
+66,680
+RMB1.63
+Other comprehensive income that may be reclassified to profit or loss
+in subsequent periods:
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+Gains or losses from changes in fair value of available-for-sale securities
+Less: Amounts transferred to net profit from other comprehensive
+income
+N/A
+(892)
+N/A
+(7,774)
+N/A
+82,617
+Less: Amounts transferred to profit or loss from other comprehensive
+income
+Changes in fair value of investment in debt instruments at fair value
+through other comprehensive income
+(69,257)
+RMB2.36
+(21,741)
+(21,699)
+RMB million
+(Restated,
+Note 2.1.1.b)
+RMB million
+2022
+2023
+Other comprehensive income attributable to equity holders of the
+Company (net of tax)
+Other comprehensive income
+For the year ended 31 December 2023
+Consolidated Statement of Comprehensive Income (continued)
+124 Annual Report 2023 | Financial Report
+(69,341)
+Allowance for credit losses on investment in debt instruments at fair
+value through other comprehensive income
+55,632
+As at
+68,112
+13,193
+13,374
+10
+258,760
+262,488
+258,933
+11.1
+413,255
+485,567
+12,753
+47,547
+2,971
+70,060
+44,576
+22
+529,488
+11.2
+6,520
+6,333
+6,333
+N/A
+(1,948)
+Notes
+9
+1,810
+As at
+31 December
+2023
+31 December
+2022
+As at
+1 January
+2022
+RMB million
+RMB million
+(Restated,
+Note 2.1.1.b)
+RMB million
+(Restated,
+Note 2.1.1.b)
+2,518
+ASSETS
+Right-of-use assets
+Investment properties
+Investments in associates and joint ventures
+Term deposits
+Statutory deposits - restricted
+7
+53,710
+54,559
+8
+1,480
+Property, plant and equipment
+(62,849)
+- Non-controlling interests
+(8,371)
+(1,450)
+Total transactions with shareholders
+11,613
+(31,435)
+(469)
+(20,291)
+(1,450)
+As at 31 December 2022 (Restated,
+Note 2.1.1.b)
+99,033
+238,723
+8,952
+374,973
+Impact of initial application of IFRS 9
+(Note 2.1.1.a)
+28,265
+74
+(74)
+(469)
+66,680
+1,432
+68,112
+(69,257)
+(84)
+(69,341)
+- (69,257)
+66,680
+1,348
+(1,229)
+13,137
+(13,137)
+(18,372)
+(18,372)
+(469)
+60,751
+396,493
+39,351
+100,108
+Dividends to non-controlling interests
+Transactions with shareholders
+Appropriation to reserves (Note 35)
+Dividends declared (Note 32)
+Reserves to retained earnings (Note 35)
+Others
+7,604
+(7,604)
+25,848
+(13,850)
+(13,850)
+(425)
+(94)
+380
+94
+380
+Total transactions with shareholder
+7,890
+(425)
+1,408
+46,181
+(21,741)
+As at 1 January 2023
+28,265
+159,784
+278,074
+8,958
+475,081
+Net profit
+46,181
+1,366
+47,547
+Other comprehensive income
+(21,741)
+42
+(21,699)
+Total comprehensive income
+6
+N/A
+8,073
+156,677
+under the equity method
+Financial changes in insurance contracts
+(487)
+Non-controlling interests
+42
+(84)
+(1,636)
+Total comprehensive income for the year, net of tax
+(1,229)
+Attributable to:
+- Equity holders of the Company
+24,440
+1,408
+(2,577)
+1,348
+25,848
+660
+Share of other comprehensive income of associates and joint ventures
+N/A
+Share of other comprehensive income of associates and joint ventures
+under the equity method
+(51)
+(3,015)
+Exchange differences on translating foreign operations
+325
+1,102
+Financial changes in insurance contracts
+(97,940)
+4,967
+Financial changes in reinsurance contracts
+679
+545
+Other comprehensive income that may not be reclassified to profit or
+loss in subsequent periods:
+Changes in fair value of investment in equity instruments at fair value
+through other comprehensive income
+1,122
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+203,478
+Annual Report 2023 Financial Report 125
+For the year ended 31 December 2023
+Net profit
+Other comprehensive income
+Total comprehensive income
+Transactions with shareholders
+Appropriation to reserves (Note 35)
+Dividends declared
+Dividends to non-controlling interests
+Reserves to retained earnings (Note 35)
+Others
+28,265
+As at 1 January 2022 (Restated, Note
+249,755
+8,073
+487,134
+(93,078)
+2,437
+(90,641)
+28,265
+201,041
+Impact of initial application of IFRS 17 (Note
+2.1.1.b)
+As at 31 December 2021
+2.1.1.b)
+Attributable to equity holders of the Company
+Share
+capital
+Retained
+Non-
+controlling
+Reserves
+earnings
+interests
+Total
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+(Note 34)
+(Note 35)
+Consolidated Statement of Changes in Equity
+Investment in debt instruments at amortised cost
+Investment in equity instruments at fair value through
+211,349
+As at
+As at
+31 December
+31 December
+2023
+2022
+RMB million
+RMB million
+1 January
+2022
+RMB million
+(Restated,
+Note 2.1.1.b)
+(Restated,
+Note 2.1.1.b)
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contract liabilities
+14.2
+4,859,175
+4,266,947
+3,809,716
+Reinsurance contract liabilities
+(21,360)
+14.3
+188
+160
+154
+Interest-bearing loans and other borrowings
+15
+12,857
+4,665,367
+Approved and authorised for issue by the Board of Directors on 27 March 2024.
+Bai Tao
+Director
+24
+Net fair value gains through profit or loss
+12,707
+N/A
+23
+Net realised gains on financial assets
+174,809
+(9,375)
+22
+N/A
+122,994
+21
+182,578
+12,774
+(Restated,
+Note 2.1.1.b)
+RMB million
+2023
+212,445
+20
+Investment income
+Interest income
+Insurance revenue
+Notes
+For the year ended 31 December 2023
+Consolidated Statement of Comprehensive Income
+Annual Report 2023 | Financial Report 123
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+Li Mingguang
+Director
+2022
+RMB million
+N/A
+19,222
+16
+Share capital
+Reserves
+Retained earnings
+Attributable to equity holders of the Company
+Non-controlling interests
+Total equity
+Total liabilities and equity
+34
+28,265
+28,265
+28,265
+35
+145,933
+99,033
+156,677
+302,895
+238,723
+203,478
+477,093
+366,021
+388,420
+9,941
+487,034
+8,952
+374,973
+8,073
+396,493
+5,802,086
+5,010,068
+Equity
+3,416
+4,268,874
+4,635,095
+5,315,052
+36,166
+34,997
+34,994
+Other liabilities
+17
+126,750
+117,751
+113,133
+Deferred tax liabilities
+29
+272
+999
+Current tax liabilities
+Bonds payable
+309
+248
+Premiums received in advance
+48,878
+Financial assets sold under agreements to repurchase
+18
+216,851
+49,654
+148,958
+47,546
+239,446
+Financial liabilities at fair value through profit or loss
+13,878
+3,344
+Total liabilities
+238
+11.3
+(12,156)
+10
+Income tax
+Profit before income tax
+Other expenses
+Other impairment losses
+Expected credit losses
+Finance costs
+reinsurance contracts held
+Less: Reinsurance finance income/(expenses) from
+(4,119)
+6,274
+(148,700)
+(127,923)
+26
+Insurance finance income/(expenses) from insurance contracts
+issued
+4,438
+Less: Amounts recovered from reinsurers
+(4,726)
+Allocation of reinsurance premiums paid
+1,705,375
+(131,614)
+(150,353)
+25
+25
+Insurance service expenses
+370,861
+344,746
+N/A
+N/A
+Held-to-maturity securities
+Net profit
+Attributable to:
+- Equity holders of the Company
+- Non-controlling interests
+N/A
+N/A
+Investment in debt instruments at fair value through
+11.4
+2,744,169
+N/A
+N/A
+other comprehensive income
+11.5
+138,005
+N/A
+N/A
+other comprehensive income
+11.7
+Financial assets at fair value through profit or loss
+29
+28
+(15,212)
+(18,131)
+(3,150)
+N/A
+1,217
+27
+27
+(4,863)
+(5,308)
+583
+616
+11.6
+Investment income from associates and joint ventures
+N/A
+1,533,753
+19,759
+38,533
+12,915
+Accrued investment income
+51
+49,580
+48,538
+Cash and cash equivalents
+149,305
+127,594
+60,459
+Total assets
+5,802,086
+5,010,068
+4,665,367
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+122 Annual Report 2023 | Financial Report
+Consolidated Statement of Financial Position (continued)
+As at 31 December 2023
+Notes
+As at
+Total revenues
+8,944
+10,603
+Other income
+3,979
+8,079
+11.11
+Financial assets purchased under agreements to resell
+24,180
+46,126
+Loans
+11.8
+N/A
+342,083
+429,878
+Available-for-sale securities
+11.9
+N/A
+1,738,108
+1,429,287
+Securities at fair value through profit or loss
+11.10
+N/A
+1,574,204
+223,790
+Reinsurance contract assets
+14.3
+25,846
+24,096
+19,327
+Other assets
+13
+37,318
+22,004
+33,981
+Deferred tax assets
+29
+24,431
+206,771
+(425)
+Certified Public Accountants
+As at 31 December 2023
+(469)
+Payment of lease liabilities
+(1,149)
+(1,307)
+Capital injected into subsidiaries by non-controlling interests
+18,035
+5,896
+Cash received related to other financing activities
+750
+Cash paid related to other financing activities
+(1,769)
+Net cash inflow/(outflow) from financing activities
+60,273
+(120,095)
+Foreign exchange gains/(losses) on cash and cash equivalents
+64
+217
+Net increase in cash and cash equivalents
+20,467
+67,135
+Cash and cash equivalents
+Beginning of the period
+End of the period
+127,594
+60,459
+(418)
+148,061
+Dividends paid to non-controlling interests
+(13,850)
+(424,236)
+(158,271)
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+Annual Report 2023 | Financial Report 127
+Consolidated Statement of Cash Flows (continued)
+For the year ended 31 December 2023
+2023
+RMB million
+2022
+RMB million
+(Restated,
+Note 2.1.1.b)
+CASH FLOWS FROM FINANCING ACTIVITIES
+Increase/(decrease) in financial assets sold under agreements
+to repurchase, net
+Cash received from borrowings
+67,129
+43
+(90,711)
+688
+Interest paid
+(7,921)
+(7,545)
+Repayment of borrowings
+(577)
+(8,275)
+Dividends paid to equity holders of the Company
+(18,372)
+Net cash inflow/(outflow) from investing activities
+127,594
+Cash at banks and in hand
+GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH
+Independent Auditor's Report (continued)
+Annual Report 2023 | Financial Report 119
+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.
+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.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+The directors of the Company are responsible for the other information. The other information comprises all of the information
+included in the annual report other than the consolidated financial statements and our auditor's report thereon.
+OTHER INFORMATION
+Based on the above procedures, we found that the significant
+estimates and judgements involved in determining the fair
+value of level 3 financial instruments were supportable by the
+evidence we gathered.
+Testing the accuracy, on a sample basis, of the fair value
+calculations used for level 3 financial assets.
+Testing the significant unobservable inputs used by the
+Group in determining the fair values and assessing the
+reasonableness of these inputs by comparing them to
+information available from third-party sources or market
+data;
+Evaluating the appropriateness of the Group's valuation
+techniques and significant assumptions by referring to
+industry practices and valuation principles;
+With the assistance of our valuation experts, we performed
+the following audit procedures:
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls over
+the Group's fair value measurement of level 3 financial assets,
+including controls over management's review of the valuation
+techniques, the significant assumptions and the significant
+unobservable inputs used in the fair value measurements.
+How our audit addressed the Key Audit Matter
+We have identified the fair value of the Group's level 3
+financial assets as a key audit matter due to the significant
+estimates and judgements involved in the determination
+of valuation techniques, significant assumptions and
+significant unobservable inputs.
+These level 3 financial assets primarily include unlisted
+equity securities and unlisted debt securities, which are
+accounted for as financial assets at fair value through profit
+or loss, investment in debt instruments at fair value through
+other comprehensive income or investment in equity
+instruments at fair value through other comprehensive
+income. The fair values of these financial assets are
+measured using valuation techniques based on significant
+unobservable inputs.
+At 31 December 2023, the Group held level 3 financial
+assets measured at fair value, with a carrying value of
+RMB607.01 billion, accounting for 10.46% of the Group's
+total assets.
+Refer to Note 5.4 to the consolidated financial statements.
+Fair value of level 3 financial assets
+Key Audit Matter
+KEY AUDIT MATTERS (continued)
+Independent Auditor's Report (continued)
+(13,895)
+The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true
+and fair view in accordance with IFRS Accounting Standards 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 consolidated
+financial statements that are free from material misstatement, whether due to fraud or error.
+Analysis of balances of cash and cash equivalents
+In preparing the consolidated financial statements, the directors 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 either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+Those charged with governance are responsible for overseeing the Group's financial reporting process.
+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. We
+report our opinion 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.
+Short-term bank deposits
+147,453
+123,142
+4,452
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+128 Annual Report 2023 | Financial Report
+Hong Kong
+PricewaterhouseCoopers
+The engagement partner on the audit resulting in this independent auditor's report is Yip Siu Foon, Linda.
+From the matters communicated with those charged with governance, 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.
+We also provide those charged with governance 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, actions taken to eliminate threats or safeguards applied.
+We communicate with those charged with governance 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.
+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.
+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.
+concern.
+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
+•
+FINANCIAL STATEMENTS (continued)
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+Independent Auditor's Report (continued)
+120 Annual Report 2023 | Financial Report
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the directors.
+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.
+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.
+As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
+throughout the audit. We also:
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS
+(198)
+608
+34,330
+(174,809)
+(122,994)
+N/A
+(1,217)
+N/A
+3,150
+N/A
+(551)
+460,499
+458,817
+5,016
+5,291
+381
+(8,079)
+(3,979)
+69
+Decrease/(increase) in securities at fair value through profit or loss, net
+N/A
+(35,286)
+Decrease/(increase) in financial assets at fair value through profit or loss, net
+Increase/(decrease) in financial liabilities at fair value through profit or loss, net
+Receivables and payables
+(13,777)
+N/A
+(2,187)
+3,175
+5,877
+9,375
+12,265
+70,060
+RMB million
+28,265
+Cash paid related to other financing activities
+145,933
+302,895
+9,941
+487,034
+The notes on pages 129 to 272 form an integral part of these consolidated financial statements.
+126 Annual Report 2023 | Financial Report
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2023
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before income tax
+Adjustments for:
+Investment income
+Interest income
+Expected credit losses.
+Other impairment losses
+Net realised and unrealised gains on financial assets
+Insurance contracts and reinsurance contracts held
+Depreciation and amortisation
+Foreign exchange gains/(losses)
+Investment income from associates and joint ventures
+2023
+2022
+RMB million
+(Restated,
+Note 2.1.1.b)
+Income tax paid
+44,576
+982
+556,929
+513,350
+1,051
+363
+4,395
+(881,317)
+(519,495)
+(836,048)
+(819,785)
+(4,171)
+(3,076)
+(4,217)
+Property, plant and equipment
+(5,436)
+80,787
+44,273
+Decrease/(increase) in financial assets purchased under agreements to resell,
+21,837
+(27,327)
+net
+Interest received
+145,824
+141,680
+(1,036)
+Dividends received
+33,373
+Decrease/(increase) in term deposits, net
+Equity investments and subsidiaries
+Investments in associates and joint ventures
+7,317
+Interest received – securities at fair value through profit or loss
+Dividends received - securities at fair value through profit or loss
+N/A
+Debt investments
+5,401
+N/A
+699
+Interest received - financial assets at fair value through profit or loss
+Dividends received - financial assets at fair value through profit or loss
+N/A
+615
+N/A
+Net cash inflow/(outflow) from operating activities
+384,366
+345,284
+-
+CASH FLOWS FROM INVESTING ACTIVITIES
+Disposals of subsidiaries
+Disposals of property, plant and equipment
+Disposals of equity investments
+251,226
+168,656
+309,801
+210,688
+Maturities of debt investments
+Disposals of debt investments
+Disposals and maturities:
+Purchases:
+All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised
+within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole.
+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 is available
+to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
+The principal or the most advantageous market must be accessible by the Group at the measurement date.
+The Group adopted IFRS 17 for the preparation and disclosure of financial reports on 1 January 2023, and the comparative
+financial statements of the Group have been restated. This is mainly due to these changes in IFRS 17 compared to IFRS
+4, as follows:
+2.1.1.b IFRS 17 - Insurance Contracts
+In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance
+contracts covering recognition, measurement, presentation and disclosure, which replaces IFRS 4 Insurance Contracts. In
+June 2020, the IASB issued the amendments to IFRS 17 which include a deferral of the effective date of IFRS 17 to annual
+reporting periods beginning on or after 1 January 2023. Insurers qualifying for the deferral of IFRS 9 can apply both IFRS
+17 and IFRS 9 for the first time to annual reporting periods beginning on or after 1 January 2023.
+Notes to the Consolidated Financial Statements (continued)
+It provides a comprehensive general model for insurance contracts, and the measurement is based on the building blocks
+of expected present value of future cash flows, a risk adjustment for non-financial risk and a contractual service margin
+representing the unearned profit of the insurance contracts. It also provides the variable fee approach for insurance
+contracts with direct participation features and the premium allocation approach mainly for short-duration;
+Annual Report 2023 | Financial Report 137
+in the absence of a principal market, in the most advantageous market for the asset or liability.
+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.
+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
+136 Annual Report 2023 | Financial Report
+.
+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:
+(iii) Accounting policy for financial instruments related to IAS 39 applicable as of 31 December 2022 (continued)
+Fair value measurement
+2.1.1.a IFRS 9 – Financial Instruments (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 2023 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+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 losses are 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
+losses were recognised through net profit. The impairment losses recognised in net profit on equity instruments are not
+reversed through net profit.
+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.
+the market price of the equity securities was more than 50% below their cost at the reporting date;
+For the year ended 31 December 2023
+in the principal market for the asset or liability, or
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+398
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2023 (continued)
+324
+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:
+324
+8
+8
+398
+2,343
+(2,343)
+Provision for impairment of other assets
+639
+21
+138 Annual Report 2023 | Financial Report
+The equity of the Group as at 1 January 2022 decreased by RMB90,641 million due to the initial application of IFRS 17.
+Refer to Note 2.8 for relevant accounting policies.
+For insurance contracts with accounting treatments that are inconsistent with the provisions of IFRS 17 prior to 1 January
+2023, the Group adopted the retrospective approach. When full retrospective approach is impracticable, the Group adopted
+the modified retrospective approach or fair value approach.
+Extensive disclosures are required to provide information on the recognised amounts from insurance contracts and the
+nature and extent of risks arising from these contracts.
+Insurance revenue, insurance service expenses and insurance finance income and expenses are presented separately;
+and
+An entity may simplify the measurement of a group of insurance contracts using the premium allocation approach if
+and only if the entity reasonably expects that such simplification would produce a measurement of the liabilities for
+remaining coverage for the group that would not differ materially from the one that would be produced applying the
+general model or the coverage period of each contract in the group is one year or less at the inception of the group;
+Variable fee approach should be adopted for insurance contracts with direct participation features where policyholders
+share in the returns from underlying items. When applying the variable fee approach, the entity's share of the fair value
+changes of the underlying items is included in the contractual service margin;
+Investment component is the amounts that an insurance contract requires the Group to repay to a policyholder in all
+circumstances, regardless of whether an insured event occurs. Insurance revenue and insurance service expenses
+presented in profit or loss has excluded any investment components;
+The recognition of insurance revenue and insurance service expenses is made in the statement of comprehensive
+income based on the services provided during the period;
+The discount rate assumption is determined based on observable current market situation that reflect the characteristics
+of the insurance contracts. The effect of changes in discount rates will be reported in either profit or loss or other
+comprehensive income, determined by an accounting policy choice;
+Certain changes in the fulfilment cash flows relating to future service adjust the carrying amount of the contractual
+service margin at the end of the reporting period, and thereby will be recognised in profit or loss over the remaining
+coverage period;
+A contractual service margin represents the unearned profit of the insurance contracts and will be recognised in profit
+or loss over the coverage period;
+The fulfilment cash flows include the expected present value of future cash flows and a risk adjustment for non-financial
+risk, remeasured every reporting period;
+•
+•
+•
+•
+2.1.1.b IFRS 17 - Insurance Contracts (continued)
+2.1 Basis of preparation (continued)
+• the disappearance of an active market for that financial asset because of financial difficulties.
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+•
+2 SUMMARY OF MATERIAL 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 2023 (continued)
+2.1.1.a IFRS 9 – Financial Instruments (continued)
+(iii) Accounting policy for financial instruments related to IAS 39 applicable as of 31 December 2022:
+Financial assets
+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
+investment in securities fall into the following four categories:
+(a) 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.
+(b) 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.
+(c) 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.
+(d) 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.
+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.
+Annual Report 2023 | Financial Report 135
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+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 2023 (continued)
+other comprehensive income - debt instruments
+Provision for impairment of fair value through
+1,390
+751
+(2,343)
+Provision for impairment of loans
+For the year ended 31 December 2023
+it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganisation; and
+Notes to the Consolidated Financial Statements (continued)
+4,015
+a breach of contract, such as a default or delinquency in payments;
+•
+significant financial difficulty of the issuer or debtor;
+•
+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 impaired. 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:
+Impairment of financial assets other than securities at fair value through profit or loss
+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.
+Loans are carried at amortised cost, net of allowance for impairment.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at amortised cost.
+Recognition and measurement (continued)
+(iii) Accounting policy for financial instruments related to IAS 39 applicable as of 31 December 2022 (continued):
+Financial assets (continued)
+2.1.1.a IFRS 9 – Financial Instruments (continued)
+investment
+Provision for impairment of available-for-sale
+securities
+Sub-total
+Total
+1,739
+886
+2,625
+18,588
+(18,588)
+18,588
+(16,849)
+886
+2,625
+21,570
+(19,192)
+1,637
+134 Annual Report 2023 | Financial Report
+instruments at amortised cost
+Add: Transfer from loans
+Provision for impairment of term deposits
+Provision for impairment of statutory deposits
+2 SUMMARY OF MATERIAL 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 2023 (continued)
+2.1.1.a IFRS 9 – Financial Instruments (continued)
+(i) As at 1 January 2023, the Group adjusted the carrying amount of original financial assets to the carrying amount under
+IFRS 9 based on the measurement category under IFRS 9 (continued):
+6. Financial assets at fair value through profit or loss
+31 December 2022
+Add: Transfer from securities at fair value through profit or loss
+Add: Transfer from available-for-sale securities
+Add: Transfer from loans
+Remeasurement: From amortised cost to fair value
+Remeasurement: From cost to fair value
+Presentation adjustments: Interest receivable
+For the year ended 31 December 2023
+1 January 2023
+31 December 2022
+Less: Transfer to investment in debt instruments at amortised cost
+Less: Transfer to investment in debt instruments at fair value through other comprehensive
+income
+1 January 2023
+8. Loans
+31 December 2022
+Less: Transfer to financial assets at fair value through profit or loss
+Less: Transfer to investment in debt instruments at amortised cost
+Less: Transfer to investment in debt instruments at fair value through other comprehensive
+income
+1 January 2023
+9. Available-for-sale securities
+Carrying amount
+RMB million
+7. Held-to-maturity securities
+Notes to the Consolidated Financial Statements (continued)
+132 Annual Report 2023 | Financial Report
+As at 31 December 2022, the total carrying amount of unlisted equity securities, preferred stocks and perpetual bonds measured at fair value held
+by the Group was RMB119,913 million.
+Add: Transfer from available-for-sale securities
+7,808
+Add: Transfer from loans
+220,914
+Remeasurement: From fair value to amortised cost
+(92)
+Remeasurement: ECL
+(398)
+Presentation adjustments: Interest receivable
+1,680
+1 January 2023
+231,896
+4. Investment in debt instruments at fair value through other comprehensive income
+31 December 2022
+Add: Transfer from available-for-sale securities
+529,652
+83,236
+Add: Transfer from held-to-maturity securities
+1,572,220
+Presentation adjustments: Interest receivable
+28,225
+Remeasurement: From amortised cost to fair value
+128,631
+1 January 2023
+2,341,964
+5. Investment in equity instruments at fair value through other comprehensive income
+31 December 2022
+Add: Transfer from available-for-sale securities (note)
+1 January 2023
+119,913
+119,913
+Note:
+223,790
+1,080,735
+37,933
+1,535
+3,632
+Remeasurement: Interest payable
+1 January 2023
+12. Bonds payable
+31 December 2022
+Remeasurement: Interest payable
+1 January 2023
+13. Financial assets sold under agreements to repurchase
+31 December 2022
+Remeasurement: Interest payable
+1 January 2023
+223,790
+(223,790)
+12,774
+8
+12,782
+34,997
+1,170
+36,167
+148,958
+64
+149,022
+(ii) As at 1 January 2023, reconciliation of the Group from the provision for impairment under IAS 39 to impairment provision
+under IFRS 9 is as below:
+Measurement categories
+Impairment
+provision under
+Presentation
+Impairment
+provision under
+IAS 39
+adjustment Remeasurement
+IFRS 9
+RMB million
+31 December 2022
+Provision for impairment of investment in debt
+11. Interest-bearing loans and other borrowings
+31 December 2022
+6,123
+1,353,748
+1,574,204
+(1,984)
+(1,572,220)
+342,083
+(37,933)
+(220,914)
+(83,236)
+31 December 2022
+1,738,108
+Less: Transfer to financial assets at fair value through profit or loss
+Less: Transfer to investment in debt instruments at amortised cost
+Less: Transfer to investment in debt instruments at fair value through other comprehensive
+income
+(1,080,735)
+(7,808)
+(529,652)
+Less: Transfer to investment in equity instruments at fair value through other comprehensive
+income
+(119,913)
+1 January 2023
+Annual Report 2023 | Financial Report 133
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL 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 2023 (continued)
+2.1.1.a IFRS 9 – Financial Instruments (continued)
+-
+(i) As at 1 January 2023, the Group adjusted the carrying amount of original financial assets to the carrying amount under
+IFRS 9 based on the measurement category under IFRS 9 (continued):
+Carrying amount
+RMB million
+10. Securities at fair value through profit or loss
+Less: Transfer to financial assets at fair value through profit or loss
+1 January 2023
+2,982
+660
+6,445
+IFRS 9 replaces the "incurred loss" model with the "expected credit loss" model which is designed to include forward-
+looking information. The Group expects 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.
+Impairment
+2.1.1.a IFRS 9 – Financial Instruments (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 2023 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+Hedge accounting
+For the year ended 31 December 2023
+130 Annual Report 2023 | Financial Report
+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. The unrealized gains and losses of the other comprehensive income
+("OCI") on equity instruments previously classified as available-for-sale securities recognised in income. If the Group elects
+to measure equity investments at FVOCI, gains and losses would be recognised in retained earnings when the instruments
+are disposed, except for the received dividends which do not represent a recovery of part of the investment cost.
+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.
+Classification and measurement
+2.1.1.a IFRS 9 Financial Instruments
+(i) The final version of IFRS 9 was issued by the IASB in July 2014, which introduces new requirements for classification and
+measurement, impairment, and hedge accounting. The standard is effective for periods beginning on or after 1 January
+2018, with early adoption permitted. The Group had adopted the temporary exemption permitted in the 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. Therefore, the Group adopted IFRS 17 and IFRS 9 for the first
+time on 1 January 2023.
+Notes to the Consolidated Financial Statements (continued)
+The Group does not apply 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.
+The Group adopted IFRS 9 on 1 January 2023. Refer to Note 2.4 Financial Instruments for the accounting policies under
+IFRS 9.
+Impact of initial application of IFRS 9 – Financial Instruments
+498,294
+123
+Investment in debt instruments at amortised cost
+Statutory deposits - restricted
+Term deposits
+RMB million
+As at
+31 December
+2022
+1 January
+2023
+RMB million
+As at
+Notes
+Including:
+Assets
+STATEMENT OF FINANCIAL POSITION
+The following table presents the carrying amounts of financial instruments of the Group as at 1 January 2023 classified and
+measured under IAS 39 and IFRS 9, respectively.
+In accordance with the transitional provisions in IFRS 9, there is no need to restate the comparative information. The impact
+of adoption of IFRS 9 at the initial application date are included in retained earnings and reserves at the beginning of the
+period upon adjustment, with a corresponding increase of RMB100,108 million in shareholders' equity as at 1 January 2023.
+In alignment with the above treatment, the Group only discloses relevant information for the current period.
+Except for IFRS 9 and IFRS 17, the above amendments to the standards did not have any significant impact on the
+consolidated financial statements of the Group for the year ended 31 December 2023.
+Definition of Accounting Estimates
+IFRS Practice Statement 2
+Amendments to IAS 8
+Amendments to IAS 1 and
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 129
+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 measured at fair value, insurance contracts and reinsurance contracts
+held for assets or liabilities, 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 material 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 4.
+The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
+2.1 Basis of preparation
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES
+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 27 March 2024.
+In August 2022, the Company has applied for the voluntary delisting of its American depositary shares ("ADSS") from the
+New York Stock Exchange (the "NYSE"). The last day of trading of the Company's ADSs on the NYSE was 1 September 2022
+(U. S. Eastern time) and the delisting of the Company's ADSs has taken effect on 2 September 2022 (U. S. Eastern time).
+On 13 November 2023, the Company filed a Form 15F with the SEC to deregister the ADSS and the underlying H Shares
+and terminate its reporting obligations under the U. S. Securities Exchange Act of 1934, as amended. The deregistration
+and termination of reporting obligations became effective on 12 February 2024 (U. S. Eastern time).
+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 Stock Exchange of Hong Kong Limited,
+and the Shanghai Stock Exchange.
+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 underwriting of life, health, accident and other types of personal insurance business; reinsurance 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.
+1 ORGANISATION AND PRINCIPAL ACTIVITIES
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements
+Sub-total
+1,984
+2.1 Basis of preparation (continued)
+485,567
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2023
+IFRS 9
+Amendments to IAS 12
+1 January 2023
+1 January 2023
+1 January 2023
+International Tax Reform - Pillar Two Model Rules
+Disclosure of Accounting Policies
+1 January 2023
+1 January 2023
+1 January 2018(i)
+Effective for
+annual periods
+beginning on or after
+Deferred Tax related to Assets and Liabilities arising
+from a Single Transaction
+Insurance Contracts
+Financial Instruments
+Content
+Amendments to IAS 12
+IFRS 17
+Standards/Amendments
+6,445
+231,896
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+N/A
+(i) As at 1 January 2023, the Group adjusted the carrying amount of original financial assets to the carrying amount under
+IFRS 9 based on the measurement category under IFRS 9:
+-
+2.1.1.a IFRS 9 – Financial Instruments (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 2023 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 131
+3,344
+3,344
+148,958
+149,022
+13
+34,997
+1. Term deposits
+36,167
+31 December 2022
+1 January 2023
+120
+6,333
+(8)
+6,333
+498,294
+(324)
+13,051
+485,567
+Carrying amount
+RMB million
+31 December 2022
+3. Investment in debt instruments at amortised cost
+1 January 2023
+Presentation adjustments: Interest receivable
+Remeasurement: ECL
+31 December 2022
+2. Statutory deposits - restricted
+Presentation adjustments: Interest receivable
+Remeasurement: ECL
+12
+Add: Transfer from held-to-maturity securities
+12,782
+Liabilities
+Securities at fair value through profit or loss
+Available-for-sale securities
+Loans
+Held-to-maturity securities
+Financial assets at fair value through profit or loss
+N/A
+119,913
+5
+LO
+Investment in equity instruments at fair value through other
+comprehensive income
+N/A
+12,774
+4
+Investment in debt instruments at fair value through other
+comprehensive income
+Including:
+8
+2,341,964
+1,353,748
+=23
+67% 10
+Financial assets sold under agreements to repurchase
+Financial liabilities at fair value through profit or loss
+11
+223,790
+N/A
+1,738,108
+N/A
+Interest-bearing loans and other borrowings
+9
+N/A
+N/A
+1,574,204
+Bonds payable
+N/A
+342,083
+The Group recognises credit losses the basis of the ECL for cash and cash equivalents, term deposits, statutory deposits,
+financial assets purchased under agreements to resell, investment in debt instrument at amortised cost, investment in debt
+instrument at fair value through other comprehensive income, as well as other receivables, etc.
+Expected credit losses ("ECL") refer to the weighted average of credit losses with the respective risks of a default occurring
+as the weights. Credit loss refers to the difference between all contractual cash flows discounted at the original effective
+interest rate or credit-adjusted effective interest rate for credit-impaired financial assets and receivable under the contract
+and all cash flows expected to be received, which is the present value of all cash shortfalls.
+Giving consideration to reasonable and supportable information on past events, current conditions and forecasts of future
+economic conditions weighted by the probability of default, the Group recognises the ECL as the probability-weighted
+amount of the present value of the difference between the cash flows receivable from the contract and the cash flows
+expected to be collected.
+At each reporting date, the ECL of financial instruments at different stages is measured respectively. 12-month ECL is
+recognised for financial instruments in Stage 1 which do not have a significant increase in credit risk since initial recognition;
+lifetime ECL is recognised for financial instruments in Stage 2 which have had a significant increase in credit risk since initial
+recognition but are not deemed to be credit-impaired; and lifetime ECL is recognised for financial instruments in Stage 3
+that has been credit-impaired.
+For the financial instruments in Stage 1 and Stage 2, the Group calculates the interest income by applying the effective
+interest rate to the gross carrying amount (before net of expected credit losses). For the financial instruments in Stage 3,
+the interest income is calculated by applying the effective interest rate to the amortised cost (net of expected credit losses).
+144 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.4 Financial instruments (continued)
+Impairment
+When an investment in equity instruments measured at fair value through other comprehensive income is derecognised, the
+difference between the carrying amount and the consideration received as well as any cumulative gain or loss previously
+recognised in other comprehensive income are recognised in retained earnings. For other financial assets, when they are
+derecognised, their cumulative gains or losses previously recognised in other comprehensive income should be transferred
+out and recognised in profit or loss.
+For other receivables that are classified into groups, the Group calculates the ECL with reference to historical credit loss
+experience, current conditions, and forecasts of future economic conditions, and based on the exposure at default and the
+lifetime ECL rates.
+The Group recognises the impairment gain or loss into profit or loss for the period. For debt instruments classified as fair
+value through other comprehensive income, the Group recognises the loss allowance in profit or loss, meanwhile adjusts
+other comprehensive income, which does not decrease the carrying amount of the financial assets.
+Derecognition
+A financial asset is derecognised when one of the following criteria is met: (i) the contractual rights to receive the cash
+flows from the financial asset has expired, (ii) the financial asset has been transferred and the Group transfers substantially
+all the risks and rewards of ownership of the financial asset to the transferee, or (iii) the financial asset has been transferred
+and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially
+all the risks and rewards of ownership of the financial asset.
+Equity instruments classified as financial assets at fair value through profit or loss. After the initial confirmation, gains or
+losses arising from changes in the fair value of such financial assets (including dividend income earned and exchange gains
+or losses) are recognised in profit or loss for the period and shown in investment income. Dividend income from equity
+instruments is generally determined by the amount distributed by the investee and is recognised when the Group's right
+to receive dividends is established.
+2.4.2 Financial liabilities
+Financial liabilities are classified into financial liabilities at amortised cost and financial liabilities at fair value through profit
+or loss at initial recognition.
+Financial liabilities at amortised cost consist primarily of interest-bearing loans and other borrowings, financial assets
+sold under agreements to repurchase, bonds payable and liabilities arising from certain investment contracts without a
+discretionary participation feature (presented in other liabilities). Such financial liabilities are initially recognised at fair value,
+net of transaction costs incurred, and using the effective interest rate method for subsequent measurement.
+Financial liabilities at fair value through profit or loss mainly include liabilities arising from certain investment contracts without
+discretionary participation features (pension annuity products that do not transfer insurance risk), which are designated on
+initial recognition for subsequent measurement at fair value, with all realized or unrealized gains and losses recognised in
+profit or loss.
+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.
+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.
+Annual Report 2023 | Financial Report 145
+Notes to the Consolidated Financial Statements (continued)
+2.4.1 Financial assets (continued)
+Impairment (continued)
+All equity instruments held by the Group are subsequently measured at fair value, and gains or losses are recognised in
+profit or loss. However, on initial recognition of an equity investment that is not held for trading, the Group may irrevocably
+elect to present subsequent changes in the instrument's fair value in other comprehensive income, and no provision for
+impairment is required. Dividend income is recognised in profit or loss for the period (except for those clearly represent
+a recovery of part of the cost of the investments). Other net gains and losses (including exchange gains and losses). are
+recognised in other comprehensive income, and may not be subsequently transferred to profit or loss. Changes in the
+fair value of equity instruments measured at fair value through profit and loss, including any dividend income and foreign
+exchange gains and losses, are recognised in profit or loss within investment income. Dividend incomes on these equity
+instruments, which are generally determined at the amounts to be distributed by the investees, are recognised when the
+Group's right to receive the payment is established.
+For the year ended 31 December 2023
+Equity instruments
+Starting from 1 January 2023, the Group has adopted IFRS 9 and adjusted the accounting policies accordingly. The newly
+revised accounting policies are set out below:
+For the year ended 31 December 2023
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity. A financial asset or a financial liability is recognised when the Group becomes a party to the
+contractual provisions of the instrument.
+Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase or sell assets.
+At initial recognition, financial assets or financial liabilities not at fair value through profit or loss are measured at fair value
+plus or minus transaction costs (such as related charges and commissions) that are directly attributable to the acquisition
+or issue of such financial assets or financial liabilities. For financial assets and financial liabilities at fair value through profit
+or loss, transaction costs are recognised in profit or loss.
+142 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.4 Financial instruments (continued)
+2.4.1 Financial assets
+Classification and measurement
+Based on the Group's business model for managing the financial assets and the contractual cash flow characteristics of the
+financial assets, financial assets are classified as: financial assets at amortised cost, investment in debt instruments at fair
+value through other comprehensive income, investment in equity instruments at fair value through other comprehensive
+income, and financial assets at fair value through profit or loss. When, and only when, the Group changes the business
+model for managing financial assets, the Group shall reclassify all affected financial assets.
+Debt instruments
+Debt instruments are those financial instruments that meet the definition of a financial liability from the issuer's perspective.
+Classification and subsequent measurement of debt instruments depend on:
+(a) the Group's business model for managing assets; and
+Based on these factors, the Group classifies its debt instruments into the following three measurement categories:
+i. Financial assets at amortised cost
+The financial asset is held within a business model whose objective is to collect the contractual cash flows, and the
+contractual cash flow characteristics are consistent with a basic lending arrangement, which gives rise on specified dates
+to the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, and
+the financial assets are not designated as at fair value through profit or loss, so they are measured at amortised cost.
+The interest income of such financial assets is recognised using the effective interest rate method. Impairment losses
+and foreign exchange gains or losses are recognised in profit or loss. The gains or losses arising from derecognition are
+recognised directly in profit or loss.
+ii. Investment in debt instruments at fair value through other comprehensive income
+The financial asset is held within a business model whose objectives are both collecting the contractual cash flows and
+selling such financial assets, and the contractual cash flow characteristics are consistent with a basic lending arrangement. In
+addition, the financial assets are not designated as at fair value through profit or loss. Such financial assets are measured at
+fair value through other comprehensive income, and interest income is recognised using the effective interest rate method.
+Impairment losses and foreign exchange gains or losses are recognised in profit or loss for the current period. When such
+financial assets are derecognised, the cumulative changes in fair value recognised in other comprehensive income are
+carried forward to profit or loss for the current period.
+iii. Financial assets at fair value through profit or loss
+Debt instruments held by the Group that are not measured at amortised cost or fair value through other comprehensive
+income are classified as financial assets at fair value through profit or loss. These financial assets are subsequently
+measured at fair value. Net gains or losses, including any interest or dividend income, are recognised in profit or loss within
+investment income. The interest income represents the interest accrual on these financial assets which is calculated using
+the coupon rate.
+Annual Report 2023 | Financial Report 143
+Notes to the Consolidated Financial Statements (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.4 Financial instruments (continued)
+2.4.1 Financial assets (continued)
+Classification and measurement (continued)
+Equity instruments are financial instruments that meet the definition of equity instruments when analysed from the issuer's
+perspective.
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+2.4.2 Financial liabilities (continued)
+Notes to the Consolidated Financial Statements (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts (continued)
+2.8.1 Definition (continued)
+Reinsurance contract is an insurance contract issued by the reinsurer to compensate the cedent for claims arising from
+one or more insurance contracts issued by the cedent.
+The Group adopts different models for different types of insurance contracts. Insurance contracts with direct participation
+features are measured using the variable fee approach. The Group simplifies the measurement using the premium allocation
+approach for insurance contracts and reinsurance contracts with coverage of one year or less or contract groups where
+there is no significant difference between the results of measuring liabilities for remaining coverage using the premium
+allocation approach and the results of measuring such liabilities using general measurement model. Other types of insurance
+contracts and reinsurance contracts are measured using the general measurement model.
+The Group assesses the classification of contracts using its expectations at inception of the contracts and does not reassess
+the conditions afterwards, unless the contracts are modified.
+2.8.2 Combination
+The Group treats a series of insurance contracts with the same counterparty or related counterparties which may achieve
+an overall commercial effect, as a whole in order to report the substance of such contracts.
+2.8.3 Separation
+An insurance contract may contain one or more components, the Group separates the following components:
+(a) embedded derivatives meeting the separation conditions of accounting policies for financial instruments under IFRS
+Financial Instruments;
+Annual Report 2023 | Financial Report 147
+9
+(c) promises to transfer distinct goods or services other than insurance contract services.
+Investment component is the amount that an insurance contract requires to repay to policyholders regardless of whether
+an insured event occurs.
+After the Group identifies and separates the non-insurance components that meet the above conditions for separation, the
+Group applies the accounting policies related to insurance contracts to the remaining portion.
+2.8.4 Classification
+The Group identifies portfolios of insurance contracts as contracts subject to similar risks and are managed together.
+A group of insurance contracts consists of one or more insurance contracts issued within a period of no longer than one
+year and with similar levels of profitability.
+The Group divides a portfolio of insurance contracts into a minimum of the following groups:
+(a) a group of contracts that is onerous at initial recognition;
+(b) a group of contracts that at initial recognition has no significant possibility of becoming onerous subsequently;
+(c) a group of the remaining contracts in the portfolio.
+148 Annual Report 2023 | Financial Report
+2.4 Financial instruments
+(b) distinct investment components, but the investment components that meet the definition of investment contracts with
+discretionary participation features are still accounted for applying the accounting policies for insurance contracts;
+(c) a substantial proportion of any change in the amounts to be paid to the policyholder is expected to vary with the change
+in fair value of the underlying items.
+(b) an amount equal to a substantial share of the fair value returns on the underlying items is expected to be paid to the
+policyholder; and
+(a) the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
+A financial liability is derecognised or partly derecognised when the underlying present obligation is discharged or partly
+discharged. The difference between the carrying amount of the derecognised part of the financial liability and the consideration
+paid is recognised in profit or loss for the current period.
+2.5 Fair value measurement
+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 is 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 5.4, 9 and 12 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.
+2.6 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.
+2.7 Financial assets purchased under agreements to resell
+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 financial assets 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.
+146 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts
+2.8.1 Definition
+The contracts issued by the Group are classified into insurance contracts and investment contracts.
+An insurance contract is a contract under which the issuer of the contract accepts significant insurance risk from the
+policyholder by agreeing to compensate the policyholder if a specified insured event adversely affects the policyholder. The
+Group assesses the extent to which insurance risk is transferred within a contract, conducting a test for the presence of
+significant insurance risk, thereby determining whether the contract should be classified as an insurance contract. Insurance
+contracts are those contracts that transfer significant insurance risk.
+When the Group performs tests on significant insurance risk, it determines that a contract transfers significant insurance
+risk if the following conditions are met:
+(a) at least in one scenario that has commercial substance, an insured event specified by the contract could cause the
+Group to pay significant additional amounts, even if the insured event is extremely unlikely, or even if the expected
+present value of the contingent cash flows is a small proportion of the expected present value of the remaining cash
+flows from the insurance contract. Absence of discernible effect on the economics of the transaction indicates lack of
+commercial substance. The additional amounts refer to the present value of amounts payable if an insured event occurs
+that exceed those that would be payable if no insured event had occurred (including claims handling and assessment
+costs).
+(b) at least in one scenario that has commercial substance, an insured event specified by the contract could cause the
+Group to incur a loss on a present value basis. However, even if a reinsurance contract does not expose the issuer to
+the possibility of a significant loss, that contract is deemed to transfer significant insurance risk if it transfers to the
+reinsurer substantially all the insurance risk relating to the reinsured portions of the underlying insurance contracts.
+Investment contracts issued by the Group have the legal form of insurance contracts but do not transfer significant insurance
+risks. The Group accounts for the investment contract with discretionary participation features applying the accounting
+treatments for insurance contracts. An investment contract with discretionary participation features is a financial instrument
+that provides a particular investor with the contractual right to receive guaranteed and additional amounts. The additional
+amounts are subject to the returns on a specified pool of items at the discretion of the issuer, and are expected to be a
+significant portion of the total contractual benefits. For liabilities arising from investment contracts without discretionary
+participation features, the Group accounts for these contracts according to note 2.4.2.
+An insurance contract is an insurance contract with direct participation features if all the following conditions are met at
+the inception of the contracts:
+2.4 Financial instruments (continued)
+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.
+(b) cash flow characteristics of financial assets (whether the cash flows are solely payments of principal and interest on
+the principal amount outstanding).
+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.
+1 January 2024
+1 January 2025
+The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
+2.2 Consolidation
+The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year
+ended 31 December 2023. 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
+•
+1 January 2024
+No mandatory effective
+date yet determined but
+available for adoption
+the ability to use its power over the investee to affect its returns.
+•
+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.
+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:
+1 January 2024
+1 January 2024
+beginning on or after
+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. The Group adjusts the financial statements
+of its associates and joint ventures for insurance companies that have not adopted IFRS 9 and IFRS 17 in accordance with
+the Group's accounting policies and recognises investment income and other comprehensive income, etc. accordingly.
+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.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.2 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 2023
+Effective for
+annual periods
+Standards/Amendments
+Amendments to IAS 1
+Amendments to IAS 1
+Amendments to IFRS 16
+Amendments to IFRS 10 and
+IAS 28
+Amendments to IAS 7, 'Cash
+Flow Statement' and IFRS
+7, 'Financial Instruments:
+Disclosures'
+Amendments to IAS 21
+Content
+Sale or Contribution of Assets between an Investor or
+its Associate or Joint Venture
+Financing Arrangements of Supplier
+Lack of Convertibility
+Annual Report 2023 | Financial Report 139
+Notes to the Consolidated Financial Statements (continued)
+Classification of Liabilities as Current or Non-current
+Non-current Liabilities with Covenants
+Lease Liability in a Sale and Leaseback
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.2 Consolidation (continued)
+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.
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.3 Associates and joint ventures
+Investments in associates and joint ventures are accounted for using the equity method of accounting and are initially
+recognised at cost.
+Annual Report 2023 | Financial Report 141
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+2.3 Associates and joint ventures (continued)
+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.
+For the year ended 31 December 2023
+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.
+140 Annual Report 2023 | Financial Report
+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.
+Notes to the Consolidated Financial Statements (continued)
+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;
+2.2 Consolidation (continued)
+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.
+The consolidated financial statements incorporate the financial statements of the combining entities or businesses in
+business combination under common control as if they had been combined from the date when the combining entities
+or businesses first came under the control of the ultimate holding company. The net assets of the combining entities or
+businesses are consolidated using the carrying amount from the ultimate holding company's perspective. No amount is
+recognised for goodwill or excess of the Group's interest in the book value of the net assets over cost at the time of the
+common control combination, to the extent of the continuation of the ultimate holding company's interest. The consolidated
+statement of comprehensive income includes the results of each of the combining entities or businesses from the earliest
+date presented or since the date when the combining entities or businesses first came under common control, where this
+is a shorter period, regardless of the date of the common control combination.
+The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group, other than
+common control 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 comparative financial data have been restated to reflect the business combinations under common control occurred during
+this year. Transaction costs, including professional fees, registration fees, costs of furnishing information to shareholders,
+costs or losses incurred in combining operations of the previously separate businesses and other costs incurred in relation
+to the common control combination that is to be accounted for by using the merger accounting method are recognised as
+expenses in the period in which they are incurred.
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+The insurance contract liabilities are subsequently measured by the Group at the reporting date at the total of the liabilities
+for remaining coverage and the liabilities for incurred claims.
+The liabilities for remaining coverage include the fulfilment cash flows related to unexpired coverage period allocated to the
+group at the financial position date and the contractual service margin of the group at that date.
+The liabilities for incurred claims include the fulfilment cash flows related to claims and other related expenses incurred
+allocated to the group at the financial position date.
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 151
+For the year ended 31 December 2023
+2.8 Insurance Contracts (continued)
+For insurance contracts without direct participation features, the carrying amount of the contractual service margin of a
+group of insurance contracts at the reporting date is adjusted by the Group to reflect the effect of the following changes
+at the group of contracts level:
+Subsequent measurement
+(b) be consistent with observable current market prices for financial instruments with cash flows whose characteristics are
+consistent with those of the insurance contracts, excluding the effect of factors that influence such observable market
+prices but do not affect the future cash flows of the insurance contracts.
+(c) any cash flows arising from the contracts in the group at that date.
+(b) the derecognition at the date of initial recognition of any asset for insurance acquisition cash flows and any other asset
+or liability previously recognised for cash flows related to the group of contracts;
+(a) the fulfilment cash flows;
+On initial recognition, the contractual service margin is an amount arising from:
+The contractual service margin is a component of the liabilities for the group of insurance contracts that represents the
+unearned profit the Group will recognise as provides insurance contract services in the future.
+The risk adjustment for non-financial risk is applied to the present value of the estimated future cash flows, to reflect the
+compensation that the Group requires for bearing the uncertainty about the amount and timing of the cash flows that arises
+from non-financial risk.
+(a) reflect the time value of money, the characteristics of the cash flows and the liquidity characteristics of the insurance
+contracts; and
+The Group uses appropriate discount rate to adjust the estimates of future cash flows to reflect the time value of money
+and the financial risks related to those cash flows, to the extent that the financial risks are not included in the estimates
+of cash flows. The discount rates applied to the estimates of the future cash flows shall:
+Initial measurement (continued)
+2.8.6 Measurement of insurance contracts (continued)
+(i) General provisions (general measurement model) (continued)
+If the total amount represents net cash inflows, the Group recognises it as contractual service margin. If the total amount
+represents net cash outflows, the Group recognises a loss.
+(i) General provisions (general measurement model) (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+(a) the effect of any new contracts added to the group;
+2.8.6 Measurement of insurance contracts (continued)
+For groups of insurance contracts measured using the variable fee approach, the carrying amount of the contractual service
+margin of a group of contracts at each reporting date equals the carrying amount at the start of the reporting period adjusted
+for:
+The variable fee reflects the consideration received by the Group for providing investment-related services by managing the
+underlying items on behalf of the policyholder, and is equal to the Group's share of the fair value of the underlying items
+less the fulfilment cash flows that do not vary based on the return on the underlying items.
+The Group applies the variable fee approach to measure the insurance contracts with direct participation features. The Group
+estimates the fulfilment cash flows of the groups of insurance contracts with direct participation features at the difference
+between the fair value of the underlying items and the variable fee.
+The measurement of variable fee approach is consistent with the general measurement model except for the accounting
+policies listed below.
+(ii) Measurement of groups of insurance contracts with direct participation features (variable fee approach)
+2.8.6 Measurement of insurance contracts (continued)
+2.8 Insurance Contracts (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+152 Annual Report 2023 | Financial Report
+Subsequent measurement (continued)
+(e) changes in risk adjustment for non-financial risk that relate to future service.
+(c) differences between the amount of investment components that were expected to be payable in the period and the
+amount of investment components that actually became payable;
+(b) changes in estimates of the present value of future cash flows in the liabilities for remaining coverage, measured at the
+discount rates determined on initial recognition, except for those that relate to the effects of the time value of money,
+financial risk and changes therein;
+(a) experience adjustments arising from premiums received in the period that related to future services and related cash
+flows, measured at the discount rates determined on initial recognition;
+Changes in fulfilment cash flows that related to future services mainly comprise:
+The Group rationally determines the coverage units of the groups of contracts in each period of the coverage period based
+on the pattern of provision of insurance contract services, and recognises insurance revenue accordingly over the current
+and future periods by amortising the carrying amount of the contractual service margin as adjusted for (a) to (d) above.
+(e) the amount recognised as insurance revenue because of the services provided in the period.
+(d) the effect of any currency exchange differences on the contractual service margin; and
+the above changes adjust the loss component within the liabilities for remaining coverage with correspondence to
+insurance service expenses. When the changes exceed the amount of loss component, the loss component should be
+reduced to zero. The remaining should be reinstating the contractual service margin.
+when the changes result in a decrease in the carrying amount of the contractual service margin, and the changes
+exceed the carrying amount of the contractual service margin. The contractual service margin is reduced to zero, and
+the excess is recognised in insurance service expenses and a loss component is recognised within the liabilities for
+remaining coverage;
+(c) changes relating to future service; except for
+(b) interest accreted on the carrying amount of the contractual service margin for contracts measured using the general
+measurement model. Interest accreted on the contractual service margin is measured at the locked-in discount rates.
+The locked-in discount rates are determined at the date of initial recognition of a group of contracts, applied to nominal
+cash flows that do not vary based on the returns on any underlying items;
+(d) differences between the amount of policy loans that were expected to be receivable in the period and the amount of
+policy loans that actually became receivable;
+2.8 Insurance Contracts (continued)
+(c) when it becomes onerous.
+For the year ended 31 December 2023
+Initial measurement
+(i) General provisions (general measurement model)
+2.8.6 Measurement of insurance contracts
+(b) the date the Group recognises an onerous group of underlying insurance contracts.
+(a) the later of the beginning of the coverage period or that any underlying insurance contract is initially recognised;
+For the reinsurance contracts held that provide proportionate coverage, they are recognised from the earliest of the following:
+(b) the date the Group recognises an onerous group of underlying insurance contracts.
+(a) the beginning of the coverage period of the group of reinsurance contracts held; and
+Reinsurance contracts held are recognised from the earliest of the following:
+(a) the effect of any new contracts added to the group;
+(b) the date when the first payment from a policyholder becomes due, or the date when the first payment is received by
+the Group if there is no contractual due date;
+On initial recognition, the Group measures a group of insurance contracts at the total of the fulfilment cash flows and the
+contractual service margin.
+(a) the beginning of the coverage period of the group of contracts, the coverage period refers to the period during which
+the Group provides insurance contract services;
+2.8.5 Recognition
+These groups represent the level of aggregation at which insurance contracts are initially recognised and measured. The
+Group does not reassess the composition of the groups subsequently.
+The Group classifies reinsurance contracts held within a period of no longer than one year into the same group of reinsurance
+contracts held.
+(b) a group of contracts for which, at initial recognition, there is no significant possibility of a net gain arising subsequently;
+(c) a group of the remaining contracts in the portfolio.
+(a) a group of contracts for which there is a net gain at initial recognition;
+The Group divides a portfolio of reinsurance contracts held into at least the following groups:
+Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance contracts issued.
+2.8.4 Classification (continued)
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+The Group recognises a group of insurance contracts it issues from the earliest of the following:
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+Annual Report 2023 | Financial Report 149
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+150 Annual Report 2023 | Financial Report
+(b) the Group has the practical ability to reassess the risks of the portfolio of insurance contracts that contains the contract
+and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio; and the pricing of the
+premiums up to the date when the risks are reassessed does not take into account the risks that relate to periods after
+the reassessment date.
+(a) the Group has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or
+level of benefits that fully reflects those risks; or
+A substantive obligation to provide insurance contract services ends when:
+Cash flows are within the boundary of an insurance contract if the Group has the right to require policyholders to pay
+premiums or has a substantial obligation to provide policyholders with insurance contract services.
+The Group includes in the measurement of a group of insurance contracts all the future cash flows within the boundary of
+each contract in the group and does not measure future cash flows outside the boundary of the contract group.
+(d) are estimated separately from adjustment for the time value of money and financial risk, unless the most appropriate
+measurement technique combines these estimates.
+(c) reflect conditions existing at the reporting date; and
+(b) reflect the perspective of the Group, provided that the estimates of any relevant market variables are consistent with
+observable market prices for those variables;
+(a) estimates of future cash flows are unbiased probability-weighted averages;
+Notes to the Consolidated Financial Statements (continued)
+The estimates of future cash flows:
+The Group defines insurance acquisition cash flows as cash flows arising from the costs of selling, underwriting and starting
+a group of insurance contracts that are directly attributable to the portfolio of insurance contracts to which the group belongs.
+The fulfilment cash flows do not reflect the non-performance risk of the Group.
+(c) a risk adjustment for non-financial risk.
+(b) an adjustment to reflect the time value of money and the financial risks; and
+(a) estimates of future cash flows directly related to the insurance contract;
+Fulfilment cash flows comprise the following:
+Initial measurement (continued)
+(i) General provisions (general measurement model) (continued)
+2.8.6 Measurement of insurance contracts (continued)
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+The Group may estimate the future cash flows at a higher level of aggregation and then allocate the resulting fulfilment
+cash flows to individual groups of contracts.
+(b) the change in the amount of the Group's share of the fair value of the underlying items, except to the extent that:
+If, at any time during the coverage period, relevant facts and circumstances indicate that a group of insurance contracts is
+onerous, the Group will recognise a loss in profit or loss and increase the liabilities for remaining coverage.
+the increase in the amount of the Group's share of the fair value of the underlying items reverses the loss component
+of the liabilities for remaining coverage.
+.
+.
+.
+the modified contract would have been excluded from the scope of the accounting policies related to insurance contracts;
+the Group would have separated different components from the host insurance contract, resulting in a different insurance
+contract to which the accounting policies related to insurance contracts would have applied;
+the modified contract would have had a substantially different contract boundary; or
+the modified contract would have been included in a different group of contracts.
+(b) the original contract met the definition of an insurance contract with direct participation features, but the modified
+contract no longer meets that definition, or vice versa; or
+(c) the Group applied the premium allocation approach to the original contract, but the modifications mean that the contract
+no longer meets the eligibility criteria for that approach.
+If a contract modification meets none of the conditions above, the Group treats changes in cash flows caused by the
+modification as changes in estimates of fulfilment cash flows.
+The Group derecognises an insurance contract when it is extinguished, i.e., when the obligation specified in the insurance
+contract expires or is discharged or cancelled.
+158 Annual Report 2023 | Financial Report
+156 Annual Report 2023 | Financial Report
+When the Group measures the groups of reinsurance contracts held, it adjusts the loss-recovery component to reflect
+changes in the loss components of the onerous underlying insurance contracts, with the carrying amount of the loss-recovery
+component not exceeding the portion of the carrying amount of the loss components of the onerous underlying insurance
+contracts that the Group expects to recover from the group of reinsurance contracts held.
+The Group recognises the amount calculated above as an adjustment to contractual service margin and simultaneously as
+recoveries of insurance service expenses from reinsurers in profit or loss of the period.
+(b) the percentage of claims on the underlying insurance contracts the Group expects to recover from the group of reinsurance
+contracts held.
+(a) the loss recognised on the underlying insurance contracts; and
+If the reinsurance contract held is entered into before or at the same time as the onerous underlying insurance contracts are
+recognised, when the Group recognises a loss on initial recognition of an onerous group of underlying insurance contracts
+or on addition of onerous underlying insurance contracts to a group, the Group recognises a loss-recovery component of
+the asset for remaining coverage for such groups of reinsurance contracts held by multiplying:
+The asset for incurred claims includes the fulfilment cash flows related to recovery of claims and other related expenses
+incurred allocated to the group of reinsurance contracts held at the financial position date.
+The asset for remaining coverage includes the fulfilment cash flows related to unexpired coverage period allocated to the
+group of reinsurance contracts held at the financial position date and the contractual service margin of the group at that date.
+The asset for reinsurance contracts held is subsequently measured by the Group at each financial position date at the total
+of the asset for remaining coverage and the asset for incurred claims.
+The Group recognises any net cost or net gain of the above total amounts as a contractual service margin.
+(d) loss-recovery component of assets for remaining coverage of reinsurance contracts held.
+(a) if the modified terms had been included at contract inception:
+If the terms of an insurance contract are modified, the Group derecognises the original contract and recognises the modified
+contract as a new contract, if any of the conditions below are satisfied:
+2.8.9 Modification and derecognition
+(c) the allocation of the contractual service margin is modified so that the Group recognises the contractual service margin
+over the duration of the group of contracts in a systematic way that reflects the transfer of investment services under
+the contract.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts (continued)
+2.8.7 Measurement of groups of reinsurance contracts held (continued)
+The Group measures the contractual service margin at each financial position date for a group of reinsurance contracts held
+as the carrying amount determined at the start of the reporting period, adjusted for:
+(a) the effect of contracts added to the group of contracts in the period on the contractual service margin;
+(b) interest accreted on the carrying amount of the contractual service margin, measured at the discount rates determined
+at the date of initial recognition of a group of contracts, to nominal cash flows that do not vary based on the returns on
+any underlying items;
+(c) the loss-recovery component of the asset for remaining coverage recognised on initial recognition of an onerous group
+of underlying insurance contracts or on addition of onerous underlying insurance contracts to a group, and reversals of
+a loss recovery component of the asset for remaining coverage to the extent those reversals are not changes in the
+fulfilment cash flows of the group of reinsurance contracts held;
+(d) the changes in the fulfilment cash flows relating to future service, other than the change resulting from a change in
+fulfilment cash flows allocated to a group of underlying insurance contracts that does not adjust the contractual service
+margin for the group of underlying insurance contracts, or the change resulting from recognition or reversal of losses
+from onerous groups of underlying contracts measured applying the premium allocation approach;
+(e) the effect of any currency exchange differences in the period arising on the contractual service margin;
+(c) any cash flows arising from the reinsurance contracts held in the group at that date;
+(f) the amortisation of the contractual service margin in the period. The Group rationally determines the coverage units
+of the group of reinsurance contracts held in each period of the coverage period based on the pattern of receipt of
+insurance contract services, and recognises profit or loss accordingly over the current and future periods by amortising
+the carrying amount of the contractual service margin as adjusted for (a) to (e) above.
+The Group applies the same principles to measure the groups of insurance contracts issued and the groups of reinsurance
+contracts held using the premium allocation approach.
+When a group of reinsurance contracts held is measured using the premium allocation approach, for the amount recognised
+and reversed by the loss-recovery component of asset for remaining coverage recovered from reinsurers, the Group adjusts
+the carrying amount of asset for remaining coverage recovered from reinsurers in the group of reinsurance contracts while
+recognising the amounts recovered from reinsurers.
+Annual Report 2023 | Financial Report 157
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts (continued)
+2.8.8 Investment contracts with discretionary participation features
+In addition to the requirements for insurance contracts set out above, the recognition and measurement for investment
+contract with discretionary participation features are modified as follows:
+(a) the date of initial recognition is the date the Group becomes party to the contract;
+(b) the contract boundary is modified so that cash flows are within the contract boundary if they result from a substantive
+obligation of the Group to deliver cash at a present or future date. The Group has no substantive obligation to deliver
+cash if the Group has the practical ability to set a price for the promise to deliver the cash that fully reflects the amount
+of cash promised and related risks;
+(ii) Groups of reinsurance contracts measured using the premium allocation approach
+the decrease in the amount of the Group's share of the fair value of the underlying items exceeds the carrying amount
+of the contractual service margin, giving rise to a loss;
+(b) the amount derecognised at that date of any asset or liability previously recognised for cash flows related to the group
+of reinsurance contracts held;
+On initial recognition for a group of reinsurance contracts held, the Group calculates the sum of:
+After the Group has recognised a loss on an onerous group of insurance contracts, the subsequent measurements are:
+(a) for any subsequent increases relating to future service in fulfilment cash flows allocated to the group arising from
+changes in estimates of future cash flows and the risk adjustment for non-financial risk, and any subsequent decreases
+in the amount of the Group's share of the fair value of the underlying items, the Group recognises a loss as insurance
+service expenses in profit or loss and increases the liabilities for remaining coverage;
+revenue.
+Any amounts allocated to the loss component of the liabilities for remaining coverage do not be recognised as insurance
+(b) changes in the risk adjustment for non-financial risk recognised in profit or loss because of the release from risk; and
+(c) insurance finance income or expenses.
+(a) estimates of the present value of future cash flows for claims and expenses released from the liabilities for remaining
+coverage because of incurred insurance service expenses;
+After a loss is recognised, the Group allocates the subsequent changes in fulfilment cash flows of the liabilities for remaining
+coverage specified as follows on a systematic basis between the loss component and the liabilities for remaining coverage
+excluding the loss component:
+(b) for a group of insurance contracts with direct participation features, the decrease in the amount of the Group's share
+of the fair value of the underlying items exceed the carrying amount of the contractual service margin.
+(a) the amount of unfavorable changes relating to future service in the fulfilment cash flows changes in estimates of future
+cash flows and the risk adjustment for non-financial risk exceed the carrying amount of the contractual service margin;
+A group of insurance contracts becomes onerous (or more onerous) on subsequent measurement if meets one of the following
+conditions, the Group recognises a loss as insurance service expenses in profit or loss and increases loss component of
+the liabilities for remaining coverage:
+(iii) Measurements for onerous insurance contracts (continued)
+2.8.6 Measurement of insurance contracts (continued)
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 153
+If a group of insurance contracts is onerous at the date of initial recognition, or if additional loss caused by contracts added
+to the group of onerous contracts, the Group recognises a loss as insurance service expenses in profit or loss for the net
+outflow for the group of onerous contracts, resulting in the carrying amount of the liabilities for the group being equal to
+the fulfilment cash flows and the contractual service margin of the group being zero.
+(iii) Measurements for onerous insurance contracts
+(e) the amount recognised as insurance revenue because of the services provided in the period. The Group identifies the
+coverage units of the groups of contracts for the coverage period in accordance with the insurance contract service
+provided, and recognised in the insurance revenue of the current period and subsequent periods accordingly by allocating
+the carrying amount of the contractual service margin as adjusted for (a) to (d) above.
+such decreases in the fulfilment cash flows are allocated to the loss component of the liabilities for remaining coverage.
+(d) the effect of any currency exchange differences on the contractual service margin; and
+•
+• such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, giving rise to
+a loss;
+(c) the changes in fulfilment cash flows relating to future service and do not vary based on the returns of the fair value of
+underlying items, except to the extent that:
+(b) for any subsequent decreases relating to future service in fulfilment cash flows allocated to the group arising from
+changes in estimates of future cash flows and the risk adjustment for non-financial risk, and any subsequent increases
+in the amount of the Group's share of the fair value of the underlying items, the Group reverses the insurance service
+expenses in profit or loss and decreases the loss component of the liabilities for remaining coverage until that component
+is reduced to zero, the Group adjusts the contractual service margin only for the excess of the decrease over the amount
+allocated to the loss component.
+(iv) Simplified approach for measurement of groups of insurance contracts (premium allocation approach)
+The Group uses the premium allocation approach for measuring the group of insurance contracts with a coverage period
+of each contract in the group is one year or less, or the Group reasonably expects that the measurement of the liabilities
+for remaining coverage for the group using the premium allocation approach would not differ materially from the one that
+would be produced using general measurement model.
+154 Annual Report 2023 | Financial Report
+(i) Groups of reinsurance contracts not measured using the premium allocation approach (continued)
+2.8.7 Measurement of groups of reinsurance contracts held (continued)
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 155
+The cash flows are within the contract boundary if they arise from substantive rights and obligations of the Group that exist
+during the reporting period in which the Group is obligated to pay premiums to the reinsurer or in which the Group has a
+substantive right to receive services from the reinsurer.
+The fulfilment cash flows for the group of reinsurance contracts held include estimates of future cash flows an adjustment
+to reflect the time value of money and the financial risks and a risk adjustment for non-financial risk which relate directly to
+fulfil insurance contracts. The Group determines the risk adjustment for non-financial risk so that it represents the amount
+of risk being transferred by the holder of the group of reinsurance contracts to the issuer of those contracts.
+'
+On initial recognition, the Group measures a group of reinsurance contracts held at the total of the fulfilment cash flows and
+the contractual service margin. The contractual service margin represents the net cost or net gain the Group will recognise
+as it receives insurance contract services from the reinsurer.
+(a) the fulfilment cash flows;
+(i) Groups of reinsurance contracts not measured using the premium allocation approach
+The Group recognises the liabilities for incurred claims of the insurance contracts as the amount of fulfilment cash flow
+related to the incurred compensation.
+At the reporting date, the carrying amount of the liabilities for remaining coverage is the carrying amount at the start of
+the reporting period plus the premiums received in the period, minus insurance acquisition cash flows, plus any amounts
+relating to the amortisation of insurance acquisition cash flows recognised as insurance service expenses in the reporting
+period, plus any adjustment to a financing component, minus the amount recognised as insurance revenue for services
+provided in that period, and minus any investment component paid or transferred to the liabilities for incurred claims.
+The carrying amount of a group of insurance contracts issued at the reporting date is the sum of the liabilities for remaining
+coverage and the liabilities for incurred claims.
+Subsequent measurement
+On initial recognition, the Group measures the liabilities for remaining coverage based on the premiums received minus the
+insurance acquisition cash flows, minus (or add) the amount of the assets for insurance acquisition cash flows and other
+related assets or liabilities that is derecognised at the initial recognition.
+(iv) Simplified approach for measurement of groups of insurance contracts (premium allocation approach) (continued)
+Initial measurement
+2.8.6 Measurement of insurance contracts (continued)
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+2.8.7 Measurement of groups of reinsurance contracts held
+(i) Groups of reinsurance contracts not measured using the premium allocation approach (continued)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+For the year ended 31 December 2023
+3 SUMMARY OF OTHER ACCOUNTING POLICIES (continued)
+3.5 Leases (continued)
+As a lessee (continued)
+Subsequent measurement (continued)
+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 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 and adjust the carrying amount of right-of-use asset accordingly. 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.
+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.
+3.6 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.
+Annual Report 2023 | Financial Report 165
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+3 SUMMARY OF OTHER ACCOUNTING POLICIES (continued)
+Notes to the Consolidated Financial Statements (continued)
+168 Annual Report 2023 | Financial Report
+164 Annual Report 2023 | Financial Report
+Subsequent measurement
+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.
+Annual Report 2023 | Financial Report 163
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+3 SUMMARY OF OTHER ACCOUNTING POLICIES (continued)
+3.4 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.
+3.5 Leases
+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. 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. For short-term leases with a lease term of not
+more than 12 months and low-value asset leases with a lower value when the individual asset is new, the Group chooses
+not to recognise the right of use assets and lease liabilities and recognises the relevant rental expenses in profit or loss or
+the cost of the relevant asset on a straight-line basis over each period of the lease term. 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.
+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.
+Significant judgements made by the Group in the classification of financial assets include business model and analysis on
+contractual cash flow characteristics.
+4.2.1 Classification of financial assets
+The Group's principal investments are debt investments, equity investments, term deposits, etc. The critical estimates and
+judgements are those associated with the recognition of impairment and the measurement of fair value.
+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.
+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.
+3.10 Current and deferred income taxation (continued)
+3 SUMMARY OF OTHER ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+166 Annual Report 2023 | Financial Report
+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.
+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.
+3.10 Current and deferred income taxation
+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.
+3.9 Share capital
+The advance premiums received by the Group are mainly premiums received for insurance contracts that have not yet met
+the criteria for initial recognition.
+3.8 Premiums received in advance
+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.
+Stock appreciation rights
+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.
+Housing 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. All
+contributions made under the government-sponsored pension plans described above are fully attributable to employees
+at the time of the payment and the Group is unable to forfeit any amounts contributed by it to such plans. In addition to
+the government-sponsored pension plans, the Group established an employee annuity fund plan pursuant to the relevant
+laws and regulations in the PRC, whereby the Group is required to contribute to the plan at fixed rates of the employees'
+salary costs. Contributions made by the Group under the annuity fund plan that is forfeited in respect of those employees
+who resign from their positions prior to the full vesting of the contributions will be recorded in the public account of the
+annuity fund and shall not be used to offset any contributions to be made by the Group in the future. All funds in the
+public account will be attributed to the employees whose accounts are in normal status after the approval procedures are
+completed as required. Under these plans, the Group has no legal or constructive obligation for retirement benefit beyond
+the contributions made.
+3.7 Employee benefits
+Pension benefits
+Notes to the Consolidated Financial Statements (continued)
+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 deferred tax 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.
+3.11 Provisions and contingencies
+4.2 Financial instruments
+The description of the above assumptions is detailed in Note 14.1.
+The judgments and estimates used in the valuation process will affect the amount recognised in the consolidated financial
+statements for insurance contracts and reinsurance contracts held.
+Fulfilment cash flows are determined on the basis of the Group's estimates of future benefits, premiums and related
+expenses, taking into account the risk adjustment for non-financial risk. The mortality rate, morbidity rate, lapse rate, discount
+rate, expense assumption and policy dividend assumption used for the estimation of future cash flows are determined
+according to the latest empirical analysis and current and future economic conditions.
+4.1.4 Estimates of future benefit payments and premiums arising from insurance contracts not using
+the premium allocation approach
+The Group's unit of coverage is determined by considering the benefits provided by each contract and its expected duration
+of insurance coverage. For policies that include investment return services or investment-related services, the amount
+corresponding to the investment return service or investment-related service is the investment component or one of the
+amounts that the policyholder is entitled to recover.
+The Group has established rules to unbundle non-distinct investment components. Generally, for relevant contracts, the
+Group determines the non-distinct investment components based on cash surrender values and similar contractual terms.
+4.1.2 Investment components
+The Group identifies portfolios of insurance contracts as contracts subject to similar risks and are managed together. The
+Group makes judgments about whether it has similar risk factors and management methods.
+4.1.1 Portfolios of contracts
+Leasehold improvements
+4.1 Insurance contracts
+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.
+4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 167
+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 equity holders of the Company.
+3.12 Dividend distribution
+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.
+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.
+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.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying amount 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.
+The actual result may have significant differences in accordance with changes in accounting estimates and professional
+judgement.
+Office equipment, furniture and fixtures
+Motor vehicles
+4.1.3 Determination of coverage unit
+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:
+Annual Report 2023 | Financial Report 159
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts (continued)
+2.8.10 Presentation (continued)
+(ii) Insurance service expenses
+The Group recognises the increase in the liabilities for incurred claims because of claims and expenses incurred in the
+period and any subsequent changes in fulfilment cash flows relating to incurred claims and incurred expenses as insurance
+service expenses.
+Insurance service expenses include the following:
+(a) claims and other related expenses incurred in the period, excluding investment components;
+(b) amortisation of insurance acquisition cash flows;
+(c) changes that relate to past service – changes in the fulfilment cash flow relating to the liabilities for incurred claims;
+and
+(d) changes that relate to future service - onerous contract losses or reversals of those losses.
+For contracts not measured using the premium allocation approach, amortisation of insurance acquisition cash flows is
+reflected in insurance service expenses in the same amount as insurance acquisition cash flows recovery reflected within
+insurance revenue. For contracts measured using the premium allocation approach, amortisation of insurance acquisition
+cash flows is based on the passage of time.
+(iii) Allocation of reinsurance premiums paid
+The Group recognises the reduction in the asset for remaining coverage because of insurance contract services received
+from the reinsurer in the period as allocation of reinsurance premiums paid. The Group treats amounts from the reinsurer
+that it expects to receive that are not contingent on claims of the underlying contracts as the reduction to the allocation
+of reinsurance premiums paid. Allocation of reinsurance premiums paid excludes any investment components of the
+reinsurance contracts held.
+(iv) Amounts recovered from reinsurers
+The increase in the carrying amount of the incurred claims for reinsurance contracts held incurred due to the incurred claims
+and other directly attributable expenses in the current period, as well as the subsequent changes in the related fulfilment
+cash flows, are recognised as the amounts recovered from reinsurers. The Group does not include the investment component
+of the reinsurance contracts held when recognising the amounts recovered from reinsurers.
+(v) Financial changes in insurance contracts
+Insurance finance income or expenses comprises the change in the carrying amount of the group of insurance contract
+liabilities and reinsurance contract assets arising from:
+(a) the effect of the time value of money and changes in the time value of money;
+For groups of insurance contracts measured using the premium allocation approach, the Group recognises insurance revenue
+based on the passage of time over the coverage period of a group of contracts.
+(b) the effect of financial risk and changes in financial risk.
+(b) The Group determines insurance service expenses related to insurance acquisition cash flows in a systematic way on
+the basis of the passage of time. The Group recognises the same amount as insurance revenue to reflect the portion
+of the premiums that relate to recovering those cash flows.
+•
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+Buildings
+2.8 Insurance Contracts (continued)
+2.8.10 Presentation
+(i) Insurance revenue
+The Group recognises the reduction in the liabilities for remaining coverage because of services provided in the period as
+insurance revenue.
+The amount of insurance revenue recognised in the reporting period depicts the transfer of promised services at an amount
+that reflects the portion of consideration that the Group expects to be entitled to in exchange for those services.
+For contracts not measured using the premium allocation approach, insurance revenue includes the following:
+(a) Amounts related to the changes in the liabilities for remaining coverage;
+•
+•
+claims and other related expenses incurred in the period measured at the amounts expected at the beginning of the
+period, excluding:
+-
+- amounts allocated to the loss component;
+- repayments of investment components;
+- amounts that relate to transaction-based taxes collected on behalf of third parties; and
+- insurance acquisition cash flows.
+the changes in the risk adjustment for non-financial risk, excluding:
+- changes included in insurance finance income or expenses;
+- changes that relate to future service that adjust the contractual service margin; and
+- amounts allocated to the loss component.
+• other.
+160 Annual Report 2023 | Financial Report
+amounts of the contractual service margin amortised; and
+For the year ended 31 December 2023
+For contracts with direct participation features, the Group determines the contractual service margin or loss component of
+the liabilities for remaining coverage at the transition date as:
+(a) based on the amount that fair value of the underlying items minus the fulfilment cash flows at transition date and
+appropriately adjusted the relevant cash flow and non-financial risk adjustment before transition date;
+(b) if (a) result in a contractual service margin, the amount of the contractual service margin recognised in profit or loss
+before transition date was determined by comparing the remaining coverage units at transition date with the coverage
+units provided under the group of contracts before that date;
+(c) if (a) result in a loss component, the Group adjust the loss component to nil and increase the liabilities for remaining
+coverage excluding the loss component by the same amount.
+(ii) Fair value approach
+For the groups of contracts that are measured using the fair value approach, the Group determines the contractual service
+margin or loss component of the liabilities for remaining coverage at transition date as the difference between the fair value
+of a group of contracts at that date and the fulfilment cash flows at that date.
+The fair value of the group of contracts is calculated using the present value method, based on reasonable and supportable
+information available at the transition date.
+3 SUMMARY OF OTHER ACCOUNTING POLICIES
+3.1 Segment reporting
+3.2 Foreign currency translation
+Contracts with direct participation features
+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.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+3 SUMMARY OF OTHER ACCOUNTING POLICIES (continued)
+3.3 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 financial assets when fair value is positive and as financial liabilities when fair value is negative.
+Embedded derivatives that are not closely related to their host contract (which is not an asset regulated by the Financial
+Instruments Standard) and that meet the definition of a derivative are separated and fair valued through profit or loss.
+3.4 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.
+Notes to the Consolidated Financial Statements (continued)
+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
+162 Annual Report 2023 | Financial Report
+(i) Modified retrospective approach (continued)
+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.
+2.8 Insurance Contracts (continued)
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+2.8 Insurance Contracts (continued)
+2.8.10 Presentation (continued)
+2.8.12 Transition date approach (continued)
+(v) Financial changes in insurance contracts (continued)
+The Group disaggregates the financial changes in insurance contracts into insurance finance income or expenses from insurance
+contracts issued reinsurance finance income or expenses from reinsurance contracts held and other comprehensive income.
+For the contracts not measured using the variable fee approach, the changes in carrying amount of insurance contract
+liabilities arising from the financial risk changing, such as discount rate, are recognised in other comprehensive income; For
+the contracts measured using the variable fee approach, insurance finance income or expenses equal to the amounts that
+can eliminate accounting mismatches arising from profit or loss from underlying items, and the remainders are recognised
+in other comprehensive income.
+For the treatment result of accounting estimates for insurance contracts and reinsurance contracts held made in interim
+financial statements, the Group has elected to adjust it in subsequent interim periods or in the annual reporting period.
+2.8.12 Transition date approach
+As at 1 January 2022, the Group applied IFRS 17 retroactively. When it was impracticable to use the full retrospective
+approach, the modified retrospective approach or the fair value approach were adopted by the Group. In accordance with
+IFRS 17, the comparative financial statements of the Group have been restated.
+(i) Modified retrospective approach
+2.8.11 The effect of accounting estimates made in interim financial statements
+For contracts without direct participation features, the Group determines the contractual service margin or loss component
+of the liabilities for remaining coverage at the transition date as:
+(a) the Group estimates the future cash flows at the date of initial recognition of a group of insurance contracts as the
+amount of the future cash flows at the transition date, adjusted by the cash flows that occurred between the date of
+initial recognition of a group of insurance contracts and the transition date;
+(b) the risk adjustment for non-financial risk on initial recognition was determined by adjusting the amount at transition date
+or earlier date (if applicable) for the expected release of risk before transition date. The expected release of risk was
+determined with reference to the release of risk for similar insurance contracts that the Group issued at transition date;
+2 SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
+(c) When the Group recognises contractual service margin at initial recognition, interest accreted on the carrying amount
+of the contractual service margin during the period, measured at the discount rates determined on initial recognition.
+The amount of the contractual service margin recognised in profit or loss before transition date was determined by
+comparing the remaining coverage units at transition date with the coverage units provided under the group of contracts
+before that date; and
+(d) When the Group recognises the loss component at initial recognition, the amount allocated to the loss component before
+transition date is determined on a systematic and rational basis.
+Annual Report 2023 | Financial Report 161
+Contracts without direct participation features
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+The sensitivity analysis for interest rate risk illustrates how changes in interest income, the fair value of future cash flows of
+a financial instrument, insurance contract liabilities and other items will fluctuate because of changes in market interest rates.
+As at 31 December 2023, if market interest rates were 50 basis points higher or lower with all other variables held constant,
+profit before income tax for the year would have been RMB6,026 million or RMB14,179 million (as at 31 December 2022:
+RMB8,633 million or RMB15,191 million) higher or lower, respectively, mainly as a result of higher or lower interest
+income on floating rate cash and cash equivalents, term deposits, statutory deposits-restricted and debt investments and
+the fair value gains or losses on debt investments at fair value through profit or loss and changes in insurance contract
+liabilities. Other comprehensive income before income tax would have been RMB9,899 million or RMB20,803 million (as
+at 31 December 2022: RMB126,190 million or RMB137,367 million) higher or lower, respectively, mainly as a result of the
+fair value gains or losses on investment in debt instruments at fair value through other comprehensive income, and the
+change of insurance contract liabilities.
+176 Annual Report 2023 | Financial Report
+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 11.
+(i) Interest rate risk
+5.2.1 Market risk
+Interest rate risk refers to the risk that the value of financial instruments and the measurement results of insurance
+contracts will fluctuate due to changes in market interest rates. The Group's financial assets are principally comprised of
+term deposits, debt investments which are exposed to interest rate risk. Changes in the level of interest rates could have
+a significant impact on the Group's investment return, as well as an impact on the measurement of the Group's insurance
+contracts and reinsurance contracts held.
+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.
+5.2 Financial risk
+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.
+5 RISK MANAGEMENT (continued)
+7
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 175
+24,821
+1,773
+Total liabilities for incurred claims
+risk adjustment for non-financial
+risk and discounting, etc.
+Effect of indirect claims expenses,
+before 2019
+Total liabilities - Accident years
+21,417
+Notes to the Consolidated Financial Statements (continued)
+23,041
+For the year ended 31 December 2023
+For the year ended 31 December 2023
+20,928
+5.2 Financial risk (continued)
+64,840
+1,173
+1,074
+1,426
+541
+40,871
+RMB million
+Total
+Others
+EUR
+GB pound
+US dollar HK dollar
+5 RISK MANAGEMENT (continued)
+Investment in equity instruments at fair
+Financial assets at fair value through profit
+Equity investments
+Financial assets
+As at 31 December 2023
+The following table summarises primary financial assets and financial liabilities denominated in currencies other than RMB
+as at 31 December 2023 and 31 December 2022, expressed in RMB equivalent:
+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 other borrowings denominated in currencies other than
+the functional currency, such as US dollar, HK dollar, GB pound and EUR.
+(iii) Currency risk
+As at 31 December 2023, if the prices of all the Group's equity investments had increased or decreased by 10% with all
+other variables held constant, profit before income tax for the year would have been RMB68,496 million or RMB68,842
+million (as at 31 December 2022: RMB4,047 million or RMB4,618 million) higher or lower, respectively, mainly as a result of
+the fair value gains or losses on equity investments at fair value through profit or loss and the change of insurance contract
+liabilities. Other comprehensive income before income tax would have been RMB1,775 million or RMB1,795 million lower
+or higher (as at 31 December 2022: RMB43,381 million or RMB43,857 million higher or lower), respectively, mainly as a
+result of fair value gains or losses on investment in equity instruments at fair value through other comprehensive income,
+and the change of insurance contract liabilities.
+The Group manages price risk by holding an appropriately diversified investment portfolio as permitted by laws and regulations
+designed to reduce the risk of price concentration in any one specific industry or issuer.
+Price risk arises mainly from the volatility of prices of equity investments held by the Group. Prices of equity investments
+are determined by market forces. The Group is subject to increased price risk mainly because China's capital markets are
+relatively volatile. The Group's insurance contracts using the variable fee approach are exposed to price risk.
+(ii) Price risk
+5.2.1 Market risk (continued)
+or loss
+320
+before 2019
+29
+2023
+RMB million
+2022
+2021
+2020
+2019
+Contracts measured using the premium allocation approach (accident year)
+The following table indicates the claim development for contracts measured using the premium allocation approach with
+taking into account the impacts of ceded business:
+26,721
+2,610
+Total liabilities for incurred claims
+risk and discounting, etc.
+Total
+risk adjustment for non-financial
+7
+Total liabilities - Accident years
+24,104
+21,973
+1,659
+339
+104
+29
+2019 to 2023
+Total liabilities - Accident years from
+(253,961)
+value through other comprehensive
+income
+Effect of indirect claims expenses,
+Estimated accumulated undiscounted
+claims expenses (after reinsurance)
+Year end
+2019 to 2023
+Total liabilities - Accident years from
+(248,363)
+(39,479)
+(51,521)
+(55,075)
+(51,132)
+(51,156)
+Accumulated claims expenses paid
+51,185
+4 years later
+51,234
+51,570
+3 years later
+55,395
+51,938
+51,540
+2 years later
+60,896
+53,416
+52,694
+56,125
+52,405
+51,611
+1 year later
+56,651
+52,774
+50,012
+102
+8,886
+28,318
+Debt investments
+2,176
+2,176
+Term deposits
+314
+3
+7
+8
+296
+Securities at fair value through profit or loss
+6,692
+6,692
+Available-for-sale securities
+Cash and cash equivalents
+1,278
+Loans
+206
+206
+Held-to-maturity securities
+Debt securities
+7,595
+874
+1,212
+394
+614
+4,501
+Securities at fair value through profit or loss
+1,278
+68,733
+2,849
+62
+178 Annual Report 2023 | Financial Report
+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, equipment and so on to
+lower the 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 National Financial Regulatory Administration ("NFRA") 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.
+As at 31 December 2023, 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, profit before income tax for the year would have been
+RMB7,738 million (as at 31 December 2022: RMB927million) 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 equity instruments at fair value through other comprehensive income
+included in the table above. Other comprehensive income before tax recognised in equity instruments at fair value through
+other comprehensive income would have been RMB889 million (31 December 2022: RMB6,820 million) lower or higher due
+to the foreign exchange. The actual exchange losses in 2023 were RMB380 million (2022: exchange losses in RMB69 million).
+5.2.2 Credit risk
+12,255
+12,255
+3,192
+2,307
+3,192
+2,307
+6,756
+Total
+62
+6,756
+Financial liabilities
+90,256
+884
+1,355
+610
+59,089
+(40,438)
+Total
+3,262
+7
+136
+208
+Interest-bearing loans and other borrowings
+58,413
+10,320
+Available-for-sale securities
+614
+49,856
+33,174
+Total
+2,830
+2
+102
+52
+99
+2,575
+Cash and cash equivalents
+2,850
+1,542
+2,850
+189
+189
+amortised cost
+Investment in debt instruments at
+237
+237
+through other comprehensive income
+Investment in debt instruments at fair value
+- 21 14 5 6,43
+6,395
+or loss
+Financial assets at fair value through profit
+Term deposits
+1,081
+86,267
+Financial liabilities
+Equity securities
+Financial assets
+RMB million
+Total
+Others
+EUR
+GB pound
+HK dollar
+US dollar
+As at 31 December 2022
+(iii) Currency risk (continued)
+5.2.1 Market risk (continued)
+5.2 Financial risk (continued)
+5 RISK MANAGEMENT (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 177
+12,857
+12,857
+3,378
+2,495
+3,378
+2,495
+6,984
+Total
+6,984
+Interest-bearing loans and other borrowings
+8,886
+(53,220)
+5,540
+(51,939)
+Fu Lu Shuang Xi Participating Endowment (c)
+3,053
+2.67%
+Sheng Shi Zun Xiang Annuity (d)
+7,157
+6.25%
+0.02%
+5.78%
+Mei Man Yi Sheng Annuity (e)
+Others (f)
+2,854
+94,723
+82.79%
+114,430
+100.00%
+1111
+Total
+2.49%
+6,618
+contracts (i)
+1.39%
+19
+0.00%
+14
+0.00%
+509,867
+Xin Xiang Wei Lai Participating Endowment (a)
+Kang Ning Whole Life (b)
+90.26%
+94.43%
+564,877
+100.00%
+540,926
+100.00%
+Insurance benefits of life insurance
+510,789
+5,453
+3,800
+6.27%
+4.37%
+0.58%
+2,616
+74,594
+4
+0.00%
+Kang Ning Whole Life (b)
+392,552
+9.24%
+386,218
+0.68%
+10.06%
+184,863
+4.35%
+181,523
+4.73%
+Sheng Shi Zun Xiang Annuity (d)
+48,176
+Fu Lu Shuang Xi Participating Endowment (c)
+28,876
+Xin Xiang Wei Lai Participating Endowment (a)
+Liabilities of life insurance contracts (i)
+3.01%
+85.77%
+86,964
+100.00%
+Annual Report 2023 | Financial Report 171
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.1 Insurance risk (continued)
+5.1.2 Concentration of insurance risks (continued)
+As at 31 December 2023
+As at 31 December 2022
+RMB million
+%
+RMB million
+%
+7,492
+1.13%
+0.01%
+1.73%
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+4.4 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.
+4.5 Determination of control over investee
+Annual Report 2023 | Financial Report 169
+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.
+5 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.
+5.1 Insurance risk
+5.1.1 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 main
+risk to the Group is that actual claims are paid in excess of the carrying value of the insured liability. 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.
+The Group issues certain structured entities (e. g. funds and asset management products), 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 2023, 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 33(b) for the details.
+The business of the Group mainly comprises life insurance contracts and non-life insurance contracts. For life insurance
+contracts, the most significant factor is constant improvement in medical and social conditions that would help prolong
+life span. Insurance risk is also affected by policyholders' rights to terminate contracts, reduce premiums, refuse to pay
+premiums or exercise annuity conversion rights. Thus, insurance risk is also subject to policyholders' behaviours and
+decisions. For non-life insurance contracts, the significant factors that could increase the overall frequency of claims are
+epidemics, profound changes in lifestyles, natural disasters, and accidents resulting in earlier or more claims than expected.
+The Group manages insurance risk through underwriting strategies, reinsurance arrangements and claims handling.
+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.
+For the description of valuation techniques, please refer to Note 5.4. Using different valuation techniques and parameter
+assumptions may lead to some differences of fair value estimations.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+4.2 Financial instruments (continued)
+4.2.1 Classification of financial assets (continued)
+The Group's assessment of the business model is performed on a financial asset portfolio basis, and determined on the basis
+of scenarios which are reasonably expected to occur, taking into account: how cash flows were realised in the past, how the
+performance are evaluated and reported to the entity's key management personnel; the risks that affect the performance
+and the way in which those risks are assessed and managed; and how managers of the business are compensated, etc.
+4.3 Impairment of investments in associates and joint ventures
+When assessing whether contractual cash flow characteristics of financial assets are consistent with basic lending
+arrangement, key judgements made by the Group include: the possibility of changes in timing or amount of the principal
+during the duration due to reasons such as early repayment; whether interest only includes considerations for time value
+of money, credit risks, other basic lending risks, costs and profits. For example, whether the prepayment amount only
+reflects the principal outstanding and the interest on the principal outstanding, as well as the reasonable compensation for
+the early termination of the contract.
+The Group calculates ECL through default risk exposure and ECL rate, and determines the ECL rate based on default
+probability and default loss rate. In determining the ECL rate, the Group uses data such as internal historical credit loss
+experience, and adjusts historical data based on current conditions and forward-looking information.
+4.2.3 Fair value of financial instruments
+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 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 investments: 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 investments: 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.
+Financial assets purchased under agreements to resell, term deposits, interest-bearing loans and other borrowings, and
+financial assets sold under agreements to repurchase: the carrying amounts of these assets in the statement of financial
+position approximate fair value.
+4.2.2 Measurement of ECL
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+Mei Man Yi Sheng Annuity (e)
+Others (f)
+Total
+38,632
+6.84%
+5
+Sheng Shi Zun Xiang Annuity (d)
+0.00%
+1.99%
+13,247
+2.45%
+5,065
+0.90%
+9,379
+11,233
+Fu Lu Shuang Xi Participating Endowment (c)
+Xin Xiang Wei Lai Participating Endowment (a)
+Kang Ning Whole Life (b)
+Premiums of life insurance contracts (i)
+5.1 Insurance risk (continued)
+5.1.1 Types of insurance risks (continued)
+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 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.
+5.1.2 Concentration of insurance risks
+Currently, the Group's insurance operation is mainly located in the PRC. There are no significant differences among the
+regions where the Group underwrites insurance contracts.
+The major products of the Group's life insurance contracts are listed below:
+Product name
+For the year ended 31 December
+2023
+2022
+RMB million
+%
+RMB million
+%
+61
+54,528
+1.42%
+Mei Man Yi Sheng Annuity (e)
+Others (f)
+(5,562)
+(5,340)
+(918)
+(672)
+(3,508)
+(3,315)
+(2,322)
+Sensitivity analysis of contracts measured using the premium allocation approach
+If holding all other variables constant, the Group considers the following expected effect of changes in claim ratios assumption
+on consolidated profit before income tax for the year.
+Without considering the ceded business, holding all other variables constant, if claim ratios are 100 basis points higher or
+lower than the current assumption, the consolidated pre-tax profit is expected to be RMB249 million (as at 31 December
+2022: RMB266 million) lower or higher, respectively; With consideration of ceded business, holding all other variables
+constant, if claim ratios are 100 basis points higher or lower than the current assumption, the consolidated pre-tax profit is
+expected to be RMB238 million (as at 31 December 2022: RMB252 million) lower or higher, respectively.
+174 Annual Report 2023 Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+Changes in factors such as the amount of contractual claims measured using the premium allocation approach have the
+potential to affect changes in the assumed level of the reserve for outstanding claims, which in turn affects the simultaneous
+changes in the liabilities for incurred claims.
+5.1 Insurance risk (continued)
+(2,606)
+Lapse rate
+4,920
+3,563
+3,734
+2,388
+Lapse rate
+Increase by 10%
+Decrease by 10%
+2,499
+5,505
+5,294
+762
+529
+3,468
+3,285
+2,229
+5.1.3 Sensitivity analysis (continued)
+Sensitivity analysis of contracts measured using the premium allocation approach (continued)
+The following table indicates the claim development for contracts measured using the premium allocation approach without
+taking into account the impacts of ceded business:
+52,248
+53,202
+57,642
+54,879
+52,197
+52,769
+62,411
+56,890
+52,239
+52,043
+4 years later
+51,842
+Accumulated claims expenses paid
+(51,813)
+3 years later
+55,256
+57,727
+53,369
+Contracts measured using the premium allocation approach (accident year)
+Estimated accumulated undiscounted
+claims expenses (before
+reinsurance)
+2019
+2020
+2021
+2022
+RMB million
+2023
+Total
+Year end
+1 year later
+2 years later
+50,564
+3,471
+5,299
+3,651
+Decrease by 10%
+5.1 Insurance risk (continued)
+5.1.2 Concentration of insurance risks (continued)
+(c) Fu Lu Shuang Xi Participating Endowment is a participating insurance contract with the options for regular premium
+of 3 years, 5 years and 10 years paid annually, semi-annually, quarterly or monthly. Its insured period extends from the
+effective date of the insurance contract to the corresponding date of the year when the policyholders turn 75-year-old.
+This product is applicable to healthy policyholders between 30-day-old and 60-year-old. Starting from the effective date
+of the insurance contract, the survival benefit is paid every two policy years on the corresponding date at 10% of the
+basic sum insured. If death incurred over insured period, the contract terminates and death benefit is paid at death
+benefit amount. If the policyholders live to the annual corresponding effective date of the expiration period, the contract
+terminates and maturity benefit is paid at maturity benefit amount.
+(d) Sheng Shi Zun Xiang Annuity is an annuity insurance contract with the options for regular premium of 3 years or 5 years
+paid annually or monthly. The insurance period is 20 years. This product is applicable to healthy policyholders between
+28-day-old and 70-year-old. If the insured survives on the first and second annual effective dates after the contract has
+been in force for five policy years, a special survival benefit shall be paid according to the following provisions: for a
+premium payment period of three years, a special survival benefit shall be paid according to 48% and 12% of the annual
+premium determined by the contract's basic insurance amount; for a premium payment period of five years, a special
+survival benefit shall be paid according to 60% and 40% of the annual premium determined by the contract's basic
+insurance amount. If the insured survives until the effective date of the contract, the annuity shall be paid at the basic
+insurance amount every year from the first effective date of the contract after the contract has been in force for seven
+policy years until the expiration of the insurance period of the contract. If the insured survives until the effective date
+of the year in which the insurance period of the contract expires, the contract shall terminate, and the maturity benefit
+shall be paid according to the premiums paid (excluding interest). If the insured dies during the insurance period, the
+contract shall terminate, and the death benefit shall be paid according to the greater value of the premiums paid at the
+time of the insured's death (excluding interest) minus the sum of the special survival benefit paid and the cash value.
+(e) Mei Man Yi Sheng Annuity is a participating annuity insurance contract with annual premium payment method and four
+types of premium payment periods: 3 years, 5 years, 8 years and 12 years. The insurance period is from the effective
+date of the contract to the effective date of the year when the insured reaches the age of 75. Any person between
+30 days and 60 years old and in good health can be the insured person. From the effective date of the contract to the
+date corresponding to the effective date of the year when the insured reaches the age of 74. If the insured is alive, the
+annuity of care will be paid every year on the effective date of the contract according to the following provisions: The
+annuity of care is the basic insurance amount multiplied by the period of payment (number of years) multiplied by 1%.
+The contract shall be terminated on the effective date of the year in which the insured survives until he reaches the age
+of 75, and the expiration benefit shall be paid according to the following provisions: The expiration benefit is the basic
+insurance amount multiplied by the payment period (number of years). If the insured dies due to illness within 2 years
+from the effective (or re-effective) date of the contract, the death benefit shall be paid according to the premium paid
+(without interest), and the contract shall terminate. If the insured dies due to accidental injury or dies due to illness 2
+years after the effective (or re-effective) date of the contract, the death benefits shall be paid in accordance with the
+following provisions and the contract shall be terminated. The death benefit is the basic insurance amount multiplied
+by the number of years paid at the time of death multiplied by 110%.
+(f) Others consist of various life insurance contracts with no significant concentration.
+Annual Report 2023 | Financial Report 173
+5 RISK MANAGEMENT (continued)
+Notes to the Consolidated Financial Statements (continued)
+5 RISK MANAGEMENT (continued)
+5.1 Insurance risk (continued)
+5.1.3 Sensitivity analysis
+Sensitivity analysis of contracts not measured using the premium allocation approach
+Significant assumptions involved in calculation of insurance contract liabilities include mortality, morbidity, lapse rate and
+discount rate, etc.
+If holding all other variables constant, the Group considers the expected effect of changes in assumptions on mortality,
+morbidity and lapse rate on consolidated profit before income tax and consolidated other comprehensive income before
+income tax for the year, and considers the effect of risk mitigation on insurance contracts and reinsurance contracts held,
+as follows. For effect of changes in assumption on discount rate, please refer to Note 5.2.1(i).
+For the year ended 31 December 2023
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+172 Annual Report 2023 | Financial Report
+154,698
+3.64%
+158,469
+4.13%
+Total
+3,440,644
+4,249,809
+80.96%
+3,060,157
+79.66%
+100.00%
+3,840,899
+100.00%
+(i) The premiums, the current amount of insurance benefits and the ending balance of liabilities are data under the Chinese
+Accounting Standards for Business Enterprises ("ASBE").
+(a) Xin Xiang Wei Lai Participating Endowment is a participating endowment insurance contract. It provides two options
+with regards to payment of premiums, i.e., one-off payment or regular payments in 3 years or 5 years. The insurance
+period is divided into 8 years and 10 years. This product is applicable to healthy policyholders between 28-day-old
+and 72-year-old. From the first effective date after the fifth policy year to the expiration period, if the insured lives to
+the annual corresponding effective date, a survival benefit shall be paid according to the following provisions: If the
+payment is made in the form of single premium, 20% of the annual premium as determined by the contract's basic
+insurance amount shall be paid. If the payment period is three years, 60% of the annual premium as determined by the
+contract's basic insurance amount shall be paid. If the payment period is five years, 100% of the annual premium paid
+as determined by the contract's basic insurance amount shall be paid. If the insured lives to the annual corresponding
+effective date of the expiration period, the contract shall terminate, and the maturity benefit shall be paid at the basic
+sum insured. If the insured dies from the effective date of the contract to the effective date of the year in which the
+insured reaches the age of 18, the death benefit shall be paid at the greater value of the insurance premium (excluding
+interest) and cash value paid by the insured at the time of death. If the insured dies on the effective date of the year
+in which the insured reaches the age of 18, the contract shall terminate, and the death benefit shall be paid according
+to the following provisions: if the insured dies before the effective date of the year in which the insured reaches the
+age of 41, the death benefit shall be paid at 160% of the insurance premium (excluding interest) paid at the time of the
+insured's death; from the effective date of the year in which the insured reaches the age of 41 to the effective date
+of the year in which the insured dies before the effective date of the year in which the insured reaches the age of 61,
+the death benefit shall be paid at 140% of the insurance premium (excluding interest) paid at the time of the insured's
+death; the death benefit shall be paid at 120% of the insurance premium (excluding interest) paid at the time of the
+insured's death on and after the effective date of the year in which the insured reaches the age of 61.
+(b) 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 and the payment methods of insurance are divided into single payment, annual payment, and semi-
+annual payment. 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.
+For the year ended 31 December
+(56,551)
+2023
+Assumptions
+reinsurance
+RMB million
+RMB million
+Mortality/Morbidity rate
+Increase by 10%
+(5,407)
+After
+(3,556)
+(3,184)
+(4,773)
+(3,436)
+(3,509)
+(2,219)
+Mortality/Morbidity rate
+(4,928)
+Before
+reinsurance
+reinsurance
+reinsurance
+Changes in
+assumptions
+Effect on profit before
+income tax
+Effect on other comprehensive
+income before income tax
+Effect on profit before
+Effect on other comprehensive
+income tax
+income before income tax
+Before
+After
+reinsurance
+reinsurance
+Before
+reinsurance
+After
+reinsurance
+Before
+After
+2022
+170 Annual Report 2023 | Financial Report
+(13,878)
+Later than 3
+years but not
+later than 5
+years
+5.2 Financial risk (continued)
+5.2.3 Liquidity risk (continued)
+As at 31 December 2022
+Contractual and expected cash flows (undiscounted)
+Without
+maturity
+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
+RMB million
+Financial and insurance assets
+Equity securities
+890,926
+Debt securities
+264,690
+467,372
+422,088
+Loans
+The Group's debt securities investment mainly includes government bonds, government agency bonds, corporate bonds and
+subordinated bonds. As at 31 December 2023, 99.9% (as at 31 December 2022: 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 2023,100% (as
+at 31 December 2022: 100%) of the subordinated bonds held by the Group either had credit ratings of AA/A-2 or above, or
+were issued by national commercial banks. The bonds issuers' credit ratings are assigned by a qualified appraisal institution
+in the PRC and updated at each reporting date.
+137,926
+78,902
+3,306,607
+118,063
+Term deposits
+195,048
+226,337
+100,235
+Statutory deposits - restricted
+Reinsurance contract assets
+5 RISK MANAGEMENT (continued)
+4,063
+For the year ended 31 December 2023
+182 Annual Report 2023 | Financial Report
+355,437
+(24)
+14,374
+(7)
+(317,979)
+(6)
+(8,454,552)
+(54)
+Financial assets sold under
+agreements to repurchase
+(217,237)
+Financial liabilities at fair value
+through profit or loss
+(13,878)
+Interest-bearing loans and other
+borrowings
+(13,259)
+Bonds payable
+(36,498)
+Lease liabilities
+(757)
+(580)
+Sub-total
+(13,878)
+87,662
+Net cash inflow/(outflow)
+1,085,723
+874,057
+13,787
+826,711
+(89)
+(318,074)
+309,829
+(22)
+(8,454,628)
+(4,310,312)
+Notes to the Consolidated Financial Statements (continued)
+Reinsurance contract liabilities
+988
+2,988
+(273,556)
+(7,787,599)
+(145)
+(149,004)
+(3,344)
+(3,675)
+(9,426)
+(97)
+(317)
+(328)
+(36,498)
+(919)
+(790)
+(98)
+(20)
+(3,344)
+887,582
+153,125
+(19,630)
+(273,757)
+(7,788,081)
+1,173,091
+816,271
+332,233
+(4,324,023)
+The cash flows from various insurance contracts presented in the table above are the expected future net cash flows from
+existing insurance policies, which consist primarily of cash flows from premiums, claims, expense payments and policy loans,
+and do not take into account future net cash flows from new business. The excess cash inflows from matured financial
+assets will be reinvested to cover any future liquidity exposures. The estimate is subject to assumptions including mortality,
+morbidity, the lapse rate, and expense assumption, etc. Actual experience may differ from estimates.
+As at 31 December 2023, the carrying amount of the Group's insurance contract liabilities was RMB4,859,175 million (as
+at 31 December 2022: RMB4,266,947 million), while the amount that the policyholder can demand reimbursement at any
+time was RMB3,795,388 million (as at 31 December 2022: RMB3,317,324 million).
+Annual Report 2023 | Financial Report 183
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+27,090
+(6)
+4,604
+8
+Net cash inflow/(outflow)
+1,718
+3,047
+39,388
+Securities purchased under
+agreements to resell
+Accrued investment income
+38,548
+52,161
+290
+Cash and cash equivalents
+127,594
+Sub-total
+890,926
+1,019,966
+835,901
+605,990
+3,464,058
+Financial and insurance
+liabilities
+Insurance contract liabilities
+Reinsurance contract liabilities
+Securities sold under
+agreements to repurchase
+Financial liabilities at fair value
+through profit or loss
+Interest-bearing loans and other
+borrowings
+Bonds payable
+Lease liabilities
+Sub-total
+307,043
+Insurance contract liabilities
+Financial and insurance liabilities
+4,144,316
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.2 Financial risk (continued)
+5.2.2 Credit risk (continued)
+Criteria for judging significant changes in credit risk (continued)
+Forward-looking information and management overlay
+The determinations of 12 months and the lifetime ECL also incorporates forward-looking information. The Group has
+performed historical data analysis and identified the key macroeconomic variables associated with credit risk and expected
+credit losses for each portfolio, including gross domestic product, the amount of exports and the amount of fixed asset
+investment completed, etc. The Group has developed macroeconomic forward looking adjustment model by establishing
+a pool of macro-economic indicators, preparing data, filtering model factors, etc.
+During the reporting period, the Group adjusted the predicted values of forward-looking economic indicators by synthesis of
+available data and considered the possibility of each scenario to determine the final macroeconomic scenarios and weights
+for measuring the relevant expected credit loss. The impact of these economic indicators on PD and LGD varies to different
+businesses. The Group comprehensively considers internal and external data, statistical analysis to determine the relationship
+between these economic indicators with PD and LGD. The Group evaluates and forecasts these economic indicators at least
+annually, provides the best estimates for the future, and regularly evaluates the results. Similar to other economic forecasts,
+the estimates of economic indicators have high inherent uncertainties, actual results may have significant difference with
+estimates. The Group considered the estimates above represented the optimal estimation of possible outcomes.
+In the year 2023, the Group updated the forward-looking parameters used in the measurement of ECL in response to
+changes in the macroeconomic environment. The cumulative year-on-year growth rate of GDP is expected to range between
+3.9% to 5.5% under the base, optimistic, and adverse scenarios for 2024. The optimistic and adverse scenarios are equally
+weighted and the base scenario is more weighted in each scenario.
+The following table presents the credit risk exposures of financial instruments under the scope of expected credit loss.
+Carrying amount
+Stage 1
+Stage 2
+Stage 3
+RMB million
+Cash and cash equivalents
+149,305
+Financial assets purchased under agreements to
+resell
+19,759
+Term deposits
+413,255
+Statutory deposits
+restricted
+6,520
+Investment in debt instruments at amortised
+cost
+211,349
+--
+Notes to the Consolidated Financial Statements (continued)
+Investment in debt instruments at fair value
+180 Annual Report 2023 | Financial Report
+Purchase or originate a financial asset at a significant discount that reflects the fact that a credit loss has occurred.
+As at 31 December 2023, 96.5% (as at 31 December 2022: 95.6%) 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 main reinsurance contracts were entered into with state-owned reinsurance companies.
+The Group believes these commercial banks, CSDCC and reinsurance companies have a high credit quality. As a result,
+the Group concludes that the credit risk associated with term deposits, statutory deposits, cash and cash equivalents and
+reinsurance contracts held has not caused a material impact on the Group's consolidated financial statements as at 31
+December 2023 and 2022.
+Measurement of ECL
+The Group formulates the credit losses of investment in debt instruments at amortised cost, investment in debt financial
+instruments at fair value through other comprehensive income, etc., using expected credit loss models according to IFRS
+9 requirements. For other receivables, the Group applies the simplified approach to recognise a loss allowance based on
+lifetime ECLs. The Group integrates factors such as asset type and market segment into a combination of items with similar
+credit risk characteristics.
+Parameters for measuring expected credit losses
+The parameters and assumptions involved in ECL model are described below:
+The Group considers the credit risk characteristics of different financial instruments when determining if there is significant
+increase in credit risk. For financial instruments with or without significant increase in credit risk, 12-month or lifetime
+expected credit losses are provided respectively. The expected credit loss is the result of discounting the product of EAD,
+PD and LGD.
+Annual Report 2023 | Financial Report 179
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.2 Financial risk (continued)
+5.2.2 Credit risk (continued)
+Measurement of ECL (continued)
+Exposure at Default (EAD): EAD is based on the amounts the Group expects to be owed at the time of default, over the
+next 12 months or over the remaining lifetime.
+Probability of Default (PD): The PD represents the likelihood of a borrower defaulting on its financial obligation, either over
+the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.
+Loss Given Default (LGD): LGD represents the Group's expectation of the extent of loss on a defaulted exposure. LGD
+varies by type of counterparty, type and seniority of claim and availability of collateral or other credit support.
+Criteria for judging significant changes in credit risk
+When considering the impairment stages for financial assets, the Group evaluates the credit risk at initial recognition and
+whether there is any significant increase in credit risk for each reporting period. The Group considers various reasonable
+supporting information to judge if there is significant increase in credit risk, including the forward-looking information.
+The Group sets quantitative and qualitative criteria to judge whether the credit risk has significant increase in credit risk after
+initial recognition. The judgement criteria mainly include the PD changes of the debtors, changes of credit risk categories and
+other indicators of significant increase in credit risk. In the judgement of whether the financial instruments have significant
+increase in credit risk after initial recognition, the Group considers the 30 days past due as one of criteria of significant
+increase in credit risk, in accordance with the standard.
+Definition of financial assets that are credit-impaired
+A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
+flows of that financial asset have occurred. On each reporting date, the Group mainly considers but is not limited to the
+following factors when assessing whether the debtor has incurred credit impairment:
+•
+•
+Significant financial difficulty of the issuer or counterparty; or
+A breach of contract, such as a default or past due event; or
+The lender gives the borrower concessions for economic or contractual reasons due to the debtor financial difficulties,
+where such concessions are normally reluctant to be made by the borrower; or
+It becoming probable that the borrower will enter bankruptcy or financial re-organisation; or
+•
+•
+Disappearance of an active market for that financial asset because of financial difficulties; or
+The credit impairment of financial assets may be caused by the joint effects of multiple events, and may not be caused
+by separately identifiable events.
+through other comprehensive income
+Other assets
+2,735,577
+8,592
+Without Not later than
+maturity
+1 year
+Later than 1
+year but not
+later than 3
+years
+Later than 5
+years
+RMB million
+Financial and insurance assets
+Equity investments
+Debt investments
+Term deposits
+Statutory deposits - restricted
+Reinsurance contract assets
+Financial assets purchased
+under agreements to resell
+Cash and cash equivalents
+1,099,601 122 664719
+422,558
+664,719
+188,436
+144,278
+499,102
+120,329
+4,111,034
+706
+5,590
+1,128
+2,799
+5,461
+3,011
+33,282
+19,800
+149,305
+Sub-total
+1,099,601
+786,395
+812,924
+627,903
+As at 31 December 2023
+Contractual and expected cash flows (undiscounted)
+The following table shows the undiscounted cash flows of insurance assets and insurance liabilities, financial assets and
+financial liabilities for contracts not using the premium allocation approach:
+In the normal course of business, the Group attempts to match the maturity of financial assets to the maturity of insurance
+and financial liabilities to reduce liquidity risk.
+Total
+37,241
+3,573,006
+8,592
+Maximum
+credit risk
+exposure
+149,305
+19,759
+413,255
+6,520
+211,349
+77
+2,744,169
+37,318
+77
+Financial assets 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. 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.
+Collateral and other credit enhancements
+5.2 Financial risk (continued)
+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.
+As at 31 December 2023, the Group's maximum credit risk exposure of insurance contracts and reinsurance contracts held
+was RMB18,627 million (as at 31 December 2022: RMB19,810 million). The Group had no credit risk exposure relating to
+off-statement financial position items as at 31 December 2023 and 31 December 2022.
+5.2.2 Credit risk (continued)
+5.2 Financial risk (continued)
+5 RISK MANAGEMENT (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+3,581,675
+The Group internally grades the financial instruments based on the credit quality and risk characteristics. The credit rating of
+the financial instruments could further be classified into the different levels according to the internal rating scale. As at 31
+December 2023, the debt investments held by the Group have sufficient evidence to show that the asset is not expected
+to default, or there is no reason to suspect that the asset had incurred default. The related credit risk has not caused a
+material impact on the Group's consolidated financial statements as at 31 December 2023.
+Annual Report 2023 | Financial Report 181
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.2 Financial risk (continued)
+5.2.3 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.
+Credit risk exposure
+5.2.4 Capital management
+333,258
+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 11.2, Note 19 and Note 35, respectively.
+or loss
+Equity investments
+Funds
+Common stocks
+Others
+Debt investments
+Government bonds
+Government agency bonds.
+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 NFRA, 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.
+Corporate bonds
+Fair value measurement using
+Quoted prices
+in active
+Significant
+observable
+Significant
+unobservable
+markets
+Level 1
+inputs
+Level 2
+inputs
+Level 3
+Total
+RMB million
+RMB million
+RMB million
+RMB million
+206,682
+281
+206,963
+400,172
+15,241
+Financial assets at fair value through profit
+415,413
+The following table presents the Group's quantitative disclosures of the fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2023:
+5 RISK MANAGEMENT (continued)
+46,458
+Others managed by affiliated entities Note 2
+87,959
+13,067
+13,067
+Others managed by third parties Note 2
+Note1
+100,892
+100,892
+service fee
+Investment income
+Investment income and
+Investment income
+service fee
+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, asset-backed plans, etc.
+(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
+As at 31 December 2023, the size of the unconsolidated structured entities that the Group sponsored but had no interest was
+RMB623,539 million (as at 31 December 2022: RMB608,027 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 2023, the management service fee from these structured entities was RMB1,651 million (2022: RMB1,731
+million), which was recorded as other income. The Group did not transfer assets to these structured entities.
+5.4 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 investments
+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 investments
+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.
+186 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.4 Fair value hierarchy (continued)
+Under certain conditions, the Group may not receive a price quote from independent third-party valuation service providers.
+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 and liabilities valued by this method
+are generally classified as Level 3.
+As at 31 December 2023, assets classified as Level 1 accounted for 28.17% of assets measured at fair value on a recurring
+basis. Fair value measurements classified as Level 1 include certain debt investments, equity investments that are traded
+in an active exchange market or interbank market and open-ended funds with public market price quotations. 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 to which the implied yields
+for debt investments 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 Group adopted this price of the debt investments 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 Group 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 2023, assets classified as Level 2 accounted for 58.60% 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
+valuation service providers 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 trading prices from the Chinese interbank market or from valuation service providers.
+As at 31 December 2023, assets classified as Level 3 accounted for 13.23% 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 and the comparable companies approach. The determination of Level
+3 is primarily based on the significance of certain unobservable inputs used for measurement of the asset's fair value.
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 4.2.
+Annual Report 2023 | Financial Report 187
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5.4 Fair value hierarchy (continued)
+70,539
+58,131
+210,550
+Investment in debt instruments at fair value
+through other comprehensive income
+Government bonds
+250,592
+Government agency bonds
+184,458
+244,238
+1,533,140
+494,830
+1,717,598
+Corporate bonds
+Subordinated bonds/debts
+9,452
+484
+399,469
+408,921
+Others
+22,268
+2,631
+22,752
+Total
+1,292,496
+2,688,048
+97,437
+607,005
+100,068
+4,587,549
+Liabilities measured at fair value
+Financial liabilities at fair value through
+profit or loss
+Total
+188 Annual Report 2023 | Financial Report
+(13,878)
+(13,878)
+72,773
+29,617
+10,579
+32,577
+339,220
+409
+3,213
+3,622
+682
+6,131
+6,813
+7,785
+179,308
+45
+187,138
+114,391
+201,044
+-
+46,458
+315,435
+218,911
+230,771
+Subordinated bonds
+Others
+Investment in equity instruments at fair
+value through other comprehensive income
+Common stocks
+14,273
+514
+14,787
+Preferred stocks
+50,445
+50,445
+Others
+11,860
+Note 1
+Credit quality
+Investment income and
+service fee
+Investment income and
+9,794
+9,794
+175,402
+Funds managed by affiliated entities
+RMB million
+Interest held by
+the Group
+Maximum
+exposure
+of assets
+RMB million
+RMB million
+Size
+Carrying amount
+Unconsolidated structured entities
+As at 31 December 2023
+(i) The unconsolidated structured entities that the Group has interest in
+The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in or
+sponsored.
+The Group's interests in unconsolidated structured entities are accounted for in investment in financial assets at fair value
+through profit or loss and debt instruments at fair value through other comprehensive income. 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
+4.5 for the Group's consolidation judgements related to structured entities.
+5.3 Disclosures about interest in unconsolidated structured entities
+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.
+service fee
+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.
+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;
+5.2.4 Capital management (continued)
+5.2 Financial risk (continued)
+5 RISK MANAGEMENT (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+184 Annual Report 2023 | Financial Report
+Funds managed by third parties
+Note 1
+174,195
+174,195
+Debt investment schemes managed by third parties
+103,825
+103,825
+Note1
+Others managed by third parties Note 2
+Investment income
+Investment income and
+9,211
+9,211
+40,116
+45,544
+45,544
+Note 1
+Debt investment schemes managed by third parties.
+Others managed by affiliated entities Note 2
+service fee
+ii) Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and liquidity
+risk are low;
+Investment income and
+31,035
+73,722
+Debt investment schemes managed by affiliated
+entities
+Investment income
+56,551
+56,551
+Note1
+Trust schemes managed by third parties
+Investment income
+1,284
+1,284
+2,090
+Trust schemes managed by affiliated entities
+Investment income
+31,035
+i) Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and liquidity
+risk are very low;
+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 consolidated financial statements relating to its interest in unconsolidated structured entities and the
+Group's maximum exposure are shown below:
+207%
+of assets
+RMB million
+exposure
+RMB million
+Interest held by
+the Group
+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.
+Funds managed by affiliated entities
+185,894
+10,096
+10,096
+Investment income and
+service fee
+Funds managed by third parties
+Trust schemes managed by affiliated entities
+Trust schemes managed by third parties
+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 NFRA evaluates the comprehensive solvency
+of insurance companies and supervises insurance companies by classifying them into four categories:
+RMB million
+126,573
+Investment income
+1,992
+1,295
+1,295
+Investment income
+Note1
+47,674
+47,674
+Investment income
+(13,878)
+Debt investment schemes managed by affiliated
+entities
+60,850
+22,781
+22,781
+126,573
+Size
+Note 1
+Carrying amount
+144%
+Maximum
+219%
+158%
+487,290
+449,160
+699,688
+1,007,601
+981,594
+710,527
+RMB million
+2023
+31 December
+As at
+As at
+31 December
+2022
+RMB million
+For the year ended 31 December 2023
+Comprehensive solvency ratio
+(i) The unconsolidated structured entities that the Group has interest in (continued)
+5.3 Disclosures about interest in unconsolidated structured entities (continued)
+5 RISK MANAGEMENT (continued)
+Notes to the Consolidated Financial Statements (continued)
+As at 31 December 2022
+Annual Report 2023 | Financial Report 185
+The former China Banking and Insurance Regulatory Commission ("Former CBIRC") issued the "Solvency Regulatory
+Rules II for Insurance Companies" at the end of 2021. The NFRA issued the "Circular of NFRA on Optimization of
+Solvency Supervision Standards for Insurance Companies" in September 2023. The Company has calculated the core and
+comprehensive solvency ratio, core capital, actual capital and minimum capital as of 31 December 2023 in accordance with
+these requirements, as listed below:
+Core capital
+Actual capital
+Minimum capital
+Core solvency ratio
+Investment income
+Unconsolidated structured entities
+First-year business
+First-year regular
+First-year business
+Single
+Accident insurance business
+Renewal business
+First-year regular
+First-year regular
+First-year business
+Health insurance business
+Renewal business
+Single
+Renewal business
+Single
+Total
+65,655
+2023
+Life insurance business
+65,777
+115,329
+114,023
+380,351
+381,783
+RMB million
+14,018
+109,112
+105,291
+130,839
+485,642
+512,622
+2022
+21,727
+For the year ended 31 December
+First-year
+Figures of Gross Written Premiums
+2022
+2023
+641,380
+615,190
+Premiums from new policies
+210,813
+184,767
+Including: First-year regular premiums
+112,573
+96,426
+First-year regular premiums with a payment duration of
+ten years or longer
+49,522
+RMB million
+41,821
+430,567
+430,423
+Value of one year's sales1
+36,860
+32,944
+Including: Individual agent business sector¹
+34,646
+31,385
+Policy persistency rate (14 months) 2 (%)
+90.40
+83.00
+Policy persistency rate (26 months) 2 (%)
+Surrender rate³ (%)
+Renewal premiums
+Key Performance Indicators of 2023
+Mr. Bai Kai, Mr. Ruan Qi, Mr. Li Mingguang, Ms. Liu Hui, Mr. Zhao Guodong
+From left to right:
+We continued to provide insurance services for the
+people and made consistent efforts to improve our
+performance in serving the overall interests of national
+development. We steadfastly put people as the first priority
+and deeply engaged in building a multi-tiered social security
+system for the people's wellbeing. We made significant
+improvement to inclusive insurance services in terms of
+coverage and accessibility, with the supplementary major
+medical expenses insurance programs covering nearly 350
+million people and the long-term care insurance programs
+providing services to more than 38 million people. The
+number of the city-customised insurance projects undertook
+by us hit a record high, and our capacity of supplying
+insurance protection for new urban residents and new
+business practitioners was constantly enhanced. We
+contributed to the improvement of the multi-tiered pension
+insurance system and made tremendous efforts to advance
+the pilot program of the third-pillar private pension insurance
+business while the commercial pension insurance business
+thrived. We paid special attention to the enhancement of
+Annual Report 2023 | Chairman's Statement 09
+the risk protection for the senior people, and the senior-care
+service system and ecosystem was constantly optimised.
+Meanwhile, we actively performed our roles as the main
+force for serving the real economy and maintaining financial
+stability, and realigned the direction of capital investment,
+with our existing investments in real economy and in green
+investments amounted to over RMB4 trillion and RMB460
+billion, respectively. We took effective actions to support
+rural revitalisation in all aspects, and helped create a new
+paradigm for integrated urban and rural development. The
+"rural revitalisation insurance" became the only project in
+the insurance industry that was listed in the "4th Global
+Best Poverty Reduction Practices". We further reinforced
+the buildup of the ESG system and were awarded the "2023
+Forbes China ESG Innovative Enterprise" by Forbes.
+We strengthened asset-liability management and
+consistently enhanced our capability in business value
+creation. We conducted an in-depth analysis of new changes
+in both assets and liabilities and kept researching on the
+interest rate trend. Prioritising business value growth, we
+reinforced systematic, holistic and long-term thinking and
+incorporated the concept of asset-liability management into
+all aspects including product supply, business development,
+asset allocation and risk prevention and control, so as to
+further improve the refined management and balance the
+relationships between assets and liabilities and between long-
+term value and short-term benefits, in order to consistently
+enhance our capabilities of sustainable development. While
+realising a growth in the insurance business, we saw our
+business structure being optimised further. In 2023, we
+hit a record high in terms of gross written premiums, with
+a double-digit increase in the value of one year's sales.
+Our industry leading position in terms of gross written
+premiums, value of one year's sales and embedded value
+were further consolidated, and our solvency ratios remained
+at relatively high levels. We practised the philosophy of long-
+term investment, value investment and prudent investment,
+consistently strengthened our professional capability in
+investment, made allocation to major assets categories
+from the cross-cycle and long-term perspective, proactively
+took positions in industries with medium- and long-term
+growth potentials at a low level of the capital market, and
+strengthened the management and control of investment
+risks, striving to stabilise our investment income.
+We advanced reforms in greater depth and continued
+to bring together the internal driving forces for
+development. Following the policy direction and responding
+to market demands, we gave full play to our own advantages
+and pushed forward a series of reforms (including the "Eight
+Reform Programs"), so as to enhance the precise delivery
+of products and services and facilitate the upgrading of
+our business models. The sales system reforms achieved
+breakthroughs. The three transformation measures in relation
+to the upgrading of the existing sales force, establishment
+of new sales force and sales force empowerment were
+implemented at an accelerated pace, speeding up the
+transformation and upgrading of a specialised, professional
+and integrated sales force. Regarding the healthcare and
+senior-care ecosystem as our long-term development
+strategy, we made tremendous efforts to expand product
+and service supply through diverse models and created a
+closed-loop system of "products - services - payment", thus
+making significant achievements in "insurance + services".
+Taking data and technology as the key production factors, we
+deepened the integration of digitalisation and business and
+focused on technology-driven initiatives, further enhancing
+the convenience and competitiveness of our insurance
+services. We forged China Life's good services, which
+are "convenient, quality and caring", and ranked among
+the top of the industry in the assessment of protection
+of consumers' rights and interests as conducted by the
+industry regulator.
+We coordinated business development and risk control,
+and consistently fortified the cornerstone for our healthy
+business operations. The insurance industry is an industry
+operating and managing risks. Taking risk prevention and
+control as our permanent task and upholding the concept of
+sound and prudent business operation, we struck a balance
+between stable growth and risk control and firmly held
+onto the bottom line that no systemic risks arose. We
+enhanced our business operations in compliance with laws
+and regulations, fully implemented the requirements under
+the C-ROSS (Phase II) Regulation, put into practice a series
+of new rules on "aligning sales practices with regulatory
+filings" in a stringent manner, ensured security while seeking
+development and vice versa. As a result, the Company's risk
+prevention and control measures were performed effectively.
+We continued to optimise the compliance management
+system and successfully obtained certifications under both
+domestic and international standards in this regard. The
+Company continuously maintained the rating of Class A in
+the integrated risk rating for insurance companies, and was
+among the top-ranked life insurance companies as evaluated
+by SARMRA under the C-ROSS (Phase II) Regulation.
+2023 also marked the 20th anniversary for China Life's
+shareholding reform and public listing. Twenty years ago,
+we were the first life insurance company listed overseas
+in China, and attracted close attention from worldwide
+investors, creating a splendid record of the world's largest
+IPO of that year. Looking back on the changes over the past
+two decades, the rapid growth of China's economy created
+favourable external conditions and significant opportunities
+for the insurance industry in China. Setting our mission and
+vision as "safeguarding people's wellbeing and building
+a world-class life insurance company", we established
+sound and effective corporate governance structures and
+10 Annual Report 2023 | Chairman's Statement
+internal governance mechanisms. Maintaining a close bond
+with the nation, we adhered to the rules of life insurance
+business and advanced reforms and innovations along the
+course of internal and external development. We maintained
+the industry leadership position and became the largest
+life insurance company globally, with our total assets,
+investment assets, embedded value and gross written
+premiums achieving growth of several times or even dozens
+of times. While we pursued our high-quality development
+to create long-term value, we have always attached great
+importance to investor returns. We have made dividend
+distributions of over RMB190 billion in total since our listing.
+Looking ahead to our new journey, we will draw inspiration
+and propulsion from our valuable experiences in the past
+twenty years, and pool all efforts to forge ahead in the future.
+We will continue to strengthen Party leadership in optimising
+our corporate governance, promote the governance
+effectiveness of modern financial corporation with Chinese
+characteristics to be further manifested, pursue our own
+business development to catering to people's demands,
+and create a new paradigm for high-quality development,
+thereby contributing to building the country into a financial
+powerhouse and serving the Chinese-style modernisation.
+2024 marks the 75th anniversary of the founding of the
+People's Republic of China and is also the critical year for
+implementing the "14th Five-Year Plan". We will steadfastly
+march toward the direction where we aspire. Currently, the
+life insurance industry is at a crucial stage for transformation
+and development. We will focus on five major areas,
+namely technology finance, green finance, inclusive finance,
+pension finance and digital finance, properly manage the
+relationships between stability and progress, establishment
+and abolishment, scale and profitability, assets and liabilities,
+as well as development and security, and balance the short-
+term profit with long-term value, with a view to enhancing
+our business performance. Having the confidence to be a
+pioneer, we will constantly deepen supply-side reforms,
+strengthen business foundation, improve on services,
+transform and upgrade traditional driving forces, and
+accelerate the cultivation of new driving forces, so as to
+contribute to the buildup of a modern financial system with
+Chinese characteristics.
+By Order of the Board
+bitha'
+Bai Tao
+Chairman
+27 March 2024
+Annual Report 2023 | Chairman's Statement 11
+MANAGEMENT
+DISCUSSION
+AND ANALYSIS
+REVIEW OF BUSINESS OPERATIONS
+2023 was a year of economic recovery and development
+following the transition of COVID-19 pandemic prevention
+and control measures. China's economy rebounded with a
+positive outlook, and the life insurance industry also saw a
+steady recovery and growth as a whole.
+The Company maintained the strategic consistency of
+"achieving stable growth, prioritising business value,
+optimising structure, strengthening sales force, promoting
+reforms and guarding against risks", and took proactive
+actions to promote growth model transformation, structural
+adjustments, as well as quality and efficiency improvement
+by seizing development opportunities arising from the
+continued recovery of the industry, so as to make itself
+stronger with excellent performance. As a result, the
+Company made satisfactory achievements for high-quality
+development, recorded a good performance with sound
+momentum in business growth and further enhanced its
+comprehensive strengths with its industry leading position
+remaining solidified. As at the end of the Reporting Period,
+the Company's total assets and investment assets reached
+RMB5.80 trillion and RMB5.66 trillion, respectively, hitting
+new record highs again. Its embedded value reached
+RMB1.26 trillion, an increase of 5.6% under the same basis,
+which remained at the industry leadership position. The core
+solvency ratio increased by 14.60 percentage points from
+the end of 2022 to 158.19%, maintaining at a relatively high
+level. The number of long-term in-force policies held by the
+Company reached 328 million.
+1
+The Company continued to lead the industry in both business
+value and scale, and realised a strong growth in its insurance
+business with its business structure continuously optimised.
+During the Reporting Period, the Company's gross written
+premiums reached a record high of RMB641,380 million,
+a year-on-year increase of 4.3%, maintaining the industry
+leadership position. The key business performance indicators
+achieved a rapid growth. Premiums from new policies
+reached RMB210,813 million, a year-on-year increase of
+14.1%. First-year regular premiums were RMB112,573
+million, increasing by 16.7% year on year. In particular,
+first-year regular premiums with a payment duration of
+ten years or longer reached RMB49,522 million, a year-on-
+year increase of 18.4%, and its proportion in the first-year
+regular premiums rose by 0.62 percentage point, showing
+a significant improvement in business structure. The value
+of one year's sales was RMB36,860 million, a year-on-
+year increase of 11.9% over the 2022 corresponding data
+restated under the new economic assumptions (the value
+of one year's sales under the 2022 economic assumptions
+was RMB41,035 million, a year-on-year increase of 14.0%
+under the same basis), continuing to lead the industry.
+In 2023, the Company incorporated the concept of asset-
+liability management into every aspect of business operations
+and management, actively balanced long-term value and
+short-term benefits, continued to strengthen cost control
+and underwriting management, and strived to stabilise the
+overall income level. The net profit attributable to equity
+holders of the Company was RMB46,181 million.
+The data regarding premiums (including gross written premiums, premiums from new policies, first-year regular premiums, first-year regular premiums
+with a payment duration of ten years or longer, renewal premiums, single premiums and short-term insurance business premiums, etc.) in this annual
+report are relevant data under ASBE.
+12
+Annual Report 2023 | Management Discussion and Analysis
+79.10
+Gross Written Premiums Categorised by Business
+74.20
+0.95
+430,567
+Renewal premiums
+430,423
+2023
+Short-term
+insurance premiums
+76,503
+Value of one year's sales (RMB million)
+2023
+regular premiums
+112,573
+2022
+36,860
+32,944 ▼
+21,737
+Single premiums
+Short-term
+insurance premiums
+74,264
+Embedded value (RMB million)
+First-year
+regular premiums
+96,426
+As at 31 December 2023
+2022
+As at 31 December 2022
+1,260,567
+5.6%
+1,194,220
+In 2023, the Company fully launched a series of reforms
+(including the "Eight Reform Programs"), focusing on
+the key areas for reform to accelerate changes in quality,
+efficiency and growth drivers. The sales system reforms
+achieved initial results, and the direction for transforming
+sales force to become more specialised, professional and
+integrated was further clarified. The existing sales force
+of the Company were upgraded at an accelerated pace
+with a focus on six major measures such as structural
+adjustments, foundation consolidation, reinforcement in
+urban areas and deep engagement in counties. As at the
+end of 2023, the size of its sales force was stabilised first
+in the industry. The number of agents of the individual
+agent business sector was 634,000, and the productivity
+of the sales force was improved steadily with the monthly
+average first-year regular premiums per agent rising by
+28.6% year on year. The Company proactively promoted
+the deployment of new sales models, and launched the
+"Seed Program" on a pilot basis to build a team of financial
+and insurance planners. As at the end of 2023, the pilot
+program had been rolled out in eight cities. The buildup of
+the senior-care ecosystem was accelerated. By upholding
+the philosophy of building a senior-care ecosystem that
+"gives children peace of mind, and reassures the senior
+people" and sticking to the four principles of long-termism,
+customer-centric approach, market-oriented operations and
+business development on a rolling basis, the Company laid
+down its medium- and long-term objectives and planning for
+the development of a senior-care services ecosystem with
+China Life characteristics, carried out dynamic assessments
+of strategy implementation and optimised its development
+measures on an ongoing basis. The Company strengthened
+14 Annual Report 2023 | Management Discussion and Analysis
+its service supply through diverse models to accelerate
+the projects deployment in key cities. Operations and
+customer services were further upgraded. The national
+centralised and shared business mode of operations,
+which was first of its kind in the industry, was applied to
+all aspects of operations, and the operations efficiency was
+improved by over 27.0%. The Company further optimised
+the operation standard specification system, laying a solid
+foundation of its operations and services characterised with
+"standardisation and specialisation". The "convenient and
+caring" services of claims settlement won wide recognition,
+and innovative service models such as "Advanced Claims.
+Payment" and the reminder services on claims notification
+of electronic invoices for medical charges were consistently
+promoted. The creation of a "comprehensive consumer
+protection" paradigm featuring all-employee participation,
+full coverage and whole-chain management was completed,
+and the Company ranked among the top of the industry
+in the assessment of protection of consumers' rights and
+interests as conducted by the industry regulator. FinTech
+and digitalisation were advanced in all aspects,
+consistently driving the iterative upgrading of the Company's
+technological capabilities. Container cloud began to take
+shape, and a platform with terabyte level data processing
+capability was fully constructed. The Company was among
+the first batch of companies to implement new accounting
+standards for insurance contracts in China. The intelligent
+and digital risk control system effectively facilitated the
+moving forward of risk prevention and control points. The
+in-depth integration of technology and business empowered
+all aspects of operations and management of the Company,
+achieving remarkable results in the data-driven initiatives.
+BUSINESS ANALYSIS
+14,077
+Renewal premiums
+Single premiums
+breakdown (RMB million)
+As at
+As at
+31 December
+31 December
+2023
+2022
+Embedded value¹
+Number of long-term in-force policies (hundred million)
+Gross investment income4
+Net profit attributable to equity holders of the Company
+1,260,567
+3.28
+1,194,220
+3.25
+2023
+2022
+123,082
+46,181
+176,277
+66,680
+Notes:
+1.
+2.
+3.
+4.
+The corresponding results for the year 2022 have been restated using 2023 embedded value economic assumptions.
+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.
+Surrender rate, which is for long-term insurance business, is the proportion of the surrender payment to the sum of the reserves at the beginning of the
+period and the premiums. Items such as surrender payment, reserves and premiums are relevant data under ASBE.
+For the year 2022, the data of investment businesses related to IFRS 17 - Insurance Contracts has been restated and presented, while the data of
+investment businesses related to IFRS 9 - Financial Instruments has not been restated and presented. Therefore, relevant data is not comparable.
+Annual Report 2023 | Management Discussion and Analysis 13
+Gross written premiums
+1.11
+Gross written premiums
+91,273
+5,149
+Analysis of Insurance Business
+In 2023, the Company kept on pursuing high-quality
+development, and attained remarkable achievements
+in its insurance businesses with its industry leading
+position consolidated further. Sales system reforms were
+implemented to facilitate the upgrading of the Company's
+existing sales force and the deployment of its new sales
+models, which further consolidated the foundation for the
+Company's business development. The Company continued
+to enhance its day-to-day sales force management. The
+size of its sales force was stabilised first in the industry,
+with optimised structure and enhanced quality, and its
+productivity was improved substantially. As at the end of
+the Reporting Period, the number of its total sales force
+was approximately 694,000.
+Individual Agent Business Sector
+The individual agent business sector adhered to the strategy
+of "productive agents-driven business", focused on value
+creation, and deepened business channel transformation.
+A rapid growth was achieved in all indicators for the new
+business, and the business structure was significantly
+optimised. During the Reporting Period, gross written
+premiums from the sector grew by 1.9% year on year to
+reach RMB501,580 million, within which renewal premiums
+were RMB391,218 million. First-year regular premiums were
+RMB91,807 million, an increase of 12.6% year on year.
+In particular, first-year regular premiums with a payment
+Gross written premiums of individual
+agent business sector (RMB million)
+2023
+2022
+Insurance Business
+▼ 91,807
+▼ 81,508
+First-year regular premiums
+Agents of individual
+agent business sector
+634,000
+501,580 ▼
+1.9%
+492,439 ▼
+12.6%
+16 Annual Report 2023 | Management Discussion and Analysis
+1. Gross written premiums of individual agent business sector mainly include premiums of the general sales team and the upsales team, etc.
+2. Gross written premiums of other channels mainly include premiums of government-sponsored health insurance business and online sales, etc.
+Notes:
+32,898
+32,003
+First-year business of long-term insurance
+46
+21
+16
+2
+30
+19
+3
+29
+Short-term insurance business
+32,849
+31,953
+Total
+641,380
+615,190
+duration of ten years or longer were RMB49,503 million,
+an increase of 18.4% year on year, and its proportion in
+the first-year regular premiums was 53.92%, an increase
+of 2.64 percentage points year on year. In 2023, the value
+of one year's sales of the sector was RMB34,646 million,
+an increase of 10.4%² year on year.
+In 2023, the individual agent business sector upheld
+the concept of "team construction based on customer
+resources", accelerated the establishment of a customer
+management-centric business operation and management
+system in the sector, and consistently proceeded with "6+1"
+key tasks to strive for the high-quality development of the
+Company. The sector made consistent efforts to enhance
+the professional competence of the existing sales force,
+optimised agent recruitment and development on an ongoing
+basis, and created an integrated cultivation system for newly
+recruited agents that coordinated recruitment and cultivation.
+Programs, such as the "Regular Operation 4.0 System for
+the Team Building of the Individual Agent Business Sector",
+the "Zhongxin Project" and the "Foundation Strengthening
+Program", were carried out to further stabilise the sales
+force. The exploration of new sales models was transitioned
+to the pilot stage from the research and development stage,
+and the "Seed Program" was launched under the deployment
+of new sales models to build a "specialised, value-oriented
+and integrated" team of financial and insurance planners,
+aiming for cultivating new driving forces for growth in the
+future. Sales force empowerment was further advanced as
+scenario-based technological applications empowered the
+development of sales force, and digital sales offices were
+also established to improve sales effectiveness. As at the
+end of the Reporting Period, the number of agents of the
+sector was 634,000, including 410,000 agents from the
+general sales team and 224,000 agents from the upsales
+team. The quality of sales force continued to improve, with
+an increase in both the number and proportion of high-
+performance agents. Meanwhile, the productivity of the
+sales force was improved substantially, with the monthly
+average first-year regular premiums per agent increasing by
+28.6% year on year.
+Diversified Business Sector
+The diversified business sector pushed forward specialised
+business operation in great depth, concentrating on both
+business scale and value, and advancing the high-quality
+development of the Company. In 2023, the sector carried
+out more refined channels management, made new
+achievements in specialised business operation as well as
+transformation and upgrading, and recorded an increase in
+value contribution to the Company. The value of one year's
+sales of the sector was RMB2,214 million, rising significantly
+by 42.0% year on year.
+3.8%
+3.0%
+24,059 ▼27,333▼
+2022
+78,748 ▼
+Short-term insurance premiums
+24.2%
+63,415 ▼
+18 Annual Report 2023 | Management Discussion and Analysis
+Direct sales representatives of
+group insurance channel
+37,000
+Proportion of
+high-performance
+personnel rose by
+from the end of 2022
+4.7
+percentage
+points
+2023 was the opening year for fully implementing the
+guidelines of the 20th CPC National Congress and also a
+year of economic recovery and development following the
+transition of the three-year COVID-19 pandemic prevention
+and control measures. Looking back to the past year, as
+China's economy rebounded with sound momentum and
+market demands were gradually improving, the life insurance
+industry saw a remarkable recovery trend. Centering on
+serving the overall interests of national development, China
+Life gave full play to the functions of insurance as a "shock
+absorber" for economic operation and a "stabiliser" for
+social development and steadfastly pushed forward its
+development in finance with Chinese characteristics. With
+building a world-class life insurance company as its goal, the
+Company worked hard to pursue high-quality development
+with concerted efforts. As a result, the Company achieved
+a steady progress while maintaining stability in its business
+development and further enhanced its comprehensive
+strengths with its market leading position remaining
+solidified. It has been awarded Grade A in the evaluation
+of operations of insurance companies by the Insurance
+Association of China for eight consecutive years, and ranked
+62nd and 12th by Forbes Global 2000 and Fortune China 500,
+respectively. Embracing the "investor-oriented" concept,
+the Board has proposed to distribute a cash dividend of
+RMB4.30 per 10 shares (inclusive of tax), and such proposal
+will be submitted to the 2023 Annual General Meeting for
+review and discussion.
+23,000
+Renewal business
+Account managers of
+bancassurance channel
+2022
+2
+The growth rate is calculated based on the restated results for 2022 using the 2023 embedded value economic assumptions.
+3
+The growth rate is calculated based on the restated results for 2022 using the 2023 embedded value economic assumptions.
+Annual Report 2023 | Management Discussion and Analysis
+17
+Bancassurance Channel The bancassurance channel
+strengthened the cooperation with banks, accelerated
+business development, and achieved a rapid growth in both
+the scale of its premiums and business value. During the
+Reporting Period, gross written premiums from the channel
+amounted to RMB78,748 million, an increase of 24.2%
+year on year. First-year regular premiums were RMB20,735
+million, an increase of 39.4% year on year. First-year regular
+premiums with a payment duration of five years or longer
+were RMB9,877 million. Renewal premiums amounted
+to RMB38,112 million (a year-on-year increase of 5.3%),
+accounting for 48.40% of gross written premiums from the
+channel. The bancassurance channel constantly enhanced
+the professional and technological capabilities of its account
+manager team, the quality of which was improved steadily.
+As at the end of the Reporting Period, the number of account
+managers of the bancassurance channel reached 23,000, and
+the quarterly average active managers recorded a year-on-
+year growth of 8.5%, with the productivity in terms of regular
+premiums per account manager increasing substantially year
+on year.
+Group Insurance Channel The group insurance channel
+coordinated business scale and profitability, and pushed
+forward stable development in all business lines. During
+the Reporting Period, gross written premiums from the
+channel were RMB28,154 million, an increase of 3.0%
+year on year. In particular, short-term insurance premiums
+from the channel were RMB24,974 million, an increase of
+3.8% year on year. As at the end of the Reporting Period,
+the number of direct sales representatives of the channel
+was approximately 37,000, among which the proportion of
+high-performance personnel rose by 4.7 percentage points
+from the end of 2022, with the productivity per direct sales
+representative increasing steadily.
+Gross written premiums of
+group insurance channel (RMB million)
+2023
+24,974 ▼28,154 ▼
+Gross written premiums of
+bancassurance channel (RMB million)
+20,735 ▼
+2023
+39.4%
+14,879 ▼
+First-year regular premiums
+3,460
+Single
+Other channels²
+For the year ended 31 December
+RMB million
+2023
+2022
+Individual agent business sector¹
+501,580
+492,439
+Gross Written Premiums Categorised by Channel
+First-year business of long-term insurance
+81,732
+First-year regular
+91,807
+81,508
+Single
+320
+224
+92,127
+15
+Annual Report 2023 | Management Discussion and Analysis
+During the Reporting Period, gross written premiums from the life insurance business of the Company amounted to
+RMB512,622 million, a year-on-year increase of 5.6%. Gross written premiums from the health insurance business were
+RMB114,023 million, a year-on-year decrease of 1.1%. Gross written premiums from accident insurance business were
+RMB14,735 million, a year-on-year increase of 3.6%.
+62,195
+60,628
+48,368
+49,552
+14,735
+14,219
+14,319
+13,699
+1
+4
+14,318
+13,695
+416
+520
+641,380
+615,190
+Note: Single premiums in the above table include premiums from short-term insurance business.
+Renewal business
+391,218
+392,849
+Short-term insurance business
+28,154
+First-year business of long-term insurance
+1,946
+27,333
+1,929
+First-year regular
+15
+37
+Single
+1,931
+1,892
+Renewal business
+1,234
+1,345
+Short-term insurance business
+24,974
+24,059
+Group insurance channel
+First-year regular
+394
+Short-term insurance business
+18,235
+17,858
+Bancassurance channel
+78,748
+63,415
+First-year business of long-term insurance
+40,191
+26,821
+First-year regular
+20,735
+14,879
+Single
+19,456
+11,942
+Renewal business
+38,112
+36,200
+445
+CHAIRMAN'S
+STATEMENT
+11.9%
+5
+5,280
+Statutory deposits
+261,179
+27,089
+561
+14,880
+218,649
+Long-term equity investments
+1,574,204
+2,312
+3,766
+99,919
+1,468,207
+Held-to-maturity investments
+1,738,108
+359
+16,252
+14
+6,333
+3,112
+or loss
+Financial liabilities at fair value through profit
+II. Liabilities
+120,415
+5,251,984
+Total
+Other assets
+Undistributable assets
+5,131,569
+63,110
+12,279
+328,884
+4,727,296
+Total distributable asset
+Separate account assets
+680
+212
+4,126
+1,608,279
+736
+774
+||
+295
+441
+Claim reserves receivable from reinsurers
+Reserves for life insurance receivables from
+reinsurers
+48
+726
+Unearned premium reserves receivable from
+reinsurers
+19,697
+463
+10,966
+8,268
+Premiums receivables
+52,309
+603
+109,451
+603
+receivables from reinsurers
+Available-for-sale financial assets
+485,567
+6,732
+1,147
+30,438
+447,250
+Term deposits
+596,490
+1,971
+815
+29,727
+563,977
+Loans
+4,294
+4,294
+Reserves for long-term health insurance
+270
+8
+3,344
+Including: Investment income from
+905
+217,775
+707
+520
+13,949
+202,599
+Investment income
+748
+157
+reserves
+Change in unearned premium
+2,287
+299,569
+4,194,074
+Total distributable liabilities
+34,504
+associates and joint ventures
+Other distributable liabilities
+3,909
+Other gains
+(37)
+(21)
+176
+65
+3,628
+(557)
+॰ 'དྲེས༔
+59
+871
+Foreign exchange gains/(losses)
+(554)
+(8,139)
+Fair value gains/(losses)
+7
+104
+266
+12
+7
+Separate account liabilities
+18,999
+355,743
+Policyholder deposits
+60,819
+314
+3,327
+57,178
+Claims payable
+148,954
+1,465
+353
+9,375
+137,761
+repurchase
+Financial assets sold under agreements to
+374,742
+7
+Unearned premium reserves
+3,634
+12,774
+12,774
+Long-term borrowings
+233,663
+233,663
+Reserves for long-term health insurance
+3,607,236
+1,467
+3,605,769
+Reserves for life insurance
+26,153
+3,921
+22,232
+Claim reserves
+13,108
+9,474
+(8,751)
+125
+48,606
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.4 Fair value hierarchy (continued)
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2023:
+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 or exercised
+Settlement
+Closing balance
+Notes to the Consolidated Financial Statements (continued)
+69
+Financial assets purchased under
+983
+Elimination
+Total
+RMB million
+I. Assets
+Cash fund
+114,111
+7,766
+293
+6,783
+128,953
+Financial assets at fair value through profit
+or loss
+208,103
+14,162
+534
+223,782
+Others
+comprehensive comprehensive
+income
+(9,110)
+(553)
+(26,013)
+(19,302)
+(45,868)
+80,062
+(8,270)
+(437)
+(6,695)
+(1,138)
+Less: Premiums ceded to reinsurers
+615,190
+14,219
+115,329
+485,642
+(934)
+Investment
+in debt
+instruments
+at fair value
+through other
+(8,176)
+6,872
+RMB million
+income
+RMB million
+Financial assets
+at fair value
+through profit
+or loss- Equity
+RMB million
+79,678
+82,833
+32,703
+161,537
+55,341
+Financial assets
+at fair value
+through profit
+or loss- Debt
+RMB million
+Total
+RMB million
+205,281
+24,385
+529,329
+112,429
+1,042
+1,848
+9,526
+12,416
+937
+7,809
+3,308
+Accident
+Life
+(31)
+(21,396)
+III. Operating profit
+11,758
+7,446
+1,943
+3,236
+24,383
+Add: Non-operating income
+94
+6
+8
+108
+Less: Non-operating expenses
+(413)
+(51)
+(28)
+(1,358)
+Impairment losses
+Interest receivables
+38,533
+38
+92
+2,447
+35,956
+agreements to resell
+(1,572)
+3,199
+(30,387)
+Including: inter-segment transactions
+(2,988)
+(203)
+(8)
+3,199
+(19,956)
+Health
+(2)
+IV. Net profit before income tax
+RMB million
+Operating income: 826,055
+N/A
+Net profit before income tax: 24,047
+N/A
+(455,194)
+46,013
+Total revenue: 370,861
+Profit before income tax: 70,060
+Annual Report 2023 Financial Report
+195
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+6 SEGMENT INFORMATION (continued)
+As at 31 December 2022
+Item
+IFRS 17
+(444)
+IFRS 9
+Adjustment
+Supplementary Information:
+Depreciation and amortisation expenses
+11,439
+7,424
+1,942
+3,242
+24,047
+3,028
+1,126
+327
+810
+5,291
+The reconciliation of segment information to the consolidated statement of comprehensive income is as follows:
+Segment information
+For the year ended 31 December 2022
+Consolidated statement of
+comprehensive income
+2
+(1,001)
+(69)
+286
+83
+Disposals
+(3,351)
+(335)
+(118)
+(819)
+(2,079)
+Charge for the year
+(23,097)
+(1,671)
+(996)
+(5,786)
+(14,644)
+As at 1 January 2022
+43
+Accumulated depreciation
+282
+As at 31 December 2022
+(24)
+As at 31 December 2022
+As at 1 January 2022
+Net book value
+As at 31 December 2022
+Disposals
+Charge for the year
+(24)
+As at 1 January 2022
+Impairment
+(25,754)
+(1,724)
+(1,071)
+(6,319)
+(16,640)
+694
+(1)
+80,338
+5,026
+(69)
+93
+(3,622)
+286
+3,174
+Transfers upon completion
+78,754
+2,433
+6,790
+1,311
+8,394
+59,826
+As at 1 January 2022
+RMB million
+Total
+Additions
+2,206
+64
+1
+1,268
+8,884
+62,954
+31 December 2022
+(773)
+(320)
+(44)
+(299)
+(110)
+Disposals
+(266)
+(266)
+Transfers into investment properties
+2,692
+2,124
+503
+construction improvements
+45,158
+46,290
+315
+(424,827)
+(36,662)
+285
+6,720
+(461,204)
+(33)
+91
+253
+311
+Policyholder dividends resulting from
+participation in profits
+(20,566)
+(119)
+(20,685)
+Tax and surcharges
+(900)
+Increase in insurance contracts reserve
+Less: Insurance reserves recoverable from
+reinsurers
+(204)
+301
+406
+(13,088)
+(7,007)
+3,199
+(801,672)
+Surrenders
+(35,268)
+(1,835)
+(19)
+(37,122)
+Claims expense
+(77,609)
+(56,803)
+(6,271)
+(140,683)
+Less: Claims recoverable from reinsurers
+6,013
+2,608
+(21)
+(1,261)
+(3,183)
+(672)
+198 Annual Report 2023 | Financial Report
+As at 31 December 2023, the net book value of buildings above which were in process to obtain title certificates was
+RMB4,617 million (as at 31 December 2022: RMB6,459 million).
+(25)
+(25)
+EIE
+54,559
+482
+5,025
+197
+2,565
+55,632
+762
+6,789
+(28,159)
+(136)
+Other operating expenses
+23
+Underwriting and policy acquisition costs
+(37,731)
+(11,396)
+(4,165)
+(1,485)
+(54,777)
+Administrative expenses
+(25,505)
+(10,174)
+(2,751)
+(3,783)
+(42,213)
+Less: Expenses recoverable from reinsurers
+284
+718
+1,025
+vehicles
+fixtures
+Buildings
+Total
+vehicles construction improvements
+Leasehold
+Motor Assets under
+Office
+equipment,
+furniture and
+fixtures
+Buildings
+Cost
+7 PROPERTY, PLANT AND EQUIPMENT
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Assets: 5,010,068
+Liabilities: 4,635,095
+23,819
+(171,768)
+(265,735)
+N/A
+N/A
+RMB million
+RMB million
+As at 1 January 2023
+8,884
+2,220
+189
+1,020
+114
+Additions
+(8)
+192
+(2,063)
+244
+1,619
+Transfers upon completion
+80,338
+2,206
+5,026
+1,268
+62,954
+3,543
+of financial position
+Consolidated statement
+II. Operating expenses
+122
+(1)
+8
+115
+Gains/(losses) on disposal of assets
+(3,199)
+3,199
+Including: inter-segment transactions
+8,977
+(3,199)
+10,510
+98
+1,568
+Other operating income
+(669,864)
+Impact of
+Deferred tax
+(114,912)
+36,875
+Adjustment
+IFRS 17
+IFRS 9
+196 Annual Report 2023 | Financial Report
+Liabilities: 4,806,863
+Assets: 5,251,984
+Segment information
+As at 31 December 2022
+The reconciliation of segment information to the consolidated statement of financial position is as follows:
+4,806,863
+Total
+289,188
+Non-distributable liabilities
+Other liabilities
+4,517,675
+14,251
+9,781
+84
+Disposals
+(1,201)
+(185)
+2,565
+46,290
+As at 1 January 2023
+Net book value
+(23)
+2
+(1)
+(25)
+EE
+(22)
+As at 31 December 2023
+2
+Disposals
+-
+Charge for the year
+197
+(1)
+5,025
+54,559
+Leasehold
+Motor Assets under
+Office
+equipment,
+furniture and
+Cost
+7 PROPERTY, PLANT AND EQUIPMENT (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 197
+53,710
+416
+5,182
+288
+2,702
+45,122
+As at 31 December 2023
+482
+(24)
+As at 1 January 2023
+Impairment
+(1,071)
+(6,319)
+(16,640)
+As at 1 January 2023
+Accumulated depreciation
+82,192
+2,215
+5,183
+1,345
+9,963
+63,486
+As at 31 December 2023
+(1,681)
+(183)
+(112)
+(1,724)
+(25,754)
+Charge for the year
+(2,107)
+(28,459)
+(1,799)
+(1,057)
+(7,261)
+(18,342)
+As at 31 December 2023
+857
+Premium income
+165
+178
+405
+Disposals
+(3,562)
+(240)
+(95)
+(1,120)
+109
+607,825
+Investment
+in equity
+instruments
+at fair value
+through other
+108,791
+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 33, as well as income and expenses of subsidiaries.
+-
+(ii) Health insurance business (Health)
+The segment information submitted by the Group to the operating decision-maker is prepared in accordance with ASBE,
+among which insurance contracts-related data is prepared in accordance with ASBE No. 25 Direct Insurance Contracts
+(Caikuai [2006] No. 3), ASBE No. 26 - Reinsurance Contracts (Caikuai [2006] No. 3) and Regulations regarding the Accounting
+Treatment of Insurance Contracts (Caikuai [2009] No. 15), and financial instruments-related data is prepared in accordance
+with ASBE No. 22 - Recognition and Measurement of Financial Instruments (Caikuai [2006] No. 3), ASBE No. 23 - Transfer
+of Financial Assets (Caikuai [2006] No. 3), ASBE No. 24 - Hedging (Caikuai [2006] No. 3) and ASBE No. 37 - Presentation
+of Financial Instruments (Caikuai [2014] No. 23).
+Investment income, fair value change gain or loss, exchange gain or loss, etc., are allocated to each segment in proportion
+to the average insurance contract reserve and insured deposit and investment funds of the corresponding segment at the
+beginning and end of the period. Business and management fees are allocated to each segment based on the unit cost of
+products in each corresponding operating segment.
+6.3 Allocation basis of assets and liabilities
+In addition to premiums receivable, reinsurance reserves receivable, insured loans pledged, separate account assets,
+claims payable, insured reserves and investment funds, reserves for various insurance contracts, and separate account
+liabilities, which are directly recognised to each segment, other financial assets and financial liabilities shall be apportioned
+to each segment in proportion to the average insurance contract reserves and insured reserves and investment funds of
+the corresponding segments at the beginning and end of the period.
+192 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+6.2 Allocation basis of income and expenses
+Life insurance business relates primarily to the sale of life insurance policies, including those life insurance policies without
+significant insurance risk transferred.
+(i) Life insurance business (Life)
+The Group operates in the life insurance business segment, the health insurance business segment, the accident insurance
+business segment and other business segment:
+Discounted cash flow
+method
+Discount rate
+Range
+as at 31 December 2023:
+15%-33%
+as at 31 December 2022:
+12%-30%
+as at 31 December 2023:
+1.57%-16.70%
+as at 31 December 2022:
+2.41%-10.55%
+Relationships between fair
+value and unobservable
+inputs
+The fair value is inversely
+related to the discounts for
+lack of marketability
+The fair value is inversely
+related to discount rate
+Annual Report 2023 | Financial Report 191
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+6 SEGMENT INFORMATION
+6.1 Operating segments
+6 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2023
+Life
+Health
+114,023
+14,735
+641,380
+Less: Premiums ceded to reinsurers
+(1,267)
+(6,110)
+(618)
+(7,995)
+Change in unearned
+premium reserves
+(1,156)
+(88)
+(1,244)
+Investment income
+177,373
+512,622
+unobservable inputs
+Discounts for lack of
+marketability
+Premium income
+14,029
+Accident
+Others
+Elimination
+Total
+RMB million
+I. Operating income
+695,053
+119,459
+14,424
+12,655
+(3,732)
+837,859
+Premiums earned
+511,355
+106,757
+632,141
+Significant
+Valuation techniques
+Comparable companies
+method
+The table below presents information about the significant unobservable inputs used for primary financial instruments at
+fair value classified as Level 3 as at 31 December 2023 and 31 December 2022:
+Total
+(3,351)
+190 Annual Report 2023 | Financial Report
+(3,344)
+(3,351)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+5.4 Fair value hierarchy (continued)
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2022:
+Securities at fair
+value through
+Available-for-sale securities
+Debt securities
+RMB million
+profit or loss
+Equity securities
+Debt securities
+profit or loss
+RMB million
+Investment contracts at fair value through
+profit or loss
+3,018
+149,284
+45
+152,347
+Others
+129
+Total
+782,037
+25,521
+766,574
+2,105
+27,755
+396,153
+1,944,764
+Liabilities measured at fair value
+Financial liabilities at fair value through
+(3,344)
+12,287
+RMB million
+14,530
+(600)
+(10,778)
+(11,378)
+Maturity
+(34,255)
+(748)
+(35,003)
+Ending balance
+173,302
+220,701
+2,150
+396,153
+For the assets and liabilities measured at fair value on a recurring basis, during the year ended 31 December 2023,
+RMB69,953 million (2022: RMB4,993 million) debt investments were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB22,570 million (2022: RMB46,485 million) debt investments were transferred from Level 2 to
+Level 1. RMB11,851 million equity investments were transferred from Level 1 to Level 2 (2022: RMB3,478 million), whereas
+RMB15,174 million equity investments were transferred from Level 2 to Level 1 (2022: RMB23,470 million).
+For the years ended 31 December 2023 and 2022, 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 representations
+of financial assets.
+As at 31 December 2023 and 31 December 2022, significant unobservable inputs such as discount rate and discounts for
+lack of marketability were used in the valuation of primary assets and liabilities at fair value classified as Level 3.
+Disposals or exercised
+Total
+RMB million
+(1,997)
+(1,829)
+Purchases
+160,499
+49,497
+188,583
+44,778
+45
+2,671
+349,127
+96,946
+Transferred out of Level 3
+(10)
+(10)
+Total gains/(losses) recorded in profit or loss
+(1,714)
+182
+(1,532)
+Total gains/(losses) recorded in other
+comprehensive income
+(168)
+386
+581
+190,627
+(2,059)
+(10,592)
+(24,825)
+Administrative expenses
+(63,092)
+(1,718)
+(4,260)
+(9,833)
+(47,281)
+Underwriting and policy acquisition costs
+(1,417)
+(305)
+(21)
+(202)
+(889)
+(3,600)
+Tax and surcharges
+(41,076)
+376
+3,732
+(8)
+(240)
+(3,484)
+Including: inter-segment transactions
+(32,591)
+3,732
+(3,103)
+(353)
+(2,629)
+(30,238)
+Other operating expenses
+728
+10
+342
+Less: Expenses recoverable from reinsurers
+Impairment losses
+(11,695)
+(11,614)
+(48,740)
+(22)
+(2,335)
+(46,383)
+Claims expense
+Surrenders
+(825,618)
+3,732
+(8,876)
+(13,625)
+(117,405)
+(689,444)
+II. Operating expenses
+73
+(1)
+(103,907)
+(81)
+(63,894)
+Less: Claims recoverable from reinsurers
+participation in profits
+Policyholder dividends resulting from
+287
+39
+151
+97
+reinsurers
+7,009
+(407,211)
+(174,819)
+(170)
+339
+6,164
+(31,089)
+(375,952)
+Increase in insurance contracts reserve
+Less: Insurance reserves recoverable from
+506
+(7,018)
+Corporate bonds
+(49,334)
+(110)
+I co-
+-
+51
+8
+(1)
+144
+4,169
+(557)
+(381)
+1
+12,582
+(3,732)
+11,086
+Including: inter-segment transactions
+3,732
+(3,732)
+125
+Gains/(losses) on disposal of assets
+2,110
+11
+Including: Investment income from
+associates and joint ventures
+8,816
+607
+19
+(916)
+8,526
+Other gains
+87
+6
+Fair value gains/(losses)
+3,894
+268
+Foreign exchange gains/(losses)
+165
+Other operating income
+(3,407)
+For the year ended 31 December 2023
+Operating income: 837,859
+(425)
+94
+7
+6
+81
+12,241
+3,779
+799
+2,054
+5,609
+Less: Non-operating expenses
+Add: Non-operating income
+III. Operating profit
+(53,001)
+(150)
+(29)
+Net profit before income tax: 11,878
+(1)
+(457)
+Segment information
+The reconciliation of segment information to the consolidated statement of comprehensive income is as follows:
+5,016
+861
+233
+1,118
+2,804
+11,878
+3,784
+798
+2,031
+5,265
+Depreciation and amortisation expenses
+Supplementary Information:
+IV. Net profit before income tax
+(2)
+9,622
+Opening balance
+2,387
+5,888,479
+Total
+138,972
+Other assets
+Undistributable assets
+5,749,507
+70,317
+11,784
+373,294
+5,294,112
+Total distributable assets
+8,416
+8,409
+7
+Separate account assets
+II. Liabilities
+7,235
+Financial liabilities at fair value through profit
+5,106
+66,592
+311
+5,302
+60,979
+Claims payable
+216,704
+2,100
+436
+13,800
+200,368
+repurchase
+Financial assets sold under agreements to
+5,469
+11
+352
+or loss
+Policyholder deposits
+680
+364
+Available-for-sale financial assets
+404,131
+6,658
+808
+25,560
+371,105
+Term deposits
+603,639
+1,982
+673
+30,172
+570,812
+Loans
+4,573
+4,573
+2,099,921
+11
+144,633
+13,924
+5,278
+Statutory deposits
+257,606
+27,098
+468
+14,823
+215,217
+Long-term equity investments
+1,706,441
+2,394
+3,462
+109,581
+1,591,004
+Held-to-maturity investments
+2,263,047
+4,569
+466,619
+19,864
+486,483
+Notes to the Consolidated Financial Statements (continued)
+194 Annual Report 2023 | Financial Report
+Liabilities: 5,315,052
+Assets: 5,802,086
+(5,856)
+(1,549)
+(102,426)
+590
+Liabilities: 5,418,437
+(279,280)
+198,743
+Assets: 5,888,479
+RMB million
+Consolidated statement of
+financial position
+Impact of
+Deferred tax
+IFRS 17
+For the year ended 31 December 2023
+IFRS 9
+6 SEGMENT INFORMATION (continued)
+Life
+484,504
+Premiums earned
+826,055
+(3,199)
+10,243
+15,031
+122,358
+681,622
+I. Operating income
+RMB million
+Total
+Elimination
+Others
+Accident
+Health
+For the year ended 31 December 2022
+Segment information
+Adjustment
+As at 31 December 2023
+266,376
+266,376
+Reserves for long-term health insurance
+3,983,433
+1,705
+3,981,728
+Reserves for life insurance
+24,461
+3,853
+20,608
+Claim reserves
+14,220
+3,730
+10,490
+Unearned premium reserves
+Long-term borrowings
+Separate account liabilities
+7
+12,719
+8,409
+The reconciliation of segment information to the consolidated statement of financial position is as follows:
+295,457
+5,418,437
+Total
+Non-distributable liabilities
+Other liabilities
+5,122,980
+23,228
+10,117
+receivables from reinsurers
+38,107
+2,291
+339,083
+4,750,552
+Total distributable liabilities
+35,745
+Other distributable liabilities
+8,416
+12,719
+71
+Reserves for long-term health insurance
+6,333
+700
+· Debt securities
+RMB million
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Others
+Securities at fair value through profit or loss
+131,897
+--
+131,897
+396,163
+17,985
+414,148
+50,522
+Others
+50,522
+Preferred stocks
+Funds
+in active
+markets
+observable
+Significant
+unobservable
+inputs
+inputs
+Level 1
+Level 2
+Level 3
+Total
+RMB million
+RMB million
+RMB million
+Assets measured at fair value
+Available-for-sale securities
+- Equity securities
+Common stocks
+Significant
+45,525
+700
+358
+13,444
+Common stocks
+Others
+17,280
+92
+1,272
+18,552
+173
+265
+Debt securities
+Government bonds
+661
+1,144
+1,805
+Government agency bonds
+13,086
+29,260
+Funds
+174,398
+244,964
+36,945
+10,243
+47,188
+77,982
+235,288
+313,270
+3,678
+184,885
+188,563
+53,194
+102,830
+156,024
+1,096
+173,302
+- Equity securities
+Quoted prices
+170,179
+The following table presents the Group's quantitative disclosures of the fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2022:
+274
+103
+3,254
+47,248
+Interest receivables
+122
+35
+1,117
+16,213
+agreements to resell
+Financial assets purchased under
+1,270
+513
+16,244
+235,852
+Premiums receivables
+Financial assets at fair value through profit
+or loss
+12,939
+Unearned premium reserves receivable from
+reinsurers
+Fair value measurement using
+reinsurers
+647
+642
+21,521
+50,879
+17,487
+253,879
+149,566
+II
+334
+313
+Claim reserves receivable from reinsurers
+Reserves for life insurance receivables from
+56
+586
+463
+7,506
+8,119
+9,135
+(432,368)
+IFRS 17
+Consolidated statement of
+comprehensive income
+(6,895)
+(60,745)
+97,437
+210,550
+218,956
+607,005
+Annual Report 2023 | Financial Report 189
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+5 RISK MANAGEMENT (continued)
+289
+5.4 Fair value hierarchy (continued)
+Total revenue: 344,746
+39,593
+Adjustment
+IFRS 9
+RMB million
+Profit before income tax: 44,576
+132,636
+Cash fund
+I. Assets
+RMB million
+Total
+Others
+As at 31 December 2023
+Accident
+Elimination
+Life
+Item
+6 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 193
+Health
+By place of listing:
+Trust schemes
+Total
+Impairment provision
+Sub-total
+Others (i)
+Debt investment plans
+11.3 Investment in debt instruments at amortised cost
+6,520
+Notes to the Consolidated Financial Statements (continued)
+206 Annual Report 2023 | Financial Report
+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 NFRA. These funds may not be used for any purpose other than for paying off debts
+during liquidation proceedings.
+6,527
+6,333
+6,333
+(7)
+Listed in Mainland, PRC
+11 FINANCIAL ASSETS (continued)
+Listed in Hong Kong, PRC
+Over ten years
+Unlisted (ii)
+As at
+2,400
+31 December
+Total
+After five years but within ten years
+After one year but within five years
+Within one year
+Maturing:
+Contractual maturity schedule
+Total
+Others
+Debt investment plans
+Trust schemes
+Fair value hierarchy
+(i) Other Investment in debt instruments at amortised cost mainly include large-denomination certificates of deposits.
+(ii) Unlisted debt investments mainly include non-publicly traded trust schemes and debt investment plans.
+For the year ended 31 December 2023
+Total
+Listed overseas
+6,010
+Sub-total
+517
+238,951
+183,832
+174,513
+RMB million
+RMB million
+2022
+2023
+31 December
+31 December
+As at
+As at
+Impairment provision
+Total
+After one year but within five years
+Within one year
+Maturing:
+11.1 Term deposits
+2023
+301,735
+3,933
+413,464
+(209)
+RMB million
+RMB million
+31 December
+2022
+2023
+31 December
+As at
+As at
+Total
+Impairment provision
+Sub-total
+After one year but within five years
+Within one year
+contractual maturity schedule:
+11.2 Statutory deposits - restricted
+As at 31 December 2023, the Group's term deposits of RMB1,506 million were deposited in banks for risk reserves of
+enterprise annuity fund investments and risk reserves of personal endowment security management business, which are
+restricted to use (as at 31 December 2022, the Group's term deposits of RMB2, 175 million were deposited in banks for
+risk reserves of enterprise annuity fund investments, risk reserves of personal endowment security management business
+and backing overseas borrowings, which are restricted to use).
+485,567
+413,255
+485,567
+RMB million
+9,688
+53,255
+Impairment provision
+Total
+Over ten years
+After five years but within ten years
+After one year but within five years
+Within one year
+Maturing:
+Contractual maturity schedule
+Total
+Unlisted (ii)
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+By place of listing:
+Total
+Others (i)
+Subordinated bonds
+As at
+Corporate bonds
+31 December
+494,830
+1,717,598
+11 FINANCIAL ASSETS
+208 Annual Report 2023 | Financial Report
+(i) Other investment in debt instruments at fair value through other comprehensive income mainly include trust schemes and debt investment plans.
+(ii) Unlisted debt investments include those traded on the Chinese interbank market and those not publicly traded.
+(1,432)
+2,744,169
+1,965,497
+207,198
+398,475
+172,999
+2,744,169
+2,348,743
+179
+58
+395,189
+2,744,169
+22,752
+100,068
+408,921
+2023
+RMB million
+Government agency bonds
+Government bonds
+11.4 Investment in debt instruments at fair value through other comprehensive income
+128,994
+128,994
+55,494
+RMB million
+Total
+Level 3
+RMB million
+As at 31 December 2023
+Level 2
+RMB million
+RMB million
+Level 1
+211,349
+210,523
+57
+132
+637
+211,349
+(350)
+211,699
+34,448
+55,494
+178
+2,437
+32,276
+11 FINANCIAL ASSETS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 207
+211,349
+7,329
+67,097
+92,002
+123,996
+44,921
+2023
+31 December
+As at
+219,379
+216,764
+2,437
+178
+34,891
+RMB million
+For the year ended 31 December 2023
+154,370
+Annual Report 2023 | Financial Report 205
+As at 31 Percentage Accumulated
+Provision
+for
+equity
+Dividends
+profit or
+Change of
+January
+December
+December
+Accounting
+method
+Other
+Share of
+As at 1
+As at 31
+Movements in the current year
+262,488
+Investment
+cost
+2022
+2023
+98,085
+98,085
+53,201
+Equity method
+China Guangfa Bank Co., Ltd. ("CGB") (i)
+Associates
+RMB million
+RMB million
+2.1.1.b)
+(Restated, Note
+impairment
+amount of
+of equity
+interest
+2023
+declared movements impairment
+loss
+the cost
+258,760
+(3,150)
+(4,778)
+1,302
+Under the market comparison approach and income approach, an increase (decrease) in the comprehensive adjustment
+coefficient will result in an increase (decrease) in the fair value of investment properties.
+The Group uses the weighted average of market comparison approach and income approach as its valuation 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; the income approach is to convert
+projected future incomes of investment properties into value by rate of return, rate of capitalization or income multiplier.
+According to the calculation results of the above two valuation approaches, 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.
+The fair value of investment properties of the Group as at 31 December 2023 amounted to RMB16,677 million (as at
+31 December 2022: RMB16,854 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.
+As at 31 December 2023, the Group had no investment properties for which the title certificates were in process to obtain
+(as at 31 December 2022: nil).
+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.
+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.
+16,854
+16,626
+13,193
+13,374
+(2,033)
+1
+(437)
+(1,597)
+15,226
+(11)
+14,971
+266
+Annual Report 2023 | Financial Report 201
+6,061
+Notes to the Consolidated Financial Statements (continued)
+10 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+(5,373)
+(4,854)
+3,979
+8,079
+12,877
+(8,252)
+262,485
+RMB million
+RMB million
+2022
+2023
+As at 31 December
+Change of provision for impairment
+Other equity movements
+Dividends declared
+Share of profit or loss
+As at 1 January
+Change of the cost
+For the year ended 31 December 2023
+(742)
+244
+1,241
+(505)
+62,683
+100
+1,438 (1,545)
+720
+(9,280)
+208,160 208,157
+156,641
+Sub-total
+61,973 61,970
+59,055
+Equity method
+Others (iv)
+Limited ("China Unicom") (iii)
+10.03%
+23,052
+66
+(390)
+7,494 (3,492)
+360
+1,400
+(6,367)
+(230)
+(298)
+3,553 3,553
+7,656
+Equity method
+Mapleleaf Century Limited ("MCL")
+("Joy City")
+5,414 66.67%
+162
+(162)
+293
+23
+5,283 5,283
+6,281
+Equity method
+Joy City Commercial Property Fund L. P.
+Joint ventures
+204,279
+Buildings
+RMB million
+774
+22,602 22,602
+137
+1,737
+1,737
+1,339
+Equity method
+COFCO Futures Company Limited
+("Sino-Ocean") (ii)
+(5,862)
+29.59%
+(2,194)
+2,194
+2,194
+11,245
+Equity method
+Sino-Ocean Group Holding Limited
+43.686%
+104,645
+83
+14
+26
+1
+21,801
+Equity method
+China United Network Communications
+Company")
+Gas Pipeline Co., Ltd. ("Pipeline
+43.86%
+12,104
+(8)
+(789)
+21,569 (10,000) 1,332
+21,569
+10,000
+Equity method
+China Pipe Group Sichuan to East China
+("COFCO Futures")
+35.00%
+1,795
+(26)
+3,025
+For the year ended 31 December 2023
+As at 1 January 2022
+21
+5,370
+639
+Additions
+As at 1 January 2022
+Cost
+RMB million
+Total
+5,372
+Others
+1,480
+1
+1,479
+1,810
+1
+1,809
+(2,094)
+Buildings
+Deductions
+(1,808)
+640
+(1,808)
+(2,392)
+1,599
+1,599
+Deductions
+(1,139)
+(1)
+(1,138)
+Charge for the year
+(2,854)
+(1)
+(2,853)
+As at 1 January 2022
+Accumulated depreciation
+4,204
+3
+4,201
+31 December 2022
+(2,394)
+(939)
+1,239
+(2)
+21 13
+(3)
+Charge for the year
+As at 1 January 2023
+Accumulated depreciation
+As at 31 December 2023
+Deductions
+Additions
+As at 1 January 2023
+Cost
+RMB million
+Total
+Others
+Buildings
+For the year ended 31 December 2023
+(a) Right-of-use assets
+8 LEASES
+Notes to the Consolidated Financial Statements (continued)
+Notes to the Consolidated Financial Statements (continued)
+4,201
+(2,394)
+636
+3,570
+(2,091)
+1,239
+(938)
+3,574
+4
+637
+(1,267)
+4,204
+31
+As at 31 December 2023
+As at 1 January 2023
+Net book value
+As at 31 December 2023
+As at 1 January 2023
+Impairment
+As at 31 December 2023
+Deductions
+(2,392)
+(1,267)
+As at 31 December 2022
+Impairment
+As at 1 January 2022
+1
+(437)
+(2,033)
+15,222
+(5)
+1
+15,226
+As at 31 December 2023
+As at 1 January 2023
+Fair value
+As at 31 December 2023
+As at 1 January 2023
+Net book value
+As at 31 December 2023
+Deductions
+As at 1 January 2023
+Additions
+Accumulated depreciation
+(2,469)
+As at 31 December 2023
+13,193
+16,854
+Fair value
+As at 31 December 2022
+As at 1 January 2022
+Net book value
+As at 31 December 2022
+Deductions
+As at 1 January 2022
+Additions
+Accumulated depreciation
+31 December 2022
+Deductions
+Additions
+As at 1 January 2022
+Cost
+9 INVESTMENT PROPERTIES (continued)
+Notes to the Consolidated Financial Statements (continued)
+200 Annual Report 2023 | Financial Report
+16,677
+12,753
+As at 31 December 2022
+Deductions
+As at 1 January 2023
+Interest on lease liabilities
+(b) The amounts recognised in profit or loss in relation to leases are as follows:
+8 LEASES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 199
+The Group's right-of-use assets include the above assets and land use rights disclosed in Note 13.
+The Group had neither significant profit from subleasing right-of-use assets nor profit or loss from sale and leaseback
+transactions for the year ended 31 December 2023 (2022: same).
+1,810
+1
+2,518
+1
+2,517
+1,809
+As at 31 December 2022
+As at 1 January 2022
+Net book value
+As at 31 December 2022
+Depreciation charge of right-of-use assets
+Expense relating to short-term leases
+Additions
+Expense relating to leases of low-value assets
+(except for short-term lease liabilities)
+9 INVESTMENT PROPERTIES
+Cost
+RMB million
+Buildings
+1,537
+1,313
+1
+324
+319
+74
+1,139
+939
+54
+RMB million
+RMB million
+2022
+31 December
+As at
+As at 31
+December
+2023
+Total
+75.00%
+258,933
+Equity method
+644,687
+37,315
+29,306
+246,072
+3,417,906
+Total assets
+MCL
+RMB million
+9,710
+Joy City
+RMB million
+RMB million
+RMB million
+RMB million
+Company China Unicom
+Pipeline
+COFCO
+Futures
+Sino-Ocean
+RMB million RMB million
+23,957
+Total liabilities
+3,156,057
+216,858
+holders of the associates and
+joint ventures
+Total equity attributable to equity
+11,184
+9,688
+347,274
+35,946
+3,417
+47,886
+261,849
+Total equity
+12,773
+22
+297,413
+1,369
+25,889
+198,186
+CGB
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31 December
+2022 and for the year ended 31 December 2022:
+10 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+For the year ended 31 December 2023
+(20,985)
+16,019
+Net profit/(loss)
+973
+155
+379,643
+6,213
+3,779
+43,380
+69,678
+Total revenues
+3,025
+5,414
+23,052
+12,104
+1,795
+104,645
+239
+31,747
+3,030
+141
+Notes to the Consolidated Financial Statements (continued)
+204 Annual Report 2023 | Financial Report
+(73)
+141
+19,032
+3,030
+242
+(21,228)
+18,860
+Total comprehensive income
+(444)
+319
+3
+(243)
+2,841
+Other comprehensive income
+371
+18,713
+investments
+3,407
+11,184
+219
+(15,650)
+15,528
+Net profit/(loss)
+883
+(145)
+361,123
+3,128
+6,097
+42,447
+75,154
+Others (iv)
+3,553
+5,283
+22,602
+21,569
+3,222
+16,651
+(164)
+774
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2023 and 31 December
+2022. The Group had a capital contribution commitment of RMB13,638 million with associates and joint ventures as at 31
+December 2023 (as at 31 December 2022: RMB15,231 million). The capital contribution commitment amount has been
+included in the capital commitments in Note 38.
+(i) Total adjustments include accounting policy difference adjustments, fair value adjustments and other adjustments.
+(976)
+(154)
+16,841
+3,128
+225
+(21,836)
+12,763
+Total comprehensive income
+(1,750)
+10
+190
+6
+(6,186)
+(2,765)
+Other comprehensive income
+1,737
+2,194
+98,085
+investments
+4,737
+7,924
+170,408
+36,330
+3,407
+23,957
+217,227
+joint ventures after adjustments
+holders of the associates and
+Total equity attributable to equity
+(6,447)
+(1,764)
+16,038
+384
+(7,790)
+369
+Total adjustments (i)
+Proportion of the Group's
+35,946
+ownership
+29.59%
+Net carrying value of the
+(5,862)
+Impairment
+3,553
+5,283
+22,602
+21,569
+1,737
+8,056
+98,085
+investments
+Gross carrying value of the
+75.00%
+66.67%
+10.03%
+43.86%
+35.00%
+43.686%
+Net carrying value of the
+Total revenues
+Impairment provision
+As at 31 December 2022, the major associates and joint ventures of the Group are as follows:
+66.67%
+75.00%
+The British Virgin Islands
+The British Cayman Islands
+10.03%
+PRC
+43.86%
+Place of incorporation
+PRC
+PRC
+29.59%
+Hong Kong, PRC
+43.686%
+PRC
+Percentage of equity
+interest held
+Place of incorporation
+35.00%
+Percentage of equity
+interest held
+Name
+Associates
+10.03%
+PRC
+43.86%
+PRC
+35.00%
+PRC
+29.59%
+Hong Kong, PRC
+43.686%
+PRC
+MCL
+Joint ventures
+Joy City
+China Unicom
+Pipeline Company
+COFCO Futures
+Sino-Ocean
+CGB
+MCL
+Joy City
+Joint ventures
+China Unicom
+262,488
+220,699
+Total
+54,481
+(98)
+585 (1,362)
+1,028
+54,328 54,328
+64,058
+Sub-total
+46,042
+132
+590 (1,200)
+1,028
+45,492 45,492
+(5,862)
+50,121
+262,485
+The British Cayman Islands
+The British Virgin Islands
+8,079 (4,854) 1,302
+(6,367)
+Pipeline Company
+COFCO Futures
+Sino-Ocean
+CGB
+Associates
+Name
+As at 31 December 2023, the major associates and joint ventures of the Group are as follows:
+(v) There is no significant restriction for the Group to dispose of its associates and joint ventures.
+(iv) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
+On 31 December 2023, the stock price of China Unicom was RMB4.38 per share.
+(iii) The 2022 final dividend of RMB0.0427 in cash per ordinary share was approved and declared in the Annual General
+Meeting of China Unicom on 29 June 2023. The Company received a cash dividend of RMB136 million. The 2023 interim
+dividend of RMB0.0796 in cash per ordinary share was approved and declared in the Annual General Meeting of China
+Unicom on 9 August 2023. The Company received a cash dividend of RMB254 million.
+10 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+202 Annual Report 2023 | Financial Report
+(ii) The Group made adjustments to the profit or loss on the basis of the statement of comprehensive income and the
+statement of changes in equity for 2023 provided by Sino-Ocean Group. The profit and loss adjustment amount for 2023
+is RMB -2,194 million, and the carrying amount of Sino-Ocean held by the Group as at 31 December 2023 was 0.
+(i) The 2022 final dividend of RMB0.078 in cash per ordinary share was approved and declared in the Annual General
+Meeting of CGB on 20 June 2023. The Company received a cash dividend of RMB742 million.
+258,760
+66.67%
+75.00%
+(8,252)
+Notes to the Consolidated Financial Statements (continued)
+14,746
+3,571
+16,543
+232,244
+joint ventures after adjustments
+holders of the associates and
+Total equity attributable to equity
+(7,267)
+(1,501)
+15,565
+362
+9,514
+251
+Total adjustments (i)
+11,301
+9,622
+159,241
+174,806
+14,384
+8,121
+Proportion of the Group's
+5,414
+3,025
+Annual Report 2023 | Financial Report 203
+23,052
+12,104
+1,795
+5,862
+104,645
+investments
+Gross carrying value of the
+75.00%
+66.67%
+43.86%
+35.00%
+29.59%
+43.686%
+ownership
+4,034
+3,571
+10.03%
+231,993
+21,814
+26,169
+206,172
+3,509,522
+Total liabilities
+Total assets
+MCL
+RMB million
+RMB million RMB million RMB million RMB million RMB million RMB million
+Joy City
+China
+Unicom
+COFCO
+Futures
+Sino-Ocean
+CGB
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31 December
+2023 and for the year ended 31 December 2023:
+10 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+7,029
+For the year ended 31 December 2023
+662,845
+9,629
+Pipeline
+Company
+3,232,537
+24,127
+11,301
+9,622
+357,935
+Total equity attributable to equity
+3,584
+holders of the associates and
+joint ventures
+20,792
+276,985
+14,384
+Total equity
+12,826
+7
+304,910
+7,430
+22,585
+185,380
+(2,343)
+Government agency bonds
+Government bonds
+Debt securities
+Available-for-sale securities, at fair value
+11.9 Available-for-sale securities
+212 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+344,426
+(i) Under IFRS 17 Insurance Contracts, policy loans are no longer accounted for as a separate financial asset and should be accounted for as fulfilment cash
+flow of the relevant policies.
+342,083
+13,670
+11 FINANCIAL ASSETS (continued)
+Corporate bonds
+For the year ended 31 December 2023
+Others (i)
+Sub-total
+Equity securities
+1,700,806
+Funds
+As at
+31 December
+2022
+RMB million
+47,188
+As at
+156,024
+313,270
+188,563
+Subordinated bonds
+180,686
+Maturing:
+RMB million
+(Restated (i))
+31 December
+2022
+174,398
+RMB million
+33,961
+160,527
+83,894
+1,295,822
+1,574,204
+Annual Report 2023 | Financial Report 211
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+11 FINANCIAL ASSETS (continued)
+11.8 Loans
+Loans
+Impairment
+Net value
+52,989
+Within one year
+After five years but within ten years
+Over ten years
+Total
+Impairment
+Net value
+As at
+31 December
+2022
+RMB million
+(Restated (i))
+344,426
+(2,343)
+342,083
+As at
+31 December
+2022
+After one year but within five years
+879,443
+94
+Preferred stocks
+85,450
+38
+793,861
+879,443
+420,287
+59,495
+59
+378,824
+858,665
+1,738,108
+(i)
+Other available-for-sale securities mainly include unlisted equity investments, private equity funds, trust schemes and perpetual bonds.
+(ii) Unlisted debt securities are 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 quotations, wealth management products and private equity funds.
+Debt securities
+Maturing:
+RMB million
+-
+contractual maturity schedule
+After one year but within five years
+After five years but within ten years
+Over ten years
+Total
+214 Annual Report 2023 | Financial Report
+As at
+31 December
+2022
+RMB million
+118,373
+206,086
+15,993
+879,443
+239,004
+315,980
+Within one year
+Common stocks
+2022
+As at
+Others (i)
+Sub-total
+Available-for-sale securities, at cost
+Equity securities
+Others (i)
+Total
+131,897
+414,148
+50,522
+244,964
+841,531
+17,134
+1,738,108
+Annual Report 2023 | Financial Report 213
+31 December
+Notes to the Consolidated Financial Statements (continued)
+11 FINANCIAL ASSETS (continued)
+11.9 Available-for-sale securities (continued)
+Debt securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted (ii)
+Sub-total
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted (ii)
+Sub-total
+Total
+For the year ended 31 December 2023
+1,354,739
+Total
+15,993
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Others (i)
+Sub-total
+Equity investments
+Funds
+Common stocks
+Others (ii)
+Sub-total
+Total
+Debt investments
+Listed in Mainland, PRC
+Unlisted (iii)
+Government bonds
+Sub-total
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted (iii)
+Sub-total
+As at
+31 December
+2023
+RMB million
+3,622
+6,813
+187,138
+315,435
+230,771
+743,779
+206,963
+Equity investments
+415,413
+Debt investments
+11 FINANCIAL ASSETS (continued)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+11 FINANCIAL ASSETS (continued)
+11.5 Investment in equity instruments at fair value through other comprehensive income
+Common stocks
+Preferred stocks
+Others (i)
+Total
+By place of listing:
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Unlisted (ii)
+Total
+(i)
+Other investment in equity instruments at fair value through other comprehensive income mainly include perpetual bonds.
+(ii) Unlisted equity investments include those not traded on stock exchanges, which are mainly perpetual bonds.
+11.6 Financial assets at fair value through profit or loss
+As at
+31 December
+RMB million
+14,787
+50,445
+72,773
+138,005
+56,962
+8,891
+72,152
+138,005
+In 2023, the Group disposed of investment in equity instruments at fair value through other comprehensive income amounted
+to RMB2,713 million, and the net cumulative gains of RMB96 million on disposal was transferred from other comprehensive
+income to retained earnings.
+The dividends income of investment in equity instruments at fair value through other comprehensive income recognised
+during the year are described in Note 22.
+Annual Report 2023 | Financial Report 209
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+2023
+339,220
+961,596
+1,705,375
+231,704
+144
+62
+1,342,294
+1,574,204
+As at 31 December 2022 there was no provision for impairment of held-to-maturity securities held by the Group.
+Debt securities - fair value hierarchy
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Total
+Debt securities - contractual maturity schedule
+Maturing:
+1,574,204
+Within one year
+After five years but within ten years
+Over ten years
+Total
+As at 31 December 2022
+Level 1
+RMB million
+Level 2
+RMB million
+Total
+RMB million
+240,597
+104,751
+719
+177,217
+976,103
+417,814
+1,080,854
+185,426
+186,145
+After one year but within five years
+378,105
+1,004,162
+178,203
+13,734
+RMB million
+2022
+50,058
+693,721
+743,779
+422,464
+41,877
+10,230
+487,025
+961,596
+1,705,375
+(i) Other debt investments under financial assets at fair value through profit or loss mainly include trust schemes and debt investment plans.
+(ii) Other equity investments under financial assets at fair value through profit or loss mainly include perpetual bond, private equity funds and unlisted equities.
+(iii) Unlisted debt investments include those traded on the Chinese interbank market and those not publicly traded. Unlisted equity investments refer to
+investments that are not traded on stock exchanges, mainly perpetual bonds, private equity funds and open-ended funds with public market price quotations.
+210 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+11 FINANCIAL ASSETS (continued)
+11.7 Held-to-maturity securities
+(i)
+Debt securities
+Government bonds
+31 December
+As at
+For the year ended 31 December 2023
+Unlisted debt securities refer to debt securities traded in Chinese interbank market.
+Total
+Unlisted (i)
+346,067
+Listed overseas
+Listed in Mainland, PRC
+Debt securities
+Total
+Subordinated bonds
+Corporate bonds
+Government agency bonds.
+Listed in Hong Kong, PRC
+11 FINANCIAL ASSETS (continued)
+97,081
+Debt securities
+The fair values of the underlying items of the Group's Insurance contracts with direct participation features are as follows:
+As at
+31 December
+As at
+31 December
+2023
+2022
+RMB million
+RMB million
+Cash and cash equivalents
+Term deposits
+47,693
+34,993
+131,206
+197,000
+Investment in debt instruments at amortised cost
+12,163
+N/A
+Investment in debt instruments at fair value through other comprehensive
+income
+1,077,916
+N/A
+Investment in equity instruments at fair value through other comprehensive
+income
+61,599
+N/A
+Financial assets at fair value through profit or loss
+589,031
+N/A
+Loans
+Held-to-maturity securities
+Available-for-sale securities, at fair value
+12 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+216 Annual Report 2023 | Financial Report
+38,533
+resell
+Cash and cash equivalents
+149,305
+127,594
+149,305
+127,594
+Financial liabilities at fair value through profit or
+(13,878)
+(3,344)
+(13,878)
+(3,344)
+loss
+Financial assets sold under agreements to
+Securities at fair value through profit or loss
+(216,851)
+(216,851)
+(148,958)
+repurchase
+Bonds payable
+(36,166)
+(34,997)
+(36,278)
+(35,387)
+Interest-bearing loans and other borrowings
+(12,857)
+(12,774)
+(12,857)
+(12,774)
+(i) The estimates and judgements to determine the fair value of financial assets are described in Note 4.2.
+(ii) The fair values of investment in debt instruments at amortised cost, held-to-maturity securities and loans are determined by reference with the debt
+securities which are measured by fair value. Please refer to Note 5.4.
+(148,958)
+Other miscellaneous items
+Total
+N/A
+1,005
+963
+77
+171
+15,930
+8,373
+37,318
+22,004
+(i)
+The Group's right-of-use assets include the above land use rights and right-of-use assets disclosed in Note 8.
+(ii) As at 31 December 2023, other items in the Group's other assets were mainly subsidiary real estate related assets.
+During the year ended 31 December 2023, the Group recognised an expected credit loss of RMB65 million on other
+receivables (2022: an assets impairment loss of RMB36 million), and at 31 December 2023, the provision for impairment
+of other receivables is RMB720 million (As at 31 December 2022: RMB639 million).
+Annual Report 2023 | Financial Report 217
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+3,299
+14 INSURANCE CONTRACTS
+All of the future cash flows within the boundary of each group of contracts are included in the measurement of each group
+of insurance contracts.
+The Group estimates cash flows which are expected in the future and the timing and probability that they will occur based
+on the information available at the reporting date. In making these expectations, the Group uses information about past
+events, current conditions and forecasts of future conditions. The Group's estimate of future cash flows is the probability-
+weighted mean of a range of scenarios that reflect the full range of possible outcomes.
+The Group adjusts the estimates of future cash flows to reflect the time value of money.
+Assumptions used to develop estimates about future cash flows are reassessed by the Group at the reporting date and
+adjusted where required.
+Significant actuarial assumptions used are discussed below:
+Discount rates
+Based on the information available at the reporting date, the Group; applies the bottom-up approach in determining the
+the risk-free yield curve. The assumed spot discount rates are as follows:
+As at 31 December 2023
+As at 31 December 2022
+218 Annual Report 2023 | Financial Report
+Discount rate assumptions
+2.57% 4.80%
+2.59% 4.80%
+11.10 Securities at fair value through profit or loss
+14.1 Significant actuarial assumptions
+(1) Estimates of future cash flows
+19,759
+4,662
+7,765
+564,510
+N/A
+178,972
+N/A
+715,824
+N/A
+59,482
+167,942
+186,876
+2,087,550
+1,937,657
+13 OTHER ASSETS
+Land use rights (i)
+Investments receivable and prepaid
+1,029
+Disbursements
+Prepayments to constructors
+Tax prepaid
+Others (ii)
+Total
+As at
+As at
+31 December
+2022
+31 December
+2023
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+7,861
+8,092
+Due from related parties
+38,533
+95
+Financial assets purchased under agreements to
+13,444
+18,552
+265
+32,261
+223,790
+36,455
+21
+293
+154,760
+191,529
+16,901
+637
+4,233
+10,490
+32,261
+191,529
+223,790
+(ii) Unlisted debt securities are those traded on the Chinese interbank market and those not publicly traded. Unlisted equity securities are those not traded
+on stock exchanges, which are mainly open-ended funds with public market price quotations.
+Annual Report 2023 | Financial Report 215
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+11 FINANCIAL ASSETS (continued)
+11.11 Financial assets purchased under agreements to resell
+Maturing:
+Within 30 days
+Above 30 days
+Total
+As at
+As at
+31 December
+31 December
+(i) Other debt securities at fair value through profit or loss mainly include inter-bank certificates of deposits.
+2023
+27,755
+9,622
+Government bonds
+19,759
+Government agency bonds.
+Corporate bonds
+Others (i)
+Sub-total
+Equity securities
+Funds
+Common stocks
+Others
+Subtotal
+Total
+Debt securities
+Listed in Mainland, PRC
+152,347
+Listed in Hong Kong, PRC
+Sub-total
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted (ii)
+Sub-total
+Total
+For the year ended 31 December 2023
+As at
+31 December
+2022
+RMB million
+1,805
+Unlisted (ii)
+2022
+Listed overseas
+RMB million
+2,744,169
+N/A
+138,005
+N/A
+138,005
+N/A
+1,705,375
+N/A
+1,705,375
+N/A
+Held-to-maturity securities (ii)
+N/A
+1,574,204
+N/A
+N/A
+1,700,806
+N/A
+342,083
+N/A
+351,285
+Available-for-sale securities, at fair value
+1,720,974
+N/A
+1,720,974
+Securities at fair value through profit or loss
+N/A
+223,790
+RMB million
+223,790
+N/A
+Loans (ii)
+2,744,169
+N/A
+cost (ii)
+77
+19,759
+38,215
+318
+38,533
+Investment in debt instruments at fair value
+through other comprehensive income
+Investment in equity instruments at fair value
+through other comprehensive income
+Financial assets at fair value through profit or
+loss
+19,682
+12 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+The table below presents the carrying amount and estimated fair value of major financial assets and liabilities:
+Estimated fair value (i)
+As at
+As at
+31 December
+2023
+RMB million
+31 December
+2022
+RMB million
+As at
+31 December
+2023
+RMB million
+As at
+Carrying amount
+485,567
+6,333
+N/A
+219,379
+211,349
+413,255
+6,520
+6,333
+31 December
+485,567
+413,255
+6,520
+Investment in debt instruments at amortised
+Statutory deposits - restricted
+Term deposits
+RMB million
+2022
+N/A
+at 31 December 2023
+6,251
+798
+Premiums received
+578
+33,770
+Insurance contract liabilities as
+222 Annual Report 2023 | Financial Report
+26,143
+(3,277)
+Claims and other expenses paid
+25,665
+(66,101)
+(66,101)
+62,824
+Total cash flows
+(16,857)
+(16,857)
+paid
+Insurance acquisition cash flows
+79,681
+Notes to the Consolidated Financial Statements (continued)
+79,681
+(66,101)
+For the year ended 31 December 2023
+Excluding loss
+14.2 Insurance contract liabilities (continued)
+31,225
+699
+(25,665)
+3,766
+RMB million
+Total
+risk
+non-financial
+adjustment for
+Present value
+of future cash
+flows
+component
+component
+Loss
+Risk
+liabilities for
+incurred claims
+approach at transition
+the modified retrospective
+Contracts measured using
+at 1 January 2022
+Insurance contract liabilities as
+liabilities for remaining
+coverage
+Contracts measured using the premium allocation approach (continued)
+(1) Reconciliation of the liabilities for remaining coverage and the liabilities for incurred claims for
+insurance contracts issued (continued)
+14 INSURANCE CONTRACTS (continued)
+Investment components
+Changes to liabilities for
+(146)
+incurred claims
+689
+689
+losses on onerous contracts
+Losses and reversals of
+16,531
+16,531
+acquisition cash flows
+Amortisation of insurance
+38,045
+518
+39,196
+(1,669)
+expenses
+Incurred claims and other
+(52,147)
+(52,039)
+(108)
+(52,147)
+Total insurance revenue
+(52,039)
+693
+Other contracts
+Total insurance service
+1,175
+(3,250)
+(3,934)
+36,620
+(980)
+(34,319)
+comprehensive income
+Total amounts recognised in
+1,991
+20
+674
+1,297
+contracts
+Financial changes in insurance
+(816)
+(166)
+35,946
+(980)
+(35,616)
+Insurance service result
+51,331
+(166)
+35,946
+(980)
+16,531
+expenses
+(684)
+36,383
+59,392
+(18,160)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 223
+35,872
+724
+29,959
+1,778
+3,411
+at 31 December 2022
+Insurance contract liabilities as
+779
+(58,613)
+(58,613)
+(58,613)
+Total cash flows
+Claims and other expenses paid
+(16,913)
+(16,913)
+paid
+Insurance acquisition cash flows
+76,305
+76,305
+Premiums received
+14.2 Insurance contract liabilities (continued)
+22,770
+(2) Reconciliation of fulfilment cash flows and contractual service margin for insurance contracts issued
+Contracts not measured using the premium allocation approach
+Present value adjustment for
+of future cash non-financial
+(108)
+(6,658)
+(6,658)
+(6,658)
+(1,771)
+(1,771)
+Changes relating to current service
+Current experience adjustment
+financial risk
+(65,689)
+(65,689)
+4,231,075
+783,473
+Change in the risk adjustment for non-
+the service provided
+Contractual service margin recognised for
+34,186
+3,413,416
+2023
+Insurance contract liabilities as at 1 January
+Total
+Contractual
+risk service margin
+RMB million
+flows
+Risk
+(18,160)
+(22,770)
+(1,290)
+(3,783)
+incurred claims
+Changes to liabilities for
+1,770
+1,770
+losses on onerous contracts
+Losses and reversals of
+17,045
+17,045
+acquisition cash flows
+Amortisation of insurance
+37,675
+648
+37,718
+(691)
+expenses
+Incurred claims and other
+(55,407)
+(55,407)
+Total insurance revenue
+(37,247)
+(37,247)
+Other contracts
+(634)
+Investment components
+(4,417)
+expenses
+31
+34,577
+1,079
+(36,977)
+comprehensive income
+Total amounts recognised in
+2,044
+17
+642
+1,385
+contracts
+Financial changes in insurance
+Insurance service result
+(3,334)
+14
+33,935
+1,079
+(38,362)
+52,073
+14
+33,935
+1,079
+17,045
+Total insurance service
+approach at transition
+704,912
+Contracts measured using
+195,893
+46,618
+10,735
+138,540
+income
+Total amounts recognised in comprehensive
+257,169
+449
+256,720
+Financial changes in insurance contracts
+(61,276)
+46,618
+10,286
+(118,180)
+Insurance service result
+99,022
+46,618
+10,286
+42,118
+Total insurance service expenses
+247
+247
+Changes to liabilities for incurred claims
+Investment components
+12,595
+(209,261)
+Premiums received
+14.2 Insurance contract liabilities (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+220 Annual Report 2023 | Financial Report
+4,825,405
+35,387
+30,904
+4,759,114
+31 December 2023
+Insurance contract liabilities as at
+398,437
+(255,365)
+653,802
+Total cash flows
+(255,365)
+(255,365)
+Claims and other expenses paid
+(51,110)
+(51,110)
+Insurance acquisition cash flows paid
+704,912
+(1,771)
+209,261
+(1) Reconciliation of the liabilities for remaining coverage and the liabilities for incurred claims for
+insurance contracts issued (continued)
+12,595
+Losses and reversals of losses on onerous
+component
+Excluding loss
+Liabilities for remaining
+coverage
+Contracts not measured using the premium allocation approach
+(1) Reconciliation of the liabilities for remaining coverage and the liabilities for incurred claims for
+insurance contracts issued
+14.2 Insurance contract liabilities
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 219
+The risk adjustment for non-financial risk is calculated at the Group level and then allocated down to each group of contracts
+in accordance with their risk profiles. The Group determines non-financial risk adjustments based on the confidence interval
+method and at a 75% confidence level.
+(2) Risk adjustment for non-financial risk
+The policy dividend assumption is uncertainty and is affected by factors such as the expected investment returns, the Group's
+dividend policy, and the reasonable expectations of policyholders. The Group is obliged to pay 70% or a higher percentage
+as agreed in the insurance policy of the cumulative distributable income to the participating insurance policyholders.
+Policy dividend assumption
+The lapse rates 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 are determined with reference to
+creditable past experience, current conditions, future expectations and other information.
+Lapse rates
+Expense assumptions are based on the information available at the reporting date 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.
+Expense assumptions
+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.
+The Group bases its mortality assumptions on the China Life Insurance Mortality Table (2010-2013), adjusted where
+appropriate to reflect the Group's recent historical mortality experience. The main source of uncertainty with insurance
+contracts is that epidemics and wide-ranging lifestyle changes could result in deterioration in future mortality experience.
+Similarly, continuing advancements in medical care and social conditions may push forward improvements in longevity.
+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.
+(1) Estimates of future cash flows (continued)
+Mortality/Morbidity
+14.1 Significant actuarial assumptions (continued)
+Loss Liabilities for
+component incurred claims
+contracts
+Total
+Insurance contract liabilities as at
+1 January 2023
+42,118
+42,118
+flows
+Amortisation of insurance acquisition cash
+44,062
+46,371
+(2,309)
+Incurred claims and other expenses
+(160,298)
+(160,298)
+Total insurance revenue
+(16,727)
+(16,727)
+Other contracts
+(20,943)
+(20,943)
+(122,628)
+(122,628)
+Contracts measured using the modified
+retrospective approach at transition
+Contracts measured using the fair value
+approach at transition
+4,231,075
+34,873
+20,169
+4,176,033
+RMB million
+Contracts not measured using the premium allocation approach (continued)
+Liabilities for remaining
+coverage
+Excluding loss
+34,873
+20,169
+4,176,033
+31 December 2022
+Insurance contract liabilities as at
+365,340
+(212,884)
+578,224
+Total cash flows
+(212,884)
+(212,884)
+Claims and other expenses paid
+(43,884)
+(43,884)
+Insurance acquisition cash flows paid
+622,108
+622,108
+Premiums received
+171,236
+(171,236)
+Investment components
+92,402
+43,041
+4,231,075
+9,920
+Annual Report 2023 | Financial Report 221
+For the year ended 31 December 2023
+35,872
+724
+29,959
+1,778
+3,411
+at 1 January 2023
+component component
+Total
+adjustment
+for non-
+financial risk
+of future cash
+flows
+RMB million
+Loss
+Present value
+Risk
+incurred claims
+liabilities for
+Excluding loss
+coverage
+liabilities for remaining
+Insurance contract liabilities as
+Contracts measured using the premium allocation approach
+(1) Reconciliation of the liabilities for remaining coverage and the liabilities for incurred claims for
+insurance contracts issued (continued)
+14.2 Insurance contract liabilities (continued)
+14 INSURANCE CONTRACTS (continued)
+Notes to the Consolidated Financial Statements (continued)
+39,441
+income
+Total amounts recognised in comprehensive
+(127,171)
+(127,171)
+Total insurance revenue
+(2,515)
+(2,515)
+Other contracts
+(17,179)
+(17,179)
+(107,477)
+(107,477)
+Contracts measured using the modified
+retrospective approach at transition
+Contracts measured using the fair value
+approach at transition
+3,773,333
+33,480
+10,249
+3,729,604
+1 January 2022
+Insurance contract liabilities as at
+RMB million
+Total
+component incurred claims
+component
+Liabilities for
+Loss
+Incurred claims and other expenses
+(1,125)
+42,532
+41,407
+140,032
+399
+139,633
+Financial changes in insurance contracts
+(47,630)
+43,041
+9,521
+(100,192)
+Insurance service result
+79,541
+43,041
+the modified retrospective
+9,521
+Total insurance service expenses
+509
+509
+Changes to liabilities for incurred claims
+10,646
+10,646
+contracts
+Losses and reversals of losses on onerous
+26,979
+26,979
+Amortisation of insurance acquisition cash
+flows
+26,979
+(65,689)
+1,495
+Impact of insurance contracts initially
+the modified
+retrospective
+approach at the
+measured using
+Insurance
+contracts
+Insurance
+769,137
+74,734
+136,909
+557,494
+As at 31 December 2023
+22,944
+1,901
+3,932
+17,111
+Financial changes in insurance contracts
+28,409
+38,581
+11,175
+(21,347)
+Changes relating to future service
+(22,684)
+(12,512)
+11,175
+contracts
+(21,347)
+transition date
+Other contracts
+(36,736)
+Changes relating to future service
+(48,825)
+(10,873)
+(1,216)
+(36,736)
+contractual service margin
+Changes in estimates with adjustment to
+47,966
+47,966
+the period
+Impact of insurance contracts initially recognised in
+(43,273)
+(463)
+(7,643)
+(35,167)
+Changes relating to current service
+805,433
+139,178
+666,255
+As at 1 January 2022
+RMB million
+Total
+measured using
+the fair value
+approach at the
+transition date
+(1,216)
+contractual service margin
+51,093
+(5) Reconciliation of contractual service margin for insurance contracts not measured using the
+premium allocation approach
+14.2 Insurance contract liabilities (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+769,137
+285,163
+194,653
+105,156
+119,844
+64,321
+As at
+31 December
+2023
+RMB million
+226 Annual Report 2023 | Financial Report
+Total
+3-5 years (including 5 years)
+510 years (including 10 years)
+More than 10 years
+1 - 3 years (including 3 years)
+1 year or less (including 1 year)
+Number of years until expected to be amortised
+The expected amortisation of contractual service margin provided in the table below represents the amount by which the
+carrying value of the Group's contractual service margin at 31 December 2023 is expected to be apportioned to future years
+on the basis of the unit of coverage, which does not include contractual service margin for future new business, accrued
+interest, etc., and therefore there may be differences with the amortisation of contractual service margin in future years.
+(4) Expected amortisation of contractual service margin
+772
+772
+521
+Insurance
+contracts
+Changes in estimates with adjustment to
+measured using
+retrospective
+51,093
+the period
+Impact of insurance contracts initially recognised in
+(65,689)
+(3,131)
+(12,088)
+(50,470)
+Changes relating to current service
+783,473
+37,383
+133,890
+612,200
+As at 1 January 2023
+RMB million
+Total
+transition date Other contracts
+transition date
+approach at the
+approach at the
+the fair value
+measured using
+contracts
+Insurance
+the modified
+521
+37,093
+Financial changes in insurance contracts
+6,694
+6,694
+Reinsurance premiums paid
+1,674
+(1,674)
+Investment components
+1,937
+4,441
+300
+(2,804)
+income
+Total amounts recognised in comprehensive
+1,444
+107
+1,337
+493
+4,441
+193
+(4,141)
+Gains or losses on reinsurance contracts
+Financial changes in reinsurance contracts held
+4,634
+4,441
+193
+Incurred claims and other expenses recovered
+696
+from reinsurers
+(5,868)
+14 INSURANCE CONTRACTS (continued)
+Notes to the Consolidated Financial Statements (continued)
+228 Annual Report 2023 | Financial Report
+(123)
+19
+(142)
+December 2023
+Reinsurance contract liabilities as at 31
+24,420
+7,087
+2,290
+15,043
+December 2023
+Reinsurance contract assets as at 31
+24,297
+7,106
+2,290
+14,901
+Net assets/(liabilities) of reinsurance contract
+as at 31 December 2023
+826
+(5,868)
+6,694
+Total cash flows
+(5,868)
+(859)
+696
+389
+Reinsurance contract assets as at 1 January
+2023
+RMB million
+Total
+loss-recovery Loss-recovery recovered from
+component component
+reinsurers
+incurred claims
+Assets for
+Excluding
+Assets for remaining coverage
+recovered from reinsurers
+(1) Reconciliation of remaining coverage and incurred claims for reinsurance contracts held
+Contracts not measured using the premium allocation approach
+14.3 Reinsurance contract assets/(liabilities)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 227
+783,473
+37,383
+133,890
+612,200
+As at 31 December 2022
+22,172
+753
+3,571
+17,848
+12,842
+389
+1,990
+21,669
+3,549
+3,745
+(196)
+Amounts recovered from reinsurers
+recovered from reinsurers
+Changes to assets for incurred claims
+Recognition and reversals of loss-recovery
+component
+expenses
+Recovery of incurred claims and other
+(4,141)
+(4,141)
+Allocation of reinsurance premiums paid
+21,534
+6,859
+1,990
+12,685
+as at 1 January 2023
+Net assets/(liabilities) of reinsurance contract
+(135)
+22
+(157)
+January 2023
+Reinsurance contract liabilities as at 1
+6,837
+(74,118)
+Total
+47,966
+37,884
+2,930,016
+2022
+Insurance contract liabilities as at 1 January
+RMB million
+Total
+Contractual
+risk service margin
+Risk
+adjustment for
+non-financial
+Present value
+of future cash
+flows
+Contracts not measured using the premium allocation approach (continued)
+(2) Reconciliation of fulfilment cash flows and contractual service margin for insurance contracts
+issued (continued)
+14.2 Insurance contract liabilities (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+224 Annual Report 2023 | Financial Report
+4,825,405
+769,137
+36,928
+4,019,340
+Insurance contract liabilities as at 31
+December 2023
+398,437
+398,437
+805,433
+Total cash flows
+3,773,333
+the service provided
+53,731
+contractual service margin
+Changes in estimates with adjustment to
+772
+47,966
+1,790
+(48,984)
+recognised in the period
+Impact of insurance contracts initially
+(58,785)
+(43,273)
+(2,017)
+(13,495)
+Changes relating to current service
+(13,495)
+(13,495)
+Current experience adjustment
+(2,017)
+(2,017)
+financial risk
+Change in the risk adjustment for non-
+(43,273)
+(43,273)
+Contractual service margin recognised for
+(4,906)
+(255,365)
+Claims and other expenses paid
+5
+242
+Changes to liabilities for incurred claims
+12,595
+28,409
+1,939
+(17,753)
+Changes relating to future service
+12,074
+661
+11,413
+contractual service margin
+Changes in estimates without adjustment to
+(22,684)
+29
+22,655
+contractual service margin
+Changes in estimates with adjustment to
+521
+51,093
+1,249
+(51,821)
+recognised in the period
+247
+(255,365)
+Changes relating to past service
+5
+(51,110)
+(51,110)
+Insurance acquisition cash flows paid
+704,912
+704,912
+Premiums received
+195,893
+(14,336)
+2,742
+207,487
+income
+Total amounts recognised in comprehensive
+257,169
+22,944
+2,569
+231,656
+Financial changes in insurance contracts
+(61,276)
+(37,280)
+173
+(24,169)
+Insurance service result
+247
+242
+47,966
+(48,825)
+contractual service margin
+54,854
+1,649
+53,205
+Insurance acquisition cash flows
+(737,251)
+(22,061)
+(715,190)
+(787,451)
+(14,355)
+(773,096)
+future cash inflows
+Estimates of the present value of
+RMB million
+Total
+Onerous
+contracts
+contracts
+Total
+Non-onerous
+Onerous
+contracts
+RMB million
+Non-onerous
+contracts
+2022
+2023
+(3) Impact of the initial recognition of the insurance contracts issued in the current period
+Contracts not measured using the premium allocation approach
+44,060
+14.2 Insurance contract liabilities (continued)
+2,610
+Others
+1,790
+17
+1,773
+1,249
+51,093
+51,093
+Contractual service margin
+10
+1,239
+Risk adjustment for non-financial risk
+688,267
+22,816
+665,451
+735,630
+14,866
+720,764
+future cash outflows
+Estimates of the present value of
+641,597
+20,206
+621,391
+680,776
+13,217
+667,559
+46,670
+Changes in estimates without adjustment to
+14 INSURANCE CONTRACTS (continued)
+Notes to the Consolidated Financial Statements (continued)
+116,365
+Financial changes in insurance contracts
+(47,630)
+(44,132)
+(5,193)
+1,695
+Insurance service result
+509
+3
+506
+Changes relating to past service
+509
+3
+506
+Changes to liabilities for incurred claims
+10,646
+(859)
+(3,179)
+14,684
+Changes relating to future service
+9,874
+(63)
+9,937
+22,172
+For the year ended 31 December 2023
+140,032
+income
+Annual Report 2023 | Financial Report 225
+4,231,075
+783,473
+34,186
+3,413,416
+December 2022
+Insurance contract liabilities as at 31
+365,340
+365,340
+Total cash flows
+(212,884)
+(212,884)
+Claims and other expenses paid
+(43,884)
+(43,884)
+Insurance acquisition cash flows paid
+622,108
+622,108
+Premiums received
+92,402
+(21,960)
+(3,698)
+118,060
+Total amounts recognised in comprehensive
+For the year ended 31 December 2023
+257
+Changes relating to current service
+Notes to the Consolidated Financial Statements (continued)
+1,146
+RMB million
+RMB million
+50,712
+54,925
+1,779
+1,994
+65,689
+43,273
+42,118
+26,979
+160,298
+52,147
+55,407
+212,445
+182,578
+Gains or losses on reinsurance
+1,019
+5
+979
+35
+115
+(6)
+121
+2022
+I
+2023
+238 Annual Report 2023 | Financial Report
+148,958
+As at 31 December 2023, bonds with a carrying amount of RMB182,528 million (as at 31 December 2022: RMB110,104
+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 markets.
+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 2023, the carrying amount
+of securities deposited in the collateral pool was RMB310,320 million (as at 31 December 2022: RMB269,925 million). The
+collateral is restricted from trading during the period of the repurchase transaction.
+Annual Report 2023 | Financial Report 237
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+19 STATUTORY INSURANCE FUND
+As required by the former 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 to 31 December 2022.
+Since January 1,2023, the Group has paid the Insurance Protection Fund in accordance with the "Measures for the
+Administration of the Insurance Security Fund" (Issued by Order no.7 [2022] Former CBIRC, the Ministry of Finance of the
+People's Republic of China and the People's Bank of China) and the "Notice of the General Office of the China Banking
+and Insurance Regulatory Commission on Matters related to the Payment of Insurance Protection Fund" (No. 2 [2023] of
+the General Office of the China Banking and Insurance Regulatory Commission).
+The fund contribution is equal to the product of the business income and the fund rate, which is composed of the base
+rate and the risk differential rate, and is equal to the sum of the base rate and the risk differential rate.
+(1) Benchmark Interest Rate
+Short-term health insurance and accident insurance shall be paid at 0.8% of business income;
+Life insurance, long-term health insurance and annuity insurance shall be paid at 0.3% of business income; Among them,
+investment-linked insurance shall be paid at 0.05% of business income;
+(2) Risk differential rate
+The risk differential rate is based on the results of the comprehensive solvency risk rating. When the rating is A (including
+AAA, AA and A), B (including BBB, BB and B), C and D, the applicable rate is -0.02%,0%, 0.02% and 0.04%, respectively.
+When the life insurance protection fund reaches 1% of the total assets of the industry, payment will be suspended. The
+total assets of the industry shall be subject to the data determined by the State Financial Supervision and Regulation.
+20 INSURANCE REVENUE
+Contracts not measured using the premium allocation approach
+Amounts relating to the changes in the liabilities for remaining coverage
+Expected incurred claims and other expenses
+Change in the risk adjustment for non-financial risk
+Contractual service margin recognised for the service provided
+Amortisation of insurance acquisition cash flows
+Sub-total
+Contracts measured using the premium allocation approach
+Total
+For the year ended 31 December
+216,851
+59
+Amounts recovered from reinsurers
+1,269
+7
+1,013
+20
+229
+at 1 January 2022
+Reinsurance contract liabilities as
+January 2022
+Reinsurance contract assets as at 1
+RMB million
+Total
+risk
+Assets for incurred claims
+recovered from reinsurers
+Present value Risk adjustment
+for non-financial
+of future cash
+flows
+component
+component
+Loss-recovery
+Excluding
+loss-recovery
+Assets for remaining coverage
+recovered from reinsurers
+(1) Reconciliation of remaining coverage and incurred claims for reinsurance contracts held (continued)
+Contracts measured using the premium allocation approach (continued)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+(111)
+59
+3
+(30)
+reinsurers
+claims recovered from
+Changes to assets for incurred
+recovery component
+Recognition and reversals of loss-
+other expenses
+845
+11
+858
+(24)
+Recovery of incurred claims and
+(696)
+.1
+$)
+(696)
+Allocation of reinsurance premiums
+paid
+1,239
+7
+1,091
+23
+118
+reinsurance contract as at 1
+January 2022
+Net assets/(liabilities) of
+78
+Notes to the Consolidated Financial Statements (continued)
+148,958
+Total
+2022
+RMB million
+22 March 2019
+Total
+22 March 2029
+4.28%
+35,000
+35,000
+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%.
+On 18 February 2024, the Company issued the "Notice of Exercise of Redemption Option of China Life Insurance Company
+Limited 2019 Bonds for Capital Replenishment (Bond Pass-Through) " and on 22 March 2024, the Company redeemed the
+capital supplementary Bond in full.
+Bonds payable are measured at amortised cost as described in Note 2.4.2.
+236 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+17 OTHER LIABILITIES
+Payable to the third-party holders of consolidated structured entities
+Salary and welfare payable
+Brokerage and commission payable
+Payable to constructors
+Interest payable of debt instruments
+Agency deposits
+Tax payable
+RMB million
+Stock appreciation rights (Note 31)
+2023
+Maturity date
+25 June 2024
+773
+742
+2,605
+2,450
+2,495
+2,307
+6,984
+6,756
+436
+15 June 2034
+15 June 2034
+51
+32
+12,857
+12,774
+(i) The adjustment date is 1 January of each year.
+16 BONDS PAYABLE
+As at 31 December 2023, all bonds payable were the bonds for capital replenishment (the "Bond") with a total carrying
+amount of RMB36,166 million (as at 31 December 2022: RMB34,997 million), and the fair value of RMB36,278 million (as
+at 31 December 2022: RMB35,387 million). 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:
+As at
+31 December
+As at
+31 December
+Issue date
+Interest rate p. a.
+216,579
+272
+Others
+As at
+126,750
+117,751
+18 FINANCIAL ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+As at
+As at
+31 December
+31 December
+2023
+2022
+RMB million
+RMB million
+Interbank markets
+150,028
+101,641
+Stock exchange markets
+66,823
+47,317
+216,851
+148,958
+Total
+Maturing:
+Within 30 days
+More than 30 days within 90 days
+21,318
+Total
+23,509
+181
+As at
+31 December
+31 December
+2023
+2022
+RMB million
+RMB million
+(Restated,
+Note 2.1.1.b)
+84,295
+73,845
+8,404
+11,735
+4,780
+4,664
+2,189
+2,606
+1,451
+1,241
+1,107
+1,298
+834
+704
+340
+8 March 2024
+230 Annual Report 2023 | Financial Report
+(6
+(2,833)
+3,384
+Total cash flows
+(2,833)
+(2,833)
+from reinsurers
+Incurred claims and other expenses recovered
+3,384
+3,384
+Reinsurance premiums paid
+1,604
+(1,604)
+Investment components
+3,049
+5,103
+223
+(2,277)
+income
+Total amounts recognised in comprehensive
+1,217
+71
+Financial changes in reinsurance contracts held
+1,832
+551
+5,103
+Net assets/(liabilities) of reinsurance contract
+12,685
+loss-recovery
+Excluding
+Assets for remaining coverage
+recovered from reinsurers
+(1) Reconciliation of remaining coverage and incurred claims for reinsurance contracts held (continued)
+Contracts measured using the premium allocation approach
+14.3 Reinsurance contract assets/(liabilities) (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 229
+(135)
+22
+(157)
+December 2022
+Reinsurance contract liabilities as at 31
+21,669
+6,837
+1,990
+12,842
+December 2022
+Reinsurance contract assets as at 31
+21,534
+6,859
+1,990
+as at 31 December 2022
+Loss-recovery
+152
+Gains or losses on reinsurance contracts
+(132)
+January 2022
+Reinsurance contract liabilities as at 1
+18,058
+2,977
+1,767
+13,314
+2022
+RMB million
+Total
+Assets for
+incurred claims
+recovered from
+reinsurers
+component
+component
+Loss-recovery
+Excluding
+loss-recovery
+recovered from reinsurers
+Reinsurance contract assets as at 1 January
+Assets for remaining coverage
+(1) Reconciliation of remaining coverage and incurred claims for reinsurance contracts held (continued)
+Contracts not measured using the premium allocation approach (continued)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+8
+(3,423)
+(124)
+as at 1 January 2022
+5,255
+5,103
+152
+834
+834
+268
+268
+Amounts recovered from reinsurers
+recovered from reinsurers
+Changes to assets for incurred claims
+Recognition and reversals of loss-recovery
+component
+4,153
+4,269
+(116)
+expenses
+Recovery of incurred claims and other
+(3,423)
+(3,423)
+Allocation of reinsurance premiums paid
+17,934
+2,985
+1,767
+13,182
+Net assets/(liabilities) of reinsurance contract
+(65)
+component
+Assets for incurred claims
+recovered from reinsurers
+Present value Risk adjustment
+of future cash
+flows
+RMB million
+recovered from reinsurers
+Incurred claims and other expenses
+1,714
+1,714
+Reinsurance premiums paid
+1,283
+(1,283)
+Investment components
+(704)
+(2)
+(128)
+(29)
+(545)
+comprehensive income
+Total amounts recognised in
+77
+37
+I
+40
+contracts held
+Financial changes in reinsurance
+(781)
+(2)
+Total cash flows
+(165)
+1,714
+(2,051)
+100
+1
+(166)
+at 31 December 2023
+Reinsurance contract liabilities as
+1,426
+10
+1,790
+28
+(402)
+31 December 2023
+Reinsurance contract assets as at
+1,361
+10
+10
+1,890
+29
+29
+(568)
+December 2023
+reinsurance contract as at 31
+Net assets/(liabilities) of
+(337)
+(2,051)
+(2,051)
+component
+(29)
+(196)
+2,402
+12
+2,786
+58
+(454)
+January 2023
+reinsurance contract as at 1
+Net assets/(liabilities) of
+(25)
+2,427
+12
+2,757
+29
+1
+(55)
+at 1 January 2023
+Reinsurance contract liabilities as
+57
+(399)
+January 2023
+Reinsurance contract assets as at 1
+Total
+for non-
+financial risk
+Allocation of reinsurance premiums
+(585)
+paid
+(585)
+(2)
+21
+(165)
+(29)
+(810)
+(11)
+(799)
+contracts
+Gains or losses on reinsurance
+30
+30
+Amounts recovered from reinsurers
+reinsurers
+claims recovered from
+Changes to assets for incurred
+recovery component
+Recognition and reversals of loss-
+584
+9
+634
+(59)
+other expenses
+Recovery of incurred claims and
+(585)
+8 March 2024
+127,171
+E
+For the year ended 31 December 2023
+14 INSURANCE CONTRACTS (continued)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+(5) Reconciliation of contractual service margin for reinsurance contracts held not measured using
+the premium allocation approach
+As at 1 January 2023
+Changes relating to current service
+Impact of reinsurance contracts initially recognised in
+the period
+Changes in estimates with adjustment to contractual
+service margin
+Changes relating to future service
+Financial changes in reinsurance contracts held
+As at 31 December 2023
+As at 1 January 2022
+Changes relating to current service
+Impact of reinsurance contracts initially recognised in
+the period
+Changes in estimates with adjustment to contractual
+service margin
+Changes relating to future service
+Financial changes in reinsurance contracts held
+As at 31 December 2022
+Reinsurance
+contracts held
+measured using
+the modified
+retrospective
+approach at the
+transition date
+10,716
+Other contracts
+4,629
+1,308
+36
+62
+(1,040)
+62
+Contractual service margin
+(36)
+9
+(27)
+(170)
+2
+(168)
+Total
+(4) Expected amortisation of contractual service margin
+The expected amortisation of contractual service margin provided in the table below represents the amount by which the
+carrying value of the Group's contractual service margin at 31 December 2023 is expected to be apportioned to future
+years on the basis of the unit of coverage, which does not include contractual service margin of reinsurance contracts held
+for future new business, accrued interest, etc., and therefore there may be differences with amortisation of contractual
+service margin in future years.
+Number of years until expected to be amortised
+1 year or less (including 1 year)
+1 - 3 years (including 3 years)
+3-5 years (including 5 years)
+510 years (including 10 years)
+More than 10 years
+Total
+234 Annual Report 2023 | Financial Report
+As at
+31 December
+2023
+RMB million
+797
+1,587
+2,395
+9
+Total
+(13,806)
+857
+(168)
+(168)
+11,973
+(357)
+11,616
+11,973
+(525)
+11,448
+(1,000)
+(4)
+(1,004)
+(13,806)
+(524)
+(14,330)
+Annual Report 2023 | Financial Report 235
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+257
+257
+Current experience adjustment
+(344)
+(344)
+financial risk
+819
+RMB million
+5
+814
+(524)
+(14,330)
+857
+(27)
+(27)
+2,962
+435
+3,397
+2,962
+408
+3,370
+(598)
+(15)
+(613)
+(10,585)
+(131)
+(10,716)
+Reinsurance
+contracts held
+measured using
+the modified
+retrospective
+approach at the
+transition date
+Other contracts
+RMB million
+Total
+(25,593)
+(25,593)
+27
+Risk adjustment for non-financial risk
+(6)
+Changes relating to past service
+834
+834
+Gains or losses on reinsurance contracts held
+Financial changes in reinsurance contracts held
+Total amounts recognised in comprehensive
+income
+(9,276)
+(1,159)
+12,267
+1,832
+1,842
+379
+(1,004)
+1,217
+(7,434)
+(780)
+11,263
+3,049
+Reinsurance premiums paid
+3,384
+3,384
+Incurred claims and other expenses recovered
+from reinsurers
+(2,833)
+(2,833)
+834
+Total cash flows
+834
+Changes to assets for incurred claims
+(344)
+819
+732
+Impact of reinsurance contracts held initially
+recognised in the period
+106
+62
+(168)
+Changes in estimates with adjustment to
+contractual service margin
+(10,729)
+(887)
+11,616
+Changes in estimates without adjustment to
+contractual service margin
+256
+10
+266
+Changes relating to future service
+(10,367)
+(815)
+11,448
+266
+recovered from reinsurers
+551
+551
+Net assets/(liabilities) of reinsurance contract
+as at 31 December 2022
+contracts
+with a net
+gain
+contracts
+with a net
+cost
+Reinsurance
+contracts with contracts with
+Reinsurance
+Total
+a net gain
+RMB million
+a net cost
+RMB million
+Total
+future cash inflows
+560
+191
+751
+1,142
+4
+1,146
+Estimates of the present value of
+future cash outflows
+(551)
+(209)
+(760)
+(1,034)
+Reinsurance
+Reinsurance
+2022
+2023
+27,934
+7,930
+(14,330)
+21,534
+Reinsurance contract assets as at 31
+December 2022
+27,998
+7,870
+(14,199)
+21,669
+Reinsurance contract liabilities as at 31
+Change in the risk adjustment for non-
+December 2022
+60
+(131)
+(135)
+Annual Report 2023 | Financial Report 233
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+14 INSURANCE CONTRACTS (continued)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+(3) Impact of the initial recognition of the reinsurance contracts in the current period
+Contracts not measured using the premium allocation approach
+Estimates of the present value of
+For the year ended 31 December
+6M SOFR+1.15%
+LPR (i)
+LPR+0.53% (i)
+LPR+0.63% (i)
+819
+(64)
+the service provided
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 231
+(25)
+29
+1
+(55)
+at 31 December 2022
+Reinsurance contract liabilities as
+2,427
+12
+2,757
+57
+67
+(399)
+31 December 2022
+Reinsurance contract assets as at
+2,402
+12
+2,786
+58
+(454)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+December 2022
+(2) Reconciliation of fulfilment cash flows and contractual service margin for reinsurance contracts held
+Contracts not measured using the premium allocation approach
+Present value adjustment for
+of future cash non-financial
+the service provided
+Contractual service margin recognised for
+21,534
+(14,330)
+7,930
+27,934
+as at 1 January 2023
+Net assets/(liabilities) of reinsurance contract
+(135)
+(131)
+60
+(64)
+January 2023
+Reinsurance contract liabilities as at 1
+21,669
+(14,199)
+7,870
+27,998
+2023
+Reinsurance contract assets as at 1 January
+Total
+Contractual
+risk service margin
+RMB million
+flows
+Risk
+857
+reinsurance contract as at 31
+747
+323
+5
+LO
+979
+35
+(696)
+contracts
+15 INTEREST-BEARING LOANS AND OTHER BORROWINGS
+As at
+As at
+31 December
+31 December
+Maturity date
+Interest rate
+2023
+2022
+RMB million
+RMB million
+Guaranteed loans
+Guaranteed loans
+Credit loans
+Credit loans
+Mortgages loans
+Mortgages loans
+Mortgages loans
+Total
+27 September 2024
+15 June 2034
+EURIBOR+2.8%
+EURIBOR+2.8%
+3.08%
+819
+Financial changes in reinsurance
+Net assets/(liabilities) of
+contracts held
+|
+(1,359)
+2,106
+(1,359)
+(1,359)
+2,106
+Total cash flows
+recovered from reinsurers
+Incurred claims and other expenses
+2,043
+| |
+2,106
+Reinsurance premiums paid
+(2,043)
+Investment components
+416
+1,011
+35
+(635)
+comprehensive income
+Total amounts recognised in
+93
+9
+32
+61
+857
+5
+financial risk
+232 Annual Report 2023 | Financial Report
+(123)
+(80)
+35
+(78)
+December 2023
+Reinsurance contract liabilities as at 31
+24,420
+(10,636)
+7,859
+27,197
+December 2023
+Reinsurance contract assets as at 31
+24,297
+(10,716)
+7,894
+27,119
+Net assets/(liabilities) of reinsurance contract
+as at 31 December 2023
+826
+826
+Total cash flows
+(5,868)
+(5,868)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+14 INSURANCE CONTRACTS (continued)
+14.3 Reinsurance contract assets/(liabilities) (continued)
+Contractual service margin recognised for
+Change in the risk adjustment for non-
+17,934
+(25,593)
+8,710
+34,817
+as at 1 January 2022
+Net assets/(liabilities) of reinsurance contract
+(124)
+(22)
+57
+from reinsurers
+(159)
+Reinsurance contract liabilities as at 1
+18,058
+(25,571)
+8,653
+34,976
+Reinsurance contract assets as at 1 January
+2022
+Total
+Contractual
+risk service margin
+Present value Risk adjustment
+of future cash for non-financial
+flows
+Contracts not measured using the premium allocation approach (continued)
+(2) Reconciliation of fulfilment cash flows and contractual service margin for reinsurance contracts
+held (continued)
+January 2022
+Incurred claims and other expenses recovered
+RMB million
+6,694
+389
+25
+364
+Changes relating to future service
+contractual service margin
+Changes in estimates without adjustment to
+3,397
+(302)
+(3,095)
+contractual service margin
+Changes in estimates with adjustment to
+(2,740)
+(27)
+recognised in the period
+Impact of reinsurance contracts held initially
+(352)
+(1,097)
+(592)
+857
+(352)
+(1,097)
+Changes relating to current service.
+(1,097)
+6,694
+Current experience adjustment
+(352)
+(9)
+(241)
+36
+389
+1,937
+3,370
+Reinsurance premiums paid
+3,614
+(36)
+(1,641)
+1,444
+557
+1,500
+493
+4,227
+(613)
+(3,141)
+Changes to assets for incurred claims
+recovered from reinsurers
+(593)
+696
+Changes relating to past service
+696
+696
+696
+Gains or losses on reinsurance contracts held
+Financial changes in reinsurance contracts held
+Total amounts recognised in comprehensive
+income
+6,993
+initial As at 1 January
+application of
+2022
+Recognised in
+IFRS 17 (Restated, Note profit or loss in
+(Note 2.1.1.b)
+2.1.1.b) the current year
+Recognised
+in other
+comprehensive
+income in the
+current year
+(418)
+7,596
+As at
+31 December
+(Restated, Note
+2021
+7,596
+2.1.1.b)
+RMB million
+Provision for asset impairment
+(603)
+2022
+31 December
+Net value
+Impact of
+852
+securities
+Accrued payroll
+Fair value changes on available-for-sale
+(852)
+Others
+1,147
+1,147
+45,854
+(33,024)
+12,830
+527
+4,212
+1,670
+7,389
+24,431
+As at
+2,883
+(22,927)
+(534)
+(7,360)
+(169)
+Others
+Net value
+(22,927)
+23,779
+852
+(534)
+1,190
+491
+1,147
+30,541
+23,181
+418
+242
+45,854
+22,431
+securities
+2,883
+Fair value changes on available-for-sale
+2,440
+2,714
+Insurance contract liabilities
+7,644
+30,541
+38,185
+(9,801)
+(1,839)
+26,545
+Deductible losses
+7,185
+7,185
+Fair value changes in securities reflecting
+changes in fair value through net profit
+(2,022)
+(2,022)
+418
+changes in fair value through net profit
+(c) As at 31 December 2023 and 31 December 2022, the amounts of deferred tax assets and liabilities are as follows
+(continued):
+(62,540)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+29 TAXATION (continued)
+As at 31 December 2023 and 31 December 2022, the deferred taxation was calculated in full on temporary differences
+under the statement of financial position liability method using the principal tax rate of 25%. The movements in deferred
+tax assets and liabilities during the year are as follows:
+As at
+31 December
+2022
+(Restated, Note
+244 Annual Report 2023 | Financial Report
+Impact of
+initial
+application of
+2.1.1.b)
+IFRS 9 As at 1 January
+(Note 2.1.1.a)
+profit or loss in
+2023
+the current year
+Recognised
+in other
+comprehensive
+income in the
+current year
+Recognised in
+(272)
+46,126
+24,431
+As at
+31 December
+Unrecognised deductible tax losses of the Group amounted to RMB7,116 million as at 31 December 2023 (as at 31
+December 2022: RMB3, 183 million).
+As at
+31 December
+2023
+2022
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+Deferred tax assets
+Deferred tax liabilities
+Net deferred tax assets
+Net deferred tax liabilities
+86,971
+48,703
+(62,540)
+(2,849)
+As at
+31 December
+2023
+RMB million
+Provision for asset impairment
+7,185
+5,170
+12,355
+Changes in fair value of the financial
+assets at fair value through profit or
+loss
+10,356
+10,356
+9,147
+19,503
+Changes in fair value of the financial
+assets at fair value through other
+comprehensive income
+(37,052)
+(37,052)
+(25,488)
+7,185
+Fair value changes in securities reflecting
+Deductible losses
+32,583
+Accrued payroll
+6,993
+(5,058)
+1,935
+(324)
+298
+1,909
+2,714
+2,714
+(851)
+1,863
+Insurance contract liabilities
+26,545
+26,545
+(9,457)
+49,671
+Annual Report 2023 | Financial Report 245
+Glorious Fortune Forever Limited
+For the year ended 31 December 2023
+100.00%
+indirectly
+RMB200 million
+Asset
+management
+Golden Phoenix Tree Limited
+Company") (i)
+PRC
+King Phoenix Tree Limited
+New Aldgate Limited
+Hong Kong, PRC
+The British
+Jersey Island
+100.00% directly
+Not applicable
+Investment
+100.00%
+Shanghai Rui Chong Investment Co., Limited ("Rui Chong
+China Life Wealth Management Company Limited ("CL
+Wealth") (i)
+management
+Fund
+Hong Kong, PRC
+74.27% directly RMB3,400 million
+and indirectly
+50.00% indirectly
+Pension and
+Not applicable
+annuity
+Asset
+management
+China Life (Suzhou) Pension and Retirement Investment
+Company Limited ("Suzhou Pension Company") (i)
+PRC
+100.00% directly RMB3,236 million
+and indirectly
+Investment in
+retirement
+properties
+China Life AMP Asset Management Co., Ltd. ("CL AMP") (i)
+PRC
+85.03% indirectly RMB1,288 million
+Not applicable
+Investment
+indirectly
+PRC
+Not applicable
+Investment
+The British
+100.00% directly
+Not applicable
+Investment
+Virgin Islands
+Fortune Bamboo Limited
+The British
+100.00% directly
+Not applicable
+Investment
+248 Annual Report 2023 | Financial Report
+Virgin Islands
+(c) As at 31 December 2023 and 31 December 2022, the amounts of deferred tax assets and liabilities are as follows:
+100.00% directly
+China Life Franklin Asset Management Company Limited
+("AMC HK")
+The British
+Virgin Islands
+Golden Bamboo Limited
+100.00% directly RMB6,100 million
+Investment
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Investment
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Investment
+CL Hotel Investor, L. P.
+USA
+100.00% directly
+Not applicable
+Investment
+Sunny Bamboo Limited
+PRC
+Asset
+management
+activities
+86,971
+48,703
+Deferred tax liabilities:
+- deferred tax liabilities to be settled after 12 months
+(60,691)
+(1,396)
+- deferred tax liabilities to be settled within 12 months
+Sub-total
+(1,849)
+(1,453)
+(62,540)
+(2,849)
+Net deferred tax assets/(liabilities)
+24,431
+45,854
+30 EARNINGS PER SHARE
+8,930
+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 2023 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 (2022: same).
+6,384
+80,587
+29 TAXATION (continued)
+(d) The analysis of net deferred tax assets and deferred tax liabilities is as follows:
+As at
+As at
+31 December
+31 December
+2023
+2022
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+Deferred tax assets:
+- deferred tax assets to be recovered after 12 months
+- deferred tax assets to be recovered within 12 months
+Sub-total
+39,773
+Notes to the Consolidated Financial Statements (continued)
+31 STOCK APPRECIATION RIGHTS
+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 approved the Proposal on Extension of the Effective Period of Stock Appreciation
+Rights to extend the exercise period of all stock appreciation rights, which is also subject to government policy.
+Immediate and
+ultimate holding
+company
+Annual Report 2023 | Financial Report 247
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Subsidiaries
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2023:
+Place of
+incorporation
+Percentage of
+equity interest
+Name
+China Life Asset Management Company Limited ("AMC") (i)
+China Life Pension Company Limited ("Pension Company") (i)
+and operation
+PRC
+Registered
+held
+capital
+60.00% directly RMB4,000 million
+Principal
+Legal
+representative
+Bai Tao
+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.
+Nature of
+ownership
+State-owned
+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; 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.
+As at 31 December 2023, there were 55.01 million units outstanding and exercisable (as at 31 December 2022: same). As
+at 31 December 2023, the amount of intrinsic value for the vested stock appreciation rights was RMB168 million (as at 31
+December 2022: RMB327 million).
+246 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+31 STOCK APPRECIATION RIGHTS (continued)
+The fair value of the stock appreciation rights is estimated at each reporting date using lattice-based option valuation models
+based on expected volatility from 32% to 54%, an expected dividend yield of no higher than 5.34% and a risk-free interest
+rate ranging from 2.43% to 4.69%.
+The Company recognised a gain of RMB159 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 2023 (2022: The Company
+recognised a loss of RMB49 million in the net fair value through profit or loss in the consolidated comprehensive income
+representing the fair value change of the rights). RMB168 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 2023 (as
+at 31 December 2022: RMB327 million and RMB13 million), respectively. There was no unrecognised compensation cost
+for the stock appreciation rights as at 31 December 2023 (as at 31 December 2022: same).
+32 DIVIDENDS
+Pursuant to the shareholders' approval at the Annual General Meeting on 28 June 2023, a final dividend of RMB0.49 (inclusive
+of tax) per ordinary share totalling RMB13,850 million in respect of the year ended 31 December 2022 was declared and paid
+in 2023. The dividend has been recorded in the consolidated financial statements for the year ended 31 December 2023.
+Pursuant to a resolution passed at the meeting of the Board of Directors on 27 March 2024, a final dividend of RMB0.43
+(inclusive of tax) per ordinary share totalling approximately RMB12,154 million for the year ended 31 December 2023 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 2023.
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+CLIC
+Location of
+registration
+Beijing, China
+Principal business
+Relationship with
+the Company
+(i) Non-taxable income mainly includes interest income from government bonds, and dividend income from applicable equity investments. Expenses not
+deductible for tax purposes mainly include retiree wages that do not meet the criteria for deduction according to the relevant tax regulations.
+Net realised gains on financial assets
+(2,971)
+CONTRACTS
+26 NET INVESTMENT RETURNS AND FINANCIAL CHANGES IN INSURANCE
+131,614
+150,353
+52,073
+51,331
+Net investment returns
+79,541
+509
+247
+10,646
+12,595
+26,979
+42,118
+99,022
+Returns on investment recognised in profit or loss
+For the year ended 31 December
+2023
+Realised gains or losses (i)
+Impairment (ii)
+Sub-total
+Equity securities
+Realised gains or losses (i)
+Impairment (ii)
+Sub-total
+Total
+For the year ended
+31 December
+2022
+RMB million
+7,344
+Interest income
+2022
+RMB million
+RMB million
+41,407
+44,062
+2022
+RMB million
+RMB million
+24 NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+240 Annual Report 2023 | Financial Report
+(ii) During the year ended 31 December 2022, the Group recognised an impairment charge of RMB2,644 million on available-for-sale funds, an impairment
+charge of RMB15,486 million on available-for-sale stock securities, an impairment charge of RMB1,701 million on available-for-sale other equity securities,
+an impairment reversal of RMB145 million on available-for-sale debt securities, for which the Group determined that objective evidence of impairment
+existed. The Group recognised no impairment charge on loans and an impairment reversal of RMB1,476 million on loans during the period.
+(i) Realised gains or losses were generated mainly from available-for-sale securities.
+12,707
+3,742
+(19,831)
+23,573
+8,965
+1,621
+(9,375)
+N/A
+174,809
+N/A
+Debt securities
+Equity securities
+Debt securities
+Stock appreciation rights
+25 INSURANCE SERVICE EXPENSES
+2023
+For the year ended 31 December
+Total
+Contracts measured using the premium allocation approach
+Sub-total
+Losses and reversals of losses on onerous contracts
+Changes to liabilities for incurred claims
+Amortisation of insurance acquisition cash flows
+Contracts not measured using the premium allocation approach
+Incurred claims and other expenses
+(12,156)
+462
+(1,613)
+(10,956)
+(49)
+RMB million
+2022
+31 December
+For the year ended
+Financial liabilities at fair value through profit or loss
+Total
+Net fair value gains through profit or loss
+23 NET REALISED GAINS ON FINANCIAL ASSETS
+1,948
+RMB million
+Dividends and interest income
+Dividends
+Financial assets at fair value through profit or loss
+Investment in equity instruments at fair value through other comprehensive income
+Interest income
+23,893
+5,224
+2023
+Financial assets at fair value through profit or loss
+Sub-total
+54,691
+Realised gains/(losses)
+Financial assets at fair value through profit or loss
+(41,676)
+Investment in debt instruments at fair value through other comprehensive income
+Sub-total
+25,574
+31 December
+For the year ended
+22 INVESTMENT INCOME
+Notes to the Consolidated Financial Statements (continued)
+21 INTEREST INCOME
+Interest income from financial assets measured at amortised cost (i)
+For the year ended 31 December 2023
+Interest income from investment in debt instruments at fair value through other
+comprehensive income
+Total
+For the year ended
+31 December
+2023
+RMB million
+33,908
+89,086
+122,994
+(i) Interest income from financial assets measured at amortised cost mainly includes interest income arising from cash and cash equivalents, financial assets
+purchased under agreements to resell, investment in debt instruments at amortised cost and term deposits.
+Interest income is recognised using the effective interest rate method.
+10,396
+(31,280)
+Unrealised gains/(losses)
+Financial assets at fair value through profit or loss
+Financial liabilities at fair value through profit or loss
+Stock appreciation rights
+Financial assets purchased under agreements to resell
+Total
+For the year ended
+31 December
+2022
+RMB million
+(Restated (i))
+62,883
+32,079
+5,174
+28,934
+770
+25,161
+19,095
+713
+174,809
+(i)
+Loans
+For the year ended 31 December 2022, interest income included in investment income was RMB145,105 million. Interest
+income was mainly accrued using the effective interest method.
+Bank deposits
+- available-for-sale securities
+Sub-total
+(33,074)
+129
+159
+Total
+(32,786)
+(9,375)
+Annual Report 2023 | Financial Report 239
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+22 INVESTMENT INCOME (continued)
+Debt securities
+- held-to-maturity securities
+- available-for-sale securities
+- at fair value through profit or loss
+Equity securities
+- at fair value through profit or loss
+N/A
+Under IFRS 17 Insurance Contracts, policy loans should be accounted for as fulfilment cash flow of the relevant policies, therefore its interest is no longer
+recognised as interest income.
+Investment income from associates and joint ventures
+(18,206)
+18,131
+15,212
+The disclosure above does not include underwriting and policy acquisition costs in the fulfilment cash flows.
+29 TAXATION
+Deferred 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.
+(17,388)
+(a) The amount of taxation charged to net profit represents:
+Deferred taxation
+Taxation charges
+For the year ended 31 December
+2023
+2022
+RMB million
+Current taxation - Enterprise income tax
+(19,719)
+(19,151)
+22,636
+Amounts recognised in insurance service expenses
+For the year ended 31 December
+2023
+2022
+RMB million
+RMB million
+15,105
+17,681
+7,471
+7,476
+5,016
+5,291
+65
+53
+27,013
+RMB million
+(Restated, Note
+2.1.1.b)
+2,190
+(242)
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+44,576
+70,060
+11,144
+17,515
+(10)
+(18,522)
+(246)
+(15,932)
+171
+4,034
+212
+311
+33
+267
+12,707
+(12,156)
+2022
+Less: Expenses directly attributable to insurance contracts
+Insurance acquisition cash flows recognised in liabilities for
+remaining coverage
+2023
+Deductible losses for which no deferred tax asset was recognised
+Others
+(2,971)
+1,948
+Annual Report 2023 | Financial Report 243
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+29 TAXATION (continued)
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC (2022: same)
+is as follows:
+For the year ended 31 December
+Profit before income tax
+Income tax computed at the statutory tax rate
+Adjustment on current income tax of previous period
+Non-taxable income (i)
+Investment income
+122,994
+Expenses not deductible for tax purposes (i)
+Income tax at the effective tax rate
+Remuneration in respect of audit services provided by auditors
+Others
+1,241
+(4,212)
+Social security and other benefits
+26 NET INVESTMENT RETURNS AND FINANCIAL CHANGES IN INSURANCE
+CONTRACTS (continued)
+Financial changes in insurance contracts
+Changes in fair value of underlying items of insurance contracts with
+direct participation features
+Interest expense
+Changes in interest rates and other financial assumptions
+Total financial changes in insurance contracts
+Recognised in profit or loss
+Recognised in other comprehensive income
+Total
+27 EXPECTED CREDIT LOSSES
+For the year ended 31 December
+2023
+2022
+Notes to the Consolidated Financial Statements (continued)
+RMB million
+Annual Report 2023 | Financial Report 241
+223,824
+8,079
+Depreciation and amortisation
+3,979
+Net expected credit losses
+1,217
+N/A
+Other impairment losses
+(3,150)
+Sub-total
+122,915
+176,189
+Returns/(losses) on investment recognised in other comprehensive income
+100,909
+(101,161)
+Total
+75,028
+RMB million
+For the year ended 31 December 2023
+66,193
+Investment in debt instruments at amortised cost
+Term deposits
+Statutory deposits - restricted
+Other receivables
+Total
+(59)
+(115)
+(1)
+65
+(1,217)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+28 PROFIT BEFORE INCOME TAX
+Profit before income tax is stated after charging the following:
+Salary and bonus
+(1,107)
+RMB million
+242 Annual Report 2023 | Financial Report
+259,160
+2023
+73,487
+104,897
+42,896
+142,076
+88,070
+148,700
+127,923
+(6,624)
+259,160
+142,076
+Investment in debt instruments at fair value through other comprehensive income
+For the year
+ended 31
+December
+131,237
+25,693
+PRC
+Wuhu Yuanxiang Tianyi Investment
+("Yuanxiang Tianfu") (ii)
+100.00%
+99.98%
+Not
+applicable
+Investment
+Not
+Xi'an Shengyi Jingsheng Real Estate Co., Ltd.
+Management Partnership (Limited Partnership)
+directly
+applicable
+("Yuanxiang Tianyi") (ii)
+PRC
+directly
+Investment
+Management Partnership (Limited Partnership)
+100.00%
+PRC
+RMB831
+PRC
+Principal
+activities
+RMB484
+Investment
+indirectly
+Shanghai Wansheng Industry Partnership
+99.98%
+PRC
+million
+Not
+Investment
+(Limited Partnership) ("Shanghai Wansheng")
+directly
+applicable
+(ii)
+Wuhu Yuanxiang Tianfu Investment
+99.98%
+Investment
+China Life Xing Wan (Tianjin) Enterprise
+indirectly
+Fund (Limited Partnership) ("CL Pension
+directly
+Not
+applicable
+Investment
+Industry") (ii)
+China Life Qihang Phase I (Tianjin) Equity
+PRC
+Investment Fund Partnership (Limited
+99.99%
+directly
+Not
+applicable
+Investment
+Partnership) ("CL Qihang Fund I") (ii)
+PRC
+Management Partnership (Limited Partnership)
+Registered
+capital
+99.90%
+PRC
+Beijing China Life Pension Industry Investment
+Guang De") (ii)
+CBRE Global Investors U. S. Investments I, LLC
+USA
+99.99%
+million
+Not
+Investment
+("CG Investments")
+directly
+("Shengyi Jingsheng") (i)
+applicable
+PRC
+99.95%
+Not
+Investment
+Fund Partnership (Limited Partnership) ("CL
+directly
+applicable
+China Life Guangde (Tianjin) Equity Investment
+Percentage
+of equity
+interest held
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Subsidiaries (continued)
+Dalian Hope Building Company Ltd. ("Hope
+Building") (i)
+100.00% directly RMB1,530 million
+Health
+management
+PRC
+100.00%
+indirectly
+RMB100 million
+Investment
+PRC
+89.997% directly
+Not applicable
+Investment
+The British
+100.00%
+Not applicable
+Investment
+PRC
+New Capital Wisdom Limited
+Ningbo Meishan Bonded Port Area Guo Yang Guo Sheng
+Investment Partnership ("Guo Yang Guo Sheng") (ii)
+China Life Franklin (Shenzhen) Private Equity Investment
+Fund Management Co., Limited ("Franklin Shenzhen
+Company") (i)
+99.98%
+indirectly
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2023 (continued):
+Place of
+incorporation
+Percentage of
+equity interest
+Name
+Virgin Islands
+China Century Core Fund Limited
+held
+The British
+Cayman
+Islands
+100.00%
+indirectly
+Registered
+capital
+Not applicable
+Principal
+activities
+Investment
+China Life (Beijing) Health Management Co., Limited ("CL
+Health") (i)
+and operation
+and operation
+indirectly
+Wisdom Forever Limited Partnership
+Not applicable
+Investment
+PRC
+99.98% directly
+Not applicable
+Investment
+Partnership (Limited Partnership) ("Yuan Shu Yuan Jiu") (ii)
+Annual Report 2023 | Financial Report 249
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Subsidiaries (continued)
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2023 (continued):
+Place of
+incorporation
+Name
+99.98% directly
+PRC
+Investment
+Not applicable
+The British
+100.00%
+Not applicable
+Investment
+Virgin Islands
+indirectly
+The British
+New Fortune Wisdom Limited
+100.00%
+Investment
+Cayman
+indirectly
+Islands
+Ningbo Meishan Bonded Port Area Bai Ning Investment
+Partnership (Limited Partnership) ("Bai Ning") (ii)
+Shanghai Yuan Shu Yuan Pin Investment Management
+Partnership (Limited Partnership) ("Yuan Shu Yuan Pin") (ii)
+Shanghai Yuan Shu Yuan Jiu Investment Management
+PRC
+99.98% directly
+Not applicable
+Not
+applicable
+(f) Transactions with significant related parties
+("CL Xingwan") (ii)
+indirectly
+indirectly
+CL Jiayuan
+RMB300
+99.99%
+RMB300
+99.99%
+99.99%
+indirectly
+Tianjin Pension Company
+RMB1,216
+99.99%
+RMB1,216
+99.99%
+indirectly
+indirectly
+indirectly
+RMB65
+99.99%
+RMB65
+CL Qihang Fund I
+RMB6,915
+99.99% directly
+RMB57
+RMB6,972
+99.99% directly
+CL Xingwan
+RMB3,765
+99.98%
+RMB3,765
+99.98%
+indirectly
+indirectly
+CL Nianfeng
+90.81% directly
+90.81% directly
+CL Hangzhou
+CL Qingdao (i)
+RMB210
+RMB210
+100.00%
+2023
+2022
+Note
+RMB million
+RMB million
+9,806
+12,941
+(i)
+463
+463
+(ii.a)
+141
+150
+Agency fee received from CLP&C
+(iii)
+1,706
+Rental and a service fee received from CLP&C
+For the year ended 31 December
+RMB3,987 99.90% directly
+CLP&C
+Distribution of dividends from the Company and AMC to
+CLIC
+indirectly
+CL Qinhuangdao (i)
+100.00%
+indirectly
+Zhuhai Xinwan (i)
+RMB3,322
+49.00%
+indirectly
+RMB4,344
+RMB7,666
+100.00%
+indirectly
+In 2023, CL Qingdao, CL Qinhuangdao and Zhuhai Xinwan were newly included in the consolidation scope.
+254 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+CLIC
+Policy management fee received from CLIC
+Asset management fee received from CLIC
+Dividends from CLP&C
+RMB1,595
+RMB2,392
+indirectly
+indirectly
+Yuan Shu Yuan Jiu
+RMB540
+99.98% directly
+Yuan Shu Yuan Pin
+RMB540
+Partnership
+99.98% directly
+RMB505
+99.98% directly
+RMB505
+99.98% directly
+Shanghai Wansheng
+RMB4,036
+99.98% directly
+RMB35
+RMB35
+100.00%
+USD452
+100.00%
+(e) Percentages of holding of related parties with control relationship and changes during the year
+(continued)
+(i)
+Subsidiaries (continued)
+As at 31 December 2022
+Amount
+Percentage of
+holding
+Increase
+Decrease
+Amount
+As at 31 December 2023
+Percentage of
+holding
+million
+million
+million
+million
+Wisdom Forever Limited
+USD452
+RMB12
+RMB4,048 99.98% directly
+Bai Ning
+RMB1,680
+RMB1,093
+100.00%
+RMB479
+RMB1,093
+99.98% directly
+100.00%
+indirectly
+indirectly
+CG Investments
+RMB4,111
+99.99% directly
+CL Guang De
+RMB1,316
+99.95% directly
+RMB120
+RMB4,111 99.99% directly
+RMB1,436 99.95% directly
+CL Pension Industry
+Shengyi Jingsheng
+99.90% directly
+RMB23
+RMB502
+99.98% directly
+RMB1,680
+99.98% directly
+Hope Building
+RMB484
+100.00%
+RMB484
+100.00%
+indirectly
+indirectly
+Yuanxiang Tianfu
+RMB502
+99.98% directly
+RMB23
+RMB479
+99.98% directly
+Yuanxiang Tianyi
+99.98% directly
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Asset management fee received from CLIC
+2868
+83
+475
+(v)
+30
+57
+40
+75
+241
+76
+1,888
+264
+120
+700
+57
+850
+12
+1,595
+248
+549
+483
+Capital contribution to Golden Phoenix Tree Limited
+Capital contribution to China Life Guangde
+Capital contribution to China Life Qihang Fund I
+Capital contribution to Shanghai Wansheng
+Capital reduction of subsidiaries (Note 33(e))
+Capital contribution to Yuanshu Yuanjiu
+Capital contribution to Yuanshu Yuanpin
+Capital contribution to Yuanxiang Tianfu
+Capital contribution to Yuanxiang Tianyi
+Transaction between the consolidated structured entities
+and the Company
+Distribution of profits from the consolidated structured
+entities to the Company
+256 Annual Report 2023 | Financial Report
+2022
+RMB million
+3,265
+2,872
+11
+18
+5
+94
+12
+35
+31
+35
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f) Transactions with significant related parties (continued)
+Notes (continued):
+(ii.f) On 29 December 2021, the Company and AMC HK renewed an Insurance Funds Entrusted Investment Management Agreement, which is effective from
+1 January 2022 to 31 December 2024. 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 semi-annual basis. The management fee is determined by market-oriented pricing, and
+the maximum investment management fee paid annually is RMB30 million. Asset management fees charged to the Company by AMC HK are eliminated
+in the consolidated statement of comprehensive income.
+(iii)
+(iv)
+(v)
+(vi)
+On 31 January 2018, CLP&C and the Company signed a Framework Agreement for Mutual Insurance Sales Business Agency (the Company as the Agent),
+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 was effective for three years, from 8 March 2018 to 7 March 2021. On 20
+February 2021, CLP&C and the Company renewed the agreement, effective for two years, from 8 March 2021 to 7 March 2023. This agreement was
+automatically renewed for one year to 7 March 2024 upon the expiration of the term.
+On 11 July 2023, the Company and CGB signed 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 was effective from the signing date to 31 December 2025.
+On 27 December 2021, the Company and CGB renewed a Cooperation Agreement for Agency of Corporate Group Insurance Products. All 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 payable on a monthly basis. The agreement is effective for one year from 1 January
+2022, with an automatic one-year renewal, no more than twice, if no objections were raised by either party upon expiry. In 2023, both parties agreed
+that the agreement continued to be effective..
+On 29 December 2021, the Company and Pension Company renewed an Entrusted Agency Agreement for Pension Business Acted by China Life. The
+agreement is effective from 1 January 2022 to 31 December 2024. The business means that Pension Company entrusted the Company to cooperate in
+selling enterprise annuity funds, pension security business, occupational pension business and the third-pillar pension financial business. According to
+the agreement, the commissions for the cooperative service of enterprise annuity fund management, which is the core business of Pension Company,
+are calculated at 50% to 70% of the annual entrusting management fee revenues, depending on the duration of the agreement. The commissions for
+cooperative 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 cooperative investment management services, in accordance with the duration of
+the agreement, are calculated at 35% to 60% of the annual investment management fee (excluding risk reserves for investment). For pension security
+business, 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, decreasing 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 the daily management fee applied to the various individual pension management products in all of the
+management years; the cooperative commissions of occupation annuity and third-pillar pension financial business 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.
+On 31 December 2021, the Company and CLHI renewed an aged-care projects management service agreement, effective from 1 January 2022 to 31
+December 2022. In 2023, both parties agreed to automatically renew this agreement for one year as along as this would not go against Listing Rules
+and the regulations of the NFRA. In accordance with the agreement, the Company entrusted CLHI to operate and manage existed aged-care projects
+and paid CLHI a management service fee. The management service fee was calculated and payable on a quarterly basis, by multiplying the total amount
+of the investments under management (based on the daily weighted average investment amount) by the annual rate of 2%.
+258
+Annual Report 2023 Financial Report
+Annual Report 2023 | Financial Report 257
+Capital contribution to Pension Industry Fund
+(ii.e) On 1 January 2023, the Company and AMC renewed an Insurance Funds Entrusted Investment Management Agreement, effective from 1 January
+2023 to 31 December 2025. 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 daily accrued fixed service fee was
+calculated and payable on a quarterly basis, by multiplying the net value of the total investment assets on the day by the variety-based annual investment
+management fee rate divided by 360; the variable investment management service fee was calculated by multiplying 7.5% of the current year's fixed
+investment management service fee with the payment ratio determined based on the Company's annual assessment of AMC and is payable on an annual
+basis. Asset management fees charged to the Company by AMC were eliminated in the consolidated statement of comprehensive income.
+(ii.c) On 10 February 2021, CLP&C renewed an Insurance Funds Entrusted Investment Management Agreement with AMC, entrusting AMC to manage and
+make investments for its insurance funds, effective from 1 January 2021 to 31 December 2023. 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.
+31
+23
+46
+23
+46
+2 2 ww
+20,616
+15,686
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f) Transactions with significant related parties (continued)
+Notes:
+(i)
+On 31 December 2021, the Company and CLIC renewed an Insurance Agency Agreement, effective from 1 January 2022 to 31 December 2024. 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 is payable 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 RMB14.0 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.
+(ii.a) In December 2022, 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 2023 to 31 December 2025. In accordance with the agreement, CLIC paid AMC a basic service fee for
+the management of insurance funds. The fixed investment management service fee applicable to various investment products (mainly bonds, deposits,
+stocks, funds, public real estate investment trusts, financial products, unlisted equity, equity investment funds, derivatives, liquidity management and
+domestic securities lending) was between 0.02% and 0.3%. The service fee was calculated on a monthly basis and payable on a quarterly basis, by
+multiplying the average book value of the assets under management (net of the funds and interests of positive repurchase transactions, and of book
+balances of products issued by AMC, for which management fee has been paid) at the beginning and the end of any given month by the rate, divided by
+12. The rate applicable to assets issued by AMC, for which management fee has been paid, is subject to relevant legal documents on financial products,
+and no additional management fees shall be paid. 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. Upon expiration, the agreement is automatically one-year renewal, if no objections were
+raised by either party upon expiry. The agreement remains effective until 31 December 2023, with no disputes from both parties in 2023.
+(ii.d) On 30 June 2023, the Company and CLI renewed an Entrusted Investment Management and Operation Service Agreement of Alternative Investment
+of Insurance Funds, effective from 1 July 2023 to 31 December 2024. The agreement shall be automatically renewed for one year unless either party
+gives written notice to the other party not to renew it 90 business days prior to the expiration of this agreement. The company entrusts CLI with the
+investment and management of the company's entrusted assets and provides operational services for the equity/real estate funds that the company
+entrusts it to manage and operate. The Company paid CLI an asset management fee, product management fee, real estate operation management
+service fee, a performance related bonus and consignment operation fee based on the agreement. According to the agreement, the annual investment
+management service fee for the new project is 0.08% of the balance of funds paid in real time and not withdrawn, and the stock item is calculated
+according to the applicable agreement at the time of investment and the relevant rate of investment guidelines. The fee rate for product management
+does not exceed 0.6% per year. The fee for real estate operation and management services is 3% to 6% of the EBITDA of the related real estate
+project. Regarding performance bonuses, for existing non-fixed return projects, 15% of the amount exceeding the threshold (8% IRR) will be extracted;
+For amounts exceeding 10% IRR, an additional 20% will be extracted. The entrusted operation fee is 0.02% of the actual contributed capital balance
+of the entrusted operation projects. 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 2% to positive
+2% of the investment management fee in the current period.
+(ii.c)
+Capital increase in subsidiaries (Note 33(e))
+Rental received
+Asset management fee received from CLIC
+(ii.b)
+102
+108
+Transactions with associates and joint ventures
+CGB
+Interest received on deposits
+CL Overseas
+Dividends from CGB
+Rental fee from CGB
+Sino-Ocean
+Interest of corporate bonds received from Sino-Ocean
+Transaction between other associates and joint ventures
+and the Group
+Dividends from other associates and joint
+ventures (Note 10)
+Commission expenses charged by CGB
+96
+96
+14
+1,516
+99
+80
+जै४
+99
+75
+42
+43
+CLI
+Payment of asset management fee to CLI
+(ii.d)
+542
+637
+CLHI
+Payment of operation management service fee to CLHI
+(vi)
+74
+Transaction between EAP and the Group
+Contribution to EAP
+For the year ended 31 December
+2023
+Note
+Transactions between other subsidiaries and the Company
+Payment of an asset management fee
+For the year ended 31 December
+2023
+Note
+RMB million
+Payment of an asset management fee to AMC
+(ii.e)
+Payment of an asset management fee to AMC HK
+(ii.f)
+Payment of an asset management fee to Pension Company
+Dividends from subsidiaries
+Dividends from AMC
+Dividends from Pension Company
+Dividends from the other subsidiaries
+Agency fee received
+Agency fee from Pension Company
+(f) Transactions with significant related parties (continued)
+Rental received from Pension Company
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Notes to the Consolidated Financial Statements (continued)
+RMB million
+2022
+RMB million
+2,453
+742
+2,747
+774
+(iv)
+252
+218
+163
+173
+37
+7
+4,032
+4,463
+1,051
+1,355
+Annual Report 2023 | Financial Report 255
+For the year ended 31 December 2023
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 253
+Investment
+management
+Jiao Yin Guo Xin China Aluminium Co., Ltd. Supply-side Reform
+Collective Fund Trust Scheme
+99.99% directly
+RMB10,000 million
+Bai Rui Heng Yi No.817 Collective Fund Trust Scheme (Zhong Guo
+Guo Xin)
+90.00% directly and
+RMB10,000 million
+RMB10,000 million
+indirectly
+89.00% directly
+Investment
+management
+Investment
+management
+RMB10,000 million
+Investment
+management
+Chongqing Trust Fund • Guo Rong No.4 Collective Fund
+.
+Guang Da Hui Ying No. 8 Collective Fund
+98.40% directly
+Shan Guo Tou Jing Tou Corporate Trust Loan Collective Funds Trust
+Scheme
+•
+RMB21,799 million
+China Life-Yunnan Guoqi Reform And Development Equity
+Investment Plan |
+China Life- Hufa No.1 Equity
+CL Investment-China Eastern Airlines Group Equity
+100.00% directly
+RMB13,000 million
+Investment
+management
+Investment
+management
+99.15% directly
+RMB11,798 million
+Investment
+management
+100.00% directly
+RMB11,000 million
+Investment
+management
+China Life-China Hua Neng Debt-to-Equity Swap
+100.00% directly
+RMB10,000 million
+Investment
+management
+Jiao Yin Guo Xin Jing Tou Corporate Collective Funds
+Zhong Hang Trust Fund Tian Qi [2020] No.372 China Eastern
+85.00% directly
+RMB9,992 million
+management
+Annual Report 2023 | Financial Report 251
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(c) Other related parties
+Significant related parties
+China Life Real Estate Co., Limited ("CLRE")
+China Life Insurance (Overseas) Company Limited ("CL Overseas")
+China Life Investment Management Company Limited (Formerly known as
+"China Life Investment Holding Company Limited")("CLI")
+China Life Ecommerce Company Limited ("CL Ecommerce")
+China Life Healthcare Investment company limited ("CLHI")
+China Life Enterprise Annuity Fund ("EAP")
+China Life Property & Casualty Insurance Company Limited ("CLP&C")
+CGB
+Sino-Ocean Group
+Relationship with the Company
+Under common control of CLIC
+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
+An associate of the Company
+An associate of the Company
+An associate of the Company
+Investment
+72.78% directly
+RMB8,000 million
+Jiang Su Trust Xin Bao Sheng No.144 (Jing Tou)
+Investment
+management
+91.98% directly
+RMB9,970 million
+Investment
+management
+99.99% directly
+RMB9,000 million
+Airlines Equity Instrument Investment Collective Fund Trust
+Scheme
+Investment
+management
+Zhong Hang Trust Fund ⚫Tian Qi 21A No.155 China Eastern Airlines
+Perpetual Bonds Investment Collective Fund Trust Scheme
+Kun Lun Trust China Metallurgical No.1 Collective Fund
+99.38% directly
+RMB8,000 million
+Investment
+management
+86.25% directly
+RMB8,000 million
+Investment
+management
+84.00% directly
+Associated enterprises and joint ventures of the basic and important information related to see note 10.
+(d) Registered capital of related parties with control relationship and changes during the year
+CL Asset-Yuanliu No.3 Insurance Asset Management Product
+Investment
+Company Limited ("CL Jiayuan")(i)
+indirectly
+China Life (Tianjin) Pension & Retirement
+PRC
+Investment Company Limited ("Tianjin
+99.99%
+indirectly
+million
+RMB1,551
+Health
+consultation
+million
+management
+Pension Company")(i)
+China Life (Qingdao) Health Management Co.,
+PRC
+Ltd. ("CL Qingdao") (i)
+99.50%
+indirectly
+Investment
+RMB1,500
+99.99%
+PRC
+China Life Nianfeng Insurance Agency Co., Ltd.
+PRC
+90.81%
+("CL Nianfeng") (i)
+directly
+RMB544
+million
+Insurance
+China Life (Hangzhou) Hotel Co., Ltd. ("CL
+PRC
+99.99%
+RMB65
+agent
+Hotel
+Hangzhou")(i)
+indirectly
+million
+management
+China Life Jiayuan (Xiamen) Health Management
+RMB211
+Health
+million
+management
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2023 (continued):
+Notes:
+(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.
+(ii) The table below presents the basic information of the Company's major consolidated structured
+entities as at 31 December 2023:
+Percentage of shares
+Trust/investments
+Name
+CL Asset-Yuanliu No.1 Insurance Asset Management Product
+CL Asset-Yuanliu No.2 Insurance Asset Management Product
+held
+68.75% directly
+received
+RMB112,779 million
+Principal activities
+Investment
+management
+75.88% directly
+RMB23,648 million
+(b) Subsidiaries (continued)
+management
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Notes to the Consolidated Financial Statements (continued)
+China Life Qinhuangdao Health and Elderly Care
+PRC
+100.00%
+RMB33
+Elderly care
+Service Co., Ltd. ("CL Qinhuangdao") (i)
+Zhuhai Xinwan Real Estate Co., Ltd. ("Zhuhai
+Xinwan") (i)
+indirectly
+million
+PRC
+100.00%
+RMB6,800
+indirectly
+million
+services
+Real estate
+management
+250 Annual Report 2023 | Financial Report
+For the year ended 31 December 2023
+As at
+31 December
+As at
+31 December
+60.00% directly
+74.27% directly
+and indirectly
+50.00%
+indirectly
+million
+RMB1,680
+RMB2,746
+60.00% directly
+74.27% directly
+and indirectly
+-- HKD130
+50.00%
+indirectly
+HKD130
+RMB2,181 100.00% directly
+RMB1,095
+85.03%
+RMB1,095
+indirectly
+RMB200
+100.00%
+- RMB200
+indirectly
+RMB2,181 100.00% directly
+RMB2,746
+RMB1,680
+holding
+68.37%
+Subsidiaries
+As at 31 December 2022
+Percentage of
+holding
+AMC
+Pension Company
+China Life Franklin Asset
+Management Company
+Limited
+Suzhou Pension Company
+CL AMP
+CL Wealth
+Golden Phoenix Tree Limited
+King Phoenix Tree Limited
+As at 31 December 2023
+Percentage of
+Amount
+million
+Increase
+million
+Decrease
+million
+Amount
+85.03%
+indirectly
+100.00%
+indirectly
+RMB2,359 100.00% directly
+RMB2,435 100.00% directly
+USD1,125
+100.00%
+indirectly
+RMB1,530 100.00% directly
+RMB100
+100.00%
+indirectly
+RMB2,835 89.9
+RMB2,835 89.997% directly
+RMB1,530 100.00% directly
+RMB100
+100.00%
+indirectly
+RMB2,835 89.997% directly
+100.00%
+indirectly
+100.00%
+indirectly
+---
+100.00%
+indirectly
+100.00%
+indirectly
+100.00%
+indirectly
+RMB19,324
+RMB2,435 100.00% directly
+USD1,125
+RMB3,101 100.00% directly
+RMB264
+RMB264 100.00% directly
+100.00%
+indirectly
+100.00%
+indirectly
+Rui Chong Company
+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
+Franklin Shenzhen Company
+Guo Yang Guo Sheng
+New Capital Wisdom Limited
+New Fortune Wisdom Limited
+RMB6,100 100.00% directly
+RMB1,167 100.00% directly
+100.00% directly
+RMB6,100 100.00% directly
+RMB1,167 100.00% directly
+100.00% directly
+RMB285 100.00% directly
+RMB285 100.00% directly
+RMB3,101 100.00% directly
+RMB2,359 100.00% directly
+68.37%
+RMB19,324
+million
+RMB1,288
+RMB1,288
+CL Wealth
+RMB200
+RMB200
+Rui Chong Company
+RMB6,100
+RMB6,100
+CL Health
+RMB1,530
+Franklin Shenzhen Company
+RMB100
+Shengyi Jingsheng Company
+RMB831
+Hope Building
+RMB484
+CL Nianfeng
+CL AMP
+RMB544
+RMB3,236
+RMB2,181
+Name of related party
+2022
+million
+Increase
+million
+Decrease
+2023
+million
+million
+CLIC
+RMB4,600
+RMB4,600
+AMC
+RMB4,000
+RMB4,000
+Pension Company
+RMB3,400
+RMB3,400
+Suzhou Pension Company
+RMB1,055
+Investment
+CL Hangzhou
+CL Jiayuan
+252 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e) Percentages of holding of related parties with control relationship and changes during the year
+Shareholder
+As at 31 December 2022
+CLIC
+Amount
+Percentage of
+holding
+Increase
+Decrease
+Amount
+As at 31 December 2023
+Percentage of
+holding
+million
+million
+million
+RMB6,800
+RMB65
+RMB211
+RMB33
+RMB700
+RMB1500
+RMB1,530
+RMB100
+RMB831
+RMB484
+RMB544
+RMB65
+RMB1,500
+Tianjin Pension Company
+CL Qingdao
+CL Qinhuangdao
+Zhuhai Xinwan
+RMB1,551
+RMB211
+RMB33
+RMB6,800
+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.
+RMB851
+Transactions with CLIC and its subsidiaries
+comprehensive contracts and
+Unrealised
+insurance
+45,511
+for-sale
+securities (i)
+under the equity
+method
+to profit or
+loss
+Statutory
+reserve fund
+Discretionary
+reserve fund
+General
+foreign
+under the equity
+to profit or
+reserve
+operations
+method
+loss
+Total
+RMB million RMB million
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) 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 balances 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.
+As at
+As at
+31 December
+reserves
+Other
+Share
+premium
+reclassifiable
+266 Annual Report 2023 | Financial Report
+(i)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Reserves
+Other
+Financial
+changes in
+insurance
+Financial
+Unrealised
+gains/(losses)
+comprehensive contracts and
+income reinsurance
+Other
+comprehensive
+31 December
+changes in
+reclassifiable
+contracts
+Exchange
+differences
+income non-
+contracts
+reclassifiable
+non-
+from available-
+to profit or loss
+reclassifiable
+on translating
+to profit or loss
+changes in
+2023
+2022
+RMB million
+8,027
+Amount due to CGB
+(74)
+(66)
+Corporate bonds of Sino-Ocean
+234
+648
+Amount due from CL Ecommerce
+3
+4
+Amount due to CL Ecommerce
+(18)
+8,059
+(29)
+Amount due from CL Hotel Investors, L. P.
+6,241
+6,137
+Amount due from Pension Company
+36
+43
+Amount due from Rui Chong Company
+Amount due to AMC
+Amount due to Pension Company
+Amount due to AMC HK
+10
+274
+Amounts due from and to subsidiaries of the Company
+The Company has elected to account for its investments in associates and joint ventures in separate financial statements under
+the equity method starting from 1 January 2023 in accordance with IAS 27 Separate Financial Statement with retrospective
+adjustment. This retrospection resulted in an increase in investments in associates and joint ventures of RMB52,352 million,
+an increase in retained earnings of RMB49,488 million and an increase in reserves of RMB2,961 million as at 1 January
+2022. Also it resulted in an increase in investments in associates and joint ventures of RMB45,476 million, an increase in
+retained earnings of RMB49,207 million and a decrease in reserves of RMB1,090 million as at 31 December 2022.
+Wealth management products and other securities of CGB
+43,707
+RMB million
+Amounts due from and to related parties of the Group
+Amount due from CLIC
+Amount due from CL Overseas
+549
+539
+109
+118
+Amount due from CLP&C
+335
+293
+Amount due to CLP&C
+Amount due from CLI
+57,904
+Amount due to CLI
+(68)
+(53)
+5
+5
+(483)
+(528)
+4
+4
+Amount due to CLHI
+(30)
+(61)
+Amount deposited with CGB
+Amount due from CLRE
+(1,771)
+4,551,587
+5,665,649
+28,098
+Deferred tax assets
+23,020
+45,939
+24,059
+Financial assets purchased under agreements to resell
+13,155
+35,816
+3,463
+Accrued investment income
+70
+47,159
+47,159
+Cash and cash equivalents
+135,645
+119,036
+53,593
+Total assets
+5,665,649
+4,903,878
+4,551,587
+Annual Report 2023 | Financial Report 265
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Statement of financial position (continued)
+22,778
+29,627
+Other assets
+19,327
+117,711
+N/A
+N/A
+Financial assets at fair value through profit or loss
+1,462,090
+N/A
+N/A
+Held-to-maturity securities
+N/A
+1,571,892
+1,531,640
+Loans
+LIABILITIES AND EQUITY
+N/A
+410,789
+Available-for-sale securities
+N/A
+1,644,704
+1,370,035
+Securities at fair value through profit or loss
+N/A
+93,657
+120,191
+Reinsurance contract assets
+25,846
+24,096
+324,557
+As at
+As at
+As at
+203,605
+140,591
+232,496
+Total liabilities
+5,183,796
+4,532,209
+4,165,173
+Equity
+Share capital
+28,265
+28,265
+28,265
+agreements to repurchase
+Reserves (Note 39(b))
+Total equity
+Total liabilities and equity
+147,745
+95,578
+152,959
+RMB million RMB million RMB million
+305,843
+247,826
+205,190
+481,853
+371,669
+386,414
+Retained earnings
+4,903,878
+Financial assets sold under
+49,654
+31 December
+2023
+31 December
+2022
+1 January
+2022
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+RMB million
+(Restated, Note
+2.1.1.b)
+Liabilities
+Insurance contract liabilities
+Reinsurance contract liabilities
+4,859,175
+4,266,947
+47,546
+3,809,716
+160
+154
+Bonds payable
+36,166
+34,997
+34,994
+Other liabilities
+35,784
+39,860
+40,267
+Premiums received in advance
+48,878
+188
+other comprehensive income
+(782)
+(123)
+fair value
+contracts
+income non-
+insurance
+Financial
+changes in
+Other
+comprehensive
+Exchange
+differences
+income reinsurance
+assets at
+and
+comprehensive
+Financial
+contracts
+Other
+insurance
+changes in
+Financial
+Impact of initial application
+(Restated, Note
+2.1.1.b)
+As at 31 December 2022
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Reserves (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+95,578
+Annual Report 2023 | Financial Report 267
+reclassifiable contracts
+on
+reclassifiable
+non-
+53,360
+RMB million RMB million RMB million
+RMB million RMB million RMB million
+RMB million RMB million RMB million
+RMB million
+RMB million RMB million
+Total
+loss
+method
+under the equity to profit or
+foreign
+operations
+reserve
+(1,615)
+reserve fund
+General
+Discretionary
+reserve
+under the equity to profit or
+method loss
+Other comprehensive
+income
+reserves
+Share
+premium
+to profit or loss reclassifiable
+translating
+Statutory
+to profit or loss reclassifiable
+through other
+fund
+Under IFRS 17 Insurance Contracts, changes in the fair value of available-for-sale securities attributable to policyholders are no longer measured and
+accounted for separately and are measured and accounted for within contract liabilities.
+(646)
+664g6
+67,201
+1,580
+53,360
+Other comprehensive
+Appropriation to reserves
+income
+Other comprehensive
+(Restated, Note
+2.1.1.b)
+As at 1 January 2022
+(93,078)
+(112,671)
+(4) (112,671)
+(4)
+2.1.1.b)
+of IFRS 17 (Note
+Impact of initial application
+246,037
+47,409
+RMB million
+50,573
+47,604
+1,580
+53,360
+As at 31 December 2021
+(Restated, Note
+39(a))
+RMB million RMB million RMB million
+19,597
+934
+50,573
+47,409
+99
+(56)
+51,341
+50,607
+(107,159) 54,505
+(1,817)
+(4,578)
+934
+53,360
+(646)
+2.1.1.b)
+(Restated, Note
+45,511
+As at 31 December 2022
+earnings
+income to retained
+12,960
+3,932
+5,096
+3,932
+(69,639)
+(1,559)
+5,512
+(1,813)
+(71,779)
+152,959
+Others
+(73)
+(4,578)
+(107,159) 54,505
+Total
+Overseas listed (ii)
+(i)
+All shares owned by CLIC are domestic listed shares.
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited.
+260 Annual Report 2023 | Financial Report
+28,265 28,264,705,000
+As at 31 December 2023
+28,265
+No. of shares
+RMB million
+19,323,530,000
+19,324
+8,941,175,000
+8,941
+1,500,000,000
+1,500
+7,441,175,000
+7,441
+28,264,705,000
+28,265
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+35 RESERVES
+(i)
+Including: Domestic listed
+Owned by other equity holders
+Owned by CLIC (i)
+As at 31 December 2023, the Company's share capital is as follows:
+(5)
+(7)
+(h) Key management personnel compensation
+Salaries and other benefits
+For the year ended 31 December
+2023
+2022
+RMB million
+RMB million
+18
+37
+The total compensation package for the Company's key management personnel has not yet been finalised in accordance
+with regulations of the relevant PRC authorities. The compensation listed above is the tentative payment.
+Financial
+changes in
+Annual Report 2023 | Financial Report 259
+For the year ended 31 December 2023
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(i) Transactions with state-owned enterprises
+Under IAS 24 Related Party Disclosures, 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 are 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 party transactions and has applied IAS 24 exemption and
+disclosed only qualitative information.
+As at 31 December 2023, 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 2023,
+a large portion of group insurance business of the Group were 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 state-owned reinsurance companies.
+34 SHARE CAPITAL
+As at 31 December 2023
+No. of shares
+RMB million
+As at 31 December 2022
+No. of shares
+RMB million
+Registered, authorised, issued and fully paid
+Ordinary shares of RMB1 each
+28,264,705,000
+Notes to the Consolidated Financial Statements (continued)
+Financial
+Other insurance
+Other
+17753
+1,753
+406 (98,034)
+76,279
+Others
+earnings
+income to retained
+Other comprehensive
+Appropriation to reserves
+income
+Other comprehensive
+51,341
+3,932
+50,607
+116,736
+934
+53,360
+As at 1 January 2023
+28 (55,453)
+121,314
+2.1.1.a)
+of IFRS 9 (Note
+95,578
+(1,615)
+51,341
+50,607
+(1,789) (162,612) 54,505
+(1,817)
+1,753
+65,889
+268 Annual Report 2023 | Financial Report
+(420) 147,745
+(1,012)
+13
+53,094
+54,539
+56,258
+(1,383) (260,646)
+192,944
+64
+2
+64
+998
+753
+53,360
+(96)
+67
+62
+(92)
+7,438
+(21,128)
+(487)
+695
+31
+13
+161,467
+(1,615)
+As at 31 December 2023
+Investment in equity instruments at fair value through
+RMB million RMB million RMB million
+N/A
+380
+(94)
+67
+51
+380
+Others
+(92)
+retained earnings
+Other comprehensive income to
+7,604
+.
+1,919
+3,932
+1,753
+Appropriation to reserves
+(487) (21,741)
+660
+325
+(51) (97,261)
+75,073
+Other comprehensive income
+159,784
+(1,587)
+(275)
+52,429
+As at 31 December 2023
+53,905
+28
+188,476
+assets
+sold under
+Interest-
+bearing loans
+liabilities-
+to the
+Financial
+Other
+payable
+Other
+liabilities-
+36 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+Changes in liabilities arising from financing activities
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+262 Annual Report 2023 | Financial Report
+50,607
+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.
+(b) Approved at the Annual General Meeting in 28 June 2023, the Company appropriated RMB3,932 million to the discretionary reserve fund for the year
+ended 31 December 2022 based on net profit under CAS (2022: RMB5,096 million).
+(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 RMB1,753million for the year ended 31 December 2023 (2022: RMB3,932 million).
+145,933
+351,424
+(420)
+(1,019)
+50
+54,348
+54,539
+56,306
+(259,873)
+(407)
+(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 2023, the Company appropriated 10% of net profit under CAS which amounted to RMB1,753 million to the general reserve
+for future uncertain catastrophes, which cannot be used for dividend distribution or conversion to share capital increment (2022: RMB3,932 million).
+In addition, pursuant to the CAS, the Group appropriated RMB166 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2022: RMB177 million).
+54,553
+(162,612)
+(356)
+Total
+loss
+operations equity method
+reserve
+reserve fund
+fund
+loss
+equity method
+income
+reserves
+to profit or
+foreign loss under the
+RMB million RMB million
+General
+to profit or
+loss under the
+Other comprehensive
+Share
+premium
+to profit or reclassifiable
+translating
+Statutory
+to profit or reclassifiable
+through other
+non-
+reclassifiable
+on
+Discretionary
+third-party
+RMB million
+RMB million RMB million
+113,472
+(352)
+53,905
+As at 1 January 2023
+60,751
+28 (55,453)
+116,176
+IFRS 9 (Note 2.1.1.a)
+Impact of initial application of
+99,033
+(1,587)
+(275)
+RMB million RMB million RMB million
+52,429
+54,553
+(107,159)
+(384)
+(2,704)
+(352)
+53,905
+(Restated, Note 2.1.1.b)
+As at 31 December 2022
+(c)
+(b)
+(a)
+RMB million RMB million RMB million RMB million
+50,607
+reclassifiable contracts
+interest
+payable
+(1,149)
+(1,500)
+(1,073)
+Changes from financing cash flows
+273,474
+73,934
+149,022
+1,569
+36,167
+12,782
+At 1 January 2023
+1,259
+(72)
+89
+64
+1,170
+8
+IFRS 9
+Impact of initial application of
+272,215
+72
+73,845
+148,958
+1,569
+34,997
+64,330
+10,361
+70,969
+Foreign exchange movement
+N/A
+84,295
+216,851
+1,255
+36,166
+12,857
+At 31 December 2023
+592
+621
+(29)
+Others
+5,104
+12,774
+2,882
+1,499
+669
+Interest expense
+(4)
+810
+810
+New leases
+(4)
+entities
+of consolidated structured
+Changes arising from losing control
+479
+479
+54
+At 31 December 2022
+272,215
+72
+364,065
+359
+67,862
+239,446
+2,182
+34,994
+19,222
+At 1 January 2022
+RMB million
+RMB million
+RMB million
+RMB million
+Changes from financing cash flows
+RMB million
+RMB million
+Total
+activities
+entities
+repurchase
+financing
+related to
+to structured
+agreements consolidated
+Lease
+liabilities
+Bonds
+payable
+and other
+borrowings
+RMB million
+holders of
+(7,587)
+(90,711)
+73,845
+148,958
+1,569
+34,997
+12,774
+At 31 December 2022
+26
+223
+(197)
+Others
+4,863
+4,786
+(1,307)
+74
+Interest expense
+817
+817
+New leases
+of consolidated structured
+entities
+Changes arising from losing control
+1,139
+1,139
+Foreign exchange movement
+(98,695)
+(5,073)
+5,983
+3
+fair value
+reserve
+income non-
+(b) Operating lease commitments
+As at
+As at
+31 December
+31 December
+2023
+2022
+RMB million
+RMB million
+86,590
+1,466
+91,727
+1,408
+88,056
+93,135
+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
+264 Annual Report 2023 | Financial Report
+As at
+As at
+31 December
+31 December
+2023
+Total
+Property, plant and equipment
+Investments
+Contracted, but not provided for
+contracts
+income non-
+Exchange
+income reinsurance
+gains/
+insurance
+comprehensive
+Annual Report 2023 | Financial Report 263
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+37 PROVISIONS AND CONTINGENT LIABILITIES
+The following is a summary of the significant contingent liabilities:
+contracts
+2022
+As at
+31 December
+2023
+2022
+RMB million
+RMB million
+583
+531
+Pending lawsuits
+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 analyses all pending lawsuits on a case by case basis 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 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 2023 and 31 December
+2022, 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.
+38 COMMITMENTS
+(a) Capital commitments
+The Group had the following capital commitments relating to property development projects and investments:
+31 December
+RMB million
+914
+1,413
+RMB million
+Investment properties
+6,063
+6,266
+6,191
+Investments in subsidiaries
+315,929
+246,115
+170,387
+Investments in associates and joint ventures
+Term deposits
+Statutory deposits - restricted
+217,717
+222,069
+2,239
+216,315
+442,690
+491,332
+5,801
+5,653
+5,653
+Investment in debt instruments at amortised cost
+32,206
+N/A
+N/A
+Investment in debt instruments at fair value through
+other comprehensive income
+2,908,332
+322,298
+(losses) from
+1,595
+51,116
+893
+1,478
+198
+160
+2,525
+2,531
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+(a) Statement of financial position
+As at
+31 December
+1,364
+2023
+As at
+1 January
+2022
+RMB million
+RMB million
+(Restated, Note
+2.1.1.b)
+RMB million
+(Restated, Note
+2.1.1.b)
+ASSETS
+Property, plant and equipment
+Right-of-use assets
+48,775
+49,856
+As at
+31 December
+2022
+reclassifiable
+As at
+differences
+(Restated Note 2.1.1.b)
+As at 31 December 2022
+(1,450)
+(1,450)
+Others
+(74)
+(74)
+retained earnings
+Other comprehensive income to
+13,137
+4,109
+5,096
+contracts
+Appropriation to reserves
+(69,257)
+(1,636)
+1,102
+5,512
+(3,015)
+(71,220)
+Other comprehensive income
+156,677
+123
+(1,377)
+48,320
+53,905
+(352)
+(2,704)
+(384)
+differences
+income reinsurance
+assets at
+insurance
+Exchange comprehensive
+and
+Financial comprehensive
+changes in
+Other
+contracts
+Other
+Financial
+45,511
+insurance
+Financial
+35 RESERVES (continued)
+For the year ended 31 December 2023
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2023 | Financial Report 261
+Under IFRS 17 Insurance Contracts, changes in the fair value of available-for-sale securities attributable to policyholders are no longer measured and
+accounted for separately and are measured and accounted for within insurance contract liabilities.
+99,033
+(1,587)
+(275)
+50,607 52,429
+54,553
+(107,159)
+changes in
+50,621
+3,932
+2,631
+loss
+equity method
+operations
+reserve
+reserve fund
+reserve fund
+to profit or
+loss under the
+foreign
+General
+Discretionary
+Statutory
+Total
+(112,671)
+under the equity
+for-sale
+securities (i)
+Other
+reserves
+Share
+premium
+reclassifiable
+to profit or
+on translating
+reclassifiable
+to profit or loss
+available-
+non-
+reclassifiable
+method
+RMB million RMB million RMB million
+to profit or
+loss
+RMB million RMB million
+RMB million RMB million RMB million
+68,516
+1,098
+53,905
+(Restated, Note 2.1.1.b)
+As at 1 January 2022
+(93,078)
+249,755
+(4)
+19,597
+IFRS 17 (Note 2.1.1.b)
+Impact of initial application of
+123
+(112,671)
+RMB million
+(1,377)
+RMB million RMB million RMB million
+(a)
+(c)
+53,905
+1,098
+As at 31 December 2021
+2,635
+50,621
+45,511
+48,320
+48,919
+272 Annual Report 2023 | Financial Report
+||32 I
+There was no arrangement under which a director, chief executive or supervisor waived or agreed to waive any remuneration
+during the year.
+The emoluments of the five highest paid individuals are the total emoluments paid to them during the year.
+For the year ended 31 December 2023, 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
+(2022: nil).
+2
+Number of individuals
+IIIGI
+2022
+2023
+For the year ended 31 December
+In case of any discrepancy between the Chinese version and the English version of this report,
+the Chinese version shall prevail; in case of any discrepancy between the printed version and
+the website version of this report, the website version shall prevail.
+5
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+FSC™ C008061
+Telephone
+Website
+E-mail
+16 Financial Street, Xicheng District, Beijing, P. R. China
+TM
+: 86-10-63633333
+: www.e-chinalife.com
+ir@e-chinalife.com
+MIX
+Paper | Supporting
+responsible forestry
+FSC
+www.fsc.org
+14,121.4
+Office Address :
+8,008.0
+50.0
+1,136.0
+621.8
+485.4
+62.4
+87.8
+635.6
+452.3
+62.4
+100.1
+614.8
+1,021.9
+125.5
+218.0
+1,365.4
+(i) Ye Yinglan was appointed as employee representative supervisor in June 2023.
+(ii) Hu Zhijun and Wang Xiaoqing resigned as employee representative supervisor in June 2023
+(iii) Niu Kailong did not receive remuneration from the Company.
+(iv) The above remuneration was calculated based on the relevant employment period during the reporting period.
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2022 are as
+follows:
+Performance
+Name
+Basic salaries related bonuses
+Subtotal of
+salary income
+Deferred
+payment
+included in
+salary income Benefits in kind
+Pension scheme
+contributions
+91.4
+Deferred
+payment
+65.3
+1,645.0
+The compensation amounts disclosed above for these directors and the chief executive for the year ended 31 December
+2022 were restated based on the finalised amounts determined during 2023.
+The directors and chief executive received the compensation amounts disclosed above during their term of office in 2023
+and 2022.
+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.
+270 Annual Report 2023 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+40 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 2023 are as
+follows:
+Name
+Cao Weiqing
+Ye Yinglan (i)
+Hu Zhijun (ii)
+Wang Xiaoqing (ii)
+Lai Jun
+Niu Kailong (iii)
+Remuneration
+Benefits in
+paid
+kind
+Pension
+scheme
+contributions
+Total
+RMB thousand
+1,267.9
+151.9
+225.2
+465.1
+Actual paid
+Total included in total included in total
+RMB thousand
+Hu Zhijun (ii)
+306.7
+381.2
+687.9
+152.5
+52.9
+77.4
+818.2
+152.5
+665.7
+Wang Xiaoqing
+695.3
+1,176.8
+1,872.1
+470.7
+117.7
+209.0
+2,198.8
+470.7
+1,728.1
+Lai Jun
+768.8
+1,370.0
+2,138.8
+548.0
+1,054.5
+274.1
+1,328.6
+115.8
+Jia Yuzeng (i)
+1,148.6
+584.7
+1,733.3
+350.8
+113.5
+237.6
+2,084.4
+350.8
+1,733.6
+Cao Weiging (i)
+104.4
+(vii) The above remuneration was calculated based on the relevant employment period during the reporting period, and there is no performance remuneration
+recovery and deduction in 2022.
+83.5
+50.1
+1,301.2
+23.4
+225.8
+50.1
+175.7
+Cao Qingyang (ii)
+461.2
+685.2
+1,146.4
+274.1
+66.4
+187.9
+(vi) Tang Xin resigned as independent director in March 2022 and continued to perform as independent director until July 2022. Leung Oi-Sie Elsie resigned
+as independent director in July 2022. Huang Yiping and Chen Jie were appointed as independent directors of the Company in July 2022.
+(v) Wang Junhui is a non-executive director and does not receive any remuneration from the Company.
+(iv) Huang Xiumei resigned as executive director in November 2022 and did not receive any remuneration from the Company from October 2022.
+(v) Zhuo Meijuan was appointed as non-executive director in June 2023 and did not receive any remuneration from the Company.
+(vi) The above remuneration was calculated based on the relevant employment period during the reporting period.
+420.0
+420.0
+420.0
+420.0
+Annual Report 2023 | Financial Report 269
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+40 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 2022 are as follows:
+Performance
+Name
+Basic salaries related bonuses
+Subtotal of
+salary income
+Deferred
+payment
+included in
+salary income Benefits in kind
+Pension scheme
+contributions
+Deferred
+payment
+Total included in total
+Actual paid
+included in total
+RMB thousand
+Bai Tao (i)
+Zhao Peng (ii)
+Su Hengxuan (iii)
+Li Mingguang
+(iv) Wang Junhui is a non-executive director and does not receive any remuneration from the Company.
+(iii) Li Mingguang did not receive remuneration from the Company from May 2023.
+Bai Tao was appointed as the chairman and executive director in May 2022 and did not receive remuneration from the Company.
+(ii) Zhao Peng did not receive remuneration from the Company, and resigned as executive director in August 2023.
+(i)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+40 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 2023 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 2023
+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 2023 are as follows:
+Name
+Bai Tao (i)
+Zhao Peng (ii)
+Li Mingguang (iii)
+Wang Junhui (iv)
+Zhuo Meijuan (v)
+Lam Chi Kuen
+Zhai Haitao
+Huang Yiping
+Chen Jie
+1,432.0
+Pension
+Benefits in
+paid
+kind
+scheme
+contributions
+Total
+RMB thousand
+417.7 50.3 84.2 552
+552.2
+420.0
+420.0
+420.0
+420.0
+Remuneration
+117.3
+1,145.6
+687.4
+175.0
+70.0
+245.0
+Huang Yiping (vi)
+125.0
+50.0
+175.0
+Chen Jie (vi)
+125.0
+175.0
+420.0
+420.0
+420.0
+420.0
+245.0
+245.0
+245.0
+245.0
+175.0
+175.0
+175.0
+175.0
+(i)
+Bai Tao was appointed as the chairman and executive director in May 2022 and did not receive remuneration from the Company.
+(ii) Zhao Peng was appointed as executive director in October 2022 and did not receive any remuneration from the Company.
+(iii) Su Hengxuan and other non-executive directors did not receive remuneration from the Company. Su Hengxuan resigned as executive director in August
+2022 and Yuan Changqing resigned as non-executive director in June 2022.
+Leung Oi-Sie Elsie (vi)
+245.0
+70.0
+175.0
+144.3
+288.2
+3,010.1
+687.4
+2,322.7
+Huang Xiumei (iv)
+939.8
+728.3
+1,668.1
+437.0
+108.6
+194.2
+2,577.6
+1,970.9
+1,533.9
+Yuan Changqing (i)
+Wang Junhui (v)
+Lam Chi Kuen
+300.0
+120.0
+420.0
+Zhai Haitao
+300.0
+120.0
+420.0
+Tang Xin (vi)
+437.0
+210.6
+14.5
+271
+6,872.0
+RMB thousand
+RMB thousand
+2022
+2023
+For the year ended 31 December
+RMB4,000,001 - RMB4,500,000
+RMB1,000,001 - RMB2,000,000
+RMB2,000,001 - RMB3,000,000
+RMB3,000,001 - RMB4,000,000
+RMBO - RMB1,000,000
+The emoluments fell within the following bands:
+Total
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+Details of the remuneration of the five highest paid individuals are as follows:
+For the year ended 31 December 2023, the five individuals whose emoluments were the highest in the Company include
+one supervisor (2022: one director and one supervisor).
+548.0
+1,918.7
+Niu Kailong (iii)
+(i) Cao Weiqing was appointed as Chairman of the Board of Supervisors in November 2022. Jia Yuzeng resigned as the Chairman of the Supervisory Board.
+(ii) Hu Zhijun was appointed as employee representative supervisor in July 2022, while Cao Qingyang resigned as employee representative supervisor.
+(iii) Niu Kailong did not receive remuneration from the Company.
+(iv) The above remuneration was calculated based on the relevant employment period during the reporting period, and there is no performance remuneration
+recovery and deduction in 2022.
+Annual Report 2023 Financial Report
+(c) Five highest paid individuals
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2023
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+(b) Supervisors' emoluments (continued)
+12,820.2
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2022 were restated
+based on the finalised amounts determined during 2023.
+The supervisors received the compensation amounts disclosed above during their term of office in 2023 and 2022.
+2,466.7
+The Company's cash inflows mainly come from insurance
+premiums received, interest, dividend 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.
+(120,095)
+60,273
+Net cash inflow/(outflow) from
+168.0%
+(158,271)
+(424,236)
+Net cash inflow/(outflow) from
+investing activities
+11.3%
+345,284
+384,366
+Net cash inflow/(outflow) from
+operating activities
+Change
+2022
+2023
+RMB million
+For the year ended 31 December
+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.
+Consolidated Cash Flows
+24 Annual Report 2023 | Management Discussion and Analysis
+The Company believes that its sources of liquidity are
+sufficient to meet its current cash requirements.
+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 the Company's insurance activities
+primarily relate to benefit payments under these insurance
+products, as well as payments for policy surrenders,
+withdrawals and policy loans.
+Liquidity Uses
+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 which it invests. 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 its ability to sell these investments or sell
+them at a fair price.
+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 RMB148,061 million. In addition, the vast
+majority of its 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 RMB413,255 million.
+Analysis of Cash Flows
+Liquidity Sources
+As at the end of the Reporting Period, the insurance contract liabilities of the Company were RMB4,859,175 million, an
+increase of 13.9% from the end of 2022, primarily due to the accumulation of insurance liabilities from new policies and
+renewals.
+414
+-1.8%
+ANALYSIS OF SPECIFIC ITEMS
+23
+Annual Report 2023 | Management Discussion and Analysis
+During the Reporting Period, there was no material equity
+investment or non-equity investment of the Company that
+was subject to disclosure requirements.
+Major Investments
+The Company insisted on a prudent investment philosophy.
+Based on a disciplined and scientific internal rating system
+and a multi-dimensional management mechanism of risk
+limits, the Company prudently scrutinised credit profiles of
+targets and risk exposure concentration before investing and
+carried out ongoing tracking after investment, effectively
+controlling credit risks through early identification, early
+warning, and early disposal. No credit default event in relation
+to domestic credit assets occurred for the Company in 2023.
+The Company's credit asset investments mainly included
+credit bonds and debt-type financial products, which
+concentrated on sectors such as banking, transportation,
+non-banking finance, public utilities, and energy. As at the
+end of the Reporting Period, over 98% of the credit bonds
+held by the Company were rated AAA by external rating
+institutions, whereas over 99% of the debt-type financial
+products were rated AAA by external rating institutions. In
+general, the asset quality of the Company's credit investment
+products was in good condition, and the credit risks were
+well controlled.
+Credit Risk Management
+Insurance Contract Liabilities
+In 2023, the Company's net investment income was
+RMB185,866 million, and the net investment yield was
+3.70%; the gross investment income of the Company was
+RMB123,082 million, and the gross investment yield was
+2.43%.
+2.
+1.
+Notes:
+3.90%
+2.43%
+3.96%
+21,360
+N/A
+For the year 2022, the data of investment businesses related to IFRS 17 - Insurance Contracts has been restated and presented, while the data of
+investment businesses related to IFRS 9 - Financial Instruments has not been restated and presented. Therefore, relevant data is not comparable.
+In the calculation of the investment yield of the year 2023, the average investment assets as the denominator exclude the fair value changes of investment
+in debt instruments at fair value through other comprehensive income, so as to reflect the strategic intention of the Company for the management of
+assets and liabilities. The formula used for calculating the investment yield of the year 2022 is the same as that of previous years.
+Insurance contract liabilities of long-term insurance business
+Insurance contract liabilities of short-term insurance business
+Total of insurance contract liabilities
+Including: Contractual service margin
+783,473
+769,137
+13.9%
+4,266,947
+4,859,175
+-5.9%
+35,872
+33,770
+14.0%
+4,231,075
+4,825,405
+Change
+2022
+2023
+RMB million
+31 December
+As at
+31 December
+As at
+N/A
+Gross investment yield²
+financing activities
+Foreign exchange gains/(losses) on
+Details of structured entities controlled by the Company
+are set out in Note 33(b) in the Notes to the Consolidated
+Financial Statements in this annual report.
+Structured Entities Controlled by the Company
+Annual Report 2023 | Management Discussion and Analysis
+26
+CLP&C has not adopted IFRS 9 - Financial Instruments and IFRS 17 - Insurance Contracts. Therefore, the financial data presented in this table is calculated
+in accordance with IFRS 39 - Financial Instruments and IFRS 4 - Insurance Contracts.
+For details, please refer to Note 10 and Note 33(b) in the Notes to the Consolidated Financial Statements in this annual report.
+2.
+1.
+Notes:
+43.686% 3,509,522 276,985 16,019
+21,790
+40% 145,623 33,823 1,393
+27,800
+3.53% is held
+by AMC
+795
+18,015 7,140
+70.74% is
+held by the
+Company, and
+3,400
+18,083 2,876
+21,436
+60%
+TECHNOLOGY CAPABILITIES,
+OPERATIONS AND SERVICES
+Technology Capabilities
+In 2023, following the technological development trend and
+responding to the requirements of high-quality development,
+the Company fully launched the FinTech and Digitalisation
+Program to optimise technological capabilities, strengthen
+technology empowerment and deepen technological
+innovation, with the aim to promote the Company's high-
+quality development with high-quality supply of technological
+capabilities.
+Iterative upgrading of technological capabilities. Grasping
+the trend of technology, the Company developed its digital
+infrastructure with China Life characteristics. It created a
+distributed cloud-based multi-active data center, effectively
+ensuring the continuity of its business. With the buildup
+of the China Life multi-cloud ecosystem, the delivery of
+computing and resources storage was achieved within
+minutes. The cloud-native transformation of key products
+was realised by utilising cloud-native concepts to innovate
+its application architecture.
+28 Annual Report 2023 | Management Discussion and Analysis
+The Company anticipates that it will have sufficient capital to
+meet its insurance business expenditures and new general
+investment needs in 2024. At the same time, the Company
+will make corresponding financing arrangements based
+on capital market conditions if it plans to implement any
+business development strategies in the future.
+China's macro economy still faces difficulties in the short
+term, including insufficient effective demands, overcapacity
+in certain industries, weak social expectations and increasing
+uncertainties in the external environment, and there will
+still be some uncertainties in the development of the life
+insurance industry. Currently, long-end interest rates remain
+at historically low levels, the insufficient supply of quality
+assets is likely to continue and the equity market may
+continue to be volatile, all of which will create significant
+asset-liability matching pressures for the Company. The
+transformation and upgrading of the sales force may witness
+certain challenges, and the buildup of a "product + services'
+model remains at the stage for further exploration. The full
+release of the reform dividend will take time.
+Potential Risks
+In 2024, the Company will pursue the customer-centric
+approach, adhere to the guideline of seeking progress while
+maintaining stability, promote stability through progress,
+and establish new growth drivers before abolishing the
+old ones. Specifically speaking, the Company will uphold
+the "three consistencies" (strengthening Party building,
+promoting reforms and guarding against risks), realise
+the "three enhancements" (stabilising business growth,
+increasing business value and emphasising on sales force),
+and spend extra efforts on the "three breakthroughs"
+(optimising services, facilitating integration and cutting
+costs). As a result, the Company's Party building, reforms
+and innovation, and risk prevention and control will continue
+to be strengthened; business scale, business value and
+profitability, and quality of the sales force will be effectively
+enhanced; services optimisation, integrated development,
+and cost reduction and efficiency improvement will see
+major breakthroughs. All these advancements will jointly
+drive a robust growth of the Company in terms of business
+scale, value, profitability and high-performance agents in long
+term, and further consolidate its market leading position.
+Development Strategies and Business Plans of the
+Company
+trend with improved quality. As market players are exploring
+new fields and new sectors at an accelerated pace, shaping
+new advantages and new momentums for business
+development, strengthening innovation in aspects such
+as specialisation, digitalisation and ecologicalization, and
+improving the capability in risk prevention and control, these
+will jointly promote the overall high-quality development of
+the industry.
+Industry Landscape and Development Trends
+High-quality development is the key theme of finance
+and insurance in the new era. China's economy has
+formed good and solid fundamentals over the long-term
+development, and its vast market size, ample macro-policy
+space and comprehensively deepening reforms bring strong
+development momentum to the domestic economy. Further,
+the growing demands of people for multi-level, high-quality
+healthcare, medical and senior-care services also provide
+and create a huge market space and potential for the
+development of the life insurance industry. The consensus
+that the life insurance industry is at an important stage full
+of strategic opportunities remains unchanged. Meanwhile,
+with the implementation of various regulatory rules and
+regulations in the industry, the fundamentals for the long-
+term healthy development of the market will be further
+consolidated, and the industry will see a stable development
+FUTURE PROSPECT
+"
+assets assets profit
+The Company's protection of consumers' rights and
+interests led the industry. The Company formed a
+"comprehensive consumer protection" paradigm featuring
+all-employee participation, full coverage and whole-chain
+management. A digital and intelligent consumer protection
+platform was created to enhance the effectiveness of its
+consumer protection management. Training programs on
+consumer protection covered all employees within the
+Company. The Company also innovated the "consumer
+protection +' education and promotion model, and the
+number of consumers participating in related activities
+throughout the year rose by 64.6% year on year. It ranked
+among the top of the industry in the assessment of protection
+of consumers' rights and interests as conducted by the
+industry regulator, and both the life insurance service quality
+and customer satisfaction were maintained at high levels.
+invoices for medical charges. "Advanced Claims Payment"
+delivered heart-warming protection in advance to customers
+on medical treatments, benefiting 27,800 customers.
+Annual Report 2023 | Management Discussion and Analysis 27
+Claims settlement services brought heart-warming
+protection. The Company kept developing the "convenient
+and caring" claims settlement services, with the average
+efficiency for claims settlement being improved to 0.38
+day and the claims acceptance rate reaching 99.7%.
+The coverage of convenient claims payment was further
+expanded. The number of cases in relation to "Claims
+Settlement for Critical Illness within One Day" increased
+by 31.9% year on year. The whole-process non-manual
+claims settlement operation was carried out on a pilot basis,
+and the average efficiency for processing each claim case
+rising by over 90%. The Company continued to reform its
+model of claims settlement services, and provided claims
+payments of 567,000 customer-times throughout the year
+through reminder services on claims notification of electronic
+The quality of operations was solidified due to
+professional capabilities. The Company continued to
+optimise the operation standard specification system that
+covers unified national practices, service standards and job
+description, laying a solid foundation of its operations and
+services featured with "standardisation and specialisation".
+The Company also played an active role in participating in the
+formulation of industry and national standards. As the only
+insurance company involved, it participated in the formulation
+of the national standards for intelligent customer services,
+contributing its wisdom to the standardised development in
+this regard. 95519 has been named as the "Best Customer
+Contact Center in China" by the Customer Contact Center
+Standards Committee (CCCS) for 20 consecutive years.
+The Company deeply engaged in innovating models for
+insurance operations. The "Digital Underwriters" achieved
+a replacement rate of 24.9% for manual work in six work
+scenarios. The centralised and shared business mode of
+operations, which was first of its kind in the industry,
+was fully applied to the areas of policy administration,
+underwriting and claims settlement, and the efficiency of
+these three areas was improved by over 27.0%.
+In 2023, pursuing the "people-centric" approach and
+focusing on value improvement and service diversification,
+the Company deeply engaged in developing more
+centralised, digitalised and intelligent, and diversified
+business operations and services, so as to accelerate the
+construction of a nationwide integrated system of operations
+and services. It strengthened the protection of consumers'
+rights and interests, and devoted itself to advancing the
+Company's high-quality development by capitalising on its
+own professional capabilities in operations, aiming to build
+its core competitiveness with China Life's good services,
+which are "convenient, quality and caring".
+Operations and Services
+and verification system for anti-money laundering, which
+was the first application innovation of "machine learning
++ knowledge graph" in the anti-money laundering field of
+the life insurance industry, was awarded the second prize
+of the FinTech Development Awards by the People's Bank
+of China.
+Further strengthened digital risk control. A digital risk
+control system based on the big data analytics was created to
+quickly identify and accurately capture risks in key business
+fields, realising the goals of moving forward risk control
+points and dynamic monitoring. The intelligent identification
+Significant achievement of technological innovation.
+With the full-stack IT application innovation as a
+breakthrough, a real-time data service platform, which was
+capable of processing data volume at petabytes (PB) level,
+was constructed based on the new proprietary distributed
+architecture. China Life distributed hybrid cloud was
+awarded the special prize of Capital Financial Innovation
+Achievements.
+Data-driven value advancement. The Company
+emphasised on the accuracy, real-time, consistency and
+security of data, and empowered the entire value chain
+of its insurance business with data factors as the driving
+force. With its terabyte level data processing capability,
+the Company realised the whole-process systematic
+and automated generation of financial statements under
+new insurance contracts standards with high quality, and
+developed a financial accounting and actuarial measurement
+system under the new accounting standards by using more
+accurate algorithm, more sophisticated model and more
+efficient process, fully ensuring the implementation of the
+new accounting standards in a systemic, complete and
+accurate manner.
+Customer experience was improved with more diversified
+services. The coverage of inclusive value-added services was
+expanded to multiple fields such as health, sports, women,
+parenting and aesthetic education, and feedback on life, and
+the number of customers covered by the services grew by
+12.1% year on year. A new and upgraded VIP service system
+was rolled out, and the number of VIP customers and the
+number of customers being provided with the VIP services
+grew by 11.9% and 26.0%, respectively, year on year. The
+capability of service access through multiple contact points
+was further improved. The monthly active users of the
+China Life APP and the online customer services grew by
+15.8% and 126.5%, respectively, year on year. The Company
+created a "green access" for senior people for multi-channel
+services, providing the age-friendly services of 25,683,100
+customer-times throughout the year.
+capital Shareholding
+4,000
+Total
+Registered
+710,527
+31 December
+2022
+31 December
+2023
+As at
+As at
+RMB million
+Comprehensive solvency ratio
+Core solvency ratio
+Minimum capital
+Actual capital
+699,688
+Core capital
+Solvency Ratio
+equivalents
+-69.5%
+67,135
+20,467
+Net increase in cash and cash
+cash and cash equivalents
+-70.5%
+217
+64
+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 the Company's solvency ratios as at the end of the Reporting Period:
+Main reasons for change
+An increase in the scale of
+universal insurance accounts
+The needs for investment
+management
+The needs for liquidity
+management
+981,594
+449,160
+China Guangfa Bank Taking public deposits; granting short-term, mid-term and long-
+Co., Ltd.
+term loans; handling settlements in and out of China; honoring bills
+and offering discounting services; issuing financial bonds; issuing,
+paying for and underwriting government bonds as an agent; sales
+and purchases of negotiable securities such as government bonds
+and financial bonds; engaging in inter-bank borrowings; providing
+letters of credit service and guarantee; engaging in bank card
+business; acting as payment and receipt agent and insurance
+agent; providing safe deposit box services; taking deposits and
+granting loans in foreign currency; foreign currency remittance;
+foreign currency exchange; international settlements; foreign
+exchange settlements and sales; inter-bank foreign currency
+borrowings; honoring bills of exchange and offering discounting
+services in foreign currency; granting foreign currency loans;
+granting foreign currency guarantees; sales and purchases of
+negotiable securities other than shares in a foreign currency for
+itself and as an agent; issuing negotiable securities other than
+shares in a foreign currency for itself and as an agent; sales
+and purchases of foreign exchange on its own account and on
+behalf of its customers; issuing and making payments for foreign
+credit card as an agent; offshore financial operations; assets and
+credit verification, consultation and notarisation businesses; other
+businesses approved by the NFRA and other relevant authorities.
+Property loss insurance; liability insurance; credit insurance
+and bond 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 businesses permitted
+by the NFRA.
+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 NFRA.
+Management and utilisation 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.
+Major business scope
+China Life Property
+and Casualty
+Insurance Company
+Limited²
+China Life Pension
+Company Limited
+Company name
+China Life Asset
+Management
+Company Limited
+Net
+Net
+1,007,601
+RMB million
+25
+Annual Report 2023 | Management Discussion and Analysis
+During the Reporting Period, there was no sale of material assets and equity of the Company.
+Sale of Material Assets and Equity
+As at the end of the Reporting Period, the Company's comprehensive solvency ratio was 218.54%, an increase of 11.76
+percentage points from the end of 2022, and the Company's core solvency ratio was 158.19%, an increase of 14.60
+percentage points from the end of 2022, all continuing to stay at relatively high levels.
+206.78%
+218.54%
+143.59%
+158.19%
+487,290
+Major Subsidiaries and Associates of the Company¹
+channel of exclusive
+- Impairment losses of investment assets
+Net investment yield²
+(1,282)
+(universal insurance) (diamond version)
+China Life Xin Account Endowment Insurance
+56
+Mainly through the channel of
+exclusive individual agents
+(universal insurance) (type C)
+(國壽鑫尊寶終身壽險(萬能型)(C款))
+32,152
+China Life Xin Zun Bao Whole Life Insurance
+354
+Surrender
+payment
+deposits Major sales channel
+36,708 Mainly through the channel of
+exclusive individual agents
+China Life Xin Zun Bao Whole Life Insurance
+(universal insurance) (type A)
+(國壽鑫尊寶終身壽險(萬能型)(A款))
+Insurance product
+Net increase
+in policyholder
+RMB million
+For the year ended 31 December 2023
+Top Three Insurance Products in terms of Net Increase in Policyholder Deposits note
+Note: Standard premiums are 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.
+(國壽城鄉居民大病團體醫療保險(A型))
+Rural and Urban Citizens (type A)
+923
+individual agents
+Mainly through the
+channel of exclusive
+individual agents
+Through other channels
+(國壽鑫賬戶兩全保險(萬能型)(鑽石版))
+19,564
+Mainly through the channel of
+exclusive individual agents
+321
+7.30%
+413,255
+72.31%
+3,479,159
+72.78%
+4,119,072
+Percentage
+Amount
+As at 31 December 20221
+As at 31 December 2023
+Amount Percentage
+25,517
+Bonds
+Investment category
+RMB million
+As at the end of the Reporting Period, the Company's investment assets categorised by investment object are set out as
+below:
+grade credit bonds, with an aim to stabilise the allocation
+of underlying positions. In respect of equity investments,
+the Company proceeded with the medium- and long-term
+investment deployment by pursuing balanced allocations and
+structural optimisation. In respect of alternative investments,
+the Company focused on high-quality entities as well as
+competitive sectors, and made innovation in investment
+models, for the purpose of increasing the size of allocations
+in this regard. The Company maintained a stable portfolio
+with high-quality assets in general.
+Investment Portfolios
+In 2023, interest rates were at low levels, the shortage
+of quality assets remained unchanged, and the stock
+market fluctuated downward with significant structural
+differentiation. Under the complicated market environment,
+the Company firmly maintained its strategic consistency,
+pursued asset-liability matching management and conducted
+investment operations in a flexible manner. In respect of
+fixed-income investments, the Company proactively made
+allocations to long-term interest rate bonds and high-
+Investment Business
+21
+Annual Report 2023 | Management Discussion and Analysis
+Note: The data regarding net increase in policyholder deposits and surrender payment are relevant data under ASBE.
+Fixed-maturity financial assets
+Term deposits
+25,517
+China Life Critical Illness Group Health Insurance for
+(國壽鑫福臨門年金保險)
+Gross
+written
+premiums
+Standard
+premiums
+China Life Xin Xiang Wei Lai Endowment Insurance
+(國壽鑫享未來兩全保險)
+38,632
+from new
+policies Note
+11,600
+Surrender
+Major sales channel
+payment
+Mainly through the
+channel of exclusive
+97
+Insurance product
+individual agents
+36,629
+8
+Mainly through the
+585
+channel of exclusive
+individual agents
+China Life Xin Yu Jin Sheng Endowment Insurance
+(國壽鑫裕金生兩全保險)
+35,630
+57
+Mainly through the
+China Life Xin Yao Dong Fang Annuity Insurance
+(國壽鑫耀東方年金保險)
+485,567
+RMB million
+Top Five Insurance Products in terms of Gross Written Premiums
+10,932
+35,278
+China Life Xin Fu Lin Men Annuity Insurance
+Other Channels During the Reporting Period, gross written
+premiums from other channels were RMB32,898 million, an
+increase of 2.8% year on year. The Company proactively
+participated in a variety of government-sponsored health
+insurance businesses and supported the construction of
+a multi-tiered medical security system. As at the end of
+the Reporting Period, the Company carried out over 200
+supplementary major medical expenses insurance programs,
+covering nearly 350 million people. It also undertook over
+70 policy-sponsored long-term care insurance programs,
+providing services to more than 38 million people.
+Meanwhile, it implemented over 120 city-customised
+commercial medical insurance projects. The Company
+actively participated in social governance related to medical
+protection and continued to undertake over 600 healthcare
+entrusted programs.
+Online Insurance Business
+The Company continued to promote the development
+of the online insurance business by optimising its online
+insurance business operation system featuring centralised
+operation and unified management, to provide customers
+with a quality service experience. In 2023, the online
+insurance business grew rapidly. Total premiums of the
+online insurance business under the regulatory caliber were
+RMB76,020 million, an increase of 20.9% year on year.
+The Company further consolidated its foundation for the
+development of the online insurance business to enhance
+the core operating capabilities and channel value of the
+online insurance business.
+Integrated Financial Business
+The Company actively engaged in the construction of a "Life
+Insurance +" integrated financial ecosystem, with a view
+to empowering the Company's high-quality development.
+In 2023, premiums of CLP&C cross-sold by the Company
+through collaboration were RMB23,600 million, with the
+number of insurance policies increasing by 6.5% year on
+year. Through the cross-sale of property insurance products,
+the Company diversified its client contacts and facilitated the
+acquisition of new customers and the increase of commission
+income of its sales team. The scale of business of Pension
+Company cross-sold by the Company through collaboration
+were RMB8,655 million. The Company entrusted CGB to
+sell its bancassurance products, with the first-year regular
+premiums amounting to RMB1,799 million, an increase of
+16.6% year on year. The Company also actively explored
+the synergy between insurance and investment businesses,
+continuously deepened its cooperation with AMC and CLI,
+etc., and constantly innovated and explored new insurance-
+investment interactive models. Besides, in order to satisfy
+the diverse needs of its customers, the Company has carried
+out various business operation activities by co-working with
+CLP&C and CGB, so as to provide customers with one-
+stop and all-round solutions of the high-quality financial and
+insurance services.
+Inclusive Healthcare and Integrated Senior-care Service
+System
+For the year ended 31 December 2023
+Being customer-centric, the Company actively engaged in
+the construction of a multi-tiered social security system and
+clarified its medium- and long-term objectives and planning
+for the development of a senior-care services ecosystem,
+so as to promote the buildup of the inclusive healthcare
+and integrated senior-care service system with all efforts.
+With respect to the "insurance + senior-care services",
+the Company accelerated the senior-care ecosystem
+construction by gradually expanding the deployment of
+the senior-care services projects in key cities to further
+enhance its capability in supplying diversified services, thus
+offering its customers with full life-cycle senior-care services
+that "give children peace of mind, and reassure the senior
+people". In 2023, seven new residential senior-care services
+projects were added to the list and the pilot programs
+of home-based senior-care services were launched in five
+cities. The Company created a new exclusive team of China
+Life senior-care services planners and enriched relevant
+product system, in order to better satisfy the needs of
+customers for senior-care planning and protection with its
+specialised services. The Company actively engaged in the
+construction of the national third-pillar pension insurance
+system, and launched its new products and services on an
+ongoing basis. As at the end of the Reporting Period, the
+scale of the Company's third-pillar private pension business
+ranked among the top of the industry.
+4
+Including premiums from online insurance business acquired by different sales channels of the Company.
+Annual Report 2023 | Management Discussion and Analysis
+19
+Analysis of Insurance Products
+With the "people-centric" approach as the focus of its
+insurance products supply, the Company actively served
+national strategies and people's livelihood. It consistently
+optimised the supply of diverse products and services,
+strengthened asset-liability management and interaction,
+and carried out in-depth research on product supply, so as
+to enhance its capability in supplying high-quality insurance
+products. In 2023, the Company newly developed and
+upgraded a total of 196 insurance products.
+The Company made great efforts to provide pension
+financial services, strengthened research and development
+of commercial pension insurance products, and enriched
+the third-pillar private pension insurance product system,
+optimised and upgraded exclusive commercial pension
+insurance products. It also implemented the pilot programs
+of insurance liability conversion from life insurance to long-
+term care insurance, and consistently launched insurance
+products offering protection for the senior people such
+as pension funds, medical expenses, compensation for
+accidental injuries. The Company continued to increase
+its support to inclusive finance by expanding insurance
+protection supply to such groups as women, children,
+new industry practitioners and new urban residents, and
+enriching the exclusive product system for specific groups
+of people. It also played an active role in promoting FinTech
+insurance protection and optimised technology insurance.
+product system, offering protection services to customers
+such as employees of technology companies. Meanwhile,
+in fully serving the Healthy China initiative, the Company
+coordinated and promoted the research and development of
+products with respect to critical illness insurance, long-term
+care insurance and medical insurance, optimised insurance
+liabilities, and improved insurance protection functions. It also
+deeply engaged in the product supply in the niche markets of
+health insurance, and explored and promoted the integrated
+development of health protection and health services, for
+the purpose of better satisfying the diversified demands of
+customers for health protection. The Company continued to
+expand the scope of agriculture-related insurance products
+and enhanced insurance protection for agriculture-related
+population, creating a sound exclusive insurance product
+system in relation to rural revitalisation. It innovated regional
+products through research and development by launching
+insurance products for Hainan Free Trade Port, Guangdong-
+Hong Kong-Macao Greater Bay Area and other regions, with
+an aim to actively promote coordinated regional development.
+20 Annual Report 2023 | Management Discussion and Analysis
+In 2023, with respect to the "insurance + healthcare
+services", the Company fully consolidated internal and
+external quality resources and made consistent efforts
+to enhance its capability in health management services,
+creating a health management and service system integrating
+online and offline operations and with high quality and
+efficiency. As at the end of the Reporting Period, more
+than a hundred types of services were available on the China
+Life Inclusive Healthcare Service Platform, covering seven
+categories of health management services such as physical
+examination, health consulting, health promotion, disease
+prevention, chronic disease management, medical services
+and rehabilitation care, and the accumulated registered users
+of the platform increased by 20.0% from the end of 2022,
+ranking among the top of the industry.
+N/A
+10.09%
+55.83%
+Gross investment income
+20221
+2023
+RMB million
+For the year ended 31 December
+Investment Income
+Annual Report 2023 | Management Discussion and Analysis
+22
+As at the end of the Reporting Period, the Company's investment assets reached RMB5,659,250 million. Among the major
+types of investments, the percentage of investment in bonds was 55.83%, the percentage of term deposits was 7.30%,
+the percentage of investment in debt-type financial products was 8.57%, and the percentage of investment in stocks and
+funds (excluding money market funds) was 11.23%.
+Cash and others include cash, cash at banks, short-term deposits, and financial assets purchased under agreements to resell, etc.
+6.
+Other equity investments include private equity funds, unlisted equities, preference shares and equity investment plans, etc.
+5.
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balance of money market funds as at 31 December 2023 was
+RMB1,597 million.
+Other fixed-maturity investments include statutory deposits-restricted and interbank certificates of deposits, etc.
+4.
+3.
+2. Debt-type financial products include debt investment schemes, trust schemes, asset-backed plans, credit asset-backed securities, specialised asset
+management plans, and asset management products, etc.
+As at 31 December 2022, the data of investment businesses related to IFRS 17 - Insurance Contracts has been restated and presented, while the data
+of investment businesses related to IFRS 9 - Financial Instruments has not been restated and presented. Therefore, relevant data is not comparable.
+1.
+Notes:
+Net investment income
+Net income from fixed-maturity investments
+Net income from equity investments
+123,082
+176,277
+- Expected credit losses of investment assets
+(8,751)
+(32,786)
++ Unrealised gains or losses
+27,518
+(31,280)
++ Realised disposal gains
+3,979
+8,079
+Share of profit of associates and joint ventures
+100.00%
+2,187
+Investment income from cash and others
+87
+102
+Net income from investment properties
+29,704
+29,117
+142,913
+144,216
+178,870
+185,866
+4,352
+4,811,893
+100.00%
+5,659,250
+8.99%
+432,700
+7.60%
+430,200
+Common stocks
+18.51%
+890,926
+19.43%
+1,099,601
+Equity financial assets
+Funds4
+1.67%
+1.08%
+61,215
+Other fixed-maturity investments³
+9.46%
+455,026
+8.57%
+484,828
+Debt-type financial products²
+51.09%
+2,458,440
+80,126
+3,159,774
+206,963
+145,341
+Total
+5.45%
+262,488
+4.57%
+258,760
+Investments in associates and joint ventures
+3.45%
+166,127
+2.99%
+169,064
+3.66%
+Cash and others6
+13,193
+0.23%
+12,753
+Investment properties
+6.50%
+312,885
+8.17%
+462,438
+Other equity investments5
+3.02%
+0.28%
+3.70%
+1. The corresponding results for the year 2022 have been restated using 2023 EV economic assumptions.
+Numbers may not be additive due to rounding.
+EMBEDDED
+VALUE
+577,127
+5. 10% increase in expenses
+26,112
+456,240
+4. 10% decrease in investment return
+47,644
+713,980
+3. 10% increase in investment return
+33,204
+39,263
+34,647
+555,649
+36,860
+584,807
+2. Risk discount rate -50bps
+1. Risk discount rate +50bps
+Base case scenario
+Sales after Cost
+of Required Capital
+616,352
+6. 10% decrease in expenses
+592,487
+40,516
+574,794
+37,701
+592,494
+Using 2022 Economic Assumptions
+13. Allowing for diversification in calculation of VIF
+12.10% decrease in morbidity rates
+11.10% increase in morbidity rates
+10. 10% decrease in lapse rates
+36,081
+577,213
+9. 10% increase in lapse rates
+10% increase in mortality rate for annuity products
+37,730
+589,427
+8. 10% decrease in mortality rate for non-annuity products and
+10% decrease in mortality rate for annuity products
+35,996
+580,222
+7. 10% increase in mortality rate for non-annuity products and
+Value of One Year's
+RMB million
+Value of In-Force
+Business after Cost
+of Required Capital
+Sensitivity Results
+1.
+1,260,567
+1,462
+(13,850)
+132
+37,044
+(40,643)
+(73,807)
+(624)
+36,860
+83,473
+1,230,519
+RMB million
+Notes:
+K Embedded Value as at 31 December 2023 (sum A through J)
+Others
+J
+|
+Shareholder Dividend Distribution and Capital Changes
+Numbers may not be additive due to rounding.
+35,094
+2.
+B Reflects expected impact of covered business, and the expected return on investments supporting the 2023 opening net worth.
+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
+Annual Report 2023 | Embedded Value
+32
+J Other miscellaneous items.
+Reflects dividends distributed to shareholders during 2023.
+|
+Reflects the gains or losses due to changes in exchange rate.
+H
+Change in the market value adjustment from the beginning of year 2023 to 31 December 2023 and other adjustments.
+G
+Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
+F
+Compares actual with expected investment returns during 2023.
+E
+Reflects the difference between actual operating experience in 2023 (including mortality, morbidity, lapse, and expenses etc.) and the assumptions.
+D
+Value of one year's sales for the 12 months ended 31 December 2023.
+C
+Items B through J are explained below:
+595,090
+38,628
+629,037
+For the year ended 31 December 2023, CLIC paid AMC a
+service fee of RMB140.82 million.
+Asset Management Agreement between CLIC and AMC
+CLIC and AMC entered into the 2023-2025 asset management
+agreement on 29 December 2022, with a term from 1
+January 2023 to 31 December 2025. Pursuant to the 2023-
+2025 asset management 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 33 in the Notes to the Consolidated
+Financial Statements. The annual cap for each of the three
+years ending 31 December 2025 is RMB500 million.
+Annual Report 2023 | Significant Events
+36
+For the year ended 31 December 2023, the Company paid
+AMC a service fee of RMB3,264.68 million.
+The Company and AMC entered into the 2023-2025 asset
+management agreement on 1 January 2023, with a term
+from 1 January 2023 to 31 December 2025. Pursuant to the
+2023-2025 asset management 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 33 in
+the Notes to the Consolidated Financial Statements. The
+annual caps for the three years ending 31 December 2025
+are RMB4,000 million, RMB5,000 million and RMB6,000
+million, respectively.
+Asset Management Agreement between the Company
+and AMC
+Asset Management Agreements
+For the year ended 31 December 2023, CLP&C paid the
+Company an agency service fee of RMB1,705.64 million.
+The Company and CLP&C has entered into the 2024
+insurance sales framework agreement on 23 February 2024,
+with a term of three years from 8 March 2024 to 7 March
+2027. Pursuant to the agreement, CLP&C will continue to
+entrust the Company to act as an agent to sell selected
+insurance products within the authorised regions, and pay
+an agency service fee to the Company in consideration of
+the services provided. The annual caps for the three years
+ending 31 December 2026 are RMB2,620 million, RMB2,840
+million and RMB3,110 million, respectively.
+The Company and CLP&C entered into the 2021 insurance
+sales framework agreement on 20 February 2021, with a
+term of two years from 8 March 2021 to 7 March 2023,
+which could be automatically extended for one year to 7
+March 2024. Pursuant to the agreement, CLP&C would
+entrust the Company to act as an agent to sell selected
+insurance products within the authorised 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 33
+in the Notes to the Consolidated Financial Statements. The
+annual caps for the three years ended 31 December 2023
+were RMB3,500 million, RMB3,830 million and RMB4,240
+million, respectively.
+Insurance Sales Framework Agreement
+For the year ended 31 December 2023, the service fee paid
+by CLIC to the Company amounted to RMB463.21 million.
+The Company and CLIC entered into the 2022-2024 policy
+management agreement on 31 December 2021, with a term
+from 1 January 2022 to 31 December 2024. Pursuant to the
+agreement, the Company will accept CLIC's entrustment
+to provide policy administration services relating to the
+non-transferred policies. The Company acts as a service
+provider under the agreement and does not acquire any
+rights or assume any obligations as an insurer under the
+non-transferred policies. For details as to the method of
+calculation of the service fee, please refer to Note 33 in the
+Notes to the Consolidated Financial Statements. The annual
+cap in respect of the service fee to be paid by CLIC to the
+Company for each of the three years ending 31 December
+2024 is RMB491 million.
+Policy Management Agreement
+The Company has complied with the disclosure requirements
+under Chapter 14A of the Listing Rules in respect of the
+above continuing connected transactions. When conducting
+the above continuing connected transactions during the
+Reporting Period, the Company has followed the pricing
+policies and guidelines formulated at the time when such
+transactions were entered into.
+During the Reporting Period, the Company also carried
+out certain continuing connected transactions, including
+the policy management agreement between the Company
+and CLIC, and the asset management agreement between
+CLIC and AMC, which were exempt from the reporting,
+announcement, annual review and independent shareholders'
+approval requirements under Chapter 14A of the Listing
+Rules.
+During the Reporting Period, the continuing connected
+transaction carried out by the Company that was subject to
+the reporting, announcement, annual review and independent
+shareholders' approval requirements under Chapter 14A of
+the Listing Rules included the agreement for entrusted
+investment and management and operating services with
+respect to alternative investments with insurance funds
+between the Company and CLI. Such agreement and
+the transactions thereunder have been approved by the
+independent shareholders of the Company.
+Annual Report 2023 | Significant Events 35
+Agreement for Entrusted Investment and Management
+and Operating Services with respect to Alternative
+Investments with Insurance Funds between the
+Company and CLI
+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 insurance sales framework agreement
+between the Company and CLP&C, the asset management
+agreement between the Company and AMC, the framework
+agreement between the Company and China Life Capital,
+and the framework agreements entered into by China Life
+AMP with the Company, CLIC and CLI, respectively. 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 CLI and China Life Capital. Therefore, each of CLIC,
+CLP&C, CLI 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. China Life AMP
+is a subsidiary of AMC, and is therefore also a connected
+subsidiary of the Company.
+As approved by the First Extraordinary General Meeting
+2021 of the Company, the Company and CLI entered
+into the 2022-2024 agreement for entrusted investment
+and management and operating services with respect to
+alternative investments with insurance funds (the "2022-
+2024 Alternative Investment Agreement") on 27 December
+2021. The 2022-2024 Alternative Investment Agreement was
+for a term from 1 January 2022 to 31 December 2023, and
+could be automatically renewed for one year. Pursuant to the
+2022-2024 Alternative Investment Agreement, the Company
+would entrust CLI to perform services including the entrusted
+investment and management and the entrusted operation
+with respect to alternative investments. For the entrusted
+investment and management, it covered the equity/real
+estate direct investments, equity/real estate funds, non-
+standard financial products and quasi-securitisation financial
+products already entrusted by the Company to CLI for
+investment and management under the existing projects,
+as well as the non-standard financial products and quasi-
+securitisation financial products entrusted for investment
+under the new projects. CLI would invest and manage
+assets entrusted to it by the Company, on a discretionary
+basis, within the scope of utilisation of insurance funds as
+specified by the regulatory authorities and in accordance
+with the requirements of applicable laws and regulations
+and the investment guidelines of the Company, and the
+Company would pay CLI the investment management
+service fee, product management fee, real estate operation
+management service fee and performance reward in respect
+As approved by the 2022 Annual General Meeting of the
+Company, the Company and CLI entered into the 2023-2025
+agreement for entrusted investment and management and
+operating services with respect to alternative investments
+with insurance funds (the "2023-2025 Alternative Investment
+Agreement") on 30 June 2023 to modify the type of assets
+entrusted by the Company to CLI for investment and
+management under the 2022-2024 Alternative Investment
+Agreement, and to set forth the pricing principle for each
+type of the products. The 2023-2025 Alternative Investment
+Agreement is for a term from 1 July 2023 to 31 December
+2024, and can be automatically renewed for one year. The
+2022-2024 Alternative Investment Agreement has been
+terminated and replaced by the 2023-2025 Alternative
+Investment Agreement after the latter came into effect.
+Pursuant to the 2023-2025 Alternative Investment
+Agreement, CLI will continue to invest and manage assets
+entrusted to it by the Company, on a discretionary basis,
+within the scope of utilisation of insurance funds as specified
+by the regulatory authorities and in accordance with the
+requirements of applicable laws and regulations and the
+investment guidelines of the Company, and the Company
+will pay CLI the investment management service fee,
+product management fee, real estate operation management
+service fee and performance reward in respect of the
+investment and management services provided by CLI to
+the Company. The entrusted assets under the 2023-2025
+Alternative Investment Agreement include insurance asset
+management products, financial products, equity/real estate
+funds and public REITs products (which are mainly conducted
+by way of strategic fund and restrict to the participation in
+strategic placement). In addition, CLI will continue to provide
+the operating services to the Company with respect to the
+equity/real estate funds invested by the Company at its
+own discretion and entrusted by it to CLI for operation and
+management, and the Company will pay CLI the entrusted
+operation fee in this regard. For details as to the method of
+calculation of the fees for the investment and management
+services (including the investment management service fee,
+product management fee, real estate operation management
+service fee and performance reward) and the entrusted
+operation fee in relation to the operating services, please
+refer to Note 33 in the Notes to the Consolidated Financial
+Statements.
+2.
+31,385
+34,646
+Notes:
+Annual Report 2023 | Significant Events
+38
+CLIC and China Life AMP entered into the 2023-2025
+framework agreement on 9 December 2022, with a term
+of three years from 1 January 2023 to 31 December 2025.
+Pursuant to the agreement, CLIC will subscribe for or redeem
+the fund units of the funds managed by China Life AMP, and
+pay the relevant fees. Pricing of the transactions under the
+agreement shall be determined by the parties through arm's
+length negotiations with reference to industry practices.
+For each of the three years ending 31 December 2025,
+the annual cap of the subscription price and corresponding
+subscription fee for the subscription of fund products is
+RMB2,000 million, and the annual cap of the redemption
+price and corresponding redemption fee for the redemption
+of fund products is RMB2,000 million.
+AMP
+Framework Agreement between CLIC and China Life
+For the year ended 31 December 2023, the subscription price
+and corresponding subscription fee for the subscription of
+fund products were RMB11,314.00 million, the redemption
+price and corresponding redemption fee for the redemption
+of fund products were RMB8,130.26 million, and the
+management fee paid by the Company for the private asset
+management was RMB26.70 million.
+The Company and China Life AMP entered into the 2023-
+2025 framework agreement on 30 December 2022, with a
+term of three years from 1 January 2023 to 31 December
+2025. Pursuant to the agreement, the Company and China
+Life AMP will conduct certain daily transactions, including
+the subscription and redemption of fund products and private
+asset management. Pricing of the transactions under the
+agreement shall be determined by the parties through arm's
+length negotiations with reference to industry practices.
+For each of the three years ending 31 December 2025,
+the annual cap of the subscription price and corresponding
+subscription fee for the subscription of fund products is
+RMB20,000 million, the annual cap of the redemption price
+and corresponding redemption fee for the redemption of
+fund products is RMB20,000 million, and the annual cap of
+the management fee payable by the Company for the private
+asset management is RMB700 million.
+Framework Agreements with China Life AMP
+Framework Agreement between the Company and
+China Life AMP
+For the year ended 31 December 2023, 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
+RMB4,000.00 million, and the management fee charged by
+China Life Capital as the general partner or the manager of
+the fund products was RMB142.20 million.
+The Company and China Life Capital entered into the 2023-
+2025 framework agreement on 28 December 2022, with a
+term from 1 January 2023 to 31 December 2025. Pursuant
+to the agreement, the Company will 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 each of the three years ending 31 December 2025,
+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 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
+RMB500 million.
+Cooperation Framework Agreement for Investment
+Management with Insurance Funds between the
+Company and China Life Capital
+For the year ended 31 December 2023, the fees for the
+investment and management services (including the
+investment management service fee, product management
+fee, real estate operation management service fee and
+performance reward) and the entrusted operation fee in
+relation to the operating services paid by the Company to
+CLI amounted to RMB770.49 million, and the contractual
+amount of assets newly entrusted by the Company to CLI
+for investment and management was RMB76,764.50 million.
+For the three years ending 31 December 2025, the annual
+caps on the contractual amount of assets newly entrusted
+by the Company to CLI for investment and management are
+RMB120,000 million (or its equivalent in foreign currency),
+RMB140,000 million (or its equivalent in foreign currency)
+and RMB150,000 million (or its equivalent in foreign
+currency), respectively, and the annual caps on the fees
+for the investment and management services payable by
+the Company to CLI (including the investment management
+service fee, product management fee, real estate operation
+management service fee and performance reward) and the
+entrusted operation fee in relation to the operating services
+are RMB1,500 million (or its equivalent in foreign currency),
+RMB1,800 million (or its equivalent in foreign currency) and
+RMB2,200 million (or its equivalent in foreign currency),
+respectively. The annual cap on the contractual amount of
+assets newly entrusted for investment and management,
+as well as the annual cap on the fees for the investment
+and management services and the entrusted operation fee
+for the year ended 31 December 2023 under the 2022-2024
+Alternative Investment Agreement were both revised as
+the relevant annual caps under the 2023-2025 Alternative
+Investment Agreement, after the latter came into effect.
+37
+Annual Report 2023 | Significant Events
+of the investment and management services provided by
+CLI to the Company. For the entrusted operation, CLI would
+provide the operating services to the Company with respect
+to the equity/real estate funds invested by the Company at
+its own discretion and within the scope prescribed in the
+agreement, and the Company would pay CLI the entrusted
+operation fee in this regard.
+H Exchange Gains or Losses
+MAJOR CONNECTED TRANSACTIONS
+Continuing Connected Transactions
+MATERIAL LITIGATIONS OR
+ARBITRATIONS
+a review of the methodology used to develop the
+embedded value and value of one year's sales as at 31
+December 2023, in accordance with the "CAA Standards
+of Actuarial Practice: Appraisal of Embedded Value",
+issued by the China Association of Actuaries ("CAA");
+Our scope of work covered:
+Scope of Work
+China Life has retained Deloitte Consulting (Shanghai)
+Co., Ltd. to review its EV Results. The task is undertaken
+by Deloitte Actuarial and Insurance Solutions of Deloitte
+Consulting (Shanghai) Co., Ltd. ("Deloitte Consulting" or
+"we").
+China Life Insurance Company Limited ("China Life") has
+prepared embedded value results as at 31 December 2023
+("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.
+INDEPENDENT ACTUARIES REVIEW
+OPINION REPORT ON EMBEDDED
+VALUE OF CHINA LIFE INSURANCE
+COMPANY LIMITED
+33
+Annual Report 2023 | Embedded Value
+14.0%
+5.1%
+1,230,519
+36,004
+1,293,269
+41,035
+Change
+31 December
+2022
+2023
+31 December
+RMB million
+Value of One Year's Sales after Cost of Required Capital
+Embedded Value
+a review of the economic and operating assumptions
+used to develop embedded value and value of one year's
+sales as at 31 December 2023; and
+During the Reporting Period, the Company was not involved
+in any material litigation or arbitration.
+Basis of Opinion, Reliance and Limitation
+The determination of embedded value is based on a range
+of assumptions on future operations and investment
+performance. The future actual experiences are affected
+by internal and external factors, many of which are not
+entirely controlled by China Life. Hence the future actual
+experiences may deviate from these assumptions.
+On 22 August 2022, the Company filed a Form 25 with
+the United States Securities and Exchange Commission
+(the "SEC") to voluntarily delist its American depositary
+shares ("ADSs") from the New York Stock Exchange. The
+delisting became effective on 2 September 2022 (Eastern
+Time in the U.S.). On 13 November 2023, the Company
+filed a Form 15F with the SEC to deregister the ADSS
+and the underlying H Shares and terminate its reporting
+obligations under the U.S. Securities Exchange Act of 1934,
+as amended. The deregistration and termination of reporting
+obligations became effective on 12 February 2024 (Eastern
+Time in the U.S.).
+INFORMATION ON DELISTING AND
+DEREGISTRATION OF AMERICAN
+DEPOSITARY SHARES
+SIGNIFICANT
+EVENTS
+□ □ □
+Annual Report 2023 | Embedded Value
+34
+27 March 2024
+Deloitte Consulting (Shanghai) Co., Ltd.
+Eric Lu
+Yu Jiang
+For and on behalf of
+The embedded value results are consistent with its
+methodology and assumptions used. The overall result
+is reasonable.
+The operating assumptions used by China Life have taken
+into account the past experience and the expectation of
+future experience; and
+The economic assumptions used by China Life have taken
+into account the current investment market conditions
+and the investment strategy of China Life;
+The embedded value methodology used by China Life
+is in line with the "CAA Standards of Actuarial Practice:
+Appraisal of Embedded Value" issued by CAA. This
+method is commonly used by life and health insurance
+companies in China;
+•
+•
+•
+Based on the scope of work above, we have concluded that:
+Opinion
+This report is addressed solely to China Life in accordance
+with the terms of our engagement letter. 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 statements
+set forth in this report.
+We carried out our review work based on "CAA Standards
+of Actuarial Practice: Appraisal of Embedded Value", issued
+by CAA. In carrying out our review, we have relied on the
+completeness and accuracy of audited and unaudited data
+and information provided by China Life.
+G Market Value and Other Adjustments
+a review of China Life's EV Results, including embedded
+value, value of one year's sales, analysis of embedded
+value movement from 31 December 2022 to 31 December
+2023, and the sensitivity results of value of in-force
+business and value of one year's sales.
+E Investment Experience Variance
+31 December
+31 December
+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
+2023
+2022
+675,760
+649,623
+648,848
+617,721
+(73,124)
+584,807
+544,596
+1,260,567
+1,194,220
+45,184
+40,157
+G Cost of Required Capital
+(8,324)
+(7,213)
+H Value of One Year's Sales after Cost of Required Capital (F + G)
+Including: Value of One Year's Sales of Individual Agent Business Sector
+RMB million
+36,860
+Components of Embedded Value and Value of One Year's Sales
+SUMMARY OF RESULTS
+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
+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 can be
+provided by the embedded value method. 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.
+F Methodology, Model and Assumption Changes
+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.
+BACKGROUND
+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.
+Annual Report 2023 | Embedded Value 29
+DEFINITIONS OF EMBEDDED VALUE
+AND VALUE OF ONE YEAR'S SALES
+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
+Net-of-tax adjustments for relevant differences 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/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.
+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"). Deloitte Consulting (Shanghai) Co.,
+Ltd. performed a review of China Life's embedded value.
+The review statement is contained in the "Independent
+Actuaries Review Opinion Report on Embedded Value of
+China Life Insurance Company Limited" 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 4.5% per annum. 17%
+grading to 21% (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 8% 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.
+30 Annual Report 2023 | Embedded Value
+The embedded value as at 31 December 2023, the value of one year's sales for the 12 months ended 31 December 2023,
+and the corresponding results as at 31 December 2022 are shown below:
+32,944
+(64,040)
+29.9%
+31.3%
+The new business margin of one year's sales of individual agent business sector for the 12 months ended 31 December
+2023 is shown below:
+New Business Margin of One Year's Sales of Individual Agent Business Sector
+By First Year Premium
+By Annual Premium Equivalent
+31 December
+2023
+27.4%
+31.0%
+Notes:
+1.
+2.
+31 December
+2022
+Annual Report 2023 | Embedded Value
+The corresponding results for the year 2022 have been restated using 2023 EV economic assumptions.
+First Year Premium is the written premium used for calculation of the value of one year's sales and Annual Premium Equivalent is calculated as the sum
+of 100 percent of first year regular premiums and 10 percent of single premiums.
+C Value of New Business in the Period
+A Embedded Value at the Start of Year
+B Expected Return on Embedded Value
+ITEM
+Analysis of Embedded Value Movement in 2023
+D Operating Experience Variance
+MOVEMENT ANALYSIS
+31
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
+PENSION PLAN
+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
+Bai Tao (Chairman)
+Li Mingguang
+Zhao Peng
+Wang Junhui
+Zhuo Meijuan
+Lam Chi Kuen
+Zhai Haitao
+Huang Yiping
+Chen Jie
+(resigned on 4 August 2023 due to the adjustment of work arrangements)
+Annual Report 2023 | Corporate Governance
+48
+Full-time employees of the Company 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 Company contributes on a monthly basis to these
+pension plans for full-time employees. All contributions made
+under the government-sponsored pension plans described
+above are fully attributable to employees of the Company
+at the time of the payment and the Company is unable
+to forfeit any amounts contributed by it to such plans.
+In addition to the government-sponsored pension plans,
+the Company established an employee annuity fund plan
+pursuant to the relevant laws and regulations in the PRC,
+whereby the Company is required to contribute to the plan
+at fixed rates of the employees' salary costs. Contributions
+Imade by the Company under the annuity fund plan that is
+forfeited in respect of those employees who resign from
+their positions prior to the full vesting of the contributions
+will be recorded in the public account of the annuity fund and
+shall not be used to offset any contributions to be made by
+the Company in the future. All funds in the public account
+will be attributed to the employees whose accounts are in
+normal status after the approval procedures are completed
+as required. Under these plans, the Company has no legal
+or constructive obligation for retirement benefit beyond the
+contributions made.
+No management or administration contracts for the whole
+or substantial part of any business of the Company were
+entered into during the Reporting Period.
+Profit Distribution Plan and Public Reserves
+Capitalisation Plan for the Year 2023
+Details of the movement in share capital of the Company
+are set out in Note 34 in the Notes to the Consolidated
+Financial Statements in this annual report.
+SHARE CAPITAL
+Details of the movement in property, plant and equipment
+of the Company are set out in Note 7 in the Notes to the
+Consolidated Financial Statements in this annual report.
+PROPERTY, PLANT AND EQUIPMENT
+As at the end of 31 December 2023, the distributable
+reserves of the Company was RMB207,030 million.
+DISTRIBUTABLE RESERVES
+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 sufficient opportunities
+to express their opinions and appeals, and their legitimate
+rights have been well protected. The Independent Directors
+diligently considered the profit distribution policy and
+expressed their independent opinions in this regard.
+No public reserve capitalisation is provided for in the profit
+distribution plan for the year.
+In accordance with the profit distribution plan for the year
+2023 approved by the Board on 27 March 2024, with the
+appropriation to its discretionary surplus reserve fund of
+RMB1,753 million (10% of the net profit for 2023), the
+Company, based on 28,264,705,000 shares in issue,
+proposed to distribute cash dividends amounting to
+approximately RMB12,154 million (representing 58% of the
+net profit attributable to equity holders of the Company
+in the consolidated statements) to all shareholders of the
+Company at RMB0.43 per share (inclusive of tax). The
+foregoing profit distribution plan is subject to the approval
+by the 2023 Annual General Meeting. Dividends payable
+to domestic shareholders are declared, valued and paid in
+RMB. Dividends payable to shareholders of the Company's
+overseas-listed foreign shares are declared and valued in
+RMB and paid in the currency of the jurisdiction in which the
+overseas-listed foreign 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 overseas-listed foreign 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 date of
+declaration of the distribution of dividends.
+CORPORATE
+GOVERNANCE
+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 shareholders, and give timely
+reply to concerns of small- and medium-sized shareholders.
+MANAGEMENT CONTRACTS
+Annual Report 2023 | Significant Events
+The guarantee occurred before the company became a holding subsidiary of the Company in 2023, and did not involve the provision of guarantee for the
+Company's shareholders, effective controller or their related parties.
+The "Resolution on the Issue of Capital Supplementary
+Bonds by the Company" was considered and approved
+at the First Extraordinary General Meeting 2023 of the
+Company, pursuant to which the Company intended to
+issue capital supplementary bonds in the PRC with a total
+amount of no more than RMB35 billion in one or more
+tranches, depending on market conditions. The proceeds
+from the issue of the capital supplementary bonds will be
+used for replenishing the supplementary tier 1 capital of
+the Company in accordance with applicable laws and the
+approvals from regulatory authorities, so as to support the
+sustained and steady development of its business. The
+issue is still subject to the approval by regulatory authorities.
+Investors are advised to pay attention to the announcements
+made by the Company in its listed jurisdictions for the further
+development in this regard.
+(appointed on 21 June 2023)
+40
+Annual Report 2023 | Significant Events
+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 for
+10% or more of the Company's profits for the Reporting
+Period, nor were there any such matters that occurred in
+previous periods but subsisted during the Reporting Period.
+During the Reporting Period, China Life Insurance Company
+Limited neither gave external guarantees nor provided
+guarantees to its holding subsidiaries.
+As at the end of the Reporting Period, the external guarantee
+balance of the holding subsidiaries of the Company was
+RMB447 million 5.
+Entrusted investment management during the Reporting
+Period or any entrusted investment management occurred
+in previous periods but subsisted during the Reporting
+Period: Investment is one of the principal businesses of
+the Company. The Company mainly adopts the mode of
+entrusted investment for management of its investment
+assets, and has 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 managers include
+AMC and its subsidiaries, and CLI and its subsidiaries. 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 insurance fund utilisation. The
+Company entered into entrusted investment management
+agreements or asset management contracts with all
+managers and supervised the managers' daily investment
+performance through the measures such as investment
+guidelines, asset custody and performance 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 report, the Company
+had no other material contracts during the Reporting Period.
+UNDERTAKINGS MADE BY
+THE PARTIES INCLUDING
+THE COMPANY'S EFFECTIVE
+CONTROLLER, SHAREHOLDERS,
+RELATED PARTIES, ACQUIRERS
+AND THE COMPANY WHICH ARE
+EITHER GIVEN OR EFFECTIVE DURING
+THE REPORTING PERIOD
+42
+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 reorganisation. 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 assist the Company in
+completing 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.
+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 Commission
+of the State Council ("SASAC"), and 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.
+5
+Annual Report 2023 | Corporate Governance 47
+Annual Report 2023 | Significant Events
+41
+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.
+ALLEGED VIOLATION OF LAWS
+AND REGULATIONS BY, PENALTIES
+IMPOSED ON AND RECTIFICATION
+OF THE COMPANY AND ITS
+CONTROLLING SHAREHOLDERS,
+EFFECTIVE CONTROLLER,
+DIRECTORS, SUPERVISORS OR
+SENIOR MANAGEMENT
+During the Reporting Period, the Company was not
+investigated for suspected crimes according to law, and none
+of its controlling shareholders, effective controller, Directors,
+Supervisors and senior management were subject to any
+compulsory measures for suspected crimes according to
+law. The Company or its controlling shareholders, effective
+controller, Directors, Supervisors and senior management
+were not subject to any criminal punishment, investigation
+by the CSRC for alleged violation of laws and regulations,
+administrative penalty by the CSRC, or material administrative
+penalty by other competent authorities, nor were they
+detained by the disciplinary inspection and supervision
+authorities for alleged serious violation of disciplines or
+laws or duty-related crimes which had an impact on their
+performance of duties. None of the Company's Directors,
+Supervisors and senior management were subject to any
+compulsory measures by other competent authorities for
+alleged violation of laws and regulations which had an impact
+on their performance of duties.
+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.
+OTHER MATTERS
+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 profit distribution proposal shall be reviewed
+by the Board of Directors. The Board of Directors shall have
+a sufficient discussion of the 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 online voting mechanism to the
+shareholders. When deliberating on specific cash dividend
+proposal by the Company's general meeting, the Company
+Annual Report 2023 | Corporate Governance
+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
+regulatory authorities 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.
+Relationship between the Company and its
+Customers
+Being customer-centric all along, the Company was
+committed to offering high-quality services to customers,
+and provided insurance services and value-added services
+for more than 500 million customers on a cumulative basis.
+The Company consistently implemented various regulatory
+requirements by integrating the protection of consumers'
+rights and interests into every aspect of corporate governance
+and business operation and management, further optimised
+the development of the systems and mechanisms for the
+protection of consumers' rights and interests, promoted the
+effective operation of various mechanisms for the protection
+of consumers' rights and interests such as consumer
+protection review and assessment, internal training and
+internal audit, etc., and took active actions in transition
+from after-event management and control to practising the
+consumer protection concept along the whole chain, so as to
+create a "comprehensive consumer protection" paradigm. In
+2023, the Company carried out over 15,000 educational and
+promotion activities in total, with the number of consumers
+involved reaching approximately 290 million.
+Please also refer to the "Technology Capabilities, 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 labour 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 mechanisms: an employee
+management mechanism with the characteristics of focus
+on grass roots, combination of training and working of
+employees, hierarchical responsibility and unified standard;
+a performance management mechanism that was strategy-
+based and result-oriented, adopted hierarchical classification,
+and focused on application; and a remuneration distribution
+mechanism that was based on the principles of salary
+determined by position, remuneration paid based on
+performance, emphasis on incentives and preference to
+the grass roots, and was compatible with the high-quality
+development requirements of the Company. The Company
+also emphasised on the cultivation and development of
+employees by building and optimising a "four-in-one" talent
+training system on an ongoing basis, pursued classification
+of employees for training with an equal emphasis on full
+coverage, strived to apply cultivation and training in the
+entire process of growth of cadres and employees, and
+continued to focus on empowerment. The Company attached
+importance to humanistic concern by constantly improving
+the mechanism for communication with employees,
+safeguarding the legitimate rights and interests 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.
+The Company actively promoted the construction of a
+corporate democratic management system with employee
+representative meetings as its basic form to protect the
+democratic rights of employees and to facilitate the joint
+development between employees and the Company. The
+Company and its provincial branches have fully established
+the system of employee representative meetings,
+safeguarded the right to know, right to propose, right to
+decide and right to vote at such meetings according to
+law, and inspected and monitored the implementation
+of any resolutions adopted by employee representative
+meetings, thus carrying out the function of supervising
+the implementation of proposals in a serious manner and
+constantly improving democratic management. In 2023,
+the Company held employee representative meetings for
+all employees twice, during which the "Report on the By-
+election of Representatives of the Third Session of the
+Employee Representative Meeting of the Company", the
+"Report on the Review of the Representatives' Qualification",
+the "Report on the Candidates for Additional Employee
+Representative Supervisors of the Seventh Session of the
+Board of Supervisors", the "Report on the Amendments
+to the Provisions for Handling of Violations of Regulations
+46
+Annual Report 2023 | Corporate Governance
+by Employees of China Life Insurance Company Limited
+(Revised in 2023)", the "Duty Report of the Board of
+Supervisors of China Life Insurance Company Limited
+for the Year 2022", the "Report on the Amendments to
+the Measures for Supplementary Commercial Insurance
+Protection for Employees of Branches of China Life Insurance
+Company Limited", and the "Report on the Provisional
+Measures for the Administration of Professional Personnel
+of China Life Insurance Company Limited" were considered
+and approved, respectively.
+For details regarding the Company's employees (including the
+number of employees, professional composition, education
+levels, employee diversity, remuneration policy and training
+plans), please refer to the section headed "Directors,
+Supervisors, Senior Management and Employees" in this
+annual report.
+For information during the Reporting Period such as the
+environmental and social responsibilities of the Company, the
+relationship between the Company and its customers, and
+the relationship between the Company and its employees,
+please also refer to the full text of the 2023 Environmental,
+Social and Governance & Social Responsibility Report
+separately disclosed by the Company on the website of the
+SSE (www.sse.com.cn) and the HKExnews website of Hong
+Kong Exchanges and Clearing Limited (www.hkexnews.hk)
+simultaneously.
+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 Policy are as follows:
+•
+Companies", the "Notice on Optimising the Solvency
+Regulatory Standards for Insurance Companies", the
+"Measures for the Administration of Connected Transactions
+of Banking and Insurance Institutions", and the "Measures
+for the Administration of Banking and Insurance Supervision
+and Statistics", consistently improved its systems and
+mechanisms, and stringently implemented the spirit and
+requirements of major regulatory documents on insurance
+product development and design, information disclosure,
+sales management, insurance agents management,
+protection of consumers' rights and interests and customers'
+information, corporate governance, fund utilisation, solvency
+management, connected transactions management,
+reinsurance management and data governance, etc., as
+released by the NFRA, for the purpose of further carrying
+out compliance management responsibilities at all levels
+and in various lines. The Company consistently optimised
+the compliance management framework of "three lines of
+defense" to ensure that the three lines of defense performed
+their own functions and responsibilities 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 held on to the bottom line of the systematic risk,
+which guaranteed the healthy and high-quality development
+of the Company on an ongoing basis.
+Annual Report 2023 | Corporate Governance 45
+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, emphasising on services and
+being legal compliant" and promoted the compliance culture
+and concepts of "being compliant on a proactive 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 implemented applicable
+laws and regulations and regulatory requirements, such as
+the Insurance Law, the Company Law, the Securities Law,
+the "Personal Information Protection Law", the "Regulations
+on Preventing and Dealing with Illegal Fund-raising", the
+"Provisions on the Administration of Insurance Companies",
+the "Measures of the China Banking and Insurance
+Regulatory Commission on Administrative Punishment",
+the "Measures for the Administration of the Utilisation of
+Insurance Funds", the "Provisions on the Supervision and
+Administration of Insurance Agents", the "Rules for the
+Information Disclosure of Personal Insurance Products with a
+Term of One Year or More", the "Standards for the Corporate
+Governance of Banking and Insurance Institutions", the
+"Provisions on the Administration of Solvency of Insurance
+Companies", the "Solvency Regulatory Rules II for Insurance
+In 2023, the Company strengthened its corporate
+responsibility, coordinated joint forces from all fronts to
+offer assistance, and continued to improve its long-term
+mechanism for assistance, so as to make every effort to
+enhance the quality and efficiency of finance and insurance
+serving rural revitalisation. The Company dispatched 980
+cadres staying at villages for assistance, undertook projects
+in 1,171 assistance localities, and devoted assistance
+funds of RMB33.66 million for the year, helping farmers to
+improve both production and income. The Company made
+substantial efforts to develop insurance business in response
+to the demands of rural residents for diversified insurance
+protection and offered risk protection of RMB30.71 trillion
+for 280 million rural residents within the year. The claims
+payment of RMB15,858 million were made to 4.35 million
+people, which helped guard against the bottom line of
+poverty. Based on the characteristics of people lifted out
+of poverty, the Company commenced targeted insurance
+business in relation to rural revitalisation and developed
+four new exclusive products to provide multi-level insurance
+protections, offering risk protection of RMB1.53 trillion for
+the year, a year-on-year increase of 43%. The Company
+strived to make innovation in assistance measures, expanded
+the coverage for assistance, learned and practiced the
+experience acquired from "Ten Million Projects", so as
+to enhance the effectiveness of assistance initiatives and
+facilitate rural revitalisation in all aspects.
+In accordance with Article 219 of the Articles of
+Association, the Procedures of Reviewing the
+Company's Profit Distribution Proposal are as
+follows:
+Mr. Huang Yiping, Mr. Lam Chi Kuen, Mr. Wang Junhui, Mr. Bai Tao, Mr. Li Mingguang, Ms. Zhuo Meijuan, Mr. Zhai Haitao, Ms. Chen Jie
+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.
+From left to right:
+43
+BUSINESS REVIEW
+•
+Overall Operation of the Company during the
+Reporting Period
+To consistently carry out the national decisions and
+arrangements with respect to promoting green development,
+the Company established a green finance system with China
+Life characteristics, promoting the high-quality development
+of green insurance business. It continued to step up its
+support to green, low-carbon and circular economy, and
+consistently enhanced the quality and effectiveness of
+green insurance business in serving the green transition
+of economy and society. Focusing on key fields and
+major industries of ecological civilisation construction, the
+Company safeguarded the high-quality development in a
+green and low-carbon way. In 2023, the Company improved
+its capability in supplying green insurance products,
+providing insurance protection of RMB603,165 million to
+customers from the green industries. It also incorporated
+ESG concept into investment management and practices.
+As at 31 December 2023, its green investments amounted
+to RMB462,788 million.
+44 Annual Report 2023 | Corporate Governance
+Work on Low-carbon Operation
+With the incorporation of the overall environmental goal
+of "ensuring a healthy and friendly environment for the
+accomplishment of 'carbon neutrality'" into all aspects
+of its operations, the Company effectively proceeded
+with various tasks such as energy saving and emission
+reduction, green operation and green office, prioritising
+eco-environmental conservation and green development
+with steadfast efforts. In 2023, the Company continued to
+improve its online, intensive and intelligent operations and
+services, as a result of which over 6,000 tonnes of paper
+were saved. The "Measures for the Administration of Energy
+Saving and Emission Reduction of China Life Insurance
+Company Limited" was revised to strengthen the planning,
+organisation, adjustment and control and management of the
+energy supply and entire energy process, and a number of
+office buildings were awarded LEED platinum certification.
+With the construction of a sustainable supply chain as its
+goal, the Company considered environmental performance
+as one of the key factors for assessment of its suppliers, and
+gave priority to the procurement of energy-saving products
+and equipments as well as new energy vehicles, practising
+an eco-friendly, low-carbon operational model.
+Work on Social Responsibility
+The Company integrated the concept of "performing social
+responsibilities" into its core values, gave full play to the
+advantages of the insurance industry, and shouldered
+corporate social responsibilities in serving the "National
+Priorities". The Company continued to improve its capability
+in inclusive financing services and established a senior-
+care service supply mode featuring "one main model with
+several complementary models". As at 31 December 2023,
+the Company carried out over 200 supplementary major
+medical expenses insurance programs, covering nearly 350
+million people. It also implemented over 120 city-customised
+commercial medical insurance projects accumulatively,
+covering over 40 million people. Meanwhile, it undertook over
+70 long-term care insurance programs, providing services to
+more than 38 million people. The third-pillar private pension
+business ranked among the top of the industry, with its
+investment in the senior-care field amounting to nearly
+RMB10 billion. Adhering to the aspiration of sharing the
+achievements of corporate development with the society,
+the Company devoted itself to public welfare and charitable
+undertakings, and organised charitable activities such as
+"Art Education Program - Children's Charity Spring Festival
+Gala" and "Caring for Women and Protecting their Health".
+It donated RMB36 million to China Life Foundation as well
+as public welfare insurance policies to 776,700 people-
+times. The Company organised volunteer service teams to
+take part in volunteer service activities such as "Civilisation
+100+", formed over 320 service teams consisting of youth
+volunteers, with more than 2,800 registered youth volunteers,
+and offered volunteer services of over 540 times.
+Specific Work on Consolidation of Achievements in
+Poverty Alleviation and Rural Revitalisation Undertakings
+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 and Social Responsibilities
+Work on Green Finance
+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;
+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 with the
+relevant agreements governing such transactions; and
+•
+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;
+•
+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:
+Confirmation by Auditor
+For the year ended 31 December 2023, the subscription
+price and corresponding subscription fee for the subscription
+of fund products were RMB140.00 million, the redemption
+price and corresponding redemption fee for the redemption
+of fund products were RMB140.00 million, and the
+management fee paid by CLI and its subsidiaries for the
+private asset management was RMBO million.
+CLI and China Life AMP entered into the 2023-2025
+framework agreement on 29 December 2022, with a term
+of three years from 1 January 2023 to 31 December 2025.
+Pursuant to the agreement, CLI and its subsidiaries will
+conduct certain daily transactions with China Life AMP,
+including the subscription and redemption of fund products
+and private asset management. Pricing of the transactions
+under the agreement shall be determined by the parties
+through arm's length negotiations with reference to
+industry practices. For each of the three years ending 31
+December 2025, the annual cap of the subscription price
+and corresponding subscription fee for the subscription of
+fund products is RMB2,000 million, the annual cap of the
+redemption price and corresponding redemption fee for the
+redemption of fund products is RMB2,000 million, and the
+annual cap of the management fee payable by CLI and its
+subsidiaries for the private asset management is RMB20
+million.
+Framework Agreement between CLI and China Life
+AMP
+For the year ended 31 December 2023, the subscription
+price and corresponding subscription fee for the subscription
+of fund products were RMBO million, and the redemption
+price and corresponding redemption fee for the redemption
+of fund products were RMB87.91 million.
+The Company shall give priority to cash dividends as its
+profit distribution manner.
+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.
+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;
+Profit distribution modes: The Company may 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;
+In accordance with Article 218 of the Articles of
+Association, the Company's Profit Distribution
+Policy is as follows:
+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.
+Confirmation by Independent Directors
+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;
+the transactions were entered into in the ordinary and
+usual course of business of the Company;
+During the Reporting Period, the Company was not involved
+in claims, debt transactions or guarantees of a non-operating
+nature with related parties.
+Statement on Claims, Debt Transactions and
+Guarantees etc. of a Non-operating Nature with
+Related Parties
+The Company has complied with the disclosure requirements
+under Chapter 14A of the Listing Rules in respect of the
+above one-off connected transactions.
+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:
+As approved by the twenty-third meeting of the seventh
+session of the Board of Directors of the Company, the
+Company and CLP&C contributed RMB5,000,000,000 and
+RMB1,000,000,000, respectively, to the equity investment
+plan established by CLI. The Company entered into an
+entrustment contract with CLI on 12 May 2023 for such
+purpose. All funds under the equity investment plan would
+be used for the subscription of limited partnership interest
+in Beijing MTR Equity Investment Fund Partnership (Limited
+Partnership). The partnership would make equity investment
+in Beijing MTR Corporation Ltd. and eventually invest in
+the metro projects being developed and operated and to
+be developed and operated by such company. CLI had, on
+behalf of the equity investment plan and as a limited partner,
+entered into a partnership agreement with Beijing Capital
+Chuangxin Enterprise Management Co., Ltd. and China Life
+Industrial Investment Management Co., Ltd. ("CLIIM") (each
+as a general partner and managing partner), and Beijing
+Capital Group Co., Ltd. (as a limited partner) in relation to
+the formation of the partnership on 18 April 2023. China Life
+Capital served as the manager of the partnership.
+Investment in Beijing MTR Equity Investment Fund
+Partnership (Limited Partnership)
+Investment in Jicang (Tianjin) Logistics Equity
+Investment Fund Partnership (Limited Partnership)
+As approved by the twenty-third meeting of the seventh
+session of the Board of Directors of the Company, the
+Company contributed RMB999,000,000 to the equity
+investment plan established by CLI and entered into an
+entrustment contract with CLI on 8 May 2023 for such
+purpose. All funds under the equity investment plan would
+be used for the subscription of limited partnership interest in
+Jicang (Tianjin) Logistics Equity Investment Fund Partnership
+(Limited Partnership). The partnership would, directly or
+through one- or multi-level investment vehicles, make equity
+investment in certain project companies which are engaged
+in the operation of logistics real estate located in the PRC
+and which are held or to be acquired by Cainiao Network
+Technology Co., Ltd. and its designated affiliates. Such
+logistics real estate would be the completed projects for
+high-standard modernised warehouses with sophisticated
+operation that are located in the areas of important logistics
+node cities in the Yangtze River Delta where supplies and
+demands are relatively healthy. CLI had, on behalf of the
+equity investment plan and as a limited partner, entered into
+a partnership agreement with Hangzhou Youhu Enterprise
+Management Limited and China Life Properties Investment
+Management Company Limited ("China Life Properties")
+(each as a general partner and managing partner), and
+Zhejiang Cainiao Supply Chain Management Co., Ltd.,
+Manulife-Sinochem Life Insurance Co., Ltd. and Chasing
+Jixiang Life Insurance Co., Ltd. (each as a limited partner) in
+relation to the formation of the partnership on 23 February
+2023. China Life Capital served as the manager of the
+partnership.
+Each of CLI, Jiaotou Jinshi, China Life Jinshi, China Life
+Properties, China Life Capital and CLIIM is an associate of
+CLIC, and therefore a connected person of the Company.
+The above transactions constituted one-off 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 Company shall take the investment return for
+investors into full account and allocate the required
+percentage of the Company's realised distributable
+profits to shareholders as dividends each year;
+Annual Report 2023 | Significant Events
+As approved by the twenty-second meeting of the seventh
+session of the Board of Directors of the Company, the
+Company contributed RMB3,000,000,000 to the equity
+investment plan established by CLI and entered into an
+entrustment contract with CLI on 27 April 2023 for such
+purpose. All funds under the equity investment plan would
+be used for the subscription of limited partnership interest
+in Jiangxi Jiaotou Expressway Investment Fund (Limited
+Partnership). The partnership would primarily invest in
+highway projects in Jiangxi Province, the PRC. CLI had, on
+behalf of the equity investment plan and as a limited partner,
+entered into a partnership agreement with Jiangxi Jiaotou
+Jinshi Transportation and Investment Management Co., Ltd.
+("Jiaotou Jinshi") (as the general partner and managing
+partner), and Jiangxi Communications Investment Group Co.,
+Ltd. and Jiangxi Transportation Development Fund (Limited
+Partnership) (each as a limited partner) in relation to the
+formation of the partnership on 24 November 2022. China
+Life Jinshi Asset Management Company Limited ("China Life
+Jinshi") served as the manager of the partnership.
+the transactions were conducted on normal commercial
+terms;
+Other Major Connected Transactions
+Investment in Jiangxi Jiaotou Expressway
+Investment Fund (Limited Partnership)
+. the amounts of the above transactions have not exceeded
+the relevant annual caps.
+• 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
+39
+0.07%
+Other
+Limited SSE 50 Exchange Traded Index
+Securities Investment Fund
+0.41%
+44,354,939 +2,694,922
+Overseas legal person
+Hong Kong Securities Clearing Company
+Limited
+117,165,585
+State-owned legal person
+Industrial and Commercial Bank of China
+0.16%
+0.04% 12,000,000 +12,000,000
+Guosen Securities Co., Ltd. - Founder Fubon
+State-owned legal person
+China National Nuclear Corporation Capital
+Holdings Co., Ltd.
+Central Huijin Asset Management Limited
+Other
+National Social Security Fund Portfolio 114
+Investment Fund
+20,306,703 +6,446,000
+0.04% 12,402,733 +5,682,600
+Limited Huatai-PineBridge CSI 300
+Exchange Traded Index Securities
+Industrial and Commercial Bank of China
+13,701,912 -7,164,617
+0.05%
+Other
+CSI Insurance Theme Index Securities
+Investment Fund
+Other
+708,240,246
+Name of shareholder
+China Securities Finance Corporation Limited State-owned legal person
+the end of the Reporting No. of H Share shareholders:
+Period
+24,368
+0.04%
+Particulars of Top Ten Shareholders of the Company
+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:
+99,815
+No. of H Share shareholders:
+24,280
+decrease
+during the
+Reporting
+Period
+Number of
+shares subject
+to selling
+restrictions
+Unit: Shares
+Number
+Total number of ordinary No. of A Share shareholders:
+share shareholders as at 107,594
+of shares
+pledged or
+frozen
+Nature of shareholder
+Percentage of
+shareholding
+Number of
+shares held as
+at the end of
+the Reporting
+Increase/
+Period
+China Life Insurance (Group) Company
+State-owned legal person
+68.37% 19,323,530,000
+HKSCC Nominees Limited
+Overseas legal person
+25.92% 7,327,523,802 +1,830,411
+2.51%
+11,108,837 +11,108,837
+Number of
+shares held
+Annual Report 2023 | Corporate Governance
+Class of shares
+Percentage of
+the respective
+class of shares
+Percentage of
+the total number
+of shares in
+issue
+China Life Insurance
+(Group) Company
+Beneficial owner
+A Shares
+19,323,530,000 (L)
+92.80%
+68.37%
+Interest in controlled
+corporation
+H Shares
+449,298,275 (L)
+Capacity
+6.04%
+BlackRock, Inc. (Note 2)
+Interest in controlled
+corporation
+H Shares
+436,647,392 (L)
+5,692,000 (S)
+5.87%
+1.54%
+0.08%
+0.02%
+The letter "L" denotes a long position. The letter "S" denotes a short position.
+(Note 1): FMR LLC was interested in a total of 449,298,275 H shares of the Company in accordance with the provisions of Part XV of the SFO. Of these
+shares, Fidelity Management & Research Company LLC, Fidelity Institutional Asset Management Trust Company and FIAM LLC were interested in
+293,895,801 H shares, 46,313,968 H shares and 62,011,759 H shares, respectively. All of these entities are either controlled or indirectly controlled
+subsidiaries of FMR LLC.
+(Note 2): BlackRock, Inc. was interested in a total of 436,647,392 H shares of the Company 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 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 Aperio Group, LLC were interested in 3,201,000 H shares, 7,992,070 H shares, 91,902,736 H shares, 190,345,000
+H shares, 268,000 H shares, 8,860,583 H shares, 1,766,000 H shares, 3,354,000 H shares, 15,876,451 H shares, 17,474,402 H shares, 6,958,196
+H shares, 58,125,917 H shares, 639,000 H shares, 9,154,628 H shares, 466,000 H shares, 11,221,030 H shares, 684,432 H shares, 5,021,000 H
+shares, 101,000 H shares and 3,235,947 H shares, respectively. All of these entities are either controlled or indirectly controlled subsidiaries of
+BlackRock, Inc. Of these 436,647,392 H shares, 30,070 H shares were cash settled unlisted derivatives.
+Total Number of Shareholders and their Shareholdings
+BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 5,692,000 H shares (0.08%). Of these 5,692,000
+H shares, 4,794,000 H shares were cash settled unlisted derivatives.
+1.59%
+Name of substantial
+shareholder
+So far as is known to the Directors, Supervisors and the chief executive of the Company, as at 31 December 2023, 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:
+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
+Notes:
+1.
+2.
+3.
+4.
+The above shares are tradable shares not subject to selling restrictions and do not include shares lent through refinancing.
+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.
+Industrial and Commercial Bank of China Limited - SSE 50 Exchange Traded Index Securities Investment Fund and Industrial and Commercial Bank of
+China Limited - Huatai-PineBridge CSI 300 Exchange Traded Index Securities Investment Fund have Industrial and Commercial Bank of China Limited as
+their 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.
+As at the end of the Reporting Period, the number of the Company's shares lent through refinancing and not yet returned by Industrial and Commercial
+Bank of China Limited - SSE 50 Exchange Traded Index Securities Investment Fund were 154,200 shares, and the number of Company's shares held
+in its general accounts and credit accounts, together with the number of the Company' shares lent through refinancing and not yet returned, totalled
+20,460,903 shares. The number of the Company's shares lent through refinancing and not yet returned by Industrial and Commercial Bank of China
+Limited - Huatai-PineBridge CSI 300 Exchange Traded Index Securities Investment Fund were 20,300 shares, and the number of Company's shares held
+in its general accounts and credit accounts, together with the number of the Company' shares lent through refinancing and not yet returned, totalled
+12,423,033 shares.
+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
+Legal representative
+Date of incorporation
+Major businesses
+Shareholdings in other
+subsidiaries and affiliates
+listed in China or abroad
+during the Reporting Period
+China Life Insurance (Group) Company
+Bai Tao
+22 August 1996 (CLIC's predecessor was PICC (Life) Co., Ltd. incorporated in August 1996.
+It was renamed as China Life Insurance Company, a company approved for formation
+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 PRC laws
+and regulations or approved by the State Council of the PRC; other businesses approved
+by insurance regulatory agencies.
+As at 31 December 2023, CLIC held 1,785,098,644 H shares of Town Health International
+Medical Group Limited (which is one of the companies listed in China or abroad in which
+CLIC has over 5% of the total share capital), representing 26.35% of its total shares.
+The effective controller of the Company is the Ministry of Finance. The equity and controlling relationship between the
+Company and its effective controller is set out as 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.
+Annual Report 2023 | Corporate Governance 57
+56
+INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+RESPONSIBILITY STATEMENT OF DIRECTORS
+ISSUE AND LISTING OF SECURITIES
+50 Annual Report 2023 | Corporate Governance
+AUDITORS
+As considered and approved by the shareholders at
+the 2022 Annual General Meeting of the Company,
+PricewaterhouseCoopers Zhong Tian LLP and
+PricewaterhouseCoopers have been appointed as the
+domestic and overseas auditors of the Company for the year
+2023, who will hold office until the conclusion of the 2023
+Annual General Meeting. PricewaterhouseCoopers Zhong
+Tian LLP and PricewaterhouseCoopers have been serving
+as the Company's auditors for three 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 authorised 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 PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers in 2023 was
+as follows:
+The remuneration paid by the Company to PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers in 2023
+increased by 25.5% year on year from 2022. The increase
+of the audit fee was attributable to the increased audit
+workload as the Company continued to implement the former
+standards on insurance contracts and financial instruments
+under ASBE, and adopted the new standards on insurance
+contracts and financial instruments for the first year for the
+preparation and disclosure of financial reports and related
+information under IFRSS in 2023.
+The Company is taking active actions to proceed with
+the selection and appointment of its auditors for the
+year 2024, and investors are advised to pay attention to
+the announcements made by the Company in its listed
+jurisdictions for the further development in this regard.
+Service/Nature
+Audit, review and agreed-upon
+RMB million
+Fees
+64.18
+procedures fee
+Based on the information publicly available to the Company
+and within the knowledge of the Directors as at the latest
+practicable date (27 March 2024), 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.
+Including: Internal control audit fee
+Non-audit services fee (tax services and
+0.55
+consultation services)
+Total
+64.73
+By Order of the Board
+Bai Tao
+Chairman
+27 March 2024
+Annual Report 2023 | Corporate Governance 51
+REPORT OF THE BOARD OF SUPERVISORS
+From left to right:
+Mr. Lai Jun, Mr. Cao Weiqing, Mr. Niu Kailong, Ms. Ye Yinglan
+Pursuant to the Company Law and the Articles of 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 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' general meetings and to perform
+any other duties under the laws, regulations and regulatory
+rules of the Company's listed jurisdictions.
+The Board of Supervisors consists of Non-employee
+Representative Supervisors, such as shareholder
+representatives, and Employee Representative 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.
+4.00
+SUFFICIENCY OF PUBLIC FLOAT
+In 2023, the gross written premiums received from the
+Company's five largest customers accounted for less than
+5% of the Company's gross written premiums for the year.
+There is no related party of the Company among the five
+largest customers.
+MAJOR CUSTOMERS
+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 2023, 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.
+INTEREST-BEARING LOANS AND OTHER
+BORROWINGS
+As at the end of the Reporting Period, the interest-bearing
+loans and other borrowings of the Company included a
+five-year bank loan of GBP275 million with a maturity date
+on 25 June 2024, which is fixed rate bank loan. Interest-
+bearing loans and other borrowings also included a five-year
+bank loan of USD970 million with a maturity date on 27
+September 2024, a three-year bank loan of EUR330 million
+with a maturity date on 8 March 2024, and an eighteen-
+month bank loan of EUR98 million with a maturity date on
+8 March 2024, all of which are floating rate bank loans.
+Details of the interest-bearing loans and other borrowings
+of the Company are set out in Note 15 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
+RMB37.59 million.
+INFORMATION OF TAX DEDUCTION FOR
+HOLDERS OF LISTED SECURITIES
+Shareholders of the Company 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 regulatory
+documents. Please refer to the announcement published by
+the Company on the website of the SSE on 7 July 2023 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 Hong Kong Exchanges and
+Clearing Limited on 28 June 2023 for the information on
+income tax in respect of the dividend distributed to H Share
+shareholders during the Reporting Period.
+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.
+H SHARE STOCK APPRECIATION RIGHTS
+No H Share stock appreciation rights of the Company were
+granted or exercised in 2023. 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
+None of the Directors or Supervisors has entered 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.
+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.
+Annual Report 2023 | Corporate Governance
+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 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 C3 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 observation of the Model Code
+and the Company's own code of conduct in the year of 2023.
+PERMITTED INDEMNITY PROVISION
+The Company made appropriate insurance arrangement with
+respect to legal actions that might be faced by its Directors:
+in connection with corporate activities, and such insurance
+arrangement was in force during the Reporting Period and
+up to the date of this report.
+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.
+ON FINANCIAL REPORTS
+The Directors are responsible for overseeing the 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 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 2023.
+The Board of Supervisors is accountable to the 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 categorised
+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.
+Currently, the seventh session of the Board of Supervisors of
+the Company comprises Mr. Cao Weiqing, Mr. Niu Kailong,
+Mr. Lai Jun and Ms. Ye Yinglan, with Mr. Cao Weiqing
+acting as the Chairman of the Board of Supervisors. Mr.
+Niu Kailong is a Non-employee Representative Supervisor,
+whereas Mr. Cao Weiqing, Mr. Lai Jun and Ms. Ye Yinglan
+are Employee Representative Supervisors. In June 2023,
+Ms. Wang Xiaoqing and Ms. Hu Zhijun resigned from their
+positions as Supervisors of the Company, respectively, due
+to the adjustment of work arrangements.
+52 Annual Report 2023 | Corporate Governance
+2.
+222
+The number of meetings attended in person includes meetings attended
+on-site and by way of telephone or video conference.
+Supervisors who were unable to attend any meeting of the Board of
+Supervisors authorised other Supervisors to attend and vote at the
+meeting on their behalf.
+ACTIVITIES OF THE BOARD OF SUPERVISORS
+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 2023, 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.
+Attending and participating in corporate governance meetings
+and actively exercising their supervisory role. In 2023, the
+Board of Supervisors attended the 2022 Annual General
+Meeting and the First Extraordinary General Meeting 2023
+of the Company, and participated in the meetings of the
+Board. All members of the Board of Supervisors participated
+in the 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 proactively
+pushing forward the further enhancement of corporate
+governance.
+Annual Report 2023 | Corporate Governance 53
+Keeping abreast of the business operations of the Company
+on a regular basis and paying attention to any major solvency
+risks that might arise in the course of its business operations.
+Members of the Board of Supervisors kept abreast of the
+business operations of the Company on a regular basis by
+reviewing the financial reports of the Company, supervised its
+financial operation and paid attention to any major solvency
+risks that might arise in the course of its business operations.
+Through their participation in meetings of the Board and the
+specialised Board committees, all Supervisors understood
+the management of solvency risks of the Company and
+performed their supervisory function with respect to the
+decision-making of the Company on solvency risks.
+Supervising the performance of duties by the Board and
+senior management in reputational risk management.
+Members of the Board of Supervisors listened to an annual
+reputational risk management report prepared by the senior
+management through participation in the meetings of the
+Board and the Risk Management and Consumer Rights
+Protection Committee, so as to supervise the performance
+of duties by the Board in reputational risk management.
+Organising the evaluations of the performance of duties by
+Directors and Supervisors. In 2023, the Board of Supervisors
+commenced the evaluations of the performance of duties by
+Directors and Supervisors in accordance with the "Measures
+for the Evaluation of the Performance of Duties by Directors
+and Supervisors" of the Company. Based on the performance
+of duties by Directors and Supervisors in 2023, the members
+of the Board of Supervisors evaluated and scored each of the
+Directors of the Company by reference to the information
+regarding the performance of duties by Directors obtained
+during their participation of meetings of the Board and
+various specialised Board committees, and evaluated and
+scored each of the Supervisors of the Company through a
+combination of self-assessment by and mutual assessment
+among Supervisors, and eventually formed evaluation
+opinions on individual Directors and Supervisors, which
+therefore improved the mechanism for the supervision and
+evaluation of duty performance of Directors and Supervisors.
+All members of both the Board and the Board of Supervisors
+of the Company were evaluated as competent in their
+performance of duties in 2023.
+Attending investigation and research activities and training
+courses and constantly enhancing performance of duties
+by the Supervisors. In 2023, according to the work plan of
+the Board of Supervisors of the Company, the members
+of the Board of Supervisors conducted investigation and
+research on Zhejiang Branch and Huzhou Branch with
+respect to, among others, the business development of
+the Company, expansion of senior-care and healthcare
+businesses, risk prevention and control, and governance of
+"Five Weaknesses", carried out an on-site inspection of "city
+center" retirement apartments project in Hangzhou, and
+communicated in person with relevant business lines and
+sales representatives of branches at the provincial, city and
+country levels for exchange of ideas, which offered support
+to the enhancement of performance of duties by the Board
+of Supervisors and its decision-making in a scientific manner.
+In 2023, the members of the Board of Supervisors further
+developed and refreshed their knowledge reserve by actively
+attending various special training courses organised by the
+securities exchanges of the Company's listed jurisdictions,
+listed companies associations and the Company itself, so as
+to enhance their performance of duties. All members of the
+Board of Supervisors attended the training programs of the
+Company on anti-money laundering. Mr. Cao Weiqing and
+Mr. Niu Kailong attended a training course on "Performance
+of Duties by Supervisors of Listed Companies: Regulations,
+Cases and Recommendations" as organised by China
+Association for Public Companies. Mr. Cao Weiqing, Mr.
+Niu Kailong, Mr. Lai Jun and Ms. Ye Yinglan attended a
+special training course on the rules of independent directors
+of listed companies as organised by the Listed Companies
+Association of Beijing for listed companies within Beijing. Mr.
+Cao Weiqing and Ms. Ye Yinglan attended training courses
+of the SSE for the first-time directors, supervisors and senior
+management of listed companies in 2023 (Sessions II and
+V), respectively.
+54
+Annual Report 2023 | Corporate Governance
+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". The Board of
+Supervisors had no objection in respect of the matters
+under its supervision during the Reporting Period.
+The Company's operations in compliance with law. During
+the Reporting Period, the Company's operations were in
+compliance with the law. 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 observed the
+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.
+The authenticity of the financial report. The Company's
+annual financial report truly reflected the Company's financial
+position and operating results. PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers have performed
+audits and have issued standard and unqualified auditors'
+reports in respect of the financial statements for the year
+2023 in accordance with the China Standards on Auditing
+of PRC Certified Public Accountants and the International
+Standards on Auditing, respectively.
+Acquisition and sale of assets. During the Reporting Period,
+the prices for acquisition and sale of assets by the Company
+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.
+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.
+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
+enhance the effectiveness of such system. The Board of
+Supervisors of the Company reviewed the self-evaluation
+report on the Company's internal control and did not raise
+any objection against the self-evaluation report of the Board
+regarding the Company's internal control.
+Information disclosure. The Company performed its
+obligation of information disclosure in strict compliance
+with the regulatory requirements, seriously implemented
+various information disclosure management systems, and
+disclosed information in a timely and fair manner. The Board
+of Supervisors is not aware of any false representations,
+misleading statements or material omissions during the
+Reporting Period.
+By Order of the Board of Supervisors
+Cao Weiqing
+Chairman of the Board of Supervisors
+27 March 2024
+Annual Report 2023 | Corporate Governance
+55
+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 structure of the
+Company.
+1.
+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.
+Notes:
+of meetings
+required to attend
+0/2
+0/2
+MEETINGS AND ATTENDANCE
+During the Reporting Period, five meetings were held by the
+Board of Supervisors of the Company. Attendance records
+of individual Supervisors are as follows:
+Number of
+Number of
+meetings attended
+in person/Number by proxies/Number
+of meetings
+required to attend
+0/5
+meetings attended
+Name of Supervisor
+Cao Weiqing
+of meetings
+required to attend
+5/5
+Niu Kailong
+5/5
+0/5
+Lai Jun
+4/5
+1/5
+Ye Yinglan
+2/3
+1/3
+Attendance records of the resigned Supervisors at the
+meetings of the Board of Supervisors are as follows:
+Number of
+in person/Number by proxies/Number
+Number of
+meetings attended
+meetings attended
+Name of Supervisor
+of meetings
+required to attend
+Wang Xiaoqing
+2/2
+2/2
+Hu Zhijun
+58 Annual Report 2023 | Corporate Governance
+FMR LLC (Note 1)
+49
+130.49
+519.07
+Notes:
+1.
+2.
+3.
+4.
+None of the resigned or retired Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting
+Period.
+This table sets out the information of Directors, Supervisors and senior management who resigned or retired during the period from the beginning of the
+Reporting Period to the date of this report.
+The emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and senior management during the Reporting
+Period.
+According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the resigned and retired Directors,
+Supervisors and senior management of the Company is currently subject to review and approval. The result of the review will be disclosed when the final
+amount is confirmed.
+388.58
+Annual Report 2023 | Corporate Governance
+Personal Profile of Current Directors, Supervisors, Senior Management and Company Secretary
+DIRECTORS
+Mr. Bai Tao, born in 1963, Chinese
+Mr. Bai became the Chairman of the Board of Directors of the Company in May 2022. He
+has been the Secretary of the Party Committee of China Life Insurance (Group) Company
+since January 2022 and the Chairman of China Life Insurance (Group) Company since
+March 2022. From 2016 to 2022, he served as a member of the Party Committee and
+the Deputy General Manager of China Investment Corporation, the Deputy Secretary
+of the Party Committee, the Vice Chairman, the President and an Executive Director of
+The People's Insurance Company (Group) of China Limited, and the Chairman and the
+Secretary of the Leading Party Members' Group of State Development & Investment
+Corp., Ltd. Mr. Bai graduated from Renmin University of China with a doctoral degree
+in economics, and is a senior economist.
+Mr. Li Mingguang, born in 1969, Chinese
+Mr. Li became an Executive Director of the Company in August 2019. He has been the
+Secretary of the Party Committee of the Company since July 2023 and the President
+of the Company since November 2023. He has been a member of the Party Committee
+and a Vice President of China Life Insurance (Group) Company since April 2023 and
+November 2023, respectively. He has been the Chairman of China Life Investment
+Management Company Limited since July 2023. Mr. Li joined the Company in 1996 and
+successively served as the Responsible Actuary, the General Manager of the Actuarial
+Department, the Chief Actuary, the Board Secretary, a Vice President and the temporary
+Person in Charge of the Company. He graduated from Shanghai Jiaotong University with
+a bachelor's degree in 1991, Central University of Finance and Economics with a master's
+degree in 1996 and Tsinghua University with an EMBA in 2010. 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 the Vice Chairman of the China Association
+of Actuaries. Mr. Li receives a special government allowance from the State Council.
+Mr. Wang Junhui, born in 1971, Chinese
+Mr. Wang became a Non-executive Director of the Company in August 2019. He has
+been the Chairman of China Life Pension Company Limited since November 2023 and
+the Chief Investment Officer of China Life Insurance (Group) Company since August
+2016. He has been the Chairman of China Life AMP Asset Management Company
+Limited since December 2016 and a Director of China United Network Communications
+Limited since March 2021. From 2004 to 2023, he successively served as an Assistant
+to the President, a Vice President and the President of China Life Asset Management
+Company Limited, and the President of China Life Investment Holding Company Limited.
+Mr. Wang graduated from the School of Computer Science of Beijing University of
+Technology with a bachelor's degree in software in 1995 and from Chinese Academy of
+Fiscal Sciences of the Ministry of Finance of the PRC with a doctoral degree in finance
+in 2008, and is a senior economist.
+62
+Annual Report 2023 | Corporate Governance
+Ms. Zhuo Meijuan, born in 1964, Chinese
+Ms. Zhuo became a Non-executive Director of the Company in June 2023. She is the
+Senior Director of the Strategic Planning Department (General Office for Deepening
+Reforms)/Office of the Board of Directors/China Life Institute of Finance of China Life
+Insurance (Group) Company. From 2016 to 2023, she served as the Deputy General
+Manager (at the department general manager level) and General Manager of the Business
+Management Department of China Life Insurance (Group) Company. She served as the
+Secretary of the Discipline Inspection Committee and the Deputy General Manager (at the
+department general manager level of the head office) of Tianjin Branch of the Company
+from 2013 to 2016, and the Deputy General Manager of the Business Management
+Department of China Life Insurance (Group) Company from 2006 to 2013. Ms. Zhuo
+successively graduated from Fujian Agricultural College and the Open University of Hong
+Kong with a master's degree in business administration, and is a senior economist.
+61
+Total
+Yes adjustment of work
+arrangements
+97.07
+December 2021 January 2023
+January 2022 - January 2023
+Resigned due to the
+1
+1
+No
+Liu Fengji
+Person in Charge of Audit
+Male
+68.00
+October 1969
+December 2021-August 2023
+36.12
+14.24
+50.36
+adjustment of work
+arrangements
+Resigned due to the
+No adjustment of work
+arrangements
+Resigned due to the
+Hu Jin
+Person in Charge of Finance Female
+November 1971
+February 2023 March 2024
+70.74
+26.33
+Mr. Lam Chi Kuen, born in 1953, Chinese
+January 1968
+Mr. Lam became an Independent Director of the Company in June 2021. He is currently
+an Independent Non-executive Director of each of China Cinda Asset Management Co.,
+Ltd. and Luks Group (Vietnam Holdings) Company Limited. He served as an Independent
+Non-executive Director of China Pacific Insurance (Group) Co., Ltd. from 2013 to 2019.
+Mr. Lam, a practicing certified public accountant in Hong Kong for approximately 35
+years, was a partner and senior consultant of Ernst & Young from 1992 to 2013 and
+has extensive experience in accounting, auditing and financial management. Mr. Lam
+received a Higher Diploma in Accounting from the Hong Kong Polytechnic College (the
+current Hong Kong Polytechnic University). He is a member of the Hong Kong Institute
+of Certified Public Accountants and a senior member of the Association of Chartered
+Certified Accountants.
+Mr. Zhai became an Independent Director of the Company in October 2021. He is
+the President and Founding Partner of Primavera Capital Group, and an Independent
+Non-executive Director of each of China Everbright Environment Group Limited and
+China Everbright Water Limited. From 2000 to 2009, Mr. Zhai worked at and held
+various positions in Goldman Sachs Group, including the Managing Director, the Chief
+Representative of its Beijing Office, the Director of the Strategic Cooperation Office
+between Goldman Sachs Group and Industrial and Commercial Bank of China, and the
+Credit Rating Consultant of the Ministry of Finance of the PRC and China Development
+Bank. From 1995 to 1998, he was the Deputy Representative of the People's Bank of
+China Representative Office for the Americas based in New York. From 1990 to 1995,
+Mr. Zhai worked at the International Department of the People's Bank of China. Mr. Zhai
+holds a master's degree in international affairs from Columbia University, a master's
+degree in business administration from New York University and a bachelor's degree
+in economics from Peking University.
+Mr. Bai Kai, born in 1974, Chinese
+Mr. Bai became a Vice President of the Company in August 2023. He successively
+served as the Deputy General Manager, the Deputy General Manager (responsible for
+daily operations) and the General Manager of Hubei Branch, and an Assistant to the
+President of the Company from 2017 to 2023, and the General Manager of Huanggang
+Branch in Hubei province and the Deputy General Manager of Qingdao Branch of the
+Company from 2011 to 2017. Mr. Bai graduated from Party School of the CPC Hubei
+Provincial Committee, majoring in economics and management, and was a postgraduate.
+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 doctoral degrees in law.
+Mr. Xu is admitted as a lawyer and certified public accountant in the PRC.
+68
+Annual Report 2023 | Corporate Governance
+3.
+None of the current Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting Period.
+2. According to the "Procedural Rules for the Board Meetings of China Life Insurance Company Limited", Directors of the Company serve for a term of
+three years and may be re-elected. However, Independent Directors may not serve for more than six years. According to the Articles of Association,
+Supervisors of the Company serve for a term of three years and may be re-elected.
+1.
+Notes:
+1,272.59
+Mr. Zhao became a Vice President of the Company in August 2023. He has been the
+Board Secretary of the Company since February 2023. He was an Assistant to the
+President of the Company from October 2019 to July 2023. 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 and the General Manager
+of Jiangsu Branch of the Company from 2016 to 2022, the Deputy General Manager
+of each of Fujian Branch and Hunan Branch of the Company from 2007 to 2016, and
+the Deputy General Manager of Changde Branch and the General Manager of Yiyang
+Branch in Hunan province of the Company from 2001 to 2007. Mr. Zhao graduated
+from Hunan Computer School in 1988, majoring in computer software, and from China
+Central Radio and Television University in 2006, majoring in business administration,
+and is a principal senior economist.
+272.55
+No
+Total
+Since March 2024
+February 1978
+Female
+Temporary Person in
+Charge of Finance
+Yuan Ying
+No
+8.71
+3.42
+5.29
+1,000.04
+Mr. Zhao Guodong, born in 1967, Chinese
+Annual Report 2023 | Corporate Governance 67
+Mr. Ruan became a Vice President of the Company in April 2018. He has been the Chief
+Risk Officer of the Company since December 2022, and the Chief Network Security
+Officer of the Company since March 2024. Mr. Ruan has been the temporary Person in
+Charge and a Director of China Life Ecommerce Company Limited since January 2024
+and May 2023, respectively. He has been the Chairman of Wonders Information Co.,
+Ltd. since July 2023. He successively served as the General Manager (at the general
+manager level of the provincial branches) of the Information Technology Department and
+the Chief Information Technology Officer of the Company from 2016 to 2018. Mr. Ruan
+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, the Deputy Manager (responsible for daily operations) and the Manager of
+the Information Technology Department of Fujian Branch of the Company from 2000
+to 2004. Mr. Ruan 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, and is a senior
+engineer.
+Annual Report 2023 | Corporate Governance 63
+Mr. Huang Yiping, born in 1964, Chinese
+Mr. Huang became an Independent Director of the Company in July 2022. He is the Dean
+of the National School of Development, Boya Chair Professor, and the Director of the
+Institute of Digital Finance of Peking University. Currently, Mr. Huang also concurrently
+serves as a contract research fellow of the Counsellors' Office of The People's Bank
+of China, an Executive Director and the Deputy Secretary-general of the China Society
+for Finance and Banking, a member of each of China Finance 40 Forum and Chinese
+Economists 50 Forum, and the Deputy Editor in Chief of Asian Economic Policy Review.
+Mr. Huang has been an Independent Director of Ant Group Co., Ltd. since August 2020.
+He served as a member of the Monetary Policy Committee of The People's Bank of
+China from June 2015 to June 2018, the Managing Director of the Emerging Market
+Headquarters/the Chief Economist of Asian Emerging Markets of Barclays Capital Asia
+from August 2011 to June 2013, the Managing Director/the Chief Economist of the Asia-
+Pacific region of Citigroup Inc. from May 2000 to February 2009, and a senior lecturer
+and the Director of China's economic projects of The Australian National University from
+August 1993 to April 2000. Mr. Huang obtained a master's degree in economics from
+Renmin University of China and a doctoral degree in economics from The Australian
+National University.
+Ms. Chen Jie, born in 1970, Chinese
+Ms. Chen became an Independent Director of the Company in July 2022. She is the
+Director and a researcher of the Commercial Law Research Unit of the Institute of
+Law, a professor and doctoral tutor of Chinese Academy of Social Sciences. She is
+a member of the Chinese Legal System Committee of China Democratic League, as
+well as the Vice Chairman of China Business Law Society, an Executive Director of
+each of the Institute of Commercial Law and the Institute of Securities Law of China
+Law Society, and a Director of the Institute of Insurance Law of China Law Society.
+Ms. Chen is also a member of the Appeal Review Committee of Shenzhen Stock
+Exchange, a member of the Expert Advisory Committee of Beijing Financial Court, and
+an arbitrator of each of Beijing Arbitration Commission/Beijing International Arbitration
+Center, Shenzhen Court of International Arbitration, China International Economic and
+Trade Arbitration Commission, Shanghai International Economic and Trade Arbitration
+Commission and Shanghai Arbitration Commission. Ms. Chen has been an Independent
+Director of Deppon Logistics Co., Ltd. since October 2022. She served as an Independent
+Director of Central China Land Media Co., Ltd. from December 2010 to April 2017, an
+Independent Director of BOMESC Offshore Engineering Company Limited from January
+2016 to January 2019, and an Independent Director of Sino Geophysical Co., Ltd. from
+November 2015 to November 2021. Ms. Chen obtained a bachelor's degree in law from
+East China College of Political Science and Law, a master's and doctoral degrees in law
+from Peking University, and a post-doctoral qualification from the Institute of Law of
+Chinese Academy of Social Sciences.
+64
+Annual Report 2023 | Corporate Governance
+SUPERVISORS
+Mr. Cao Weiqing, born in 1965, Chinese
+Mr. Cao became the Chairman of the Board of Supervisors of the Company in November
+2022. He has been a member and the Deputy Secretary of the Party Committee of
+the Company since 2022. He successively served as the Secretary of the Discipline
+Inspection Committee, the Chairman of the Board of Supervisors and a Vice President
+of China Life Asset Management Company Limited from 2016 to 2022. He served as
+the Deputy General Manager (at the general manager level of the provincial branches)
+of Hebei Branch of the Company from 2014 to 2016, and concurrently acted as the
+Secretary of the Discipline Inspection Committee and the Chairman of the Labour Union
+of such branch. From 2002 to 2014, he successively served as the Deputy General
+Manager of the Personnel Department of China Life Insurance Company, as well as the
+Deputy General Manager and General Manager of the Strategic Planning Department
+and the General Manager of the Equity Management Department of China Life Insurance
+(Group) Company. Mr. Cao graduated from Nankai University with a master's degree in
+economics, and is a senior economist.
+Mr. Niu Kailong, born in 1974, Chinese
+Mr. Niu became a Supervisor of the Company in October 2021. He has been the
+General Manager and the President of the Strategic Planning Department (General
+Office for Deepening Reforms)/Office of the Board of Directors/China Life Institute
+of Finance of China Life Insurance (Group) Company since December 2022. Mr. Niu
+successively served as the Person in Charge of the Strategy and Investment Management
+Department of China Life Healthcare Investment Company Limited, the Deputy General
+Manager (responsible for daily operations) of the Strategic Planning Department of China
+Life Insurance (Group) Company, and the General Manager of the Strategic Planning
+Department/Office of the Board of Directors (in preparation) and the President of China
+Life Institute of Finance of China Life Insurance (Group) Company from June 2020 to
+December 2022. He successively served as the Deputy General Manager of the Strategic
+Planning Department of The People's Insurance Company (Group) of China Limited, as
+well as a Supervisor, the Deputy General Manager (responsible for daily operations) of
+the Strategic Planning Department, and the Deputy General Manager (responsible for
+daily operations) of the Strategic Planning Department/Office of the Board of Directors
+of PICC Reinsurance Company Limited from April 2017 to June 2020. Mr. Niu graduated
+from Nankai University with a doctoral degree in finance. He is an associate researcher
+(social science) and senior economist.
+Annual Report 2023 | Corporate Governance
+65
+Mr. Lai Jun, born in 1964, Chinese
+Mr. Lai became a Supervisor of the Company in October 2021. He is the General Manager
+of the Human Resources Department of the Company. Mr. Lai joined the Company in
+1984, and successively served as the Deputy General Manager and the Secretary of
+the Discipline Inspection Committee of Xinjiang Branch of the Company, the Person in
+Charge, the Deputy General Manager (responsible for daily operations) and the General
+Manager of Hainan Branch, as well as the General Manager of Xinjiang Branch of
+the Company from 2002 to 2021. Mr. Lai graduated from Party School of the Central
+Committee of CPC, majoring in economics and management, and is a senior economist.
+Ms. Ye Yinglan, born in 1974, Chinese
+Ms. Ye became a Supervisor of the Company in June 2023. She has been the General
+Manager of the Integrated Finance Department of the Company since June 2023 and
+concurrently served as the General Manager of the Asset Management Department of the
+Company since November 2023. Ms. Ye joined the Company in 1999 and successively
+served as an Assistant to the General Manager and the Deputy General Manager of
+the Finance Department, the Deputy General Manager, the Deputy General Manager
+(responsible for daily operations) and the General Manager of the Finance Management
+Department, and the General Manager of the Fund Sales Management Department
+of the Company from 2009 to 2023. Ms. Ye graduated from Wuhan University with a
+doctoral degree in economics.
+66
+Annual Report 2023 | Corporate Governance
+SENIOR MANAGEMENT
+Mr. Li Mingguang, please see the section "Directors" for his personal profile.
+Ms. Liu Hui, born in 1970, Chinese
+Ms. Liu became a Vice President of the Company in July 2023. She has been the Chief
+Investment Officer of the Company since December 2023. She has been a Director of
+the China Guangfa Bank Co., Ltd. since January 2024, a Director of China Life Asset
+Management Company Limited since August 2023, and a Director of China Life Franklin
+Asset Management Company Limited since April 2023. She was a Director of Wonders
+Information Co., Ltd. from July 2023 to January 2024. From 2014 to 2022, Ms. Liu
+successively served as a Vice President of China Life Investment Holding Company
+Limited, and an Executive Director and a Vice President of China Life Investment
+Management Company Limited, and concurrently served as an Executive Director and a
+Vice President of Sino-Ocean Group Holding Limited, the President and Chairman of China
+Life Capital Investment Company Limited, and an Executive Director and the General
+Manager of China Life Real Estate Co., Limited. She served as the General Manager
+of the Investment Management Department of the Company from 2009 to 2014, and
+successively acted as an Assistant to the General Manager of the Enterprise Annuity
+Department, the Deputy General Manager of the Pension and Institutional Business
+Department and the General Manager of the Transaction Management Department of
+China Life Asset Management Company Limited from 2005 to 2009. She worked at the
+Head Office of China Construction Bank from 1992 to 2005. Ms. Liu successively obtained
+a bachelor's degree in economics from Renmin University of China and a master's
+degree in business administration from Tsinghua University, and is a senior economist.
+Mr. Ruan Qi, born in 1966, Chinese
+Mr. Zhai Haitao, born in 1969, Chinese
+Since November 2023
+Female
+Zhang Di
+Salary/
+Remuneration
+paid in RMB ten
+housing
+provident fund
+received from the
+received
+and enterprise
+Company during
+emolument
+Reason for changes
+the Reporting
+from connected
+annuity fund paid
+Term
+thousands
+by the Company
+ten thousands
+parties of the
+Company
+in RMB
+(before tax)
+ten thousands
+28 October 2022
+Resigned due to the
+Zhao Peng
+Executive Director
+Male
+Period in RMB
+Date of birth
+Gender
+Previous position
+4.
+5.
+6.
+7.
+8.
+The positions of the Directors, Supervisors and senior management in this report reflect their positions as at the date of this report. The emoluments are
+calculated based on their terms of office during the Reporting Period.
+According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the current Directors, Supervisors
+and senior management of the Company is currently subject to review and approval. The result of the review will be disclosed when the final amount is
+confirmed.
+As elected by the Third Extraordinary General Meeting 2022 of the Company and upon approval by the NFRA, Ms. Zhuo Meijuan served as a Non-executive
+Director of the seventh session of the Board of Directors from 21 June 2023. On 20 July 2023, Ms. Zhuo Meijuan had obtained the legal advice referred
+to in Rule 3.09D of the Listing Rules, and confirmed that she understood her obligations as a director of the Company.
+As elected by the tenth extraordinary meeting of the third session of the employee representative meeting of the Company and upon approval by the
+NFRA, Ms. Ye Yinglan served as an Employee Representative Supervisor of the seventh session of the Board of Supervisors of the Company from 21
+June 2023.
+As considered and approved by the twenty-seventh meeting of the seventh session of the Board of Directors of the Company and upon approval by the
+NFRA, Mr. Li Mingguang served as the President of the Company from 10 November 2023.
+As considered and approved by the twentieth meeting of the seventh session of the Board of Directors of the Company and upon approval by the NFRA,
+Ms. Liu Hui served as a Vice President of the Company from 27 July 2023. As considered and approved by the thirty-third meeting of the seventh session
+of the Board of Directors of the Company, Ms. Liu Hui served as the Chief Investment Officer of the Company from 15 December 2023.
+As considered and approved by the thirty-sixth meeting of the seventh session of the Board of Directors of the Company, Mr. Ruan Qi served as the
+Chief Network Security Officer of the Company from 27 March 2024.
+As considered and approved by the twenty-seventh meeting of the seventh session of the Board of Directors of the Company, Mr. Zhao Guodong and
+Mr. Bai Kai served as Vice Presidents of the Company from 4 August 2023.
+As considered and approved by the eighteenth meeting of the seventh session of the Board of Directors of the Company and upon approval by the NFRA,
+Mr. Zhao Guodong served as the Board Secretary of the Company from 24 February 2023.
+As considered and approved by the twenty-seventh meeting of the seventh session of the Board of Directors of the Company and upon approval by the
+NFRA, Ms. Hu Zhijun served as the Person in Charge of Audit of the Company from 28 November 2023.
+As considered and approved by the twenty-seventh meeting of the seventh session of the Board of of Directors of the Company and upon approval by
+the NFRA, Ms. Hou Jin served as the Chief Actuary of the Company from 28 November 2023.
+Ms. Yuan Ying was appointed as the Person in Charge of Finance of the Company at the thirty-sixth meeting of the seventh session of the Board of
+Directors of the Company and her qualification as the Person in Charge of Finance of the Company is subject to the approval by the NFRA. The Board
+has designated Ms. Yuan Ying as a temporary Person in Charge of Finance of the Company before the approval on her qualification is obtained.
+Due to the adjustment of work arrangements, Mr. Li Mingguang ceased to be the Board Secretary of the Company from 24 February 2023, a Vice President
+of the Company from May 2023, and the Chief Actuary of the Company from August 2023. Mr. Li Mingguang received remuneration from the Company
+during the period from January 2023 to April 2023.
+60 Annual Report 2023 | Corporate Governance
+Resigned and Retired Directors, Supervisors and Senior Management
+Other benefits,
+social insurance,
+Total
+emoluments
+Whether
+Name
+April 1972
+Chief Investment Officer
+-4 August 2023
+adjustment of work
+Zhan Zhong
+Resigned due to personal
+Vice President
+Male
+April 1968
+July 2019-June 2023
+62.65
+20.27
+82.92
+No
+reasons
+arrangements
+Resigned due to the
+Vice President
+Female
+February 1967
+July 2019 March 2024
+125.30
+38.38
+163.68
+No
+adjustment of work
+arrangements
+Assistant to the President
+Yang Hong
+adjustment of work
+No
+63.56
+President
+October 2022-August 2023
+arrangements
+Resigned due to the
+Wang Xiaoqing
+Employee Representative
+Supervisor
+27 December 2019
+Female
+October 1965
+45.23
+16.25
+61.48
+No
+adjustment of work
+-21 June 2023
+arrangements
+Resigned due to the
+Hu Zhijun
+Employee Representative
+Supervisor
+Female
+July 1971
+13 July 2022-29 June 2023
+48.54
+664
+15.02
+Yes
+January 1980
+15.79
+Chief Actuary
+Vice President
+ten thousands
+during
+the Company
+parties of
+from connected
+ten thousands
+(before tax)
+annuity
+fund paid by
+enterprise
+in RMB
+the Company
+the Company
+Period in RMB
+the Reporting
+paid in RMB
+Term
+Date of birth
+Gender
+Position
+Name
+emolument
+Remuneration
+the Company
+fund and
+ten thousands
+parties of
+the Company
+ten thousands
+Yes
+Since 16 August 2019
+July 1971
+Male
+Non-executive Director
+Wang Junhui
+Yes
+55.22
+13.45
+41.77
+since 16 August 2019,
+President since November 2023
+President
+July 1969
+Male
+Li Mingguang
+Executive Director
+Appointed as an Executive Director
+Since 31 May 2022 .. Ye
+Executive Director
+March 1963
+Male
+Bai Tao
+Chairman of the Board
+ten thousands
+(before tax)
+in RMB
+received
+Zhuo Meijuan
+Salary/
+provident
+Total
+housing
+emoluments
+Whether
+provident
+received from
+Salary/
+received
+from connected
+Period in RMB
+fund paid by
+Other benefits,
+social insurance,
+the Reporting
+enterprise
+annuity
+paid in RMB
+ten thousands
+Date of birth Term
+Gender
+Position
+Name
+emolument
+Remuneration
+the Company
+fund and
+Female
+during
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Current Directors, Supervisors and Senior Management
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
+No
+Whether
+emoluments
+housing
+Total
+social insurance,
+Other benefits,
+59
+Annual Report 2023 | Corporate Governance
+Chief Network Security Officer since
+March 2024
+2022,
+Chief Network Security
+Officer
+No
+165.97
+40.67
+125.30
+Male
+Chief Risk Officer since December
+April 2018,
+Ruan Qi
+Chief Risk Officer
+Vice President
+Appointed as a Vice President since
+December 2023
+Chief Investment Officer since
+Chief Investment Officer
+received from
+Non-executive Director
+July 1966
+July 1964
+153.12
+38.26
+114.86
+Appointed as a Vice President since
+August 2023,
+November 1967
+Male
+Zhao Guodong
+52.21
+July 2023,
+Female February 1970
+Liu Hui
+No
+Vice President
+No
+62.18
+15.67
+46.51
+Since 21 June 2023
+October 1974
+Female
+Employee Representative
+Supervisor
+Ye Yinglan
+No
+136.54
+Appointed as a Vice President since
+Board Secretary
+Board Secretary since February 2023
+Bai Kai
+No
+Female
+Hou Jin
+9.83
+3.58
+6.25
+Since November 2023
+July 1971
+Person in Charge of Audit Female
+Hu Zhijun
+No
+126.94
+30.93
+96.01
+Since July 2018
+October 1969
+Male
+Xu Chongmiao Compliance Officer
+No
+153.58
+38.72
+Since August 2023
+June 1974
+Male
+Vice President
+34.35
+102.19
+114.86
+May 1964
+Since 13 July 2022
+March 1964
+Male
+Independent Director
+Huang Yiping
+Yes
+42.00
+42.00
+Since 14 October 2021
+January 1969
+Male
+Independent Director
+Zhai Haitao
+NNO
+42.00
+0
+42.00
+Since 29 June 2021
+April 1953
+Male
+Independent Director
+Lam Chi Kuen
+Since 14 October 2021
+Yes
+Since 21 June 2023
+42.00
+42.00
+No
+Chen Jie
+Employee Representative
+Supervisor
+Lai Jun
+Representative Supervisor
+Male
+No
+Yes
+September 1974 Since 14 October 2021
+Male
+Niu Kailong
+No
+164.50
+37.71
+126.79
+Non-employee
+Male
+September 1965 Since 4 November 2022
+April 1970
+Female
+42.00
+42.00
+0
+Cao Weiqing
+Chairman of the Board of
+Supervisors
+Independent Director
+No
+Since 13 July 2022
+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. 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, as well as the requirements of its Articles of Association
+and procedural rules. Shareholders' general meeting, Board
+of Directors and Board of Supervisors of the Company have
+been functioning independently and coordinately.
+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 businesses. They have devoted sufficient time
+in 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 operations,
+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
+constantly promotes the development of its corporate
+governance, strictly performs its obligation of information
+disclosure, enhances its transparency and actively serves
+the interest of public investors so as to enhance its image
+and position in the capital market.
+Annual Report 2023 | Corporate Governance
+73
+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 specialised
+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 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 enriched 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 intensified its management of subsidiaries
+on an ongoing basis to optimise the management
+mechanism. In 2023, the Company revised the "Measures
+for the Administration of Non-wholly Owned Subsidiaries
+and Major Associates" to strengthen its management of
+performance of duties by the Directors, Supervisors and
+senior management designated to non-wholly owned
+subsidiaries and major associates, as well as its support to
+their duty performance, thereby increasing the Company's
+management and control of non-wholly owned subsidiaries
+in corporate governance.
+The Company has applied the principles of the Corporate
+Governance Code (the "CG Code") as set out in Appendix
+C1 to the Listing Rules of the HKSE. Save for code provision
+F.2.2 of Part 2 of the CG Code, the Company has complied
+with all code provisions of the CG Code during the Reporting
+Period. Mr. Bai Tao, the Chairman of the Board of Directors
+of the Company, was unable to attend the 2022 Annual
+General Meeting of the Company as required by code
+provision F.2.2 due to other business arrangements. Mr.
+Zhao Peng, the then Executive Director of the Company,
+was elected by the Board to preside over the meeting, and
+communicated with shareholders in an effective manner.
+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.
+(Corporate Governance Structure Chart)
+SHAREHOLDERS' GENERAL MEETING
+During the Reporting Period, the Company was awarded
+the "Best Practice Case of the Board of Directors' Office
+of Listed Companies for the Year 2023" by the China
+Association for Public Companies. It was also awarded,
+among others, Grade A in the assessment by the SSE of
+information disclosure of listed companies for the year 2022-
+2023, as well as the "Top 50 in the Market Capitalisation
+List (Full List) of Chinese Listed Companies" and the "Top
+5 of the Insurance Industry" by Wind.
+The Company has actively promoted the development 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 specialised Board committees, the Board
+has established five specialised Board 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 specialised Board committees
+conduct studies on specific matters, hold meetings both
+on a regular and an ad-hoc basis, communicate with the
+management, provide advice and recommendations for the
+Board's consideration, and deal with matters entrusted or
+authorised by the Board, for the purposes of improving the
+Board's efficiency and intensifying the Board's functions.
+Department
+Audit
+Committee
+Connected
+Transactions
+Control
+Committee
+As at 31 December 2023, the Company had approximately
+18,300 branches (including branches at the provincial or
+prefecture level, sub-branches, sales offices and sales &
+services offices).
+Branches
+74 Annual Report 2023 | Corporate Governance
+72
+Annual Report 2023 | Corporate Governance
+REPORT OF CORPORATE GOVERNANCE
+OVERVIEW OF CORPORATE GOVERNANCE
+Board Secretary
+Company Secretary
+Board of Directors' Office/
+Investor Relations
+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
+Risk Management
+and
+Consumer Rights
+Protection
+Committee
+Board of
+Supervisors
+Strategy and
+Assets and
+Liabilities
+Management
+Committee
+Nomination
+and
+Remuneration
+Committee
+Shareholders' general meetings convened during the Reporting Period are as follows:
+person
+Date of the meeting
+Name of Director Type of Director
+meetings
+attended in
+required to
+attend for
+the year
+Executive Director
+2
+1
+Executive Director
+2
+1
+Non-executive Director
+2
+In 2023, the Company effectively proceeded with the "Party
+Building Foundation Program" and the "Talent Development
+Program". Under the classification system and plan for talent
+training, the Company regularly launched training courses for
+leading cadres at the headquarters, provincial, municipal and
+county levels before and during their employment, continued
+to offer enhanced training programs to young cadres and
+new employees, and further nourished professional talents
+from various business lines and sectors. The Company
+also consistently solidified the foundation for training
+development, made tremendous efforts to develop a team of
+full-time and part-time lecturers and a training management
+team, optimised training methods and approaches through
+innovation, and strived to enhance training efficiency, which
+ensured the continuous supply of talents for the high-quality
+development of the Company.
+2
+general
+Session of the meeting
+Number of
+meetings
+2022 Annual General Meeting
+28 June 2023
+First Extraordinary General
+Meeting 2023
+15 December 2023
+Index for websites on which
+resolutions were published
+www.sse.com.cn
+www.hkexnews.hk
+www.e-chinalife.com
+www.sse.com.cn
+www.hkexnews.hk
+www.e-chinalife.com
+Date of publication of
+resolutions
+28 June 2023
+15 December 2023
+Eight proposals, including the "Proposal in relation to the
+Report of the Board of Directors of the Company for the
+Year 2022", the "Proposal in relation to the Report of the
+Board of Supervisors of the Company for the Year 2022"
+and the "Proposal in relation to the Financial Report of the
+Company for the Year 2022", were considered and approved
+by a combination of on-site and online voting, and the "Duty
+Report of the Independent Directors of the Company for
+the Year 2022" and the "Report on the Overall Status of
+Connected Transactions of the Company for the Year 2022"
+were debriefed and reviewed at the 2022 Annual General
+Meeting held in Beijing on 28 June 2023.
+Five proposals, including the "Proposal in relation to the
+Election of Ms. Liu Hui as an Executive Director of the
+Seventh Session of the Board of Directors of the Company",
+the "Proposal in relation to Project Huizhi" and the "Proposal
+in relation to the Issue of Capital Supplementary Bonds by the
+Company", were considered and approved by a combination
+of on-site and online voting at the First Extraordinary General
+Meeting 2023 held in Beijing on 15 December 2023.
+Attendance records of the current Directors at the
+shareholders' general meetings convened during the
+Reporting Period are as follows:
+Number of
+shareholders'
+Training Plans
+70 Annual Report 2023 | Corporate Governance
+Remuneration Policy for Employees
+Niu Kailong
+China Life Insurance (Group) Company
+Position
+Chairman
+Vice President
+Chief Investment Officer
+Senior Director of the Strategic
+Planning Department (General
+Office for Deepening Reforms)/
+Office of the Board of Directors/
+China Life Institute of Finance
+General Manager and President of
+the Strategic Planning Department
+(General Office for Deepening
+Reforms)/Office of the Board of
+Directors/China Life Institute of
+Finance
+Term
+Since March 2022
+Since November 2023
+Since August 2016
+Since September 2023
+Since December 2022
+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.
+Abstention from voting by Directors during the discussion
+of their remuneration at Board meetings: The "Proposal in
+relation to the Remuneration of Directors and Supervisors
+of the Company for the Year 2022" was considered and
+approved at the thirty-third meeting of the seventh session
+of the Board of Directors of the Company. The Board of
+Directors agreed to submit the proposal to the general
+meeting for approval, and all Directors abstained from voting
+during the discussion of their remuneration.
+Specific recommendations given by the Nomination and
+Remuneration Committee with respect to the remuneration
+of Directors, Supervisors and senior management: The
+"Proposal in relation to the Remuneration of Directors and
+Supervisors of the Company" and the "Proposal in relation to
+the Remuneration of Senior Management of the Company"
+were considered and approved at the ninth meeting of the
+Nomination and Remuneration Committee of the seventh
+session of the Board of Directors of the Company. Having
+been fully reviewed by the Directors present at the meeting,
+the Nomination and Remuneration Committee unanimously
+approved the proposals and agreed to submit the same to
+the Board of Directors for review.
+Basis for determination of the remuneration of Directors,
+Supervisors and senior management: The remuneration
+of Directors, Supervisors and senior management 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.
+China Life Insurance (Group) 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 and retired
+Directors, Supervisors and senior management) from the
+Company totalled RMB17.9166 million. In accordance
+with the relevant requirements of the measures for the
+administration of remunerations of the Company, the
+standard for performance-based bonus (as part of the
+remuneration) payable to Directors, Supervisors and senior
+management of the Company in 2023 has not yet been
+determined.
+Zhuo Meijuan
+Li Mingguang
+Wang Junhui
+Non-executive Director
+Ms. Hu Zhijun, born in 1971, Chinese
+Ms. Hu became the Person in Charge of Audit of the Company in November 2023. She
+has been the General Manager of the Audit Department of the Company since October
+2022. She was a Supervisor of the Company from July 2022 to June 2023. Ms. Hu
+joined the Company in 2006 and successively served as an Assistant to the General
+Manager and the Deputy General Manager of Tianjin Branch, the Deputy General Manager
+and the Secretary of the Discipline Inspection Committee of Beijing Branch, and the
+General Manager of the Asset Management Department of the Company from 2009
+to October 2022. Prior to joining the Company, she worked at China Packing Import &
+Export Tianjin Company and other companies. Ms. Hu graduated from Tianjin Institute
+of Finance and Economics in 1993, majoring in accounting with a bachelor's degree in
+economics, and from Nankai University in 2006, majoring in corporate management with
+a master's degree in management. Ms. Hu is admitted as a certified public accountant in
+the PRC. She is a principal senior accountant and the national leading accounting talent
+recognised by the Ministry of Finance of the PRC in the first session of its assessment
+and selection, and was listed in the "Financial Talent Pool" of the Ministry of Finance
+of the PRC.
+Ms. Hou Jin, born in 1980, Chinese
+Ms. Hou became the Chief Actuary of the Company in November 2023. She has been
+the General Manager of the Actuarial Department of the Company since September
+2023 and concurrently served as the General Manager of the Product Department of
+the Company since November 2023. Ms. Hou successively served as a senior actuary
+(Grade III), an Assistant to the General Manager and the Deputy General Manager of
+the Actuarial Department and the temporary Chief Actuary of the Company from 2017
+to 2023. Ms. Hou successively graduated from Southwestern University of Finance and
+Economics and Nankai University, with a bachelor's degree and a master's degree in
+economics, and is a full member of the China Association of Actuaries and a member
+of the Society of Actuaries.
+Ms. Yuan Ying, born in 1978, Chinese
+Ms. Yuan became the temporary Person in Charge of Finance of the Company in March
+2024. She has been the Deputy General Manager (responsible for daily operations) of the
+Finance Department of the Company since December 2023. She successively served as
+an Assistant to the General Manager of the Accounting Department, and an Assistant
+to the General Manager and the Deputy General Manager of the Finance Department
+of the Company from 2018 to 2023. Ms. Yuan graduated from Peking University with
+a master's degree in management.
+Annual Report 2023 | Corporate Governance 69
+COMPANY SECRETARY
+Mr. Heng Victor Ja Wei, born in 1977, British
+Mr. Heng is the managing partner of Morison Heng. He holds a Master of Science
+degree of the Imperial College of Science, Technology and Medicine, the University of
+London, and 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
+20 years of experience in accounting and auditing for private and public companies and
+financial consultancy. He serves as an Independent Non-executive Director of each of
+Lee & Man Chemical Company Limited, Matrix Holdings Limited, Best Food Holding
+Company Limited, Trade Go Fintech Limited and Veson Holdings Limited, all of which are
+listed on the main board of the HKSE, as well as an Independent Non-executive Director
+of Bacui Technologies International Ltd., which is listed on the Singapore Exchange.
+Positions Held by Current Directors, Supervisors and Senior Management in Shareholders of the
+Company
+Name
+Name of shareholders
+Bai Tao
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+Annual Report 2023 | Corporate Governance
+71
+EMPLOYEES AND BRANCHES
+Employees
+Class of education level
+Master and above
+Bachelor
+College diploma
+Secondary school
+Others
+Total
+5,783
+3,585
+100,000
+Number of
+employees
+6,758
+69,799
+20,582
+953
+1,908
+100,000
+Employee Diversity
+The Company attached great importance to the enhancement
+of its development and competitiveness arising from the
+diversity of its employees. As at 31 December 2023, there
+were five female members in the senior management of the
+Company, accounting for 50% of the senior management;
+the percentage of female employees of the Company and
+its major subsidiaries was 57%.
+Total
+Others
+Other expertise and technicians
+and customer services
+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
+Icosts have to be incurred
+98,065
+1,935
+100,000
+The Company has established a remuneration and incentive
+system with reference to employee's positions, the
+Company's performance and market conditions.
+60
+Class of professional composition
+Number of
+employees
+Management and administration
+Sales and sales management
+Finance and auditing
+Insurance verification, claim processing
+19,341
+44,187
+4,545
+22,559
+As at the end of the Reporting Period, the composition of
+the employees of the Company and its major subsidiaries
+is as follows:
+2
+Chen Jie
+Independent Director
+Twenty-fourth meeting of
+the seventh session of the Board
+27 April 2023
+Twenty-third meeting of
+the seventh session of the Board
+29 March 2023
+Twenty-second meeting of
+the seventh session of the Board
+27 February 2023
+Twenty-first meeting of
+25 May 2023
+the seventh session of the Board
+Twentieth meeting of
+Date of the meeting
+Session of the meeting
+Board meetings convened during the Reporting Period are as follows:
+77
+Annual Report 2023 | Corporate Governance
+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.
+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.
+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 2023, all notices,
+agendas and related documents in respect of such regular
+Board meetings were sent to Directors in compliance with
+Hong Kong, China
+3 persons
+Female
+2 persons
+18 January 2023
+4 persons
+the seventh session of the Board
+28 June 2023
+2
+Annual Report 2023 | Corporate Governance
+78
+Eight proposals, including the "Proposal in relation to the
+Financial Report of the Company for the First Half of 2023",
+were considered and approved, and four reports, including
+the "Report on the Company's Business Operations for the
+First Half of 2023 and Work Arrangement for the Second
+Half of 2023", were debriefed.
+Eight proposals, including the "Proposal in relation to the
+Nomination of Mr. Li Mingguang as the President of the
+Company", were considered and approved.
+One proposal, namely the "Proposal in relation to the
+Solvency Report of the Company for the Second Quarter
+of 2023", was considered and approved.
+Five proposals, including the "Proposal in relation to the
+'Capital Planning of the Company for the Years from 2023
+to 2025", were considered and approved.
+Two proposals, including the "Proposal in relation to the
+'Stress Test Report on the Company's Solvency for the
+Year 2022, were considered and approved.
+Nine proposals, including the "Proposal in relation to the
+First Quarter Report of the Company for 2023" and the
+"Proposal in relation to the 'Report of Corporate Governance
+of the Company for the Year 2022'", were considered and
+approved, and four reports, including the "Report on the
+Company's Business Operations for the First Quarter of
+2023 and Work Arrangement for the Next Stage", were
+debriefed.
+33 proposals, including the "Proposal in relation to the
+Financial Report of the Company for the Year 2022", were
+considered and approved, and eight reports, including the
+"Report on the Business Operations and Management of
+the Company for 2022", were debriefed.
+Twenty-fifth meeting of
+One proposal, namely the "Proposal in relation to the
+'Product Tracing Report of the Company for 2022"'", was
+considered and approved.
+Resolutions adopted at the meeting
+the seventh session of the Board
+23 August 2023
+Twenty-eighth meeting of
+the seventh session of the Board
+4 August 2023
+Twenty-seventh meeting of
+the seventh session of the Board
+25 July 2023
+the seventh session of the Board
+Two proposals, including the "Proposal in relation to the
+Nomination of Ms. Liu Hui as a Vice President of the
+Company", were considered and approved.
+6 persons
+Twenty-sixth meeting of
+Directors by gender
+Number of Directors
+meetings
+Name of Director Type of Director
+meetings
+general
+Number of
+Number of
+shareholders'
+Attendance record of the resigned Director at the
+shareholders' general meetings convened during the
+Reporting Period is as follows:
+Zhai Haitao
+Li Mingguang
+Wang Junhui
+Zhuo Meijuan
+Lam Chi Kuen
+Bai Tao
+attended in
+2
+2
+2
+Independent Director
+Huang Yiping
+2
+2
+Independent Director
+2
+Male
+2
+Independent Director
+required to
+2
+attend for
+5 persons
+Number of Directors
+person
+Mainland China
+Directors by location
+2 persons
+2 persons
+Number of Directors
+Non-executive Independent
+Director
+Director
+Directors by type
+76 Annual Report 2023 | Corporate Governance
+The Company has developed a well-established procedure
+for nomination and election of Directors, under which the
+Board shall, when nominating Directors, consider their
+professional ability and conduct, and also take into account
+the requirement for diversity of the Board members.
+Complementarity among the Board members in aspects
+including but not limited to gender, age, culture, educational
+background, professional experience, skills and expertise will
+be considered in the selection of candidates for Directors. The
+Company will also take into account factors based on its own
+business model and specific needs from time to time. The
+ultimate decision will be based on merit and contribution that
+the selected candidates will bring to the Board. The Board
+and the Nomination and Remuneration Committee will from
+time to time discuss the measurable objective for achieving
+diversity of the Board. In relation to gender diversity, the
+Company sets its phased objective for 2024 as having three
+female Directors to serve on the Board. The above objective
+of gender diversity is expected to be achieved in the near
+future. The Company will also continue to take active actions
+in identifying female Directors and management members.
+The Company believes that the gender diversity in the Board
+would bring more inspiration to the Board and enhance the
+business development of the Company. Currently, the Board
+of the Company comprises eight members with extensive
+experience in various fields, such as financial management,
+macro economy, financial accounting, law and management.
+The diversified composition of the Board is as follows:
+Executive
+Director
+In 2023, Independent Directors of the Board of the Company
+possessed extensive experience in various fields, such as
+macro economy, financial management, 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. 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.
+Currently, the Board of the Company comprises eight
+members, including two Executive Directors, two 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 organised 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 applied 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.
+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 CG 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 specialised Board committees of which they are
+members, providing opinions at meetings of the Board and
+the specialised Board committees, resolving any potential
+conflict of interest, serving on the Audit Committee, the
+Nomination and Remuneration Committee and other
+specialised 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.
+BOARD
+75
+Annual Report 2023 | Corporate Governance
+1
+1
+Executive Director
+the year
+Zhao Peng
+Annual Report 2023 | Corporate Governance 79
+Pursuant to the "Measures for the Evaluation of the
+Performance of Duties by Directors and Supervisors" 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 2023.
+trends, macro economy and the development trend of the
+insurance industry by attending special training courses on
+certain topics as organised by the securities exchanges
+of the Company's listed jurisdictions, listed companies
+associations and the Company itself. All members of the
+Board of the Company attended the training programs on
+anti-money laundering. Ms. Zhuo Meijuan, a Non-executive
+Director, attended a training course of the SSE for the first-
+time directors, supervisors and senior management of listed
+companies in 2023 (Session II). Mr. Wang Junhui and Ms.
+Zhuo Meijuan, both being Non-executive Directors, attended
+a special training course on the rules of independent directors
+of listed companies as organised by the Listed Companies
+Association of Beijing for listed companies within Beijing.
+Mr. Lam Chi Kuen, Mr. Zhai Haitao and Ms. Chen Jie, all
+being Independent Directors, attended a follow-up training
+course for independent directors of listed companies in 2023
+(Session VI) as organised by the SSE.
+16 proposals, including the "Proposal in relation to the
+Nomination of Ms. Liu Hui as the Chief Investment Officer
+of the Company", were considered and approved, and one
+report, namely the "Audit Report on the Solvency Risk
+Management System of the Company for the Year 2023",
+was debriefed.
+Two proposals, including the "Proposal in relation to Project
+Huizhi", were considered and approved.
+One proposal, namely the "Proposal in relation to the
+Adjustment to the Composition of Specialised Committees
+of the Seventh Session of the Board of Directors of the
+Company", was considered and approved.
+One proposal, namely the "Proposal in relation to Matters
+on the Post-investment of Project Zhongcheng", was
+considered and approved.
+Currently, the seventh session of the Board of the Company
+comprises the following members: Mr. Bai Tao, the
+Chairman and an Executive Director, Mr. Li Mingguang,
+an Executive Director, Mr. Wang Junhui and Ms. Zhuo
+Meijuan, both being Non-executive Directors, and Mr. Lam
+Chi Kuen, Mr. Zhai Haitao, Mr. Huang Yiping and Ms. Chen
+Jie, all being Independent Directors. Due to the adjustment
+of work arrangements, Mr. Zhao Peng resigned from his
+position of Executive Director and the relevant positions
+in the specialised Board committees of the Company in
+August 2023.
+In 2023, all members of the Board further developed and
+refreshed their information and knowledge in aspects such
+as laws and regulations of securities markets, regulatory
+Resolutions adopted at the meeting
+Meetings and Attendance
+Six proposals, including the "Proposal in relation to the
+Third Quarter Report of the Company for 2023", were
+considered and approved, and two reports, including the
+"Report on the Company's Business Operations for the
+First Three Quarters of 2023 and Work Arrangement for
+the Fourth Quarter of 2023", were debriefed.
+During the Reporting Period, a total of 14 meetings (including five regular Board meetings and nine ad-hoc Board meetings)
+were held by the Board of the Company, of which ten meetings were convened by way of on-site meeting, four meetings
+by way of participation through communication tools. Attendance records of the current individual Directors are as follows:
+tools
+Name of Director
+Type of Director
+Number of
+meetings
+required to
+attend
+Number of
+meetings
+attended in
+person
+meetings
+participated
+through
+communication
+Number of
+meetings
+attended by
+proxies
+Bai Tao
+Li Mingguang
+Wang Junhui
+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.
+Zhuo Meijuan
+Lam Chi Kuen
+Number of
+15 December 2023
+Attendance of Meetings by Independent Directors
+Thirty-third meeting of
+Executive Director
+In 2023, the Independent Directors of the Company took
+part in two investigation and research activities in relation
+to China Life Science Park and the customer experience
+center of Beijing Branch in Zhichun Road, respectively, and
+conducted physical inspection, investigation and research
+on the two segments of technology and operations of
+the Company, for the purpose of further understanding
+of the "Technology-driven China Life" and the business
+operations and management of the Company. In addition, the
+Independent Directors listened to two special reports on the
+"development trends of the life insurance industry and the
+strategy of the Company" and the "investment management
+of the Company", enhancing their understanding of insurance
+business and the development trends of the industry.
+Investigation and Research by Independent Directors and
+the Trainings for Them
+In 2023, Independent Directors of the Company held a
+separate special meeting with the Chairman of the Board,
+during which the Independent Directors put forward their own
+views and opinions on various aspects such as the macro-
+environment, business development, and risk management,
+etc., and gave advice and recommendations on matters
+including the high-quality development, innovation in business
+model, and investment management of the Company. The
+Company attached great importance to opinions and advice
+from Independent Directors, timely submitted the concerns,
+opinions and advice of the Independent Directors to the
+management of the Company and its relevant functional
+departments, adopted their opinions and advice after careful
+deliberation and discussion by various departments, and
+promptly gave feedbacks to Independent Directors in relation
+to the adoption and implementation thereof.
+Communications between Independent Directors and All
+Parties of the Company
+All Independent Directors diligently fulfilled their
+responsibilities by attending meetings of the Board and the
+specialised Board committees convened in 2023, actively
+participating in discussions and providing guiding opinions
+on the proposals considered and discussed at the meetings,
+and seriously examining and approving such matters as
+connected transactions, nomination of Directors and
+senior management and their remunerations, annual profit
+distribution plan, internal control assessment, changes in
+accounting estimates and appointment of external auditors,
+thus expressing their independent opinions in an objective
+and fair manner. The Independent Directors were engaged
+in the work of specialised Board committees, providing
+professional advice in respect of major decisions of the
+Company. They listened to the reports from relevant
+personnel, kept abreast of the daily operations and any
+possible operational risks of the Company in a timely
+manner, and expressed their opinions and exercised their
+functions and powers at Board meetings, thus playing a
+vital role in the decision-making of the Board. In 2023, the
+Independent Directors of the Company gave their consent
+to the matters resolved by the Board and the specialised
+Board committees of the Company.
+Performance of Duties by Independent Directors
+Currently, a total of four Independent Directors serve on
+the Board of the Company, accounting for over one-third
+of the total number of members of the Board and being
+in line with the the requirements of relevant laws and
+regulations, as well as the Articles of Association. These
+four Independent Directors possess extensive experience
+in various fields, such as macro economy, financial
+management, legal compliance, accounting and auditing,
+and serve as the Chairmen/Chairpersons of the specialised
+Board committees. Other than receiving their remuneration
+as Independent Directors of the Company, they do not
+I have any business or financial interest in the Company and
+its subsidiaries, nor hold any management positions in the
+Company. The Company has received annual confirmation
+letters for self-inspection from each of the Independent
+Directors to confirm their independence and, after the
+assessment of the Board, considered them to satisfy the
+criteria for independent directors and the requirements of
+independence under the regulatory rules of the Company's
+listed jurisdictions.
+80 Annual Report 2023 | Corporate Governance
+Note: Directors who were unable to attend any meeting of the Board authorised other Directors to attend and vote at the meeting on their behalf.
+0
+1
+3
+3
+the seventh session of the Board
+7
+Date of the meeting
+Twenty-ninth meeting of
+21 September 2023
+the seventh session of the Board
+Thirtieth meeting of
+17 October 2023
+the seventh session of the Board
+Thirty-first meeting of
+the seventh session of the Board
+26 October 2023
+Thirty-second meeting of
+22 November 2023
+the seventh session of the Board
+Session of the meeting
+14
+Name of Director
+4
+14
+10
+4
+0
+Number of
+meetings
+absent
+0
+0
+0
+0
+oooo O o O 0
+0
+0
+0
+Independent Director
+313 o o o
+Number of
+The Risk Management and Consumer Rights Protection
+Committee is mainly responsible for formulating 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 and the management's response to these
+findings as delegated by the Board or on its own initiative,
+dealing with major disagreement, major risk emergency
+events or crisis events 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.
+Type of Director
+Number of
+meetings
+required to
+attend
+Number of
+meetings
+attended in
+person
+meetings
+participated
+through
+communication
+Number of
+meetings
+attended by
+Number of
+meetings
+absent
+proxies
+tools
+Zhao Peng
+Executive Director
+Attendance record of the resigned Director of the Company at the Board meetings convened during the Reporting Period
+is as follows:
+7
+Chen Jie
+4
+Executive Director
+14
+Non-executive Director
+14
+16
+9
+4
+7
+4
+Non-executive Director
+9
+7
+2
+1
+Independent Director
+10
+4
+Zhai Haitao
+Independent Director
+14
+10
+4
+0
+0
+Huang Yiping
+Independent Director
+14
+9
+14
+The Company established its Risk Management Committee
+on 30 June 2003. In December 2019, the Board resolved
+to rename the Risk Management Committee as the Risk
+Management and Consumer Rights Protection Committee,
+the additional function of management of consumer rights
+protection was included in the functions of the original Risk
+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 meetings. Currently, the Risk
+Management and Consumer Rights Protection Committee
+of the seventh session of the Board comprises Mr. Huang
+Yiping, an Independent Director, Mr. Wang Junhui and Ms.
+Zhuo Meijuan, both being Non-executive Directors, and Ms.
+Chen Jie, an Independent Director, with Mr. Huang Yiping.
+acting as the Chairman.
+required to
+attend
+Carrying out the evaluation of the performance of duties
+by Directors, Supervisors and senior management of the
+Company and their performance appraisal. The Nomination and
+Remuneration Committee of the Board reviewed proposals
+on the results of evaluating the performance of duties by
+Directors for the year 2022, the results of performance
+appraisal of senior management for the year 2022 and the
+performance target contract of senior management for the
+year 2023, the remunerations of Directors, Supervisors and
+senior management of the Company for the year 2022,
+and made recommendations to the Board in respect of
+matters such as the determination of performance target,
+performance appraisal procedures and results.
+Meetings and Attendance
+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 and other tasks in relation to internal and
+external audits. The Audit Committee is also responsible
+for communications between the internal and external
+auditors and the establishment of the internal whistleblowing
+mechanism of the Company.
+The Company established its Audit Committee on 30
+June 2003. In 2023, the Audit Committee comprised only
+Independent Directors. Currently, the Audit Committee of
+the seventh session of the Board of the Company comprises
+Mr. Lam Chi Kuen, Mr. Zhai Haitao and Ms. Chen Jie, all
+being Independent Directors, with Mr. Lam Chi Kuen acting
+as the Chairman.
+AUDIT COMMITTEE
+82 Annual Report 2023 | Corporate Governance
+The composition of the Board of Supervisors and the
+profile of each Supervisor are set forth in the section
+headed "Directors, Supervisors, Senior Management and
+Employees" of this report, and the details of the duty
+performance of the Board of Supervisors are set forth in
+the section headed "Report of the Board of Supervisors".
+BOARD OF SUPERVISORS
+As at the date of this report, Mr. Bai Tao is 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. As at the date of this report, Mr. Li
+Mingguang is 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 systems, drawing up basic
+rules and regulations of the Company, submitting to the
+Board any requests for appointment or removal of senior
+management 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.
+CHAIRMAN AND PRESIDENT
+The Company believes that the composition of the Board
+of Directors of the Company (including the number and
+proportion of Independent Directors) and the above
+mechanism for the performance of duties by Independent
+Directors can ensure that independent views and input are
+available to the Board of Directors.
+In 2023, the Company provided various materials
+to Independent Directors, which facilitated them to
+comprehend information associated with the insurance
+industry. Independent Directors have access to adequate
+resources and may obtain external professional advice to
+ensure the performance of their duties. 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.
+In 2023, the Independent Directors of the Company seriously
+listened to the issues that overseas and domestic investors
+were concerned about from results briefings, ensuring the
+communication and exchange of opinions with small- and
+medium-sized shareholders. There were no obstacles
+encountered by the four Independent Directors of the
+Company during their performance of duties.
+Performance of Other Duties
+Annual Report 2023 | Corporate Governance 81
+In the meanwhile, the Independent Directors further
+developed and refreshed their professional knowledge by
+actively attending special training courses on certain topics
+as organised by the securities exchanges of the Company's
+listed jurisdictions, listed companies associations and the
+Company itself. In 2023, the four Independent Directors of
+the Company attended the training programs of the Company
+on anti-money laundering. Mr. Lam Chi Kuen, Mr. Zhai Haitao
+and Ms. Chen Jie attended a follow-up training course for
+independent directors of listed companies in 2023 (Session
+VI) as organised by the SSE.
+debriefed.
+Five proposals, including the "Proposal in relation to the Financial
+Report of the Company for the First Quarter of 2023" and the "Proposal
+in relation to the Appointment of Auditors of the Company for the Year
+2023", were considered and approved, and two reports, including the
+"Report of PricewaterhouseCoopers on the Results of Agreed-upon
+Procedures for the First Quarter of 2023 and the Interim Review Plan
+for 2023", were debriefed.
+Two proposals, including the "Proposal in relation to the Financial
+Report of the Company for the First Half of 2023", were considered and
+approved, and one report, namely the "Report of PricewaterhouseCoopers
+on the Interim Review for 2023", was debriefed.
+One proposal, namely the "Proposal in relation to the Financial
+Report of the Company for the Third Quarter of 2023", was
+considered and approved, and one report, namely the "Report of
+PricewaterhouseCoopers on the Agreed-upon Procedures for the Third
+Quarter of 2023 and the Annual Review Plan", was debriefed.
+14 December 2023
+Twelfth meeting of the Audit Committee
+of the seventh session of the Board
+One proposal, namely the "Pre-approval of the Scope of Additional
+Services of PricewaterhouseCoopers", was considered and approved.
+Performance of Duties by the Audit Committee
+In 2023, the Audit Committee of the Board of the
+Company performed its relevant duties and functions
+in strict compliance with the "Procedural Rules for the
+Audit Committee Meetings". During meetings of the Audit
+Committee, all members reviewed the proposals in relation
+to, among others, the audit of the Company, its financial
+reports, appointment of external auditors, internal control
+and compliance, and actively participated in discussions at
+the meetings.
+Reviewing and approving financial information of the
+Company and the disclosure thereof. The Audit Committee
+of the Board, according to its duties, reviewed and approved
+the Company's financial reports for the year 2022, the first
+quarter of 2023, the first half of 2023 and the third quarter
+of 2023. 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. By reviewing and monitoring the completeness of
+financial statements, annual report and accounts, interim
+report and quarterly reports of the Company, examining
+significant matters such as financial statements and reports,
+and focusing on changes in accounting estimates, changes
+in major accounting items and compliance with accounting
+standards, the Audit Committee guaranteed the accuracy,
+completeness and consistency of the financial information
+publicly disclosed by the Company.
+84
+Annual Report 2023 | Corporate Governance
+During the Reporting Period, five meetings were held by the Audit Committee of the Board of the Company. Attendance
+records of individual members are as follows:
+Name of member
+Position
+Lam Chi Kuen
+Ten proposals, including the "Proposal in relation to the Financial
+Report of the Company for the Year 2022", the "Proposal in relation
+to the Relevant Arrangement for New Accounting Standards of
+the Company" and the "Proposal in relation to the Appointment
+of PricewaterhouseCoopers for the Implementation of the Agreed-
+upon Procedures of the Company for the First Quarter of 2023",
+were considered and approved, and one report, namely the “Report
+of PricewaterhouseCoopers on the Audit for the Year 2022", was
+Description
+Eleventh meeting of the Audit Committee
+of the seventh session of the Board
+25 October 2023
+Tenth meeting of the Audit Committee
+of the seventh session of the Board
+22 August 2023
+Ninth meeting of the Audit Committee
+of the seventh session of the Board
+26 April 2023
+Eighth meeting of the Audit Committee
+of the seventh session of the Board
+28 March 2023
+Meetings convened
+The meetings convened are as follows:
+83
+Supervising and assessing the internal and external audits
+of the Company. In 2023, the Audit Committee of the Board
+reviewed the proposals of the Company in relation to, among
+others, the internal audit work for 2022 and the internal audit
+work for the first half of 2023, communicated any matters of
+concern in a timely and effective manner, further understood
+the duties of the Company's audit departments, and
+supervised the compliance and 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. The Audit Committee strengthened
+communications with external auditors and supervised the
+performance of duties by the external auditors in a diligent
+and responsible way. Besides regular meetings, the Audit
+Committee convened communication meetings in advance
+with external auditors 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. Prior to the audit conducted
+by the external auditors and the review of the annual report,
+the Audit Committee communicated the relevant situations
+with the external auditors and listened to the report in
+connection with the arrangement of the audit. Before an
+audit opinion was issued by the external auditors, the Audit
+Committee commenced in-depth communications with them
+so as to understand whether there were any issues arisen
+during the audit and follow up with the progress of the audit.
+In the selection and appointment of external auditors, the
+Audit Committee performed its duty of review in compliance
+with laws.
+Annual Report 2023 | Corporate Governance
+96
+0/5
+5/5
+Independent Director, member of the Audit
+Committee of the seventh session of the Board
+0/5
+5/5
+0/5
+5/5
+Number of
+meetings
+attended by
+proxies/Number
+of meetings
+required to
+attend
+Number of
+meetings
+attended in
+person/Number
+of meetings
+required to
+attend
+Independent Director, Chairman of the Audit
+Committee of the seventh session of the Board
+Chen Jie
+Zhai Haitao
+Note: The number of meetings attended in person includes meetings attended on-site and by way of telephone or video conference.
+RISK MANAGEMENT AND CONSUMER RIGHTS
+PROTECTION COMMITTEE
+Supervising and assessing the effectiveness of internal
+control of the Company. The Audit Committee of the Board
+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 the
+"Standard Regulations on Corporate Internal Control" and
+other domestic and overseas regulatory requirements.
+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 NFRA and the securities
+exchanges of the Company's listed jurisdictions. As required
+by its duties and responsibilities, the Audit Committee
+reviewed the annual work report on and working plan for
+internal control assessment, and the annual compliance
+report of the Company to ensure that its work was conducted
+strictly according to the relevant regulatory requirements in
+a reasonable and efficient manner.
+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 seventh
+session of the Board comprises Ms. Chen Jie, an Independent
+Director, Mr. Wang Junhui, a Non-executive Director, and
+Mr. Lam Chi Kuen, an Independent Director, with Ms. Chen
+Jie acting as the Chairperson.
+18 January 2023
+Eighth meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+28 March 2023
+Ninth meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+26 April 2023
+Tenth meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+4 August 2023
+Eleventh meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+25 October 2023
+Twelfth meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+14 December 2023
+Thirteenth meeting of the Nomination and
+Remuneration Committee of the seventh
+session of the Board
+Description
+One proposal, namely the "Proposal in relation to the Nomination of
+Ms. Liu Hui as a Vice President of the Company", was considered
+and approved.
+Six proposals, including the "Proposal in relation to the Remuneration
+of Directors and Supervisors of the Company" and the "Proposal in
+relation to the Remuneration of Senior Management of the Company",
+were considered and approved.
+One proposal, namely the "Proposal in relation to the 'Corporate
+Governance Report for the Year 2022' with respect to the 'Incentive
+and Restraint Mechanism'", was considered and approved.
+Eight proposals, including the "Proposal in relation to the Nomination of
+Mr. Li Mingguang as the President of the Company", were considered
+and approved.
+One proposal, namely the "Proposal in relation to the Performance
+Target Contracts of Senior Management of the Company for the Year
+2023", was considered and approved.
+Four proposals, including the "Proposal in relation to the Nomination
+of Ms. Liu Hui as the Chief Investment Officer of the Company", were
+considered and approved.
+Annual Report 2023 | Corporate Governance
+87
+Performance of Duties by the Nomination and
+Remuneration Committee
+In 2023, the Nomination and Remuneration Committee of
+the Board of the Company performed its relevant duties and
+functions in strict compliance with the "Procedural Rules for
+the Nomination and Remuneration Committee Meetings".
+All members of the Nomination and Remuneration
+Committee performed their obligations in a responsible
+manner and reviewed the proposals on the nomination of
+Directors of the seventh session of the Board and senior
+management of the Company, their business objectives
+and performance 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 Committee
+of the Board, all members actively participated in 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 (including taking into account
+diversity factors, such as gender, age, cultural and educational
+background, skills, expertise and experience), fully reviewed
+the professional qualifications and industrial background of
+the candidates for Directors and members of the Board
+committees. It also conducted a careful assessment on the
+qualifications, skills, expertise and experience of candidates
+for senior management to ensure that the candidates met
+the requirements set by the Company, and submitted a
+review opinion to the Board and agreed to submit such
+proposals to the Board for consideration.
+Proposing remuneration policy of Directors, Supervisors
+and senior management of the Company. The Nomination
+and Remuneration Committee of the Board took into
+account various factors such as business development
+management, strategic investment decisions, and corporate
+governance management and control, carefully examined
+and determined the specific remuneration packages of all
+Executive Directors and senior management, 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,
+88 Annual Report 2023 | Corporate Governance
+and seriously appraised the performance of Directors in the
+discharge of their duties.
+Meetings convened
+The meetings convened are as follows:
+Annual Report 2023 | Corporate Governance
+86
+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 criteria of
+Directors and senior management. The 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 of candidates to be nominated as new Directors,
+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 industry, and
+the candidates' commitment to the Company. As to the
+nomination of Independent Directors, the Nomination and
+Remuneration Committee will give special consideration to
+the independence of the relevant candidates.
+The Nomination and Remuneration Committee determines,
+with delegated responsibility by the Board, the specific
+remuneration packages of all Executive Directors and
+senior management. The fixed salary of the Executive
+Directors and other members of senior 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
+stock appreciation rights to be granted are determined with
+reference to market levels and the actual circumstances of
+the Company.
+Annual Report 2023 | Corporate Governance 85
+Meetings and Attendance
+During the Reporting Period, six meetings were held by the Nomination and Remuneration Committee of the Board of the
+Company. Attendance records of individual members are as follows:
+Name of member
+Position
+Number of
+meetings
+attended in
+person/Number
+of meetings
+required to
+attend
+Number of
+meetings
+attended by
+proxies/Number
+of meetings
+Independent Director, Chairperson of the
+Chen Jie
+NOMINATION AND REMUNERATION COMMITTEE
+Nomination and Remuneration Committee of the
+seventh session of the Board
+0/6
+Wang Junhui
+Non-executive Director, member of the Nomination
+and Remuneration Committee of the seventh
+session of the Board
+2/6
+4/6
+Lam Chi Kuen
+Independent Director, member of the Nomination
+and Remuneration Committee of the seventh
+session of the Board
+6/6
+90
+0/6
+Notes:
+1. The number of meetings attended in person includes meetings attended on-site and by way of telephone or video conference.
+Directors who were unable to attend any meeting of specialised Board committees authorised other Directors to attend and vote at the meeting on their
+behalf.
+2.
+6/6
+Independent Director, member of the Audit
+Committee of the seventh session of the Board