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+5
+Email: ir@e-chinalife.com
+Securities Representative: Li Yinghui
+Office Address: 16 Financial Street, Xicheng District, Beijing, P.R. China
+Telephone: 86-10-63631191
+Fax: 86-10-66575112
+Email: liyh@e-chinalife.com
+* Ms. Li Yinghui, Securities Representative of the Company, is also the main contact person of the external
+Company Secretary engaged by the Company
+Registered Office Address:
+16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Current Office Address:
+16 Financial Street, Xicheng District, Beijing, P.R. China 100033
+Telephone: 86-10-63633333
+Fax: 86-10-66575722
+Website: www.e-chinalife.com
+Email: ir@e-chinalife.com
+3
+52525
+25252
+Fax: 86-10-66575112
+Office Address: 16 Financial Street, Xicheng District, Beijing, P.R. China
+Telephone: 86-10-63631241
+Board Secretary: Zheng Yong
+China Life Insurance Company Limited (“China Life")
+China 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
+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
+China Life Insurance Company Limited Annual Report 2016
+2
+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”.
+1
+Except for "the Company" referred to in the Consolidated Financial Statements.
+China Life Insurance Company Limited Annual Report 2016
+Company Profile
+Registered Name in Chinese:
+中國人壽保險股份有限公司(簡稱「中國人壽」)
+Registered Name in English:
+Material Risk Alert:
+Company Profile
+Hong Kong Office:
+Office Address: 16/F, Tower A, China Life Centre, One Harbour Gate,
+China Life
+601628
+The Stock Exchange of
+Hong Kong Limited
+China Life
+New York Stock
+Exchange
+2628
+LFC
+H Share Registrar and Transfer Office:
+Computershare Hong Kong Investor Services Limited
+Shanghai Stock Exchange
+Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong
+Deutsche Bank
+60 Wall Street, New York, NY 10005
+Domestic Legal Adviser:
+King & Wood Mallesons
+International Legal Advisers:
+Latham & Watkins
+Debevoise & Plimpton LLP
+Auditors of the Company:
+Depositary of ADR:
+China Life Investment Holding Company Limited, a wholly-owned
+subsidiary of CLIC
+ADR
+A Share
+18 Hung Luen Road, Hung Hom, Kowloon, Hong Kong
+Telephone: 852-29192628
+Fax: 852-29192638
+Media for the Company's A Share Disclosure:
+China Securities Journal
+Shanghai Securities News
+Securities Times
+CSRC's Designated Website for the Company's Annual Report Disclosure:
+H Share
+www.sse.com.cn
+The Company's Annual Reports may be obtained at:
+12/F, China Life Plaza, 16 Financial Street, Xicheng District, Beijing, P.R. China
+Stock Information:
+Stock Type
+Exchanges on which the
+Stocks are Listed
+Stock Short Name
+Stock Code
+The Company's H Share Disclosure Websites:
+HKExnews website at www.hkexnews.hk
+The Company's website at www.e-chinalife.com
+Domestic Auditor: Ernst & Young Hua Ming LLP
+China Life Property and Casualty Insurance Company Limited, a non-
+wholly owned subsidiary of CLIC
+China Life AMP Asset Management Company Limited, an indirect non-
+wholly owned subsidiary of the Company
+Internal Control and Risk Management
+Honors and Awards
+Independent Auditor's 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
+China Life Insurance Company Limited
+Annual Report 2016
+Contents
+2
+3
+9
+10
+35
+Corporate Governance
+Directors, Supervisors, Senior Management and Employees
+Changes in Ordinary Shares and Shareholders Information
+Significant Events
+C
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Stock Code: 2628
+Annual Report 2016
+點諧中國
+成己为人
+成人达己
+45
+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.
+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 2016, the Company had approximately
+246 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
+Report of the Supervisory Committee
+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.
+48
+61
+65
+AMP
+CLWM
+CLP&C
+CLI
+CIRC
+CSRC
+HKSE
+SSE
+Pension Company
+Company Law
+Securities Law
+Articles of Association
+China or PRC
+RMB
+China Life Insurance Company Limited and its subsidiaries
+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
+Insurance Law
+China Life Wealth Management Company Limited, an indirect non-
+wholly owned subsidiary of the Company
+AMC
+The Company'
+80
+60
+102
+106
+107
+113
+115
+117
+CLIC
+118
+227
+52525
+1
+25252
+China Life Insurance Company Limited Annual Report 2016
+Definitions and Material Risk Alert
+In this annual
+report, unless the context otherwise requires, the following expressions have the following meanings:
+120
+Address: Level 16, Ernst & Young Tower, Oriental Plaza, No.1 East Changan Avenue,
+Legal Representative: Yang Mingsheng
+Name of the Signing Auditors: Zhang Xiaodong, Wu Jun
+Weighted average ROE (%)
+6.16
+11.56
+decrease of 5.40
+12.83
+11.22
+5.38
+percentage points
+Ratio of assets and liabilities* (%)
+88.59
+86.68
+increase of 1.91
+87.21
+88.72
+88.25
+Gross investment yield' (%)
+4.56
+Major financial ratio
+4.68
+2.42
+2.77
+1.22
+-45.7%
+1.14
+0.88
+0.39
+Equity holders' equity pers
+share
+10.74
+6.39
+11.41
+10.05
+7.80
+7.82
+Net cash inflow/(outflow) from operating
+activities per share
+3.15
+(0.67)
+N/A
+-5.9%
+0.66
+percentage points
+decrease of 1.83
+percentage points
+4.88
+Dongcheng District, Beijing, P.R. China
+The percentage of first-year regular premiums in long-term new policy premiums was 56.28%, an increase of 12.06
+percentage points year-on-year. The first-year regular premiums surpassed single premiums for the first time since
+the listing of the Company. Of these, the percentage of first-year regular premiums with ten years or longer payment
+duration in first-year regular premiums was 54.69%, an increase of 2.49 percentage points year-on-year. Along with the
+high growth of the businesses, the premium payment duration was also lengthened, resulting in the initial establishment
+of a sustainable development model with first-year premiums driven by first-year regular premiums and gross written
+premiums driven by renewal businesses. Meanwhile, the Company pushed forward the product diversification strategy,
+promoted product innovation, put more efforts into developing protection type businesses, and continually optimized
+the business structure. The value of one year's sales was RMB49,311 million, an increase of 56.4% year-on-year, with
+the value doubled over the past two years.
+New enhancement in competitiveness. “No matter how long and difficult the road is, one can reach the destination
+with steady walks.” Being market-oriented, centering around the development of individual insurance as the guideline
+and pushing forward the three core strategies of developing individual business, focusing on large-and medium-sized
+cities and reinforcing rural business development with concerted efforts, the Company was committed to improving
+sustainable development capability and the competitiveness in key markets. With a leading market share in terms of
+gross written premiums, the Company also took the lead in terms of first-year regular premiums and sales force in the
+exclusive agent
+channel whose core role has been brought into full play. Competitive landscape in large- and medium-
+sized cities has continued to improve and first-mover advantage in rural market has been further reinforced. As at the
+end of the Reporting Period, the total number of sales force across all channels was 1.814 million, an increase of 57.1%
+year-on-year. The number of productive agents grew significantly, and remarkable achievements have been made in the
+size expansion and quality improvement of the sales force.
+New progress in reform and innovation. Being customer-oriented and accelerating the construction of a “New
+Generation of Integrated Business Processing System”, the Company started its business process reengineering,
+constructed a new business mode and technological infrastructure, and launched two platforms of “China Life E-Store"
+and “China Life E-Bao Mobile Customer Services System", as well as more than twenty new applications, through which
+customer experience and operational efficiency have been significantly improved, and as a result, the Company has taken
+a solid step in the transformation to an Internet-based operation and management mode. In addition, the Company built
+a motivating platform for innovation, and established four operation and management innovation pilot zones where
+the atmosphere of reform and innovation was strong and the fruitful results generated by innovation were gradually
+emerging.
+New stride in comprehensive strength. As at the end of the Reporting Period, total assets of the Company amounted to
+RMB2.70 trillion, an increase of 10.2% year-on-year, remaining at the first place in the industry, and investment assets
+amounted to RMB2.45 trillion, an increase of 7.2% year-on-year. Core solvency ratio and comprehensive solvency ratio
+of the Company reached 280.34% and 297.16%, respectively. The Company achieved an industry-leading score in the
+"Solvency Aligned Risk Management Requirements and Assessment” (“SARMRA") conducted by the CIRC. In order
+to accommodate new situations of economic and financial development and meet comprehensive needs of customers,
+the Company successfully increased its stakes in China Guangfa Bank Co., Ltd. (“CGB”), and a concerted action plan
+between CGB and the Company was initiated, under which insurance products sold by CGB business outlets grew
+rapidly and preliminary synergy effects from insurance-banking collaboration have been emerging.
+RETROSPECTIVE REVIEW: SEIZING OPPORTUNITIES, STICKING TO THE INHERENT
+RULES, AND HARMONIZING WITH THE STAKEHOLDERS
+In 2016, at the 20th anniversary of the separated operation of life insurance business and the overall adoption of the
+individual agent system, the Company has achieved outstanding results in leap-frog development of its business and a
+historic breakthrough in business restructuring. What the Company has achieved in 2016 is the result of advancement
+with great endeavor and accumulated hard work for many years. Extensive experience in Chinese insurance market tells
+us that fulfilling the essence of the insurance industry requires persistence, and the new era of reform needs enthusiasm
+and innovation.
+7
+52525
+25252
+8
+China Life Insurance Company Limited Annual Report 2016
+Chairman's Statement
+the
+Seizing opportunities. “A flexible person with good knowledge can win, and a creative person with integrity can make
+progress.” Reform and opening-up over three decades has brought profound changes to China's economy and society,
+and the consistent improvement of the market economy has laid an institutional foundation for the insurance industry.
+In particular, since the issuance of the “Several Opinions of the State Council on Accelerating the Development of the
+Modern Insurance Service" in 2014, developing the commercial insurance industry has become a national commitment.
+Seizing the opportunities and adhering to the guideline of “development as the first priority", the Company was
+committed to continuous growth of the value of our business and the upgrade of insurance supply so as to meet the
+increasing insurance demands of customers. Adapting to changes in the demographic structure, changes in the ways of
+care for senior citizens, new requirements for social security, and healthcare system reforms, the Company implemented
+strategy of "Integrated Pension and Inclusive Healthcare Service". Specifically, the Company undertook more than
+250 supplementary major medical insurance projects, providing services for 420 million people; carried out innovative
+smart pension services by establishing senior living communities in places such as Beijing, Suzhou, Tianjin, and Sanya;
+and creating a healthcare and pension service sub-brand called “China Life Senior Living Homes”, forming a strategic
+layout of the senior living communities featuring “Three Points in a Line and Evergreen in Four Seasons"; and the
+Company sped up its presence in the healthcare and medicare industry and extended the healthcare industry chain.
+Firmly following the anti-poverty strategy of the state, the Company advanced the mode of poverty alleviation by means
+of insurance in Ningxia, Gansu and Chongqing and developed inclusive businesses such as micro-insurance to achieve
+a unification between economic and social benefits. With the help of the national “Internet+” initiative, the Company
+deeply integrated IT innovation results and life insurance business, advancing the construction of “High-tech China
+Life” and firmly facilitating reform and innovation throughout the Company.
+Sticking to the inherent rules. “For anything to succeed, it requires thorough consideration and then forceful
+execution." As a leader in the industry, the Company's development echoed the path of life insurance industry in China
+towards "an insurance superpower” in the world. Just as the leap-frog development of the Chinese insurance industry
+has not always been smooth, China Life's development is full of obstacles. In many years of our professional operation,
+we learned by doing and did by learning, increasingly realizing the significance of “knowing the rules, following the
+rules and practicing the rules", which is the greatest advantage of an insurance operation. Adhering to the philosophy
+of "prudent operation and credible service", we controlled the cost of liabilities to a reasonable level and realized
+an interactive linkage between assets and liabilities; sticking to the development plan of focusing on value, regular
+premiums, individual insurance, sales force and urban areas and taking value as the guide, we coordinated the relations
+among shareholders, employees, sales force and customers; we put great efforts into developing long- and medium-term
+regular businesses and protection type products, optimizing business structure and reinforcing sustainable development;
+we followed a route of business growth driven by development of sales force, including both its size expansion and
+quality improvement, and continually expanded our business coverage and the rate of market penetration. While
+persisting in our constant recurring rules, we realized “change is the only constant", such that we took “innovation
+driven" as the general strategy and have been actively building the Company to be an innovative enterprise. We need
+to achieve accelerated growth while building a firm foundation, and look for opportunities and momentum while
+embracing the changes.
+Harmonizing with the stakeholders. “Victory is ensured when people pool their strength; success is secured when people
+pour their talents together." We valued customer interests, offered solutions based on customer needs, and cultivated
+new customers while maintaining existing customers so that customer resources became the value engine for corporate
+development. We listened to the opinions of investors, and communicated with investors in all respects, and in addition
+to ensuring that shareholders shared in the growth of the Company, we also actively included opinions of investors into
+the Board's decision making process. Knowing the truth that “prosperity of a business is driven by people", we listened
+to employees and agents, improved the talent development system, advanced the China Life “entrepreneur” project,
+and built platforms for employees' and agents' career development, thus steadily increasing the income of the sales force
+and enhancing the organic driving force. Consciously contributing to the economy and society and actively engaging in
+public welfare undertakings, we are an excellent corporate citizen. With the expectations of the Company's stakeholders
+being generally satisfied and stronger senses of achievement being fulfilled by employees and agents, the corporate
+culture of "s success for
+you, success by you" could be further promoted.
+Great breakthrough in business restructuring. The Company continued reducing its single premium business in the
+bancassurance channel and focused on accelerating the growth of first-year regular premium business. First-year regular
+premiums and first-year regular premiums with ten years or longer payment duration doubled over the past two years.
+New records for business development. During the Reporting Period, the Company's gross written premiums were
+RMB430,498 million, an increase of 18.3% year-on-year, the highest growth since 2009, making the Company the first
+and the sole insurance company with premiums exceeding RMB400,000 million in China. First-year regular premiums
+were RMB93,945 million, an increase of 51.8% year-on-year, and first-year regular premiums with ten years or longer
+payment duration were RMB51,378 million, an increase of 59.0% year-on-year, both indicators setting record highs.
+Premiums from short-term insurance were RMB40,060 million, an increase of 23.7% year-on-year. Renewal premiums
+were RMB223,502 million, exceeding RMB200,000 million for the first time, realizing an increase of 16.6% year-on-
+year, and setting a record high since 2012.
+The year 2016 marked the beginning of the “13th Five-Year Plan” and was also a year in which the Company achieved
+fruitful results with pioneering spirit. Specifically, we achieved good results, emphasizing on the protection function
+of insurance, adhering to the operating guideline of “prioritizing value, strengthening sales force, optimizing business
+structure, achieving stable growth and safeguarding against risks”, and actively promoted supply-side reform. We
+achieved an incredible result not only in the history of the Company but also in the history of the industry.
+2016 OVERVIEW: GROWTH, DEVELOPMENT AND BREAKTHROUGH
+2.80
+Notes:
+1.
+Net profit refers to net profit attributable to equity holders of the Company, while equity holders' equity refers to equity
+attributable to equity holders of the Company.
+2.
+Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities +
+Held-to-maturity securities + Term deposits + Securities purchased under agreements to resell + Loans + Statutory deposits
+restricted + Investment properties
+3.
+4.
+5.39
+5.
+Gross investment yield = (Net investment income + Net realised gains/(losses) on financial assets + Net fair value gains/(losses)
+through profit or loss)/((Investment assets at the beginning of the period + Investment assets at the end of the period)/2). The
+figures as at the end of the past years were adjusted on the same basis.
+5
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Chairman's Statement
+Yang Mingsheng, Chairman
+6
+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
+Earnings per share (basic and diluted)³
+China Life Insurance Company Limited Annual Report 2016
+Chairman's Statement
+2,246,567 1,972,941 1,898,916
+17.6%
+6.6% 440,766 417,883
+330,105 324,813
+Benefits, claims and expenses
+522,794
+463,492
+12.8%
+404,275
+371,485
+322,126
+391,557 363,554
+Insurance benefits and claims expenses
+407,045
+352,219
+15.6%
+315,294
+312,288 300,562
+Profit before income tax
+23,842
+45,931
+362,301
+426,230
+Net premiums earned
+507,449
+Per share (RMB)
+International Auditor: Ernst & Young
+Address: 22/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong
+China Life Insurance Company Limited
+Annual Report 2016
+Financial Summary
+RMB million
+Under International Financial
+-48.1%
+Reporting Standards (IFRS)
+2015
+Change
+2014
+2013
+2012
+For the year ended
+Total revenues
+540,781
+2016
+40,402
+Major Financial Data'
+10,968
+68,292
+132,182
+As at 31 December
+Total assets
+2
+Investment assets
+Total liabilities
+Total equity holders' equity
+2,696,951
+2,448,315
+2,453,283
+2,389,303
+2,122,101
+303,621
+322,492
+29,451
+10.2%
+7.2% 2,100,870 1,848,681 1,790,838
+12.6% 1,959,236 1,750,356 1,675,815
+-5.9% 284,121 220,331 221,085
+78,247
+N/A
+2,287,639
+89,098
+(18,811)
+19,127
+34,699
+-44.9%
+of the Company
+Net profit attributable to equity holders
+24,765
+11,061
+Net profit attributable to ordinary share holders
+32,211
+18,741
+34,514
+-45.7%
+32,211
+24,765
+11,061
+of the Company
+Net cash inflow/(outflow) from operating activities
+100%
+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.
+Activities of the Supervisory Committee during the Reporting Period
+3.
+The Supervisory Committee had no objection in respect of any matters under its supervision
+during the Reporting Period.
+2.
+Note: At the sixth meeting of the fifth session of the Supervisory Committee held on 28 April 2016, Mr. Miao Ping gave written
+authorization for Mr. Shi Xiangming to act as his proxy to attend, vote and chair the meeting.
+100%
+5/5
+5/5
+100%
+515
+5/5
+100%
+89
+AUDIT COMMITTEE
+52525
+Position
+Name of member
+Number of meetings attended
+80%
+In 2016, five 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
+69
+1.
+The Company established its Audit Committee on 30 June 2003. In 2016, the Audit Committee comprised only
+Independent Directors of the Company. At present, the Audit Committee of the fifth session of the Board comprises
+the Independent Directors, Mr. Robinson Drake Pike, Mr. Chang Tso Tung Stephen and Mr. Tang Xin, with Mr.
+Robinson Drake Pike acting as the Chairman. 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.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2016
+90
+06
+25252
+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.
+Note
+Robinson Drake Pike
+Number of meetings attended
+In 2016, the Nomination and Remuneration Committee reviewed the proposal on the remuneration of Directors,
+Supervisors and senior management, 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.
+93
+Attendance rate
+Performance of duties by the Nomination and Remuneration Committee
+of the fifth session of the Board
+Nomination and Remuneration Committee
+100%
+5/5
+Non-executive Director, member of the
+Miao Jianmin
+of the fifth session of the Board
+Nomination and Remuneration Committee
+100%
+515
+Independent Director, member of the
+China Life Insurance Company Limited
+Annual Report 2016
+Attendance rate
+Wang Cuifei
+Xiong Junhong
+Zhan Zhong
+Shi Xiangming
+Miao Ping
+Name of Supervisor
+4/5
+In 2016, five meetings were held by the fifth session of the Supervisory Committee. Attendance records of
+individual Supervisors are as follows:
+1.
+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.
+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 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.
+Corporate Governance
+Meetings and attendance
+Robinson Drake Pike
+Corporate Governance
+4/5 Note
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+(4)
+(5)
+(6)
+(7)
+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.
+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.
+Examining the internal audit functions of the Company. The Audit Committee reviewed proposals
+including the "Proposal on the 2015 Internal Audit Summary and the 2016 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 2016 and the Internal Audit Work Plan for the Second Half of 2016", 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.
+Conducting investigation and research of local branches. From 18 to 23 August 2016, 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 local branches of the Company in Gansu Province, Wuwei City, Zhangye
+City and Lanzhou City, and examined the implementation of internal audit of Gansu local branch.
+NOMINATION AND REMUNERATION COMMITTEE
+The Company established the Management Training and Remuneration Committee on 30 June 2003. On 16
+March 2006, the Board resolved to change the name of the Management Training and Remuneration Committee to
+the Nomination and Remuneration Committee, with a majority of Independent Directors on the committee. 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.
+92
+2.
+China Life Insurance Company Limited
+Annual Report 2016
+52525
+Number of meetings attended
+Attendance rate
+Chang Tso Tung Stephen
+Independent Director, Chairman of the
+Nomination and Remuneration Committee
+5/5
+91
+Position
+In 2016, five 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
+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.
+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. 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.
+Corporate Governance
+Name of member
+Reviewing the change of the auditor for US Form 20-F of the Company for the year 2016. In 2016, the
+"Proposal in relation to the Change of the Auditor for US Form 20-F of the Company for the Year 2016"
+was considered and approved at the eighth meeting of the Audit Committee of the fifth session of the Board
+of Directors and then submitted to the Board and shareholders' general meeting for approval.
+Reviewing connected transactions. In 2016, the Audit Committee reviewed the “Proposal in relation to
+the Renewal of the ‘Framework Agreement for Daily Connected Transactions' by each of the Company
+and Pension Company with AMP", the "Proposal in relation to the Renewal of the 'Framework Agreement
+for Daily Connected Transactions' by each of China Life Insurance (Group) Company and CLP&C with
+AMP" and the "Proposal in relation to the Renewal of the 'Framework Agreement for Daily Connected
+Transactions' between the Company and China Guangfa Bank Co., Ltd.”, and submitted them to the Board
+and shareholders' general meeting for approval; and listened to the report on the list of connected persons 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 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 report of the
+Company, and examining significant matters such as financial statements and reports, the Audit Committee
+guaranteed the accuracy and completeness of the financial information disclosed by the Company and the
+consistency of its financial reports. Prior to the audit conducted by the accounting firm and the review of
+the annual report, the Audit Committee communicated the relevant situations with the auditors and listened
+to the report in connection with the arrangement of the audit. After a preliminary opinion on audit was
+issued by the accounting firm, the Audit Committee commenced in-depth communications with it so as to
+understand whether there were any issues arisen during the audit.
+Huang Yiping
+Name of member
+In 2016, attendance records of the resigned Director at the Audit Committee meetings are as follows:
+Note: At the eighth meeting of the Audit Committee of the fifth session of the Board held on 27 October 2016, Mr. Robinson
+Drake Pike gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend, vote and chair the
+meeting.
+Committee of the fifth session of the Board
+100%
+Position
+5/5
+Tang Xin
+Committee of the fifth session of the Board
+100%
+5/5
+Chang Tso Tung Stephen Independent Director, member of the Audit
+80%
+Independent Director, member of the Audit
+Independent Director, Chairman of the Audit
+Committee of the fifth session of the Board
+Number of meetings attended
+Note
+(3)
+(2)
+(1)
+In 2016, 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.
+Independent Director, member of the Audit
+Corporate Governance
+China Life Insurance Company Limited
+Note: At the fourth meeting of the Audit Committee of the fifth session of the Board held on 29 February 2016, Mr. Huang
+Yiping gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote at the meeting.
+0
+Attendance rate
+Committee of the fifth session of the Board
+0/1
+Annual Report 2016
+25252
+of the fifth session of the Board
+Corporate Governance
+6/6
+99
+83%
+Note
+5/6
+100%
+6/6
+99
+100%
+515
+Attendance rate
+Number of meetings attended
+Independent Director, member of the Strategy
+and Investment Decision Committee of the
+fifth session of the Board
+and Investment Decision Committee of the
+fifth session of the Board
+Executive Director, member of the Strategy
+Strategy and Investment Decision Committee
+of the fifth session of the Board
+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
+Non-executive Director, member of the
+China Life Insurance Company Limited
+Annual Report 2016
+Corporate Governance
+At present, 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. 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. 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 the relevant policies, and Mr. Anthony Francis Neoh retired from his position as a member
+of the Strategy and Investment Decision Committee of the fifth session of the Board due to the expiry of his term of
+office.
+1.
+Meetings and attendance
+100%
+In 2016, six 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:
+Position
+Tang Xin
+Lin Dairen
+Wang Sidong
+Xu Haifeng
+Leung Oi-Sie Elsie
+Name of member
+96
+3/3
+100%
+98
+Finalizing the Company's development plans and reports. In 2016, the Strategy and Investment
+Decision Committee discussed and reviewed the assessment report for the outline of the "12th Five-year"
+development plan for the year 2015 and at the end of the planning period, and the outline of the “13th
+Five-year" development plan of the Company, and submitted its opinions to the Board.
+Reviewing annual investment plans and entrusted investments of the Company. In 2016, the Strategy and
+Investment Decision Committee carefully reviewed the proposals on investment plans and authorization
+of investments, fully reviewed the proposals such as the “Proposal in relation to the Investment Plan of
+the Company for the Year 2017”, the “Proposal in relation to the Authorization of Investment in Non
+Self-use Real Estate of the Company for the Year 2017”, the “Proposal in relation to the Investment Plan
+and the Authorization of Investment in Self-use Real Estate of the Company for the Year 2017", and the
+“Proposal in relation to the Authorization of Investment in the Equity Investment Fund of the Company
+for the Year 2017”, and submitted its opinions to the Board in this regard. The Strategy and Investment
+Decision Committee carefully reviewed the proposals of the Company such as the annual investment
+management guidelines, reviewed and approved the “Proposal in relation to the 'Management Guidelines
+on the Investment Made by China Life Asset Management Company Limited under the Entrustment of
+the Company (2017)"", the "Proposal in relation to the 'Management Guidelines on the Investment Made
+by China Life Franklin Asset Management Company Limited under the Entrustment of the Company
+(2017) "" and the “Proposal in relation to the 'Management Guidelines on the Investment Made by China
+Life Investment Holding Company Limited under the Entrustment of the Company (2017)"", and agreed to
+submit the above proposals to the Board for review and approval.
+(3)
+100%
+(2)
+(1) Discussing major strategic projects of the Company. In 2016, the Strategy and Investment Decision
+Committee reviewed major strategic projects of the Company, such as the acquisition by the Company of
+the shares of CGB from Citigroup and IBM Credit, the investment by the Company in China Life Chengda
+(Shanghai) Healthcare Equity Investment Center and the investment by the Company in Chongqing Trust -
+Collective Fund Trust Scheme for the PPP Project for Qingdao Metro Line 4, fully discussed the necessity,
+feasibility and risks of the project proposals and made recommendations to the Board.
+In 2016, 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 related annual 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.
+Performance of duties by the Strategy and Investment Decision Committee
+2.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+97
+0
+Note: At the fourth meeting of the Strategy and Investment Decision Committee of the fifth session of the Board held on 29
+February 2016, Mr. Huang Yiping gave written authorization for Mr. Anthony Francis Neoh to act as his proxy to attend,
+vote and chair the meeting.
+Note: At the ninth meeting of the Strategy and Investment Decision Committee of the fifth session of the Board held on 20
+December 2016, Mr. Wang Sidong gave written authorization for Mr. Lin Dairen to act as his proxy to attend and vote at
+the meeting.
+In 2016, attendance records of the resigned Directors at the Strategy and Investment Decision Committee
+meetings are as follows:
+Name of member
+Position
+Number of meetings attended
+Attendance rate
+33
+Huang Yiping
+Independent Director, Chairman 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
+Note
+0/1
+2/2
+100%
+Anthony Francis Neoh
+96
+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.
+STRATEGY AND INVESTMENT DECISION COMMITTEE
+Attendance rate
+Number of meetings attended
+fifth session of the Board
+Risk Management Committee of the
+Executive Director, member of the
+Xu Hengping
+fifth session of the Board
+Non-executive Director, member of the
+Risk Management Committee of the
+fifth session of the Board
+Independent Director, Chairperson of the
+Risk Management Committee of the
+Position
+Liu Jiade
+Leung Oi-Sie Elsie
+Name of member
+In 2016, three regular meetings were held by the Risk Management Committee of the fifth session of the Board.
+Attendance records of individual members are as follows:
+Meetings and attendance
+1.
+(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), fully reviewed the professional qualifications and
+industrial background of Mr. Liu Huimin and Mr. Yin Zhaojun, both being the candidates for Directors,
+and the independence of Ms. Leung Oi-Sie Elsie, a candidate for Independent Director, 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.
+ล
+(3)
+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.
+Carrying out the performance appraisal of senior management officers. The Nomination and Remuneration
+Committee reviewed the "Proposal on the Results of Performance Appraisal of Senior Management
+Officers for 2015 and the Performance Target Contract for 2016", and the "Proposal on the Amendment
+to the Performance Target Contract for 2016 of Certain Senior Management Officers", and made
+recommendations to the Board in respect of matters such as the determination of performance target,
+performance appraisal procedures and results.
+(4) Revising the system on performance appraisal and remuneration management of Directors, Supervisors
+and senior management officers. In 2016, the Nomination and Remuneration Committee reviewed
+and approved the “Proposal in relation to the Amendment to the System on Performance Appraisal and
+Remuneration Management of Directors, Supervisors and Senior Management Officers" for the purposes
+of further standardizing the performance appraisal and remuneration management of Directors, Supervisors
+and senior management officers, establishing a well-developed incentive and restraint mechanism and
+facilitating the standardized operation and healthy development of the Company, and revised the
+"Provisional Measures on the Performance Appraisal of Directors, Supervisors and Senior Management
+Officers" and the “Provisional Measures on the Remuneration Management of Directors, Supervisors and
+Senior Management Officers" in accordance with the relevant policies and requirements and based on the
+actual situation of the Company.
+1/1
+94
+China Life Insurance Company Limited
+Annual Report 2016
+Corporate Governance
+RISK MANAGEMENT COMMITTEE
+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, discussing with the management
+and assisting them in establishing well-developed risk management and internal control system, 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.
+At present, the Risk Management Committee of the fifth session of the Board comprises Ms. Leung Oi-Sie Elsie, an
+Independent Director, Mr. Liu Jiade, a Non-executive Director, and Mr. Xu Hengping, an Executive Director, with
+Ms. Leung Oi-Sie Elsie acting as the Chairperson. Mr. Anthony Francis Neoh retired from his position as the Chairman
+of the Risk Management Committee of the fifth session of the Board due to the expiry of his term of office. Mr. Zhang
+Xiangxian resigned from his position as a member of the Risk Management Committee of the fifth session of the Board
+due to age reason.
+4
+100%
+3/3
+33
+95
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Corporate Governance
+2.
+100%
+Performance of duties by the Risk Management Committee
+(1) Reviewing the risks on major matters concerning the business operation and management of the Company.
+In 2016, the Risk Management Committee reviewed the risk analysis on major matters concerning the
+business operation and management of the Company, and reviewed and approved the “Proposal in relation
+to the Financial Budget of the Company for the Year 2017" and the "Proposal in relation to the Risk
+Analysis on the Investment Plan of the Company for the Year 2017” in accordance with the regulatory
+requirements of the CIRC on C-ROSS.
+(2)
+(3)
+Attending meetings of the Risk Management Committee of the Board and providing guidance on the
+risk management of the Company. In 2016, 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.
+Providing its opinions for the review of the proposals on risk management to the Board. In 2016, 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 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 2015 and the work
+plan for the year 2016, the risk appetite statement of the Company for the year 2016, and the audit report
+on the solvency risk management system of the Company for the year 2016, which offered professional
+support to the Board's decision-making in a scientific manner.
+(4) Convening special meetings by the Chairman of the Risk Management Committee. On 26 October 2016,
+Ms. Leung Oi-Sie Elsie, the Chairperson of the Risk Management Committee, convened special meetings
+with the person-in-charge of each of the Legal and Compliance Department and the Risk Management
+Department, discussing matters on legal compliance and risk management of the Company.
+In 2016, 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 law.
+China Life Insurance Company Limited Annual Report 2016
+2/2
+fifth session of the Board
+100%
+33
+3/3
+100%
+In 2016, attendance records of the resigned Directors at the Risk Management Committee meetings are as follows:
+Name of member
+Non-executive Director, member of the
+Risk Management Committee of the
+fifth session of the Board
+Position
+Attendance rate
+Anthony Francis Neoh
+Independent Director, Chairman of the
+Risk Management Committee of the
+2/2
+100%
+Zhang Xiangxian
+Number of meetings attended
+"2016 Golden Dragon Award - Best Life Insurance
+Company of the Year"
+II. RISK MANAGEMENT
+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.
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+103
+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 2016, there has been no major error in periodic report
+disclosures of the Company. In order to enhance the confidentiality of its inside information and regulate the
+collection, management and reporting of its material information, the Company has formulated the "Measures
+for the Administration of Persons Who Have Knowledge of Inside Information of China Life Insurance Company
+Limited" and 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 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” 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.
+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.
+China Life Insurance Company Limited Annual Report 2016
+Internal Control and Risk Management
+102
+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.
+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 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.
+Pursuant to the requirements of the "Notice on the Proper Preparation for Disclosure of 2016 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 2016 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 2016 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 2016 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 2016. 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.
+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 has also formulated and issued the “Internal Control Implementation Manual of China
+Life Insurance Company Limited (2016 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
+1.
+Internal Control and Risk Management
+Internal Control and Risk Management
+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.
+The Risk Management Department, Audit Department and Supervision Department of the Company are
+responsible for overseeing the implementation of its internal control policies. 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. With the active implementation of the requirements
+of regulatory departments and the management of the Company and the adherence to the risk-oriented principle,
+the Audit Department has carried out routine audits and a variety of ad-hoc audits, covering the management of
+orphan policies, key city projects, supplementary major medical insurance, information system security, solvency
+risk management system, internal control of capital application, subsequent audit, connected transactions 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.
+Hexun.com the "14th China's Financial Annual
+Champion Awards of 2016"
+-
+"FORTUNE China"
+"Forbes"
+Honors and Awards
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+105
+It should be noted 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 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.
+The Company conducts a self-assessment on solvency risk management capability every year pursuant to the
+requirements of the CIRC on the C-ROSS 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. From October to November 2016, the CIRC
+conducted an inspection on the solvency risk management of the Company. According to the feedback given by
+the CIRC, the Company received a leading score among its peers in the life insurance industry in the "C-ROSS
+Solvency Risk Management Assessment” (“SARMRA") of the CIRC in 2016. The Company conducts a risk
+assessment 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 the senior management.
+Based on the assessment, the overall risk of the Company is within a controllable range.
+In 2016, the Company consistently reinforced the construction of its risk management system. Pursuant to the
+requirements of the CIRC on the C-ROSS, the Company established a risk management system, with the “Rules
+for the Management of Comprehensive Risks" as the general outline, the risk management systems on seven types
+of risks (including insurance risk, market risk, etc.) as the focus, and the implementing rules for series of business
+as the base, so as to form a fundamental system and standard on the risk control of the Company. The Company
+actively pushed forward the adjustment to the organizational structure of risk management by appointing the
+chief risk officer, regulating the establishment of risk management departments and creating additional divisions
+and offices with relevant functions. The Company also consistently optimized its mechanism for the formation,
+transmission and application of risk preference, and applied such risk preference to the work such as budget, assets
+allocation and strategic planning.
+China Life Insurance Company Limited Annual Report 2016
+Internal Control and Risk Management
+104
+Under the management of a unified system, 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.
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+52525
+96
+99
+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 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.
+PERFORMANCE APPRAISAL AND INCENTIVES FOR SENIOR MANAGEMENT
+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, 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.
+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.
+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.
+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 from
+the shareholders of the Company and other related parties.
+management.
+INDEPENDENCE OF THE COMPANY FROM ITS CONTROLLING SHAREHOLDER
+Employees: The Company is independent in the aspects of employment, human resources and remuneration
+Corporate Governance
+Annual Report 2016
+China Life Insurance Company Limited
+25252
+China Life Insurance Company Limited Annual Report 2016
+Corporate Governance
+SHAREHOLDERS' INTERESTS
+101
+With the approval at the 2014 Annual General Meeting held on 28 May 2015, the Company included the “fund sales
+business" into its business scope as stipulated in the Articles of Association and amended certain articles pursuant to the
+regulatory requirements. For details of such amendment, please refer to the Supplemental Notice of Annual General
+Meeting published by the Company on the HKExnews website of the Hong Kong Exchanges and Clearing Limited on 8
+May 2015. The amendment was approved by the CIRC on 20 April 2016.
+CHANGES OF THE ARTICLES OF ASSOCIATION
+In the assessment and selection of the "Gold Bull Award for the PRC Listed Companies in 2015" held by China
+Securities Journal in 2016, the Company was awarded the titles of the "Gold Bull Award for Top 100 Listed Companies
+in 2015" and the "Gold Bull Award for the Most Profitable Companies in 2015”. In the assessment and selection of the
+"Golden Governance-Outstanding Board Secretaries of Listed Companies in 2015” held by Shanghai Securities News
+in 2016, Mr. Zheng Yong, the Board Secretary, was awarded the title of the “Golden Governance-Board Secretary for
+Information Disclosure".
+In 2016, 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, 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 the third quarter of 2016, the Company held a global conference call in relation to the release of
+its operating results for the first time since its listing to convey the message of the management directly to the capital
+market. Looking back to 2016, the Company communicated with more than 3,000 investors and analysts through
+different channels, including the reception at the Company of 110 groups of investors and analysts consisting of over
+850 individuals in total, communicating with more than 1,000 investors by participating in 16 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 2016, 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 development strategies, business operations and major issues of the Company, and extended the scope and
+depth of information disclosure of periodic reports and special reports, so as to ensure investors to obtain timely and
+accurate information affecting its 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 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.
+Corporate Governance
+"2016 Forbes Global 2000", ranking No. 49
+Annual Report 2016
+100
+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.
+INFORMATION DISCLOSURE AND INVESTOR RELATIONS
+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.
+China Life Insurance Company Limited
+"2016 Top 500 Chinese Enterprises", ranking No. 12
+"The Asset" magazine
+"The Asset Triple A Country Awards: Best Transaction of
+the Year in China/Best Bonds of the Year in China"
+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 2016, and of its consolidated financial performance and its consolidated cash flows for the
+year then ended in accordance with International Financial Reporting Standards ("IFRSS") issued by the International
+Accounting Standards Board (“IASB”) and have been properly prepared in compliance with the disclosure requirements
+of the Hong Kong Companies Ordinance.
+BASIS FOR OPINION
+We conducted our audit in accordance with International Standards on Auditing (“ISAs”) issued by the International
+Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the
+Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent
+of the Group in accordance with the Code of Ethics for Professional Accountants (the "Code") issued by the Hong Kong
+Institute of Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with
+the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
+opinion.
+KEY AUDIT MATTERS
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of
+the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate
+opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in
+that context.
+We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial
+statements section of our report, including in relation to these matters. Accordingly, our audit included the performance
+of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial
+statements. The results of our audit procedures, including the procedures performed to address the matters below,
+provide the basis for our audit opinion on the accompanying consolidated financial statements.
+107
+25252
+"2016 Most Influential Life Insurance Company"
+Independent Auditor's Report
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+KEY AUDIT MATTERS (continued)
+We have audited the consolidated financial statements of China Life Insurance Company Limited (the "Company")
+and its subsidiaries (the “Group”) set out on pages 113 to 226, which comprise the consolidated statement of financial
+position as at 31 December 2016, 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.
+Key audit matter
+The Group had significant insurance contract liabilities
+stated at RMB1,847.99 billion as at 31 December 2016,
+representing 77.34% 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,
+expenses, lapse rates, and so on, are set up 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 key assumptions
+changes on the performance of the Group.
+How our audit addressed the key audit matter
+In our audit, we involved our internal actuarial specialists
+to assist us in performing 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' 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;
+Establishing models independently to test the
+valuation of liabilities for selected insurance
+products; and
+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.
+108
+Valuation of insurance contract liabilities
+OPINION
+China Life Insurance Company Limited Annual Report 2016
+EY 安永
+"The Asset Triple A Regional Awards: Best Bonds of Fixed
+Income Assets"
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+"Financial Times" - "2016 Gold Medal List of
+Chinese Financial Institutions (the 9th Session)"
+"National Business Daily" - Assessment and
+Selection of the "Golden Tripod Award"
+(the 7th Session)
+"21st Century Business Herald" - "Assessment
+and Selection of the Competitiveness of Asian
+Financial Enterprises in 2016"
+"Assessment and Selection of the Supervisory
+Committees of Listed Companies with the
+Best Practice" jointly organized by the Listed
+Companies Association of the PRC, the Shanghai
+Stock Exchange and the Shenzhen Stock
+Exchange
+China Association for Quality Promotion - "2nd
+Chinese Conference on Services"
+China Association for Quality Promotion - "3.15
+Themed Activities on Consumption and Right
+Protection of China Association for Quality
+Promotion in 2016"
+"2016 BrandZ Top 100 Global Most Valuable Brands",
+ranking No. 59
+"2016 Excellent Customer Service Award"
+"2016 Best Life Insurance Company in Asia"
+"Top 20 Supervisory Committees of Listed Companies with
+the Best Practice"
+Millward Brown
+Independent Auditor's Report
+"Five-star Award of the China Service Stars"
+"Service Quality and Innovation Award"
+106
+-
+"2016 China
+"2016 China Charitable Enterprise"
+China Philanthropy Times
+Charity Annual Conference"
+China Life Insurance Company Limited Annual Report 2016
+52525
+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.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
+STATEMENTS (continued)
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+China Life Insurance Company Limited Annual Report 2016
+Consolidated Statement of Financial Position
+111
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
+related disclosures made by the directors.
+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.
+As at 31 December 2016
+25252
+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.
+Ernst & Young
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
+regarding independence and to communicate with them all relationships and other matters that may reasonably be
+thought to bear on our independence, and where applicable, related safeguards.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance
+in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or
+when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
+the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
+communication.
+The engagement partner on the audit resulting in this independent auditor's report is Ng Chi Keung.
+China Life Insurance Company Limited Annual Report 2016
+Certified Public Accountants
+112
+Hong Kong
+23 March 2017
+31 December
+2016
+ASSETS
+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.
+As at
+RMB million
+31 December
+GAGAG
+Property, plant and equipment
+Investment properties
+67
+30,389
+26,974
+1,191
+1,237
+Investments in associates and joint ventures
+8
+119,766
+47,175
+Held-to-maturity securities
+9.1
+594,730
+504,075
+Loans
+9.2
+226,573
+207,267
+Term deposits
+RMB million
+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.
+Notes
+2015
+As at
+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.
+How our audit addressed the key audit matter
+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.
+China Life Insurance Company Limited Annual Report 2016
+25252
+109
+We tested valuation, verification and model approval
+processes, and evaluated the design and operating
+effectiveness of the internal controls over those processes.
+Our internal valuation specialists were involved to assist
+us 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.
+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 of the external valuer.
+Calculating the Weighted Average Cost of Capital
+using the Capital Asset Pricing Model.
+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
+the Group; and
+•
+In our audit, our internal valuation specialists were
+involved to assist us in reviewing the technique and the
+discount rate used in the impairment test with reference
+to valuation guidelines and industry practices, which
+including:
+How our audit addressed the key audit matter
+Independent Auditor's Report
+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.
+Fair value of financial assets
+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 RMB12.68 billion as at
+31 December 2016. As the quoted market price of this
+investment had been below its carrying value for more
+than one year, the Group performed an impairment
+test with the assistance from an external valuer in 2015,
+based on which an impairment loss of RMB1.01 billion
+was recorded as at 31 December 2015. During 2016,
+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 2016 as well, with the result that no
+further impairment loss 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)
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+52525
+Independent Auditor's Report
+China Life Insurance Company Limited Annual Report 2016
+9.3
+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 RMB91.24 billion as at 31 December 2016. These
+investments are classified as level 3 in the fair value
+hierarchy, as their fair value 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.
+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
+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.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
+STATEMENTS
+The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing the
+Group's financial reporting process.
+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 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.
+RESPONSIBilities of THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
+STATEMENTS
+(Incorporated in the People's Republic of China with limited liability)
+To the shareholders of China Life Insurance Company Limited
+52525
+Independent Auditor's Report
+China Life Insurance Company Limited Annual Report 2016
+110
+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.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any
+form of assurance conclusion thereon.
+thereon.
+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
+OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
+We assessed the objectivity and capability of the external
+valuer and tested the historical financial information, from
+which the assumptions for the cash flow projection were
+generated.
+Assessing the discount rate by verifying the selection
+of comparable companies based on bank industry
+experience and performing a corroborative analysis
+using the Capital Asset Pricing Model independently.
+Testing the cash flow projection by comparing the
+key assumptions it based on against the historical
+business data and market practice; and
+Assessing the methodology of the valuation of the
+intangible assets;
+Our internal valuation specialists were involved to assist us
+to review the valuation methodologies and key valuation
+assumptions used by management, and the procedures
+included among others:
+Please refer to Note 3.3 for the key assumptions involved
+in the valuation.
+On 29 August 2016, the Group completed the acquisition
+of an additional 23.686% equity interest in an existing
+associate, China Guangfa Bank Co., Ltd. (“CGB”), which
+remained an associate accounted for under the equity
+method. The Group performed a purchase price allocation
+exercise that involved valuing the identifiable net assets
+of CGB, especially for the identifiable intangible assets
+which are mainly the core deposit intangibles and the
+credit card client relationship arising from the acquisition.
+The Group engaged an external valuer to perform the
+valuation of the identifiable intangible assets, as the
+valuation involved complex assumptions and judgements,
+the change to which can have a material impact on the
+valuation adopted in the financial statements.
+Valuation of identifiable intangible assets generated from an acquisition
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+538,325
+113
+Statutory deposits – restricted
+296
+(117)
+(117)
+Dividends to non-controlling interests
+Others
+(11,491)
+(10,090)
+(11,491)
+Dividends paid (Note 32)
+10,090
+Appropriation to reserves (Note 36)
+7,791
+7,791
+instruments holders
+Capital paid in by other equity
+296
+80
+80
+non-controlling interests
+Capital paid in by
+42,324
+549
+34,699
+7,076
+7,137
+61
+7,076
+35,187
+488
+34,699
+60
+GaGas
+Total transactions with owners
+7,791
+19,127
+(25,774)
+Total comprehensive income
+(25,776)
+(2)
+(25,774)
+Other comprehensive income
+19,585
+458
+19,127
+Net profit
+326,214
+3,722
+123,055
+163,381
+7,791
+28,265
+As at 1 January 2016
+326,214
+3,722
+123,055
+163,381
+7,791
+28,265
+As at 31 December 2015
+(3,441)
+(37)
+(21,581)
+10,386
+287,331
+3,210
+109,937
+145,919
+41,775
+(6,647)
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to:
+42,324
+(6,191)
+7,137
+(25,776)
+Total comprehensive income for the year, net of tax
+Other comprehensive income for the year, net of tax
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods
+7,137
+(25,776)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+10
+(2,242)
+8,242
+28
+Income tax relating to components of other comprehensive income
+21
+Exchange differences on translating foreign operations
+353
+(864)
+(12,767)
+17,372
+(32,297)
+(6,038)
+54,080
+(44,509)
+456
+562,622
+549
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+28,265
+(Note 36)
+(Note 35)
+(Note 34)
+RMB million
+RMB million
+earnings
+RMB million
+RMB million
+RMB million
+RMB million
+Reserves
+instruments
+capital
+Retained
+Other equity
+Share
+Total
+interests
+Non-controlling
+year ended 31 December 2016
+For the
+of the Company
+Attributable to equity holders
+Transactions with owners
+Total comprehensive income
+Other comprehensive income
+As at 1 January 2015
+Net profit
+Consolidated Statement of Changes in Equity
+China Life Insurance Company Limited Annual Report 2016
+116
+Share of other comprehensive income of associates and joint ventures
+under the equity method
+(6,191)
+Appropriation to reserves (Note 36)
+199
+114
+400,451
+508,476
+41,806
+50,101
+11,546
+10,447
+Debt securities
+Purchases:
+Property, plant and equipment
+Disposal of subsidiaries
+Disposals of equity securities
+Maturities of debt securities
+(11)
+Disposals of debt securities
+CASH FLOWS FROM INVESTING ACTIVITIES
+(18,811)
+89,098
+Net cash inflows/(outflows) from operating activities
+313
+526
+Dividends received – securities at fair value through profit or loss
+1,225
+5,465
+Interest received – securities at fair value through profit or loss
+(8,380)
+(9,331)
+Income tax paid
+Disposals and maturities:
+3,875
+(173,628)
+(53,340)
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+118
+67,047
+(104,703)
+Net cash inflows/(outflows) from investing activities
+(11,305)
+(7,483)
+Decrease/(increase) in policy loans, net
+8,828
+20,390
+Dividends received
+81,688
+78,891
+Interest received
+(9,602)
+(22,035)
+Decrease/(increase) in securities purchased under agreements to resell, net
+124,838
+37,515
+Decrease/(increase) in term deposits, net
+(766)
+(65,158)
+Capital contribution to associates and joint ventures
+(8,384)
+(5,310)
+Property, plant and equipment
+(522,787)
+(537,012)
+Equity securities
+70,482
+124,466
+Receivables and payables
+403
+Consolidated Statement of Cash Flows
+China Life Insurance Company Limited Annual Report 2016
+25252
+117
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+307,648
+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
+(151)
+(151)
+Others
+interests
+Dividends to non-controlling
+(12,257)
+(12,257)
+Dividends paid (Note 32)
+(7,367)
+- 7,367
+For the year ended 31 December 2016
+Transactions with owners
+2016
+RMB million
+1,539
+Financial liabilities at fair value through profit or loss
+(100,089)
+(76,318)
+Securities at fair value through profit or loss
+Changes in operating assets and liabilities:
+(1,974)
+(5,855)
+Share of profit of associates and joint ventures, net
+(812)
+(582)
+Foreign exchange gains
+2,036
+2,083
+Depreciation and amortisation
+112,142
+131,354
+Insurance contracts
+(42,506)
+1,056
+Net realised and unrealised losses/(gains) on financial assets
+(97,582)
+(109,147)
+Investment income
+Adjustments for:
+45,931
+23,842
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before income tax
+RMB million
+2015
+attributable to participating policyholders
+456
+Fair value gains/(losses) on available-for-sale securities
+26,514
+36,836
+19
+32,266
+35,252
+Statutory insurance fund
+Current income tax liabilities
+Deferred tax liabilities
+Other liabilities
+Premiums received in advance
+30,092
+39,038
+Annuity and other insurance balances payable
+28
+31,354
+18
+Securities sold under agreements to repurchase
+856
+2,031
+Financial liabilities at fair value through profit or loss
+67,994
+37,998
+17
+2,643
+16,170
+16
+675
+Bonds payable
+81,088
+7,768
+16,953
+1,214
+123,055
+122,558
+163,381
+145,007
+36
+7,791
+28,265
+28,265
+7,791
+35
+34
+རལ
+2,122,101
+2,389,303
+Yang Mingsheng
+Director
+Approved and authorised for issue by the Board of Directors on 23 March 2017.
+Total liabilities and equity
+Total equity
+Non-controlling interests
+Attributable to equity holders of the Company
+Retained earnings
+Reserves
+Other equity instruments
+Share capital
+Equity
+Total liabilities
+217
+491
+20
+5,347
+Interest-bearing loans and borrowings
+87,725
+Policyholder dividends payable
+84,106
+23
+12
+Cash and cash equivalents
+Other assets
+Reinsurance assets
+11,913
+13,421
+11
+Premiums receivable
+49,552
+55,945
+9.8
+Accrued investment income
+21,503
+43,538
+9.7
+Securities purchased under agreements to resell
+137,990
+209,124
+9.6
+Securities at fair value through profit or loss
+770,516
+766,423
+9.5
+Available-for-sale securities
+6,333
+6,333
+9.4
+Amount transferred to net profit from other comprehensive income
+Portion of fair value changes on available-for-sale securities
+2,134
+Lin Dairen
+1,420
+22,013
+195,706
+15
+Investment contracts
+1,715,985
+1,847,986
+14
+RMB million
+RMB million
+Notes
+2015
+2016
+31 December
+As at
+As at
+31 December
+Insurance contracts
+Liabilities
+LIABILITIES AND EQUITY
+As at 31 December 2016
+Consolidated Statement of Financial Position
+China Life Insurance Company Limited Annual Report 2016
+25252
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+2,448,315
+2,696,951
+Total assets
+76,096
+67,046
+23,642
+13
+Director
+107,774
+322,492
+1,974
+5,855
+8
+Share of profit of associates and joint ventures, net
+(463,492)
+(522,794)
+Total benefits, claims and expenses
+(743)
+(1,048)
+20
+Statutory insurance fund contribution
+(7,428)
+(4,859)
+Other expenses
+(27,458)
+(31,854)
+Administrative expenses
+(4,320)
+(4,767)
+26
+Finance costs
+(35,569)
+(52,022)
+Underwriting and policy acquisition costs
+(33,491)
+(15,883)
+Policyholder dividends resulting from participation in profits
+(2,264)
+(5,316)
+Profit before income tax
+25
+27
+45,931
+303,621
+Other comprehensive income that may be reclassified to
+Other comprehensive income
+RMB million
+2015
+2016
+RMB million
+Notes
+For the year ended 31 December 2016
+Consolidated Statement of Comprehensive Income
+China Life Insurance Company Limited Annual Report 2016
+25252
+115
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+RMB1.22
+RMB0.66
+30
+34,699
+488
+19,127
+458
+Basic and diluted earnings per share
+- Non-controlling interests
+- Equity holders of the Company
+35,187
+19,585
+(10,744)
+(4,257)
+28
+Attributable to:
+Net profit
+Income tax
+23,842
+Investment contract benefits
+profit or loss in subsequent periods:
+4,027
+362,301
+426,230
+(692)
+(2,510)
+362,993
+428,740
+(978)
+(1,758)
+363,971
+430,498
+Net premiums earned
+Net change in unearned premium reserves
+Less: premiums ceded to reinsurers
+Gross written premiums
+REVENUES
+2015
+RMB million
+2016
+RMB million
+Notes
+For the year ended 31 December 2016
+Consolidated Statement of Comprehensive Income
+China Life Insurance Company Limited Annual Report 2016
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+114
+2,448,315
+2,696,951
+326,214
+307,648
+3,722
+(109,509)
+Investment income
+21
+Net written premiums
+97,582
+(126,619)
+109,147
+Increase in insurance contract liabilities
+(21,009)
+(27,269)
+24
+Accident and health claims and claim adjustment expenses
+(221,701)
+(253,157)
+24
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+BENEFITS, CLAIMS AND EXPENSES
+Total revenues
+GAGAG
+24
+540,781
+507,449
+6,038
+32,297
+Net fair value gains/(losses) through profit or loss
+23
+22
+10,209
+Other income
+6,460
+5,060
+Net realised gains on financial assets
+(7,094)
+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 not relevant to the Group, since the Group
+had no joint operation as at 31 December 2016.
+GAGAG
+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 2016 (continued)
+IAS 27 Amendments - Equity Method in Separate Financial Statements
+The amendments to IAS 1 clarify, rather than significantly change, existing IAS 1 requirements. The
+amendments clarify: the materiality requirements in IAS 1; that specific line items in the statement of
+comprehensive income and the statement of financial position should be disaggregated; that entities have
+flexibility as to the order in which they present the notes to financial statements; that the share of other
+comprehensive income (“OCI”) of associates and joint ventures accounted for using the equity method
+must be presented in aggregate as a single line item, and classified between those items that will or will not
+be subsequently reclassified to profit or loss. Furthermore, the amendments clarify the requirements that
+apply when additional subtotals are presented in the statement of financial position and the statement of
+comprehensive income. The Group's consolidated financial statements have complied with the amendments.
+The amendments to IAS 27 allow entities to use the equity method to account for investments in
+subsidiaries, joint ventures and associates in their separate financial statements. The Group does not elect
+to change to the equity method in the separate financial statements, and the amendments do not have any
+impact on the Group's consolidated financial statements.
+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 to IFRS 10 and IFRS 12 do not have any material impact on the Group's
+consolidated financial statements as the Company is not an investment entity as defined in IFRS 10. The
+Group applied the amendments to IAS 28 when accounting for associates which are investment entities
+themselves.
+IFRS 11 Amendments - Accounting for Acquisitions of Interests in Joint Operations
+For the year ended 31 December 2016
+Amendments to IAS 1 – Disclosure Initiative
+Notes to the Consolidated Financial Statements
+Consolidation Exception
+2
+1 January 2016
+in Joint Operations
+Accounting for Acquisitions of Interests
+1 January 2016
+1 January 2016
+Equity Method in Separate Financial Statements
+Investment Entities: Applying the
+IAS 28 Amendments
+IFRS 11 Amendments
+IFRS 10, IFRS 12 and
+IAS 27 Amendments
+120
+1 January 2016
+Effective for annual periods
+beginning on or after
+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. There are no material changes to the accounting policies of the Group as a result of
+these annual improvements.
+China Life Insurance Company Limited Annual Report 2016
+121
+1 January 2018
+China Life Insurance Company Limited Annual Report 2016
+1 January 2017
+Disclosure Initiative
+Associate or Joint Venture
+between an Investor and its
+Sale or Contribution of Assets
+Applying IFRS 9 Financial Instruments
+with IFRS 4 Insurance Contracts
+Leases
+Revenue from Contracts with Customers
+Clarifications to IFRS 15 Revenue from
+Contracts with Customers
+Share-based Payment Transactions
+Financial Instruments
+Classification and Measurement of
+Recognition of Deferred Tax Assets for
+Unrealised Losses
+Disclosure Initiative
+Content
+IFRS 10 and IAS 28
+Amendments
+IFRS 16
+25252
+IFRS 4 Amendments
+IFRS 15
+IFRS 9
+IFRS 2 Amendments
+IAS 12 Amendments
+IAS 7 Amendments
+Standards/Amendments
+1 January 2017
+Effective for annual period
+beginning on or after
+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 2016
+2.1 Basis of preparation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+IFRS 15 Amendments
+Content
+76,096
+Standards/Amendments
+year
+Beginning of the
+Cash and cash equivalents
+Net increase/(decrease) in cash and cash equivalents
+Foreign exchange gains/(losses) on cash and cash equivalents
+(19,415)
+6,270
+Net cash inflows/(outflows) from financing activities
+(13,200)
+Cash paid related to other financing activities
+(30,000)
+Cash repaid to lenders
+2,630
+2,939
+Capital injected into subsidiaries by non-controlling interests
+13,831
+Cash received from borrowings
+(117)
+(151)
+Dividends paid to non-controlling interests
+(11,491)
+(12,257)
+Dividends paid to equity holders of the Company
+(4,471)
+(4,891)
+Interest paid
+7,791
+Cash received from issuing other equity instruments
+(13,757)
+285
+IAS 1 Amendments
+241
+29,062
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for
+the financial year beginning on 1 January 2016
+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 Basis of preparation
+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.
+SUMMARY OF SIGNIFICANT 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 23 March 2017.
+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.
+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.
+ORGANIZATION AND PRINCIPAL ACTIVITIES
+2
+1
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+119
+The notes on pages 120 to 226 form an integral part of these consolidated financial statements.
+1,961
+2,682
+Short-term bank deposits
+74,135
+64,364
+Cash at banks and in hand
+Analysis of balances of cash and cash equivalents
+End of the year
+76,096
+67,046
+47,034
+(9,050)
+1 January 2018
+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.
+1 January 2018
+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'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.
+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.
+2.3 Associates and joint ventures
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+GAGAG
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+2
+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.
+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.
+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.
+Transactions with non-controlling interests
+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.
+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 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
+recognises the fair value of the consideration received;
+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:
+2.2 Consolidation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+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.
+126
+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.
+2.4 Segment reporting
+49,999
+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.
+Over the shorter of the remaining term of
+the lease and the useful lives
+15 to 35 years
+3 to 11 years
+4 to 8 years
+Leasehold improvements
+Motor vehicles
+Office equipment, furniture and fixtures
+Buildings
+128
+Estimated useful lives
+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
+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.
+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.
+2.6 Property, plant and equipment
+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.
+2.5 Foreign currency translation
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+127
+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.
+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.
+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.
+1 January 2018
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+123
+Given insurance contracts are scoped out of IFRS 15, the Group expects the main impact of the new
+standard to be on the accounting for income from administrative and investment management services.
+The Group does not expect the impact to be significant. The Group is currently assessing the impact on the
+Group's consolidated financial statements.
+IFRS 15 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. 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, early adoption is permitted. The Group plans to adopt the new standard on the required effective date
+using the full retrospective method.
+IFRS 15 - Revenue from Contracts with Customers and IFRS 15 Amendments
+In July 2014, the IASB issued the final version of IFRS 9, bringing together all phases of the financial
+instruments project to replaces 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. The Group is currently
+assessing the impact of the standard upon adoption, and expects that the adoption of IFRS 9 will have an
+impact on the classification, measurement and impairment of the Group's financial instruments in the
+Group's consolidated financial statements.
+IFRS 9 - Financial Instruments
+statements.
+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 the employee's tax obligations 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. 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
+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 2016 (continued)
+IFRS 2 Amendments - Classification and Measurement of Share-based Payment Transactions
+2.1 Basis of preparation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+GAGAG
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+2
+IAS 12 Amendments – Recognition of Deferred Tax Assets for Unrealised Losses
+Amendments to IAS 12 were issued with the purpose of addressing the recognition of deferred tax assets
+for unrealised losses related to debt instruments measured at fair value, although they also have a broader
+application for other situations. The amendments 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 expects to adopt the
+amendments from 1 January 2017.
+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. The amendments will result in additional disclosure to be
+provided in the financial statements. The Group expects to adopt the amendments from 1 January 2017.
+IAS 7 Amendments - Disclosure Initiative
+effective.
+yet
+122
+The Group has not early adopted any standard, interpretation or amendment that has been issued but is not
+1 January 2019
+No mandatory effective
+date yet determined but
+available for adoption
+1 January 2018
+2
+Notes to the Consolidated Financial Statements
+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 2016 (continued)
+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 the upcoming
+new insurance contracts standard (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 entities whose activities are
+predominantly connected with insurance to defer the implementation date of IFRS 9 until the earlier of
+the effective date of the new insurance contracts standard and annual reporting periods beginning on or
+after 1 January 2021. 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. The Group is currently performing an assessment of the amendments to conclude which approach to
+apply.
+25252
+125
+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 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 Group's voting rights and potential voting rights.
+the contractual arrangement with the other vote holders of the investee;
+rights arising from other contractual arrangements; and
+•
+all relevant facts and circumstances in assessing whether it has power over an investee, including:
+When the Group has less than a majority of the voting or similar rights of an investee, the Group considers
+the ability to use its power over the investee to affect its returns.
+exposure, or rights, to variable returns from its involvement with the investee; and
+power over the investee (i.e. existing rights that give it the current ability to direct the relevant
+activities of the investee);
+:
+The consolidated financial statements include the financial statements of the Company and its subsidiaries
+for the year ended 31 December 2016. 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:
+2.2 Consolidation
+In addition, the Annual Improvements 2014-2016 Cycle issued in December 2016 set out amendments to
+other standards. There are no material changes to the accounting policies of the Group as a result of these
+annual improvements.
+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
+application now.
+IFRS 10 and IAS 28 Amendments - Sale or Contribution of Assets between an Investor and its Associate or
+Joint Venture
+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 2016 (continued)
+2.1 Basis of preparation (continued)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+GAGAG
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+2
+124
+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). 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. In 2017, the Group plans
+to assess the potential effect of IFRS 16 on its consolidated financial statements.
+IFRS 16 Leases
+2.1 Basis of preparation (continued)
+CASH FLOWS FROM FINANCING ACTIVITIES
+Increase/(decrease) in securities sold under agreements to
+repurchase, net
+RMB million
+RMB million
+China Life Insurance Company Limited Annual Report 2016
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2016
+2016
+2015
+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
+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
+2.13 Securities sold under agreements to repurchase
+135
+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
+as
+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.
+25252
+For the
+Notes to the Consolidated Financial Statements
+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 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.
+year
+ended 31 December 2016
+136
+2
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.16 Employee benefits
+Pension benefits
+Full-time employees of the Group are covered by various government-sponsored pension plans under which
+the employees are entitled to a monthly pension based on certain formulae. These government agencies
+are responsible for the pension liability to these employees upon retirement. The Group contributes on a
+monthly basis to these pension plans. In addition to the government-sponsored pension plans, the Group
+established an employee annuity fund pursuant to the relevant laws and regulations in the PRC, whereby the
+Group is required to contribute to the schemes at fixed rates of the employees' salary costs. Contributions to
+these plans are expensed as incurred. Under these plans, the Group has no legal or constructive obligation
+for retirement benefit beyond the contributions made.
+Housing benefits
+All full-time employees of the Group are entitled to participate in various government-sponsored housing
+funds. The Group contributes on a monthly basis to these funds based on certain percentages of the salaries
+of the employees. The Group's liability in respect of these funds is limited to the contributions payable in
+each year.
+China Life Insurance Company Limited Annual Report 2016
+2.11.4 DPF in long-term insurance contracts and investment contracts
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Stock appreciation rights
+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)
+(iii) Universal life contracts and unit-linked contracts
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+insurance components
+non-insurance components
+The insurance components are accounted for as insurance contracts; and the non-insurance
+components are accounted for as investment contracts (Note 2.11.3), which are stated in the
+investment contract liabilities.
+2.11.2.b Liability adequacy test
+The Group assesses the adequacy of insurance contract reserves using the current estimate of future cash
+flows with available information at the end of each reporting period. If that assessment shows that the
+carrying amount of its insurance liabilities (less related intangible assets, if applicable) is inadequate in light
+of the estimated future cash flows, the insurance contract reserves will be adjusted accordingly, and any
+changes of the insurance contract liabilities will be recognised in net profit.
+2.11.2.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.
+The Group assesses its reinsurance assets for impairment as at the end of reporting period. If there is
+objective evidence that the reinsurance asset is impaired, the Group reduces the carrying amount of the
+reinsurance asset to its recoverable amount and recognises that impairment loss in net profit.
+2.11.3 Investment 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
+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.
+134
+2
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+2.11 Insurance contracts and investment contracts (continued)
+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/(losses) through profit or loss
+in net profit. The related liability is included in other liabilities.
+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
+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.
+137
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+2
+3
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.23 Provisions and contingencies
+Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
+events; it is probable that an outflow of resources will be required to settle the obligation; and the amount
+has been reliably estimated. Provisions are not recognised for future operating losses.
+A contingent liability is a possible obligation that arises from past events and whose existence will only be
+confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within
+the control of the Group. It can also be a present obligation arising from past events that is not recognised
+because it is not probable that outflow of economic resources will be required or the amount of obligation
+cannot be measured reliably.
+A contingent liability is not recognised in the consolidated statement of financial position but is disclosed in
+the notes to the consolidated financial statements. When a change in the probability of an outflow occurs so
+that such outflow is probable and can be reliably measured, it will then be recognised as a provision.
+2.24 Dividend distribution
+Dividend distribution to the Company's equity holders is recognised as a liability in the Group's
+consolidated financial statements in the year in which the dividends are approved by the Company's equity
+holders.
+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.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and
+liabilities, are set out below. It is possible that actual results may be different from the estimates and judgements
+referred to below.
+3.1 Estimate of future benefit payments and premiums arising from long-term insurance
+contracts
+The determination of the liabilities under long-term insurance contracts is based on estimates of future
+benefit payments, premiums and relevant expenses made by the Group and the margins. Assumptions about
+mortality rates, morbidity rates, lapse rates, discount rates, 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.
+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.
+138
+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.
+2.17 Share capital
+Leases where substantially all the risks and rewards of ownership of assets remain with the lessor company
+are accounted for as operating leases.
+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.
+2.18 Other equity instruments
+Other equity instruments are Core Tier 2 Capital Securities issued by the Group. These securities contain no
+contractual obligation to deliver cash or another financial asset; or to exchange financial assets or financial
+liabilities with another entity under conditions that are potentially 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
+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
+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.
+Investment income
+Investment income comprises interest income from term deposits, cash and cash equivalents, debt securities,
+securities purchased under agreements to resell, loans and dividend income from equity securities. Interest
+income is recorded on an accrual basis using the effective interest rate method. Dividend income is
+recognised when the right to receive dividend payment is established.
+2
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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.
+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.
+2.22 Operating leases
+For the year ended 31 December 2016
+Turnover of the Group represents the total revenues which include the following:
+China Life Insurance Company Limited Annual Report 2016
+2.8 Financial assets (continued)
+2.8.b Recognition and measurement
+Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase
+or sell assets. Investments are initially recognised at fair value plus, in the case of all financial assets not
+carried at fair value through profit or loss, transaction costs that are directly attributable to their acquisition.
+Investments are derecognised when the rights to receive cash flows from the investments have expired or
+when they have been transferred and the Group has also transferred substantially all risks and rewards of
+ownership.
+Securities at fair value through profit or loss and available-for-sale securities are carried at fair value. Equity
+investments that do not have a quoted price in an active market and whose fair value cannot be reliably
+measured are carried at cost, net of allowance for impairments. Held-to-maturity securities are carried at
+amortised cost using the effective interest method. Investment gains and losses on sales of securities are
+determined principally by specific identification. Realised and unrealised gains and losses arising from
+changes in the fair value of the securities at fair value through profit or loss category, and the change of fair
+value of available-for-sale debt securities due to foreign exchange impact on the amortised cost are included
+in net profit in the period in which they arise. The remaining unrealised gains and losses arising from
+changes in the fair value of available-for-sale securities are recognised in OCI. When securities classified as
+available-for-sale securities are sold or impaired, the accumulated fair value adjustments are included in net
+profit as realised gains on financial assets.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at
+amortised cost.
+Loans are carried at amortised cost, net of allowance for impairment.
+The Group purchases securities under agreements to resell substantially identical securities. These
+agreements are classified as secured loans and are recorded at amortised cost, i.e. their costs plus accrued
+interests at the end of the reporting period, which approximates fair value. The amounts advanced under
+these agreements are reflected as assets in the consolidated statement of financial position. The Group
+does not take physical possession of securities purchased under agreements to resell. Sale or transfer of the
+securities is not permitted by the respective clearing house on which they are registered while the 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.
+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:
+•
+significant financial difficulty of the issuer or debtor;
+a breach of contract, such as a default or delinquency in payments;
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+it becomes probable that the issuer or debtor will enter into bankruptcy or other financial
+reorganisation; 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 market price of the equity securities was more than 50% below their cost at the reporting date;
+the market price of the equity securities was more than 20% below their cost for a period of at least six
+months at the reporting date; and
+the market price of the equity securities was below their cost for a period of more than one year
+(including one year) at the reporting date.
+130
+2
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+the disappearance of an active market for that financial asset because of financial difficulties.
+2.8 Financial assets (continued)
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+2
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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 forms 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.
+Notes to the Consolidated Financial Statements
+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.a Classification
+The Group classifies its financial assets into the following categories: securities at fair value through profit
+or loss, held-to-maturity securities, loans and receivables and available-for-sale securities. Management
+determines the classification of its financial assets at initial recognition which depends on the purpose for
+which the assets are acquired. The Group's investments in securities fall into the following four categories:
+Securities at fair value through profit or loss
+(i)
+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 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.
+(iii) Loans and receivables
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that
+are not quoted in an active market other than those that the Group intends to sell in the short term
+or held as available-for-sale. Loans and receivables mainly comprise term deposits, loans, securities
+purchased under agreements to resell, accrued investment income and premium receivables as
+presented separately in the statement of financial position.
+(iv) Available-for-sale securities
+Available-for-sale securities are non-derivative financial assets that are either designated in this
+category or not classified in any of the other categories.
+129
+25252
+2.8 Financial assets
+2.8.c Impairment of financial assets other than securities at fair value through profit or loss
+(continued)
+2
+2.9 Fair value measurement
+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:
+132
+2
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+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)
+(a)
+The reasonable estimate of liability for long-term insurance contracts is the present value of
+reasonable estimates of future cash outflows less future cash inflows. The expected future cash
+inflows include cash inflows of future premiums arising from the undertaking of insurance
+obligations, with consideration of decrement mostly from death and surrenders. The expected
+future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of the
+following:
+•
+•
+guaranteed benefits based on contractual terms, including payments for deaths,
+disabilities, diseases, survivals, maturities and surrenders;
+additional non-guaranteed benefits, such as policyholder dividends; and
+reasonable expenses incurred to manage insurance contracts or to process claims,
+including maintenance expenses and claim settlement expenses. Future administration
+expenses are included in the maintenance expenses. Expenses are determined based on
+expense analysis with consideration of future inflation and the Group's expense
+management control.
+On each reporting date, the Group reviews the assumptions for reasonable estimates of liability
+and risk margins, with consideration of all available information, taking into account the
+Group's historical experience and expectation of future events. Changes in assumptions are
+recognised in net profit. Assumptions for the amortization of residual margin are locked in at
+policy issuance and are not adjusted at each reporting date.
+(b) Margin has been taken into consideration while computing the reserve of insurance contracts,
+measured separately and recognised in net profit in each period over the life of the contracts. At
+the inception of the contracts, the Group does not recognise Day 1 gain, whereas on the other
+hand, Day 1 loss is recognised in net profit immediately.
+(c)
+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.
+The Group has considered the impact of time value on the reserve calculation for insurance
+contracts.
+133
+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.
+25252
+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.
+Long-term insurance contracts
+(ii) Long-term insurance contracts (continued)
+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.
+The Group measures financial instruments, such as securities at fair value through profit or loss and
+available-for-sale securities, at fair value at each reporting date. Fair value is the price that would be received
+to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
+measurement date. The fair value measurement of assets and liabilities is based on the presumption that the
+transaction to sell the asset or transfer the liability takes place either:
+in the principal market for the asset or liability, or
+in the absence of a principal market, in the most advantageous market for the asset or liability.
+The principal or the most advantageous market must be accessible 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.
+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 39(b) 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.
+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.
+131
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+2.10 Cash and cash equivalents
+(i)
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.11 Insurance contracts and investment contracts
+2.11.1 Classification
+The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by
+the Group are classified as insurance contracts and investment contracts. Insurance contracts are those
+contracts that transfer significant insurance risk. They may also transfer financial risk. Investment contracts
+are those contracts that transfer financial risk without significant insurance risk. A number of insurance
+and investment contracts contain a discretionary participating feature ("DPF"). This feature entitles the
+policyholders to receive additional benefits or bonuses that are, at least in part, at the discretion of the
+Group.
+2.11.2 Insurance contracts
+2.11.2.a Recognition and measurement
+The unearned premium reserve represents the portion of the premiums written net of certain
+acquisition costs relating to the unexpired terms of coverage.
+Short-term insurance contracts
+(ii)
+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.
+2
+145
+As at 31 December 2016, 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 RMB160 million (as at 31
+December 2015: RMB416 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 RMB6,948 million (as at 31
+December 2015: RMB6,928 million) lower or higher respectively, as a result of a decrease or increase
+in the fair value of available-for-sale securities.
+RISK MANAGEMENT (continued)
+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.
+25252
+4
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+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.
+China Life Insurance Company Limited Annual Report 2016
+(i) Interest rate risk
+expenses
+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.
+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 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'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.
+4.2 Financial risk
+4 RISK MANAGEMENT (continued)
+GAGAG
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+11,435
+775
+10,660
+4.2 Financial risk (continued)
+4.2.1 Market risk
+4.2.1 Market risk (continued)
+12,791
+Price risk
+19,907
+Unpaid claims
+148
+6,968
+- Available-for-sale securities
+Equity securities
+Financial assets
+Total
+Others
+EUR
+GB pound
+US dollar HK dollar
+As at 31 December 2016
+(ii)
+The following table summarises financial assets and financial liabilities denominated in currencies
+other than RMB as at 31 December 2016 and 2015, expressed in RMB equivalent:
+4.2.1 Market risk (continued)
+4.2 Financial risk (continued)
+RISK MANAGEMENT (continued)
+4
+GAGAG
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+146
+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.
+(iii) Currency risk
+As at 31 December 2016, 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 RMB3,263
+million or RMB3,400 million (as at 31 December 2015: RMB2,248 million or RMB2,248 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 RMB24,999 million or RMB28,153 million (as at 31 December 2015: RMB22,999 million or
+RMB22,999 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.
+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.
+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)
+(72,955)
+85,171
+(20,487)
+Total
+2016
+2015
+2014
+2013
+2012
+Estimated claims expenses
+Short-term insurance contracts (accident year)
+The following table indicates the claim development for short-term insurance contracts taking impacts of
+ceded business into account:
+144
+11,538
+10,756
+782
+Current year
+expenses
+(73,633)
+(16,364)
+(20,645)
+(16,726)
+(11,775)
+(8,123)
+expenses paid
+Accumulated claims
+27,120
+21,427
+16,726
+11,775
+- Securities at fair value
+Unpaid claims
+7,916
+11,331
+16,379
+(16,589)
+(11,645)
+(7,997)
+expenses paid
+Accumulated claims
+84,390
+26,897
+21,262
+16,589
+11,645
+7,997
+claims expenses
+Estimated accumulated
+7,997
+4 years later
+11,645
+7,997
+3 years later
+16,589
+11,645
+7,997
+2 years later
+21,262
+17,127
+11,743
+8,035
+1 year later
+26,897
+20,359
+(16,237)
+through profit or loss
+(iii) Currency risk (continued)
+128
+18,007
+Total
+4,531
+6
+14
+132
+636
+3,743
+Cash and cash equivalents
+5,431
+5,431
+Term deposits
+402
+9,148
+8
+15
+371
+through profit or loss
+- Securities at fair value
+266
+266
+- Available-for-sale securities
+68
+68
+Held-to-maturity securities
+Debt securities
+7,868
+1,056
+8
+1,286
+2,212
+1,242
+148
+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 2016 and 2015.
+Credit risk exposure
+Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The
+Group manages credit risk through in-house research and analysis of the Chinese economy and the
+underlying obligors and transaction structures. Where appropriate, the Group obtains collateral in the form
+of rights to cash, securities, property and equipment to lower the credit risk.
+Credit risk 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.
+4.2.2 Credit risk
+As at 31 December 2016, 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 RMB420 million (as at 31 December 2015: RMB1,592 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 RMB1,743 million (as at 31 December 2015:
+RMB1,085 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 2016
+were RMB582 million (2015: exchange gains of RMB812 million).
+8,123
+4.2.1 Market risk (continued)
+4.2 Financial risk (continued)
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+147
+2,643
+2,643
+2,643
+2,643
+Total
+Interest-bearing loans and borrowings
+Financial liabilities
+31,895
+2,190
+3,906
+1,139
+3,413
+20,177
+Total
+4,961
+9
+39
+145
+2,083
+2,685
+Cash and cash equivalents
+6,106
+-
+6,106
+Term deposits
+15,002
+378
+3
+14
+348
+profit or loss
+- Securities at fair value through
+164
+164
+- Held-to-maturity securities
+Debt securities
+8,759
+1,135
+2,475
+1,115
+13
+1,274
+2,517
+1,305
+through profit or loss
+- Securities at fair value
+13,329
+172
+8,442
+4,715
+- Available-for-sale securities
+Equity securities
+Financial assets
+Total
+Others
+EUR
+GB pound
+HK dollar
+US dollar
+As at 31 December 2015
+16,170
+731
+2,339
+16,170
+731
+2,339
+13,100
+Total
+13,100
+other borrowings
+Interest-bearing loans and
+Financial liabilities
+40,275
+70
+claims expenses
+25252
+8,123
+Total
+68.12%
+225,878
+67.69%
+264,308
+Others (f)
+2.23%
+7,388
+1.27%
+4,968
+Hong Ying Participating Endowment (e)
+7.09%
+23,508
+390,438
+5.74%
+Kang Ning Whole Life (d)
+0.27%
+888
+7.62%
+29,739
+Xin Fu Nian Nian Annuity (c)
+10.74%
+35,606
+7.93%
+30,944
+Xin Annuity (b)
+11.55%
+38,314
+22,420
+9.75%
+100.00%
+100.00%
+Others (f)
+0.43%
+499
+40.72%
+73,261
+Hong Ying Participating Endowment (e)
+3.20%
+3,692
+2.20%
+3,949
+Kang Ning Whole Life (d)
+0.10%
+120
+331,582
+2.98%
+Xin Fu Nian Nian Annuity (c)
+0.01%
+13
+0.07%
+132
+Xin Annuity (b)
+0.07%
+80
+0.04%
+67
+New Xin Feng Endowment (Type A) (a)
+insurance contracts
+Insurance benefits of long-term
+5,366
+38,059
+New Xin Feng Endowment (Type A) (a)
+Premiums of long-term insurance contracts
+3
+140
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+139
+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.
+3.4 Impairment of investments in associates and joint ventures
+When the Group performed a purchase price allocation exercise of the investment in China Guangfa Bank
+Co., Ltd. ("CGB") (refer to Note 8), the fair value of the identifiable net assets of CGB should be evaluated.
+Identifiable intangible assets arising from the acquisition are mainly the core deposit intangibles and the
+credit card client relationship, and the valuation of the fair value involved complex assumptions. The Group
+applied the appropriate methodology to estimate the core deposit intangibles and the credit card client
+relationship. The Group estimated the future cash flow data based on the historical business data of CGB
+and chose the appropriate discount rate to determine the discount rate of present value of future cash flows.
+3.3 The fair value of identifiable intangible assets arising from acquisition
+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.
+4
+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.
+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:
+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
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+G2525
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+3
+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.
+CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+3.5 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.
+%
+RMB million
+%
+RMB million
+2015
+2016
+Product name
+ended 31 December
+year
+For the
+Estimated accumulated
+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)
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+RISK MANAGEMENT (continued)
+4
+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
+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 is carried out by the Company's Risk Management Committee under policies approved by the
+Company's Board of Directors.
+RISK MANAGEMENT
+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 2016, the Group has consolidated some fund products issued and
+managed by the Company's subsidiary, China Life AMP Asset Management Company (“CL AMP”), an asset
+management plan issued and managed by the Company's subsidiary, China Life Wealth Management Co.,
+Limited (“CL Wealth”) 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.
+3.6 Determination of control over investee
+97,127
+53.99%
+The table below presents the Group's major products of long-term insurance contracts:
+96.19%
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+143
+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 RMB372 million (as at 31 December 2015: RMB315 million)
+lower or higher, respectively.
+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 RMB57,591million or RMB65,427
+million (as at 31 December 2015: RMB45,811 million or RMB52,049 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 RMB2,823 million or RMB2,953 million (as at 31
+December 2015: RMB4,032 million or RMB4,229 million) lower or higher, respectively.
+4.1
+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 RMB16,746 million
+or RMB17,492 million (as at 31 December 2015: RMB14,597 million or RMB15,253 million) lower or
+higher, respectively.
+Sensitivity analysis of long-term insurance contracts
+4.1.3 Sensitivity analysis
+GAGAG
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+Insurance risk (continued)
+4.1
+4 RISK MANAGEMENT (continued)
+142
+Others consist of various long-term insurance contracts with no significant concentration.
+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.
+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 Fu Nian Nian Annuity is an annuity insurance contract with regular premium of 3 years,
+5
+years or 10 years and it is sold with Xin Fu Nian Nian Pension Annuity as a product portfolio. Its
+insured period extends from the effective date of the Xin Fu Nian Nian Annuity to the contractual
+date starting to claim of Xin Fu Nian Nian Pension Annuity. This product is applicable to healthy
+policyholders between 28-day-old and 65-year-old. The annuity payment of first policy year is paid at
+12% of the first premium of Xin Fu Nian Nian Annuity and Xin Fu Nian Nian Pension Annuity, the
+following annuity payments are paid at 15% of the basic sum insured by Xin Fu Nian Nian Annuity;
+maturity benefit is paid at the premium received (without interest) of Xin Fu Nian Nian Annuity;
+death benefit is paid at the premium received (without interest) of Xin Fu Nian Nian Annuity or the
+cash value of Xin Fu Nian Nian Pension Annuity, whichever greater.
+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.
+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.
+Insurance risk (continued)
+Sensitivity analysis of short-term insurance contracts (continued)
+110,873
+4 years later
+11,775
+8,123
+3 years later
+16,726
+11,775
+8,123
+2 years later
+21,427
+17,265
+11,872
+8,164
+4.1.3 Sensitivity analysis (continued)
+1 year later
+20,497
+16,499
+11,476
+8,056
+Current year
+Total
+2016
+2015
+2014
+2013
+2012
+Short-term insurance contracts (accident year)
+The following table indicates the claim development for short-term insurance contracts without taking
+impacts of ceded business into account:
+27,120
+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.
+Estimated claims expenses
+(e)
+13.37%
+244,112
+Kang Ning Whole Life (d)
+0.03%
+429
+0.73%
+13,300
+Xin Fu Nian Nian Annuity (c)
+2.29%
+38,917
+3.83%
+69,846
+Xin Annuity (b)
+2.58%
+2.40%
+43,794
+New Xin Feng Endowment (Type A) (a)
+Liabilities of long-term insurance contracts
+%
+As at 31 December 2015
+RMB million
+%
+As at 31 December 2016
+RMB million
+GAGAG
+100.00%
+115,277
+100.00%
+179,902
+(f)
+Total
+214,120
+12.60%
+43,788
+117,946
+(d)
+(c)
+Hong Ying Participating Endowment (e)
+(b)
+(a)
+4.1.2 Concentration of insurance risks (continued)
+4.1 Insurance risk (continued)
+RISK MANAGEMENT (continued)
+4
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+141
+ended 31 December 2016
+100.00%
+11.05%
+Others (f)
+1,336,958
+1,213,738
+6.46%
+73.21%
+Total
+1,825,956
+100.00%
+1,698,773
+71.45%
+187,781
+(890)
+(890)
+6,401
+14,392
+54,774
+466,104
+Segment revenues
+(890)
+Including: inter-segment revenue
+6,460
+86
+5,919
+Other income
+1,345
+540,781
+890
+Benefits, claims and
+Increase in insurance contract liabilities
+Insurance benefits and claims expenses
+(126,619)
+Investment contract benefits
+(7,094)
+(274)
+(16,578)
+(109,767)
+(27,269)
+expenses
+(5,311)
+adjustment expenses
+Accident and health claims and claim
+(253,157)
+(25)
+(1,977)
+(251,155)
+Life insurance death and other benefits
+(21,958)
+(378)
+14,583
+(255)
+188,415
+- Annuity
+- Endowment
+29,524
+- Whole life
+3,871
+- Term life
+140,095
+430,498
+361,905
+Gross written premiums
+Revenues
+Total
+Elimination
+(5,091)
+RMB million
+54,010
+(25)
+Net premiums earned
+50,590
+(6,436)
+Net fair value gains/(losses) through profit or loss
+6,038
+(39)
+23
+231
+5,823
+361,649
+Net realised gains/(losses) on financial assets
+899
+403
+4,122
+103,723
+Investment income
+426,230
+13,991
+109,147
+(225)
+Attributable to
+Policyholder dividends resulting from
+23,842
+6,165
+852
+2,093
+14,732
+Segment results
+5,855
+5,855
+Share of profit of associates and joint ventures, net
+(522,794)
+890
+(6,091)
+(13,540)
+(52,681)
+(451,372)
+Income tax
+(4,257)
+Net profit
+19,585
+Others
+Notes to the Consolidated Financial Statements
+2,083
+1,490 257 196 140
+Depreciation and amortisation
+(25,774)
+(1,320)
+Segment benefits, claims and expenses
+(91)
+(23,433)
+Other comprehensive income attributable
+to equity holders of the Company
+458
+19,127
+- Non-controlling interests
+- Equity holders of the Company
+158
+(930)
+(1,048)
+(106)
+(138)
+(4,767)
+(181)
+(17)
+(174)
+(4,395)
+Finance costs
+(52,022)
+Administrative expenses
+(2,216)
+(6,906)
+(38,459)
+Underwriting and policy acquisition costs
+(15,883)
+(96)
+(15,787)
+participation in profits
+(4,441)
+(5,316)
+(22,248)
+(2,899)
+(804)
+Statutory insurance fund contribution
+890
+(3)
+(34)
+(853)
+Including: inter-segment expenses
+(4,373)
+(4,859)
+(1,360)
+(467)
+(256)
+(3,666)
+Other expenses
+(31,854)
+(2,334)
+890
+Accident
+China Life Insurance Company Limited Annual Report 2016
+For the assets and liabilities measured at fair value, during the year ended 31 December 2016, RMB8,932
+million (2015: RMB59,214 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB8,668 million (2015: RMB12,129 million) debt securities were transferred
+from Level 2 to Level 1. No material equity securities were transferred between Level 1 and Level 2.
+1,061
+76,445
+13,733
+Closing balance
+(301)
+(301)
+91,239
+Maturity
+2,331
+in other comprehensive income
+Total gains/(losses) recorded
+(67)
+(67)
+in profit or loss
+2,331
+Total gains/(losses) recorded
+155
+China Life Insurance Company Limited Annual Report 2016
+Significant
+observable
+Quoted prices
+in active
+markets
+Total
+Fair value measurement using
+Assets measured at fair value
+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:
+25252
+4.3 Fair value hierarchy (continued)
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+156
+inputs
+(3,938)
+(2,054)
+Total
+profit or loss
+Available-for-sale securities
+value through
+(2,043)
+(12)
+Debt securities
+RMB million
+(2,031)
+Securities at fair
+(2,043)
+Total
+(12)
+Investment contracts at fair value
+through profit or loss
+(2,031)
+GAGAG
+(1,884)
+Equity securities
+RMB million
+RMB million
+2,454
+1,128
+1,326
+26,032
+12,499
+64,728
+Equity securities
+1,884
+501
+13,533
+Transferred out of Level 3
+Transferred into Level 3
+Purchases
+Opening balance
+RMB million
+62,343
+through profit or loss
+Level 1
+Significant
+unobservable
+inputs
+Level 3
+Closing balance
+in other comprehensive income
+Sales
+Total gains/(losses) recorded
+in profit or loss
+Total gains/(losses) recorded
+Transferred out of Level 3
+(856)
+Transferred into Level 3
+Opening balance
+The following table presents the changes in Level 3 assets for the year ended 31 December 2015:
+(870)
+Total
+(14)
+through profit or loss
+Purchases
+Investment contracts at fair value
+(14)
+Securities at fair
+39,449
+39,449
+22,678
+542
+21,635
+501
+(870)
+RMB million
+Equity securities
+Equity securities
+RMB million
+Debt securities
+RMB million
+Total
+value through
+profit or loss
+Available-for-sale securities
+RMB million
+Level 2
+(856)
+Financial liabilities at fair value
+501
+380,823
+20,575
+- Debt securities
+347,810
+62,343
+401,899
+51,940
+- Equity securities
+Available-for-sale securities
+RMB million
+RMB million
+RMB million
+RMB million
+233,527
+through profit or loss
+Securities at fair value through
+- Equity securities
+Liabilities measured at fair value
+887,699
+64,728
+510,154
+312,817
+Total
+profit or loss
+94,984
+18,304
+- Debt securities
+43,006
+1,884
+711
+40,411
+76,680
+2,785
+Financial liabilities at fair value
+954,710
+Carrying
+value
+Without
+maturity
+Not later
+than 1 year
+but not later
+than 3 years
+but not later
+than 5 years
+As at 31 December 2016
+Later than
+5 years
+Contractual cash inflows
+Equity securities
+421,383
+421,383
+Debt securities
+1,148,894
+Financial assets
+210,589
+Later than 1 year Later than 3 years
+The following tables set forth the contractual and expected undiscounted cash flows for financial assets and
+liabilities and insurance liabilities:
+4.2.3 Liquidity risk
+Liquidity risk is the risk that the Group is unable to obtain funds at a reasonable funding cost when required
+to meet a repayment obligation and fund its asset portfolio within a certain time.
+In the normal course of business, the Group attempts to match the maturity of financial assets to the
+maturity of insurance and financial liabilities.
+149
+25252
+China Life Insurance Company Limited Annual Report 2016
+Contractual and expected cash flows (undiscounted)
+Notes to the Consolidated Financial Statements
+year
+ended 31 December 2016
+4
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+For the
+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 2016 and 2015.
+214,105
+1,014,074
+agreements to resell
+43,538
+43,538
+Accrued investment income
+55,945
+44,722
+Securities purchased under
+11,100
+Premiums receivable
+13,421
+13,421
+Cash and cash equivalents
+67,046
+67,046
+123
+188,740
+209
+1,909
+Loans
+226,573
+119,247
+47,606
+41,697
+55,106
+4,720
+Term deposits
+199,657
+260,065
+117,012
+8,858
+Statutory deposits-restricted
+6,333
+538,325
+Liabilities measured at fair value
+As at 31 December 2016, 99.5% (as at 31 December 2015: 99.9%) of the Group's bank deposits are with
+the four largest state-owned commercial banks, other national commercial banks and China Securities
+Depository and Clearing Corporation Limited (“CSDCC") in the PRC. The Group believes these
+commercial banks, and CSDCC have a high credit quality. The Group's most other loans excluding
+policyholder loans, are guaranteed by third parties or with pledge, or have the fiscal annual budget income
+as the source of repayment, or have higher credit rating borrowers. As a result, the Group concludes that
+the credit risk associated with term deposits and accrued investment income thereof, statutory deposits-
+restricted, other loans, and cash and cash equivalents will not cause a material impact on the Group's
+consolidated financial statements as at 31 December 2016 and 2015.
+Credit quality
+28,562
+- Debt securities
+86,161
+183,222
+- Equity securities
+Available-for-sale securities
+357,463
+Assets measured at fair value
+RMB million
+RMB million
+RMB million
+Level 3
+Level 2
+Level 1
+RMB million
+Significant
+unobservable
+inputs
+76,445
+13,733
+Securities at fair value
+91,239
+561,725
+301,746
+Total
+154,406
+117,234
+345,828
+399,758
+37,172
+54,718
+1,061
+867
+52,790
+- Equity securities
+through profit or loss
+- Debt securities
+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 2016,
+99.0% (as at 31 December 2015: 98.9%) 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 2016, 99.9% (as at 31 December
+2015: 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.
+inputs
+observable
+4.3 Fair value hierarchy
+154
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2016
+year
+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.
+For the
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+4.2.2 Credit risk (continued)
+4
+markets
+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.
+As at 31 December 2016, assets classified as Level 1 accounted for approximately 31.61% 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 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 date as their fair market value and classified the investments as Level 1.
+Significant
+Quoted prices
+in active
+Total
+Fair value measurement using
+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:
+For the year ended 31 December 2016
+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.
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+RISK MANAGEMENT (continued)
+4
+Note 3.2.
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see
+At 31 December 2016, assets classified as Level 3 accounted for approximately 9.55% 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.
+As at 31 December 2016, assets classified as Level 2 accounted for approximately 58.84% 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.
+4.3 Fair value hierarchy (continued)
+1,319
+The following table presents the changes in Level 3 assets for the year ended 31 December 2016:
+(390)
+Contractual cash outflows
+(108,091)
+(11,334)
+(16,207)
+(16,199)
+84,106
+Securities sold under
+(2,789,186)
+(44,697)
+(81,630)
+1,715,985
+Investment contracts
+Insurance contracts
+Expected cash outflows
+26,347
+Financial and insurance liabilities
+agreements to repurchase
+(31,354)
+67,994
+Bonds payable
+(107)
+2,643
+borrowings
+Interest-bearing loans and
+31,354
+(30,092)
+balances payable
+Annuity and other insurance
+(856)
+856
+value through profit or loss
+Financial liabilities at fair
+30,092
+(33,424)
+951,830
+583,934
+Securities purchased under
+232
+6,404
+484
+6,333
+Statutory deposits-restricted
+agreements to resell
+128,322
+190,658
+562,622
+Term deposits
+41,634
+56,003
+48,829
+296,268
+355,222
+21,503
+Accrued investment income
+559,113
+411,623
+2,347,867
+Subtotal
+76,096
+76,096
+21,503
+Cash and cash equivalents
+11,913
+Premiums receivable
+7
+18,327
+31,218
+49,552
+11,913
+96,901
+(214)
+(39,774)
+Subtotal
+Minimum capital
+Core capital
+Actual capital
+The table below summarises the core and comprehensive solvency ratio, core capital, actual capital and
+minimum capital of the Company under Solvency II as at 31 December 2016:
+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 computes the solvency ratio in
+accordance with Solvency II, identifying, assessing and managing various risks starting from 1 January 2016.
+4.2.4 Capital management (continued)
+4.2 Financial risk (continued)
+Core solvency ratio
+GAGAG
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+RISK MANAGEMENT (continued)
+4
+330%
+197,144
+85,676
+For the year ended 31 December 2016
+282,820
+Comprehensive solvency ratio
+639,396
+25252
+153
+According to Cai Kuai Bu Han [2017] No.457 Notification of the Evaluation Results of Integrated Risk Rating
+(Classification Regulation) for the Fourth Quarter of 2016, released by the CIRC, the latest Integrated Risk
+Rating result of the Company was Category A.
+(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;
+4,104
+As at 31 December 2016
+RMB million
+Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational
+risk and liquidity risk are very low;
+(i)
+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:
+297%
+280%
+228,080
+677,768
+(ii)
+(2,693)
+As at 31 December 2015
+RMB million
+152
+151
+(1,945,447)
+367,542
+483,042
+366,307
+410,767
+25252
+414,837
+(2,897,277)
+12,320
+(100,892)
+(192,806)
+(856)
+1,933,030
+Net cash inflows/(outflows)
+Actual capital
+Minimum capital
+Solvency surplus
+Solvency ratio
+China Life Insurance Company Limited Annual Report 2016
+For the
+According to Bao Jian Hui Ling [2008] No.1, Solvency Regulations of Insurance Companies (“Solvency I"),
+the table below summarises the solvency ratio, the actual capital, the minimum capital and the solvency
+surplus of the Company under Solvency I as at 31 December 2015:
+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.
+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'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.
+4.2.4 Capital management
+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 RMB53,271 million
+and RMB140,565 million, respectively for the year ended 31 December 2016 (2015: RMB49,905 million
+and RMB33,471 million, respectively), payable within one year.
+Notes to the Consolidated Financial Statements
+The liquidity analysis above does not include policyholder dividends payable amounting to RMB87,725
+million as at 31 December 2016 (as at 31 December 2015: RMB107,774 million). As at 31 December
+2016, declared dividends of RMB64,623 million (as at 31 December 2015: RMB56,597 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.
+4.2.3 Liquidity risk (continued)
+4.2 Financial risk (continued)
+RISK MANAGEMENT (continued)
+4
+ended 31 December 2016
+year
+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.
+207,267
+Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational
+risk and liquidity risk are low;
+910,196
+Life
+For the year ended 31 December 2016
+SEGMENT INFORMATION (continued)
+5
+ended 31 December 2016
+year
+Health
+For the
+China Life Insurance Company Limited Annual Report 2016
+25252
+157
+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.
+5.3 Allocation basis of assets and liabilities
+Investment income, net realised gains/(losses) 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 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.
+Notes to the Consolidated Financial Statements
+5.2 Allocation basis of income and expenses
+Subtotal
+421,383
+Investment contracts
+(3,229,394)
+35,088
+97,236
+(43,322)
+1,847,986
+2,521,458
+Insurance contracts
+Financial and insurance liabilities
+150
+1,078,038
+347,781
+537,596
+700,129
+Expected cash outflows
+195,706
+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.
+Accident insurance business relates primarily to the sale of accident insurance policies.
+RISK MANAGEMENT (continued)
+4
+64,728
+1,884
+62,343
+501
+4.3 Fair value hierarchy (continued)
+(4,800)
+3,664
+3,664
+352
+(719)
+(329)
+Loans
+(4,800)
+(iv) Other businesses (Others)
+5
+Notes to the Consolidated Financial Statements
+(iii) Accident insurance business (Accident)
+Health insurance business relates primarily to the sale of health insurance policies, including those
+health insurance policies without significant insurance risk transferred.
+(ii) Health insurance business (Health)
+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)
+China Life Insurance Company Limited Annual Report 2016
+The Group operates in four operating segments:
+SEGMENT INFORMATION
+As at 31 December 2016 and 2015, 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 2016 and 2015, 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.
+material impact
+The assets whose fair value measurements are classified under Level 3 above do not have any
+on the profit or loss of the Group.
+For the year ended 31 December 2016
+5.1 Operating segments
+(15,880)
+352
+(33,128)
+4
+RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+Contractual and expected cash flows (undiscounted)
+GAGAG
+Later than 1 year Later than 3 years
+As at 31 December 2015
+Carrying
+value
+Without
+Not later
+but not later
+but not later
+Later than
+(34,147)
+214,106
+1,000,958
+Debt securities
+411,623
+411,623
+(2,411,261)
+Equity securities
+Financial assets
+5 years
+than 5 years
+than 3 years
+than 1 year
+maturity
+Contractual cash inflows
+349,741
+130,340
+480,631
+39,038
+balances payable
+Annuity and other insurance
+(2,031)
+2,031
+value through profit or loss
+(39,038)
+Financial liabilities at fair
+81,088
+agreements to repurchase
+Securities sold under
+Contractual cash outflows
+584,526
+(259,905)
+(81,088)
+Interest-bearing loans and other
+170,658
+16,170
+borrowings
+Net cash inflows/(outflows)
+301,441
+(3,489,299)
+1,960
+419,352
+(219,498)
+46,930
+2,220,017
+Subtotal
+(39,032)
+37,998
+Bonds payable
+(16,159)
+(1,138)
+(2,031)
+Subtotal
+18,374
+2,770 15,197
+(141)
+(171)
+5,855
+17,102
+Total
+99,068
+47,175 68,387
+(820)
+(831)
+(553)
+16,801
+(5)
+(136)
+(278)
+102,664
+(1,010)
+Joint ventures
+China Life (Sanya) Health
+Investments Co., Ltd
+(171) (553)
+("Sanya Company")
+306
+306
+301 51.00%
+Others (iv)
+Equity Method
+18,068 2,464 15,197
+Equity Method
+119,766
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+166
+Percentage of equity interest held
+Country of incorporation
+(649)
+Sanya Company
+Joint venture
+Pipeline Company
+COFCO Futures
+CLP&C
+Sino-Ocean
+CGB
+Associates
+Name
+168
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+As at 31 December 2016, the major associates and joint venture of the Group are as follows:
+8
+ended 31 December 2016
+year
+8
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+GAGAG
+For the year ended 31 December 2016
+(i)
+(1,010)
+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 investment agreements, the Company acquired 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 approximately RMB23.3 billion at RMB6.39 per share. The transaction
+was settled on 29 August 2016, after which the Company holds 43.686% of CGB's equity interest. The
+Company imposes a significant influence over CGB's financial and operating decisions through its Board
+of Directors, and therefore CGB has been accounted for as an associate. The new investment cost of CGB
+includes the capitalised direct cost of the transaction.
+(iii) In December 2016, the Company contributed RMB20 billion in Pipeline Company, holding 43.86% of
+its equity interest. According to the provisions of the investment agreement and the articles of Pipeline
+Company, the Company can impose a significant influence over Pipeline Company's financial and operating
+decisions through its Board of Directors, and therefore accounted for it as an associate. As at 31 December
+2016, the Company had not yet completed the valuation of fair value for the identifiable net assets of
+Pipeline Company, therefore the carrying value of investment in Pipeline Company was stated at its
+investment cost.
+(iv) Others are mainly overseas enterprises invested by the Group. The Group invested in real estate, industrial
+logistics assets and other industries through these overseas enterprises.
+167
+25252
+China Life Insurance Company Limited Annual Report 2016
+For the
+(ii) The 2015 final dividend of HKD0.05 in cash per ordinary share was approved and declared in the Annual
+General Meeting of Sino-Ocean on 12 May 2016. The Company received a cash dividend amounting
+to RMB95 million. The 2016 interim dividend of HKD0.079 in cash per ordinary share was approved
+and declared by the board of directors of Sino-Ocean on 18 August 2016. The Company received a cash
+dividend amounting to RMB153 million.
+Notes to the Consolidated Financial Statements
+7,812
+44,405 53,190
+Casualty Insurance
+China Life Property &
+12,680 29.991% (1,010)
+(20)
+(248)
+551
+12,397
+11,245
+Equity Method
+Sino-Ocean (ii)
+43.686%
+50,229
+(491)
+4,675
+23,492
+22,553
+32,162
+of
+PRC
+As at 31 Percentage Accumulated
+December
+of equity amount of
+Method
+Cost
+Company Limited
+2015
+or loss dividends movements impairment
+2016
+interest impairment
+Associates
+CGB (i)
+Equity Method
+cost
+5,996
+("CLP&C")
+6,000
+80,694
+Subtotal
+10,407
+444
+(266)
+285
+246 9,698
+9,948
+Equity Method
+Others (iv)
+43.86%
+20,000
+20,000
+20,000
+("Pipeline Company”) (iii) Equity Method
+Co., Ltd.
+China Gas Pipeline
+463
+(135)
+(211)
+7,929
+40.00%
+COFCO Futures
+Equity Method
+Company Limited
+Equity Method
+1,339
+1,397
+22
+1,419 35.00%
+Sinopec Sichuan to East
+("COFCO Futures")
+43.686%
+32,217
+29.991%
+1,419
+7,929
+13,690
+50,229
+Gross carrying value of the investments
+51.00%
+43.86%
+35.00%
+40.00%
+43.686% 29.991%
+Proportion of the Group's ownership
+591
+32,217
+2,496
+20,000
+19,823
+109,137
+associates and joint ventures after adjustments
+Total equity attributable to equity holders of the
+ང་
+(1,576)
+3,163
+Total adjustments (i)
+591
+32,217
+2,496
+19,823
+43,999
+105,974
+of the associates and joint ventures
+42,423
+301
+Impairment
+(1,010)
+profit Declared equity
+631
+66
+631
+4,282
+8,434
+Total comprehensive income
+(526)
+(164)
+(1,070)
+Other comprehensive income
+631
+66
+1,157
+4,446
+9,504
+Net profit/(loss)
+Net carrying value of the investments
+50,229
+12,680
+7,929
+1,419
+20,000
+Total equity attributable to equity holders
+301
+55,318
+37,748
+55,728
+375
+2,339
+1
+Total revenues
+591
+2,577
+19,823
+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:
+51.00%
+35.00%
+40.00%
+29.998%
+20.00%
+Percentage of equity interest held
+51.00%
+PRC
+PRC
+PRC
+Hong Kong, PRC
+PRC
+Country of incorporation
+Sanya Company
+Joint venture
+PRC
+40.00%
+PRC
+35.00%
+PRC
+43.86%
+Pipeline
+PRC
+Name
+Associates
+CGB
+Sino-Ocean
+CLP&C
+COFCO Futures
+As at 31 December 2015, the major associates and joint venture of the Group are as follows:
+Hong Kong, PRC
+CGB Sino-Ocean
+Futures
+49,330
+105,974
+Total equity
+208
+5,014
+8,710
+52,950
+101,935
+1,941,618
+Total liabilities
+799
+37,231
+11,287
+72,773
+151,265
+2,047,592
+Total assets
+Company
+Sanya
+Company
+RMB
+RMB
+RMB
+RMB
+CLP&C
+RMB
+million
+million
+million
+million
+million
+million
+RMB
+Other Provision
+Declared dividends
+Change
+of the
+1,081
+(4,644)
+(12,107)
+(44,647)
+(403,175)
+Segment benefits, claims and expenses
+(743)
+(94)
+(103)
+(546)
+Statutory insurance fund contribution
+1,081
+(4)
+(33)
+(1,044)
+(463,492)
+Including: inter-segment expenses
+Share of profit of associates and joint ventures, net
+1,974
+34,699
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+160
+35,187
+Net profit
+(10,744)
+Income tax
+Share of
+2,700
+1,753
+557
+40,921
+Segment results
+1,974
+(7,428)
+1,081
+(997)
+(24,921)
+Underwriting and policy acquisition costs
+(33,491)
+(163)
+(33,328)
+participation in profits
+Policyholder dividends resulting from
+(2,264)
+(188)
+(2,076)
+Investment contract benefits
+(109,509)
+(38)
+(15,803)
+(93,668)
+(5,528)
+(3,813)
+(1,307)
+(35,569)
+(840)
+(327)
+(6,345)
+Other expenses
+(27,458)
+(2,218)
+(3,136)
+488
+(3,811)
+Administrative expenses
+(4,320)
+(122)
+(15)
+(129)
+(4,054)
+Finance costs
+(18,293)
+Increase in insurance contract liabilities
+Other comprehensive income attributable
+6,359
+6,492
+57,024
+1,652,469
+Insurance contracts
+Liabilities
+2,448,315
+25,034
+26,974
+Total
+Others
+Property, plant and equipment
+Unallocated
+2,396,307
+62,075
+8,443
+1,715,985
+74,482
+Investment contracts
+10,060
+1,850,433
+Segment liabilities
+101,767
+3,499
+401
+3,278
+94,589
+Others
+31,354
+986
+108
+931
+29,329
+Securities sold under agreements to repurchase
+84,106
+74,046
+2,251,307
+Segment assets
+2,335,836
+60,471
+SEGMENT INFORMATION (continued)
+5
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+2,036
+145
+240
+263
+1,388
+Depreciation and amortisation
+7,076
+492
+23
+202
+Assets
+As at 31 December 2015
+Life
+Health
+47,175
+475
+4,917
+7,904
+Others
+14,900
+7,968
+to equity holders of the Company
+69,565
+cash and cash equivalents)
+Financial assets (including
+GAGAG
+Total
+Elimination
+Others
+Accident
+RMB million
+2,243,403
+(21,009)
+(4,151)
+(16,858)
+56
+302
+3,081
+77,649
+Securities sold under agreements to repurchase
+195,706
+11,933
+183,773
+Investment contracts
+1,847,986
+7,786
+77,837
+1,762,363
+Insurance contracts
+Liabilities
+81,088
+2,696,951
+Others
+3,563
+159
+2,389,303
+169,151
+Total
+Others
+Unallocated
+2,220,152
+18,250
+8,426
+96,414
+2,097,062
+Segment liabilities
+95,372
+18,194
+338
+73,277
+23,064
+30,389
+Total
+Financial assets (including cash
+Assets
+GAGAG
+Total
+Elimination
+Others
+Accident
+RMB million
+Health
+Life
+As at 31 December 2016
+SEGMENT INFORMATION (continued)
+5
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+and cash equivalents)
+2,379,782
+92,220
+8,906
+Others
+Property, plant and equipment
+Unallocated
+2,643,498
+147,158
+9,397
+98,996
+25252
+2,387,947
+2,508,300
+135,198
+119,766
+491
+6,776
+8,165
+Others
+27,392
+Segment assets
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+5,060
+(1,081)
+5,006
+61
+1,074
+Other income
+10,209
+(3)
+36
+313
+9,863
+Net fair value gains/(losses) through profit or loss
+32,297
+(69)
+115
+Including: inter-segment revenue
+1,081
+(1,081)
+Segment revenues
+adjustment expenses
+Accident and health claims and claim
+(221,701)
+20
+(20)
+(1,737)
+(219,944)
+992
+Life insurance death and other benefits
+Benefits, claims and expenses
+507,449
+(1,081)
+5,370
+13,860
+45,204
+444,096
+Insurance benefits and claims expenses
+71,293
+31,259
+97,582
+42,041
+308,169
+Gross written premiums
+Revenues
+RMB million
+Total
+Others Elimination
+Accident
+Health
+Life
+For the year ended 31 December 2015
+SEGMENT INFORMATION (continued)
+5
+ended 31 December 2016
+year
+13,761
+363,971
+- Term life
+3,476
+436
+344
+2,983
+93,819
+Investment income
+362,301
+13,365
+Net realised gains/(losses) on financial assets
+40,855
+Net premiums earned
+98,703
+177,871
+- Annuity
+- Endowment
+28,119
+- Whole life
+308,081
+7,001
+45,931
+1,933,212
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+163
+26,974
+366
+7,565
+382
+1,878
+16,783
+As at 31 December 2015
+25,348
+303
+6,333
+year
+396
+ended 31 December 2016
+Cost
+1,435
+Buildings
+RMB million
+164
+As at 31 December 2016
+As at 1 January 2016
+Fair value
+As at 31 December 2016
+As at 1 January 2016
+Net book value
+As at 31 December 2016
+As at 1 January 2016
+Charge for the year
+Accumulated depreciation
+As at 31 December 2016
+Additions
+As at 1 January 2016
+7 INVESTMENT PROPERTIES
+2,203
+16,113
+As at 1 January 2015
+Disposals
+(1,748)
+(116)
+(135)
+(658)
+(839)
+year
+Charge for the
+(13,052)
+(943)
+(996)
+(4,473)
+(6,640)
+As at 1 January 2015
+Accumulated depreciation
+33
+393
+126
+117
+Net book value
+(24)
+(24)
+As at 31 December 2015
+Disposals
+Charge for the year
+(24)
+1,435
+As at 1 January 2015
+(14,131)
+(942)
+(1,005)
+(4,738)
+(7,446)
+As at 31 December 2015
+669
+Impairment
+41,129
+(198)
+(244)
+RMB million
+2015
+2016
+(i)
+As at 31 December
+Provision of impairment (i)
+Other equity movements
+Share of profit or loss
+As at 1 January
+Change of the cost
+8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+165
+RMB million
+GAGAG
+47,175
+68,387
+December
+Accounting
+As at 31
+Movement
+The Group's investments in associates and joint ventures are unlisted except for Sino-Ocean Group Holding
+Limited ("Sino-Ocean”), which is listed on the Stock Exchange of Hong Kong Limited. On 31 December
+2016, the stock price of Sino-Ocean was HKD3.47 per share. As at 31 December 2015, 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 2016. 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 2016.
+47,175
+119,766
+(1,010)
+649
+(831)
+(604)
+(820)
+2,984
+5,855
+766
+44,390
+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 2016 amounted to RMB2,201 million
+(as at 31 December 2015: RMB2,238 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 1 January 2015
+Net book value
+As at 31 December 2015
+year
+As at 1 January 2015
+Charge for the
+4,485
+As at 31 December 2015
+Additions
+As at 1 January 2015
+Cost
+7 INVESTMENT PROPERTIES (continued)
+2,201
+2,238
+1,191
+1,237
+As at 31 December 2015
+Fair value
+As at 1 January 2015
+As at 31 December 2015
+There were no investment properties without title certificates as at 31 December 2016.
+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.
+2,238
+2,080
+1,237
+1,283
+(46)
+(198)
+(152)
+1,435
+1,435
+Buildings
+RMB million
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+(46)
+1,308
+Accumulated depreciation
+1,387
+45,724
+1,553
+10,548
+1,424
+6,837
+25,362
+As at 31 December 2016
+(1,178)
+(27)
+(475)
+(140)
+(432)
+(104)
+Disposals
+5,779
+Accumulated depreciation
+16
+As at 1 January 2016
+(4,738)
+22
+(1,801)
+(148)
+(14,131)
+(942)
+137
+426
+36
+Disposals
+(130)
+(622)
+(901)
+year
+Charge for the
+(1,005)
+(7,446)
+4,896
+177
+653
+Office
+equipment,
+furniture and
+fixtures
+Buildings
+Cost
+6 PROPERTY, PLANT AND EQUIPMENT
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+161
+2,122,101
+188,889
+Total
+Others
+Unallocated
+7,565
+Motor
+Assets under
+vehicles
+construction improvements
+37
+Additions
+(6)
+(1,438)
+1,176
+Transfers upon completion
+41,129
+621
+1,308
+1,387
+6,616
+24,253
+As at 1 January 2016
+RMB million
+Total
+Leasehold
+7,565
+As at 31 December 2016
+256
+(4,934)
+6
+1,486
+38,424
+1,246
+6,333
+1,392
+6,676
+22,777
+Transfers upon completion
+As at 1 January 2015
+Cost
+GAGAG
+RMB million
+Total
+construction improvements
+(1,686)
+(22)
+Additions
+54
+6,616
+(8,311)
+24,253
+As at 31 December 2015
+(801)
+(123)
+(63)
+Leasehold
+(133)
+(64)
+Disposals
+3,528
+13
+2,981
+128
+352
+(418)
+Assets under
+172
+Office
+equipment,
+furniture and
+fixtures
+1,878
+16,783
+As at 1 January 2016
+Net book value
+(24)
+As at 31 December 2016
+Disposals
+year
+Charge for the
+(24)
+(24)
+As at 1 January 2016
+Impairment
+(15,311)
+Motor
+vehicles
+(1,068)
+(998)
+382
+7,565
+(24)
+366
+For the year ended 31 December 2016
+Buildings
+PROPERTY, PLANT AND EQUIPMENT (continued)
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+6
+30,389
+162
+10,548
+426
+1,903
+17,027
+As at 31 December 2016
+26,974
+485
+Debt securities
+Total
+Total
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed in Singapore
+Unlisted
+As at 31
+79,438
+RMB million
+As at 31
+December 2015
+RMB million
+97,196
+169,001
+146,405
+178,444
+126,097
+Subordinated bonds/debts
+December 2016
+Corporate bonds
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2016 and 31
+December 2015. The Group had a capital contribution commitment of RMB2,991 million with a joint venture
+as at 31 December 2016 (31 December 2015: Nil). The amount has been included in the capital commitments in
+Government agency
+Total comprehensive income
+10,092
+2,171
+150,089
+2,637
+Note 38.
+(i)
+Including adjustments for the difference of accounting policies, fair value and others.
+169
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+9
+170
+FINANCIAL ASSETS
+9.1 Held-to-maturity securities
+Debt securities
+Government bonds
+bonds
+152,135
+FINANCIAL ASSETS (continued)
+504,075
+30,615
+2,000
+71,661
+86,198
+231,608
+167,450
+260,846
+248,427
+RMB million
+594,730
+9
+9.2 Loans
+Policy loans
+Other loans (i)
+Total
+Maturing:
+Within one year
+(15)
+504,075
+As at 31
+December 2015
+As at 31
+December 2016
+RMB million
+Total
+64,192
+61,916
+144
+50
+20
+24
+530,374
+442,085
+594,730
+504,075
+The estimated fair value of all held-to-maturity securities was RMB619,152 million as at 31 December 2016
+(as at 31 December 2015: RMB550,844 million).
+Unlisted debt securities include those traded on the Chinese interbank market.
+Debt securities - Contractual maturity schedule
+Maturing:
+Within one year
+After one year but within five
+years
+After five years but within ten years
+After ten years
+594,730
+379
+Sanya
+Company
+1,028
+148,185
+65,634
+8,598
+600
+Total liabilities
+1,739,047
+99,995
+46,103
+1,836,587
+6,146
+97,540
+48,190
+19,531
+2,452
+600
+Total equity attributable to equity
+holders of the associates and
+joint ventures
+Total equity
+Total assets
+RMB
+million
+million
+Listed in Mainland, PRC
+After one year but within five
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+8
+INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+The following table illustrates the summarised financial information of the Group's major associates and joint
+venture as at 31 December 2015 and for the year ended 31 December 2015:
+GAGAG
+COFCO
+CGB Sino-Ocean
+CLP&C
+Futures
+RMB
+RMB
+million
+million
+RMB
+million
+RMB
+97,540
+41,231
+19,531
+2,452
+Impairment
+(1,010)
+Net carrying value of the investments
+22,553
+12,397
+7,812
+1,397
+306
+Total revenues
+54,735
+31,226
+46,829
+390
+Net profit
+9,064
+2,251
+2,258
+15
+Other comprehensive income
+306
+(80)
+1,397
+13,407
+600
+Total adjustments (i)
+239
+Total equity attributable to equity
+holders of the associates and joint
+ventures after adjustments
+97,540
+41,470
+19,531
+2,452
+600
+Proportion of the Group's ownership
+20.00%
+29.998%
+40.00%
+35.00%
+51.00%
+Gross carrying value of the investments
+22,553
+7,812
+years
+Listed in Hong Kong, PRC
+Equity securities
+Equity securities
+23,642
+22,013
+6,368
+6,348
+17,274
+15,665
+23,642
+22,013
+1,810
+3,148
+936
+Subtotal
+69
+911
+772
+927
+1,023
+1,718
+2,520
+2,814
+5,998
+5,855
+6,341
+RMB million
+RMB million
+4,242
+Unlisted
+Listed in Singapore
+Listed in Mainland, PRC
+Others (i)
+30,673
+41,050
+Subtotal
+345,828
+347,810
+Available-for-sale securities, at cost
+Equity securities
+Others (i)
+Total
+(i)
+20,837
+20,807
+766,423
+770,516
+GAGAG
+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.
+173
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+9
+174
+FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities (continued)
+Debt securities
+As at 31
+December 2015
+50,053
+December 2016
+1,420
+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 2016, the carrying value of premiums receivable within one year was RMB13,346 million (as
+at 31 December 2015: RMB11,899 million).
+PREMIUMS RECEIVABLE
+12
+11
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+Current
+Non-current
+25252
+The fair value of policy loans approximated its carrying amounts. The fair values of other loans and
+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.
+(iii) Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore,
+their fair value was classified as Level 1.
+The fair value of 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 RMB76,299 million and that under Level 2 was RMB542,853 million as at 31 December 2016 (as at 31
+December 2015: Level 1 RMB29,777 million and Level 2 RMB521,067 million).
+The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+(ii)
+(i)
+(2,643)
+(16,170)
+(2,643)
+(16,170)
+Interest-bearing loans and borrowings
+(69,580)
+177
+Total
+13
+OTHER ASSETS
+2,134
+1,246
+1,783
+174
+351
+1,420
+2,134
+50
+103
+87
+125
+37
+123
+1,246
+1,783
+As at 31
+December 2015
+RMB million
+RMB million
+As at 31
+December 2016
+Total
+Current
+Non-current
+Total
+Others
+Tax refundable
+Investments receivable
+Due from related parties
+Prepaid to constructors
+Land use rights
+Automated policy loans
+Disbursements
+178
+As at 31
+(38,204)
+81,854
+18,712
+8,700
+226,573
+207,267
+Other loans mainly consisted of different types of asset management products. As at 31 December
+2016, asset management products of RMB37,679 million (as at 31 December 2015: RMB37,978
+million) were owned by the Group, which are issued by China Life Asset Management Company
+Limited ("AMC") (including its subsidiaries), a subsidiary of the Company. The total assets of those
+products were RMB114,499 million (as at 31 December 2015: RMB172,983 million). Meanwhile,
+the Group also owned asset management products of RMB77,999 million (as at 31 December 2015:
+RMB75,936 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 2016, the Group's investment income from the above asset
+management products was RMB6,820 million (2015: RMB6,455 million), and the related asset
+management fee received by AMC (including its subsidiaries) for all asset management products it
+issued was RMB236 million (2015: RMB224 million).
+171
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+9
+17,500
+FINANCIAL ASSETS (continued)
+172
+Maturing:
+Within one year
+After one year but within five
+years
+After five years but within ten years
+Total
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+185,835
+344,790
+9.3 Term deposits
+After five years but within ten years
+After ten years
+Total
+24,239
+25,503
+84,078
+70,978
+90,250
+112,592
+G2525
+RMB million
+RMB million
+December 2015
+December 2016
+As at 31
+As at 31
+207,267
+226,573
+122,308
+134,131
+84,959
+92,442
+As at 31
+December 2015
+RMB million
+RMB million
+December 2016
+As at 31
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+(i)
+181,780
+Wealth management products
+380,842
+538,325
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+21,653
+25,713
+146,310
+145,399
+188,337
+206,767
+16,708
+China Life Insurance Company Limited Annual Report 2016
+19,298
+15,429
+4,722
+399,758
+401,899
+Funds
+105,290
+163,366
+Common stocks
+100,131
+74,629
+Preferred stocks
+27,880
+11,321
+Subtotal
+Others (i)
+Wealth management products
+562,622
+As at December 31 2016, term deposits of RMB13.2 billion (2015: Nil) deposited in banks for an oversea
+borrowings backed by domestic deposits business are restricted to use. In September 2016, CL Hotel
+Investor, L.P. and Glorious Fortune Forever Limited, the subsidiaries of the Company, entered into a
+loan agreement with the New York and Seoul branch of the Agricultural Bank of China, respectively.
+The Company applied to the Beijing Xicheng branch of the Agricultural Bank of China for an overseas
+borrowings backed by domestic deposits business with amounts of RMB6.5 billion and RMB6.7 billion,
+respectively, for the above loans.
+9.4 Statutory deposits - restricted
+Contractual maturity schedule:
+Within one year
+After one year but within five years
+Total
+As at 31
+December 2016
+As at 31
+December 2015
+RMB million
+RMB million
+1,720
+300
+4,613
+6,033
+6,333
+6,333
+Insurance companies in China are required to deposit an amount that equals 20% of their registered capital
+with banks in compliance with regulations of the CIRC. These funds may not be used for any purpose other
+than for paying off debts during liquidation proceedings.
+9
+FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities
+Available-for-sale securities, at fair value
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds/debts
+7,700
+(67,994)
+6,571
+Bonds payable (iii)
+Listed in Mainland, PRC
+Debt securities
+Total
+137,990
+209,124
+43,006
+54,718
+36,887
+40,035
+6,119
+14,683
+94,984
+19,512
+154,406
+3,133
+88,291
+144,131
+603
+5,689
+6,762
+380
+RMB million
+As at 31
+December 2015
+December 2016
+RMB million
+As at 31
+Subtotal
+Common stocks
+401
+8,852
+Listed overseas
+89
+137,990
+209,124
+Total
+43,006
+54,718
+Subtotal
+4,410
+10,746
+Unlisted
+6,099
+6,284
+70
+74
+Listed overseas
+Listed in Hong Kong, PRC
+32,427
+37,614
+GAGAG
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+94,984
+154,406
+86,076
+134,805
+Unlisted
+56
+Funds
+Equity securities
+Subtotal
+Others
+770,516
+766,423
+368,617
+366,665
+274,396
+250,388
+172
+232
+8,391
+25,034
+85,658
+91,011
+401,899
+399,758
+359,611
+362,595
+266
+42,022
+37,163
+RMB million
+As at 31
+December 2015
+December 2016
+RMB million
+As at 31
+Total
+Subtotal
+Unlisted
+Listed overseas
+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.
+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
+As at 31
+December 2015
+RMB million
+Corporate bonds
+(37,998)
+Government bonds
+Debt securities
+9.6 Securities at fair value through profit or loss
+FINANCIAL ASSETS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+9
+401,899
+399,758
+121,016
+108,275
+112,419
+113,779
+135,866
+144,443
+32,598
+33,261
+Total
+After ten years
+After five years but within ten years
+years
+After one year but within five
+Within one year
+Maturing:
+As at 31
+December 2016
+RMB million
+175
+Government agency bonds
+China Life Insurance Company Limited Annual Report 2016
+749,709
+745,586
+749,709
+745,586
+6,333
+6,333
+6,333
+562,622
+538,325
+562,622
+538,325
+207,267
+231,005
+207,267
+226,573
+550,844
+619,152
+504,075
+594,730
+Available-for-sale securities, at fair value
+Statutory deposits – restricted
+Term deposits
+Loans (iii)
+Held-to-maturity securities (ii)
+RMB million
+RMB million
+RMB million
+(31,354)
+RMB million
+(81,088)
+(81,088)
+Securities at fair value through profit or loss
+209,124
+137,990
+209,124
+137,990
+Securities purchased under agreements to resell
+43,538
+21,503
+43,538
+21,503
+Cash and cash equivalents
+67,046
+76,096
+67,046
+76,096
+Investment contracts (iii)
+(195,706)
+(84,106)
+(192,373)
+(82,644)
+Financial liabilities at fair value through profit or loss
+(2,031)
+25252
+(856)
+(2,031)
+(856)
+Securities sold under agreements to repurchase
+(31,354)
+As at 31
+December 2015
+6,333
+As at 31
+December 2015
+35,763
+Debt securities
+Bank deposits
+RMB million
+RMB million
+December 2015
+As at 31
+December 2016
+As at 31
+21,503
+43,538
+21,503
+43,518
+20
+Estimated fair value (i)
+As at 31
+December 2016
+RMB million
+December 2016
+RMB million
+As at 31
+9.8 Accrued investment income
+Total
+After 30 but within 90 days
+Within 30 days
+Maturing:
+176
+9.7 Securities purchased under agreements to resell
+FINANCIAL ASSETS (continued)
+9
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+As at 31
+December 2015
+17,642
+31,705
+Non-current
+2,540
+2,144
+Total
+55,945
+GAGAG
+investment contracts:
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+49,552
+Current
+44,722
+31,218
+10
+11,223
+18,334
+Total
+55,945
+49,552
+China Life Insurance Company Limited Annual Report 2016
+Others
+Notes to the Consolidated Financial Statements
+15,703
+December 2016
+Carrying value
+As at 31
+For the year ended 31 December 2016
+742
+December 2016
+As at 31
+December 2015
+RMB million
+RMB million
+8,006
+6,410
+7,234
+5,220
+5,488
+657
+3,713
+2,598
+1,611
+1,117
+1,032
+For the year ended 31 December
+2016
+634
+1,045
+2,550
+Total
+China Life Insurance Company Limited Annual Report 2016
+Securities purchased under agreements to resell
+Others
+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
+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.
+RMB million
+26,514
+26,514
+36,836
+26,514
+36,836
+5,584
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+7,699
+845
+654
+511
+As at 31
+36,836
+STATUTORY INSURANCE FUND
+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. On 26 October 2016, the Company exercised the option right to redeem the subordinated bonds issued on
+26 October 2011, and redeemed all of the subordinated bonds registered on the record date of redemption, with
+the amount of RMB30,000 million.
+186
+4.70%
+28,000
+28,000
+5 November 2012
+5 November 2022
+4.58%
+10,000
+29 June 2022
+10,000
+38,000
+68,000
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+17
+BONDS PAYABLE (continued)
+Total
+29 June 2012
+30,000
+5.50%
+9 June 2017
+2015
+1.50%
+731
+Total
+16,170
+2,643
+BONDS PAYABLE
+As at 31 December 2016, all bonds payable were subordinated bonds with a total carrying value of RMB37,998
+million (as at 31 December 2015: RMB67,994 million) and the par value of RMB38,000 million (as at 31
+December 2015: RMB68,000 million).
+Par value
+Issue date
+Maturity date
+Interest rate p.a.
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+26 October 2011
+26 October 2021
+Subtotal
+18 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+Interbank market
+Stock exchange market
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+19
+OTHER LIABILITIES
+Interest payable to policyholders
+Salary and welfare payable
+Payable to third party holders of consolidated trust schemes
+Brokerage and commission payable
+Agent deposits
+Payable to constructors
+Interest payable of debts
+Tax payable
+Stock appreciation rights (Note 31)
+Others
+Total
+Current
+Non-current
+20
+25252
+Total
+185
+As at 31 December 2016, bonds with a carrying value of RMB76,207 million (as at 31 December 2015:
+RMB28,802 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.
+Total
+Maturing:
+Within 30 days
+Total
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+65,479
+27,922
+15,609
+3,432
+81,088
+31,354
+GAGAG
+81,088
+31,354
+81,088
+31,354
+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
+2016, the carrying value of securities deposited in the collateral pool was RMB81,280 million (as at 31 December
+2015: RMB67,169 million). The collateral is restricted from trading during the period of the repurchase
+transaction.
+RMB million
+Subordinated bonds are measured at amortised cost as described in Note 2.14.
+24,541
+Total
+24 INSURANCE BENEFITS AND CLAIMS EXPENSES
+(918)
+766
+(6,319)
+9,324
+191
+180
+(48)
+(61)
+(7,094)
+10,209
+Gross
+Ceded
+Financial liabilities at fair value through profit or loss
+Net
+RMB million
+RMB million
+For the year ended 31 December 2016
+Life insurance death and other benefits
+253,824
+(667)
+253,157
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+27,519
+(250)
+27,269
+127,156
+(537)
+126,619
+RMB million
+408,499
+Stock appreciation rights
+Debt securities
+Guaranteed loans
+Total
+Net realised gains on financial assets are from available-for-sale securities.
+189
+(143)
+46
+(4)
+8,505
+(2,513)
+32,622
+(321)
+5,992
+32,301
+6,038
+32,297
+During the year ended 31 December 2016, the Group recognised an impairment charge of RMB1,615 million
+(2015: RMB147 million) of available-for-sale funds, an impairment charge of RMB898 million (2015: RMB174
+million) of available-for-sale common stocks, and an impairment charge of RMB143 million (2015: Nil) of
+available-for-sale debt securities, for which the Group determined that objective evidence of impairment existed.
+Equity securities
+187
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+23
+NET FAIR VALUE GAINS/(LOSSES) THROUGH PROFIT OR LOSS
+For the
+year
+ended 31 December
+2016
+2015
+RMB million
+RMB million
+25252
+24,854
+(1,454)
+Total
+Realised gains
+Equity securities
+Subtotal
+Impairment
+Realised gains
+Debt securities
+GAGAG
+2015
+RMB million
+RMB million
+For the year ended 31 December
+2016
+NET REALISED GAINS ON FINANCIAL ASSETS
+22
+For the year ended 31 December 2016, the interest income included in investment income was RMB88,876
+million (2015: RMB88,306 million). All interest income was accrued using the effective interest method.
+97,582
+4,320
+109,147
+368
+971
+11,115
+12,018
+32,285
+27,851
+326
+527
+8,950
+19,744
+1,382
+5,683
+18,526
+17,499
+89
+407,045
+4,767
+181
+For the year ended 31 December 2015
+Life insurance death and other benefits
+221,949
+(248)
+221,701
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+21,166
+(157)
+21,009
+109,847
+(338)
+109,509
+Total
+352,962
+106
+(743)
+25
+INVESTMENT CONTRACT BENEFITS
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+26 FINANCE COSTS
+188
+Interest expenses for bonds payable
+Interest expenses for securities sold under agreements to repurchase
+Interest expenses for interest-bearing loans and borrowings
+Total
+For the year ended 31 December
+2016
+RMB million
+2015
+RMB million
+3,126
+1,460
+3,430
+784
+352,219
+6,521
+Impairment
+30 September 2019
+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.
+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.
+(ii) The mortality and morbidity assumptions are based on the Group's historical mortality and morbidity
+experience. The assumed mortality rates and morbidity rates vary with the age of the insured and
+contract type.
+(a) Process used to decide on assumptions (continued)
+INSURANCE CONTRACTS (continued)
+14
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+ended 31 December 2016
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+179
+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.
+year
+(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 cost per policy and percentage of premium as follows:
+As at 31 December 2016
+As at 31 December 2015
+Individual Life
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+14
+180
+(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
+15.00
+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
+RMB Per Policy
+3.23%-5.32%
+3.42%-5.78%
+As at 31 December 2015
+As at 31 December 2016
+Discount rate assumptions
+(12,349)
+claims
+(8,877)
+(6,865)
+Claims incurred
+- Claims arising in current year
+- Claims arising in prior years
+Total as at 31 December - Gross
+27,120
+20,497
+391
+669
+11,538
+9,268
+Notified claims
+(16,364)
+INSURANCE CONTRACTS (continued)
+claims
+Cash paid for claims settled
+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:
+4.45%-4.85%
+4.80%-5.00%
+As at 31 December 2015
+As at 31 December 2016
+G2525
+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
+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
+INSURANCE CONTRACTS
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+14
+- Cash paid for current year
+- Cash paid for prior year
+2,085
+(a) Process used to decide on assumptions (continued)
+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.
+25252
+181
+1,714,602
+1,845,975
+Total, net
+7,857
+China Life Insurance Company Limited Annual Report 2016
+10,367
+9,218
+11,435
+- Claims and claim adjustment expenses
+Short-term insurance contracts
+1,697,527
+1,824,173
+- Unearned premiums
+Notes to the Consolidated Financial Statements
+For the
+year
+2.40%
+2,135
+1,748
+RMB million
+RMB million
+2015
+2016
+Total as at 1 January – Gross
+Incurred but not reported
+Notified claims
+The table below presents movements in claims and claim adjustment expense reserve:
+(c) Movements in liabilities of short-term insurance contracts
+INSURANCE CONTRACTS (continued)
+14
+ended 31 December 2016
+Long-term insurance contracts
+7,520
+5,181
+9,268
+1,715,985
+1,847,986
+7,944
+9,268
+11,538
+1,698,773
+1,825,956
+As at 31
+December 2015
+RMB million
+As at 31
+December 2016
+RMB million
+- Unearned premiums
+- Claims and claim adjustment expenses
+Long-term insurance contracts
+Short-term insurance contracts
+Gross
+(b) Net liabilities of insurance contracts
+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.
+G2525
+(v)
+Total,
+Recoverable from reinsurers
+7,316
+Net
+(1,383)
+(2,011)
+Total, ceded
+(87)
+(125)
+- Unearned premiums (Note 12)
+(50)
+(103)
+- Claims and claim adjustment expenses (Note 12)
+Short-term insurance contracts
+(1,246)
+(1,783)
+Long-term insurance contracts (Note 12)
+gross
+1,748
+10,492
+9,453
+33,797
+14
+195,706
+84,106
+GAGAG
+183
+142,006
+12
+25252
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+15 INVESTMENT CONTRACTS (continued)
+The table below presents movements of investment contracts with DPF:
+As at 1 January
+Deposits received
+China Life Insurance Company Limited Annual Report 2016
+50,295
+53,688
+RMB million
+1,825,956
+1,698,773
+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 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.
+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 morbidity rate as at the reporting date. Changes in assumptions other than
+morbidity rates increased insurance contract liabilities by RMB7 million.
+15
+INVESTMENT CONTRACTS
+Investment contracts with DPF at amortised cost
+Investment contracts without DPF
+At amortised cost
+- At fair value through profit or loss
+Total
+As at 31
+December 2016
+As at 31
+December 2015
+RMB million
+Deposits withdrawn, payments on death and other benefits
+Policy fees deducted from account balances
+Interest credited
+As at 31 December
+Interest rate
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+Guaranteed loans
+17 June 2019
+3.54%
+2,339
+2,643
+Guaranteed loans
+27 September 2019
+2.30%
+6,579
+Incurred but not reported
+Guaranteed loans
+Maturity date
+1,043
+50,295
+1,164
+16 INTEREST-BEARING LOANS AND BORROWINGS
+184
+17
+2015
+RMB million
+RMB million
+50,295
+47,962
+4,680
+3,746
+(2,357)
+(2,543)
+(36)
+(34)
+1,106
+53,688
+1,413
+2016
+474
+7,230
+(65)
+7,165
+Increase
+10,492
+(125)
+10,367
+7,944
+(87)
+7,857
+Release
+(7,944)
+87
+(7,857)
+(7,230)
+7,857
+65
+(87)
+Net
+7,520
+Total as at 31 December - Gross
+987
+11,538
+9,268
+182
+The table below presents movements in unearned premium reserves:
+2016
+RMB million
+2015
+RMB million
+Gross
+Ceded
+Net
+Gross
+Ceded
+As at 1 January
+(7,165)
+7,944
+10,492
+– Change in other assumptions (ii)
+Other movements
+As at 31 December
+(i)
+2015
+RMB million
+1,588,900
+390,438
+331,582
+(353,048)
+(300,990)
+73,644
+As at 31 December
+68,741
+8,510
+14,262
+- Change in discount rates
+Change in assumptions
+(ii)
+For the year ended 31 December 2016
+10,367
+Accretion of interest
+(87)
+7,857
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+INSURANCE CONTRACTS (continued)
+14
+7,944
+(125)
+The table below presents movements in the liabilities of long-term insurance contracts:
+2016
+RMB million
+1,698,773
+As at 1 January
+Premiums
+Release of liabilities (i)
+(d) Movements in liabilities of long-term insurance contracts
+25,000
+Year 2015
+Year 2016
+Long-term premiums from the bancassurance channel
+(RMB million)
+Bancassurance Channel. During the Reporting Period, the bancassurance channel deepened the
+restructuring, accelerated the development of regular premium businesses, continued to reduce single
+premium business, and improved the business value to the Company. First-year regular premiums from
+bancassurance channel were RMB17,835 million, an increase of 30.0% year-on-year. The percentage of
+first-year regular premiums with five years or longer payment duration in first-year regular premiums was
+52.17%. Single premiums were RMB68,047 million, a decrease of 7.4% year-on-year. Regular premium
+businesses made by major banks and postal offices achieved a rapid growth since the Company promoted
+sales via electronic bank sales channels, such as E-Banking, self-service terminals, mobile banks, etc. During
+the Reporting Period, the number of sales representatives in the bancassurance channel reached 234,000.
+Short-term insurance premiums
+Long-term insurance premiums
+18,782
+0
+15,000
+10,000
+Year 2015
+5,000
+6,133
+4,124
+68,047
+15,983
+20,000
+21,813
+First-year regular premiums
+7.4%
+(III) Asset Management
+Year 2016
+In 2016, the global economy experienced a weak recovery, and the international financial market has
+undergone a greater fluctuation. The downward pressure on the domestic economy has been eased and the
+domestic economy was by and large stable. China's A share market fluctuated within a narrow range after
+plummeting at the beginning of the year. The bond market has experienced range-bound fluctuations,
+and in the fourth quarter, bond yields increased significantly. In 2016, with further optimization of its
+investment management system, the Company continually expanded the size of market-oriented third
+party asset management, accelerated the development of its alternative investment platform, and steadily
+pushed forward the diversified and decentralized investment arrangements. In terms of investment
+strategies, following the rules for the insurance asset investments and adhering to the general principle
+of matching assets and liabilities, the Company caught up with the market timing with respect to fixed
+income investment allocation, increased allocation in assets with long duration, controlled risk exposure and
+maintained its allocation in equity investment in the open market at a reasonable level. Aiming at making
+long-term strategic investments in non-traditional assets, the Company continued to further global asset
+allocations and actively engaged in projects such as health- and pension-related programs, infrastructure and
+premium commercial properties both within China and abroad, so as to further diversify the sources for
+investment portfolio income.
+Other Channels. During the Reporting Period, gross written premiums from other channels were
+RMB15,191 million, an increase of 27.9% year-on-year, among which the first-year regular premiums of
+long-term insurance from tele-sales increased by over 40% year-on-year. The Company also actively carried
+out online marketing activities, and both the premiums and the number of insurance policies from on-
+line sales increased substantially as compared to the same period of last year. The Company also actively
+and steadily promoted its supplementary major medical insurance business, and as at the end of 2016, had
+undertaken accumulatively more than 250 supplementary major medical insurance projects serving 420
+million people.
+Management Discussion and Analysis
+Annual Report 2016
+China Life Insurance Company Limited
+Renewal premiums
+120,000
+100,000
+80,000
+60,000
+Single premiums
+40,000
+20,000
+0
+18,558 13,714
+73,508
+30.0%
+17,835
+Gross written premiums from the group insurance channel
+(RMB million)
+Exclusive Individual Agent Channel. During the Reporting Period, by optimizing the business
+structure and improving the quality as well as expanding the size of sales team, businesses of the
+exclusive individual agent channel achieved a strong growth, remaining the leading position in the
+market. The gross written premiums from the exclusive individual agent channel of the Company
+amounted to RMB282,136 million, an increase of 24.9% year-on-year. First-year regular premiums
+of individual insurance increased by 57.0% year-on-year, first-year regular premiums with ten years
+or longer payment duration increased by 59.6% year-on-year, 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 86.20% and 62.17%, respectively.
+Renewal premiums from the exclusive individual agent channel increased by 16.4% year-on-year.
+Through the implementation of structural transformation and the development strategy aiming at
+improving the quality and expanding the size of sales force, the Company increased the qualified new
+recruits, reinforced training for agent managers so as to further improve the productivity of its sales
+team, consolidate the foundation for sales force development and further optimize its quality. As at the
+end of the Reporting Period, the number of exclusive individual agents reached 1,495,000, a 52.7%
+increase from the end of 2015, and the quarterly number of productive agents on average increased by
+67.1% year-on-year.
+16
+0
+29,032
+46,337
+59.6%
+18,447
+Year 2015
+28,193
+Year 2016
+(RMB million)
+First-year regular premiums from the exclusive individual agent channel
+Management Discussion and Analysis
+Annual Report 2016
+China Life Insurance Company Limited
+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.
+Other channels mainly include supplementary major medical insurance business, tele-sales, etc.
+363,971
+430,498
+2.
+As at the end of the Reporting Period, the Company's investment assets reached RMB2,453,283 million,
+an increase of 7.2% from the end of 2015. Among the major types of investments, the percentage of bonds
+was 45.63% as compared to 43.55% as at the end of 2015, the percentage of term deposits was 21.94% as
+compared to 24.59% as at the end of 2015, the percentage of investment in stocks and funds (excluding
+money market funds) was 10.05% as compared to 9.34% as at the end of 2015, and the percentage of
+investment in financial products was 9.28% as compared to 7.44% as at the end of 2015.
+1.
+20,000
+Group Insurance Channel. During the Reporting Period, the group insurance channel actively strengthened
+the promotion of core businesses, continuously promoted the diversified business development, and the
+overall business developed steadily. During the Reporting Period, the gross written premiums from the
+group insurance channel of the Company amounted to RMB24,915 million, an increase of 23.9% year-
+on-year. The short-term insurance premiums from the group insurance channel amounted to RMB18,782
+million, an increase of 17.5% year-on-year. As the sales force in the group insurance channel expanded
+rapidly, the number of direct sales representatives reached over 85,000 as at the end of the Reporting Period.
+First-year regular premiums
+40,000
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+15
+57.0%
+First-year regular premiums with
+payment duration less than 5 years
+First-year regular premiums with
+payment duration from 5 to 9 years
+First-year regular premiums with
+10 years or longer payment duration
+62.17%
+Year
+2016
+24.03%
+13.80%
+agent channel
+the exclusive individual
+Structure breakdown of first-year regular premiums from
+First-year regular premiums
+with 10 years or longer
+payment duration
+80,000
+60,000
+with payment duration less
+than 10 years
+17
+2,453,283
+25252
+0.05%
+1,237
+0.05%
+1,191
+Investment properties
+3.42%
+78,147
+3.13%
+76,906
+Other equity investments
+2.29%
+52,475
+3.44%
+84,338
+Financial product investments²
+7.41%
+169,485
+4.89%
+119,973
+Cash and others
+Funds
+110,584
+97,599
+Notes:
+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, and preference shares, etc.
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money
+market funds as at 31 December 2016 and 31 December 2015 were RMB13,609 million and RMB67,282
+million, respectively.
+6.
+5.
+4.
+Other fixed-maturity investments include policy loans, and statutory deposits-restricted, etc.
+3.
+Financial product investments include debt investment plans, equity investment plans, trust schemes, wealth
+management products, project asset-backed plans, and specialized asset management plans, etc.
+2.
+The figures as at the end of last year were adjusted on the same basis.
+1.
+Notes:
+100.00%
+2,287,639
+100.00%
+Total
+4.27%
+4.51%
+52525
+4.87%
+5.71%
+562,622
+21.94%
+538,325
+Term deposits
+77.69%
+1,777,180
+78.27%
+1,920,125
+Fixed-maturity investments
+Percentage
+RMB million
+As at 31 December 2015¹
+Amount
+As at 31 December 2016
+Amount Percentage
+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.
+18
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2016
+24.59%
+111,516
+Bonds
+45.63%
+140,166
+Common stocks
+17.99%
+411,623
+17.17%
+421,383
+Equity investments
+4.40%
+100,435
+4.86%
+119,211
+Other fixed-maturity investments³
+5.15%
+117,887
+5.84%
+143,201
+Financial product investments²
+43.55%
+996,236
+1,119,388
+Total
+First-year regular
+13,220
+93,945
+51.8%
+Year 2015
+78,076
+61,900
+12
+3
+19.3%
+0
+50,000
+100,000
+150,000
+200,000
+Single premiums
+First-year regular premiums
+72,991
+First-year regular premiums & first-year regular
+premiums with 10 years or longer payment duration
+Year 2016
+Out of the premiums from new policies, first-year regular premiums amounted to RMB93,945 million, an
+increase of 51.8% year-on-year, which surpassed the single premiums for the first time since the listing of
+the Company. First-year regular premiums with ten years or longer payment duration reached RMB51,378
+million, increased by 59.0% year-on-year. Both of them doubled over the past two years, with their growth
+rates setting record highs since the listing of the Company. Renewal premiums reached RMB223,502
+million, an increase of 16.6% year-on-year, which set a record high in the past five years. As at 31 December
+2016, the number of in-force policies increased by 13.9% from the end of 2015. The Policy Persistency Rate
+(14 months and 26 months) reached 90.20% and 85.90%, respectively; and the Surrender Rate³ was 3.54%,
+a decrease of 2.01 percentage points from 2015.
+426,230
+362,301
+0
+100,000
+200,000
+300,000
+400,000
+500,000
+Calculated according to the premium data of life insurance companies in 2016 released by the CIRC.
+17.6%
+52525
+11
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+First-year premiums from long-term policies
+(RMB million)
+Year 2015
+doubled over the past two years
+Year 2016
+99.4%
+Year 2014
+First-year
+regular
+premiums
+First-year
+regular
+premiums with
+10 years or longer
+payment duration
+Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of
+long-term insurance contracts)
+China Life Insurance Company Limited
+Annual Report 2016
+Management Discussion and Analysis
+The Company adhered to the value-oriented principle and actively promoted the development of long-term
+regular businesses and protection type businesses. In 2016, the value of one year's sales was RMB49,311
+million, an increase of 56.4% year-on-year, setting a record high since the year 2005, with the value doubled
+over the past two years. As at 31 December 2016, the embedded value of the Company was RMB652,057
+million, an increase of 16.4% year-on-year.
+Value of one year's sales doubled over the past two years
+(RMB million)
+Year 2016
+101.7%
+(RMB million)
+Year 2016
+with payment duration less
+than 10 years
+42,567
+Year 2015
+29,588
+Year 2014
+20,801
+0
+32,312
+25,766
+51,378
+20,000
+9,806
+60,000
+80,000
+100,000
+First-year regular premiums
+First-year regular premiums
+with 10 years or longer
+payment duration
+Year 2016
+Net premiums earned
+(RMB million)
+During the Reporting Period, the Company's net premiums earned were RMB426,230 million, an increase
+of 17.6% year-on-year, which made the Company the first and the sole insurance company in China with
+premiums exceeding RMB400,000 million. The Company's market share² was approximately 19.9%,
+remaining the first place in the industry.
+RMB million
+2016
+2015
+Net premiums earned
+426,230
+362,301
+Premiums from new policies
+206,996
+172,364
+Including: First-year regular premiums
+93,945
+61,900
+First-year regular premiums with ten years or longer
+payment duration
+51,378
+32,312
+(I) Key Performance Indicators
+Gross investment income
+BUSINESS OVERVIEW OF 2016
+Mr. Zheng Yong, Mr. Zhao Lijun, Mr. Xu Haifeng, Mr. Lin Dairen, Mr. Xu Hengping, Mr. Li Mingguang,
+Mr. Xiao Jianyou, Mr. Ruan Qi
+China Life Insurance Company Limited
+Annual Report 2016
+Chairman's Statement
+2017 OUTLOOK: STABILITY, TRANSFORMATION AND DEVELOPMENT
+"With a new year coming, spring is back on the earth”. The year 2017 is a year of deepening the supply-side structural
+reform and also an important year to make China Life stronger and better. Based on a comprehensive analysis of
+domestic and international situations, the global economy is expected to continue its slow growth, and instability and
+uncertainty are significantly increasing. China is in a critical stage of overcoming obstacles, with its economy facing
+downside pressure and challenges. Despite all these problems accompanying advancement and development, the
+fundamental trend of a slower but stable performance with good momentum for economic growth in China remains
+unchanged, and golden opportunities for the development of the insurance industry still exist. Especially, with more
+stringent regulations and requirements set by the CIRC and the advancement of the industry's transformation, more
+opportunities arise for a value-oriented and prudent company like China Life.
+Standing at a new starting point, we will stick to the general keynote of “making steady progress", focusing on “stability”
+of the Company's strategies and operations, and seeking “progress” in transformation and innovation. The Company
+will stick to the guideline of supply-side reform, strictly follow the right direction, and advance the three critical tasks
+of accelerated growth, transformation and upgrade, and risk prevention and control to improve the level of supply.
+We will accelerate our transformation to an operation and management mode which is customer-oriented, featured by
+Internet and artificial intelligence, so as to substantially improve customer experience and make China Life the first
+choice for customers. We will establish a professional and systematic sales channel management system, fully promote
+the sales transformation, and further improve the quality and efficiency of development; adhere to the value-oriented
+principle, serve the overall interests of the country, enhance our investment capabilities, and do our best to raise profit
+while effectively preventing investment risks; strengthen the management of assets and liabilities, push forward the
+diversification of products, increase our efforts in developing the protection type businesses, and gradually promote the
+diversification of the Company's profit sources. Meanwhile, we will thoroughly implement a cross-channel operation as
+well as insurance-banking collaboration, promote the integration of resources in a deeper and more diverse direction,
+and fully exploit the development potential. In the meantime, we will also implement the strategy of innovation driven
+development with great efforts, deepen the market-oriented reform, take advantage of our strengths, and continually
+enhance the Company's development momentum.
+The times offer China Life a historic opportunity to develop and prosper, and a noble mission to serve the society. We
+will
+put ourselves in customers' position, uphold virtues and improve ourselves day after day to achieve perfection.
+By Order of the Board
+Yang Mingsheng
+Chairman
+Beijing, China
+23 March 2017
+9
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+From left to right:
+I
+108,151
+140,160
+Net profit attributable to equity holders of the Company
+RMB million
+As at
+As at
+31 December 2016 31 December 2015
+Embedded value
+Note
+Number of in-force policies (hundred million)
+Policy Persistency Rate (14 months) (%)
+Policy Persistency Rate (26 months) (%) *
+Note
+652,057
+2.46
+560,277
+2.16
+90.20
+90.00
+85.90
+85.50
+Note: 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.
+In 2016, facing the complex and changing economic environment and the challenges from the fierce market
+competition, the Company adhered to the overall strategy of innovation-driven development, regarded
+transformation and upgrading as the main focus, followed the business strategy of "prioritizing value,
+strengthening sales force, optimizing business structure, achieving stable growth and safeguarding against
+risks", accelerated the development of its core businesses, and advanced the transformation of its sales model.
+The Company worked cohesively as a whole to improve, explore and innovate, so as to achieve a great-leap-
+forward development and a historic breakthrough of business restructuring, setting a great start for the “13th
+Five-Year Plan".
+Management Discussion and Analysis
+Annual Report 2016
+China Life Insurance Company Limited
+2
+19,127
+34,699
+Value of one year's sales
+Including: Exclusive individual agent channel
+Group insurance channel
+Bancassurance channel
+49,311
+Year 2015
+31,528
+28,851
+375
+371
+2,610
+2,306
+10
+10
+46,326
+Year 2014
+40,000
+23,253
+RMB million
+2016
+2015
+Exclusive Individual Agent Channel
+282,136
+225,957
+First-year business of long-term insurance
+74,813
+47,974
+Single
+283
+495
+74,530
+47,479
+Renewal business
+199,826
+171,632
+Short-term insurance business
+7,497
+6,351
+Group Insurance Channel
+For the year ended 31 December
+24,915
+Gross written premiums categorized by channel:
+During the Reporting Period, gross written premiums from the life insurance business of the
+Company amounted to RMB361,905 million, an increase of 17.4% year-on-year. Of these, the
+first-year regular premiums were RMB87,617 million, an increase of 55.4% year-on-year. The
+percentage of first-year regular premiums in first-year premiums was 54.56%. Renewal premiums
+were RMB201,315 million, an increase of 15.9% year-on-year. The Company actively promoted
+development of the health insurance business and the gross written premiums from which were
+RMB54,010 million, an increase of 28.5% year-on-year. Gross written premiums from the accident
+insurance business amounted to RMB14,583 million, an increase of 6.0% year-on-year.
+First-year business
+14,265
+13,480
+Single
+14,226
+13,403
+First-year regular
+39
+77
+Renewal business
+318
+281
+Total
+430,498
+363,971
+13
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+14
+2.
+20,107
+First-year business of long-term insurance
+5,430
+21,813
+18,558
+Short-term insurance business
+561
+248
+Other Channels¹
+15,191
+11,879
+First-year business of long-term insurance
+811
+1,209
+Single
+90
+701
+First-year regular
+721
+508
+Renewal business
+1,160
+864
+Short-term insurance business
+Renewal business
+13,714
+17,835
+First-year regular
+3,571
+Single
+4,571
+3,372
+First-year regular
+859
+199
+Renewal business
+703
+553
+13,761
+Short-term insurance business
+15,983
+Bancassurance Channel
+108,256
+106,028
+First-year business of long-term insurance
+85,882
+87,222
+Single
+68,047
+73,508
+18,782
+14,583
+Accident Insurance Business
+17,606
+72,973
+78,068
+First-year regular
+87,617
+56,381
+Renewal business
+201,315
+173,720
+Health Insurance Business
+54,010
+42,041
+First-year business
+32,141
+24,435
+Single
+25,852
+18,993
+First-year regular
+6,289
+5,442
+Renewal business
+Single
+134,449
+160,590
+308,169
+49,311
+0
+10,000
+20,000
+30,000
+Year 2016
+112.1%
+40,000
+50,000 Year 2014
+Affected by such factors as the downturn of interest rate and the fluctuations in the capital market, the
+Company's gross investment income in 2016 was RMB108,151 million, a 22.8% decrease year-on-year. Due
+to the decrease in gross investment income and the update on the discount rate assumption for reserves of
+traditional insurance contracts, during the Reporting Period, net profit attributable to equity holders of the
+Company was RMB19,127 million, a 44.9% decrease year-on-year.
+21,869
+(II) Insurance Business
+Gross written premiums categorized by business:
+For the
+year
+ended 31 December
+RMB million
+2016
+2015
+Life Insurance Business
+First-year business
+361,905
+1.
+31,528
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+27 PROFIT BEFORE INCOME TAX
+(a)
+The amount of taxation charged to net profit represents:
+Current taxation - Enterprise income tax
+Deferred taxation
+Taxation charges
+For the year ended 31 December
+2016
+2015
+RMB million
+RMB million
+5,200
+15,408
+(943)
+(4,664)
+4,257
+10,744
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC
+(2015: 25%) is as follows:
+G2525
+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
+Tax losses utilised from previous periods
+Others
+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.
+ΤΑΧΑΤΙΟΝ
+60
+58
+Profit before income tax is stated after charging/(crediting) the following:
+For the year ended 31 December
+2016
+28
+Employee salaries and welfare costs
+Housing benefits
+Contribution to the defined contribution pension plan
+Depreciation and amortisation
+Foreign exchange losses/(gains)
+Auditor's remuneration
+2015
+For the year ended 31 December 2016
+RMB million
+15,955
+13,045
+838
+824
+1,798
+1,678
+2,083
+2,036
+(582)
+(812)
+RMB million
+available-for-sale securities
+Increase
+million
+31
+RMB1,730
+100.00%
+directly
+Franklin Shenzhen Company (ii)
+USD0.6
+USD0.6
+100.00%
+indirectly
+195
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f)
+RMB1,730
+Percentages of holding of related parties with control relationship and changes during the
+year (continued)
+CL Health (i)
+100.00%
+Forever Limited (i)
+directly
+100.00%
+directly
+.....100.0
+100.00
+%
+directly
+100.00%
+CL Hotel Investor, L.P. (i)
+Golden Bamboo Limited (i)
+Sunny Bamboo Limited (i)
+Fortune Bamboo Limited (i)
+China Century Core
+Fund Limited
+("Century Core Fund") (i)
+directly
+100.00%
+directly
+100.00%
+directly
+indirectly
+(i) New Aldgate Limited, Glorious Fortune Forever Limited, CL Hotel Investor, L.P., Golden Bamboo Limited,
+Sunny Bamboo Limited, Fortune Bamboo Limited, Century Core Fund and CL Health are new subsidiaries set up
+or invested by the Company in 2016.
+(ii) Franklin Shenzhen Company is a new subsidiary set up by AMC HK in 2016.
+Transactions with significant related parties
+Asset management fee received from CLP&C
+(ii.c)
+36
+Payment of insurance premium to CLP&C
+49
+Claim and other payments received from CLP&C
+ༀ ཤྲཱི མྲྀ ཎྜ མི ཁོ ཡ །
+950
+133
+26
+18
+17
+Agency fee received from CLP&C
+(iii)(viii)
+2,337
+1,464
+Payment of an agency fee to CLP&C
+74
+(ii.b)
+fee received from CL Overseas
+Asset management
+The following table summarises significant transactions carried out by the Group with its significant related
+parties:
+196
+Notes
+For the year ended 31 December
+2016
+RMB million
+2015
+RMB million
+Transactions with CLIC and its subsidiaries
+Policy management fee received from CLIC
+(i)(viii)
+Glorious Fortune
+869
+fee received from CLIC
+(ii.a)
+124
+Payment of dividends from the Company to CLIC
+8,116
+7,729
+Distribution of profits from AMC to CLIC
+143
+Asset management
+100.00%
+New Aldgate Limited (i)
+directly
+RMB1,680
+60.00%
+RMB1,680
+60.00%
+directly
+directly
+Pension Company
+RMB2,746
+74.27%
+RMB2,746
+74.27%
+directly
+directly
+and indirectly
+and indirectly
+China Life Franklin Asset
+HKD130
+AMC
+As at 31 December 2016
+Percentage
+of holding
+million
+Amount
+Percentage
+of holding
+Increase
+million
+Decrease
+million
+million
+As at 31 December 2016
+Amount Percentage
+of holding
+CLIC
+RMB19,324
+68.37%
+Management Company
+RMB19,324
+GAGAG
+Subsidiaries
+As at 31 December 2015
+Amount
+million
+Percentage
+of holding
+Increase
+million
+Decrease
+million
+68.37%
+(iii)
+50.00%
+indirectly
+50.00%
+indirectly
+indirectly
+Golden Phoenix Tree Limited
+100.00%
+100.00%
+directly
+directly
+King Phoenix Tree Limited
+100.00%
+100.00%
+indirectly
+indirectly
+Rui Chong Company
+RMB6,199
+100.00%
+RMB6,199
+100.00%
+directly
+indirectly
+100.00%
+RMB200
+100.00%
+Limited ("AMC HK")
+Suzhou Pension Company
+RMB800
+100.00%
+RMB 526
+RMB1,326
+100.00%
+directly
+HKD130
+directly
+RMB500
+85.03%
+- RMB500
+85.03%
+indirectly
+indirectly
+CL Wealth
+RMB200
+CL AMP
+million
+2
+Rental and a service fee received from CLP&C
+443
+entities to the Company
+Distribution from the Group's consolidated structured
+structured entities and the Company
+Transactions between the Group's consolidated
+500
+526
+(ix)
+Investment in Suzhou Pension Company
+Transactions between Suzhou Pension Company and the Company
+14
+14
+(ii.f)
+Payment of an investment management fee to AMC HK
+Transactions between AMC HK and the Company
+14
+14
+187
+20
+Notes:
+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.
+(iii)
+C
+(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 one year. 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. The agreement was
+automatically renewed for one year on 19 September 2015. On 18 September 2016, the Company and AMC
+HK renewed the agreement, which became effective from 19 September 2016 and expires on 31 December 2018.
+Asset management fees charged to the Company by AMC HK are eliminated in the consolidated statement of
+comprehensive income.
+(ii.d) On 3 February 2016, the Company and CLI renewed a management agreement of alternative investment of
+insurance funds, which is 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.
+(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.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 is 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 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.
+Notes (continued):
+Transactions with significant related parties (continued)
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+197
+(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 renewed for
+one year. 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. As at the approval date of the consolidated financial statements, CL Overseas has reached a consensus
+with AMC HK on the renewal and clauses of the agreement. The sign-off is still pending for the approval from
+Hong Kong local supervision department. The original terms are effective until the new agreement is signed.
+(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 and interests accrued
+for from 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.
+(i)
+685
+(vii)
+24
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+303
+337
+59
+60
+34
+38
+80
+422
+248
+corporate
+Transactions between EAP and the Group
+Contribution to EAP
+Transactions between Sino-Ocean and the Group
+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
+Commission expenses charged by CGB
+15
+42
+For the year ended 31 December 2016
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+Transactions between AMC and the Company
+34
+business from Pension Company
+Marketing fee income for promotion of annuity
+entrusted sales of annuity funds
+Agency fee received from Pension Company for
+Rental received from Pension Company
+GAGAG
+158
+(iv)
+215
+1,081
+2015
+RMB million
+For the year ended 31 December
+2016
+RMB million
+(ii.e)(viii)
+Notes
+Transactions between Pension Company and the Company
+Distribution of profits from AMC
+Payment of an asset management fee to AMC
+1,020
+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 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.
+3,673
+1,036
+(12,095)
+(8,316)
+(iii)
+(ii)
+(i)
+Total
+RMB million
+Others
+RMB million
+Investments
+RMB million
+Insurance
+RMB million
+comprehensive income
+(Charged)/credited to other
+(Charged)/credited to net profit
+As at 1 January 2015
+190
+Deferred tax assets/(liabilities)
+843
+148
+(19,375)
+4,664
+167
+43
+49
+Payment of rental, project fee and others expenses to CLRE
+44
+38
+Property leasing expenses charged by CLI
+(iv)
+81
+As at 31 December 2016 and 2015, 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:
+84
+13
+17
+Payment to CLI for purchase of fixed assets
+141
+97
+Payment of an asset management fee to CLI
+(ii.d)(viii)
+298
+Asset management fee received from CLI
+4
+(c)
+TAXATION (continued)
+45,931
+23,842
+year ended 31 December
+2016
+2015
+RMB million
+RMB million
+For the
+(i)
+Income tax at the effective tax rate
+Property leasing income received from CLI
+Payment of a business management service fee to
+CL Ecommerce
+38
+38
+(vi)
+56
+29
+29
+Transactions between CGB and the Group
+Interest on deposits received from CGB
+198
+5,961
+11,483
+(6,080)
+(3,324)
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+189
+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.
+28
+10,744
+(30)
+108
+(41)
+(49)
+1
+58
+2,655
+4,259
+4,257
+Amount
+As at 31 December 2015
+Shareholder
+(2,270)
+(1,381)
+- deferred tax liabilities to be settled within 12 months
+(26,850)
+(13,037)
+- deferred tax liabilities to be settled after 12 months
+GAGAG
+12,167
+6,650
+2,639
+Subtotal
+3,626
+3,024
+As at 31
+December 2015
+RMB million
+December 2016
+RMB million
+As at 31
+Deferred tax liabilities:
+Subtotal
+- deferred tax assets to be recovered within 12 months
+- deferred tax assets to be recovered after 12 months
+Deferred tax assets:
+(d) The analysis of deferred tax assets and deferred tax liabilities is as follows:
+9,528
+(14,418)
+(29,120)
+Net deferred tax liabilities
+A distribution of RMB386 million (inclusive of tax) to the holders of Core Tier 2 Capital Securities was approved
+by management according to the authorization by the Board of Directors in 2016.
+Pursuant to the shareholders' approval at the Annual General Meeting on 30 May 2016, a final dividend of
+RMB0.42 (inclusive of tax) per ordinary share totalling RMB11,871 million in respect of the year ended 31
+December 2015 was declared and paid in 2016. The dividend has been recorded in the consolidated financial
+statements for the year ended 31 December 2016.
+DIVIDENDS
+The Company recognised a gain of RMB191 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 2016
+(2015: fair value gain of RMB180 million). RMB641 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 2016 (as at 31 December 2015: RMB832 million and RMB13 million), respectively. There was no
+unrecognised compensation cost for the stock appreciation rights as at 31 December 2016 (as at 31 December
+2015: Nil).
+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 3% and a risk-free interest rate ranging from 0.10% to 0.81%.
+All the stock appreciation rights awarded were fully vested as at 31 December 2016. As at 31 December 2016,
+there were 55.01 million units outstanding and exercisable (as at 31 December 2015: 55.01 million units). As at
+31 December 2016, the amount of intrinsic value for the vested stock appreciation rights was RMB641 million (as
+at 31 December 2015: RMB832 million).
+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.
+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
+32
+31
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+191
+There is no difference between basic and diluted earnings per share. The basic and diluted earnings per share for
+the year ended 31 December 2016 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 (2015: 28,264,705,000
+ordinary shares).
+30 EARNINGS PER SHARE
+29 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 RMB14,014 million (2015: RMB32,638 million).
+(16,953)
+(7,768)
+Unrecognised deductible tax losses of the Group amounted to RMB807 million as at 31 December 2016
+(as at 31 December 2015: RMB727 million). Unrecognised deductible temporary differences of the Group
+amounted to RMB219 million as at 31 December 2016 (as at 31 December 2015: RMB186 million).
+(continued)
+- Portion of fair value changes on
+(c)
+943
+431
+1,126
+(614)
+(Charged)/credited to net profit
+(16,953)
+1,184
+(16,686)
+(1,451)
+As at 1 January 2016
+(16,953)
+1,184
+(16,686)
+(1,451)
+As at 31 December 2015
+11
+3,192
+11
+3,192
+(5,445)
+(5,445)
+- Others
+attributable to participating
+policyholders
+(Charged)/credited to other
+Pursuant to a resolution passed at the meeting of the Board of Directors on 23 March 2017, a final dividend of
+RMB0.24 (inclusive of tax) per ordinary share totalling approximately RMB6,784 million for the year ended
+31 December 2016 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 2016.
+comprehensive income
+12,639
+TAXATION (continued)
+28
+For the year ended 31 December 2016
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+(iii) The deferred tax arising from the others category is mainly related to the temporary differences of
+employee salaries and welfare costs 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 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.
+(ii)
+(v)
+As at 31 December 2016
+(7,768)
+(54)
+(4,343)
+1,615
+(2,975)
+(6,408)
+(54)
+(4,343)
+- Others
+attributable to participating
+policyholders
+available-for-sale securities
+- Portion of fair value changes on
+12,639
+- Available-for-sale securities
+192
+(i)
+Notes to the Consolidated Financial Statements
+Shanghai Rui Chong
+RMB200
+RMB200
+CL Wealth
+RMB1,060
+RMB588
+RMB588
+CL AMP
+RMB760
+RMB300
+("Suzhou Pension Company”) (i)
+Company Limited
+and Retirement Investment
+China Life (Suzhou) Pension
+RMB3,400
+RMB3,400
+Limited ("Pension Company")
+China Life Pension Company
+RMB4,000
+RMB4,000
+AMC
+RMB4,600
+RMB4,600
+CLIC
+Investment Co., Limited
+million
+("Rui Chong Company")
+RMB6,800
+China Life Insurance Company Limited Annual Report 2016
+year
+Percentages of holding of related parties with control relationship and changes during the
+(f)
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+(iii) For those subsidiaries which were not set up or invested in Mainland China, the legal definition of
+registered capital is not applicable for them.
+Registered capital of Franklin Shenzhen Company is USD2 million, and its paid-in capital is USD0.6
+million as at 31 December 2016.
+On 6 February 2016, Suzhou Pension Company completed its business registration modification
+procedure, and the registered capital was changed to RMB1,060 million. In December 2016, the
+Company completed a RMB526 million capital contribution to Suzhou Pension Company. After the
+contribution, the paid-in capital of Suzhou Pension Company increased from RMB800 to RMB1,326
+million. As at 31 December 2016, since the business registration modification procedure for the
+registered capital of Suzhou Pension Company was still in progress, the registered capital remained
+RMB1,060 million.
+USD2
+USD2
+(ii)
+(i)
+("Franklin Shenzhen Company") (ii)
+RMB1,730
+RMB1,730
+Management Co., Limited
+Equity Investment Fund
+China Life Franklin (Shenzhen)
+China Life (Beijing) Health
+Management Co., Limited
+("CL Health")
+194
+RMB6,800
+As at 31
+December 2016
+524
+- Available-for-sale securities
+Refer to Note 8 for the basic and related information of associates and joint ventures.
+(c) Associates and joint ventures
+Refer to Note 39(c) for the basic and related information of subsidiaries.
+(b) Subsidiaries
+Yang
+Mingsheng
+State-owned
+company
+Immediate and
+ultimate holding
+representative
+Legal
+Nature of
+ownership
+Relationship with
+the Company
+in respect of the in-force life, health,
+accident and other types of personal
+Beijing, Insurance services including receipt
+China of premiums and payment of benefits
+registration Principal business
+Location of
+CLIC
+Name
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS
+GAGAG
+For the year ended 31 December 2016
+Decrease
+million
+(d) Other related parties
+Significant related parties
+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.
+China Life Real Estate Co., Limited ("CLRE")
+As at 31
+December 2015
+million
+Relationship with the Company
+Name of related party
+(e) Registered capital of related parties with control relationship and changes during the year
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+ended 31 December 2016
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+193
+year
+China Life Investment Holding Company
+Under common control of CLIC
+China Life Enterprise Annuity Fund (“EAP”)
+("CL Ecommerce")
+China Life Ecommerce Company Limited
+Under common control of CLIC
+Limited ("CLI")
+Under common control of CLIC
+China Life Insurance (Overseas) Company Limited
+("CL Overseas")
+Under common control of CLIC
+A pension fund jointly set up by the Company and others
+(639)
+108
+year
+(813)
+(134)
+33
+(1,701)
+Disposals
+369
+126
+Charge for the
+(115)
+(12,752)
+23,587
+(982)
+(4,382)
+(6,469)
+As at 1 January 2015
+Accumulated depreciation
+40,262
+1,282
+7,544
+1,368
+6,481
+As at 31 December 2015
+(767)
+(114)
+636
+(919)
+As at 31 December 2015
+24,792
+(4,652)
+356
+7,544
+378
+1,829
+16,314
+As at 31 December 2015
+(63)
+303
+6,332
+391
+2,145
+15,621
+As at 1 January 2015
+Net book value
+(24)
+(24)
+(24)
+As at 31 December 2015
+Disposals
+49
+(24)
+year
+Charge for the
+As at 1 January 2015
+208
+Impairment
+(13,817)
+(926)
+(990)
+(7,249)
+(133)
+construction improvements
+(64)
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+207
+29,722
+477
+10,387
+422
+1,860
+16,576
+As at 31 December 2016
+26,421
+356
+For the
+7,544
+1,829
+As at 1 January 2016
+Net book value
+(24)
+(24)
+As at 31 December 2016
+Disposals
+year
+Charge for the
+(24)
+(24)
+As at 1 January 2016
+Impairment
+378
+year
+ended 31 December 2016
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment (continued)
+Disposals
+3,483
+8
+2,955
+128
+341
+51
+Additions
+(22)
+166
+(1,680)
+6
+1,486
+Transfers upon completion
+37,568
+1,222
+6,332
+1,373
+6,527
+22,114
+As at 1 January 2015
+RMB million
+Total
+vehicles
+Leasehold
+Motor Assets under
+Office
+equipment
+furniture
+and fixtures
+Buildings
+Cost
+(393)
+16,314
+Accumulated depreciation
+China Life Insurance Company Limited Annual Report 2016
+203,152
+Term deposits
+39(g)
+535,361
+560,807
+Statutory deposits - restricted
+221,535
+39(h)
+5,653
+Available-for-sale securities
+39(i)
+758,802
+766,799
+Securities at fair value through profit or loss
+5,653
+39(f)
+Loans
+503,489
+Investment properties
+39(b)
+1,247
+1,296
+Investments in subsidiaries
+39(c)
+27,353
+11,843
+Investments in associates and joint ventures
+39(d)
+76,427
+27,810
+Held-to-maturity securities
+39(e)
+594,054
+39(j)
+26,421
+204,046
+Securities purchased under agreements to resell
+14,252
+16,294
+62,606
+74,750
+2,645,487
+2,418,226
+39(m)
+GAGAG
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+205
+1,420
+2,134
+12
+39(k)
+43,100
+21,461
+39(1)
+55,774
+49,385
+Premiums receivable
+11
+13,421
+26,421
+11,913
+Reinsurance assets
+Other assets
+Cash and cash equivalents
+Total assets
+135,733
+29,722
+39(a)
+Property, plant and equipment
+Total
+Operating lease commitments - as lessee
+45,079
+The future minimum lease payments under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five
+34
+years
+Total
+36,307
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+632
+Later than five years
+30,453
+5,820
+39,616
+5,462
+1
+As at 31
+December 2015
+RMB million
+Pending lawsuits
+440
+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
+2016 and 2015, 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.
+COMMITMENTS
+(a)
+Capital commitments
+The Group had the following capital commitments relating to property development projects and
+investments:
+204
+(b)
+Contracted, but not provided for
+Investments
+Property, plant and equipment
+Others
+As at 31
+December 2016
+RMB million
+534
+764
+721
+27
+སྨྲ།
+258
+253
+13
+463
+524
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+Statement of financial position
+As at 31 December 2016
+As at 31
+December 2016
+Notes
+RMB million
+As at 31
+December 2015
+RMB million
+ASSETS
+10
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+267
+As at 31
+December 2015
+RMB million
+20
+1,423
+1,275
+The operating lease payments charged to profit before income tax for the year ended 31 December 2016
+were RMB994 million (2015: RMB857 million).
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+38
+COMMITMENTS (continued)
+(c) Operating lease commitments - as lessor
+The future minimum rentals receivable under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five years
+Later than five years
+Total
+As at 31
+December 2016
+RMB million
+186
+38
+Statement of financial position (continued)
+As at 31
+December 2016
+40,262
+Transfers
+upon completion
+1,174
+(1,438)
+256
+1,282
+(8)
+31
+631
+177
+4,754
+13
+5,606
+Additions
+7,544
+1,368
+6,481
+(a)
+Property, plant and equipment
+Cost
+Office
+equipment
+Buildings furniture and
+fixtures
+Motor
+vehicles
+Assets
+under
+Leasehold
+construction improvements
+Total
+RMB million
+GAGAG
+As at 1 January 2016
+23,587
+Disposals
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(104)
+(140)
+36
+Disposals
+(1,744)
+(144)
+(129)
+(596)
+426
+(875)
+Charge for the
+(13,817)
+(926)
+(990)
+(4,652)
+As at 1 January 2016
+year
+136
+22
+620
+(473)
+(26)
+(1,173)
+As at 31 December 2016
+24,688
+6,682
+1,405
+10,387
+1,525
+(14,941)
+(1,048)
+(983)
+(4,822)
+(8,088)
+As at 31 December 2016
+(430)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+67,994
+Securities sold under agreements to repurchase
+39(n)
+81,039
+30,368
+Annuity and other insurance balances payable
+37,998
+39,038
+Premiums received in advance
+35,252
+32,266
+Other liabilities
+39(0)
+30,556
+30,092
+17
+Bonds payable
+107,774
+Notes
+RMB million
+As at 31
+December 2015
+RMB million
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+14
+1,847,986
+1,715,985
+Investment contracts
+15
+195,706
+84,106
+Policyholder dividends payable
+87,725
+23,182
+Deferred tax liabilities
+39(p)
+7,543
+7,791
+7,791
+Reserves
+39(r)
+144,116
+161,672
+Retained earnings
+100,840
+106,375
+Total equity
+281,012
+304,103
+Total liabilities and equity
+2,645,487
+2,418,226
+39(q)
+As at 31 December 2016
+Other equity instruments
+28,265
+16,883
+Current income tax liabilities
+1,141
+5,256
+20
+491
+217
+Statutory insurance fund
+Total liabilities
+Equity
+206
+2,364,475
+2,114,123
+Share capital
+34
+28,265
+588
+As at 31
+December 2015
+RMB million
+December 2016
+RMB million
+The total compensation package for the Company's key management personnel for the year ended 31
+December 2016 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 2015 has been approved by the relevant authorities. The total compensation of 2015 was RMB25 million,
+including a deferred payment about RMB5 million.
+Transactions with state-owned enterprises
+Under IAS 24 Related Party Disclosures ("IAS 24”), business transactions between state-owned enterprises
+controlled by the PRC government are within the scope of related party transactions. CLIC, the ultimate
+holding company of the Group, is a state-owned enterprise. The Group's key business is insurance and
+investment related and therefore the business transactions with other state-owned enterprises are primarily
+related to insurance and investment activities. The related party transactions with other state-owned
+enterprises were conducted in the ordinary course of business. Due to the complex ownership structure, the
+PRC government may hold indirect interests in many companies. Some of these interests may, in themselves
+or when combined with other indirect interests, be controlling interests which may not be known to the
+Group. Nevertheless, the Group believes that the following captures the material related parties and has
+applied IAS 24 exemption and disclosed only qualitative information.
+As at 31 December 2016, 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 2016, 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.
+34 SHARE CAPITAL
+As at 31 December 2016
+No. of shares
+Salaries and other benefits
+RMB million
+RMB million
+Registered, authorised, issued and fully paid
+Ordinary shares of RMB1 each
+28,264,705,000
+28,265
+28,264,705,000
+28,265
+As at 31 December 2015
+No. of shares
+(j)
+GAGAG
+25
+(6)
+(604)
+(325)
+(8)
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(i)
+Key management personnel compensation
+For the year ended 31 December
+2016
+2015
+RMB million
+RMB million
+18
+201
+(17)
+25252
+Notes to the Consolidated Financial Statements
+1,500,000,000
+1,500
+7,441,175,000
+7,441
+28,264,705,000
+28,265
+8,941
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange.
+(a) Basic information
+202
+As at 31
+December 2015
+Increase
+Decrease
+As at 31
+December 2016
+35 OTHER EQUITY INSTRUMENTS
+8,941,175,000
+19,324
+19,323,530,000
+For the
+year
+ended 31 December 2016
+34 SHARE CAPITAL (continued)
+As at 31 December 2016, the Company's share capital was as follows:
+Owned by CLIC (i)
+Owned by other equity holders
+Including: Domestic listed
+Overseas listed (ii)
+Total
+(i)
+All shares owned by CLIC are domestic listed shares.
+As at 31 December 2016
+No. of shares
+RMB million
+China Life Insurance Company Limited Annual Report 2016
+50
+47
+(1)
+year
+ended 31 December 2016
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Transactions with significant related parties (continued)
+Notes (continued):
+(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.
+For the
+(ix)
+(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 the deposits with CGB and
+the subordinated debts and corporate bonds issued by Sino-Ocean.
+200
+The resulting balance due from and to significant related parties of the Group
+Amount due from CLIC
+Amount due to CLIC
+In December 2016, the Company completed a RMB526 million capital contribution to Suzhou Pension Company.
+Please refer to Note 33(e).
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+GAGAG
+33 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Transactions with significant related parties (continued)
+Notes (continued):
+(v)
+(vi)
+(vii)
+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 12 August 2016, the Company and CGB renewed the insurance
+agency agreement to distribute insurance products. 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. The transactions between the Company and CGB before the effective date of
+the renewed agreement complied with the previous agreement.
+On 23 March 2016, the Company and CGB signed an 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 selling 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 sale of each category group 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 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 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. On 26 October 2016, the Company and CL Ecommerce
+renewed the agreement, which was effective from 1 January 2016 and expired on 31 December 2016. The previous
+agreement was terminated automatically when the renewed agreement came into effect. The agreement is subject to
+an automatic one-year renewal if no objections are raised by both parties.
+On 27 November 2014, the Company and Pension Company signed an 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 2014 and expired after one 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 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 of the agency fee of occupation annuity should be in line with those of enterprise
+annuity funds. The charge rate of the agency fee of the group pension plan is in line with that of the investment
+management fee of enterprise annuity funds. The agency fee of the personal pension plan is 30% of the daily
+management fee of the personal pension plan annually.
+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 expires on 31 December 2017,
+subject to an automatic one-year renewal if no objections were raised by either party upon expiry. There are
+two types of commissions agreed upon in the agreement, which are commissions that occur in daily business
+and occur according to the annual promotional plans. Provisions of the commissions for entrusting service of
+enterprise annuity funds management remain the same as those in the previous agreement; the agency fee 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 agency fee 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 agency fee 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 income statement of the Group.
+199
+Amount due from CL Overseas
+Amount due from CLP&C
+Amount due to CLP&C
+Amount due from CLI
+47
+332
+12
+(206)
+2
+26,342
+9,660
+365
+(17)
+643
+8
+5
+(66)
+(13)
+(40)
+ཏྲཾ ངྐེ བ སྦྲུལྱཱ ཋ ཛྱེ ས བྱྲེ ༔ ནྱ གྱྱི སྤྱི ཌ ཤ ༈
+529
+Quantity million
+RMB million
+As at 31
+December 2016
+RMB million
+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 Sino-Ocean
+Amount due from CL Ecommerce
+Amount due to CL Ecommerce
+The resulting balance due from and to subsidiaries of the Company
+Amount due from Pension Company
+Amount due to Pension Company
+Amount due to AMC
+Amount due to AMC HK
+As at 31
+December 2015
+RMB million Quantity million
+RMB million Quantity million
+RMB million Quantity million
+24,787
+25,239
+163,381
+As at 1 January 2016
+53,860
+1,113
+28,239
+29,963
+28,239
+24,787
+25,239
+163,381
+Other comprehensive income for the year
+(24,863)
+180
+180
+29,963
+1,113
+Other comprehensive income for the year
+6,709
+364
+3
+7,076
+Appropriation to reserves
+3,438
+3,160
+3,492
+10,090
+Others
+296
+296
+As at 31 December 2015
+53,860
+(918)
+7
+(25,774)
+Appropriation to reserves
+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 RMB1,927 million for the year ended 31 December 2016 (2015:
+RMB3,438 million).
+Approved at the Annual General Meeting in May 2016, the Company appropriated RMB3,438 million to the
+discretionary reserve fund for the year ended 31 December 2015 based on net profit under CAS (2015: RMB3,160
+million).
+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 2016, the Company appropriated 10% of net profit under CAS
+which amounted to RMB1,927 million to the general reserve for future uncertain catastrophes, which cannot be used for
+dividend distribution or conversion to share capital increment (2015: RMB3,438 million). In addition, pursuant to the
+CAS, the Group appropriated RMB75 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2015: RMB54 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.
+203
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+37
+PROVISIONS AND CONTINGENCIES
+The following is a summary of the significant contingent liabilities:
+As at 31
+(c)
+145,919
+(b)
+145,007
+1,927
+3,438
+2,002
+7,367
+Others
+33
+33
+As at 31 December 2016
+53,860
+1,146
+5,100
+(738)
+30,166
+28,225
+27,241
+(a)
+44,687
+(3)
+21,627
+As at 31
+December 2015
+RMB million
+303,621
+322,492
+295,830
+314,701
+7,791
+As at 31
+December 2016
+RMB million
+7,791
+3,722
+4,027
+3,722
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company
+for the year ended 31 December 2016. As at 31 December 2016, there were no accumulated distributions
+unpaid attributable to other equity instruments holders of the Company.
+36
+RESERVES
+4,027
+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
+RMB million
+Core Tier 2 Capital Securities
+1,280
+7,791
+1,280
+7,791
+Total
+1,280
+7,791
+1,280
+7,791
+The Company issued Core Tier 2 Capital Securities at par with the nominal value of USD1,280 million on
+3 July 2015, and 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 year and every five years thereafter.
+(b)
+Equity attributable to equity holders
+Equity attributable to equity holders of the Company
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+Share of other
+reserve
+foreign
+operations
+Total
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+RMB million RMB million
+GAGAG
+(a)
+(b)
+(c)
+As at 1 January 2015
+53,860
+817
+23,254
+(184)
+24,801
+General
+21,747
+reserve
+fund
+reserve
+Unrealised comprehensive
+gains/
+(losses) from
+income
+of investees
+Exchange
+differences on
+available-
+under
+Statutory Discretionary
+translating
+Share
+Other
+premium
+reserves
+for-sale
+securities
+the equity
+method
+fund
+Accrued investment income
+(7,249)
+As at 1 January 2016
+8,700
+17,500
+24,039
+24,303
+80,311
+69,753
+90,102
+109,979
+RMB million
+December 2015
+As at 31
+203,152
+RMB million
+221,535
+December 2016
+221,535
+118,193
+129,093
+84,959
+92,442
+As at 31
+December 2015
+RMB million
+RMB million
+As at 31
+December 2016
+Total
+After five years but within ten years
+years
+After one year but within five
+Within one year
+As at 31
+203,152
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+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
+5,353
+4,053
+300
+1,600
+RMB million
+RMB million
+As at 31
+December 2015
+As at 31
+December 2016
+Total
+After one year but within five years
+Within one year
+Contractual maturity schedule:
+(i)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(h) Statutory deposits - restricted
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+As at 31 December 2016, the term deposits of RMB13.2 billion (2015: Nil) applying for an overseas
+borrowings backed by domestic deposits business are restricted to use. Please refer to Note 9.3 for the
+details.
+560,807
+535,361
+7,700
+380,842
+344,790
+179,965
+182,871
+Maturing:
+Available-for-sale securities, at fair value
+(g) Term deposits
+After ten years
+Total
+After ten years
+After five years but within ten years
+years
+After one year but within five
+Within one year
+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 RMB618,436 million as at 31 December 2016
+(as at 31 December 2015: RMB550,199 million).
+503,489
+594,054
+441,573
+As at 31
+December 2016
+RMB million
+529,862
+64,192
+503,489
+594,054
+152,130
+150,089
+145,824
+177,768
+126,097
+169,001
+79,438
+97,196
+RMB million
+RMB million
+61,916
+As at 31
+December 2015
+RMB million
+30,614
+After five years but within ten years
+years
+After one year but within five
+Within one year
+Maturing:
+Total
+Other loans
+Policy loans
+214
+(f) Loans
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+39
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+213
+GAGAG
+503,489
+594,054
+248,127
+260,547
+167,290
+231,391
+86,072
+71,502
+2,000
+Total
+As at 31
+December 2015
+Debt securities
+As at 31
+758,802
+366,989
+364,616
+273,023
+248,594
+172
+232
+8,391
+25,034
+85,403
+90,756
+399,810
+394,186
+766,799
+357,995
+266
+41,549
+36,691
+As at 31
+December 2015
+RMB million
+RMB million
+As at 31
+December 2016
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+357,495
+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.
+Debt securities – Contractual maturity schedule
+Maturing:
+Others
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+Securities at fair value through profit or loss
+(j)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+399,810
+394,186
+120,003
+104,244
+112,012
+113,161
+135,733
+143,840
+32,062
+32,941
+RMB million
+As at 31
+December 2015
+As at 31
+December 2016
+RMB million
+Total
+After ten years
+After five years but within ten years
+After one year but within five years
+Within one year
+Subtotal
+Government bonds
+Unlisted
+Listed in Mainland, PRC
+74,592
+100,116
+Common stocks
+162,563
+104,432
+Funds
+Equity securities
+399,810
+394,186
+Subtotal
+4,706
+11,683
+Others (i)
+Preferred stocks
+11,000
+19,298
+16,708
+Subordinated bonds/debts
+205,149
+187,287
+Corporate bonds
+25,258
+145,399
+146,310
+Government agency bonds
+21,198
+GAGAG
+As at 31
+December 2015
+RMB million
+December 2016
+RMB million
+Wealth management products
+27,880
+18,712
+Wealth management products
+Debt securities
+216
+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)
+Available-for-sale securities (continued)
+(i)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+215
+766,799
+758,802
+Total
+20,759
+20,759
+Others (i)
+Equity securities
+Available-for-sale securities, at cost
+346,230
+343,857
+Subtotal
+40,310
+29,885
+Others (i)
+50,053
+81,544
+Listed in Singapore
+As at 31
+December 2016
+Total
+Listed in Mainland, PRC
+Unlisted
+and operation
+Name
+Percentage of
+Place of
+incorporation
+GAGAG
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December
+2016:
+11,843
+27,353
+RMB million
+RMB million
+2015
+2016
+31 December
+equity interest held
+31 December
+As at
+Unlisted investments at cost
+Investments in subsidiaries
+(c)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+The fair value of investment properties of the Company as at 31 December 2016 amounted to RMB2,377
+million (as at 31 December 2015: RMB2,415 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.
+2,415
+2,231
+As at 31 December 2015
+As at 1 January 2015
+As at
+Registered capital
+Principal activities
+AMC
+King Phoenix Tree Limited
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+Golden Phoenix Tree Limited
+Asset management
+Investment in
+retirement properties
+Fund management
+Financial service
+RMB588 million
+RMB200 million
+100.00% indirectly
+PRC
+CL Wealth
+85.03% indirectly
+PRC
+CL AMP
+Not applicable
+RMB1,060 million
+100.00% directly
+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
+Fair value
+The British Jersey Island
+1,296
+As at 31 December 2015
+1,247
+1,296
+As at 1 January 2016
+Fair value
+As at 31 December 2016
+Net book value
+(266)
+As at 31 December 2016
+Transfer from property, plant and equipment
+(49)
+year
+Charge for the
+(217)
+2,415
+1,513
+Buildings
+RMB million
+As at 1 January 2016
+Accumulated depreciation
+As at 31 December 2016
+Transfer from property, plant and equipment
+Additions
+As at 1 January 2016
+Cost
+(b) Investment properties
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+1,513
+As at 31 December 2016
+2,377
+GAGAG
+As at 1 January 2015
+Net book value
+(217)
+As at 31 December 2015
+Transfer from property, plant and equipment
+(49)
+year
+Charge for the
+(168)
+1,513
+1,513
+Buildings
+RMB Million
+As at 1 January 2015
+Accumulated depreciation
+As at 31 December 2015
+Transfer from property, plant and equipment
+Additions
+As at 1 January 2015
+Cost
+210
+(b) Investment properties (continued)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+209
+1,345
+100.00% indirectly
+Not applicable
+Investment
+76.42% directly
+Collective Fund Trust Scheme
+Urbanization Developing Fund
+Huarun Trust Guokai New
+Collective Fund Trust Scheme
+Perpetual Debt Investment
+Investment management
+RMB2,000 million
+90.00% directly
+Shang Xin Huarong Capital
+Scheme (the second batch)
+No. 798 Collective Fund Trust
+Investment management
+RMB1,975 million
+RMB2,000 million
+Jiao Yin Guo Xin Wen Jian
+Communications Construction
+Investment management
+RMB3,000 million
+66.67% directly
+Investment management
+RMB3,698 million
+Investment management
+RMB4,000 million
+49.00% directly and
+indirectly
+80.24% directly
+No. 1 Collective Fund
+Trust Scheme
+Kun Lun Trust ⚫ China
+Investment Fund
+100.00% directly
+Investment management
+66.67% directly
+RMB1,500 million
+Debt securities
+Total
+Subordinated bonds/debts
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+(e) Held-to-maturity securities
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+27,810
+76,427
+27,044
+766
+48,617
+27,810
+RMB million
+RMB million
+2015
+2016
+As at 31 December
+Investments in associates and joint ventures
+As at 1 January
+(d) Investments in associates and joint ventures
+Collective Fund Trust Scheme
+Indemnificatory Housing
+Shang Xin Jing Neng Jin Tai
+Investment management
+CL AMP CSI 300 Index Securities
+Fund Trust Scheme
+Shang Xin Lv Di Collective
+Investment management
+100.00% directly
+The British Virgin Islands
+Investment
+Not applicable
+100.00% directly
+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
+Century Core Fund
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+Investment
+RMB6,800 million
+100.00% directly
+PRC
+New Aldgate Limited
+Rui Chong Company
+Not applicable
+Subtotal
+Investment
+100.00% indirectly
+RMB8,758 million
+88.02% directly
+Shang Xin - Ningbo Wu Lu Si Qiao
+PPP Collective Fund Trust Scheme
+Trust/investments received
+Percentage of shares held
+Name
+212
+Principal activities
+(ii) The table below presents the basic information of the Company's major consolidated structured
+entities as at 31 December 2016:
+(c) Investments in subsidiaries (continued)
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+25252
+211
+Non-controlling interests in subsidiaries are not significant to the Company.
+Investment
+Health management
+RMB1,730 million
+USD2 million
+100.00% directly
+100.00% indirectly
+PRC
+Franklin Shenzhen Company
+PRC
+CL Health
+Investment
+Not applicable
+The British
+Cayman Islands
+Equity securities
+ended 31 December 2016
+Common stocks
+As at 31
+49,385
+55,774
+18,256
+11,142
+31,129
+44,632
+49,385
+55,774
+2,131
+2,528
+15,642
+17,613
+31,612
+35,633
+RMB million
+As at 31
+December 2015
+Total
+Current
+Non-current
+Total
+(m) Other assets
+As at 31
+December 2016
+As at 31
+December 2015
+December 2016
+RMB million
+43,100
+21,461
+43,100
+21,461
+As at 31
+December 2016
+RMB million
+RMB million
+As at 31
+December 2015
+RMB million
+2,251
+1,124
+Total
+Current
+Non-current
+Total
+Others
+14,252
+10,394
+5,768
+5,900
+14,252
+16,294
+Funds
+16,294
+Others
+936
+Tax refundable
+RMB million
+Land use rights
+Automated policy loans
+Disbursements
+5,671
+5,809
+2,814
+2,520
+69
+1,718
+Investments receivable
+883
+4,126
+Due from related parties
+846
+756
+1,023
+Bank deposits
+Debt securities
+8,484
+Total
+50,092
+42,745
+204,046
+135,733
+Total
+Debt securities
+36,887
+Listed in Mainland, PRC
+8,194
+Listed overseas
+89
+56
+Unlisted
+134,379
+19,486
+84,738
+35,999
+14,093
+Subtotal
+(1) Accrued investment income
+As at 31
+December 2016
+As at 31
+December 2015
+RMB million
+372
+5,858
+6,578
+143,871
+86,816
+3,133
+401
+153,954
+92,988
+553
+5,218
+153,954
+RMB million
+Subtotal
+204,046
+135,733
+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.
+217
+25252
+China Life Insurance Company Limited Annual Report 2016
+Total
+Notes to the Consolidated Financial Statements
+year
+Within 30 days
+ended 31 December 2016
+218
+Maturing:
+92,988
+For the
+42,745
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(k) Securities purchased under agreements to sell
+Subtotal
+50,092
+Listed in Mainland, PRC
+33,339
+32,427
+Listed in Hong Kong, PRC
+Listed overseas
+GAGAG
+70
+4,149
+74
+10,395
+Equity securities
+Unlisted
+6,099
+6,284
+81,039
+Brokerage and commission payable
+30,368
+81,039
+30,368
+As at 31 December 2016, bonds with a carrying value of RMB76,157 million (as at 31 December 2015:
+RMB28,185 million) were pledged as collateral for financial assets sold under agreements to repurchase
+resulted from repurchase transactions entered into by the Company in the interbank market.
+For debt repurchase transactions through the stock exchange, the Company is required to deposit certain
+exchange-traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the
+stock exchange's regulation which should be no less than the balance of the related repurchase transaction.
+As at 31 December 2016, the carrying value of securities deposited in the collateral pool was RMB81,280
+million (as at 31 December 2015: RMB66,027 million). The collateral is restricted from trading during the
+period of the repurchase transaction.
+(0)
+Other liabilities
+Interest payable to policyholders
+Salary and welfare payable
+30,368
+China Life Insurance Company Limited Annual Report 2016
+Current
+Payable to constructors
+Interest payable of subordinated debts
+Stock appreciation rights (Note 31)
+Tax payable
+Others
+Total
+Non-current
+Total
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+8,006
+81,039
+6,410
+Agent deposits
+2,902
+For the year ended 31 December 2016
+15,609
+Pension
+6,466
+Deferred
+payment
+Subtotal of
+salary
+Performance
+related
+Basic
+year
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the
+ended 31 December 2015 are as follows:
+(a) Directors' and chief executive's emoluments (continued)
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+ended 31 December 2016
+year
+For the
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(n) Securities sold under agreements to repurchase
+Interbank market
+Stock exchange market
+Total
+Maturing:
+Within 30 days
+Total
+As at 31
+December 2016
+As at 31
+December 2015
+RMB million
+RMB million
+65,430
+27,466
+Deferred
+payment
+4,561
+Insurance
+RMB million
+2,598
+Total
+RMB million
+(8,316)
+3,673
+(11,637)
+534
+930
+142
+3340
+(19,023)
+4,349
+(Charged)/credited to other
+comprehensive income
+- Available-for-sale securities
+(5,401)
+(5,401)
+- Portion of fair value changes on
+available-for-sale securities
+attributable to participating
+policyholders
+3,192
+3,192
+As at 31 December 2015
+(1,451)
+(16,504)
+1,072
+(16,883)
+As at 1 January 2016
+(1,451)
+(16,504)
+1,072
+Actual paid
+(16,883)
+Others
+RMB million
+Investments
+RMB million
+(Charged)/credited to net profit
+As at 1 January 2015
+1,611
+1,117
+1,024
+634
+742
+1,045
+654
+845
+620
+484
+7,720
+5,488
+30,556
+23,182
+3,713
+30,556
+30,556
+23,182
+219
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Deferred tax liabilities
+(p)
+(i) The movements in deferred tax assets and liabilities during the year are as follows:
+220
+Deferred tax assets/(liabilities)
+GAGAG
+included in
+320.0
+scheme
+160.0
+160.0
+160.0
+35.0
+125.0
+Robinson Drake Pike
+Liu Jiade
+647.6
+272.0
+919.6
+51.9
+63.8
+272.0
+803.9
+544.0
+259.9
+Xu Haifeng
+664.1
+286.4
+950.5
+49.7
+68.2
+286.4
+832.6
+572.7
+259.9
+Xu Hengping
+320.0
+(Charged)/credited to net profit
+year
+320.0
+ended 31
+The compensation amounts disclosed above for these directors and the chief executive for the
+December 2015 were restated based on the finalised amounts determined during 2016.
+1,528.3
+114.7
+189.8
+1,223.8
+1,087.8
+1,479.4
+110.1
+190.2
+1,179.1
+1,392.8
+119.2
+125.6
+1,148.0
+RMB thousand
+Total
+Pension scheme
+contributions
+Benefits in kind
+paid
+Remuneration
+Zhan Zhong
+Miao Ping
+Shi Xiangming
+Xiong Junhong
+Name
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December
+2016 are as follows:
+(b) Supervisors' emoluments
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+For the year ended 31 December 2016
+Notes to the Consolidated Financial Statements
+China Life Insurance Company Limited Annual Report 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.
+The directors and chief executive received the compensation amounts disclosed above during their term of
+office in 2016 and 2015.
+224
+70.0
+250.0
+Huang Yiping
+133.3
+29.1
+104.2
+Bruce Douglas Moore
+Wang Sidong
+Zhang Xiangxian
+Miao Jianmin
+1,418.6
+579.1
+1,997.7
+100.6
+213.4
+579.1
+1,683.7
+1,158.1
+525.6
+Lin Dairen
+Yang Mingsheng
+RMB thousand
+in total
+in total
+Total
+in kind contributions
+income salary income
+bonuses
+salaries
+Name
+included
+included
+133.3
+133.3
+Su Hengxuan
+173.2
+320.0
+320.0
+320.0
+70.0
+250.0
+Chang Tso Tung Stephen
+740.7
+286.4
+1,027.1
+49.2
+145.3
+286.4
+832.6
+572.7
+Benefits
+259.9
+300.0
+300.0
+300.0
+50.0
+250.0
+Anthony Francis Neoh
+495.8
+190.9
+686.7
+32.7
+99.0
+190.9
+555.0
+381.8
+Miao Ping
+(614)
+securities
+RMB million
+463
+RMB million
+591
+495
+761
+644
+27
+20
+Total
+(iii) Operating lease commitments - as lessor
+1,379
+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
+1,159
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+208
+272
+324
+261
+10
+13
+542
+546
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+RMB million
+For the year ended 31 December 2016
+As at 31
+December 2015
+Later than five years
+Notes to the Consolidated Financial Statements
+For the
+year
+ended 31 December 2016
+39
+222
+STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(t) Commitments
+(i) Capital commitments
+Capital commitments of the Company relating to property development projects and investments:
+(ii)
+Contracted, but not provided for
+Investments
+Property, plant and equipment
+Others
+Total
+Operating lease commitments - as lessee
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+40,804
+4,248
+1
+31,314
+4,851
+34
+45,053
+36,199
+The future minimum lease payments under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five
+years
+As at 31
+December 2016
+China Life Insurance Company Limited Annual Report 2016
+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
+ended 31 December 2016 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 2016 consolidated financial statements. The final compensation will be disclosed in a
+separate announcement when determined.
+Xu Haifeng
+1,134.0
+125.3
+116.5
+1,375.8
+Liu Jiade
+Robinson Drake Pike
+320.0
+Tang Xin (iv)
+266.7
+Leung Oi-Sie Elsie (v)
+150.0
+||| I
+320.0
+266.7
+150.0
+(i)
+Zhang Xiangxian resigned as non-executive director on 3 August 2016.
+(ii)
+Anthony Francis Neoh retired as independent director on 20 July 2016.
+(iii)
+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.
+(iv)
+Tang Xin was appointed as independent director on 7 March 2016.
+(v)
+Leung Oi-Sie Elsie was appointed as independent director on 20 July 2016.
+223
+25252
+191.4
+1,378.8
+year
+119.2
+1,134.0
+(a) Directors' and chief executive's emoluments
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the
+ended 31 December 2016 are as follows:
+year
+Name
+Yang Mingsheng
+Remuneration
+paid
+Benefits in kind
+Pension scheme
+contributions
+Total
+RMB thousand
+Lin Dairen
+1,400.0
+125.7
+119.9
+1,645.6
+Miao Jianmin
+Zhang Xiangxian (i)
+Wang Sidong
+Anthony Francis Neoh (ii)
+150.0
+150.0
+Chang Tso Tung Stephen
+320.0
+320.0
+Huang Yiping (iii)
+53.3
+53.3
+Xu Hengping
+125.6
+25252
+221
+440
+(26,500)
+(1,310)
+(2,183)
+Subtotal
+(13,862)
+(28,683)
+Net deferred tax liabilities
+(7,543)
+(16,883)
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2016
+39 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(q)
+Other equity instruments
+Equity attributable to equity holders of the Company
+As at 31
+December 2016
+As at 31
+December 2015
+RMB million
+RMB million
+281,012
+304,103
+Equity attributable to ordinary equity holders of the Company
+Equity attributable to other equity instruments holders of the Company
+273,221
+7,791
+296,312
+7,791
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company
+for the year ended 31 December 2016. As at 31 December 2016, there were no accumulated distributions
+unpaid attributable to other equity instruments holders of the Company.
+(12,552)
+(r) Reserves
+- deferred tax liabilities to be settled after 12 months
+- deferred tax liabilities to be settled within 12 months
+11,800
+1,057
+(Charged)/credited to other
+comprehensive income
+- Available-for-sale securities
+12,626
+12,626
+- Portion of fair value changes on
+available-for-sale securities
+attributable to participating
+policyholders
+As at 31 December 2016
+(4,343)
+(6,408)
+(2,670)
+(4,343)
+1,535
+(7,543)
+(ii) The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
+Deferred tax assets:
+- deferred tax assets to be recovered after 12 months
+- deferred tax assets to be recovered within 12 months
+Subtotal
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+RMB million
+2,758
+9,247
+3,561
+2,553
+6,319
+Deferred tax liabilities:
+GAGAG
+Unrealised
+gains/(losses)
+from
+Share available-for-sale
+29,807
+28,191
+24,787
+25,027
+161,672
+Other comprehensive
+income for the
+year
+(24,848)
+(24,848)
+Appropriation to reserves
+1,927
+3,438
+1,927
+7,292
+As at 31 December 2016
+53,860
+4,959
+30,118
+28,225
+26,954
+144,116
+(s) Provisions and contingencies
+The following is a summary of the significant contingent liabilities:
+Pending lawsuits
+As at 31
+December 2016
+RMB million
+As at 31
+December 2015
+588
+RMB million
+53,860
+As at 1 January 2016
+161,672
+25,027
+premium
+RMB million
+Statutory
+reserve fund
+RMB million
+Discretionary
+General
+reserve fund
+reserve
+Total
+RMB million
+RMB million
+RMB million
+As at 1 January 2015
+Other comprehensive
+53,860
+23,177
+1,208
+24,753
+21,589
+145,006
+income for the year
+Appropriation to reserves
+6,630
+6,630
+3,438
+3,160
+3,438
+10,036
+As at 31 December 2015
+53,860
+29,807
+28,191
+24,787
+21,627
+101.5
+23,182
+Wang Cuifei
+Details of the remuneration of the five highest paid individuals are as follows:
+226
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+Total
+The emoluments fell within the following bands:
+RMB0 RMB 1,000,000
+_
+RMB1,000,001 - RMB2,000,000
+RMB2,000,001 - RMB3,000,000
+For the year ended 31 December
+2016
+RMB thousand
+2015
+RMB thousand
+6,861
+565
+9,393
+502
+7,426
+For the year ended 31 December 2016, the five individuals whose emoluments were the highest in the
+Company include one director and four supervisors (2015: two directors and one supervisor).
+9,895
+(c) Five highest paid individuals
+ended 31 December 2016
+264.6
+572.3
+88.7
+47.8
+708.8
+708.8
+Wang Cuifei
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2015 were
+restated based on the finalised amounts determined during 2016.
+The supervisors received the compensation amounts disclosed above during their term of office in 2016 and
+2015.
+225
+25252
+China Life Insurance Company Limited Annual Report 2016
+Notes to the Consolidated Financial Statements
+For the
+year
+40 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+307.7
+Number of individuals
+2015
+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") in November 2016. Willis Towers Watson, an international firm of consultants,
+performed a review of China Life's embedded value. The review statement from Willis Towers Watson is contained in
+the "Willis Towers Watson's review opinion report on embedded value” section.
+ASSUMPTIONS
+Economic assumptions: The calculations are based upon assumed corporate tax rate of 25% for all years. The investment
+returns are assumed to be grading from 4.6% to 5% by 0.2% every year (remaining level thereafter). 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%.
+Other operating assumptions such as mortality, morbidity, lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+228
+1,380.7
+Embedded Value
+For the year ended 31 December
+2016
+China Life Insurance Company Limited Annual Report 2016
+52525
+5
+5
+RMB3,000,001 - RMB4,000,000
+RMB4,000,001 - RMB4,500,000
+For the year ended 31 December 2016, 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 (2015: 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.
+Annual Report 2016
+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 shareholders' interest in distributable earnings, in present value terms, which can be
+expected to emerge over time, in accordance with the assumptions used. Second, the value of one year's sales provides
+an indication of the value created for investors by new business activity based on the assumptions used and hence the
+potential of the business. However, the information on embedded value and value of one year's sales should not be
+viewed as a substitute of financial measures under the relevant accounting basis. Investors should not make investment
+decisions based solely on embedded value information and the value of one year's sales.
+It is important to note that actuarial standards with respect to the calculation of embedded value are still evolving. There
+is still no universal standard which defines the form, calculation methodology or presentation format of the embedded
+value of an insurance company. Hence, differences in definition, methodology, assumptions, accounting basis and
+disclosures may cause inconsistency when comparing the results of different companies.
+Also, the calculation of embedded value and value of one year's sales involves substantial technical complexity and
+estimates can vary materially as key assumptions are changed. Therefore, special care is advised when interpreting
+embedded value results.
+The values shown below do not consider the future financial impact of transactions between the Company and CLIC,
+CLI, AMC, Pension Company, CLP&C, and etc.
+227
+25252
+842.3
+China Life Insurance Company Limited
+49.8
+in total
+in total
+RMB thousand
+Xia Zhihua
+303.2
+634.7
+937.9
+317.4
+155.9
+57.6
+1,151.4
+317.4
+834.0
+Shi Xiangming
+641.2
+Total
+655.0
+in kind contributions
+bonuses
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December
+2015 are as follows:
+842.3
+GAGAG
+Name
+Basic
+salaries
+Performance
+related
+Subtotal of
+salary
+Deferred
+payment
+Deferred
+included in
+Benefits
+Pension
+scheme
+payment
+Actual paid
+included
+income salary income
+1,296.2
+included
+96.5
+Miao Ping
+259.9
+572.7
+832.6
+286.4
+68.4
+952.6
+286.4
+666.2
+Zhan Zhong
+333.4
+371.4
+245.6
+704.8
+87.7
+Xiong Junhong
+969.7
+51.6
+53.8
+Yang Cuilian
+969.7
+359.0
+335.5
+694.5
+1,638.3
+163.9
+54.3
+1,638.3
+912.7
+912.7
+Li Xuejun
+359.0
+395.9
+754.9
+161.0
+2) Items B through J are explained below:
+Notes: 1) Numbers may not be additive due to rounding.
+230
+652,057
+585
+(12,257)
+Reflects expected impact of covered business, and the expected return on investments supporting the 2016 opening net
+worth.
+B
+52,168
+(13,973)
+48,116
+(31,029)
+(1,792)
+49,311
+560,277
+Embedded Value as at 31 December 2016 (sum A through J)
+Other
+C
+K
+651
+Value of one year's sales in 2016.
+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:
+Reflects the difference between actual operating experience in 2016 (including mortality, morbidity, lapse, and
+expenses etc.) and the assumptions.
+Risk discount rate +50bps
+J
+1
+Base case scenario
+RMB million
+Sensitivity Results
+Table 4
+SENSITIVITY RESULTS
+Annual Report 2016
+Embedded Value
+D
+China Life Insurance Company Limited
+I
+Reflects the gains or losses due to changes in exchange rate.
+H
+Change in the market value adjustment from the beginning of year 2016 to 31 December 2016 and other related
+adjustments.
+Reflects the effect of change of appraisal methodology, model and assumption enhancements. The change of appraisal
+methodology increased embedded value by RMB64,335 million. The enhancements of assumptions decreased
+embedded value by RMB16,218 million.
+G
+F
+Compares actual with expected investment returns during 2016.
+E
+Other miscellaneous items.
+Shareholder Dividend Distribution and Capital Injection
+Embedded Value (A + D)
+Exchange Gains or Losses
+C
+Cost of Required Capital
+(29,787)
+(43,951)
+D
+Value of In-Force Business after Cost of Required Capital (B + C)
+302,530
+291,549
+E
+335,500
+652,057
+F
+G
+Value of One Year's Sales before Cost of Required Capital
+Cost of Required Capital
+53,952
+35,684
+(4,641)
+(4,155)
+H
+2
+560,277
+I
+332,317
+B
+H
+Market Value and Other Adjustments
+G
+Methodology, Model and Assumption Changes
+F
+China Life Insurance Company Limited
+Annual Report 2016
+Embedded Value
+SUMMARY OF RESULTS
+The embedded value as at 31 December 2016 and the value of one year's sales for the 12 months to 31 December 2016,
+the corresponding results as at 31 December 2015 are shown below:
+Value of In-Force Business before Cost of Required Capital
+Table 1
+RMB million
+ITEM
+31 December
+2016
+31 December
+2015
+A
+Adjusted Net Worth
+349,528
+268,729
+Components of Embedded Value and Value of One Year's Sales
+Risk discount rate -50bps
+a review of the methodology used to develop the embedded value and value of one year's sales as at 31 December
+2016, in accordance with the “CAA Standards of Actuarial Practice: Appraisal of Embedded Value” issued by the
+China Association of Actuaries (“CAA”) in November 2016;
+Investment return +50bps
+Scope of work
+China Life has engaged Willis 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 for the financial year ended
+31 December 2016 ("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
+Embedded Value
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+Our
+231
+31,912
+269,939
+355,613
+Sales after Cost of
+Required Capital
+Value of One Year's
+Value of In-Force
+Business after Cost of
+Required Capital
+Adjusted Net Worth
+Restatement of 2015 results
+50,238
+Note: 2015 results are recalculated in accordance with the "CAA Standards of Actuarial Practice" and using the new assumptions
+(including economic and operating assumptions).
+306,744
+scope
+Value of One Year's Sales after Cost of Required Capital (F + G)
+Investment Experience Variance
+The cover photo of the printed version of this report was photographed by
+Mr. Han Chunhai, an employee of the Company.
+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.
+2
+Wesley Cui
+23 March 2017
+Michael Freeman
+232
+For and on behalf of Willis Towers Watson
+of work covered:
+the EV Results have been prepared, in all material respects, in accordance with the methodology and assumptions
+set out in the Embedded Value section.
+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 in accordance with the "CAA Standards of Actuarial
+Practice: Appraisal of Embedded Value" issued by the CAA;
+•
+Based on the scope of work above, we have concluded that:
+Opinion
+China Life.
+In carrying out our review, we have relied on the accuracy of audited and unaudited data and information provided by
+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 2016;
+the operating assumptions used by China Life have been set with appropriate regard to past, current and expected
+future experience; and
+3
+10% decrease in morbidity rates
+48,385
+298,764
+40,898
+251,560
+57,745
+353,748
+51,712
+316,555
+47,069
+289,475
+46,623
+49,311
+Sales after Cost of
+Required Capital
+Value of One Year's
+Value of In-Force
+Business after Cost of
+Required Capital
+10% decrease in expenses
+6
+10% increase in expenses
+5
+Investment return -50bps
+4
+302,530
+12
+306,295
+7
+298,350
+10% increase in morbidity rates
+11
+50,251
+303,441
+10% decrease in lapse rates
+10
+48,340
+301,530
+51,998
+10% increase in lapse rates
+49,926
+304,829
+and 10% increase in mortality rate for annuity products
+10% decrease in mortality rate for non-annuity products
+8
+48,696
+300,225
+and 10% decrease in mortality rate for annuity products
+10% increase in mortality rate for non-annuity products
+9
+49,311
+Reflects dividends distributed to shareholders.
+Note: Numbers may not be additive due to rounding.
+229
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Embedded Value
+MOVEMENT ANALYSIS
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
+Table 3
+Analysis of Embedded Value Movement in 2016
+RMB million
+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
+31,528
+31,528
+49,311
+ITEM
+2,610
+VALUE OF ONE YEAR'S SALES BY CHANNEL
+2,306
+The value of one year's sales by channel is shown below:
+Table 2
+Value of One Year's Sales by Channel
+Channel
+Group Insurance Channel
+Bancassurance Channel
+Total
+Exclusive Individual Agent Channel
+RMB million
+31 December
+31 December
+2016
+2015
+46,326
+28,851
+Note: Numbers may not be additive due to rounding.
+375
+371
+*Investment Income
+6,210
+Investment income from
+Main Reasons for Change
+Change
+RMB million
+2016
+For the year ended 31 December
+1,708
+2015
+263.6%
+35.5%
+securities at fair value
+through profit or loss
+24
+Investment Income
+24
+Investment income from
+37,243
+27,476
+available-for-sale securities
+resulting from the growing scale of
+trading bonds, mainly including
+commercial papers and
+Management Discussion and Analysis
+An increase in interest income
+China Life Insurance Company Limited Annual Report 2016
+11.9%
+-81.3%
+52525
+Investment income*
+109,147
+97,582
+Net realised gains on
+6,038
+32,297
+bonds
+financial assets
+Net fair value gains/(losses)
+(7,094)
+10,209
+N/A
+through profit or loss
+Other income
+6,460
+5,060
+27.7%
+market, the Company took efforts
+to develop health insurance business
+Further optimization of business
+structure and a decrease in certain
+high claims settlement business
+Please refer to the table below
+Substantial decrease in spread
+income of stocks and funds
+influenced by the fluctuation of the
+capital market
+Substantial decrease in spread
+income of stocks influenced by the
+fluctuation of the capital market
+An increase in commission fees
+earned from CLP&C
+23
+25252
+corporate
+109,147
+An increase in the allocation of
+bonds, but with a decline of the
+rate of return for reinvestments and
+newly added allocations under the
+low interest rate environment
+A decrease in negotiated deposits,
+and a decline of the rate of return
+for newly added allocations under
+the low interest rate environment
+An increase in the investments of
+other loans
+2016
+2015
+Change
+Main Reasons for Change
+Insurance benefits and claims 407,045
+352,219
+15.6%
+expenses
+Life insurance business
+360,922
+313,612
+15.1%
+Health insurance business
+40,513
+34,398
+17.8%
+Accident insurance
+5,610
+4,209
+33.3%
+business
+Investment contract benefits
+5,316
+2,264
+134.8%
+RMB million
+An increase in dividend income
+from available-for-sale equity
+investment
+For the year ended 31 December
+2.
+An increase in the scale of securities
+purchased under agreements to
+resell
+Investment income from
+24,854
+24,541
+1.3%
+held-to-maturity securities
+Investment income from
+bank deposits
+27,851
+32,285
+-13.7%
+Investment income from
+loans
+12,018
+11,115
+8.1%
+Other investment income
+971
+457
+112.5%
+Total
+4.7%
+97,582
+11.9%
+China Life Insurance Company Limited
+Annual Report 2016
+Management Discussion and Analysis
+Benefits, Claims and Expenses
+13,365
+2016
+Accident insurance business
+Gross investment yield including net share of profit
+4.61%
+4.45%
+4.56%
+6.39%
+4.65%
+6.35%
+of associates and joint ventures
+Notes:
+1.
+The figures for the same period of last year were adjusted on the same basis.
+2.
+3.
+Net investment income include interest income from debt investments, interest income from deposits,
+dividend and bonus from equity investments, interest income from loans, net income from investment
+properties, etc.
+Gross investment income = Net investment income + Net realized gains/(losses) on financial assets + Net fair
+value gains/(losses) through profit or loss
+4.
+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
+5.
+Net investment yield = Net investment income/((Investment assets at the beginning of the period
+Investment assets at the end of the period)/2)
++
+6.
+7.
+Gross investment yield = Gross investment income/((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 = (Gross investment
+income + 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)
+19
+Gross investment yield
+52525
+Net investment yield'
+114,006
+For the
+year
+ended 31 December
+China Life Insurance Company Limited
+Annual Report 2016
+Management Discussion and Analysis
+RMB million
+2016
+2015¹
+Net investment income²
+109,207
+97,654
++Net realized gains on financial assets
+6,038
+32,297
++Net fair value gains/(losses) through profit or loss
+(7,094)
+10,209
+Gross investment income³
+108,151
+140,160
++Net share of profit of associates and joint ventures
+5,855
+1,974
+Gross investment income including net share of profit
+of associates and joint ventures*
+142,134
+13,991
+25252
+Management Discussion and Analysis
+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
+Policyholder dividends
+2015
+Change
+Main Reasons for Change
+Net premiums earned
+426,230
+362,301
+17.6%
+Life insurance business
+361,649
+308,081
+17.4%
+Fast growth in the first-year regular
+premiums and renewals
+Health insurance business
+50,590
+40,855
+23.8%
+Catering to the demand of the
+Management Discussion and Analysis
+China Life Insurance Company Limited Annual Report 2016
+Annual Report 2016
+22
+In 2016, the balances of investment in fixed income assets and equity assets increased from the end
+of 2015. As the interest rate generally remained at a low level last year, the yields of the Company's
+new investment in fixed income assets decreased, dividend income from equity investment increased
+as compared to last year and the overall interest income from investment portfolios achieved a
+stable growth. As affected by the stock market, the spread income and the fair value gains/(losses)
+through profit or loss decreased materially from last year, impairment losses increased, and the
+gross investment income decreased as compared to last year. During the Reporting Period, the
+net investment yield was 4.61%; the gross investment yield was 4.56%, and the gross investment
+yield including net share of profit of associates and joint ventures was 4.65%. The comprehensive
+investment yield taking into account the current net fair value changes of available-for-sale securities
+recognized in other comprehensive income* was 2.43%.
+3.
+Major Investments
+On 29 February 2016, the Company entered into a share purchase agreement with Citigroup
+Inc. ("Citigroup") and an equity transfer agreement with IBM Credit LLC (“IBM Credit") and
+Citigroup. Pursuant to such agreements, the Company purchased from Citigroup and IBM
+Credit an aggregate of 3,648,276,645 shares of 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 on 29 August 2016,
+the Company held 6,728,756,097 shares of CGB, representing 43.686% of the issued share capital
+of CGB, and became its single largest shareholder. CGB has a stronger differentiating competitive
+edge in retail, small and micro businesses and other sectors and a well-developed infrastructure
+construction, which enables it to have a sound foundation for accelerating its development in the
+future. CGB is highly complementary with the Company in aspects such as asset size, customers and
+business. After the Company becomes the single largest shareholder of CGB, both parties will have
+opportunities to collaborate for integrated development in various aspects, including sales channels,
+customer services and mid-office and back-office operations, which will optimize the operating
+efficiency, enhance customer loyalty and the capability of integrated financial services, and thereby
+increasing the comprehensive competitiveness and risk resistance ability. For details, please refer to
+the announcement published by the Company on the website of the SSE on 1 March 2016 and the
+announcement on the HKExnews website of the Hong Kong Exchanges and Clearing Limited on 29
+February 2016.
+During the Reporting Period, there was no other material equity investment or non-equity investment
+of the Company that is subject to disclosure requirements.
+20
+20
+Comprehensive investment yield = (Gross investment income + Current net fair value changes of available-for-sale securities
+recognized in other comprehensive income)/((Investment assets at the beginning of the period + Investment assets at the end of
+the period)/2)
+China Life Insurance Company Limited
+Annual Report 2016
+Management Discussion and Analysis
+(IV) Operational Support and Customer Services
+With adherence to the “customer-oriented” operating concept and implementing the product diversification
+strategy with great efforts so as to meet multifarious demands of customers, the Company has been
+continuously committed to improve the customer experience and to work on the upgrades and development
+of our services. By the end of 2016, we had provided insurance services to over 500 million customers. In
+order to provide more convenient and efficient services, the Company actively applied technologies such as
+mobile Internet, big data and cloud computing. “E-Bao Mobile Customer Services System", the Company's
+on-line service system, has a total number of binding users of 10.99 million, and the number of online
+applications available on it has reached 49. Based on WeChat and other Internet channels, the Company
+launched "E-Settlement”, a mobile-based claims settlement service. With this service, the customers are
+able to remotely apply for claims settlement by themselves, which makes claims settlement service "available
+on fingertips”. In line with the social security insurance, a pilot program of direct payment for claims was
+introduced in various areas, which enabled customers to enjoy “five exemption” services (namely, exemption
+from case reporting, application and counter services, etc.) at home. Moreover, the Company entered into an
+agreement with the Institute of Medical Information, Chinese Academy of Medical Sciences, the National
+Health and Family Planning Commission of the People's Republic of China, to carry out offsite settlement
+and reimbursement for medical services across provinces under the New Village Cooperative Medical
+Scheme. As accredited by the CRM Committee of the China Federation of IT Promotion, the “95519” Call
+Center received the award of “China's Best Call Center of Year 2015-2016”. During the Reporting Period,
+the Company promptly responded to 31 critical emergency incidents, including the tour bus accident in
+Taiwan and the debris flow in Zhejiang Province, launched contingency plans immediately, simplified the
+procedures and sped up the process of claims settlement, actively performing the responsibility as a member
+of the insurance industry.
+The Company continuously paid attention to the multifarious demands of customers, and strived to build
+customer service ecosphere in order to improve customer experience. During the Reporting Period, the
+Company held 12,579 activities in total, such as the 10th "Hand-in-Hand” series of customer service
+activities, the 6th "Little Painters of China Life", China Life "Run for 700", "China Life Lectures from
+Gurus" and the "Dream Project”, providing services for more than 7.67 million customers, which helped to
+maintain a good interaction with customers. Meanwhile, the Company continuously increased the global
+emergency services and VIP services in order to satisfy the multi-layer and personalized service requirements
+of customers.
+牵手国寿健康同行
+21
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+In 2016, the Company pushed forward in full swing the establishment of a new generation of the integrated
+business processing system, a customer-based, responsive and safe and reliable system characterized by
+the application of the Internet. The Company is committed to improving its management and operation
+ability through process evolution. Starting from each aspect with respect to the operation and management
+of the life insurance business, and focusing on the improvement of customer experience and development
+of Internet services, the Company fully advanced the re-engineering and optimization of management
+and operation processes, effectively promoted the transformation of the Company's business services to a
+more Internet-based service mode, and continuously enhanced the intensification and intelligent operation
+capability of the Company.
+(V) Internal Control and Risk Management
+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 and commissions including the
+Ministry of Finance, etc., and the "Basic Standards of Internal Control for Insurance Companies" issued
+by the CIRC. Pursuant to the requirements of the CIRC with respect to 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 early-warning classification management, in order to enhance
+the Company's ability of solvency risk management. The Company received an industry-leading score in
+the Solvency Aligned Risk Management Requirements and Assessment ("SARMRA”) conducted by the
+CIRC in 2016. 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.
+In 2016, the Company actively utilized its internal audit and supervision function. In addition to
+conducting regular audits such as economic responsibility auditing and audit on connected transactions, the
+Company also conducted special audit projects based on a risk-oriented approach, focusing on audits on
+the management of orphan policies, supplementary major medical insurance and solvency risk management
+system. The Company further strengthened the rectification actions with respect to issues identified from
+audits, so as to improve the Company's audit rectification system and ensure that the Company operates in
+compliance with legal requirements.
+22
+China Life Insurance Company Limited
+15,883
+An increase in underwriting costs
+for first-year regular premium
+business resulting from the growth
+-52.6%
+joint ventures and an increase in
+China Life Insurance Company Limited
+associates' interests
+27
+27
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+28
+2.
+joint ventures
+Major Liabilities
+As at 31
+December
+2016
+As at 31
+December
+2015
+Change
+Main Reasons for Change
+Insurance contracts*
+1,847,986
+1,715,985
+7.7%
+The accumulation of insurance
+Investment contracts
+RMB million
+New investments in associates and
+153.9%
+47,175
+43,538
+21,503
+102.5%
+An increase in the scale of trading
+bonds, mainly including commercial
+papers and corporate bonds
+The needs for liquidity management
+agreements to resell
+Cash and cash equivalents
+67,046
+76,096
+Loans
+226,573
+207,267
+-11.9%
+9.3%
+The needs for liquidity management
+An increase in the investments of
+policy loans and other loans
+Statutory deposits - restricted
+Investment properties
+6,333
+6,333
+1,191
+1,237
+-3.7%
+The depreciation of investment
+properties
+Investments in associates and
+119,766
+195,706
+84,106
+132.7%
+Securities sold under
+-44.1%
+Redemption of certain subordinated
+term debts
+Deferred tax liabilities
+7,768
+16,953
+-54.2%
+Affected by a decrease in the fair
+value of available-for-sale securities
+Note: 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 USD948 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 six-month bank loan of EUR100 million with a maturity date on 9 June 2017. All of the above are
+fixed rate loans.
+* Insurance Contracts
+Life Insurance
+Health Insurance
+Accident Insurance
+Total of Insurance Contracts
+RMB million
+As at
+As at
+31 December 2016 31 December 2015
+1,762,363
+77,837
+7,786
+1,652,469
+57,024
+6,492
+1,847,986
+1,715,985
+As at the date of the statement of financial position, the reserves of various insurance contracts of the
+Company passed the liability adequacy test.
+67,994
+Securities purchased under
+37,998
+An increase in borrowings in foreign
+currency
+81,088
+31,354
+158.6%
+agreements to repurchase
+Policyholder dividends
+87,725
+107,774
+-18.6%
+payable
+liabilities from new insurance
+business and renewal business
+An increase in the scale of certain
+investment contract accounts
+The needs for liquidity management
+A decrease in investment yield from
+participating accounts
+Annuity and other insurance
+39,038
+30,092
+29.7%
+An increase in maturities payable
+balances payable
+Interest-bearing loans and
+16,170
+2,643
+511.8%
+other borrowings
+Note
+Bonds payable
+through profit or loss
+51.6%
+137,990
+31,854
+27,458
+Other expenses
+4,859
+7,428
+16.0%
+-34.6%
+Statutory insurance fund
+contribution
+1,048
+743
+25
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+3.
+Profit before Income Tax
+For the
+year ended 31 December
+2016
+2015
+Change
+Life insurance business
+14,732
+40,921
+-64.0%
+Administrative expenses
+RMB million
+10.3%
+4,767
+resulting from
+participation in profits
+Underwriting and policy
+52,022
+35,569
+46.3%
+acquisition costs
+Finance costs
+An increase in maturities payable
+and annuity payment of life
+insurance business
+An increase in the scale of health
+insurance business
+Fluctuation in claims expenses of
+41.0%
+certain business
+An increase in the scale of
+investment contracts
+A decrease in investment yield from
+participating accounts
+of the Company's business and
+the optimization of its business
+structure
+An increase in interest income from
+securities sold under agreements to
+repurchase
+The growth of business
+Since 1 May 2016, the Company's
+income from financial and insurance
+services is subject to the value-added
+tax instead of the business tax
+The growth of insurance business
+4,320
+33,491
+Main Reasons for Change
+contracts
+As at 31
+December
+2016
+As at 31
+December
+Change
+Main Reasons for Change
+2015
+Investment assets
+2,453,283
+2,287,639
+7.2%
+Term deposits
+538,325
+562,622
+-4.3%
+A decrease in the scale of negotiated
+deposits
+Held-to-maturity securities
+594,730
+504,075
+18.0%
+An increase in the allocation of
+bonds
+Available-for-sale securities
+766,423
+770,516
+-0.5%
+Securities at fair value
+209,124
+RMB million
+A decrease in gross investment
+income and the impact of the
+update of discount rate assumption
+of reserves of traditional insurance
+Major Assets
+(II) Analysis of Major Items of the Consolidated Statement of Financial Position
+Improvement on health insurance
+business structure
+An increase in claims expenses
+Health insurance business
+2,093
+557
+275.8%
+Accident insurance business
+852
+Other businesses
+6,165
+1,753
+2,700
+-51.4%
+128.3%
+Affected by an increase in net share
+of profit of associates and joint
+ventures
+During the Reporting Period, income tax of the Company was RMB4,257 million, a year-on-year
+decrease of 60.4%. This was primarily due to the combined impact of the taxable income and deferred
+tax.
+4.
+Income Tax
+5.
+Net Profit
+During the Reporting Period, net profit attributable to equity holders of the Company was
+RMB19,127 million, a year-on-year decrease of 44.9%. This was primarily due to the decrease in gross
+investment income and the impact of the update of discount rate assumption of reserves of traditional
+insurance contracts.
+26
+26
+Annual Report 2016
+Management Discussion and Analysis
+1.
+2.
+Executive Directors
+15,000
+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.
+China Life Insurance Company Limited
+Annual Report 2016
+VIII FUTURE PROSPECT AND RISK ANALYSIS
+In 2017, 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:
+(1) Macro-economic Risks
+In 2017, given the rising “de-globalization” ideology and protectionism tendency, unclear policies for major
+economies and their spillover effects as well as significantly increasing instabilities and uncertainties, the
+global economy is expected to continue its slow growth. Overall, we estimate the domestic economy will
+achieve a slower but stable performance with good momentum for growth, however, with a shaky ground to
+stabilize our economy which is in a critical stage of overcoming obstacles, a lot of problems and difficulties
+will arise during our economic development. 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, asset management and solvency
+in various aspects.
+(2) Business Risks
+Currently, China's financial market is susceptible to high risks. Although systematic risks are generally
+in control, risks such as non-performing assets risk, liquidity risk and bond default risk are cumulating.
+Meanwhile, the potential long-term low interest rate environment will put more challenges on the
+management of the Company's assets and liabilities, and the Company will need to make more efforts to
+prevent risks in relation to negative interest spread and mismatching of assets and liabilities. The CIRC
+has greatly advocated the essential function of protection of the insurance industry, and has promulgated
+regulatory policies with respect to adjusting and regulating the development of short- and medium-term
+insurance business, asset management and others. Affected by these factors, the Company will have certain
+pressures to maintain rapid business growth with growing 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.
+(3) Investment Risks
+In light of the complexity of the domestic and international economies, as well as the greater volatility of
+the financial markets, the market risk related to investment portfolios and credit risk may increase; and if
+the low interest rate environment continues for a long time, the Company will face more challenges on asset
+allocation, and the risk of assets and liabilities mismatching will increase. Meanwhile, the Company may
+develop new investment channels, utilize new investment vehicles or appoint new investment managers. All
+of the above may 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 subject to foreign exchange risks due to fluctuation in exchange rate.
+33
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+In 2017, the Company will maintain its strategic consistency and have a tactic flexibility, stick to the
+guideline of supply-side reform, and strictly follow the protection coverage function of insurance.
+Meanwhile, by following the operating guideline of “prioritizing value, strengthening sales force, optimizing
+business structure, achieving stable growth and safeguarding against risks", the Company will continually
+facilitate the implementation of “Three Strategies" in relation to development of individual insurance
+and markets in large- and medium-sized cities and rural areas, push forward the three critical tasks of
+accelerated growth, transformation and upgrade and risk prevention and control, achieve all annual targets
+for performance assessment in a wrap-around way by means of considerate planning, target execution and
+hardwork, so as to relentlessly improve the Company's core competitiveness and sustainable development
+capability and strive to build a world-class life insurance company. Given the above mentioned risk factors,
+the Company will firmly adhere to its established development strategies, and fine-tune its business
+development objectives in accordance with changing situations to an appropriate extent, so as to efficiently
+respond to challenges from market competitors and changes in the external environment.
+It is expected that the Company will have sufficient capital to meet its insurance business expenditures and
+new investment needs in general in 2017. At the same time, if there is any further capital demands, the
+Company will make corresponding financing arrangements based on capital market conditions to further
+implement its future business development strategies.
+34
+34
+China Life Insurance Company Limited
+Annual Report 2016
+VII STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+report.
+Note: For details, please refer to Note 8 and Note 33(e) in the Notes to the Consolidated Financial Statements in this annual
+9,504
+Company Name
+Major Business Scope
+China Life Asset
+Management Company
+Limited
+China Life Pension
+Company Limited
+China Life Property and
+Casualty Insurance
+Company Limited
+Management and utilization of proprietary funds;
+acting as agent or trustee for asset management
+business; consulting business relevant to the above
+businesses; other asset management business
+permitted by applicable PRC laws and regulations
+Group pension insurance and annuity; individual
+pension insurance and annuity; short-term health
+insurance; accident insurance; reinsurance of the
+above insurance businesses; business for the use of
+insurance funds that are permitted by applicable
+PRC laws and regulations; pension insurance asset
+management product business; management of
+funds in RMB or foreign currency as entrusted
+by entrusting parties for the retirement benefit
+purpose; other businesses permitted by the 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
+32
+3,400
+70.74% is held 3,697
+Report of the Board of Directors
+3,070
+by the Company,
+and 3.53% is
+held by AMC
+40%
+72,773
+19,823
+1,157
+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% 2,047,592 105,974
+143
+From left to right:
+Mr. Tang Xin, Mr. Chang Tso Tung Stephen, Mr. Xu Haifeng, Mr. Xu Hengping, Mr. Lin Dairen,
+Mr. Yang Mingsheng, Mr. Miao Jianmin, Mr. Wang Sidong, Mr. Liu Jiade, Mr. Robinson Drake Pike,
+Ms. Leung Oi-Sie Elsie
+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 sections of “Management Discussion and
+Analysis” and “Internal Control and Risk Management” in this annual report. These discussions form
+the "Report of the Board of Directors".
+(II) Environmental policies and performance of the Company
+part
+of
+The Company responded to the call from the PRC government for energy saving and emission reduction,
+put into practice the concept of green development and actively promoted green operations and green
+services. Through the enhancement of all employees' awareness on energy saving, adoption of various energy
+saving technologies and promotion of energy saving measures, etc., the Company greatly put forward any
+work associated with energy saving and emission reduction. While maintaining its business development
+pace, the Company reduced its energy consumption in the head office, the level of its paperless offices was
+increasingly enhanced and the utilization rate of intelligent communication equipment was improved in an
+efficient and effective manner, which as a result provided its customers with products and services that are
+more user-friendly, environmental-friendly and high-quality.
+Local branches of the Company reported and submitted to the head office the measuring data of water,
+electricity, gas and heating supplies on a quarterly basis in strict compliance with the "Provisional Measures
+for the Administration of Energy Saving and Emission Reduction", so that the Company can better monitor
+energy consumption data, and manage and control energy consumption in a reasonable manner.
+By taking advantage of the new technological means of Internet platform, the Company launched electronic
+documents, electronic insurance policies and office automation to effectively save the paper consumption
+resulting from paper cheques, letters and insurance policies. The Company constantly improved its 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.
+The Company established the Research & Development Center and Data Center to form a centralized
+operational services system, which lowered carbon emissions while enhancing its efficiency. The Company
+strengthened the management of office buildings of its head office, and established a management system
+for energy saving to save energy, reduce wastages and optimize procedures, thus cutting down energy
+consumption and carbon emissions in every aspect of operation.
+China Life Insurance Company Limited
+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.
+Annual Report 2016
+(III) Compliance by the Company with the relevant laws and regulations that have a significant impact
+on services
+The Company adhered to the principles of being trustworthy, assuming risks, emphasizing
+and being legal compliant, and insisted on 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",
+seriously applied the "Notice on Comprehensively Launching a Pilot Project for the Levy of Value added
+Tax in Place of Business Tax” published by the Ministry of Finance of the PRC, the “Notice on Matters
+Relevant to Further Improving the Actuarial System for Personal Insurance���, the “Notice on Strengthening
+the Supervision on Personal Insurance Products" and the "Notice on Issues concerning the Administrative
+Licensing for Banking Sideline Insurance Agents" published by the CIRC. The Company vigorously
+developed risk protection and long-term savings businesses, constantly improved the relevant rules and
+mechanisms concerning product design, business operation and taxation management, and offered full
+cooperation, support and protection for the three strategic missions of the Company - speedy development,
+transformation and upgrade, and prevention and control of risks.
+(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 established a customer-
+oriented business model in order to create value for its customers. As at the end of the Reporting Period,
+the Company provided insurance services for more than 500 million customers. The result of customer
+satisfaction increased by 1.14% year-on-year, and the result of customer loyalty remained stable.
+With the customers' demands in mind, the Company consistently broadened its value-added services and
+continued to improve customer experience. In 2016, the Company further promoted the global VIP care
+services, and constantly improved the services including the international travel and medical emergency
+services, the PRC medical emergency services, 12-hour health consultation hotlines and the global VIP
+benefit services, with a view to satisfying the multi-layer and personalized service requirements of its
+customers. The Company organized the 10th "Hand-in-Hand” series of customer service activities, which
+amounted to a total of 12,579 activities, serving approximately 7.67 million customers. Such activities
+mainly included the following: by conducing the 10th China Life customer festival activities under the
+theme of “Hand-in-hand with China Life for Better Health All Along" across China, the Company
+constantly paid attention to the health of customers; by conducting a variety of outdoor running and hiking
+activities, the Company was committed to establishing a platform of “enjoying healthy life through scientific
+sports" for customers; by conducting the “China Life Lectures from Gurus” activity, the Company enhanced
+the knowledge of its customers on healthy life, scientific sports and first aid; by organizing the 6th “Little
+Painters of China Life” series of activities, the Company was consistently concerned about the growth
+and education of teenagers and children; by organizing series of activities such as the “Dream Project",
+the Company assisted its customers in realizing their beautiful dreams. The Company also continuously
+improved its services and deepened the customers' understanding through a variety of customer activities,
+thus maintaining good interaction with its customers.
+37
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Report of the Board of Directors
+Report of the Board of Directors
+991
+PRINCIPAL BUSINESS
+1.
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+Yang Mingsheng (Chairman)
+Lin Dairen
+Xu Hengping
+Non-executive Directors
+Independent Directors
+Xu Haifeng
+Miao Jianmin
+Zhang Xiangxian
+Wang Sidong
+Liu Jiade
+Anthony Francis Neoh
+Chang Tso Tung Stephen
+Huang Yiping
+Robinson Drake Pike
+2.
+Tang Xin
+(resigned with effect from 3 August 2016 due to age reason)
+(retired upon expiry of the term with effect from 20 July 2016)
+(resigned with effect from 7 March 2016 pursuant to the
+relevant policies)
+(appointed as Director with effect from 7 March 2016)
+(appointed as Director with effect from 20 July 2016)
+35
+52525
+25252
+36
+36
+China Life Insurance Company Limited Annual Report 2016
+Report of the Board of Directors
+Leung Oi-Sie Elsie
+3.
+7,548
+60%
+RMB million
+2016
+2015
+Change
+Main Reasons for Change
+Net cash inflow/(outflow)
+from operating activities
+89,098
+(18,811)
+N/A
+Net cash inflow/(outflow)
+from investing activities
+Net cash inflow/(outflow)
+from financing activities
+(104,703)
+67,047
+N/A
+An increase in the insurance income
+and the growth in the scale of the
+investment contract accounts
+The needs for investment
+management
+6,270
+(19,415)
+N/A
+The needs for liquidity management
+Foreign exchange gains/
+285
+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
+3.
+3.
+Equity Holders' Equity
+China Life Insurance Company Limited
+Annual Report 2016
+Management Discussion and Analysis
+As at the end of the Reporting Period, equity holders' equity was RMB303,621 million, a 5.9%
+decrease from the end of 2015. This was primarily due to the impact of profit distribution and total
+comprehensive income during the Reporting Period.
+(III) Analysis of Cash Flows
+1.
+Liquidity Sources
+Our principal cash inflows come from insurance premiums, income from non-insurance contracts,
+interest income, dividend and bonus, and proceeds from sales and maturity of financial 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.
+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 RMB67,046 million.
+In addition, the vast majority of our term deposits in 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 RMB538,325 million.
+241
+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.
+Liquidity Uses
+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 policyholder loans.
+We believe that our sources of liquidity are sufficient to meet our current cash requirements.
+29
+52525
+25252
+30
+30
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+III
+2.
+18.3%
+(losses) on cash and cash
+equivalents
+Net increase/(decrease) in
+Management Discussion and Analysis
+IV
+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 2016, the brand of China Life has been ranked as
+one of the “World's 500 Most Influential Brands” published by World Brand Lab for ten consecutive years. The
+brand was also ranked as No. 4 on the "China's 500 Most Valuable Brands" list, with brand value estimated at
+RMB253,628 million, ranking No. 1 among the insurance industry.
+The Company has an extensive services and distribution network, with its business outlets and services
+counters covering both urban and rural areas. It has 1,495,000 exclusive individual agents, 85,000 direct sales
+representatives and 234,000 sales representatives at those bancassurance outlets, which forms a unique distribution
+and services network in China and makes the Company become the life insurance service provider close to
+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 an extensive customer base. As at 31 December 2016, the Company had approximately 246
+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 2016, the registered capital and the total
+assets of the Company were RMB28,265 million and RMB2,696,951 million, respectively, which ranked No. 1
+in China's life insurance industry. As at the end of 2016, the total market capitalization of the Company was
+USD91.6 billion, which ranked No. 3 among all listed insurance companies in the world.
+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. As at 31 December 2016, the investment assets reached RMB2,453,283 million, an increase of 7.2%
+from the end of 2015.
+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 teams 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. During the Reporting Period, there was no movement of these personnel which might have
+material impacts on the Company.
+V
+SALE OF MATERIAL ASSETS AND EQUITY
+Annual Report 2016
+During the Reporting Period, there was no sale of material assets and equity of the Company.
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Management Discussion and Analysis
+VI BUSINESS OPERATIONS OF OUR MAIN SUBSIDIARIES AND AFFILIATES
+RMB million
+Registered
+Capital
+Shareholding Total Assets
+Net Assets
+Net Profit
+4,000
+31
+8,284
+China Life Insurance Company Limited
+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.
+(9,050)
+29,062
+N/A
+cash and cash equivalents
+SOLVENCY RATIO
+An insurance company shall have the capital commensurate with its risks and business scale. According to the
+nature and capacity of loss absorption by capital, the capital of an insurance company is classified into the core
+capital and the supplementary capital. The core solvency ratio is the ratio of core capital to minimum capital,
+which reflects the adequacy of the core capital of an insurance company. The comprehensive solvency ratio is the
+ratio of the sum of core capital and supplementary capital to minimum capital, which reflects the overall capital
+adequacy of an insurance company. The following table shows our solvency ratios as at the end of the Reporting
+Period:
+Core capital
+Actual capital
+Minimum capital
+Core solvency ratio
+Comprehensive solvency ratio
+The decrease in the Company's solvency ratio was mainly due to the impact of the higher minimum capital
+requirement as a result of the growth of the Company's insurance business.
+As at
+31 December 2016 31 December 2015
+(unaudited)
+639,396
+633,779
+677,768
+702,076
+228,080
+195,553
+280.34%
+324.10%
+297.16%
+359.02%
+RMB million
+As at
+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 mobile Internet, big data
+and cloud computing, in a bid to enhance the service capacity of e-channel, call center and sales force and to
+improve 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.
+Management Discussion and Analysis
+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, regular job rotation, local office
+secondment, base platform exercises, and cultivation of professional leaders and talents. The Company
+attached importance to humanistic concern by safeguarding the legitimate rights and interest of employees
+in a practical manner, encouraging and guiding employees to arrange their casual leave and annual leave in a
+scientific way, with an aim to achieving work-life balance.
+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 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. According to
+the spirit of alleviating poverty proposed at the Central Poverty Alleviation and Development Conference,
+the Company formulated a special plan for warm families for 2016-2018 so as to establish and improve a
+multi-level assistance and support system for needy employees.
+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
+(I) In accordance with Article 211 of the Articles of Association, the basic principles of the Company's profit
+distribution are as follows:
+38
+1. The Company shall take the investment return for investors into full account and allocate the required
+percentage of the Company's realized distributable profits to shareholders as dividends each year;
+(V) Relationship between the Company and its employees
+Financial report audit fee
+Fees (RMB million)
+Service/Nature
+Remuneration paid by China Life Insurance Company Limited to the auditors in 2016 was as follows:
+Resolutions were passed at the First Extraordinary General Meeting 2015 and the 2015 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 2016, respectively. Ernst & Young Hua Ming LLP and Ernst & Young have been serving as
+the Company's auditors for four consecutive years.
+Due to its requirements for project management, Ernst & Young resigned as the auditor of the Company for US
+Form 20-F, with effect from the conclusion of the First Extraordinary General Meeting 2016 of the Company.
+Following the approval by the shareholders of the Company at the First Extraordinary General Meeting 2016,
+the auditor of the Company responsible for auditing the US Form 20-F for the year 2016 has been changed from
+Ernst & Young to Ernst & Young Hua Ming LLP, who shall hold office until the conclusion of the 2016 Annual
+General Meeting of the Company. Ernst & Young remains as the Hong Kong auditor of the Company. Ernst &
+Young has confirmed in writing that there is no matter relating to its resignation as the auditor of the Company
+for US Form 20-F that needs to be brought to the attention of the shareholders of the Company. There is also no
+disagreement between the Company and Ernst & Young.
+Internal control audit fee
+25. AUDITORS
+Report of the Board of Directors
+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.
+44
+At the 2016 Annual General Meeting to be held on 31 May 2017, the Board will propose a resolution to
+re-appoint Ernst & Young Hua Ming LLP as the PRC auditor and the auditor for US Form 20-F of the Company
+for the year 2017, and Ernst & Young as the Hong Kong auditor of the Company for the year 2017.
+11.14
+China Life Insurance Company Limited Annual Report 2016
+By Order of the Board
+Yang Mingsheng
+Chairman
+Beijing, China
+23 March 2017
+1.
+1.
+China Life Insurance Company Limited
+Annual Report 2016
+Report of the Supervisory Committee
+44.54
+25252
+Period.
+43
+18. MANAGEMENT CONTRACTS
+No management or administration contracts for the whole or substantial part of any business of the Company
+were entered into during the Reporting Period.
+42
+China Life Insurance Company Limited
+Annual Report 2016
+Report of the Board of Directors
+19. MATERIAL GUARANTEES
+Independent Directors of the Company have rendered their independent opinions on the Company's external
+guarantees, and are of the view that:
+(1) during the Reporting Period, the Company did not provide any external
+(2)
+guarantee;
+52525
+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 Related Parties and Issues in relation to External Guarantees Granted by Listed Companies";
+and
+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.
+21. 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 2016.
+22. MAJOR CUSTOMERS
+In 2016, 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.
+23. SUFFICIENCY OF PUBLIC FLOAT
+Based on the information publicly available to the Company and within the knowledge of the Directors as at the
+Latest Practicable Date (23 March 2017), 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.
+24. COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
+The Company has applied the principles of the Corporate Governance Code (the “CG Code”) as set out in
+Appendix 14 to the Listing Rules, and has complied with all code provisions of the CG Code during the Reporting
+From left to right:
+(3) the Company has expressly provided in its Articles of Association the level of authority required for
+approving external guarantees and the approval procedures.
+Ms. Wang Cuifei, Ms. Xiong Junhong,
+Mr. Miao Ping, Mr. Shi Xiangming,
+Mr. Zhan Zhong
+3.
+2.
+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 system.
+By Order of the Supervisory Committee
+Miao Ping
+Chairman of the Supervisory Committee
+Beijing, China
+23 March 2017
+47
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+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 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.
+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 2017-2019 framework agreements entered into
+by AMP with the Company, Pension Company, CLIC and CLP&C, respectively. Such agreements and
+the transactions thereunder have been approved by the First Extraordinary General Meeting 2016 of the
+Company held on 27 December 2016. AMP is a non-wholly owned subsidiary of AMC and is therefore a
+connected subsidiary of the Company.
+In addition, the asset management agreement for alternative investments entered into between the Company
+and CLI and the transactions thereunder 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 the 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.
+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.
+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.
+48
+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.
+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 on the financial statements for 2016 and have issued unqualified auditors'
+reports in accordance with the China Standards on Auditing of PRC Certified Public Accountants and the
+International Standards on Auditing, respectively.
+5.
+4.
+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.
+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 2016, the fifth session of the Supervisory
+Committee held 5 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 2016, the Supervisory Committee attended the 2015 Annual General Meeting and the First
+Extraordinary General Meeting 2016 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.
+45
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Report of the Supervisory Committee
+4.
+5.
+ACTIVITIES OF THE SUPERVISORY COMMITTEE
+6.
+Actively conducting research and investigation activities and training courses and performing their
+supervisory function. From 29 November to 2 December 2016, Mr. Miao Ping, the Chairman of the
+Supervisory Committee, carried out investigation and research with the members of the Supervisory
+Committee on local branches of the Company in Guizhou Province and southeast Guizhou Province, as
+well as a local sub-branch of the Company in Tianzhu County, listened to their business reports, held in-
+depth conferences with their respective key management, conducted an on-site investigation and research on
+intra-city counters of the customer service center of Guiyang branch, and the customer service center of each
+of the southeast Guizhou branch and Tianzhu sub-branch, for the purpose of understanding the business
+development and the risk prevention and control of the local branches. 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.
+Participating the activity of the “Assessment and Selection of the Supervisory Committees of Listed
+Companies with the Best Practice”. In order to strengthen the internal control compliance, audit supervision
+and risk management of the Company and further enhance the supervisory capability and duty performance
+effect of the Supervisory Committee, the Supervisory Committee of the Company participated in the
+activity of the "Assessment and Selection of the Supervisory Committees of Listed Companies with the Best
+Practice” jointly organized by the Listed Companies Association of the PRC, the Shanghai Stock Exchange
+and the Shenzhen Stock Exchange, and was named as one of the "Top 20 Supervisory Committees of Listed
+Companies with the Best Practice” and elected as an “Excellent Case for Supervisory Committees of Listed
+Companies with the Best Practice".
+46
+China Life Insurance Company Limited
+Annual Report 2016
+2.
+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. 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.
+2.
+3.
+Strengthening training and constantly enhancing duty performance of the Supervisors. In 2016, Mr. Miao
+Ping, the Chairman of the Supervisory Committee, attended the eighth special training course of 2016
+for directors and supervisors of listed companies within the territory of Beijing as organized by the Listed
+Companies Association of Beijing, which gave him the opportunity to learn and understand the businesses of
+listed companies, such as the regulatory overview of listed companies within the territory of Beijing, merger,
+acquisition and restructuring of enterprises during the reform of state-owned enterprises, merger, acquisition
+and restructuring and corporate growth, overseas strategy of enterprises, overseas investment trend and
+operation of the PRC enterprises, and the strategy of “One Belt One Road” and internationalization.
+Mr. Zhan Zhong and Ms. Wang Cuifei attended the first special training course of 2016 for directors
+and supervisors of listed companies within the territory of Beijing as organized by the Listed Companies
+Association of Beijing, which gave them the opportunity to learn and understand courses on the regulatory
+overview of listed companies within the territory of Beijing and the relevant issues and requirements, system
+of regulatory laws and regulations of listed companies, as well as the information disclosure standards,
+economic development trend, and innovative transformation of listed companies, etc.
+17. PRE-EMPTIVE RIGHTS AND ARRANGEMENTS FOR SHARE OPTIONS
+Report of the Supervisory Committee
+16. DISCLOSURE OF INTERESTS OF DIRECTORS, SUPERVISORS AND THE CHIEF
+EXECUTIVE IN THE SHARES OF THE COMPANY
+In accordance with the profit distribution plan for the year 2016 approved by the Board on 23
+March 2017, with the appropriation to its discretionary surplus reserve fund of RMB1,927 million
+(10% of the net profit for 2016), the Company, based on 28,264,705,000 shares in issue, proposed
+to distribute cash dividends amounting to RMB6,784 million to all shareholders of the Company at
+RMB0.24 per share (inclusive of tax). The foregoing profit distribution plan is subject to the approval
+by the 2016 Annual General Meeting to be held on 31 May 2017 (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.
+No public reserve capitalization is provided for in the profit distribution plan for the current financial
+year.
+40
+40
+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 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.
+The dividend distribution of the Company for the recent 3 years is as follows:
+RMB million
+Number of
+bonus stocks
+per
+ten shares (shares)
+Amount of
+dividends per
+ten shares (RMB)
+(including tax)
+Transfer of
+public reserve
+into share
+capital per ten
+Amount of
+cash dividends
+shares (shares)
+(including tax)
+Net profit
+attributable to
+equity holders of
+the Company in
+the consolidated
+statements for
+the year in which
+dividends were
+distributed
+Percentage of
+amount of
+cash dividends
+in net profit
+attributable to
+equity holders
+of the Company
+in the consolidated
+statements
+22
+Profit distribution plan or public reserves capitalization plan for the year of 2016
+1.
+(IV) Profit distribution plan and public reserves capitalization plan
+Report of the Board of Directors
+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 2016.
+(II)
+China Life Insurance Company Limited
+Annual Report 2016
+Report of the Board of Directors
+2.
+The Company shall maintain a sustainable and steady profit distribution policy and at the same time
+take into consideration the Company's long-term interest, general interest of all the shareholders and
+the sustainable development of the Company;
+3.
+The Company shall give priority to cash dividends as its profit distribution manner.
+In accordance with Article 212 of the Articles of Association, the Company's profit distribution policy is as
+follows:
+1.
+2.4
+2.
+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.
+Conditions for distribution of share dividends: If the Company's operation is sound and the Board
+of Directors is of the opinion that share dividends distribution is in the interest of all the Company's
+shareholders since the Company's stock price does not match the Company's share capital, the
+Company may propose a share dividends distribution plan if the conditions for cash dividends listed
+above are satisfied.
+In addition, the Company's profit distribution is required to comply with relevant regulatory requirements.
+If the Company's core solvency ratio or comprehensive solvency ratio does not meet the minimum
+requirements, the 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.
+(III) In accordance with Article 213 of the Articles of Association, the procedures of reviewing the Company's
+profit distribution proposal is as follows:
+The Company's profit distribution proposal shall be 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.
+39
+52525
+China Life Insurance Company Limited Annual Report 2016
+3.
+4.2
+25252
+6,784
+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.
+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.
+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 9 June 2016 for the
+information on income tax in respect of the dividend distributed to A Share shareholders during the Reporting
+Period, and the announcement published by the Company on the HKExnews website of the Hong Kong
+Exchanges and Clearing Limited on 30 May 2016 for the information on income tax in respect of the dividend
+distributed to H Share shareholders during the Reporting Period.
+10. 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.
+No H Share Stock Appreciation Rights of the Company were granted or exercised in 2016. The Company will
+deal with such rights and related matters in accordance with the PRC governmental policies.
+12. 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 “Corporate Governance” in this annual report.
+41
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Report of the Board of Directors
+13. DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS
+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).
+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.
+15. DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+4.0
+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.
+The total amount of charitable donations made by the Company during the Reporting Period was approximately
+RMB142 million.
+CHARITABLE DONATIONS
+11. H SHARE STOCK APPRECIATION RIGHTS
+RESERVES
+35%
+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.
+11,871
+34,699
+34%
+11,306
+32,211
+35%
+dividends were
+distributed
+2016
+2015
+2014
+Year in which
+China Life Insurance Company Limited
+Annual Report 2016
+Report of the Board of Directors
+19,127
+4.
+5.
+6.
+7.
+CHANGES IN ACCOUNTING ESTIMATES
+The changes in accounting estimates of the Company during the Reporting Period are set out in Note 3 in the
+Notes to the Consolidated Financial Statements in this annual report.
+56
+China Life Insurance Company Limited Annual Report 2016
+Significant Events
+(4) 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 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.
+Annual Report 2016
+(5) 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 will expire on 31 December 2017. Pursuant to the agreement,
+CLI and CLWM will enter into certain daily transactions, including asset management services,
+sale
+For the year ended 31 December 2016, the management fee paid by CLI for the asset
+management services was RMB0.04 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.
+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.
+China Life Insurance Company Limited
+56
+For the year ended 31 December 2016, 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.
+25252
+Annual Report 2016
+55
+For the year ended 31 December 2016, 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 RMB0.01
+million.
+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.
+(3) Framework Agreement between CLP&C and CLWM
+For the year ended 31 December 2016, the management fee paid by CLIC for the asset
+management services was RMB0.48 million.
+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.
+(2) Framework Agreement between CLIC and CLWM
+Significant Events
+China Life Insurance Company Limited
+year
+Significant Events
+54
+ended 31 December 2016, the management fee paid by the Company for the asset
+management services was RMB0.03 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 RMB0.14
+million.
+5.
+52525
+Confirmation by auditor
+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 above transactions in relation to the formation of partnership and investment in trust scheme
+were subject to the reporting and announcement requirements but were 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 transactions.
+(III) Statement on Claims, Debt Transactions and Guarantees etc. with Related Parties outside
+the Course of its Business
+For the
+During the Reporting Period, the Company was not involved in claims, debt transactions or guarantees with
+related parties outside the course of its business.
+On 6 December 2016, AMC, as the authorized agent on behalf of the Company and CLP&C (each as
+the principal and beneficiary), entered into a trust contract with Chongqing International Trust Co.,
+Ltd. (“Chongqing Trust”)(as the trustee) for the subscription of the trust units under the Chongqing
+Trust Collective Fund Trust Scheme for the PPP Project for Qingdao Metro Line 4 (the "Trust
+Scheme") established by Chongqing Trust. Pursuant to the trust contract, the total amount of the
+trust funds under the Trust Scheme shall be RMB2,116 million. The Company and CLP&C shall
+subscribe for 2,086 million and 30 million trust units under the Trust Scheme at a consideration of
+RMB2,086 million and RMB30 million, respectively. The trust funds under the Trust Scheme will be
+ultimately used for the investment in the PPP Project for Qingdao Metro Line 4. The trust benefits
+to be distributed by Chongqing Trust to the beneficiaries are ultimately derived from the operating
+income generated from the PPP Project for Qingdao Metro Line 4 and the special subsidies provided
+by the Qingdao Municipal Government for the project every year.
+Investment in trust scheme
+On 23 November 2016, the Company, CLIC, CLP&C and China Life Chengda (Shanghai)
+Healthcare Equity Investment Management Company Limited (“CLCD") entered into a partnership
+agreement for the formation of the China Life Chengda (Shanghai) Healthcare Equity Investment
+Center (Limited Partnership) (the “Partnership”). Pursuant to the partnership agreement, the total
+capital contribution by all the partners of the Partnership shall be RMB12,010 million, of which
+RMB10 million shall be contributed by CLCD as the general partner and managing partner, and
+RMB9,000 million, RMB2,000 million and RMB1,000 million shall be contributed by each of the
+Company, CLIC and CLP&C as a limited partner. The purpose of the Partnership is to achieve
+capital appreciation through investment in enterprises or projects in healthcare and related industries.
+The Partnership shall have a term of eight years. The Partnership shall distribute profits and share
+losses pursuant to the provisions of the partnership agreement. On 23 November 2016, the Company
+entered into a subscription agreement with CLCD (as the general partner) and China Life Equity
+Investment Company Limited (“CLEI”, as the manager of the Partnership) to confirm the Company's
+capital contribution to the Partnership. As CLI (a wholly-owned subsidiary of CLIC) holds 100% of
+the equity interest in CLEI, which in turn holds 100% of the equity interest in CLCD, each of CLEI
+and CLCD is a connected person of the Company.
+Formation of partnership
+1.
+(II) Other Major Connected Transactions
+Significant Events
+China Life Insurance Company Limited Annual Report 2016
+58
+58
+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:
+25252
+57
+52
+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
+(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)
+52525
+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.
+Annual Report 2016
+Framework Agreements with CLWM
+Insurance Sales Framework Agreement
+4.
+3.
+Significant Events
+China Life Insurance Company Limited
+For the year ended 31 December 2016, the Company paid CLI investment management service
+fee and performance incentive fee of RMB298 million. As at 31 December 2016, the contractual
+amount of the assets entrusted by the Company to CLI for investment and management was
+RMB148,574 million, among which, for the year ended 31 December 2016, the contractual
+amount of the assets newly entrusted by the Company was RMB50,129 million, and the
+contractual amount of the assets newly entrusted by the Company in its co-investment with
+CLIC and CLP&C was RMB9,000 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. The renewed agreement between the
+parties expired on 31 December 2015. On 3 February 2016, the Company and CLI entered
+into the 2016 asset management agreement for alternative investments, with a term from 1
+January 2016 to 30 June 2017. 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 the CIRC 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 and a performance incentive
+fee. For details as to the method of calculation of the investment management service fee and
+performance incentive fee, please refer to Note 33 in the Notes to the Consolidated Financial
+Statements. 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.
+Significant Events
+China Life Insurance Company Limited Annual Report 2016
+50
+50
+25252
+(1) Framework Agreement between the Company and CLWM
+49
+For the year ended 31 December 2016, CLIC paid AMC a service fee of RMB124 million.
+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.
+(2) Asset Management Agreement between CLIC and AMC
+For the year ended 31 December 2016, the Company paid AMC a service fee of RMB1,081
+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.
+(1) Asset Management Agreement between the Company and AMC
+Asset Management Agreements
+For the year ended 31 December 2016, the service fee paid by CLIC to the Company amounted to
+RMB869 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 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.
+Significant Events
+Annual Report 2016
+China Life Insurance Company Limited
+Policy Management Agreement
+1.
+2.
+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 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 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 ending 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 ending 31 December 2017 under the 2015 insurance sales
+framework agreement to RMB3,000 million and RMB5,000 million, respectively.
+For the year ended 31 December 2016, CLP&C paid the Company an agency service fee of
+RMB2,337 million.
+52525
+(1) Framework Agreement between the Company and AMP
+Framework Agreements with AMP
+For the year ended 31 December 2016, the subscription price for the fund products was
+RMB100.00 million, the redemption price for the fund products was RMB0 million, the
+subscription fee for the fund products was RMB0 million, the redemption fee for the fund
+products was RMB0 million, the sales commission fee and client maintenance fee paid by AMP
+was RMB0 million, and the fees for other daily transactions were RMB0 million.
+are RMB50 million, RMB100 million and RMB100 million, respectively; the annual caps of
+the sales commission fee and client maintenance fee payable by AMP were RMB50 million,
+RMB100 million and RMB100 million, respectively; and the annual caps of the fees for other
+daily transactions were RMB50 million, RMB100 million and RMB100 million, respectively.
+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. For the three years ending 31
+December 2019, the annual caps of the subscription price for the fund products are RMB10,000
+million; the annual caps of the redemption price for the fund products are RMB10,000 million;
+the annual caps of the subscription fee for the fund products are RMB100 million; the annual
+caps of the redemption fee for the fund products are RMB100 million; the annual caps of the
+sales commission fee and client maintenance fee payable by AMP are RMB100 million; the
+annual caps
+of the management fee and performance-based fee payable by CLP&C for the asset
+management for specific clients are RMB100 million; and the annual caps of the fees for other
+daily transactions are RMB100 million.
+Significant Events
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+53
+(4) Framework Agreement between CLP&C and AMP
+For the year ended 31 December 2016, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB1,530.59 million, and the redemption price
+and corresponding redemption fee for the redemption of fund products was RMB2,585.28
+million.
+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 expired on 31 December 2016. Pursuant to the agreement, CLIC
+and AMP would enter into transactions in relation to the subscription and redemption of
+fund products. 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 2016, the annual caps of the subscription price and corresponding
+subscription fee for the subscription of fund products were 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 were RMB5,000
+million, RMB10,000 million and RMB10,000 million, respectively. 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. 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 RMB10,000 million; the annual caps of the redemption
+price and corresponding redemption fee for the redemption of fund products are RMB10,000
+million; and the annual caps of the management fee and performance-based fee payable by
+CLIC for the asset management for specific clients are RMB100 million.
+(3) Framework Agreement between CLIC and AMP
+For the year ended 31 December 2016, 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 was RMB0 million, and the fees for
+other daily transactions were RMB0 million.
+Significant Events
+CLP&C and AMP entered into the “Cooperation Framework Agreement” on 6 June 2014. The
+agreement became effective upon signing by the parties and expired on 31 December 2016.
+Pursuant to the agreement, CLP&C and AMP would 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
+was determined by the parties through arm's length negotiations with reference to the industry
+practices. For the three years ended 31 December 2016, the annual caps of the subscription
+price for the fund products were RMB5,000 million, RMB10,000 million and RMB10,000
+million, respectively; the annual caps of the redemption price for the fund products were
+RMB5,000 million, RMB10,000 million and RMB10,000 million, respectively; the annual
+caps of the subscription fee for the fund products were RMB50 million, RMB100 million and
+RMB100 million, respectively; the annual caps of the redemption fee for the fund products
+China Life Insurance Company Limited
+Annual Report 2016
+caps
+51
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Significant Events
+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 expired on 31 December 2016. Pursuant to the agreement, the
+Company and AMP would 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 was determined by the parties through arm's length negotiations with reference
+to the industry practices. For the three years ended 31 December 2016, the annual caps of the
+subscription price and corresponding subscription fee for the subscription of fund products were
+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 were 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 were
+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 were
+RMB10 million, RMB20 million and RMB20 million, respectively; and the annual of the
+fees for other daily transactions were RMB50 million, RMB100 million and RMB100 million,
+respectively. 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.
+For the three years ending 31 December 2019, the annual caps of the subscription price and
+For the year ended 31 December 2016, the subscription price and corresponding subscription
+fee for the subscription of fund products was RMB9,188.01 million, the redemption price
+and corresponding redemption fee for the redemption of fund products was RMB4,338.51
+million, the sales commission fee and client maintenance fee paid by AMP was RMB0 million,
+the management fee paid by the Company for the asset management for specific clients was
+RMB10.90 million, and the fees for other daily transactions were RMB4.15 million.
+(2) Framework Agreement between Pension Company and AMP
+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 expired
+on 31 December 2016. Pursuant to the agreement, Pension Company and AMP would 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 was determined by the parties through arm's length
+negotiations with reference to the industry practices. For the three years ended 31 December
+2016, the annual caps of the subscription price and corresponding subscription fee for the
+subscription of fund products were 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 were 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 were RMB50 million, RMB100 million and RMB100 million,
+respectively; and the annual caps of the fees for other daily transactions were RMB50 million,
+RMB100 million and RMB100 million, respectively. 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. 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 RMB10,000 million; the annual caps of the redemption price and
+corresponding redemption fee for the redemption of fund products are RMB10,000 million;
+the annual caps of the sales commission fee and client maintenance fee payable by AMP are
+RMB100 million; the annual caps of the management fee and performance-based fee payable by
+Pension Company for the asset management for specific clients are RMB100 million; and the
+annual caps of the fees for other daily transactions are RMB100 million.
+52
+52
+corresponding subscription fee for the subscription of fund products are RMB72,600 million;
+the annual caps of the redemption price and corresponding redemption fee for the redemption
+of fund products are 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 caps of the fees for other daily transactions
+are RMB100 million.
+No. of H Share shareholders: end of the month prior to
+the disclosure of this annual
+report
+Reporting Period
+30,361
+No. of A Share shareholders:
+122,882
+Total number of ordinary
+share shareholders as at the
+No. of A Share shareholders:
+126,966
+3.
+Total number of shareholders and their shareholdings
+1.
+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
+Total number of
+ordinary share
+shareholders as at
+the end of the
+No. of H Share shareholders:
+30,257
+During the Reporting Period, there was no change in the total number of shares and the share capital of the
+Company.
+Unit: Shares
+Name of shareholder
+Nature of shareholder
+Percentage of
+shareholding
+Number of
+shares held as at
+the end of the
+Reporting Period
+Increase/decrease
+Number of shares
+during the
+Reporting Period
+subject to selling
+Number of shares
+restrictions
+pledged or frozen
+China Life Insurance (Group) Company
+Particulars of top ten shareholders of the Company
+CHANGES IN SHARE CAPITAL
+(Note 1): JPMorgan Chase & Co. was interested in a total of 568,720,847 H shares in accordance with the provisions of
+Part XV of the SFO. Of these shares, J.P. Morgan Securities LLC, JF Asset Management Limited, J.P. Morgan
+Investment Management Inc., J.P. Morgan GT Corporation, J.P. Morgan Whitefriars Inc., J.P. Morgan Securities
+plc, JPMorgan Chase Bank, N.A., J.P. Morgan Chase Bank Berhad, JPMorgan Asset Management (UK) Limited and
+China International Fund Management Co Ltd were interested in 94,276,750 H shares, 1,744,000 H shares, 238,000
+H shares, 500,000 H shares, 36,304,793 H shares, 169,712,429 H shares, 264,246,283 H shares, 800,592 H shares,
+698,000 H shares and 200,000 H shares respectively. All of these entities are either controlled or indirectly controlled
+subsidiaries of JPMorgan Chase & Co.
+1.
+State-owned legal person
+China Life Insurance Company Limited
+Annual Report 2016
+Significant Events
+III. MATERIAL CONTRACTS AND THEIR PERFORMANCE
+1.
+2.
+3.
+4.
+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.
+The Company neither gave external guarantees nor provided guarantees to its non-wholly owned subsidiaries
+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.
+Except as otherwise disclosed in this annual report, the Company had no other material contracts during the
+Reporting Period.
+2.
+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
+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.
+59
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Significant Events
+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 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.
+60
+60
+China Life Insurance Company Limited
+Annual Report 2016
+Changes in Ordinary Shares and Shareholders Information
+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.
+Changes in Ordinary Shares and Shareholders Information
+68.37%
+HKSCC Nominees Limited
+Male
+Chairman of the
+Miao Ping
+Company
+(before tax)
+thousands
+thousands
+changes
+the year the year
+Gender Age Term
+Position
+Name
+parties of the
+in RMB ten ten thousands
+RMB ten
+58 Since 11 July 2015
+0
+0
+114.80
+Xiong Junhong
+No
+147.94
+30.03
+117.91
+0
+0
+Reason for
+Since 25 May 2009
+Male
+Supervisor
+Shi Xiangming
+Supervisory Committee
+No
+139.28
+24.48
+57
+beginning of at the end of
+related
+Company Period in RMB
+social insurance,
+Other benefits,
+(II) Current Supervisors
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2016
+66
+95
+Total
+25252
+65
+Following the election at the First Extraordinary General Meeting 2015 and upon the approval from the CIRC,
+Mr. Tang Xin was appointed as a Director with effect from 7 March 2016. Following the election at the 2015
+Annual General Meeting and upon the approval from the CIRC, Ms. Leung Oi-Sie Elsie was appointed as a
+Director with effect from 20 July 2016.
+4.
+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.
+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.
+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.
+52525
+Supervisor
+housing
+provident fund
+paid/fee in
+held at the shares held
+from
+Reporting
+paid by the
+Remuneration
+of shares Number of
+emoluments
+emoluments
+annuity fund
+Number
+received
+the Company
+and enterprise
+Whether
+received from
+during the
+Female 48
+Since 20 October 2014
+0
+Company Period in RMB
+Reporting
+Remuneration
+held at the share held at
+paid by the
+of share Number of
+emoluments
+from
+during the
+Number
+received
+the Company
+and enterprise
+Whether
+provident fund received from
+housing emoluments
+annuity fund
+Total
+related
+the end of
+Male 58
+President
+Lin Dairen
+Company
+(before tax)
+thousands
+changes ten thousands
+beginning of
+the year
+Gender Age Term
+Position
+Name
+parties of the
+ten thousands
+in RMB ten
+Reason for paid in RMB
+the year
+1.
+social insurance,
+Directors, Supervisors, Senior Management and Employees
+Employee Representative Female 53 Since 11 July 2015
+Supervisor
+Wang Cuifei
+Supervisor
+No
+152.83
+30.45
+122.38
+0
+0
+Employee Representative
+Zhan Zhong
+Yes
+0
+0
+0
+0
+Male 48 Since 11 July 2015
+Other benefits,
+0
+29.29
+Annual Report 2016
+China Life Insurance Company Limited
+(III) Current Senior Management
+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.
+3.
+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.
+2.
+108.78
+Pursuant to the Articles of Association, Supervisors serve for a term of three years and may be re-elected.
+0
+0
+1.
+Notes:
+Total
+No
+138.07
+578.12
+Since April 2014
+Notes:
+0
+Chairman of the Board, Male
+Yang Mingsheng
+Company
+(before tax)
+thousands
+thousands
+changes
+of the year of the year
+Gender Age Term
+Position
+Name
+parties of the
+ten thousands
+in RMB ten
+RMB ten
+61
+Since 22 May 2012
+0
+0
+No
+164.56
+24.56
+140.00
+0
+0
+Since 27 October 2008
+Reason for
+58
+Executive Director
+Lin Dairen
+Executive Director
+Yes
+0
+0
+0
+Male
+beginning at the end
+related
+Company Period in RMB
+Total
+social insurance,
+Other benefits,
+(I) Current Directors
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+2.
+Directors, Supervisors, Senior Management and Employees
+housing
+Annual Report 2016
+I
+64
+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 2016, 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 1,066,000 H
+shares (0.01%). Of these 1,066,000 H shares, 358,000 H shares were cash settled unlisted derivatives.
+(Note 2): BlackRock, Inc. was interested in a total of 516,788,896 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 3,236,000 H shares, 2,609,000 H shares, 94,535,254 H shares,
+168,530,000 H shares, 1,536,955 H shares, 9,184,502 H shares, 2,665,235 H shares, 3,855,000 H shares, 37,301,218
+H shares, 1,562,000 H shares, 39,034,785 H shares, 3,427,700 H shares, 48,150,096 H shares, 65,373,505 H shares,
+30,179,276 H shares, 539,000 H shares, 3,878,370 H shares, 591,000 H shares, 564,000 H shares and 36,000 H
+shares respectively. All of these entities are either controlled or indirectly controlled subsidiaries of BlackRock, Inc. Of
+these 516,788,896 H shares, 2,991,915 H shares were cash settled unlisted derivatives.
+JPMorgan Chase & Co. held a short position as defined under Part XV of the SFO in 131,839,776 H shares (1.77%).
+Of these 131,839,776 H shares, 18,998,675 H shares were physically settled listed derivatives, 41,455,100 H shares
+were cash settled listed derivatives, 8,447,345 H shares were physically settled unlisted derivatives and 33,686,156 H
+shares were cash settled unlisted derivatives.
+Included in the 568,720,847 H shares are 264,241,698 H shares (3.55%), 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 568,720,847 H shares, 52,558,380 H shares were physically settled listed derivatives, 1,652,000 H
+shares were cash settled listed derivatives, 237,826 H shares were physically settled unlisted derivatives and 28,128,300
+H shares were cash settled unlisted derivatives.
+China Life Insurance Company Limited
+Xu Hengping
+emoluments
+received from
+paid/fee in
+shares held
+held at the
+from
+Reporting
+paid by the
+Remuneration
+provident fund
+of shares Number of
+during the
+annuity fund
+Number
+received
+the Company
+and enterprise
+Whether
+emoluments
+Executive Director
+Male
+58
+0
+45 Since 7 March 2016
+Male
+Independent Director
+Independent Director
+Leung Oi-Sie Elsie
+Total
+Tang Xin
+32.00
+26.67
+0
+0
+Male 65 Since 11 July 2015
+Independent Director
+Robinson Drake Pike
+32.00
+0
+32.00
+32.00
+0
+0
+Female 77 Since 20 July 2016
+0
+I
+Yes
+Yes
+No
+Yes
+Yes
+26.67
+Yes
+No
+2 3 3 3 2 3 3
+15.00
+0
+15.00
+0
+0
+Yes
+545.69
+0
+68
+Non-executive Director Male
+Miao Jianmin
+137.58
+24.18
+113.40
+Since 11 July 2015
+57
+52 Since 27 October 2008
+Male
+Xu Haifeng
+No
+137.88
+24.48
+113.40
+0
+Since 11 July 2015
+Executive Director
+Since 20 October 2014
+0
+0
+Male
+Independent Director
+Chang Tso Tung Stephen
+0
+Since 11 July 2015
+54
+Non-executive Director Male
+0
+Liu Jiade
+0
+0
+Since 24 July 2012
+55
+Non-executive Director Male
+Wang Sidong
+0
+0
+140.00
+24.56
+164.56
+7.64%
+2.01%
+131,839,776 (S)
+1.77%
+0.47%
+264,241,698 (P)
+3.55%
+0.93%
+(Note 2)
+BlackRock, Inc.
+Interest in controlled corporation
+H Shares
+516,788,896(L)
+1,066,000(S)
+6.94%
+1.83%
+568,720,847 (L)
+H Shares
+Beneficial owner, investment
+manager, trustee and custodian
+corporation/approved lending agent
+(Note 1)
+68.37%
+4.
+China Life Insurance Company Limited
+During the Reporting Period, there was no change to the controlling shareholder and the effective controller
+of the Company. As at the end of the Reporting Period, there was no other corporate shareholder holding
+more than 10% of the shares in the Company.
+INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES
+OF THE COMPANY HELD BY SUBSTANTIAL SHAREHOLDERS AND OTHER
+PERSONS UNDER HONG KONG LAWS AND REGULATIONS
+So far as is known to the Directors, Supervisors and the chief executive of the Company, as at 31 December 2016,
+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:
+Name of substantial shareholder
+0.01%
+China Life Insurance (Group)
+Company
+JPMorgan Chase & Co.
+Class of shares
+Number of
+shares held
+Percentage of the
+respective class
+of shares
+Percentage of the
+total number of
+shares in issue
+A Shares 19,323,530,000 (L)
+92.80%
+68.37%
+Capacity
+Beneficial owner
+0.00%
+The letter "L" denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interest in a lending pool.
+63
+79.38
+14.05
+65.33
+0
+0
+46 November 2014-
+Male
+August 2016
+Vice President
+7 March 2016
+Director
+No Resigned pursuant to the relevant policies
+5.33
+0
+5.33
+0
+Yang Zheng
+China Life Insurance (Group) Company
+Huang Xiumei
+Female 49 December 2014-
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+☐ ☐
+119.09
+0
+0
+Financial
+Controller
+Total
+February 2016
+No Resigned due to adjustment of work
+No Resigned due to adjustment of work
+arrangements
+19.38
+3.05
+16.33
+0
+arrangements
+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 in below:
+Hong Kong Securities Clearing Company Limited
+Overseas legal person
+0.10%
+27,290,235
++17,584,819
+China International Television Corporation
+State-owned legal person
+Hybrid Securities Investment Fund
+0.07%
+China Universal Asset Management Co., Ltd
+Other
+0.05%
+15,015,845
+- Industrial and Commercial Bank of
+China Limited - China Universal
+-Tianfu Bull No. 53 Asset Management Plan
+New China Life Insurance Company Ltd.
+- Participating - Group Participating
+-018L-FH001 Hu
+18,452,300
+Domestic Non-State-
+owned legal person
+Consumption and Vitality of
+59,384,610
+Overseas legal person
+25.88%
+7,314,015,954
++3,725
+China Securities Finance Corporation Limited
+Central Huijin Asset Management Limited
+State-owned legal person
+2.02%
++25,016,894
+572,311,916
+State-owned legal person
+0.42%
+119,719,900
+Industrial and Commercial Bank of China Limited
+-China Southern Flexible Allocation of
+Other
+0.21%
++51,619,506
+0
+0.05%
++13,538,001
+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
+The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
+China Life Insurance (Group) Company
+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)
+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 PRC; other businesses approved by insurance regulatory
+agencies.
+As at 31 December 2016, CLIC held 1,785,098,644 shares (H Share) of Town
+Health International Medical Group Limited, representing 23% of its total shares.
+62
+China Life Insurance Company Limited
+Annual Report 2016
+Changes in Ordinary Shares and Shareholders Information
+Yang Mingsheng
+13,538,001
+Information relating to the Controlling Shareholder and Effective Controller
+Industrial and Commercial Bank of China Limited-China Southern Flexible Allocation of Consumption and Vitality of Hybrid Securities
+Investment Fund has Industrial and Commercial Bank of China Limited as its 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
+State-owned legal person
+0.04%
+12,400,000
+-7,600,000
+61
+52525
+2.
+25252
+Changes in Ordinary Shares and Shareholders Information
+Details of shareholders
+1.
+2.
+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.
+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.
+3.
+China Life Insurance Company Limited Annual Report 2016
+53 20 October 2014-
+Male
+Independent
+32.47
+105.00
+0
+Since June 2013
+Male 54
+Board Secretary
+Zheng Yong
+137.47
+No
+웃음
+132.08
+24.75
+107.33
+0
+Since October 2016
+Male 48
+No
+Vice President
+No
+Chief
+I
+0
+0
+Total
+Officer
+Technology
+Information
+Ruan Qi
+No
+8.60
+24.50
+0
+0
+Since October 2016
+50
+Male
+33.10
+949.63
+68.92
+56.70
+113.40
+0
+0
+57 Since November 2014
+Male
+Vice President
+No
+24.18
+137.88
+113.40
+0
+0
+Male 58 Since November 2014
+Vice President
+Xu Hengping
+Xu Haifeng
+Li Mingguang
+No
+24.48
+12.22
+137.58
+Vice President,
+0
+0
+Male 53 Since July 2016
+Vice President
+Zhao Lijun
+Xiao Jianyou
+March 2012
+Chief Actuary since
+No
+November 2014 and
+No
+138.04
+24.64
+113.40
+0
+0
+Male 47 As Vice President since
+Chief Actuary
+19,323,530,000
+Notes:
+2.
+0
+61 24 July 2012-
+Non-executive Male
+Zhang Xiangxian
+Company Reason for changes
+(before tax)
+thousands
+0
+thousands
+the year
+of the year
+Previous Position Gender Age Term
+Name
+parties of the
+thousands
+in RMB ten
+changes
+RMB ten
+0
+Yes Resigned due to age reason
+Huang Yiping
+Yes Retired due to the expiration of session of the
+Board
+20 July 2016
+15.00
+0
+15.00
+0
+0
+0
+70
+Male
+Independent
+Director
+Neoh
+Anthony Francis
+3 August 2016
+Director
+21 June 2010-
+1.
+Reason for
+the beginning
+emoluments
+Total
+insurance,
+Other
+benefits, social
+(IV) Resignation and Retirement of Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited Annual Report 2016
+housing received from
+69
+25252
+52525
+67
+With the approval given at the seventh meeting of the fifth session of the Board of Directors of the Company
+and the approval from the CIRC, Mr. Zhao Lijun was appointed as the Vice President of the Company with
+effect from 20 July 2016. With the approval given at the ninth meeting of the fifth session of the Board of
+Directors of the Company, Mr. Xiao Jianyou, the former Assistant President, was appointed as the Vice President
+of the Company with effect from 27 October 2016, and Mr. Ruan Qi was appointed as the Chief Information
+Technology Officer of the Company with effect from 27 October 2016.
+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.
+3.
+68
+the end of
+provident fund
+and enterprise
+from related
+RMB ten
+Company
+paid/fee in
+share held at
+share held at
+emoluments
+the Company
+Period in
+Remuneration
+Number of Number of
+received
+Reporting
+annuity fund
+Whether
+during the
+paid by the
+99,739
+4,647
+Miao Jianmin
+Mr. Ruan Qi, born in 1966, Chinese
+Mr. Ruan became the Chief Information Technology Officer of the Company in October
+2016. He has been the General Manager (at the general manager level of 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 served as a
+staff member of the Computer Department of Fujian Branch, the Deputy Head of the Technical
+Division of the Computer Office, an Assistant to the Director, and the Deputy Director of the
+Computer Office, and the Deputy Manager (responsible for daily operation) and the Manager of
+the Information Technology Department of the Company from 1989 to 2004. He was a cadre
+at Fujian Research Institute of Posts and Telecommunications from 1987 to 1989. Mr. Ruan, a
+Senior Engineer, graduated from Beijing Institute of Posts and Telecommunications in August
+1987 with a Bachelor's degree in Computer Science and Communications and from Xiamen
+University with Executive Master of Business Administration (EMBA) in December 2007.
+COMPANY SECRETARY
+Mr. Heng Victor Ja Wei, born in 1977, British
+Mr. Heng is the managing partner of Morison Heng, Certified Public Accountants. Mr. Heng
+holds a Master of Science degree of the Imperial College of Science, Technology and Medicine,
+the University of London. Mr. Heng is a member of The Hong Kong Institute of Certified Public
+Accountants and a fellow of The Association of Chartered Certified Accountants. Mr. Heng has
+over 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 (formerly known as Lee & Man Handbags
+Holding Limited) and SCUD Group Limited, all of which are listed on the main board of the
+HKSE.
+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, a Senior Economist, currently serves as an arbitrator
+of the China International Economics and Trade Arbitration Commission, and the Deputy
+Chairman of the Chamber of Hong Kong Listed Companies.
+77
+25252
+China Life Insurance Company Limited Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+II POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT IN SHAREHOLDERS OF THE COMPANY
+III
+78
+52525
+Mr. Zheng Yong, born in 1962, Chinese
+Directors, Supervisors, Senior Management and Employees
+China Life Insurance Company Limited
+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 became the Chief
+Actuary of the Company in March 2012. Mr. Li joined the Company in 1996 and subsequently
+served as the Deputy Director, the Director, 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 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.
+75
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+3
+Mr. Zhao Lijun, born in 1963, 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 Director, the
+Director 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 Accounting and Finance in 1987, and from
+Tsinghua University with an EMBA in 2010. Mr. Zhao is a Senior Accountant.
+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 Individual 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.
+76
+Name
+Yang Mingsheng
+Name of shareholders
+Wang Sidong
+Xiong Junhong
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+China Life Insurance (Group) Company
+Structure of Expertise
+Class of Expertise
+Management and administration
+Sales and sales management
+Finance and auditing
+Insurance verification, claims processing and customer services
+Other expertise and technicians
+Others
+Total
+Number of Employees
+21,868
+36,091
+5,225
+28,420
+3,488
+1.
+Mr. Lin Dairen, please see the section "Directors" for his profile.
+As at the end of the Reporting Period, the composition of the employees of the Company and its major
+subsidiaries is as follows:
+Retired employees of the Company and its major subsidiaries for which extra costs have to be incurred
+Position
+Chairman
+Term
+Vice Chairman, President
+Vice President
+Since March 2012
+Since October 2013
+China Life Insurance (Group) Company
+Deputy General Manager
+of Strategic Planning
+Department
+Since June 2004
+Since June 2013
+EMPLOYEES
+(I) Employees
+Number of employees of the Company
+98,505
+Number of employees of the Company's major subsidiaries
+1,234
+Employees in total
+99,739
+7
+SENIOR MANAGEMENT
+Annual Report 2016
+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 (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.
+Mr. Miao became a Non-executive Director of the Company in October 2008. He is the Vice
+Chairman and the President of China Life Insurance (Group) Company. He is concurrently the
+Chairman of China Life Pension Company Limited, 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 degree 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 Monetary Banking, and the Central University of Finance and
+Economics with a Bachelor's degree in Insurance. Mr. Miao is a Senior Economist.
+70
+0
+China Life Insurance Company Limited
+Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+9.
+Mr. Wang Sidong, born in 1961, Chinese
+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, a Director of China Life Pension Company Limited, and a Director
+of China Life Ecommerce 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.
+Mr. Liu Jiade, born in 1963, Chinese
+Mr. Liu became a Non-executive Director of the Company in July 2015. He is the Vice
+Chairman and the President of China Guangfa Bank Co., Ltd. and concurrently serves as a
+Supervisor of Sinopec Sales Company Limited and a member of the Accounting Informatization
+Committee of the Ministry of Finance. Mr. Liu 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 August 2003 to March 2014, the Chairman of China Life
+Pension Company Limited from March 2014 to December 2016 (in particular, he concurrently
+served as the President of China Life Pension Company Limited from March 2014 to March
+2015), and the Vice President of China Life Insurance (Group) Company from August 2014
+to October 2016. Since 2003, he 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.
+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.
+71
+52525
+25252
+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 Ecommerce 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.
+China Life Insurance Company Limited Annual Report 2016
+Mr. Xu Haifeng, born in 1959, Chinese
+Mr. Xu Hengping, born in 1958, Chinese
+China Life Insurance Company Limited
+Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+DIRECTORS
+Mr. Yang Mingsheng, born in 1955, Chinese
+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 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, a Non-
+executive Director of China Insurance Security Fund Co., Ltd., the 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.
+69
+69
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+2
+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 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 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.
+Directors, Supervisors, Senior Management and Employees
+Mr. Miao Jianmin, born in 1965, Chinese
+2
+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 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 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 of Science degree.
+Ms. Xiong Junhong, born in 1968, Chinese
+Q
+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 the 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, investment research and
+strategic planning.
+China Life Insurance Company Limited
+Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+a
+e
+Mr. Zhan Zhong, born in 1968, Chinese
+74
+ค
+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 (at the 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, an Assistant to the General Manager of the Company's
+Guangdong Branch, the Deputy General Manager (responsible for daily operation) and the
+General Manager of the Individual Insurance Division of the Company and the Deputy Secretary
+of the Party Committee and the 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.
+China Life Insurance Company Limited Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+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.
+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 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.
+72
+China Life Insurance Company Limited
+Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+Mr. Chang Tso Tung Stephen, born in 1948, 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.
+Ms. Leung Oi-Sie Elsie, born in 1939, Chinese
+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, and an Independent Non-executive Director of
+Beijing Tong Ren Tang Chinese Medicine Company Limited since May 2013.
+73
+52525
+25252
+Mr. Tang Xin, born in 1971, Chinese
+rate
+Yang Mingsheng
+Lin Dairen
+Executive Director
+Executive Director
+2
+1
+100%
+0
+2
+1
+50%
+2
+0
+0
+0
+absent
+0
+proxies
+2.
+Number of
+Xu Hengping
+First Extraordinary General
+Meeting 2016
+27 December 2016
+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
+28 December 2016
+Eleven proposals including: the “Proposal in relation to the Report of the Board of Directors of the Company for
+the Year 2015", the "Proposal in relation to the Report of the Supervisory Committee of the Company for the
+Year 2015", the "Proposal in relation to the Financial Report of the Company for the Year 2015", the "Proposal
+in relation to the Profit Distribution Plan of the Company for the Year 2015”, the “Proposal in relation to the
+Election of Ms. Leung Oi-Sie Elsie as an Independent Director of the Fifth Session of the Board of Directors
+of the Company” and the “Proposal in relation to the Appointment of Auditors of the Company for the Year
+2016", etc. were considered and approved by a combination of on-site and online voting, and the “Duty Report
+of the Independent Directors of the Board of Directors of the Company for the Year 2015" and the “Report on
+the Status of Connected Transactions and the Execution of Connected Transactions Management System of the
+Company for the Year 2015" were received and reviewed at the 2015 Annual General Meeting held in Beijing on
+30 May 2016.
+82
+meetings Attendance
+China Life Insurance Company Limited
+Corporate Governance
+Five proposals including: the “Proposal in relation to the Outline of the ‘13th Five-Year' Development Plan of the
+Company", the "Proposal in relation to the Change of the Auditor for US Form 20-F of the Company for the Year
+2016", the "Proposal in relation to the Renewal of the 'Framework Agreement for Daily Connected Transactions'
+by each of the Company and Pension Company with AMP”, the “Proposal in relation to the Renewal of the
+'Framework Agreement for Daily Connected Transactions' by each of CLIC and CLP&C with AMP" and the
+"Proposal in relation to the Renewal of the 'Framework Agreement for Daily Connected Transactions' between
+the Company and China Guangfa Bank Co., Ltd." were considered and approved by a combination of on-site and
+online voting at the First Extraordinary General Meeting 2016 held in Beijing on 27 December 2016.
+Attendance records of Directors at the shareholders' general meetings convened during the Reporting Period:
+Name of Director
+Type of Director
+Number of
+shareholders'
+general meetings
+the Director was
+required to attend
+during the year
+Number of Number of Number of
+meetings meetings meetings
+physically attended by attended by
+attended telephony
+Annual Report 2016
+Executive Director
+54,731
+0
+Wang Sidong
+Non-executive Director
+2
+1
+0
+0
+1
+100%
+50%
+Non-executive Director
+Chang Tso Tung
+Independent Director
+22
+1
+0
+31 May 2016
+Liu Jiade
+2
+0
+0
+0
+0
+2
+0
+Xu Haifeng
+Executive Director
+2
+0
+2
+0
+0
+100%
+Miao Jianmin
+Non-executive Director
+2
+2
+0
+30 May 2016
+Master or above
+Date of publication
+of resolutions
+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 2016, 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 "innovation-driven growth" 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), 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 2016.
+79
+52525
+25252
+80
+China Life Insurance Company Limited Annual Report 2016
+Corporate Governance
+OVERVIEW OF CORPORATE GOVERNANCE
+The Company implements good corporate governance policies and strongly believes that through fostering sound
+corporate governance, further enhancing its transparency and establishing 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
+Supervisory
+Committee
+Nomination and
+Remuneration
+Committee
+Risk
+Management
+Committee
+Strategy and
+Investment
+(III) Training Plans
+The Company has established a remuneration and incentive system with reference to employee's positions,
+the Company's performance and market conditions.
+(II) Remuneration Policy for Employees
+99,739
+2. Education Level
+Education Level
+0
+Bachelor
+College Diploma
+Secondary School
+Others
+Decision Committee
+Total
+Annual Report 2016
+Directors, Supervisors, Senior Management and Employees
+Number of Employees
+3,733
+33,448
+2,640
+5,187
+China Life Insurance Company Limited
+2015 Annual General Meeting
+Board Secretary
+Board Secretariat/Company Secretary
+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.
+Through the investigation and research, Directors and 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 enhancing the legal compliance and risk prevention of the Company in a practical manner.
+81
+52525
+25252
+China Life Insurance Company Limited Annual Report 2016
+Corporate Governance
+9.
+The Company has actively organized Directors and Supervisors to attend various training courses. The members
+of the Board and the Supervisory Committee attended special training courses for directors and supervisors of
+listed companies as organized by the Listed Companies Association of Beijing. The Independent Directors of
+the Company attended a training course for new directors, supervisors and senior management of insurance
+institutions as organized by the CIRC and a training course on the qualifications of independent directors of listed
+companies as organized by the SSE. They attended training courses for a total of 13 person-times.
+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
+County for the purpose of understanding the business development and internal supervision of the local branches.
+The Board and the Supervisory Committee of the Company have conducted extensive investigation and
+research activities. Mr. Robinson Drake Pike and Mr. Tang Xin, both being Independent Directors, carried out
+investigation and research on local branches of the Company in Gansu Province, Wuwei City, Zhangye City and
+Lanzhou City for the purpose of inspecting the internal audit and business development of the local branches.
+Mr. Miao Ping, the Chairman of the Supervisory Committee, and Mr. Shi Xiangming, Ms. Xiong Junhong and
+Ms. Wang Cuifei, all being Supervisors, carried out investigation and research on local branches of the Company
+in Guizhou Province and southeast Guizhou Province, as well as a local sub-branch of the Company in Tianzhu
+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 the "Procedural Rules for Board of Directors Meetings" with reference to its actual operation.
+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.
+1.
+2.
+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.
+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.
+China Life Insurance Company Limited
+Annual Report 2016
+Corporate Governance
+(Corporate Governance Structure Chart)
+3.
+5.
+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 carried out the procedures relating to the resignation, retirement
+and appointment of Directors in compliance with the regulatory requirements of its listed jurisdictions and the
+provisions of its Articles of Association. Mr. Huang Yiping resigned from the Board pursuant to the relevant
+policies, Mr. Zhang Xiangxian resigned from the Board due to age reason and Mr. Anthony Francis Neoh
+retired from the Board due to the expiry of his term of office. Following the election at the First Extraordinary
+General Meeting 2015 of the Company and upon the approval by the CIRC, the appointment of Mr. Tang Xin
+as a Director of the Company became effective from 7 March 2016. Following the election at the 2015 Annual
+General Meeting of the Company and upon the approval by the CIRC, the appointment of Ms. Leung Oi-Sie
+Elsie as a Director of the Company became effective from 20 July 2016. The Company has complied with the
+corporate governance system and has strictly carried out all governance procedures.
+4.
+1
+Audit Committee
+2
+No
+80%
+0
+1
+0
+Note 5
+4
+5
+Independent Director
+No
+83%
+0
+1
+4
+Note 4
+Leung Oi-Sie Elsie
+6
+Independent Director
+3
+At the ninth meeting of the fifth session of the Board held on 27 October 2016, Mr. Robinson Drake Pike gave written
+authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote at the meeting;
+At the sixth meeting of the fifth session of the Board held on 23 March 2016, Mr. Wang Sidong gave written
+authorization for Miao Jianmin to act as his proxy to attend and vote at the meeting; at the tenth meeting of the fifth
+session of the Board held on 20 December 2016, Mr. Wang Sidong gave written authorization for Mr. Miao Jianmin to
+act as his proxy to attend and vote at the meeting;
+At the ninth meeting of the fifth session of the Board held on 27 October 2016, Mr. Miao Jianmin gave written
+authorization for Mr. Wang Sidong to act as his proxy to attend and vote at the meeting;
+At the ninth meeting of the fifth session of the Board held on 27 October 2016, Mr. Yang Mingsheng, the Chairman of
+the Board, gave written authorization for Mr. Lin Dairen to act as his proxy to attend, vote and chair the meeting;
+5.
+4.
+3.
+2.
+1.
+Notes:
+No
+100%
+0
+0
+0
+3
+At the sixth meeting of the fifth session of the Board held on 23 March 2016, Mr. Tang Xin gave written authorization
+for Mr. Anthony Francis Neoh to act as his proxy to attend and vote at the meeting.
+Independent Director
+No
+2
+0
+Note3
+4
+6
+Non-executive Director
+Wang Sidong
+No
+83%
+0
+1
+0
+5
+Note 2
+6
+0
+Robinson Drake Pike
+Tang Xin
+67%
+Liu Jiade
+100%
+0
+0
+5
+6
+Independent Director
+Chang Tso Tung Stephen
+No
+100%
+0
+0
+1
+5
+6
+Non-executive Director
+No
+China Life Insurance Company Limited
+Annual Report 2016
+Corporate Governance
+No
+0
+0
+1
+0
+0
+1
+Note
+No
+100%
+50%
+0
+0
+3
+3
+2.
+No
+Note: At the fifth meeting of the fifth session of the Board held on 29 February 2016, Mr. Huang Yiping gave
+written authorization for Mr. Anthony Francis Neoh to act as his proxy to attend and vote at the meeting.
+In 2016, 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.
+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 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, 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 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.
+CHAIRMAN AND PRESIDENT
+During the Reporting Period, no Independent Director has raised any objection against the proposals and matters
+considered by the Board of the Company.
+From 18 to 23 August 2016, Mr. Robinson Drake Pike and Mr. Tang Xin, both being Independent Directors,
+carried out investigation and research on local branches of the Company in Gansu Province, Wuwei City, Zhangye
+City and Lanzhou City, listened to the work reports of local branches in Gansu Province, Wuwei City and
+Zhangye City, held in-depth conferences with their respective key management, conducted an on-site investigation
+and research on counters of the Liangzhou District business department of Wuwei local branch, counters of the
+Ganzhou District business department of Zhangye local branch and the business premises of Lanzhou local branch
+for the purpose of understanding the business development and risk control of the local branches. Through the
+investigation and research, the Independent Directors comprehended the working situation of local branches in
+great depth and examined the implementation of the Company's internal audit and business development.
+In 2016, the Independent Directors of the Company and the representatives from the external auditors (Ernst &
+Young Hua Ming LLP and Ernst & Young) convened two special meetings to discuss on matters including the
+audit for the year 2015, 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. The Independent Directors of the
+Company convened a special meeting with the person-in-charge of each of the Legal and Compliance Department
+and the Risk Management Department to discuss the matters on legal compliance and risk management of the
+Company.
+88
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2016
+25252
+52525
+87
+88
+All Independent Directors diligently fulfilled their responsibilities and faithfully performed their duties by
+attending meetings of the Board and the specialized Board committees in 2016, examining and approving the
+Company's business development, its financial management, the necessity of its connected transactions and
+the fairness of the pricing of 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. At the
+annual special meeting among the Chairman of the Board, 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, business
+operation and management, risk management and control, directors' training and collaborative development with
+bancassurance, etc. 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 2016, 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.
+Performance of duties by Independent Directors
+100%
+0
+0
+attended by
+physically
+attend during
+Number of
+meetings
+meetings
+meetings
+required to
+to attend two
+Number of
+Number of
+Number of
+Whether the
+Director failed
+Number of
+meetings the
+Director was
+In 2016, the attendance records of the resigned Directors at the Board Meetings are as follows:
+attended by
+meetings
+Attendance
+consecutive
+meetings
+0
+3
+3
+Independent Director
+Independent Director
+Non-executive Director
+Zhang Xiangxian
+Anthony Francis Neoh
+Huang Yiping
+Non-executive Director
+in person
+absent
+proxies
+telephony
+attended
+the year
+Type of Director
+Name of Director
+rate
+Miao Jianmin
+0
+100%
+0
+100%
+0
+0
+0
+1
+0
+1
+1
+0
+0
+0
+1
+Non-executive Director
+Independent Director
+Independent Director
+0
+0
+0
+0
+Corporate Governance
+Annual Report 2016
+China Life Insurance Company Limited
+84
+In 2016, 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
+from 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 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.
+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 2016
+25252
+52525
+83
+88
+0
+Anthony Francis Neoh
+Huang Yiping
+Zhang Xiangxian
+rate
+meetings Attendance
+absent
+Tang Xin
+Independent Director
+2
+2
+0
+0
+0
+100%
+Leung Oi-Sie Elsie
+Independent Director
+1
+0
+0
+0
+No
+50%
+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 2016, 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.
+1
+0
+Number of
+Number of Number of Number of
+meetings meetings meetings
+physically attended by attended by
+attended telephony proxies
+Number of
+shareholders'
+general meetings
+the Director was
+required to attend
+during the year
+Type of Director
+Name of Director
+Period:
+0
+1
+0
+100%
+Stephen
+Robinson Drake Pike
+Independent Director
+2
+1
+0
+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.
+Attendance records of the resigned Directors at the shareholders' general meetings convened during the Reporting
+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. Wang Sidong and Mr. Liu
+Jiade, 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. Huang Yiping resigned from his position as a Director pursuant to the relevant policies, Mr. Zhang Xiangxian
+resigned from his position as a Director due to age reason, and Mr. Anthony Francis Neoh retired from his position
+as a Director due to the expiry of his term of office. 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 the “Procedural Rules for Board of Directors Meetings" with reference to
+its actual operation.
+0
+0
+0
+6
+6
+Executive Director
+Lin Dairen
+No
+83%
+0
+0
+1
+Note 1
+5
+6
+100%
+Executive Director
+No
+6
+0
+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.
+0
+0
+6
+6
+Executive Director
+Xu Haifeng
+No
+0
+100%
+0
+0
+0
+6
+Xu Hengping
+Yang Mingsheng
+Executive Director
+in
+Number of Number of
+Whether the
+Director failed
+Number of
+meetings the
+Director was
+required to
+attend during
+In 2016, 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:
+Meetings and attendance
+1.
+Corporate Governance
+China Life Insurance Company Limited Annual Report 2016
+86
+86
+25252
+52525
+85
+person
+56
+During 2016, the Board constantly monitored the system on risk management and internal control of the Company to
+ensure that the financial, operational and compliance control of the Company and its subsidiaries operated effectively,
+and the Company considered that such system was effective and sufficient. The Board also ensured that the Company
+had injected sufficient resources in accounting, internal review and financial reporting.
+Number of
+During 2016, the members of the Board attended special training courses of 2016 for directors and supervisors of listed
+companies within the territory of Beijing as organized by the Listed Companies Association of Beijing, a training course
+of 2016 for new directors, supervisors and senior management of insurance institutions as organized by the CIRC and
+a training course on the qualifications of independent directors of listed companies as organized by the SSE. Pursuant
+to the regulatory requirements, the Independent Directors of the Company passed the examination of the CIRC
+regarding the approval of qualifications of independent directors and the examination of the SSE on the qualifications of
+independent directors.
+meetings
+absent
+meetings
+physically
+proxies
+telephony
+attended
+year
+the
+Type of Director
+rate
+Name of Director
+meetings
+meetings Attendance
+to attend two
+consecutive
+Number of
+meetings
+attended by
+attended by
+CSRC's Designated Website
+for the Company's Annual
+Report Disclosure
+86-10-66575112
+liyh@e-chinalife.com
+Ms. Li Yinghui, Securities Representative of the Company, is also the main contact person of the external Company
+Secretary engaged by the Company.
+III. INFORMATION DISCLOSURE AND PLACE FOR OBTAINING THE REPORT
+Media for the Company's
+A Share disclosure
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+86-10-63631191
+The Company's website at www.e-chinalife.com
+The Company's Annual
+Report may be obtained at
+China Securities Journal, Shanghai Securities News, Securities Times
+www.sse.com.cn
+HKExnews website of Hong Kong Exchanges and Clearing Limited at
+www.hkexnews.hk
+12/F, China Life Plaza, 16 Financial Street, Xicheng District, Beijing, P.R. China
+IV. STOCK INFORMATION
+Exchanges on which the
+Li Yinghui
+The Company's H Share
+Disclosure Websites
+Securities Representative*
+852-29192628
+86-10-66575112
+86-10-63633333
+Stock Short Name
+86-10-66575722
+www.e-chinalife.com
+ir@e-chinalife.com
+16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
+Hung Hom, Kowloon, Hong Kong
+852-29192638
+China Life Insurance Company Limited
+5
+ir@e-chinalife.com
+Prelude
+Office Address
+Telephone
+Fax
+Email
+II. CONTACT INFORMATION
+Board Secretary
+Li Mingguang
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+86-10-63631241
+Name
+Stock Code
+Prelude
+A Share
+Hopewell Centre, 183 Queen's Road East,
+Wanchai, Hong Kong
+Address: 60 Wall Street, New York, NY 10005
+Debevoise & Plimpton LLP
+International Auditor
+Ernst & Young
+Address: 22/F, CITIC Tower,
+1 Tim Mei Avenue, Central, Hong Kong
+7
+China Life Insurance Company Limited N
+Core Competitiveness
+Long history
+and excellent
+brand
+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 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 home and abroad, becoming
+the first financial insurance enterprise in China triple-listed on the Shanghai Stock
+Exchange, the Hong Kong Stock Exchange and the New York Stock Exchange. Since its
+establishment, the Company has played the role of an explorer and pioneer in China's life
+insurance industry, and has committed to creating a world-class financial insurance brand.
+Through long-term and continuous brand building, China Life has become one of the
+famous and strong brands in the world with growing brand value and influence. As at the
+end of 2018, the brand of China Life has been selected as one of the "World's 500 Most
+Influential Brands" published by World Brand Lab for twelve consecutive years, ranking
+139th in 2018, and was again ranked 5th on the 2018 (the 15th session) “China's 500 Most
+Valuable Brands" list published by World Brand Lab.
+The Company sticks to its principal business, further explores the huge potentials of the
+life insurance market, and maintains its leading position in China's life insurance market.
+In 2017, the Company's gross written premiums exceeded RMB500,000 million, achieving
+a new record high. Through the long-term development and accumulation, China Life
+has solid financial strength comparable to world-class enterprises in the world. As at 31
+December 2018, the Company's total assets amounted to RMB3,254,403 million, leading
+the life insurance industry in China. As one of the largest institutional investors in China,
+the Company becomes one of the largest insurance asset management companies in China
+through its controlling shareholding in China Life Asset Management Company Limited.
+As at the end of 2018, the total market capitalization of the Company was USD77,524
+million.
+Well-
+established
+network
+and leading
+technologies
+The Company has a sound institutional and services network, with its business outlets
+and services counters covering both urban and rural areas. As at the end of the Reporting
+Period, the number of sales force from all channels of the Company was over 1.7 million,
+which forms a unique and powerful distribution and services network in China and
+through which, the Company becomes the life insurance service provider within the
+reach of customers. Moreover, the Company implemented the “Technology-driven
+China Life" development strategy in great depth by adhering to the leading concept of
+technological innovation, so as to cultivate its first-class operational management, risk
+control and customer services. The Company strives to establish a customer services system
+equipped with mobile, intelligent and social features, and leverages technologies to provide
+convenient insurance services to the public.
+China Life Insurance Company Limited
+8
+16 Financial Street, Xicheng District, Beijing, P.R. China
+100033
+Address: Shops 1712-1716, 17th Floor,
+Name of the Signing Auditors:
+Huang Yuedong, 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
+King & Wood Mallesons
+Latham & Watkins LLP
+Domestic Auditor
+Shanghai Stock Exchange
+China Life
+601628
+H Share
+The Stock Exchange of
+Hong Kong Limited
+China Life
+2628
+ADR
+New York Stock Exchange
+Stocks are Listed
+LFC
+China Life Insurance Company Limited
+6
+Prelude
+H Share Registrar and
+Transfer Office
+Depositary of ADR
+Domestic Legal Adviser
+International Legal Advisers
+Auditors of the Company
+V. OTHER RELEVANT INFORMATION
+Computershare Hong Kong
+Investors Services Limited
+Deutsche Bank
+Stock Type
+16 Financial Street, Xicheng District, Beijing, P.R. China
+100033
+RMB
+中國人壽保險股份有限公司(簡稱「中國人壽」)
+21
+•Embedded Value
+46
+Significant Events
+54
+Corporate Governance
+74
+Other Information
+China Life Insurance Company Limited ("China Life”)
+Wang Bin
+Financial Report
+151
+01 Prelude
+Definitions and Material Risk Alert
+Company Profile
+Core Competitiveness
+Business Highlights
+Financial Summary
+4
+5
+8
+10
+11
+Prelude
+Definitions and Material Risk Alert
+In this annual report, unless the context otherwise requires, the following expressions have the following meanings:
+Management Discussion and Analysis
+15
+Chairman's Statement
+3
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Stock Code: 2628
+00000 00000
+CASH
+比諧中國
+Annual Report 2018
+2003
+Listed on the New York and
+Hong Kong Stock Exchanges
+2007
+Listed on the Shanghai
+Stock Exchange
+2014
+Established Data
+The Company'
+Center in Shanghai
+Launched earthquake orphan
+sponsorship project and sponsored
+1,104 orphans cumulatively by 2018
+2017
+Insurance services covering over 500
+million customers; Launched the
+"New Generation of Integrated Business
+Processing System"; China Life IT Center
+initiated operation
+CHINA LIFE
+2018
+On-line services enhanced constantly,
+paperless insurance application
+reached 90%
+ERABADETS
+Contents
+Prelude
+2008
+CLIC
+144
+Pension Company
+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
+Material Risk Alert:
+The Company has stated in this report the details of its existing risks including risks relating to macro trends, risks
+relating to insurance business, risks relating to investment business and risks relating to network security. 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".
+1
+Except for "the Company" referred to in the Consolidated Financial Statements.
+China Life Insurance Company Limited
++
+Company Profile
+Prelude
+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 2018, the Company had approximately 285 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.
+Registered Name in Chinese
+Registered Name in English
+Legal Representative
+Registered Office Address
+Postal Code
+AMC
+Postal Code
+Telephone
+Fax
+Website
+Email
+Hong Kong Office Address
+Telephone
+Fax
+I. BASIC INFORMATION
+Articles of Association of China Life Insurance Company Limited
+Securities Law of the People's Republic of China
+Current Office Address
+Company Law of the People's Republic of China
+Insurance Law of the People's Republic of China
+AMP
+CLWM
+CLP&C
+CLI
+CBIRC
+CSRC
+HKSE
+SSE
+Company Law
+Insurance Law
+Securities Law
+Articles of Association
+China Life Capital
+China Life Insurance Company Limited and its subsidiaries
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+China or PRC
+China Securities Regulatory Commission
+China Banking and Insurance Regulatory Commission, the predecessors
+of which are China Insurance Regulatory Commission and China
+Banking Regulatory Commission
+China Life Investment Holding Company Limited, a wholly-owned
+subsidiary of CLIC
+China Life Capital Investment Company, an indirect wholly-owned
+subsidiary of CLIC
+China Life Wealth Management Company Limited, an indirect non-
+wholly owned subsidiary of the Company
+China Life AMP Asset 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
+China Life Asset Management Company Limited, a non-wholly owned
+subsidiary of the Company
+China Life Insurance (Group) Company, the controlling shareholder of
+the Company
+China Life Property and Casualty Insurance Company Limited, a non-
+wholly owned subsidiary of CLIC
+JPMorgan Chase & Co. held a short position as defined under Part XV of the SFO in 49,562,790 H Shares (0.66%). Of
+these 49,562,790 H Shares, 6,992,000 H Shares were physically settled listed derivatives, 6,181,000 H Shares were cash
+settled listed derivatives, 18,922,056 H Shares were physically settled unlisted derivatives. 11,882,008 H Shares were
+cash settled unlisted derivatives and 1 H Share was convertible instruments listed derivatives.
+Corporate Governance
+Included in the 443,651,525 H Shares are 220,178,742 H Shares (2.95%), 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 443,651,525 H Shares, 9,701,000 H Shares were physically settled listed derivatives, 41,000 H Shares
+were cash settled listed derivatives, 2,283,278 H Shares were physically settled unlisted derivatives and 9,503,000 H
+Shares were cash settled unlisted derivatives.
+_
+(Note 2): JPMorgan Chase & Co. was interested in a total of 443,651,525 H Shares in accordance with the provisions of Part XV of
+the SFO. Of these shares, JPMorgan Chase Bank, N.A.-Taipei Branch, J.P. Morgan Bank Luxembourg S.A.-Amsterdam Branch, J.P.
+Morgan Bank Luxembourg S.A.-Stockholm Bankfilial, J.P. Morgan Securities LLC, JPMORGAN CHASE BANK, N.A.-LONDON
+BRANCH, J.P. Morgan Whitefriars LLC, J.P. Morgan Investment Management Inc., JPMorgan Asset Management (Taiwan) Limited,
+JPMORGAN ASSET MANAGEMENT (UK) LIMITED, J.P. Morgan Europe Limited, Oslo Branch, J.P. Morgan Europe (UK),
+Copenhagen Br, filial af J.P. Morgan Europe Ltd, Storbritannien, J.P. Morgan Bank Luxembourg, Copenhagen Br, filial af J.P. Morgan
+Bank Luxembourg S.A., JPMorgan Chase Bank, N.A.-Sydney Branch, J.P. Morgan Europe Limited (UK), Stockholm Bankfilial, J.P.
+Morgan Bank Luxembourg S.A., JPMorgan Chase Bank, National Association, JPMorgan Chase Bank, N.A.-Hong Kong Branch, JF
+Asset Management Limited, J.P. Morgan (Suisse) SA and J.P. MORGAN SECURITIES PLC were interested in 2,955,000 H Shares,
+323,100 H Shares, 2,201,019 H Shares, 4,816,830 H Shares, 42,166,976 H Shares, 1,000,000 H Shares, 49,598,361 H shares,
+1,800,000 H shares, 18,546,000 H shares, 289,240 H shares, 369,000 H shares, 62,000 H Shares, 3,390,000 H Shares, 2,110,636 H
+Shares, 10,612,000 H Shares, 151,504,952 H Shares, 8,141,503 H Shares, 38,019,000 H Shares, 5,173,316 H Shares and 100,572,592
+H Shares, respectively. All of these entities are either controlled or indirectly controlled subsidiaries of JPMorgan Chase & Co.
+BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 5,623,000 H Shares (0.08%). Of
+these 5,623,000 H Shares, 2,222,000 H Shares were cash settled unlisted derivatives.
+(Note 1): BlackRock, Inc. was interested in a total of 591,071,341 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 3,975,000 H Shares, 10,255,000 H Shares, 149,397,927 H Shares,
+236,713,000 H Shares, 1,174,000 H Shares, 24,758,829 H Shares, 1,183,000 H Shares, 4,201,000 H Shares, 24,592,064 H Shares,
+1,024,000 H Shares, 1,101,000 H Shares, 2,315,700 H Shares, 56,896,088 H Shares, 4,621,975 H Shares, 28,483,338 H Shares,
+479,000 H Shares, 27,401,787 H Shares, 12,143,619 H Shares, 48,000 H Shares, and 307,014 H Shares, respectively. All of these
+entities are either controlled or indirectly controlled subsidiaries of BlackRock, Inc. Of these 591,071,341 H Shares, 193,000 H Shares
+were cash settled unlisted derivatives.
+2.95%
+China Life Insurance Company Limited
+The letter "L" denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interest in a lending pool.
+lending agent
+0.78%
+0.18%
+0.66%
+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 2018, 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.
+89
+China Life Insurance Company Limited
+Term
+Directors, Supervisors, Senior Management and Employees
+49,562,790 (S)
+220,178,742 (P)
+Reason for
+at the end
+of the year
+of the year
+Date of Birth
+Gender
+90
+Position
+beginning
+shares held
+held at the
+Number of
+of shares
+Number
+I. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+(I) CURRENT DIRECTORS
+Name
+1.57%
+November 1958
+443,651,525 (L)
+A Shares
+Capacity
+Beneficial owner
+Name of substantial shareholder
+China Life Insurance (Group)
+Company
+BlackRock, Inc.
+So far as is known to the Directors, Supervisors and the chief executive of the Company, as at 31 December 2018, 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:
+AND REGULATIONS
+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
+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.
+Class of shares Number of shares held
+19,323,530,000 (L)
+China Life Insurance Company Limited
+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:
+Male
+changes
+Corporate Governance
+5.96%
+Percentage of the
+respective class
+of shares
+total number of
+H Shares
+Interest in controlled corporation,
+investment manager, person having
+a security interest in shares/approved
+(Note 2)
+JPMorgan Chase & Co.
+0.02%
+0.08%
+5,623,000 (S)
+Percentage of the
+0.02%
+591,071,341 (L)
+H Shares
+Interest in controlled corporation
+(Note 1)
+68.37%
+92.80%
+shares in issue
+7.94%
+Wang Bin
+Previous Position
+July 1966
+of the year
+of the year
+changes
+ten thousands
+ten thousands
+(before tax)
+of the Company
+Jia Yuzeng
+Chairman of the Board of Male
+June 1962
+Since 11 July 2018
+0
+0
+62.65
+11.90
+Term
+74.55
+Date of Birth
+Position
+beginning
+at the end
+Reason for
+Salary/
+Remuneration
+paid in RMB
+enterprise annuity
+fund paid by
+Company during
+the Reporting
+the Company
+Period in RMB
+in RMB
+ten thousands
+Whether received
+emolument from
+connected parties
+Name
+Gender
+shares held
+No
+Luo Zhaohui
+Employee Representative Male
+June 1964
+Since 15 March 2018
+0
+0
+40.29
+26.75
+67.04
+No
+Supervisor
+Huang Xin
+Employee Representative Male
+Supervisor
+February 1974
+Since 20 June 2018
+0
+Song Ping
+Supervisors
+No
+0
+Supervisor
+Male
+March 1974
+Since 11 February 2018
+0
+0
+0
+0
+0
+Yes
+Tang Yong
+Supervisor
+Male
+July 1972
+Since 2 February 2019
+0
+0
+held at the
+of shares
+0
+32.00
+0
+32.00
+No
+Tang Xin
+Independent Director
+Male
+Leung Oi-Sie Elsie
+Independent Director
+Female
+September 1971
+April 1939
+Since 7 March 2016
+0
+0
+0
+32.00
+Since 11 July 2015
+Male
+0
+0
+Yes
+Chang Tso Tung Stephen
+Independent Director
+Male
+November 1948
+Since 20 October 2014
+0
+32.00
+0
+32.00
+Yes
+Robinson Drake Pike
+Independent Director
+October 1951
+Number of
+0
+Yes
+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.
+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.
+At the 2017 Annual General Meeting held on 6 June 2018, the sixth session of the Board of Directors of the Company was
+elected. At the first meeting of the sixth session of the Board of Directors held on the same date, Mr. Yang Mingsheng was
+elected as the Chairman of the sixth session of the Board of Directors of the Company. Due to the reason of age, Mr. Yang
+Mingsheng resigned from his positions of Executive Director and Chairman of the Board of Directors of the Company on 13
+November 2018. At the First Extraordinary General Meeting 2018 held on 13 November 2018, Mr. Wang Bin was elected as an
+Executive Director of the Company. At the seventh meeting of the sixth session of the Board of Directors held on the same date,
+Mr. Wang Bin was elected as the Chairman of the sixth session of the Board of Directors of the Company. Upon the approval by
+the CBIRC, the appointment of Mr. Wang Bin became effective on 3 December 2018.
+Following the election at the 2017 Annual General Meeting of the Company and upon the approval by the CBIRC, Mr. Su
+Hengxuan became a Non-executive Director of the Company on 11 July 2018. After the consideration and approval by the
+ninth meeting of the sixth session of the Board of Directors of the Company, Mr. Su Hengxuan was re-designated from a Non-
+executive Director to an Executive Director on 20 December 2018. Following the election at the First Extraordinary General
+Meeting 2017 and upon the approval by the CBIRC, Mr. Yuan Changqing became a Non-executive Director of the Company
+on 11 February 2018.
+5.
+China Life Insurance Company Limited
+91
+(II) CURRENT SUPERVISORS
+Other benefits,
+social insurance,
+housing provident
+Total emoluments
+fund and
+received from the
+Number
+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.
+32.00
+Corporate Governance
+3.
+Since 20 July 2016
+0
+0
+30.00
+0
+30.00
+Yes
+Total
+0
+0
+292.44
+1
+Notes:
+1.
+2.
+4.
+0
+28.20
+47.21
+Vice President
+Male
+July 1963
+Since July 2016
+0
+143.20
+23.29
+166.49
+Xiao Jianyou
+Vice President
+Male
+September 1968
+Since October 2016
+0
+0
+Zhao Lijun
+125.30
+since June 2017
+Board Secretary
+166.44
+No
+Li Mingguang
+Vice President,
+Male
+July 1969
+Appointed as Vice President since
+0
+0
+143.20
+23.36
+166.56
+No
+Chief Actuary,
+November 2014, Chief Actuary since March
+2012, Board Secretary
+23.24
+23.29
+No
+0
+123.81
+23.93
+147.74
+No
+No
+Zhan Zhong
+Marketing Director
+Male
+April 1968
+Since August 2017
+0
+0
+1
+107.40
+0
+148.59
+Since April 2018
+Male
+NN
+No
+Zhao Peng
+Vice President
+Male
+April 1972
+Since March 2018
+0
+0
+124.55
+23.34
+147.89
+No
+Ruan Qi
+Vice President
+31.57
+19.01
+143.20
+0
+(III) CURRENT SENIOR MANAGEMENT
+Other benefits,
+social insurance,
+housing provident Total emoluments
+Corporate Governance
+fund and
+received from the
+Number
+enterprise annuity
+Company during
+of share
+Number of
+fund paid by
+the Reporting Whether received
+held at the
+China Life Insurance Company Limited 2
+share held
+92
+At the 2017 Annual General Meeting held on 6 June 2018, the sixth session of the Board of Supervisors of the Company was
+elected. Following the election at the 2017 Annual General Meeting of the Company and upon the approval by the CBIRC, Mr.
+Jia Yuzeng became a Non-employee Representative Supervisor of the Company on 11 July 2018. At the first meeting of the sixth
+session of the Board of Supervisors held on 20 July 2018, Mr. Jia Yuzeng was elected as the Chairman of the sixth session of the
+Board of Supervisors of the Company.
+No
+Corporate Governance
+Total
+0
+0
+188.80
+1
+Notes:
+1.
+2.
+3.
+4.
+5.
+Pursuant to the Articles of Association, Supervisors serve for a term of three years and may be re-elected.
+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.
+According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the
+Chairman of the Board of Supervisors and the Supervisors is currently subject to review and approval. The result of the review
+will be disclosed when the final amount is confirmed.
+Following the election at the First Extraordinary General Meeting 2017 of the Company and upon the approval by the CBIRC,
+Mr. Luo Zhaohui became a Non-employee Representative Supervisor of the fifth session of the Board of Supervisors of the
+Company on 11 February 2018. Following the election at the sixth extraordinary meeting of the second session of the employee
+representative meeting and upon the approval by the CBIRC, Mr. Song Ping became an Employee Representative Supervisor
+of the fifth session of the Board of Supervisors of the Company on 15 March 2018. At the second extraordinary meeting of the
+second session of the employee representative meeting held on 14 May 2018, Mr. Song Ping and Mr. Huang Xin were elected
+as Employee Representative Supervisors of the sixth session of the Board of Supervisors of the Company. Upon the approval by
+the CBIRC, the appointment of Mr. Huang Xin as a Supervisor became effective on 20 June 2018. Following the election at
+the First Extraordinary General Meeting 2018 of the Company and upon the approval by the CBIRC, Mr. Tang Yong became a
+Non-employee Representative Supervisor of the Company on 2 February 2019.
+0
+Salary paid
+Period in RMB emolument from
+February 1963
+refer to the notes
+0
+0
+0
+0
+Yes
+qualification is still
+subject to the approval
+by the CBIRC)
+Xu Haifeng
+Vice President
+Male
+May 1959
+Since November 2014
+Male
+the Company
+President (the
+(before tax) of the Company
+beginning
+at the end
+Reason for
+in RMB
+in RMB
+Name
+Position
+Gender
+Date of Birth
+Term
+of the year
+of the year
+changes ten thousands
+ten thousands
+ten thousands connected parties
+Su Hengxuan
+0
+138.97
+July 1965
+Male
+November 2014-January 2019
+December 1961 24 July 2012-12 January 2018
+Xiong Junhong Supervisor
+Female
+December 1968 20 October 2014-23 February 2018
+Li Guodong
+Employee Representative Male
+Supervisor
+April 1965
+31 August 2017-2 January 2018
+0
+Miao Ping
+Chairman of the Board
+Male
+April 1958
+Vice President
+Non-executive Director
+11 July 2015-6 June 2018
+0
+71.60
+of Supervisors
+Wang Cuifei
+Employee Representative Female
+Supervisor
+January 1964 11 July 2015-6 June 2018
+0
+0
+27.72
+001000
+001000
+1.60
+11.33
+82.93
+0
+Wang Sidong
+166.44
+143.20
+Total emoluments
+housing provident
+Other benefits,
+social insurance,
+0
+Since 3 December 2018
+Lin Dairen
+Executive Director
+Male
+June 1958
+27 October 2008-
+0
+0
+179.00
+23.46
+202.46
+(before tax) the Company Reason for changes
+00000
+0
+0
+November 1958 11 July 2015 - 24 January 2019
+Male
+Executive Director
+Xu Hengping
+No Resigned due to the
+reason of age
+April 2014-December 2018
+19 December 2018
+President
+ten thousands
+No Resigned due to the
+reason of age
+Yes Resigned due to the
+reason of age
+fund and
+Yes Resigned due to the
+adjustment of work
+Yes Resigned due to the
+adjustment of work
+Mr. Wang Bin, born in 1958, Chinese
+Mr. Wang is the Chairman of the Board of Directors of the Company, the Chairman
+of the Board of Directors and the Secretary to the Party Committee of China Life
+Insurance (Group) Company, the Chairman of the Board of Directors of China Life Asset
+Management Company Limited, the Chairman of the Board of Directors of China Life
+Insurance (Overseas) Company Limited, and a Director and the Chairman of the Board
+of Directors of China Guangfa Bank Co., Ltd. Mr. Wang has successively been employed
+by government authorities and financial institutions, with nearly 30 years of experience
+in financial management. He worked at the People's Bank of China, participating in the
+preparation and establishment of Agricultural Development Bank of China as an important
+member. Mr. Wang served as the General Manager of Jiangxi Branch of Agricultural
+Development Bank of China, and the President of Tianjin Branch and Beijing Branch of
+the Bank of Communications Co., Ltd. (the "Bank of Communications"). He served as
+the Vice President of the Bank of Communications from 2005 to 2012 and concurrently
+served as an Executive Director of the Bank of Communications from 2010 to 2012. From
+March 2012 to August 2018, he served as the Chairman of the Board of Directors and
+the Secretary to the Party Committee of China Taiping Insurance Group Ltd. Mr. Wang
+holds a doctoral degree in economics. He is a researcher, a delegate to the 19th National
+Congress of the Communist Party of China, and a member of the 12th and 13th National
+Committee of the Chinese People's Political Consultative Conferences.
+Mr. Su Hengxuan, born in 1963, Chinese
+Mr. Su became an Executive Director of the Company in December 2018. He was
+appointed by the Board of Directors as the President of the Company in December 2018
+(the qualification of his appointment is still subject to the approval by the CBIRC). He
+served as the Vice President of China Life Insurance (Group) Company since December
+2017. He was the President of China Life Pension Company Limited from March 2015
+to February 2018. Mr. Su served various positions in the Company from 2000 to 2015,
+including the Deputy General Manager of Henan Branch, the General Manager of the
+Individual Insurance Department of the Company, the General Manager of the Individual
+Insurance Sales Department of the Company, an Assistant to the President and the Vice
+President of the Company. Mr. Su graduated from Wuhan University and the University
+of Science and Technology of China and obtained a doctoral degree in management science
+and engineering from the University of Science and Technology of China in 2011. Mr. Su,
+a senior economist, has over 35 years of experience in the operation and management of life
+insurance business.
+China Life Insurance Company Limited
+95
+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 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. Yuan Changqing, born in 1961, Chinese
+Mr. Yuan became a Non-executive Director of the Company in February 2018. He is
+the Vice Chairman, President and Deputy Secretary to the Party Committee of China
+Life Insurance (Group) Company. Mr. Yuan served as the Chairman of the Supervisory
+Committee and the Deputy Secretary to the Party Committee of Agricultural Bank of China
+Limited from April 2015 to May 2017. He served as the Deputy General Manager and the
+Secretary to the Discipline Inspection Committee of China Everbright Group Corporation
+Limited from November 2014 to April 2015, the Secretary to the Discipline Inspection
+Committee of China Everbright Group Limited from December 2008 to August 2012, and
+an Executive Director, the Deputy General Manager and the Secretary to the Discipline
+Inspection Committee of China Everbright Group Limited from August 2012 to November
+2014, during which he concurrently acted as the Chairman of Everbright Securities
+Company Limited. During the period from 1995 to 2008, he served as the Vice President,
+President and Secretary to the Party Committee of Xinjiang Branch, the President and
+Secretary to the Party Committee of Henan Branch, and the Director of the Organization
+Department of the Party Committee and the General Manager of the Human Resources
+Department of the head office of Industrial and Commercial Bank of China Limited.
+During the period from 1981 to 1995, he held various professional and management
+positions in branch offices of the People's Bank of China and Industrial and Commercial
+Bank of China. Mr. Yuan, a senior economist, graduated from the University of Hong
+Kong, majoring in international business administration with a master's degree in business
+administration.
+Corporate Governance
+96
+China Life Insurance Company Limited 2
+Corporate Governance
+Corporate Governance
+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. Yin Zhaojun, born in 1965, 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. 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's degree of science from the University
+of London, and is a fellow member of the Institute of Chartered Accountants in England
+and Wales.
+China Life Insurance Company Limited
+97
+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.
+Corporate Governance
+Mr. Tang Xin, born in 1971, Chinese
+Mr. Tang became an Independent Director of the Company in March 2016. He is a
+professor of the School of Law of Tsinghua University, the Deputy Head of the Commercial
+Law Research Center of Tsinghua University, an associate editor of "Tsinghua Law Review",
+a member of the Listing Committee of the Shanghai Stock Exchange, the Chairman of the
+Independent Director Committee of 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.
+China Life Insurance Company Limited
+98
+Mr. Liu Huimin, born in 1965, Chinese
+DIRECTORS
+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 emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and Senior
+Management during the Reporting Period.
+arrangements
+No Resigned due to the
+adjustment of work
+arrangements
+No Retired due to the expiry
+of the fifth session of the
+Board of Supervisors
+No Retired due to the expiry
+16.56
+44.28
+of the fifth session of the
+Board of Supervisors
+Shi Xiangming Supervisor
+Male
+November 1959 25 May 2009 - 18 February 2019
+0
+0
+59.38
+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 submission date of this annual report.
+3.
+2.
+1.
+Notes:
+China Life Insurance Company Limited 2
+arrangements
+94
+Total
+arrangements
+adjustment of work
+No Resigned due to the
+90.27
+30.89
+586.38
+received from the
+23.24
+22 May 2012-13 November 2018
+0
+0
+Since 20 December 2018
+February 1963
+Male
+Executive Director
+Su Hengxuan
+Executive Director
+Yes
+0
+0
+0
+emolument from
+connected parties
+of the Company
+(before tax)
+ten thousands
+ten thousands
+ten thousands
+February 1967
+Female
+Operation Director
+Yang Hong
+Salary/
+enterprise annuity
+fund paid by
+0
+Company during
+Whether received
+Remuneration
+the Company
+Period in RMB
+paid in RMB
+in RMB
+the Reporting
+Since March 2018
+Executive Director
+Executive Director
+Male
+Non-executive Director
+Yin Zhaojun
+Yes
+0
+0
+0
+0
+Since 31 July 2017
+June 1965
+Male
+Non-executive Director
+Liu Huimin
+Yes
+0
+0
+0
+Male
+May 1959
+Since 11 July 2015
+0
+143.20
+23.24
+Xu Haifeng
+166.44
+Yuan Changqing
+Non-executive Director
+Male
+September 1961
+Since 11 February 2018
+0
+No
+0
+Yes
+89.50
+fund and received from the
+received
+Number of
+enterprise annuity Company during
+emolument
+share held Number of
+Salary/
+fund paid by
+the Reporting
+from
+at the
+share held
+Remuneration
+the Company
+connected
+beginning
+at the end
+0
+changes ten thousands
+of the year of the year
+Term
+Date of Birth
+August 1955
+Male
+Whether
+Yang Mingsheng Chairman of the Board,
+Chairman of the Board,
+Name
+parties of
+ten thousands
+in RMB
+Reason for paid in RMB
+Gender
+housing provident Total emolument
+Period in RMB
+Other benefits,
+social insurance,
+26.28
+115.78
+No
+Xu Chongmiao
+Total
+Compliance Officer
+Male
+October 1969
+1
+Since July 2018
+1
+0
+25.28
+16.38
+41.66
+No
+0
+0
+0
+After the consideration and approval by the ninth meeting of the sixth session of the Board of Directors of the Company, Mr.
+Su Hengxuan was appointed as the President of the Company and the qualification of his appointment is still subject to the
+approval by the CBIRC. After the consideration and approval by the ninteenth 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 on 2 March 2018, and Ms.
+Yang Hong was appointed as the Operation Director of the Company on 2 March 2018. After the consideration and approval
+by the ninteenth meeting of the fifth session of the Board of Directors of the Company and upon the approval by the CBIRC,
+Mr. Ruan Qi was appointed as the Vice President of the Company on 8 April 2018. After the consideration and approval by the
+twenty-fourth meeting of the fifth session of the Board of Directors of the Company and upon the approval by the CBIRC, Mr.
+Xu Chongmiao was appointed as the Compliance Officer of the Company on 17 July 2018.
+MANAGEMENT
+(IV) RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND SENIOR
+93
+China Life Insurance Company Limited
+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.
+1,240.12
+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.
+Since 31 July 2017
+Notes:
+I
+3.
+Corporate Governance
+101,335
+Employees in total
+23,166
+1,482
+Number of employees of the Company
+Number of employees of the Company's major subsidiaries
+102,817
+Management and administration
+22
+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
+Number of
+Employees
+(I) Employees
+Retired employees of the Company and its major subsidiaries for which extra costs have to be incurred
+IV. EMPLOYEES
+Term
+China Life Insurance Company Limited
+Sales and sales management
+Position
+Wang Bin
+Su Hengxuan
+Yuan Changqing
+Liu Huimin
+Yin Zhaojun
+Luo Zhaohui
+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
+Chairman
+106
+Vice President
+Since August 2018
+Since December 2017
+Since May 2017
+Since September 2013
+Since October 2016
+Since July 2016
+Corporate Governance
+III. Remuneration of Directors, Supervisors and Senior Management
+1. Decision-making procedures for the remuneration of Directors, Supervisors and senior management: The
+remuneration of Directors and Supervisors is subject to approval by shareholders at general meetings, whereas the
+remuneration of senior management is subject to approval by the Board of Directors.
+2. Basis for determination of the remuneration of Directors, Supervisors and senior management: The remuneration
+of Directors, Supervisors and senior management is 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. 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 RMB21.413 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
+2018 has not yet been determined.
+Vice Chairman, President
+Vice President
+Vice President
+Deputy General Manager of
+Strategic Planning Department
+40,194
+China Life Insurance Company Limited
+5,140
+62,639
+30,053
+2,123
+3,332
+102,817
+China Life Insurance Company Limited
+4,670
+107
+The Company has established a remuneration and incentive system with reference to employee's positions, the
+Company's performance and market conditions.
+(III) Training Plans
+Adhering to the philosophy of "people-oriented and both capability and integrity being equally important", the
+Company has been promoting the unity between the growth of the Company and its employees in a harmonious
+way. In
+2018, the Company implemented the work requirements of "close to the frontline, close to the practice and adapt to the
+era" for education and training in great depth, and pushed forward employees' trainings to local branches and frontline
+business management teams for further in-depth development under the guideline of "prioritizing value, strengthening
+sales force, achieving stable growth, optimizing business structure, and safeguarding against risks”. The Company
+also strengthened training supports for its key personnel (including local management teams, sales management teams
+and key personnel in all professional sectors), 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 works in business development, team building, cultural cultivation, service improvement,
+efficiency optimization and risk prevention in 2018.
+Corporate Governance
+108
+Name of shareholders
+(II) Remuneration Policy for Employees
+Finance and auditing
+Number of
+Employees
+Others
+Insurance verification, claim processing and customer services
+26,695
+Other expertise and technicians
+4,274
+Others
+3,348
+Total
+Total
+2. Education Level
+Education Level
+Master or above
+Bachelor
+College Diploma
+Secondary School
+102,817
+Name
+Corporate Governance
+105
+Mr. Li Mingguang, born in 1969, Chinese
+Please refer to the section “Directors" for the profiles of Mr. Su Hengxuan and Mr. Xu Haifeng.
+SENIOR MANAGEMENT
+101
+Mr. Huang became a Supervisor of the Company in June 2018. He served as the General
+Manager of the Human Resources Department of the Company from March 2018 to
+December 2018. He served as the Deputy General Manager of the Human Resources
+Department of the Company from August 2014 to March 2018. From December 2010
+to August 2014, Mr. Huang successively served as an Assistant to the General Manager
+and the Deputy General Manager of the Human Resources Department of China Life
+Insurance (Group) Company, during which he was seconded to the Shijiazhuang Branch
+of the Company in Hebei Province as the Deputy General Manager from February 2011 to
+February 2013. From 2004 to 2010, he successively served as the Deputy Division Chief
+of the Labour and Wages Division, and the Deputy Division Chief and Division Chief
+of the Performance and Remuneration Management Division of the Human Resources
+Department of China Life Insurance (Group) Company. Mr. Huang graduated from Central
+University of Finance and Economics in July 1996 majoring in taxation with a bachelor's
+degree in economics, and is a senior economist and PRC certified public accountant.
+Mr. Huang Xin, born in 1974, 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. Song Ping, born in 1964, Chinese
+Mr. Tang became a Supervisor of the Company in February 2019. He is the Deputy
+General Manager of the Supervision Department of the Company, who is responsible for
+the daily operation of the Supervision Department. From October 2016 to August 2018,
+he served as an Assistant to the General Manager and the Deputy General Manager of the
+Human Resources Department of the Company. From 2011 to 2016, Mr. Tang served
+as the Division Chief of the System Staff Management Division of the Human Resources
+Department, the General Manager of the Human Resources Department of Jiangxi Branch,
+and the Division Chief of the Planning Division of the Human Resources Department
+of the Company. From 2006 to 2011, he served as the Senior Supervisor and the Deputy
+Division Chief of the Organization Division, and the Deputy Division Chief of the System Staff Management Division
+of the Human Resources Department of the Company. From 2004 to 2006, he served as the Secretary at the level
+of battalion commander and the Secretary at the level of deputy regimental commander of the General Office of the
+General Political Department of the Chinese People's Liberation Army. Mr. Tang graduated from the Party School of
+the Central Committee of the Chinese Communist Party majoring in political science and law in December 1998 and
+from Tianjin Normal University majoring in Chinese language and literature in June 2006.
+Mr. Tang Yong, born in 1972, Chinese
+China Life Insurance Company Limited
+Corporate Governance
+100
+China Life Insurance Company Limited
+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.
+Mr. Luo Zhaohui, born in 1974, Chinese
+Corporate Governance
+Mr. Jia became the Chairman of the Board of Supervisors of the Company in July 2018.
+During the period from 2006 to March 2018, he served as a Supervisor, the General
+Manager of the Human Resources Department, an Assistant to the President, the Vice
+President, the Board Secretary, an Executive Director and the Compliance Officer of China
+Life Pension Company Limited. During the period from 2004 to 2006, he served as the
+General Manager of the Work Department of the Trade Union, the Executive Deputy
+Director of the Trade Union and a Supervisor of the Company. During the period from
+1988 to 2004, he successively served as the Division Head of the General Office and a
+secretary (at the deputy director level) of the PRC Ministry of Supervision, the Deputy
+Director (responsible for daily operation) of the Minister Office of the General Supervision
+Office under the Supervision Department of the Central Commission for Discipline
+Inspection, and an inspector (at the director level), supervisor, inspector (at the deputy
+bureau chief level) and special supervisor of the General Office of the Central Commission
+for Discipline Inspection. Mr. Jia graduated from the Open University of Hong Kong in
+2003, majoring in business administration with a master's degree in business administration.
+Mr. Jia Yuzeng, born in 1962, Chinese
+SUPERVISORS
+99
+China Life Insurance Company Limited
+Ms. Leung became an Independent Director of the Company in July 2016. She was the first
+Secretary for Justice of Hong Kong, a member of the Executive Council of Hong Kong, the
+Deputy Director of the Hong Kong Basic Law Committee of the Standing Committee of
+the 2nd, 3rd and 4th National People's Congress and a consultant of Iu, Lai & Li Solicitors
+& Notaries. Ms. Leung served as a member of the Social Welfare Advisory Committee
+and the Equal Opportunities Commission, an executive committee member and a council
+member of the Hong Kong Federation of Women, the Chairperson and President of the
+International Federation of Women Lawyers, and the Honorary President of the Nanhai
+Worldwide Friendship Federation. She is a Justice of the Peace, a Notary Public and a
+China-Appointed Attesting Officer. She has been awarded the "Grand Bauhinia Medal"
+and admitted as a solicitor by the Law Societies of Hong Kong and England. Ms. Leung
+graduated from the University of Hong Kong with a master's degree in law, and is a fellow
+of the International Academy of Matrimonial Lawyers. She has been an Independent Non-
+executive Director of United Company RUSAL Plc since December 2009, an Independent
+Non-executive Director of China Resources Power Holdings Company Limited since April
+2010, and an Independent Non-executive Director of PetroChina Company Limited since
+June 2017.
+Ms. Leung Oi-Sie Elsie, born in 1939, Chinese
+II. POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND
+SENIOR MANAGEMENT IN SHAREHOLDERS OF THE COMPANY
+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 member of
+the China National Master of Insurance Education Supervisory Committee and the Vice
+Chairman of the second session of the Professional Committee of Assets and Liabilities
+Management of the Insurance Asset Management Association of China.
+Corporate Governance
+Corporate Governance
+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.
+Mr. Zhao Lijun, born in 1963, 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 15 years of experience in accounting and auditing for
+private and public companies and financial consultancy. Mr. Heng serves as an Independent
+Non-executive Director of CIMC-Tian Da Holdings Company Limited (formerly: 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.
+Mr. Heng Victor Ja Wei, born in 1977, British
+COMPANY SECRETARY
+China Life Insurance Company Limited
+Mr. Xu became the Compliance Officer of the Company in July 2018. He has been the
+General Manager of the Legal and Compliance Department and the Legal Officer of the
+Company since September 2014. From 2006 to 2014, he successively served as the Deputy
+General Manager of the Legal Affairs Department, the Deputy General Manager of the
+Legal and Compliance Department and the Legal Officer at the general manager level of the
+Company. From 2000 to 2006, he successively served as the Deputy Division Chief of the
+Regulations Division of the Development and Research Department and a senior regulations
+researcher of the Legal Affairs Department of the Company. Mr. Xu graduated from Fudan
+University in August 1991, majoring in economic law with a bachelor's degree in law, and
+from Renmin University of China in July 1996 and July 2005, respectively, majoring in
+economic law with master's and doctorate degrees in law. Mr. Xu is admitted as a lawyer and
+certified public accountant in the PRC.
+Mr. Xu Chongmiao, born in 1969, Chinese
+Ms. Yang became the Operation Director of the Company 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.
+Corporate Governance
+104
+China Life Insurance Company Limited
+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, and was an Employee Representative
+Supervisor of the Company from July 2015 to August 2017. Mr. Zhan served as the
+Deputy General Manager (responsible for daily operations) and the General Manager of the
+Company's Qinghai branch from 2013 to 2014. From 2009 to 2013, Mr. Zhan successively
+served as the Deputy General Manager (responsible for daily operations) and the General
+Manager of the Individual Insurance Division of the Company. From 2005 to 2009, he
+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 Chengdu High-tech Sub-branch of Zhongbao Life Insurance
+Company, an Assistant to the Manager and the Manager of the Marketing Department of
+Chengdu Branch, and the Deputy General Manager of Chengdu Branch of Taikang Life
+Insurance Company. Mr. Zhan graduated from Kunming Institute of Technology in July
+1989, majoring in industrial electric automation with a bachelor's degree in engineering.
+Ms. Yang Hong, born in 1967, Chinese
+Mr. Ruan became the Vice President of the Company in April 2018. He served as the Chief
+Information Technology Officer of the Company from January 2018 to April 2018. Mr.
+Ruan served as the Chief Information Technology Officer and the General Manager of
+the Information Technology Department of the Company from October 2016 to January
+2018. He served as the General Manager (at the general manager level of the provincial
+branches) of the Information Technology Department of the Company from March
+2016 to October 2016. He served as the General Manager of China Life Data Center
+and the General Manager (at the general manager level of the provincial branches) of the
+Information Technology Department of the Company from 2014 to 2016, and the Deputy
+General Manager and the General Manager of the Information Technology Department
+of the Company from 2004 to 2014. He successively served as the Deputy Division Chief
+of the Computer Division of Fujian Branch, and the Deputy Manager (responsible for
+daily 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.
+Mr. Zhan Zhong, born in 1968, Chinese
+Corporate Governance
+Mr. Xiao Jianyou, born in 1968, Chinese
+Mr. Zhao Peng, born in 1972, Chinese
+Mr. Zhao became the Vice President of the Company in March 2018. He served as an
+Assistant to the President of the Company from October 2017 to March 2018 and the
+General Manager of Zhejiang Branch of the Company from January 2015 to October 2017.
+From 2014 to 2015, he successively served as the Deputy General Manager (at the general
+manager level of the provincial branches) and the person-in-charge of Zhejiang Branch of
+the Company. From 2003 to 2014, he successively held various positions in China Life
+Insurance (Group) Company, including the Division Chief of the Capital Management
+Division of the Finance Department, an Assistant to the General Manager and the Division
+Chief of the Capital Management Division of the Finance Department, an Assistant to the
+General Manager, the Deputy General Manager and the General Manager of the Finance
+and Accounting Department, and the General Manager of the Finance Department. From
+1995 to 2003, Mr. Zhao successively served as a staff member of the Capital Division,
+a staff member of the Financial Management Division, the Deputy Division Chief and
+the Division Chief of the Capital Division of the Planning and Finance Department of
+China Life Insurance Company. Mr. Zhao graduated from Hunan College of Finance
+and Economics in July 1995, majoring in actuarial science with a bachelor's degree in
+economics, from Central University of Finance and Economics in June 2002, majoring in
+finance with a master's degree in economics, and from Tsinghua University in January 2007,
+majoring in business administration with a master's degree in business administration.
+Mr. Xiao became the Vice President of the Company in October 2016. He served as an
+Assistant to the President of the Company from July 2015 to October 2016 and has been a
+Non-executive Director of China Life Property and Casualty Insurance Company Limited
+since September 2015. He served as the General Manager of Jiangsu Branch of the Company
+from January 2014 to July 2015 and the Deputy General Manager (responsible for daily
+operation) of Jiangsu Branch of the Company 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 Individual 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.
+China Life Insurance Company Limited
+103
+Corporate Governance
+Mr. Ruan Qi, born in 1966, Chinese
+China Life Insurance Company Limited
+102
+8
+No
+Leung Oi-Sie Elsie
+Independent Director
+No
+0
+0
+100%
+100%
+8 Note 8
+0
+Robinson Drake Pike
+8
+8
+Independent Director
+Tang Xin
+87.5%
+0
+1 Note 7
+7
+8
+Independent Director
+Z ZZZZZ ZZZ
+87.5%
+0
+No
+At the nineteenth meeting of the fifth session of the Board held on 2 March 2018, Mr. Yang Mingsheng gave written
+authorization for Mr. Lin Dairen to act as his proxy to attend, vote at and chair the meeting; at the twentieth meeting of the
+fifth session of the Board held on 22 March 2018, Mr. Yang Mingsheng gave written authorization for Mr. Lin Dairen to act as
+his proxy to attend, vote at and chair the meeting; at the twenty-first meeting of the fifth session of the Board held on 26 April
+2018, Mr. Yang Mingsheng gave written authorization for Mr. Lin Dairen to act as his proxy to attend, vote at and chair the
+meeting.
+No
+In 2018, three regular Board meetings and six ad-hoc Board meetings were held by the sixth session of the Board. The
+attendance records of individual Directors are as follows:
+0
+The fifth session of the Board of the Company did not convene any meeting during the period from 1 January 2018 to
+the resignation date of Mr. Wang Sidong. Therefore, there was no meeting of the Board that required Mr. Wang Sidong
+to attend in 2018.
+At the nineteenth meeting of the fifth session of the Board held on 2 March 2018, Ms. Leung Oi-Sie Elsie attended the meeting
+by telephony.
+At the nineteenth meeting of the fifth session of the Board held on 2 March 2018, Mr. Robinson Drake Pike gave written
+authorization for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
+At the twenty-fourth meeting of the fifth session of the Board held on 5 June 2018, Mr. Chang Tso Tung Stephen gave written
+authorization for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
+8.
+7.
+6.
+117
+China Life Insurance Company Limited
+At the nineteenth meeting of the fifth session of the Board held on 2 March 2018, Mr. Chang Tso Tung Stephen attended the
+meeting by telephony.
+At the twenty-first meeting of the fifth session of the Board held on 26 April 2018, Mr. Yin Zhaojun gave written authorization
+for Mr. Xu Hengping to act as his proxy to attend and vote at the meeting; at the twenty-fourth meeting of the fifth session of
+the Board held on 5 June 2018, Mr. Yin Zhaojun gave written authorization for Mr. Liu Huimin to act as his proxy to attend
+and vote at the meeting.
+At the twentieth meeting of the fifth session of the Board held on 22 March 2018, Mr. Liu Huimin gave written authorization
+for Mr. Yin Zhaojun to act as his proxy to attend and vote at the meeting.
+At the twentieth meeting of the fifth session of the Board held on 22 March 2018, Mr. Yuan Changqing gave written
+authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote at the meeting; at the twenty-fourth
+meeting of the fifth session of the Board held on 5 June 2018, Mr. Yuan Changqing gave written authorization for Mr. Robinson
+Drake Pike to act as his proxy to attend and vote at the meeting.
+5.
+4.
+3.
+2.
+1.
+Notes:
+No
+No
+No
+No
+No
+1 Note 6
+0
+8
+Xu Haifeng
+100%
+0
+0
+8
+8
+Executive Director
+Xu Hengping
+No
+100%
+0
+Executive Director
+0
+8
+Executive Director
+Lin Dairen
+Yes
+62.5%
+0
+3 Note 1
+5
+8
+Executive Director
+Yang Mingsheng
+8
+8
+8
+Corporate Governance
+Independent Director
+Chang Tso Tung Stephen
+75%
+0
+2 Note 4
+6
+8
+Non-executive Director
+Yin Zhaojun
+87.5%
+0
+1 Note 3
+7
+8
+Non-executive Director
+Liu Huimin
+66.7%
+0
+2 Note 2
+4
+6
+Non-executive Director
+Yuan Changqing
+100%
+0
+7 Note 5
+Number of
+meetings
+the Director
+0
+Number of
+0
+0
+9 Note 6
+9
+Independent Director
+Robinson Drake Pike
+Tang Xin
+88.9%
+0
+1 Note 5
+8 Note 4
+9
+Independent Director
+Chang Tso Tung Stephen
+77.8%
+0
+Note 3
+2
+7
+9
+Non-executive Director
+Yin Zhaojun
+100%
+0
+0
+9
+100%
+9
+Independent Director
+9
+118
+China Life Insurance Company Limited
+Notes:
+At the first meeting of the sixth session of the Board held on 6 June 2018, Mr. Yuan Changqing gave written authorization for
+Mr. Robinson Drake Pike to act as his proxy to attend and vote at the meeting; at the sixth meeting of the sixth session of the
+Board held on 25 October 2018, Mr. Yuan Changqing gave written authorization for Mr. Su Hengxuan to act as his proxy to
+attend and vote at the meeting; at the ninth meeting of the sixth session of the Board held on 20 December 2018, Mr. Yuan
+Changqing gave written authorization for Mr. Liu Huimin to act as his proxy to attend and vote at the meeting.
+2.
+1. At the ninth meeting of the sixth session of the Board held on 20 December 2018, Mr. Wang Bin gave written authorization for
+Mr. Su Hengxuan to act as his proxy to attend, vote at and chair the meeting.
+No
+No
+No
+No
+No
+No
+No
+No
+Ž Ž Ž Ž Ž Ž Ž Ž
+88.9%
+0
+1 Note 8
+8 Note 7
+9
+Independent Director
+Leung Oi-Sie Elsie
+100%
+0
+0
+9
+Whether the
+Directors failed
+Non-executive Director
+66.7%
+1 Note 1
+0
+1
+person
+in
+in person
+meetings
+consecutive
+to attend two
+Rate of
+attendance
+Number of
+meetings
+absent
+by proxies
+person
+in
+to attend
+Type of Director
+Executive Director
+Wang Bin
+Name of Director
+attended
+attended
+was required
+meetings
+meetings
+Number of
+in person
+Liu Huimin
+0
+Su Hengxuan
+0
+3 Note 2
+6
+9
+Non-executive Director
+Yuan Changqing
+100%
+0
+0
+9
+9
+Executive Director
+Xu Haifeng
+No
+100%
+0
+0
+9
+9
+Executive Director
+Xu Hengping
+No
+100%
+7 7 0 0
+Executive Director
+No
+in person
+116
+consecutive
+Wang Bin
+Attendance rate
+Number of
+meetings absent
+person
+in
+during the year
+Type of Director
+Name of Director
+required to attend meetings attended
+Number of
+Executive Director
+Corporate Governance
+general meetings
+Number of
+shareholders'
+2. Attendance records of Directors at the shareholders' general meetings convened during the Reporting Period
+112
+China Life Insurance Company Limited
+Four proposals including: the “Proposal in relation to
+the Election of Mr. Wang Bin as an Executive Director
+of the Sixth Session of the Board of Directors of the
+Company", the "Proposal in relation to the Election
+of Mr. Tang Yong as a Non-employee Representative
+Supervisor of the Sixth Session of the Board of
+Supervisors of the Company”, the “Proposal in relation
+to the Remuneration of Directors and Supervisors of
+the Company for the Year 2017” and the "Proposal in
+relation to the Debt Financing for Replenishment of
+Capital of the Company" were considered and approved
+by a combination of on-site and online voting at the
+First Extraordinary General Meeting 2018 held in
+Beijing on 13 November 2018.
+were considered and approved by a combination of on-
+site and online voting, and the "Duty Report of the
+Independent Directors of the Board of Directors of the
+Company for the Year 2017” and the “Report on the
+Status of Connected Transactions and the Execution
+of Connected Transactions Management System of the
+Company for the Year 2017" were received and reviewed
+at the 2017 Annual General Meeting held in Beijing on
+6 June 2018.
+China Life Investment Holding Company Limited"
+Twenty-three proposals including: the "Proposal in
+relation to the Report of the Board of Directors of
+the Company for the Year 2017", the "Proposal in
+relation to the Report of the Board of Supervisors
+of the Company for the Year 2017”, the “Proposal
+in relation to the Financial Report of the Company
+for the Year 2017”, the “Proposal in relation to the
+Profit Distribution Plan of the Company for the Year
+2017", the "Proposal in relation to the Remuneration
+of Directors and Supervisors of the Company”, the
+proposals in relation to the election of Executive
+Directors, Non-executive Directors and Independent
+Directors of the sixth session of the Board of Directors
+of the Company, the proposals in relation to the
+election of Non-employee Representative Supervisors
+of the sixth session of the Board of Supervisors
+of the Company, the "Proposal in relation to the
+Remuneration of Auditors of the Company for the
+Year 2017 and the Appointment of Auditors of the
+Company for the Year 2018", the "Proposal in relation
+to the General Mandate for the Issuance of H Shares
+by the Company” and the “Proposal in relation to
+the Renewal of the Asset Management Agreement for
+Alternative Investments between the Company and
+Corporate Governance
+the Director was
+0
+Su Hengxuan
+Executive Director
+2
+Non-executive Director
+0
+2
+0
+2
+Non-executive Director
+Liu Huimin
+Yuan Changqing
+100%
+0
+meetings
+2
+Executive Director
+Xu Haifeng
+100%
+2 20
+Executive Director
+Xu Hengping Note
+100%
+0
+1
+1
+13 November 2018
+6 June 2018
+of resolutions
+Date of publication
+6. 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
+5. The Company carried out the procedures relating to
+the election, resignation, retirement and appointment
+of Directors and Supervisors and the procedures for the
+change of the senior management in compliance with
+the regulatory requirements of its listed jurisdictions and
+the provisions of its Articles of Association. During the
+process, the Company strictly carried out the procedures
+and elected all members of the sixth session of the
+Board of Directors and the Board of Supervisors of the
+Company at the shareholders' general meeting and the
+Employee Representative Meeting through widespread
+solicitation, stringent selection and full deliberation.
+4. 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 Board of Supervisors Meetings".
+Members of the Board of Supervisors attended the
+shareholders' general meetings and the Board of
+Supervisors meetings, participated in the Board meetings
+and the meetings of the specialized Board committees
+based on their work allocation, and conducted
+investigations on local branches to have an in-depth
+understanding of the implementation of the decisions
+made by the Board, so as to diligently perform their role
+of supervision.
+the 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 Assets and Liabilities Management
+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.
+109
+3. 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
+2. 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.
+1. The Company has set up a corporate governance
+structure with well-defined duties and responsibilities
+strictly in accordance with relevant laws, regulations
+and regulatory requirements, including the Company
+Law and the Securities Law of the PRC. The corporate
+governance structure of the Company generally meets
+the regulatory requirements of its listed jurisdictions and
+the relevant provisions. The Company has carried out its
+corporate governance procedures strictly in accordance
+with relevant laws, regulations and regulatory
+requirements, including the Company Law and the
+Securities Law of the PRC, as well as the requirements
+of its Articles of Association and procedural rules.
+Shareholders' general meetings, Board meetings and
+Board of Supervisors meetings of the Company have
+been functioning independently and coordinately.
+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)
+Corporate Governance
+Board Secretary
+Board of Directors' Office/
+Company Secretary
+Strategy and
+Assets and Liabilities
+Management Committee
+Risk Management
+Committee
+Nomination and
+Remuneration
+Committee
+Board of Supervisors
+Board of Directors
+Shareholders'
+General Meeting
+Audit Committee
+investors.
+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
+I. OVERVIEW OF CORPORATE GOVERNANCE
+Report of Corporate Governance
+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.
+1
+7. The Company has consistently made improvements
+to its systems relating to corporate governance.
+Pursuant to the regulatory requirements such as the
+"Guidelines on the Articles of Association of Insurance
+Companies" and the "Measures for the Administration
+of Independent Directors of Insurance Institutions"
+published by the CBIRC, and the "Code of Corporate
+Governance for Listed Companies" recently revised
+by the CSRC, and after taking into account its
+actual operation, the Company has commenced the
+amendments to the Articles of Association in 2018.
+The key amendments include the incorporation of
+the provisions relating to the establishment of the
+Party Committee into the Articles of Association,
+addition of new requirements for special matters of
+corporate governance, improvement of the requirements
+concerning major governance matters of the Company
+(including the rights of shareholders, the Board
+and Independent Directors, major investment and
+share repurchase), and revision of some provisions
+of the Articles of Association according to regulatory
+regulations. The amendments to the Articles of
+Association are still subject to the approval of the
+shareholders of the Company and the approval of the
+CBIRC.
+Corporate Governance
+http://www.hkexnews.hk
+http://www.e-chinalife.com
+http://www.sse.com.cn
+http://www.e-chinalife.com
+http://www.hkexnews.hk
+http://www.sse.com.cn
+Index for websites on which
+resolutions were published
+13 November 2018
+First Extraordinary
+General Meeting 2018
+6 June 2018
+2017 Annual General Meeting
+Date of the meeting
+Session of the meeting
+1. Shareholders' general meetings convened during the Reporting Period are as follows:
+111
+China Life Insurance Company Limited
+matters.
+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
+II. SHAREHOLDERS' GENERAL
+MEETING
+10. During the Reporting Period, the Company
+was awarded the title of the "2017 Listed Company
+Most Respected by Investors” in the assessment and
+selection organized by the China Association for Public
+Companies. Mr. Li Mingguang, the Board Secretary of
+the Company, was awarded the “Best Board Secretary
+of Listed Companies" in the "2018 China Securities
+Golden Bauhinia Awards" organized by Hong Kong
+Ta Kung Wen Wei Media Group. The Company
+was awarded the “Outstanding Award for Research
+on Special Topics" in the assessment and selection of
+outstanding papers for theoretical research on the system
+of the board of supervisors as organized by the China
+Association for Public Companies.
+9. The Company has actively organized Directors
+and Supervisors to attend various training courses
+and examinations. All Independent Directors of the
+Company attended special training courses on the
+business development of the Company, regulations on
+connected transactions, online sales process, and impact
+from key changes of new individual income tax law and
+corresponding measures as organized by the departments
+of the Company such as the Investment Management
+Department and the E-commerce Department. Mr. Xu
+Haifeng, an Executive Director of the Company, and
+Mr. Luo Zhaohui and Mr. Song Ping, the Supervisors
+of the Company, respectively attended the 4th and
+5th special training courses of 2018 for directors
+and supervisors of listed companies within Beijing
+as organized by the Listed Companies Association of
+Beijing. All members of the Audit Committee under the
+Board of the Company attended the 2nd training course
+of 2018 for the audit committee of listed companies and
+the exchange class for enhancement of duty performance
+capability as organized by the China Association for
+Public Companies. All Directors and Supervisors of
+the Company attended the special training courses
+for the performance of duties by directors, supervisors
+and senior management officers and the training
+programs on anti-money laundering as organized by
+the Company. Pursuant to the regulatory requirements
+of the industry, the new Directors and Supervisors of
+the Company sat for the examinations of the CBIRC
+regarding the approval of qualifications of new directors,
+supervisors and senior management officers of insurance
+institutions as organized by the CBIRC.
+Corporate Governance
+110
+China Life Insurance Company Limited
+8. The Board of Directors and the Board of Supervisors
+of the Company have conducted extensive investigation
+and research activities. The members of the Board
+successively carried out investigation and research
+on and on-site project inspection of China Life IT
+Center, Suzhou Branch of the Company, China Life
+Jiayuan Yajing (the senior living community) and
+Beijing Branch of the Company 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 Board of Supervisors
+carried out investigation and research on Hainan Branch
+of the Company 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.
+1
+2
+Yin Zhaojun
+their implementation of decisions of the Board and the
+The Board of the Company have conducted extensive
+investigation and research activities. The members
+of the Board carried out investigation and research
+on China Life IT Center, Suzhou Branch of the
+Company, China Life Jiayuan Yajing (the senior living
+community), and Fuchengmen Sub-branch under
+Beijing Branch of the Company for the purpose of
+understanding the operation of the local branches and
+Currently, the sixth session of the Board comprises the
+following members: Mr. Wang Bin, Mr. Su Hengxuan
+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. Wang Bin as the
+Chairman of the Board. In January 2018, Mr. Wang
+Sidong resigned from his position as a Director due to
+adjustment of work arrangements. Mr. Yang Mingsheng,
+Mr. Lin Dairen and Mr. Xu Hengping resigned
+from their positions as Directors in November 2018,
+December 2018 and January 2019, respectively, due to
+the reason of age.
+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.
+Regular Board meetings are held mainly to review the
+quarterly, interim or annual reports of the Company
+and to deal with other related matters. The practice
+of obtaining Board consent through the circulation of
+written resolutions does not constitute a regular Board
+meeting. An ad-hoc Board meeting may be convened
+in urgent situations if requisitioned by any of the
+following: shareholders representing over one-tenth of
+voting shares, Directors constituting more than one-
+third of the total number of Directors, the Board of
+Supervisors, more than two Independent Directors,
+the Chairman of the Board or the President of the
+Company. If the resolution to be considered at such
+ad-hoc Board meetings has been circulated to all the
+Directors and more than half of the Directors having
+voting rights approve such resolution by signing the
+resolution in writing, the ad-hoc Board meeting need
+not be physically convened and such resolution in
+writing shall become an effective resolution.
+Meetings of the Board are held both on a regular and
+an ad-hoc basis. Regular meetings are convened at
+least five 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 2018, 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.
+Corporate Governance
+114
+China Life Insurance Company Limited
+Corporate Governance
+management.
+50%
+Currently, the Board comprises ten members, including
+three 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
+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.
+III. BOARD
+113
+China Life Insurance Company Limited
+0 -
+Non-executive Director
+50%
+1
+1
+devoted sufficient time in dealing with the affairs of
+the Board and attended the relevant training courses
+organized by external regulatory authorities and the
+Company according to regulatory requirements. They
+have referred to regulatory documents on a regular basis
+so as to keep themselves informed of the regulatory
+development in a timely manner. The Company has
+purchased director's liability insurances for its Directors,
+which provide protection to Directors for liabilities
+that might arise in the course of their performance of
+duties according to law and facilitate Directors to fully
+perform their duties. So far as the Company is aware, no
+financial, business, family or other material relationship
+exists among members of the Board of Directors,
+the Board of Supervisors or the senior management,
+including between the Chairman of the Board (including
+Mr. Yang Mingsheng, the former Chairman of the Board
+and Mr. Wang Bin, the current Chairman of the Board)
+and the President of the Company (including Mr. Lin
+Dairen, the former President, and Mr. Su Hengxuan, the
+current President).
+China Life Insurance Company Limited
+115
+During 2018, all Independent Directors of the
+Company attended special training courses on the
+business development of the Company, regulations on
+connected transactions, online sale process, and impact
+from key changes of new individual income tax law and
+corresponding measures as organized by the departments
+of the Company such as the Investment Management
+Department and the E-Commerce Department. Mr. Xu
+Haifeng, an Executive Director, attended the 4th special
+training course of 2018 for directors and supervisors
+of listed companies within the territory of Beijing as
+organized by the Listed Companies Association of
+Beijing. All members of the Audit Committee under
+the Board of the Company attended the 2nd training
+course of 2018 for the audit committee of listed
+companies and the exchange class for enhancement
+of duty performance capability as organized by the
+China Association for Public Companies. All Directors
+of the Company attended the special training courses
+for the performance of duties by directors, supervisors
+and senior management officers and the training
+programs on anti-money laundering as organized by the
+Company. Pursuant to the regulatory requirements of
+the industry, the new Directors of the Company sat for
+the examinations of the CBIRC regarding the approval
+of qualifications of new directors, supervisors and
+senior management officers of insurance institutions as
+organized by the CBIRC.
+to attend two
+Whether the
+Directors failed
+Rate of
+attendance
+Number of
+meetings
+absent
+by proxies
+in person
+to attend
+Type of Director
+Name of Director
+meetings
+attended
+attended
+was required
+meetings
+Number of
+Number of
+Number
+of meetings
+the Director
+Corporate Governance
+In 2018, two regular Board meetings and six ad-hoc Board meetings were held by the fifth session of the Board. The
+attendance records of individual Directors are as follows:
+1. Meetings and attendance
+China Life Insurance Company Limited
+Corporate Governance
+The Company has consistently improved its corporate
+governance structure, regulated the acts of Directors in
+performing their duties, and optimized the mechanism
+for supervising and evaluating the performance of
+duties by Directors. Pursuant to the "Measures for the
+Administration of Independent Directors of Insurance
+Institutions" published by the CBIRC, the “Operational
+Guidance for Evaluating the Performance of Duties
+by Directors of Insurance Companies" and other
+requirements, and after taking into account the actual
+situation of its corporate governance, the Company
+formulated the "Provisional Measures for Evaluating the
+Performance of Duties by Directors" in 2018, which
+included the general provisions, and the scope, method
+and application of the evaluation on the performance
+of duties by directors, etc. 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 2018.
+2
+Executive Director
+In 2018, 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.
+Lin Dairen
+100%
+0
+2
+2
+Independent Director
+Tang Xin
+100%
+0
+2
+2
+Wang Sidong
+Robinson Drake Pike
+50%
+1
+1
+2
+Independent Director
+Chang Tso Tung Stephen
+0
+2
+0
+2
+Non-executive Director
+Leung Oi-Sie Elsie
+Independent Director
+Independent Director
+2
+2
+0
+2
+0
+2
+Executive Director
+Yang Mingsheng
+Attendance rate
+absent
+meetings
+attended
+in person
+to attend
+during the year
+China Life Insurance Company Limited
+Name of Director
+Number of
+Number
+of meetings
+was required
+the Director
+general meetings
+Number of
+shareholders'
+3. Attendance records of the resigned Directors at the shareholders' general meetings convened during the Reporting
+Period
+Note: Mr. Xu Hengping resigned from his position as an Executive Director of the Company on 24 January 2019.
+100%
+0
+Type of Director
+Number of Number of
+meetings
+to attend two
+meetings
+Number of
+Type of Director
+attended
+attended
+Name of Director
+Whether the
+Director failed
+to attend
+was required
+Number of
+meetings
+the Director
+At the fifth meeting of the sixth session of the Board held on 25 September 2018, Mr. Chang Tso Tung Stephen attended the
+meeting by telephony.
+At the ninth meeting of the sixth session of the Board held on 20 December 2018, Ms. Leung Oi-Sie Elsie gave written
+authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting.
+At the fourth meeting of the sixth session of the Board held on 23 August 2018, Ms. Leung Oi-Sie Elsie attended the meeting by
+telephony; at the fifth meeting of the sixth session of the Board held on 25 September 2018, Ms. Leung Oi-Sie Elsie attended the
+meeting by telephony.
+At the fifth meeting of the sixth session of the Board held on 25 September 2018, Mr. Robinson Drake Pike attended the
+meeting by telephony.
+At the first meeting of the sixth session of the Board held on 6 June 2018, Mr. Chang Tso Tung Stephen gave written
+authorization for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
+At the first meeting of the sixth session of the Board held on 6 June 2018, Mr. Yin Zhaojun gave written authorization for Mr.
+Liu Huimin to act as his proxy to attend and vote at the meeting; at the sixth meeting of the sixth session of the Board held on
+25 October 2018, Mr. Yin Zhaojun gave written authorization for Mr. Liu Huimin to act as his proxy to attend and vote at the
+meeting.
+8.
+7.
+6.
+5.
+4.
+Corporate Governance
+person
+In 2018, the attendance records of the resigned Directors of the sixth session of the Board of the Company at the Board
+Meetings are as follows:
+3.
+At the fifteenth meeting of the fifth session of the Board of Supervisors held on 22 March 2018, Mr. Miao Ping was unable to
+attend the meeting due to his other business commitments and therefore gave written authorization for Mr. Shi Xiangming to act
+as his proxy to attend, vote at and chair the meeting.
+by proxies
+(3) Assessing the work of and strengthening communications
+with external auditors. Besides regular meetings, the
+Audit Committee convened communication meetings
+in advance with external auditors for several times so
+as to discuss the annual audit plan of the Company,
+determine the service scope of the annual audit,
+and 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.
+(2) Reviewing connected transactions. In 2018, the
+Audit Committee reviewed the proposal in relation
+to the renewal of 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 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.
+China Life Insurance Company Limited
+Corporate Governance
+reflected the overall situation of the Company in a true,
+accurate and complete manner, and gave its written
+opinion in this regard. By reviewing and monitoring
+the completeness of financial statements, annual report
+and accounts, interim report and quarterly reports of
+the Company, and examining significant matters such as
+financial statements and reports, the Audit Committee
+guaranteed the accuracy and completeness of the
+financial information disclosed by the Company and the
+consistency of its financial reports. Prior to the audit
+conducted by the accounting firm and the review of the
+annual report, the Audit Committee communicated the
+relevant situations with the auditors and listened to the
+report in connection with the arrangement of the audit.
+After a preliminary opinion on audit was issued by the
+accounting firm, the Audit Committee commenced
+in-depth communications with it so as to understand
+whether there were any issues arisen during the audit.
+(1) Reviewing and approving financial reports. The
+Audit Committee, according to its duties, reviewed
+and approved annual, interim and quarterly financial
+reports of the Company. The Audit Committee was
+of the view that the financial reports of the Company
+In 2018, 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 any proposals
+considered and discussed at the meetings.
+2. Performance of duties by the Audit Committee
+124
+China Life Insurance Company Limited
+100%
+5/5
+Independent Director, member of the Audit Committee of the
+sixth session of the Board
+Tang Xin
+100%
+5/5
+Chang Tso Tung Stephen Independent Director, member of the Audit Committee of the
+sixth session of the Board
+100%
+5/5
+Independent Director, Chairman of the Audit Committee of
+the sixth session of the Board
+Robinson Drake Pike
+rate
+attended
+Position
+Name of member
+(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
+Attendance
+and regulations pursuant to the relevant requirements
+of the CBIRC, the SSE and the HKSE. As required by
+its duties and responsibilities, the Audit Committee
+reviewed the annual and half-year compliance reports
+of the Company to ensure that its work was conducted
+strictly according to the relevant regulatory requirements
+in a reasonable and efficient manner.
+(6) Conducting investigation and research of local
+branches. In April 2018, 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 China Life IT
+Center for the purpose of understanding the financial
+control and internal control systems of China Life IT
+Center and the research and development center. In
+August 2018, Mr. Robinson Drake Pike, the Chairman
+of the Audit Committee, Mr. Chang Tso Tung
+Stephen and Mr. Tang Xin, members of the Audit
+Committee, carried out investigation and research on
+and on-site project inspection of Suzhou Branch of the
+Company and China Life Jiayuan Yajing (the senior
+living community) for the purpose of reviewing the
+implementation of internal audit of Suzhou Branch of
+the Company. By carrying out the investigation and
+research, the Audit Committee understood the work
+of local branches in great depth and examined the
+effectiveness of the implementation of decisions of the
+Board.
+Chang Tso Tung Stephen
+75%
+3/4 Note 2
+100%
+4/4 Note 1
+rate
+attended
+Attendance
+Number
+of meetings
+Position
+Name of member
+In 2018, four meetings were held by the Nomination and Remuneration Committee of the fifth session of the Board.
+Attendance records of individual members are as follows:
+1. Meetings and attendance
+126
+China Life Insurance Company Limited
+Corporate Governance
+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.
+The Nomination and Remuneration Committee
+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.
+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 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
+The Company established the Management Training
+and Remuneration Committee on 30 June 2003. On
+16 March 2006, the Board resolved to change the
+name of the Management Training and Remuneration
+Committee to the Nomination and Remuneration
+Committee, with a majority of Independent Directors
+on the committee. Currently, the Nomination and
+Remuneration Committee of the sixth session of the
+Board comprises Mr. Tang Xin and Mr. Robinson
+Drake Pike, the Independent Directors, and Mr. Yuan
+Changqing, a Non-executive Director, with Mr. Tang
+Xin acting as the Chairman. 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. In June 2018, Mr. Chang Tso
+Tung Stephen was re-designated as the Chairman of
+the Strategy and Assets and Liabilities Management
+Committee of the sixth session of the Board after the
+expiry of the term of the Nomination and Remuneration
+Committee of the fifth session of the Board.
+REMUNERATION COMMITTEE
+VII. NOMINATION AND
+125
+(5) Examining the internal audit functions of the
+Company. The Audit Committee reviewed proposals
+including the proposal on the 2017 internal audit
+summary and the 2018 internal audit work plan and
+budget of the costs of the Company, and the proposal
+on the internal audit work report for the first half of
+2018 and the work plan for the second half of 2018,
+and convened communication meetings in advance with
+the Audit Department of the Company, with a view
+to further understanding the duties of the Company's
+audit departments and supervising the effectiveness
+of the internal audit function. The Audit Committee
+was of the view that the internal audit function of the
+Company was effective during the Reporting Period.
+Number of
+meetings
+In 2018, five meetings were held by the Audit Committee of the sixth session of the Board. Attendance records of
+individual members are as follows:
+100%
+2.
+1.
+Notes:
+Corporate Governance
+100%
+4/4
+75%
+3/4 Note 2
+100%
+4/4
+50%
+2/4 Note 1
+100%
+4/4
+Attendance rate
+Number of
+meetings attended
+Song Ping
+Huang Xin
+Luo Zhaohui
+Shi Xiangming
+Jia Yuzeng
+Name of Supervisor
+In 2018, four meetings were held by the sixth session of the Board of Supervisors. Attendance records of individual
+Supervisors are as follows:
+The fifth session of the Board of Supervisors of the Company did not convene any meeting during the period from 1
+January 2018 to the resignation date of Mr. Li Guodong and Ms. Xiong Junhong. Therefore, there was no meeting of
+the Board of Supervisors that required Mr. Li Guodong and Ms. Xiong Junhong to attend in 2018.
+At the fifteenth meeting of the fifth session of the Board of Supervisors held on 22 March 2018, Mr. Luo Zhaohui attended the
+meeting by telephony.
+2.
+At the second meeting of the sixth session of the Board of Supervisors held on 23 August 2018, Mr. Shi Xiangming gave written
+authorization for Mr. Luo Zhaohui to act as his proxy to attend and vote at the meeting; at the third meeting of the sixth session
+of the Board of Supervisors held on 25 October 2018, Mr. Shi Xiangming gave written authorization for Mr. Luo Zhaohui to act
+as his proxy to attend and vote at the meeting; at the fourth meeting of the sixth session of the Board of Supervisors held on 20
+December 2018, Mr. Shi Xiangming attended the meeting by telephony.
+At the fourth meeting of the sixth session of the Board of Supervisors held on 20 December 2018, Mr. Song Ping gave written
+authorization for Mr. Huang Xin to act as his proxy to attend and vote at the meeting.
+2. The Board of Supervisors had no objection
+in respect of any matters under its supervision
+during the Reporting Period.
+3. Activities of the Board of Supervisors during
+the Reporting Period
+2/2
+Independent Director, member of the Audit Committee of the
+fifth session of the Board
+100%
+2/2
+Tang Xin
+Chang Tso Tung Stephen Independent Director, member of the Audit Committee of the
+fifth session of the Board
+100%
+2/2
+Independent Director, Chairman of the Audit Committee of
+the fifth session of the Board
+Robinson Drake Pike
+rate
+attended
+Robinson Drake Pike
+Position
+Attendance
+meetings
+Number of
+In 2018, two meetings were held by the Audit Committee of the fifth session of the Board. Attendance records of
+individual members are as follows:
+1. Meetings and attendance
+Corporate Governance
+123
+China Life Insurance Company Limited
+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 2018, the Audit Committee comprised
+only Independent Directors of the Company. Currently,
+the Audit Committee of the sixth session of the Board
+comprises the Independent Directors, Mr. Robinson
+Drake Pike, Mr. Chang Tso Tung Stephen and Mr.
+Tang Xin, with Mr. Robinson Drake Pike acting as the
+Chairman.
+VI. AUDIT COMMITTEE
+For the activities carried out by the Board of Supervisors
+during the Reporting Period, please refer to the "Report
+of the Board of Supervisors" in this annual report.
+Name of member
+in
+Yuan Changqing
+2/4 Note 3
+investment, and challenges currently faced by the
+Company. The Independent Directors also met with the
+person-in-charge of the relevant departments, such as
+the Investment Management Department, the Strategy
+and Marketing Department, the Actuarial Department
+and the Audit Department of the Company, to discuss
+business development, strategic and asset allocation and
+work relating to the audit of the Company.
+In April 2018, Mr. Chang Tso Tung Stephen, Mr.
+Robinson Drake Pike and Ms. Leung Oi-Sie Elsie,
+all being Independent Directors of the Company,
+carried out investigation and research on China Life
+IT Center for the purpose of understanding the
+construction and operation of its infrastructures,
+listened to the presentation given by the scientific
+management office and the research and development
+center in respect of the construction and operation of
+China Life IT Center and the overall operation and
+management of the research and development center,
+and exchanged opinions in great depth with respect
+to the issues such as business development and risk
+control of China Life IT Center and the research and
+development center. In August 2018, 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
+and on-site project inspection of Suzhou Branch of the
+Company and China Life Jiayuan Yajing (the senior
+living community), listened to work reports from
+Suzhou Branch of the Company and Changshu Sub-
+branch of the Company, visited the customer service
+center and individual insurance workplace of the local
+sub-branches, and exchanged opinions in great depth
+with the person-in-charge of the local branch during
+seminars. In October 2018, Ms. Leung Oi-Sie Elsie,
+an Independent Director, carried out investigation
+and research on Beijing Branch of the Company for
+the purpose of understanding the situation of the local
+sub-branch in business sales and team building and the
+issues about products and customer services. By carrying
+out the investigation and research, the Board understood
+the work of local branches in great depth, and examined
+the effectiveness of the implementation of decisions of
+the Board, which thus enhanced the legal compliance
+and risk prevention of the Company in a practical
+manner.
+Corporate Governance
+China Life Insurance Company Limited
+120
+Corporate Governance
+China Life Insurance Company Limited
+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 special training courses on the
+business development of the Company, regulations on
+connected transactions, online sales process, and impact
+from key changes of new individual income tax law and
+corresponding measures as organized by the departments
+of the Company such as the Investment Management
+Department and the E-commerce Department. Mr.
+Robinson Drake Pike, Mr. Chang Tso Tung Stephen
+and Mr. Tang Xin, all being Independent Directors of
+the Company, attended the 2nd training course of 2018
+for the audit committee of listed companies and the
+exchange class for enhancement of duty performance
+capability as organized by the China Association for
+Public Companies. All Independent Directors attended
+the special training courses for the performance of duties
+by directors, supervisors and senior management officers
+and the training programs on anti-money laundering as
+organized by the Company.
+During the Reporting Period, no Independent Director
+has raised any objection against the proposals and
+matters considered by the Board of the Company.
+IV. CHAIRMAN AND PRESIDENT
+During the Reporting Period, Mr. Yang Mingsheng
+and Mr. Wang Bin have successively 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. During
+the Reporting Period, Mr. Lin Dairen and Mr. Su
+Hengxuan have successively served as the President of
+the Company. The President is responsible for the day-
+to-day operations of the Company, mainly including
+implementing strategies, policies, operation plans and
+investment schemes approved by the Board, formulating
+the Company's internal management structure and
+fundamental management policies, drawing up basic
+rules and regulations of the Company, submitting to
+the Board 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.
+V. BOARD OF SUPERVISORS
+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 Board of Supervisors Meetings": to examine
+the finances of the Company; to monitor whether the
+Directors, President, Vice Presidents and other senior
+management officers of the Company have acted in
+contravention of laws, regulations, the Articles of
+Association and resolutions of the shareholders' general
+meetings when discharging their duties; to review the
+financial information of the Company such as financial
+reports, results reports and profit distribution plans to
+be approved by the Board; to propose the convening of
+extraordinary shareholders' general meetings, to propose
+resolutions at shareholders' 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.
+121
+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 Board of Supervisors Meetings"
+and established protocols for Board of Supervisors
+meetings. Board of Supervisors meetings are categorized
+as regular or ad-hoc meetings in accordance with the
+degree of pre-planning involved. There are at least
+three regular meetings each year, mainly to adopt
+and review financial reports and periodic reports, and
+examine the financial condition and internal control
+of the Company. Ad-hoc meetings are convened when
+necessary.
+The sixth session of the Board of Supervisors of the
+Company comprises Mr. Jia Yuzeng, Mr. Luo Zhaohui,
+Mr. Tang Yong, Mr. Song Ping and Mr. Huang Xin,
+with Mr. Jia Yuzeng acting as the Chairman of the
+Board of Supervisors. Mr. Jia Yuzeng, Mr. Luo Zhaohui
+and Mr. Tang Yong are Non-employee Representative
+Supervisors, whereas Mr. Song Ping and Mr. Huang Xin
+are Employee Representative Supervisors. In January
+2018, Mr. Li Guodong resigned from his position as
+a Supervisor due to adjustment of work arrangements.
+In February 2018, Ms. Xiong Junhong resigned from
+her position as a Supervisor due to adjustment of work
+arrangements. In June 2018, Mr. Miao Ping and Ms.
+Wang Cuifei retired from their position as Supervisors
+of the Company due to the expiry of the term of the
+fifth session of the Board of Supervisors. In February
+2019, Mr. Shi Xiangming resigned from his position as
+a Supervisor due to adjustment of work arrangements.
+Corporate Governance
+1. Meetings and attendance
+In 2018, two meetings were held by the fifth session of the Board of Supervisors. Attendance records of individual
+Supervisors are as follows:
+Name of Supervisor
+Miao Ping
+In 2018, the Independent Directors of the Company
+and the representatives from the external auditors (Ernst
+& Young Hua Ming LLP and Ernst & Young) convened
+three special meetings to communicate and discuss on
+matters including annual audit, audit on alternative
+Shi Xiangming
+advices and recommendations on matters including
+the development strategy of the Company, corporate
+governance, operation and management, financial
+management, risk control, team building of sales force
+and training for Directors. 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 2018, 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.
+119
+meetings
+absent
+Rate of
+attendance
+in person
+consecutive
+meetings
+in person
+Yang Mingsheng
+Executive Director
+6
+4
+2
+Note
+0
+66.7%
+Yes
+Lin Dairen
+Executive Director
+8
+8
+0
+0
+100%
+No
+Note: At the fifth meeting of the sixth session of the Board held on 25 September 2018, Mr. Yang Mingsheng gave written
+authorization for Mr. Lin Dairen to act as his proxy to attend, vote at and chair the meeting; at the sixth meeting of the sixth
+session of the Board held on 25 October 2018, Mr. Yang Mingsheng gave written authorization for Mr. Lin Dairen to act as his
+proxy to attend, vote at and chair the meeting.
+2. Performance of duties by Independent Directors
+In 2018, 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.
+China Life Insurance Company Limited
+All Independent Directors diligently fulfilled their
+responsibilities and faithfully performed their
+duties by attending meetings of the Board and the
+specialized Board committees in 2018, 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. At the
+annual special meeting between the Chairman and the
+Non-executive Directors and Independent Directors,
+all Independent Directors put forward their own views
+and opinions on various aspects such as the macro-
+environment, global capital market development,
+balance between investment returns and risks, etc., and
+gave
+Luo Zhaohui
+Wang Cuifei
+China Life Insurance Company Limited
+100%
+3/3 Note 1
+100%
+3/3
+rate
+Attendance
+Number of
+meetings
+Yuan Changqing
+Robinson Drake Pike
+Position
+Name of member
+Tang Xin
+In 2018, three meetings were held by the Nomination and Remuneration Committee of the sixth session of the Board.
+Attendance records of individual members are as follows:
+The Nomination and Remuneration Committee of the fifth session of the Board of the Company did not convene any
+meeting during the period from 1 January 2018 to the resignation date of Mr. Wang Sidong. Therefore, there was no
+meeting of the Nomination and Remuneration Committee that required Mr. Wang Sidong to attend in 2018.
+Corporate Governance
+127
+China Life Insurance Company Limited
+At the thirteenth meeting of the Nomination and Remuneration Committee of the fifth session of the Board held on 21 March
+2018, Mr. Yuan Changqing gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote
+at the meeting; at the fifteenth meeting of the Nomination and Remuneration Committee of the fifth session of the Board held
+on 5 June 2018, Mr. Yuan Changqing gave written authorization for Mr. Robinson Drake Pike to act as his proxy to attend and
+vote at the meeting.
+At the twelfth meeting of the Nomination and Remuneration Committee of the fifth session of the Board held on 2 March 2018,
+Mr. Robinson Drake Pike gave written authorization for Mr. Chang Tso Tung Stephen to act as his proxy to attend and vote at
+the meeting.
+At the twelfth meeting of the Nomination and Remuneration Committee of the fifth session of the Board held on 2 March
+2018, Mr. Chang Tso Tung Stephen attended the meeting by telephony; at the fifteenth meeting of the Nomination and
+Remuneration Committee of the fifth session of the Board held on 5 June 2018, Mr. Chang Tso Tung Stephen attended the
+meeting by telephony.
+3.
+2.
+1.
+Notes:
+Corporate Governance
+50%
+2/3 Note 2
+66.7%
+Independent Director, Chairman of the Nomination and
+Remuneration Committee of the sixth session of the Board
+Independent Director, member of the Nomination and
+Remuneration Committee of the sixth session of the Board
+Non-executive Director, member of the Nomination and
+Remuneration Committee of the sixth session of the Board
+attended
+122
+Song Ping
+Number of
+meetings attended
+Attendance rate
+1/2 Note 1
+50%
+2/2
+100%
+2/2 Note 2
+100%
+2/2
+Independent Director, Chairman of the Nomination and
+Remuneration Committee of the fifth session of the Board
+Independent Director, member of the Nomination and
+Remuneration Committee of the fifth session of the Board
+Non-executive Director, member of the Nomination and
+Remuneration Committee of the fifth session of the Board
+100%
+100%
+Notes:
+128
+China Life Insurance Company Limited
+(1) 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 Nomination
+and Remuneration Committee Meetings" and the Board
+diversity policy, the Nomination and Remuneration
+Committee is responsible for reviewing 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). In March 2018, the
+Nomination and Remuneration Committee selected
+and recommended candidates for members of the sixth
+session of the Board of the Company, fully reviewed the
+professional qualifications and industrial background
+of the candidates for Directors and members of the
+In 2018, 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.
+2. Performance of duties by the Nomination and
+Remuneration Committee
+At the third meeting of the Nomination and Remuneration Committee of the sixth session of the Board held on 19 December
+2018, Mr. Yuan Changqing gave written authorization for Mr. Tang Xin to act as his proxy to attend and vote at the meeting.
+At the second meeting of the Nomination and Remuneration Committee of the sixth session of the Board held on 25 September
+2018, Mr. Robinson Drake Pike attended the meeting by telephony.
+2.
+1.
+Notes:
+2/2
+1.
+130
+3/3
+132
+China Life Insurance Company Limited
+Corporate Governance
+(4) Conducting investigation and research on local
+branches. In April 2018, Ms. Leung Oi-Sie Elsie, the
+Chairperson of the Risk Management Committee,
+carried out investigation and research on China
+Life Science and Technology Park, listened to the
+presentation given by the scientific management office
+and the research and development center in respect of
+the construction and operation of China Life Science
+and Technology Park and the overall operation and
+management of the research and development center,
+and exchanged opinions in great depth with respect to
+the issues such as the business development and risk
+control of China Life Science and Technology Park
+and the research and development center. In October
+2018, Ms. Leung Oi-Sie Elsie, the Chairperson of the
+Risk Management Committee, carried out investigation
+and research on Fuchengmen Sub-branch under
+Beijing Branch of the Company for the purpose of
+understanding the situation of the local sub-branches in
+business sales and risk prevention.
+(3) Reviewing the plan for the management of
+reputational risk of the Company. In 2018, the Risk
+Management Committee reviewed and approved the
+proposal in relation to the plan for the management
+of reputational risk of the Company for the
+year 2019
+pursuant to the relevant requirements, including the
+"Guidance for the Management of Reputational Risk
+of Insurance Companies" published by the CBIRC,
+and after taking into account the actual situation of the
+Company in management of reputational risk, and gave
+guiding opinions on the plan for the management of
+reputational risk of the Company and the prevention
+thereof.
+money laundering for the year 2017 and the work plan
+for the year 2018, the statement of the Company on risk
+preference for the year 2018, the audit report on the
+solvency risk management system of the Company for
+the year 2018 and the work report on fraudulent risk
+management, which offered professional support to the
+Board's decision-making in a scientific manner.
+(2) Providing its opinions for the review of the
+proposals on risk management to the Board. In 2018,
+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-
+(1) Reviewing the risk analysis on major matters
+concerning the business operation and management
+of the Company. In 2018, the Risk Management
+Committee reviewed the risk analysis on major matters
+concerning the business operation and management
+of the Company, reviewed and approved the proposals
+in relation to the risk compliance analysis on the asset
+strategic allocation plan of the Company for the years
+from 2019 to 2021 and the risk compliance analysis on
+the asset allocation plan of the Company for the year
+2019, and gave guiding opinions on risk control for
+major matters concerning the business operation and
+management of the Company such as the investment
+plan of the Company for the year 2019 in accordance
+with the regulatory requirements of the CBIRC on the
+China Risk Oriented Solvency System (C-ROSS).
+In 2018, 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.
+2. Performance of duties by the Risk Management
+Committee
+131
+China Life Insurance Company Limited
+At the first meeting of the Risk Management Committee of the sixth session of the Board held on 19 December 2018, Mr. Xu
+Hengping gave written authorization for Mr. Yin Zhaojun to act as his proxy to attend and vote at the meeting.
+At the first meeting of the Risk Management Committee of the sixth session of the Board held on 19 December 2018, Ms. Oi-
+Sie Elsie attended the meeting by telephony.
+2.
+1.
+Notes:
+100%
+1/1
+Corporate Governance
+Non-executive Director, member of the Risk Management
+Committee of the sixth session of the Board
+IX. STRATEGY AND ASSETS AND
+LIABILITIES MANAGEMENT
+COMMITTEE
+1. Meetings and attendance
+3/3
+Executive Director, member of the Strategy and Investment Decision
+Committee of the fifth session of the Board
+Xu Haifeng
+100%
+Executive Director, member of the Strategy and Investment Decision
+Committee of the fifth session of the Board
+Lin Dairen
+100%
+3/3
+Independent Director, Chairman of the Strategy and Investment
+Decision Committee of the fifth session of the Board
+rate
+attended
+Position
+Name of member
+Tang Xin
+Attendance
+meetings
+Number of
+In 2018, three meetings were held by the Strategy and Investment Decision Management Committee of the fifth session
+of the Board. Attendance records of individual members are as follows:
+The Strategy and Assets and Liabilities Management
+Committee is mainly responsible for the drawing-up
+of long-term development strategies and significant
+investment or financing plans of the Company,
+conducting studies on important matters concerning
+assets and liabilities management and the relevant
+policies and systems, the system for the application and
+management of insurance funds, and major strategic
+investment decisions of the Company, and making
+recommendations in respect thereof.
+of the Board comprises Mr. Chang Tso Tung Stephen
+and Ms. Leung Oi-Sie Elsie, the Independent Directors,
+and Mr. Su Hengxuan and Mr. Xu Haifeng, the
+Executive Directors, with Mr. Chang Tso Tung Stephen
+acting as the Chairman. In June 2018, Mr. Tang Xin
+was re-designated as the Chairman of the Nomination
+and Remuneration Committee of the sixth session of
+the Board of Directors after the expiry of the term of
+the Strategy and Investment Decision Committee of
+the fifth session of the Board of Directors. In December
+2018, Mr. Lin Dairen resigned from his position as
+a member of the Strategy and Assets and Liabilities
+Management Committee due to the reason of age.
+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 in relation to the Change to the Strategy and
+Assets and Liabilities Management Committee of the
+Board of Directors" was considered and approved at
+the twenty-fourth meeting of the fifth session of the
+Board, pursuant to which the Strategy and Investment
+Decision Committee was renamed as Strategy and Assets
+and Liabilities Management Committee, the additional
+function of assets and liabilities management was
+included in the functions of the original Strategy and
+Investment Decision Committee, and corresponding
+changes and amendments were made in such areas as
+the functions and responsibilities of the committee, the
+composition of the committee, and the procedural rules
+of the committee. Currently, the Strategy and Assets and
+Liabilities Management Committee of the sixth session
+100%
+Yin Zhaojun
+1/1
+Corporate Governance
+33.3%
+1/3 Note 2
+Non-executive Director, member of the Risk Management
+Committee of the fifth session of the Board
+Yin Zhaojun
+66.7%
+2/3 Note 1
+Non-executive Director, member of the Risk Management
+Committee of the fifth session of the Board
+Liu Huimin
+100%
+3/3
+Executive Director, member of the Risk Management Committee
+of the fifth session of the Board
+Xu Hengping
+100%
+Independent Director, Chairperson of the Risk Management
+Committee of the fifth session of the Board
+Leung Oi-Sie Elsie
+rate
+attended
+Position
+Notes:
+100%
+1.
+At the eleventh meeting of the Risk Management Committee of the fifth session of the Board held on 21 March 2018, Mr. Liu
+Huimin gave written authorization for Mr. Yin Zhaojun to act as his proxy to attend and vote at the meeting.
+Non-executive Director, member of the Risk Management
+Committee of the sixth session of the Board
+Liu Huimin
+0
+0/1 Note 2
+Executive Director, member of the Risk Management Committee
+of the sixth session of the Board
+Xu Hengping
+100%
+1/1 Note 1
+Independent Director, Chairperson of the Risk Management
+Committee of the sixth session of the Board
+Leung Oi-Sie Elsie
+rate
+attended
+Position
+Name of member
+Attendance
+meetings
+Number of
+In 2018, one meeting was held by the Risk Management Committee of the sixth session of the Board. Attendance
+records of individual members are as follows:
+At the twelfth meeting of the Risk Management Committee of the fifth session of the Board held on 26 April 2018, Mr. Yin
+Zhaojun gave written authorization for Mr. Xu Hengping to act as his proxy to attend and vote at the meeting; at the thirteenth
+meeting of the Risk Management Committee of the fifth session of the Board held on 5 June 2018, Mr. Yin Zhaojun gave
+written authorization for Mr. Liu Huimin to act as his proxy to attend and vote at the meeting.
+2.
+Leung Oi-Sie Elsie
+Independent Director, member of the Strategy and Investment
+Decision Committee of the fifth session of the Board
+3/3
+China Life Insurance Company Limited
+Corporate Governance
+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.
+MANAGEMENT
+XI. PERFORMANCE APPRAISAL
+AND INCENTIVES FOR SENIOR
+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
+agency business, sale of securities investment funds,
+and other businesses permitted by the banking and
+insurance administrative and regulatory authorities
+of the PRC. The Company currently possesses the
+"Insurance Company Legal Person Permit” (Number:
+000005) issued by the CBIRC. The Company is
+independently engaged in the businesses as prescribed
+in its business scope according to law, has
+separate sales
+and agency channels and is licensed to use licensed
+trademarks without consideration. The completeness
+and independence of the Company's business operations
+will not be adversely affected by its relationship with
+related parties.
+and
+Organization: The Company has established a well-
+developed organizational system, under which internal
+bodies such as the Board of Directors and the Board of
+Supervisors operate separately. There is no subordinate
+relationship between such internal bodies and the
+functional departments of the Company's controlling
+shareholder.
+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.
+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.
+management.
+Employees: The Company is independent in the aspects
+of employment, human resources and remuneration
+X. INDEPENDENCE OF THE
+COMPANY FROM ITS CONTROLLING
+SHAREHOLDER
+funds.
+of understanding the construction and operation of
+China Life IT Center and the overall operation and
+management of the research and development center.
+In August 2018, Mr. Chang Tso Tung Stephen, the
+Chairman of the Strategy and Assets and Liabilities
+Management Committee, carried out investigation and
+research on and on-site project inspection of Suzhou
+Branch of the Company and China Life Jiayuan Yajing
+(the senior living community), visited the customer
+service center and individual insurance workplace of the
+local sub-branches for the purpose of understanding the
+business development of the local branch, supervising,
+evaluating and examining major issues such as the
+implementation of the Company's strategy and use of
+135
+(6) Conducting investigation and research on local
+branches. In April 2018, Mr. Chang Tso Tung Stephen,
+the Chairman of the Strategy and Assets and Liabilities
+Management Committee, and Ms. Leung Oi-Sie Elsie,
+a member of the Strategy and Assets and Liabilities
+Management Committee, carried out investigation
+and research on China Life IT Center for the purpose
+(5) Convening communication meetings of the Strategy
+and Assets and Liabilities Management Committee in
+advance. In 2018, Mr. Chang Tso Tung Stephen, the
+Chairman of the Strategy and Assets and Liabilities
+Management Committee, convened special meetings
+with the person-in-charge of various departments such
+as the Corporate Strategy and Marketing Department,
+the Product Development Department, the Investment
+Management Department and the Actuarial Department
+for the purpose of understanding and discussing the
+performance indicators with respect to the functions of
+the Corporate Strategy and Marketing Department, as
+well as product development, etc.
+136
+(4) Finalizing the Company's development plans and
+reports. In 2018, the Strategy and Assets and Liabilities
+Management Committee discussed and reviewed the
+proposal on the 2017 assessment report for the outline
+of the 13th five-year development plan, and submitted
+its opinions to the Board.
+Corporate Governance
+XII. SHAREHOLDERS' INTERESTS
+138
+China Life Insurance Company Limited
+Corporate Governance
+December 2018.
+As considered and approved by the ninth meeting of
+the sixth session of the Board of the Company held
+on 20 December 2018, the Company intended to
+incorporate the provisions relating to the establishment
+of the Party Committee into the Articles of Association,
+add requirements for special matters of corporate
+governance, improve the requirements concerning
+major governance matters of the Company (including
+the rights of shareholders, the Board and independent
+directors, major investment and share repurchase), and
+revise certain provisions of the Articles of Association
+according to regulatory regulations. The amendments
+to the Articles of Association are still subject to the
+approval of the shareholders of the Company and the
+approval of the CBIRC. For details of the amendments,
+please refer to the announcement published by the
+Company on the website of the SSE (http://www.sse.
+com.cn) on 21 December 2018 and on the HKExnews
+website of the HKSE (http://www.hkexnews.hk) on 20
+XIV. CHANGES OF THE ARTICLES
+OF ASSOCIATION
+In the assessment and selection of the "2018 Best
+Corporate Management Team and Most Respected
+Company in Asia” held by Institutional Investor, the
+Company won the award of the "Most Respected
+Company in Asia". In the assessment and selection
+of the "2017 Listed Company Most Respected by
+Investors" organized by the China Association for
+Public Companies in 2018, the Company was awarded
+the title of the "2017 Listed Company Most Respected
+by Investors". In the assessment and selection of the
+"2018 China Securities Golden Bauhinia Awards"
+organized by Hong Kong Ta Kung Wen Wei Media
+Group, Mr. Li Mingguang, the Board Secretary of the
+Company, was awarded the "Best Board Secretary of
+Listed Companies". In the assessment and selection
+of the "2017 Golden Bull Award for Chinese Listed
+Companies" held by the China Securities Journal in
+2018, Mr. Li Mingguang, the Board Secretary of the
+Company, was awarded the "2017 Golden Bull Award
+for Board Secretary".
+communicated with them through more than 1,500
+emails, and answered more than 300 calls and emails.
+In 2018, 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 2018, the Company upgraded the
+WeChat official account for investor relations, and put
+into operation the WeChat Mini Program for investor
+relations, through which 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 2018, 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
+160 meetings with approximately 1,300 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,
+reports to ensure investors to obtain timely and accurate
+information affecting their decisions. The Company also
+modified and improved the basic system of information
+disclosure, 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.
+137
+In 2018, the Company continued to strengthen the
+construction of its information disclosure system
+and implement the regulatory requirements relating
+to information disclosure in a practical manner in
+order to ensure the timeliness, fairness, truthfulness,
+accuracy and completeness of information disclosure.
+The Company constantly enhanced the quality of
+information disclosure, actively studied and improved
+the method of disclosure of key information from
+the perspective of investors, in particular medium
+and small investors, to enable them to have a deeper
+understanding of the Company's development strategies,
+business operations and major issues, optimized the
+layout of periodic reports, increased the readability
+of periodic reports by adding charts and pictures,
+and inserted additional business highlights and index
+for announcements published during the year to
+enable investors to have a clearer understanding of
+the operating results and business operation of the
+Company. The Company extended the scope and
+depth of information disclosure of periodic and ad-hoc
+manner.
+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
+XIII. INFORMATION DISCLOSURE
+AND INVESTOR RELATIONS
+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
+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.
+China Life Insurance Company Limited
+(3) Discussing major strategic projects of the Company.
+In 2018, the Strategy and Assets and Liabilities
+Management Committee reviewed major strategic
+projects of the Company, such as the strategic asset
+allocation plan of the Company for the years from 2019
+to 2021, and investments by the Company in Shandong
+New and Old Kinetic Energy Conversion China Life
+Equity Investment Fund (Limited Partnership) and
+China Life Guangde (Tianjin) Equity Investment Fund
+Partnership (Limited Partnership), fully discussed the
+necessity, feasibility and risks of the project proposals
+and made recommendations to the Board.
+for the Assets and Liabilities Management of the
+Company" and the "Provisional Measures for the Assets
+Allocation and Management of the Company", and
+made recommendations to the Board.
+(2) Reviewing the systems of the Company concerning
+assets and liabilities management. In 2018, the Strategy
+and Assets and Liabilities Management Committee
+reviewed and approved the proposal on the systems
+of the Company concerning assets and liabilities
+management as well as assets allocation pursuant to the
+requirements of the "Rules for the Management and
+Supervision of Insurance Assets and Liabilities (Nos.
+1-5) published by the CBIRC, studied on the "Measures
+100%
+4/4
+100%
+4/4
+100%
+4/4
+Chang Tso Tung Stephen Independent Director, Chairman of the Strategy and Assets and
+Liabilities Management Committee of the sixth session of the Board
+Executive Director, member of the Strategy and Assets and Liabilities
+Management Committee of the sixth session of the Board
+Executive Director, member of the Strategy and Assets and Liabilities
+Management Committee of the sixth session of the Board
+Xu Haifeng
+Su Hengxuan
+rate
+attended
+Position
+Name of member
+Attendance
+Number of
+meetings
+In 2018, four meetings were held by the Strategy and Assets and Liabilities Management Committee of the sixth session
+of the Board. Attendance records of individual members are as follows:
+133
+China Life Insurance Company Limited
+100%
+Leung Oi-Sie Elsie
+Independent Director, member of the Strategy and Assets and
+Liabilities Management Committee of the sixth session of the Board
+3/4 Note
+75%
+(1) Reviewing annual investment plans and entrusted
+investments of the Company. In 2018, the Strategy and
+Assets and Liabilities Management Committee carefully
+reviewed the proposals on investment plans such as the
+annual assets allocation plan of the Company and the
+annual investment plan of the Company for self-use real
+estate, the proposals on authorization of investments
+such as the annual authorization by the Company
+of investment in non self-use real estate, the annual
+authorization of investment entrusted by the Company
+in connection with Renminbi liberalization and the
+annual authorization by the Company of investment
+in equity investment funds, and the proposals on
+investment guidelines such as the management
+guidelines on the investment made by AMC, Franklin
+Asset Management Company Limited and CLI under
+the entrustment of the Company. The Strategy and
+Assets and Liabilities Management Committee fully
+reviewed the above proposals and submitted its opinions
+to the Board in this regard.
+In 2018, all members of the Strategy and Assets and
+Liabilities Management Committee attended meetings
+in a timely manner, reviewed the proposals on the
+application of the Company's insurance funds, annual
+investments, major strategic projects and annual related
+reports. Members of the Strategy and Assets and
+Liabilities Management Committee diligently performed
+their duties. During meetings of the Strategy and Assets
+and Liabilities Management Committee, all members
+actively participated in discussions and gave professional
+advices on any proposals considered and discussed at the
+meetings.
+2. Performance of duties by the Strategy and
+Assets and Liabilities Management Committee
+China Life Insurance Company Limited
+Corporate Governance
+134
+China Life Insurance Company Limited
+Note: At the third meeting of the Strategy and Assets and Liabilities Committee of the sixth session of the Board held on 13 November
+2018, Mr. Lin Dairen gave written authorization for Mr. Xu Haifeng to act as his proxy to attend and vote at the meeting.
+66.7%
+Name of member
+2/3 Note
+Lin Dairen
+rate
+Attendance
+Number of
+meetings
+attended
+Position
+Name of member
+In 2018, attendance records of the resigned Director of the sixth session of the Board at the Strategy and Assets and
+Liabilities Management Committee meetings are as follows:
+Note: At the first meeting of the Strategy and Assets and Liabilities Management Committee of the sixth session of the Board held on
+23 August 2018, Ms. Leung Oi-Sie Elsie attended the meeting by telephony; at the fourth meeting of the Strategy and Assets and
+Liabilities Management Committee of the sixth session of the Board held on 19 December 2018, Ms. Leung Oi-Sie gave written
+authorization for Mr. Chang Tso Tung Stephen to act as her proxy to attend and vote at the meeting.
+Corporate Governance
+Executive Director, member of the Strategy and Assets and Liabilities
+Management Committee of the sixth session of the Board
+Attendance
+3/3
+Number of
+50-59 years old
+40-49 years old
+Directors by age:
+Corporate Governance
+person
+1
+Female
+persons
+9
+Male
+Directors by gender:
+Directors by type:
+Independent Director
+4 persons
+3 persons
+3 persons
+Executive Director
+The members of the sixth session of the Board of the
+Company possess extensive experience in various fields,
+such as finance and insurance, macro-economics,
+financial accounting, law and management. Currently,
+the diversified composition of the sixth session of the
+Board is as follows:
+Board committees and the independence of Independent
+Directors, and submitted the opinions in relation
+thereto to the Board, conducted a careful assessment
+on the qualifications, skills, knowledge and experience
+of candidates for senior management officers to ensure
+that the candidates met the requirements set by the
+Company, and submitted a review opinion to the Board.
+The Nomination and Remuneration Committee agreed
+to submit such proposals to the Board for consideration.
+meetings
+60-69 years old
+Over 70 years old
+Non-executive Director
+5
+1 person
+1. Meetings and attendance
+China Life Insurance Company Limited
+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.
+age.
+The Company established its Risk Management
+Committee on 30 June 2003. Currently, the Risk
+Management Committee of the sixth session of
+the Board comprises Ms. Leung Oi-Sie Elsie, an
+Independent Director, and Mr. Liu Huimin and Mr.
+Yin Zhaojun, the Non-executive Directors, with Ms.
+Leung Oi-Sie Elsie acting as the Chairperson. In January
+2019, Mr. Xu Hengping resigned from his position as
+a member of the Risk Management Committee of the
+sixth session of the Board due to the reason of
+VIII. RISK MANAGEMENT
+COMMITTEE
+service center and individual insurance workplace of the
+local sub-branches, and exchanged opinions in great
+depth with the person-in-charge of the local branch
+of the Company during seminars for the purpose of
+understanding the remuneration standard and appraisal
+incentive measures of the local branch and its sub-
+branches.
+(4) Conducting investigation and research on local
+branches. In April 2018, Mr. Robinson Drake Pike,
+a member of the Nomination and Remuneration
+Committee, carried out investigation and research
+on China Life Science and Technology Park for the
+purpose of understanding its operation. In August 2018,
+Mr. Tang Xin, the Chairman of the Nomination and
+Remuneration Committee, and Mr. Robinson Drake
+Pike, a member of the Nomination and Remuneration
+Committee, carried out investigation and research
+on and on-site project inspection of Suzhou Branch
+of the Company and China Life Jiayuan Yajing
+(the senior living community), visited the customer
+Corporate Governance
+(3) Carrying out the performance appraisal of Directors,
+Supervisors and senior management officers of the
+Company. The Nomination and Remuneration Committee
+reviewed proposals such as the results of performance
+appraisal of senior management officers for 2017
+and the performance target contract for 2018, the
+remuneration of Directors and Supervisors of the
+Company, the remuneration of senior management
+officers of the Company, and amendments to the
+measures for the administration of remuneration of
+Directors, Supervisors and senior management officers
+of the Company, and made recommendations to the
+persons
+Board in respect of matters such as the determination of
+performance target, performance appraisal procedures
+and results.
+3 persons
+1
+In 2018, three meetings were held by the Risk Management Committee of the fifth session of the Board. Attendance
+records of individual members are as follows:
+China Life Insurance Company Limited
+129
+person
+(2) Proposing remuneration policy of Directors,
+Supervisors and senior management officers of the
+Company. The Nomination and Remuneration
+Committee took into account various factors such as
+business development 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.
+2018/9/27
+Announcement - Resolutions Passed at the First Extraordinary General Meeting 2018
+72
+2018/10/25
+Announcement - Continuing Connected Transactions between AMC and Chongqing Trust
+71
+2018/10/25
+Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of 2018)
+70
+Announcement of Premium Income
+2018/10/12
+Notice of Board Meeting
+68
+Notification Letter and Request Form to Non-Registered Shareholders
+2018/11/13
+2018/10/15
+69
+76
+Announcement - Change of Chairman
+2018/12/20
+67
+Announcement – Proposed Amendments to the Articles of Association
+78
+2018/12/20
+Announcement on Change of President
+77
+73
+2018/12/11
+2018/12/7
+Announcement - Approval of Qualification as Chairman by the CBIRC
+75
+2018/11/14
+Announcement of Premium Income
+74
+2018/11/13
+Announcement of Premium Income
+2018/9/27
+Announcement - Nomination of Executive Director
+66
+2018/9/12
+Announcement of Premium Income
+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 2018, there has been no major
+error in periodic report disclosures of the Company.
+In order to enhance the confidentiality of its inside
+information and regulate the collection, management
+and reporting of its material information, the Company
+has formulated the "Measures for the Administration of
+Persons Who Have Knowledge of Inside Information
+of China Life Insurance Company Limited” and, after
+taking into account the regulatory requirements, revised
+the "Rules for the Administration of Information
+Disclosure of China Life Insurance Company Limited"
+and the "System of Internal Reporting of Material
+Information of China Life Insurance Company Limited"
+in 2018. In particular, the internal report on material
+information has been included in the indicator system
+under the internal control report of the Company.
+Persons responsible for reporting material information
+(including all departments, branches, subsidiaries and
+affiliates of the Company, the controlling shareholder
+and the shareholders holding over 5% of shares of
+the Company) obtain and identify potential material
+information at the level of operation and management
+by making use of various information technologies, and
+submit and report such information to the President
+and the Board of the Company as earlier as possible.
+The Board then makes the final decision on whether to
+release the material information, and discloses the same
+to such extent as it considers reasonable and practicable.
+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.
+Corporate Governance
+China Life Insurance Company Limited
+61
+140
+The Company has established a comprehensive
+information technology system to cover all aspects of
+IT work and formed a closed-loop control mechanism
+focusing on centralized review and publication, periodic
+inspection and continuous improvement. By conducting
+measures such as the inspection and evaluation of system
+implementation on a regular basis, the Company has
+guaranteed the effective implementation of the system
+and facilitated the standardization and normalization of
+various IT work. Further, the Company has constantly
+promoted the construction of the systems of information
+safety and information risk control, and formulated
+and implemented a series of effective information safety
+control measures at various stages of the system research
+and development and its operation and maintenance,
+thereby strengthening the Company's information safety
+protection capability. The Company has explored the
+establishment of an efficient information risk control
+system and strengthened its control over information
+risks in advance, so as to effectively ensure the successful
+commencement of various tasks.
+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 2018, the Company
+actively adapted to the stringent regulatory environment
+in the PRC and overseas financial industry and strictly
+complied with the regulatory requirements to constantly
+improve the organizational structure of internal audit
+and strengthen the building of audit teams, which
+effectively performed the supervisory role of audit. The
+146
+Company carried out the economic responsibility audit
+on managers at all levels, anti-money laundering audit,
+and a variety of special audits with a focus on connected
+transactions, solvency risk management system, and
+information system. Meanwhile, the Company has put
+more efforts on the application of audit results, and
+effectively avoided the occurrence of similar incidents
+previously and repeatedly identified in audit, facilitating
+the standardized management and compliance operation
+of the Company. The Company has formulated
+regulations with respect to the reporting, investigation,
+handling of and responsibility attribution for cases
+involving any violations of laws, disciplinary rules and
+regulations by employees, each being implemented
+by the 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 CBIRC
+and internal policies such as the "Implementing Rules
+for Responsibility Attribution of Cases". The Company
+has established and optimized three lines of defense for
+compliance management to form a joint force in the
+aspect of compliance management. The Company has
+also applied the compliance risk prevention throughout
+the course of its business development, promoted
+the compliance concepts such as active compliance
+and value of compliance in the whole system,
+further consolidated the foundation of the Company
+in compliance operation, enhanced its ability of
+compliance operation, and firmly defended the bottom
+line of compliance risk, which guaranteed the healthy
+and high-quality development of the Company on an
+ongoing basis.
+China Life Insurance Company Limited
+141
+(II) Risk Management
+Corporate Governance
+Notification Letter and Change Request Form to Registered Shareholders
+79
+62
+99
+2018/9/27
+Reply Slip of Holders of H Shares
+65
+2018/9/27
+Date of disclosure
+Form of Proxy of Holders of H Share for use at the First Extraordinary General Meeting 2018
+of the Company to be held on Tuesday, 13 November 2018
+2018/9/25
+Items
+Serial No.
+147
+2018/9/27
+Notice of the First Extraordinary General Meeting 2018
+63
+2018/9/27
+Election of Mr. Wang Bin as an Executive Director of the Sixth Session of the Board of
+Directors, Election of Mr. Tang Yong as a Non-employee Representative Supervisor of the
+Sixth Session of the Board of Supervisors, Remuneration of Directors and Supervisors for the
+year 2017, Capital Debt Financing of the Company and Notice of the First Extraordinary
+General Meeting 2018
+64
+Announcement - Renewal of Continuing Connected Transactions under Asset Management
+Agreements
+2018/8/23
+80 Announcement - Connected Transaction – Formation of Partnership
+2018/6/6
+44
+Announcement of Premium Income
+2018/6/13
+45
+Announcement - Approval of Qualification as Supervisor by the CBIRC
+2018/6/29
+Announcement - Resolutions Passed at the Annual General Meeting, Election of Members of
+the Sixth Session of the Board of Directors and the Board of Supervisors of the Company and
+Distribution of Final Dividend
+46
+2018/7/16
+47
+Announcement - Approval of Qualification as Director and Supervisor by the CBIRC and
+Election of Chairman of the Board of Supervisors
+2018/7/20
+48
+Announcement - Estimated Profit Increase for the First Half of 2018
+2018/7/27
+Announcement of Premium Income
+49
+43
+Items
+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 Board of
+Supervisors, 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, the Financial Management
+Department, the Accounting Department and the
+Business Administration Department, 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 and Audit 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 and
+Audit Department, the Comprehensive Management
+Department 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
+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
+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
+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.
+139
+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 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.
+It is the responsibility of the Board of the Company
+to establish and effectively implement well-established
+internal control systems, assess their effectiveness and
+disclose the report on the internal control assessment.
+The Board and the Audit Committee are responsible
+for leading the implementation of internal control
+measures of the Company, and the Board of Supervisors
+supervises the internal control assessments performed
+by the Board. The Company has established the Risk
+Management Department in its headquarters and
+branches. The 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.
+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 2018 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 2018. 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.
+Date of disclosure
+Pursuant to the requirements of the "Notice on the
+Proper Preparation for Disclosure of 2018 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 2018 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 2018 in its Form 20-F (U.S. Annual Report)
+submitted to the SEC in accordance with Section 404
+(I) Internal Control
+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.
+XV. INTERNAL CONTROL AND
+RISK MANAGEMENT
+China Life Insurance Company Limited
+Corporate Governance
+China Life Insurance Company Limited
+Serial No.
+The Company has been devoting significant effort
+towards the promotion of internal control and the
+establishment of internal control related systems. In
+accordance with the requirements of Section 404 of the
+"U.S. Sarbanes-Oxley Act”, the “Standard Regulations
+on Corporate Internal Control", the "Implementation
+Guidelines for Corporate Internal Control”, the
+"Guidance on Internal Control for Companies Listed on
+the Shanghai Stock Exchange”, the “Rules Governing
+the Listing of Securities on The Stock Exchange of
+Hong Kong Limited”, and the "Basic Standards of
+Internal Control for Insurance Companies" issued
+by the CBIRC, the Company has carried out a lot of
+work on its internal control system establishment,
+rules implementation and risk management by
+strictly following its corporate governance structure.
+The Company has also formulated and issued the
+“Internal Control Implementation Manual of China
+Life Insurance Company Limited (2018 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.
+2018/12/20
+Announcement regarding the Receipt of the Administrative Penalty Decision from the
+People's Bank of China
+50
+57
+2018 Interim Report
+2018/9/6
+58
+Notification Letter and Change Request Form to Registered Shareholders
+2018/9/6
+59
+2018/8/23
+Notification Letter and Request Form to Non-Registered Shareholders
+China Life Insurance Company Limited
+Other Information
+Partnership
+2018/12/28
+81
+Announcement on the Progress of Connected Transaction in relation to the Formation of
+2018/12/20
+148
+2018/7/29
+Announcement - Nomination of Non-employee Representative Supervisor
+Announcement on Supplementary Information regarding the Compensation of Directors,
+Supervisors and Senior Management Members in 2017
+Announcement of Premium Income
+2018/8/13
+51
+Notice of Board Meeting
+manner.
+2018/8/13
+52
+56
+Announcement of Unaudited Interim Results for the Six Months Ended 30 June 2018
+53
+Announcement - Connected Transaction – Formation of Partnership
+2018/8/23
+54
+Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of 2018)
+2018/8/23
+55
+2018/8/23
+workflows.
+Other Information
+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.
+2018/4/11
+26
+Notification Letter and Request Form to Non-Registered Shareholders
+2018/4/11
+27
+Announcement of Premium Income
+2018/4/13
+Notification Letter and Change Request Form to Registered Shareholders
+28
+2018/4/16
+29
+Announcement – Estimated Profit Increase for the First Quarter of 2018
+2018/4/20
+30
+2018 First Quarter Report
+2018/4/26
+Notice of Board Meeting
+31
+25
+Reply Slip of H Share Shareholders
+2018/4/11
+21
+Reports of the Board & Supervisory Committee, Financial Report & Profit Distribution Plan,
+Remuneration of Directors & Supervisors, Election of Directors, Election of Non-employee
+Representative Supervisors, Remuneration of Auditors & Appointment of Auditors, General
+Mandate to issue H Shares, Duty Report of the Independent Directors of the Board of
+Directors, Report on the Status of Connected Transactions & the Execution of the Connected
+Transactions Management System & Notice of AGM
+2018/4/11
+22
+Notice of Annual General Meeting
+2018/4/11
+2018/4/11
+China Life Insurance Company Limited
+Serial No.
+Items
+Date of disclosure
+23
+Form of Proxy of H Share Shareholders for use at the Annual General Meeting of the
+Company to be held on Wednesday, 6 June 2018
+2018/4/11
+24
+145
+Annual Report 2017
+Announcement - Connected Transaction - Capital Injection to CLP&C
+Announcement
+38
+Supplemental Notice of Annual General Meeting
+2018/5/17
+39
+Supplemental Form of Proxy of Holders of H Shares for use at the Annual General Meeting
+of the Company to be held on Wednesday, 6 June 2018
+2018/5/17
+40
+2018/5/17
+Notification Letter and Change Request Form to Registered Shareholders
+41 Notification Letter and Request Form to Non-Registered Shareholders
+2018/5/17
+42
+Announcement - Election of Employee Representative Supervisors of the Sixth Session of the
+Supervisory Committee
+2018/5/21
+Other Information
+China Life Insurance Company Limited
+2018/5/17
+2018/4/26
+Renewal of Continuing Connected Transactions and Supplemental Notice of Annual General
+Meeting
+2018/5/14
+-
+32
+Renewal of Continuing Connected Transactions in relation to the
+Entrusted Investment and Management Agreement for Alternative Investments with
+Insurance Funds
+2018/4/26
+33
+Announcement Continuing Connected Transactions in relation to the Cooperation
+Framework Agreement for Investment Management with Insurance Funds
+2018/4/26
+37
+34
+2018/4/26
+China Life Insurance Company Limited - Announcement on Changes in Accounting
+35
+2018/4/26
+Estimates
+36
+Announcement of Premium Income
+Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2018)
+Pursuant to the requirements of the CBIRC on the
+China Risk Oriented Solvency System (C-ROSS),
+the Company pushed forward the establishment of
+a solvency risk management system, 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 recognized by regulatory
+authorities. In 2018, the CBIRC conducted an onsite
+assessment, namely SARMRA, on the Company, and
+the score of the Company ranked high in the life
+insurance industry. The Company conducts a risk
+assessment 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 the senior
+management. Based on the assessment, the overall risk
+of the Company is within a controllable range.
+20
+China Life Insurance Company Limited – Announcement on Changes in Accounting
+Estimates
+Announcement - Resignation of Supervisor
+2018/1/3
+2
+Announcement - Resignation of Non-executive Director
+2018/1/12
+3
+Announcement of Premium Income
+1
+2018/1/16
+2018/1/18
+ST
+5
+Reply Form
+2018/1/18
+19
+6
+4 Election of Language and Means of Receipt of Corporate Communication
+Announcement - Election of Employee Representative Supervisor
+Date of disclosure
+Serial No.
+Corporate Governance
+China Life Insurance Company Limited
+142
+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.
+Corporate Governance
+Items
+07
+Index of Announcements
+Honors and Awards
+145
+149
+Index of Announcements
+Other Information
+60
+Other Information
+2018/3/22
+2018/1/23
+Announcement - Estimated Profit Increase for the Year 2017
+14
+Announcement - Approval of Qualification as Supervisor by the CIRC
+2018/3/20
+15
+Announcement of Results for the Year Ended 31 December 2017
+2018/3/22
+16
+2018/3/18
+Announcement on Supplementary Information regarding the Compensation of Directors,
+Supervisors and Senior Management Members in 2016
+17
+Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of 2017)
+2018/3/22
+18
+China Life Insurance Company Limited 2017 Corporate Social Responsibility Report
+2018/3/22
+19
+2018/3/22
+7
+Announcement - Connected Transaction in relation to Acquisition of Property
+2018/3/13
+8
+Announcement - Forfeiture of Unclaimed Dividends
+2018/1/30
+2018/2/8
+9
+Announcement of Premium Income
+2018/2/12
+13
+Announcement - Approval of Qualification as Director and Supervisor by the CIRC and
+2018/2/25
+Resignation of Supervisor
+11
+Notice of Board Meeting
+2018/3/9
+12
+Announcement of Premium Income
+10
+2018/9/6
+Jointly published by China Enterprise Research Centre of Tsinghua University and “National Business Daily"
+How our audit addressed the key audit matter
+Ernst & Young
+Certified Public Accountants
+Hong Kong
+27 March 2019
+China Life Insurance Company Limited
+157
+Consolidated Statement of Financial Position
+As at 31 December 2018
+Financial Report
+ASSETS
+As at
+As at
+The engagement partner on the audit resulting in this independent auditor's report is Choi Kam Cheong, Geoffrey.
+31 December
+31 December
+2017
+Notes
+RMB million
+RMB million
+Property, plant and equipment
+Investment properties
+69
+47,281
+42,707
+7
+9,747
+3,064
+2018
+Investments in associates and joint ventures
+communication.
+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.
+155
+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)
+RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
+STATEMENTS
+The directors of the Company are responsible for the preparation of consolidated financial statements that give a
+true and fair view in accordance with IFRSs issued by the IASB and the disclosure requirements of the Hong Kong
+Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
+the consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the directors of the Company are responsible for assessing the
+Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
+going concern basis of accounting unless the directors of the Company either intend to liquidate the Company or to
+cease operations or have no realistic alternative but to do so.
+The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing the
+Group's financial reporting process.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
+STATEMENTS
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
+Our report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or
+accept liability to any other person for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
+users taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+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
+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.
+Financial Report
+China Life Insurance Company Limited
+156
+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)
+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.
+• 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.
+China Life Insurance Company Limited
+8
+161,472
+48,402
+50,641
+Premiums receivable
+11
+15,648
+14,121
+Reinsurance assets
+Other assets
+Deferred tax assets
+Cash and cash equivalents
+Total assets
+12
+9.8
+4,364
+13
+33,437
+33,952
+28
+1,257
+50,809
+48,586
+3,254,403
+2,897,591
+China Life Insurance Company Limited
+158
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+3,046
+201,661
+Accrued investment income
+9,905
+Held-to-maturity securities
+9.1
+806,717
+717,037
+Loans
+9.2
+450,251
+383,504
+Term deposits
+9.3
+559,341
+449,400
+36,185
+Statutory deposits - restricted
+6,333
+6,333
+Available-for-sale securities
+9.5
+870,533
+810,734
+Securities at fair value through profit or loss
+9.6
+138,717
+136,809
+Securities purchased under agreements to resell
+9.7
+9.4
+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.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any
+form of assurance conclusion thereon.
+150
+Notes to the Consolidated
+163
+Cash Flows
+Consolidated Statement of
+162
+Changes in Equity
+Consolidated Statement of
+160
+Comprehensive Income
+Consolidated Statement of
+Financial Statements
+158
+Consolidated Statement of
+Financial Position
+Independent Auditor's Report
+08 Financial Report
+thereon.
+China Life Insurance Company Limited
+"Annual Best Insurance Brand"
+Insurance Industry"
+Jointly published by “China Finance” and “Insurance Today" - "2018 Assessment and Selection of 'China Tripod' in the
+"Hexun.com" -the "16th China's Financial Annual Champion Awards"
+"2018 Insurance Poverty Alleviation Pioneer of the Year"
+"Shanghai Securities News" – "Golden Wealth Management' for the Year of 2018"
+"Excellent Award for Insurance Protection Brand"
+152
+"National Business Daily" - the "2018 China's Insurance Annual Champion Awards"
+"Outstanding Life Insurance Company"
+165
+EY安永
+How our audit addressed the key audit matter
+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.
+management.
+The Group had significant insurance contract liabilities
+stated at RMB2,216.03 billion as at 31 December 2018,
+representing 75.60% 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 settlements of
+policyholder liabilities. Actuarial models are used to
+support the calculation of insurance contract liabilities.
+The complexity of the actuarial 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, etc., are
+established by applying estimates and judgements based
+on the experience analysis and future expectations by
+Valuation of insurance contract liabilities
+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)
+Financial Report
+Independent Auditor's Report (continued)
+Independent Auditor's Report
+152
+Financial Report
+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.
+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.
+KEY AUDIT MATTERS
+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.
+BASIS FOR 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 2018, 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.
+We have audited the consolidated financial statements of China Life Insurance Company Limited (the "Company")
+and its subsidiaries (the “Group”) set out on pages 158 to 284, which comprise the consolidated statement of financial
+position as at 31 December 2018, 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.
+OPINION
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+China Life Insurance Company Limited
+Shortlisted as one of the candidates for the Global Award for the DCD
+“Operating Team of the Data Center for the Year – Corporate Class” in 2018
+Data Center Dynamics - "Global Award"
+Other Information
+The Group held a material investment in an associate,
+Sino-Ocean Group Holding Limited (“Sino-Ocean”), a
+company listed on the Stock Exchange of Hong Kong
+Limited, with a carrying value of RMB12.81 billion as
+at 31 December 2018. 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
+2017. During 2018, 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 2018 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.
+Disclosure of the impairment of this investment is
+disclosed in Note 8.
+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:
+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
+Calculating the weighted average cost of capital using
+the Capital Asset Pricing Model.
+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
+China Life Insurance Company Limited
+154
+Independent Auditor's Report (continued)
+Impairment test for an investment in an associate
+Financial Report
+KEY AUDIT MATTERS (continued)
+Key audit matter
+Fair value of financial assets
+The Group held material investments in certain financial
+assets such as private equity funds, preference shares, other
+equity and debt investments, which were accounted for
+as available-for-sale securities at fair value or securities
+at fair value through profit or loss with the total amount
+of RMB179.25 billion as at 31 December 2018. These
+investments were classified as level 3 in the fair value
+hierarchy, as their fair values were measured using
+valuation techniques with significant unobservable 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.
+Note 4.4 discloses the balance of these investments,
+the valuation techniques and significant unobservable
+inputs used in the measurement of the fair value of these
+investments.
+How our audit addressed the key audit matter
+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.
+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
+To the shareholders of China Life Insurance Company Limited
+(Incorporated in the People's Republic of China with limited liability)
+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)
+149
+China Life Insurance Company Limited
+"Ark Prize for Insurance Company with High-quality Development in 2018”
+"Securities Times'
+ranking 6th
+"2018 Top 100 Brand Value of Chinese Listed Companies”, ranking 26th
+“2018 Top 25 Brand Value of Chinese Listed Companies (Financial List)",
+Other Information
+“Golden Dragon Award – 2018 Best Life Insurance Company"
+"Financial Times" - "Gold Medal List of Chinese Financial Institutions"
+"2018 Best Life Insurance Company in Asia"
+"21st Century Business Herald" - "Assessment and Selection of the Competitiveness of Asian Financial Enterprises in
+the 21st Century"
+"2018 Forbes Global 2000", ranking 35th
+"Forbes"
+Honors and Awards
+•
+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 expectations of the Group;
+Establishing actuarial models independently to test the
+valuation of liabilities for selected insurance products;
+and
+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.
+China Life Insurance Company Limited
+153
+Independent Auditor's Report (continued)
+In our audit, we involved our internal actuarial specialists
+to perform the following audit procedures in this area,
+which included among others:
+•
+14
+RMB million
+RMB million
+Notes
+2017
+2018
+31 December
+31 December
+As at
+As at
+Insurance contracts
+Liabilities
+LIABILITIES AND EQUITY
+As at 31 December 2018
+Consolidated Statement of Financial Position (continued)
+Investment contracts
+2,216,031
+586
+China Life Insurance Company Limited
+(15,609)
+8,580
+Total transactions with owners
+135
+135
+(135)
+(135)
+(7,164)
+(7,164)
+Dividends paid (Note 32)
+Dividends to non-controlling interests
+Others
+(8,445)
+- 8,445
+Transactions with owners
+Appropriation to reserves (Note 37)
+24,826
+485
+32,253
+(7,912)
+(7,926)
+(14)
+(7,912)
+32,752
+499
+32,253
+(135)
+307,648
+(7,164)
+28,265
+(2,070)
+168
+45
+(2,070)
+11,936
+541
+11,395
+325,310
+4,377
+139,202
+145,675
+7,791
+28,265
+Transactions with owners
+Total comprehensive income
+Other comprehensive income
+Net profit
+As at 1 January 2018
+325,310
+4,377
+139,202
+145,675
+7,791
+As at 31 December 2017
+4,027
+122,558
+145,007
+China Life Insurance Company Limited
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+485
+45
+24,341
+9,325
+Financial Report
+24,826
+9,911
+(7,926)
+(2,025)
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to:
+Total comprehensive income for the year, net of tax
+Other comprehensive income for the year, net of tax
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods
+(7,926)
+(2,025)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+2,359
+1,716
+28
+161
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2018
+As at 1 January 2017
+7,791
+28,265
+(Note 37)
+(Note 36)
+(Note 35)
+RMB million
+RMB million
+earnings
+RMB million
+RMB million
+RMB million
+RMB million
+11,395
+Reserves
+capital
+Retained
+Other equity
+Share
+Total
+Non-controlling
+interests
+Attributable to equity holders
+of the Company
+Financial Report
+Total comprehensive income
+Other comprehensive income
+Net profit
+instruments
+Income tax relating to components of other comprehensive income
+586
+Capital paid in by non-controlling
+1,164
+Dividends received – securities at fair value through profit or loss
+4,497
+3,527
+Interest received - securities at fair value through profit or loss
+(4,473)
+(9,991)
+Income tax paid
+38,967
+48,838
+Receivables and payables
+931
+1,114
+Financial liabilities at fair value through profit or loss
+76,378
+(9,020)
+Securities at fair value through profit or loss
+Changes in operating assets and liabilities:
+(7,143)
+(7,745)
+Share of profit of associates and joint ventures, net
+(52)
+194
+778
+Foreign exchange losses/(gains)
+Net cash inflow/(outflow) from operating activities
+200,990
+(500,737)
+(335,301)
+(516,051)
+(294,238)
+103
+274
+506,306
+278,003
+142,845
+110,425
+30,540
+48,942
+Property, plant and equipment
+Equity investments
+Debt investments
+Purchases:
+Property, plant and equipment
+Disposals of equity investments
+Maturities of debt investments
+Disposals of debt investments
+Disposals and maturities:
+Financial Report
+CASH FLOWS FROM INVESTING ACTIVITIES
+147,552
+2,240
+2,638
+Depreciation and amortisation
+(44)
+(17,575)
+5,688
+I
+(197)
+(197)
+(149)
+(149)
+(11,690)
+(5,885)
+(11,690)
+5,885
+105
+15
+105
+15
+162
+As at 31 December 2018
+China Life Insurance Company Limited
+Total transactions with owners
+Dividends to non-controlling interests
+Others
+Dividends paid (Note 32)
+Appropriation to reserves (Note 37)
+interests
+(11,931)
+28,265
+7,791
+149,293
+176,148
+190,210
+Insurance contracts
+(6,225)
+37,869
+Net realised and unrealised losses/(gains) on financial assets
+(122,727)
+(125,167)
+Investment income
+Adjustments for:
+41,671
+9,911
+13,921
+RMB million
+2017
+2018
+Profit before income tax
+CASH FLOWS FROM OPERATING ACTIVITIES
+For the year ended 31 December 2018
+Consolidated Statement of Cash Flows
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+323,290
+4,919
+133,022
+RMB million
+(865)
+598
+Exchange differences on translating foreign operations
+Su Hengxuan
+Wang Bin
+Director
+Approved and authorised for issue by the Board of Directors on 27 March 2019.
+2,897,591
+3,254,403
+325,310
+323,290
+4,377
+4,919
+320,933
+318,371
+139,202
+133,022
+145,675
+149,293
+37
+7,791
+7,791
+36
+35
+28,265
+28,265
+35
+Director
+Financial Report
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+159
+(1,395)
+700
+508,305
+531,323
+(3,661)
+(4,503)
+511,966
+535,826
+Investment income
+Net premiums earned
+Net change in unearned premium reserves
+Net written premiums
+Less: premiums ceded to reinsurers
+Gross written premiums
+REVENUES
+RMB million
+RMB million
+Notes
+2017
+2018
+Financial Report
+For the year ended 31 December 2018
+Consolidated Statement of Comprehensive Income
+China Life Insurance Company Limited
+Total liabilities and equity
+Total equity
+Non-controlling interests
+49,465
+Annuity and other insurance balances payable
+87,309
+192,141
+18
+Securities sold under agreements to repurchase
+1,877
+17
+Derivative financial liabilities
+2,529
+2,680
+Financial liabilities at fair value through profit or loss
+18,794
+20,150
+16
+Interest-bearing loans and borrowings
+83,910
+85,071
+Policyholder dividends payable
+232,500
+255,434
+15
+2,025,133
+44,820
+Premiums received in advance
+Other liabilities
+Deferred tax liabilities
+Attributable to equity holders of the Company
+Retained earnings
+Reserves
+Other equity instruments
+Share capital
+2,572,281
+2,931,113
+282
+558
+20
+20
+532,023
+6,198
+4,871
+28
+47,430
+58,426
+19
+18,505
+46,650
+Equity
+Total liabilities
+Statutory insurance fund
+Current income tax liabilities
+2,630
+506,910
+Net realised gains on financial assets
+Net fair value gains through profit or loss
+Other income
+499
+32,253
+11,395
+541
+32,752
+11,936
+(8,919)
+(1,985)
+28
+41,671
+13,921
+27
+7,143
+7,745
+8
+(608,827)
+(621,243)
+expenses
+(1,068)
+(1,097)
+20
+20
+(6,426)
+(7,642)
+China Life Insurance Company Limited
+160
+Basic and diluted earnings per
+share
+20
+735
+Share of other comprehensive income of associates and joint
+ventures under the equity method
+5,605
+(32)
+attributable to participating policyholders
+(42)
+(15,003)
+(24,591)
+19,549
+Amount transferred to net profit from other comprehensive income
+Portion of fair value changes on available-for-sale securities
+Fair value gains/(losses) on available-for-sale securities
+- Non-controlling interests
+RMB million
+Notes
+2017
+2018
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods:
+Other comprehensive income
+For the year ended 31 December 2018
+Consolidated Statement of Comprehensive Income (continued)
+RMB1.13
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+RMB0.39
+30
+RMB million
+(19,546)
+- Equity holders of the Company
+Net profit
+(40,552)
+24
+Accident and health claims and claim adjustment expenses
+(259,708)
+(248,736)
+24
+Life insurance death and other benefits
+BENEFITS, CLAIMS AND EXPENSES
+Insurance benefits and claims expenses
+Total revenues
+643,355
+627,419
+7,493
+8,098
+6,183
+(18,278)
+23
+42
+(19,591)
+22
+122,727
+125,167
+21
+222
+(33,818)
+Increase in insurance contract liabilities
+24
+(189,931)
+Income tax
+Profit before income tax
+Share of profit of associates and joint ventures, net
+Total benefits, claims and
+Statutory insurance fund contribution
+Other expenses
+(35,953)
+(37,486)
+Administrative expenses
+(4,601)
+(4,116)
+Attributable to:
+26
+(64,789)
+(62,705)
+Underwriting and policy acquisition costs
+(21,871)
+(19,646)
+Policyholder dividends resulting from participation in profits
+(8,076)
+(9,332)
+25
+Investment contract benefits
+(172,517)
+Finance costs
+(9,619)
+(2,025)
+(34,928)
+2.1 Basis of preparation
+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 SUMMARY OF SIGNIFICANT 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 2019.
+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.
+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.
+1 ORGANISATION AND PRINCIPAL ACTIVITIES
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+164
+China Life Insurance Company Limited
+Financial Report
+1,142
+17
+Short-term bank deposits
+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.
+50,792
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial
+year beginning on 1 January 2018
+Standards/Amendments
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+165
+China Life Insurance Company Limited
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2018
+beginning on or after
+Clarifications to IFRS 15 Revenue from Contracts with Customers
+Transfers of Investment Property
+Classification and Measurement of Share-based Payment Transactions
+Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
+Revenue from Contracts with Customers
+Content
+IAS 40 Amendments
+IFRS 15 Amendments
+IFRS 4 Amendments
+IFRS 15
+IFRS 2 Amendments
+Effective for annual periods
+Cash at banks and in hand
+Analysis of balances of cash and cash equivalents
+48,586
+3,560
+Capital injected into subsidiaries by non-controlling interests
+3,121
+727
+(135)
+(149)
+Cash received from borrowings
+Dividends paid to non-controlling interests
+(7,164)
+(11,690)
+(5,671)
+(3,990)
+6,228
+104,832
+Dividends paid to equity holders of the Company
+Interest paid
+Increase/(decrease) in securities sold under agreements to repurchase, net
+4,034
+Cash repaid to lenders
+(38,000)
+Cash paid related to other financing activities
+50,809
+year
+End of the
+67,046
+48,586
+Beginning of the year
+Cash and cash equivalents
+(18,460)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2,223
+(179)
+81
+Foreign exchange gains/(losses) on cash and cash equivalents
+(45,595)
+92,963
+Net cash inflow/(outflow) from financing activities
+(8,008)
+(327)
+Net increase/(decrease) in cash and cash equivalents
+2.1 Basis of preparation (continued)
+47,444
+IFRS 2 Amendments - Classification and Measurement of Share-based Payment Transactions
+(238,373)
+(173,676)
+The notes on pages 165 to 284 form an integral part of these consolidated financial statements.
+China Life Insurance Company Limited
+163
+2018
+2017
+RMB million
+RMB million
+Consolidated Statement of Cash Flows (continued)
+For the year ended 31 December 2018
+CASH FLOWS FROM FINANCING ACTIVITIES
+Investments in associates and joint ventures
+The Group does not apply the hedge accounting currently, so the Group expects that the new hedge accounting model
+under IFRS 9 will have no impact on the Group's consolidated financial statements.
+Hedge accounting
+Net cash inflow/(outflow) from investing activities
+(399)
+(309)
+Cash paid related to other investing activities
+(37,304)
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2018 (continued)
+(109,590)
+92,148
+Decrease/(increase) in securities purchased under agreements to resell, net
+26,258
+6,981
+IFRS 9 replaces the "incurred loss" model with the "expected credit loss" model which is designed to include forward-
+looking information. The Group is in the process of developing and testing the key models required under IFRS 9 and
+analysing the impact on the expected loss provision; the Group believed that the provision for debt instruments of the
+Group under the "expected credit loss" model would be larger than that under the previous “incurred loss” model.
+Interest received
+98,012
+Dividends received
+19,503
+29,014
+Decrease/(increase) in policy loans, net
+(34,208)
+(15,515)
+106,342
+Impairment
+Decrease/(increase) in term deposits, net
+China Life Insurance Company Limited
+167
+China Life Insurance Company Limited
+In addition, 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. There is no significant impact on the
+accounting policies of the Group as a result of these amendments.
+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 amendments do not have any significant impact on the Group's consolidated financial statements.
+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. Based on the standard's transitional
+provisions, the entity shall recognise the cumulative effect of initially applying IFRS 15 as an adjustment to the opening
+balance of retained earnings or other component of equity of the annual reporting period that includes the date of
+initial application, and does not require a restatement of prior periods. The Group adopted IFRS 15 using the modified
+retrospective approach from 1 January 2018. Adoption of the standard has no significant impact on relative items of the
+Group's consolidated financial statements.
+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 supersedes 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.
+IFRS 15 - Revenue from Contracts with Customers and IFRS 15 Amendments
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2018 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+166
+Financial Report
+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 for entities issuing contracts within the scope of IFRS 4 upon 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 at fair value through profit
+or loss ("FVTPL"); and (ii) its activities are predominantly connected with insurance at 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 other comprehensive
+income ("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 Company performed an assessment of the amendments and reached the conclusion that its activities
+were predominantly connected with insurance as at 31 December 2015. There has been no significant change in the
+activities of the Group since then that requires reassessment, and the Group considers 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, continues to apply IAS 39 to its financial assets and financial liabilities in its reporting period starting on 1
+January 2018. The disclosures about the Group's temporary exemption from IFRS 9 are disclosed in Note 33.
+The Group's accounting treatment for cash-settled share-based payments is consistent with the clarification in the
+amendments. In addition, the Group has no share-based payment transactions with net settlement features for
+withholding tax obligations and has not made any modifications to the terms and conditions of its share-based payment
+transactions. Therefore, these amendments have no impact on the Group's consolidated financial statements.
+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 investment cost.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+IAS 40 Amendments - Transfers of Investment Property
+2.1 Basis of preparation (continued)
+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 significant impact on the Group's consolidated financial statements.
+IFRS 9 - Financial Instruments
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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 OCI. If the Group elects to record equity investments at FVOCI, gains and
+losses would never be recognised in income except for the received dividends which do not represent a recovery of part of
+Financial Report
+1 January 2018
+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
+FVTPL, based on their respective business models. The Group analysed the contractual cash flow characteristics of
+financial assets as at 31 December 2018 and made relevant disclosures in Note 33 according to IFRS 4 Amendments.
+Financial Instruments
+Content
+IFRS 9
+Standards/Amendments
+2.1.2 New accounting standards and amendments that are effective but temporary exemption is
+applied by the Group for the financial year beginning on 1 January 2018
+Effective for annual periods
+beginning on or after
+173
+Transactions with non-controlling interests
+China Life Insurance Company Limited
+For the year ended 31 December 2018
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.2 Consolidation (continued)
+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)
+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.
+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.
+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'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.
+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.
+2.3 Associates and joint ventures
+The Group uses the acquisition method of accounting to account for business combinations. The consideration
+transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the
+equity interest issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting
+from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets
+acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
+value at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest
+in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.
+The excess of the aggregate of the consideration transferred, the fair value of any non-controlling interest in the
+acquiree, and the fair value of any previous equity interest in the acquiree at the acquisition date over the fair value of
+the net identifiable assets acquired and liabilities assumed is recorded as goodwill. If this is less than the fair value of
+the net assets of the subsidiary acquired in the case of a bargain purchase, the Group re-assesses whether it has correctly
+identified all of the assets acquired and all of the liabilities assumed, and reviews the procedures used to measure the
+amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net
+assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. Goodwill is
+tested annually for impairment and carried at cost less accumulated impairment losses. If there is any indication that
+goodwill is impaired, recoverable amount is estimated and the difference between carrying amount and recoverable
+amount is recognised as an impairment charge. Impairment losses on goodwill are not reversed in subsequent periods.
+Gains or losses on the disposal of an entity take into consideration the carrying amount of goodwill relating to the entity
+sold.
+The 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.
+• 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.
+172
+recognises any surplus or deficit in profit or loss; and
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.2 Consolidation (continued)
+The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
+one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
+the subsidiary and ceases when the Group loses control of the subsidiary.
+Profit or loss and each component of OCI are attributed to the equity holders of the Company and to the non-
+controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,
+adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the
+Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
+transactions between members of the Group are eliminated in full upon
+consolidation.
+Financial Report
+A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
+the Group loses control over a subsidiary, it:
+•
+derecognises the assets (including goodwill) and liabilities of the subsidiary;
+•
+derecognises the carrying amount of any non-controlling interests;
+•
+derecognises the cumulative translation differences recorded in equity;
+•
+recognises the fair value of the consideration received;
+•
+recognises the fair value of any investment retained;
+•
+Financial Report
+China Life Insurance Company Limited
+China Life Insurance Company Limited
+Notes to the Consolidated Financial Statements (continued)
+Estimated useful lives
+15 to 35 years
+China Life Insurance Company Limited
+Financial Report
+176
+Buildings
+Office equipment, furniture and fixtures
+Motor vehicles
+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:
+Leasehold improvements
+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.
+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.
+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.
+2.7 Investment properties
+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
+3 to 11 years
+4 to 8 years
+Over the shorter of the remaining term of
+the lease and the useful lives
+Depreciation
+2.6 Property, plant and equipment (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2018
+Financial Report
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.3 Associates and joint ventures (continued)
+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.
+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.
+175
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+174
+China Life Insurance Company Limited
+IFRS 3 Amendments
+⚫ the Group's voting rights and potential voting rights.
+No mandatory effective date
+determined but available for adoption
+The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet
+effective.
+IFRS 16 - Leases
+IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, related IFRS Interpretations Committee Interpretation
+and Standing Interpretations Committee Interpretation. 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). 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. 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.
+China Life Insurance Company Limited
+169
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Sale or Contribution of Assets between an
+Investor and its Associate or Joint Venture
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2018 (continued)
+IFRS 16 - Leases (continued)
+The Group will adopt IFRS 16 from 1 January 2019. The Group plans to adopt the modified retrospective approach
+according to transitional provisions in IFRS 16. In addition, the Group plans to apply the new requirements to contracts
+that were previously identified as leases applying IAS 17 and measure the lease liability at the present value of the
+remaining lease payments. The right-of-use asset will be measured at the amount of the lease liability, adjusted by the
+amount of any prepaid or accrued lease payments relating to the lease recognised in the statement of financial position
+immediately before the date of initial application. The Group plans to use the exemptions allowed by the standard on
+leases whose lease terms end within 12 months as of the date of initial application and leases of low-value assets. The
+Group has performed a detailed assessment on the impact of adoption of IFRS 16. The Group has estimated that right-
+of-use assets of RMB2.6 billion and lease liabilities of RMB2.2 billion will be recognised at 1 January 2019, with no
+corresponding adjustment to the opening balance of retained earnings. Based on the current assessment, the Group
+expects the adoption of IFRS 16 will have no significant impact on the Group's consolidated statement of comprehensive
+income.
+IFRS 3 Amendments - Definition of a business
+In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations. The
+amendments clarify and provide additional guidance on the definition of a business. The amendments clarify that for
+an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a
+substantive process that together significantly contribute to the ability to create outputs. A business can exist without
+including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether
+market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on
+whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create
+outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to
+customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance
+to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a
+simplified assessment of whether an acquired set of activities and assets is not a business. The amendments are effective
+for annual reporting periods beginning on or after 1 January 2020 and apply prospectively. Earlier application is
+permitted. The Group expects to adopt the amendments from 1 January 2020. The amendments are not expected to
+have any significant impact on the Group's consolidated financial statements.
+IAS 1 and IAS 8 Amendments - Definition of Material
+In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting
+Policies, Changes in Accounting Estimates and Errors to provide a new definition of material. The new definition states
+that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions
+that the primary users of general purpose financial statements make on the basis of those financial statements. The
+amendments clarify that materiality will depend on the nature or magnitude of information. A misstatement of
+information is material if it could reasonably be expected to influence decisions made by the primary users. The
+amendments are effective for annual reporting periods beginning on or after 1 January 2020 and apply prospectively.
+Earlier application is permitted. The Group expects to adopt the amendments from 1 January 2020. The amendments
+are not expected to have any significant impact on the Group's consolidated financial statements.
+2.1 Basis of preparation (continued)
+Financial Report
+yet
+1 January 2021
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2018
+Content
+Effective for annual periods
+beginning on or after
+Standards/Amendments
+IFRS 16
+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.
+IAS 1 and IAS 8 Amendments
+IFRS 17
+IFRS 10 and IAS 28 Amendments
+Leases
+Definition of a Business
+Definition of Material
+Insurance Contracts
+1 January 2019
+1 January 2020
+1 January 2020
+Financial Report
+China Life Insurance Company Limited
+170
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2018 (continued)
+IFRS 10 and IAS 28 Amendments
+Venture
+-
+Sale or Contribution of Assets between an Investor and its Associate or Joint
+Amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements in IFRS 10 and IAS 28 in
+dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments
+require a full recognition of a gain or loss when the sale or contribution of assets between an investor and its associate
+or joint venture constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss
+resulting from the transaction is recognised in the investor's profit or loss only to the extent of the unrelated investor's
+interest in that associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but
+an entity that early adopts the amendments must apply them prospectively. The Group will apply these amendments
+when they become effective.
+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 significant impact
+on the accounting policies of the Group as a result of these amendments.
+2.2 Consolidation
+year
+The consolidated financial statements include the financial statements of the Company and its subsidiaries for the
+ended 31 December 2018. Subsidiaries are those entities which are controlled by the Group (including the structured
+entities controlled by the Group). Control is achieved when the Group is exposed, or has rights, to variable returns
+from its involvement with the investee and has the ability to affect those returns through its power over the investee.
+Specifically, the Group controls an investee if and only if the Group has:
+power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
+investee);
+exposure, or
+· rights, to variable returns from its involvement with the investee; and
+• the ability to use its power over the investee to affect its returns.
+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
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+171
+The Group is currently assessing the impact of the standard upon adoption.
+For the year ended 31 December 2018
+Financial Report
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2018 (continued)
+IFRS 17 Insurance Contracts
+In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance
+contracts covering recognition and measurement, presentation and disclosure, which replaces IFRS 4 Insurance Contracts.
+In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies
+for measurement purposes, IFRS 17 provides a comprehensive model (the general model) for insurance contracts,
+supplemented by the variable fee approach for contracts with direct participation features and the premium allocation
+approach mainly for short-duration which typically applies to certain non-life insurance contracts.
+The main features of the new accounting model for insurance contracts are as follows:
+• The fulfilment cash flows including the expected present value of future cash flows and explicit risk adjustment,
+remeasured every reporting period;
+• A contractual service margin represents the unearned profitability of the insurance contracts and is recognised in profit
+or loss over the coverage period;
+• Certain changes in the expected present value of future cash flows are adjusted against the contractual service margin
+and thereby recognised in profit or loss over the remaining coverage period;
+• The effect of changes in discount rates will be reported in either profit or loss or other comprehensive income,
+determined by an accounting policy choice;
+• The recognition of insurance revenue and insurance service expenses in the statement of comprehensive income based
+on the concept of services provided during the period;
+• Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct
+investment components), are not presented in the statement of comprehensive income, but are recognised directly on
+the statement of financial position;
+• Insurance services results are presented separately from the insurance finance income or expense;
+• Extensive disclosures to provide information on the recognised amounts from insurance contracts and the nature and
+extent of risks arising from these contracts.
+IFRS 17 is effective for annual reporting periods beginning on or after 1 January 2021. Early application is permitted,
+provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. Retrospective
+application is required, with comparative figures required. However, if full retrospective application for a group of
+insurance contracts is impracticable, the entity is required to choose either the modified retrospective approach or the
+fair value approach.
+In November 2018, the IASB tentatively decided to defer the effective date for IFRS 17 by one year to reporting periods
+beginning on or after 1 January 2022. The IASB also tentatively decided to allow insurers qualifying for the deferral
+of IFRS 9 an additional year of deferral, meaning that they could apply both standards for the first time to reporting
+periods beginning on or after 1 January 2022. As at the approval date of the consolidated financial statements, the
+changes to the effective dates have not yet been finalised by the IASB.
+China Life Insurance Company Limited
+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 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:
+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 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.8 Financial assets (continued)
+2.8.b Recognition and measurement (continued)
+Loans are carried at amortised cost, net of allowance for impairment.
+The Group purchases securities under agreements to resell substantially identical securities. These agreements are
+classified as secured loans and are recorded at amortised cost, i.e., their costs plus accrued interests at the end of the
+reporting period, which approximates fair value. The amounts advanced under these agreements are reflected as assets
+in the consolidated statement of financial position. The Group does not take physical possession of securities purchased
+under agreements to resell. Sale or transfer of the securities is not permitted by the respective clearing house on which
+they are registered while the lent capital is outstanding. In the event of default by the counterparty, the Group has the
+right to the underlying securities held by the clearing house.
+2.8.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:
+significant financial difficulty of the issuer or debtor;
+a breach of contract, such as a default or delinquency in payments;
+For the year ended 31 December 2018
+• it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganisation; 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 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
+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.
+Financial Report
+China Life Insurance Company Limited
+178
+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.
+⚫ the disappearance of an active market for that financial asset because of financial difficulties.
+Notes to the Consolidated Financial Statements (continued)
+• 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.
+China Life Insurance Company Limited
+Notes to the Consolidated Financial Statements (continued)
+177
+For the year ended 31 December 2018
+Financial Report
+2.8 Financial assets
+2.8.a Classification
+(i) Securities at fair value through profit or loss
+This category has two sub-categories: securities held for trading and those designated as at fair value through profit or
+loss at inception. Securities are classified as held for trading at inception if acquired principally for the purpose of selling
+in the short-term or if they form part of a portfolio of financial assets in which there is evidence of taking short-term
+profit. The Group may classify other financial assets as at fair value through profit or loss if they meet the criteria in IAS
+39 and designated as such at inception.
+(ii) Held-to-maturity securities
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+(iii) Loans and receivables
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
+active market other than those that the Group intends to sell in the short-term or held as available-for-sale. Loans and
+receivables mainly comprise term deposits, loans, securities purchased under agreements to resell, accrued investment
+income and premium receivables as presented separately in the statement of financial position.
+(iv) Available-for-sale securities
+Available-for-sale securities are non-derivative financial assets that are either designated in this category or not classified
+in any of the other categories.
+cost.
+2.8.b Recognition and measurement
+Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase or sell assets.
+Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through
+profit or loss, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the
+rights to receive cash flows from the investments have expired or when they have been transferred and the Group has also
+transferred substantially all risks and rewards of ownership.
+Securities at fair value through profit or loss and available-for-sale securities are carried at fair value. Equity investments
+that do not have a quoted price in an active market and whose fair value cannot be reliably measured are carried at cost,
+net of allowance for impairments. Held-to-maturity securities are carried at amortised cost using the effective interest
+method. Investment gains and losses on sales of securities are determined principally by specific identification. Realised
+and unrealised gains and losses arising from changes in the fair value of the securities at fair value through profit or
+loss category, and the change of fair value of available-for-sale debt securities due to foreign exchange impact on the
+amortised cost are included in net profit in the period in which they arise. The remaining unrealised gains and losses
+arising from changes in the fair value of available-for-sale securities are recognised in OCI. When securities classified
+as available-for-sale securities are sold or impaired, the accumulated fair value adjustments are included in net profit as
+realised gains on financial assets.
+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.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at amortised
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+187
+China Life Insurance Company Limited
+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.
+The Group issues contracts that transfer insurance risk or financial risk or both. This section summarises these risks and
+the way the Group manages them.
+4.1 Insurance risk
+Risk management is carried out by the Company's Risk Management Committee under policies approved by the
+Company's Board of Directors.
+4 RISK MANAGEMENT
+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 2018, 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 41(c) for the
+details.
+4.1 Insurance risk (continued)
+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.
+4.1.1 Types of insurance risks
+4.1.1 Types of insurance risks (continued)
+2017
+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.
+3.5 Determination of control over investee
+Xin Fu Ying Jia Annuity (a)
+Premiums of long-term insurance contracts
+%
+RMB million
+%
+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.
+RMB million
+Product name
+For the year ended 31 December
+Financial Report
+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
+2018
+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.
+3.2 Financial instruments
+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.
+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.
+China Life Insurance Company Limited
+185
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+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.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and liabilities,
+are set out below. It is possible that actual results may be different from the estimates and judgements referred to below.
+3.1 Estimate of future benefit payments and premiums arising from long-term insurance contracts
+The determination of the liabilities under long-term insurance contracts is based on estimates of future benefit
+payments, premiums and relevant expenses made by the Group and the margins. Assumptions about mortality rates,
+morbidity rates, lapse rates, discount rates, 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.
+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.
+38,397
+The Group's principal investments are debt securities, equity securities, term deposits and loans. The critical estimates
+and judgements are those associated with the recognition of impairment and the measurement of fair value.
+The Group considers a wide range of factors in the impairment assessment as described in Note 2.8.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 judgements. The methods and assumptions used
+by the Group in measuring the fair value of financial instruments are as follows:
+3.3 Impairment of investments in associates and joint ventures
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+186
+3.4 Income tax
+China Life Insurance Company Limited
+parameter
+For the description of valuation techniques, please refer to Note 4.4. Using different valuation techniques and
+assumptions may lead to some differences of fair value estimations.
+⚫ fair values 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.
+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.
+Financial Report
+7.99%
+3,019
+8.73%
+Hong Fu Zhi Zun Annuity (b)
+8,764
+6.52%
+2
+0.00%
+Xin Ru Yi Annuity (c)
+3,526
+2.62%
+China Life Insurance Company Limited
+3,594
+2.16%
+Kang Ning Whole Life (d)
+4,663
+3.47%
+4,197
+2.52%
+Hong Ying Participating Endowment (e)
+100.00%
+166,224
+100.00%
+134,398
+Total
+60.57%
+4.79%
+100,679
+86,857
+Others (f)
+29.96%
+49,796
+21.38%
+28,741
+64.64%
+7,956
+1.37%
+1,847
+21,435
+4.30%
+20,667
+Kang Ning Whole Life (d)
+5.41%
+25,166
+4.61%
+4.57%
+Xin Ru Yi Annuity (c)
+5.35%
+24,877
+4.64%
+22,292
+Hong Fu Zhi Zun Annuity (b)
+21,960
+40,588
+Hong Ying Participating Endowment (e)
+0.30%
+Xin Fu Ying Jia Annuity (a)
+Insurance benefits of long-term insurance contracts
+100.00%
+464,898
+100.00%
+480,496
+1,448
+Total
+349,813
+78.20%
+375,732
+Others (f)
+0.65%
+A contingent liability is not recognised in the consolidated statement of financial position but is disclosed in the notes
+75.25%
+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.
+Financial Report
+2.11.2 Insurance contracts (continued)
+2.11.2.a Recognition and measurement (continued)
+(ii) Long-term insurance contracts (continued)
+(b) Margin has been taken into consideration while computing the reserve of insurance contracts, measured separately
+and recognised in net profit in each period over the life of the contracts. At the inception of the contracts, the Group
+does not recognise Day 1 gain, whereas on the other hand, Day 1 loss is recognised in net profit immediately.
+Margin comprises risk margin and residual margin. Risk margin is the reserve accrued to compensate for the uncertain
+amount and timing of future cash flows. At the inception of the contract, the residual margin is calculated net of certain
+acquisition costs, mainly consist of underwriting and policy acquisition costs, by the Group representing Day 1 gain and
+will be amortised over the life of the contracts. For insurance contracts of which future returns are affected by investment
+yields of corresponding investment portfolios, their related residual margins are amortised based on estimated future
+participating dividends payable to policyholders. For insurance contracts of which future returns are not affected by
+investment yields of corresponding investment portfolios, their related residual margins are amortised based on sum
+assured of outstanding policies. The subsequent measurement of the residual margin is independent from the reasonable
+estimate of future discounted cash flows and risk margin. The assumption changes have no effect on the subsequent
+measurement of the residual margin.
+(c) The Group has considered the impact of time value on the reserve calculation for insurance contracts.
+(iii) Universal life contracts and unit-linked contracts
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+• insurance components
+• non-insurance components
+The insurance components are accounted for as insurance contracts; and the non-insurance components are accounted
+for as investment contracts (Note 2.11.3), which are stated in the investment contract liabilities.
+2.11.2.b Liability adequacy test
+The Group assesses the adequacy of insurance contract reserves using the current estimate of future cash flows with
+available information at the end of each reporting period. If that assessment shows that the carrying amount of its
+insurance liabilities (less related intangible assets, if applicable) is inadequate in light of the estimated future cash flows,
+the insurance contract reserves will be adjusted accordingly, and any changes of the insurance contract liabilities will be
+recognised in net profit.
+2.11.2.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.
+China Life Insurance Company Limited
+181
+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
+Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment contracts are
+carried at amortised cost.
+For investment contracts with or without DPF, the Company's policy fee income mainly consists of acquisition cost and
+various fees (handling fees and management fees, etc.) over the period of which the service is provided. Policy fee income
+net of certain acquisition cost is amortised over the expected life of the contracts by period and recognised in revenue.
+2.11.3 Investment contracts
+2.11 Insurance contracts and investment contracts (continued)
+The Group assesses its reinsurance assets for impairment as at the end of reporting period. If there is objective evidence
+that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable
+amount and recognises that impairment loss in net profit.
+2.11.2.c Reinsurance contracts held (continued)
+2.11.2 Insurance contracts (continued)
+2.11 Insurance contracts and investment contracts (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+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.
+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 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2018
+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.
+2.10 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.
+2.11 Insurance contracts and investment contracts
+2.11.1 Classification
+The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by the Group are
+classified as insurance contracts and investment contracts. Insurance contracts are those contracts that transfer significant
+insurance risk. They may also transfer financial risk. Investment contracts are those contracts that transfer financial risk
+without significant insurance risk. A number of insurance and investment contracts contain a discretionary participating
+feature ("DPF"). This feature entitles the policyholders to receive additional benefits or bonuses that are, at least in part,
+at the discretion of the Group.
+China Life Insurance Company Limited
+179
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.11 Insurance contracts and investment contracts (continued)
+2.11.2 Insurance contracts
+2.11.2.a Recognition and measurement
+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.
+Notes to the Consolidated Financial Statements (continued)
+180
+China Life Insurance Company Limited
+Financial Report
+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.
+control.
+Financial Report
+• 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
+guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals,
+maturities and surrenders;
+•
+(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:
+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:
+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.
+(ii) Long-term insurance contracts
+• additional non-guaranteed benefits, such as policyholder dividends; and
+2.13 Securities sold under agreements to repurchase
+The Group retains substantially all the risk and rewards of ownership of securities sold under agreements to repurchase
+which generally mature within 180 days from the transaction date. Therefore, securities sold under agreements to
+repurchase are classified as secured borrowings. The Group may be required to provide additional collateral based on the
+fair value of the underlying securities. Securities sold under agreements to repurchase are recorded at amortised cost, i.e.,
+their cost plus accrued interest at the end of the reporting period. It is the Group's policy to maintain effective control
+over securities sold under agreements to repurchase which includes maintaining physical possession of the securities.
+Accordingly, such securities continue to be carried on the consolidated statement of financial position.
+2.14 Bonds payable
+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 regulations are 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.
+Financial Report
+China Life Insurance Company Limited
+184
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Financial Report
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.21 Current and deferred income taxation (continued)
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
+realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
+end of the reporting period.
+Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off
+current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income tax
+levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
+to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
+each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
+2.22 Operating leases
+Leases where substantially all the risks and rewards of ownership of assets remain with the lessor company are accounted
+for as operating leases.
+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 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+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
+• 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.
+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.
+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.
+The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
+to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
+All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
+categorised within the fair value hierarchy, described in Notes 4.4, 7, 10 and 41(b) based on the lowest level input that is
+significant to the fair value measurement as a whole.
+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.
+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.
+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.
+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
+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.
+2.16 Employee benefits
+Pension benefits
+Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
+subsequently re-measured at their fair value. The resulting gain or loss of derivative financial instruments is recognised in
+net profit. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
+Embedded derivatives that are not closely related to their host contracts and meet the definition of a derivative are
+separated and fair valued through profit or loss. The Group does not separately measure embedded derivatives that
+meet the definition of an insurance contract or embedded derivatives that are closely related to host insurance contracts
+including embedded options to surrender insurance contracts for a fixed amount (or an amount based on a fixed amount
+and an interest rate).
+2.15 Derivative instruments
+Stock appreciation rights
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+182
+China Life Insurance Company Limited
+Financial Report
+Subordinated debts in 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.
+Financial Report
+For the year ended 31 December 2018
+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.
+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.
+The policy fee income for investment contracts mainly consists of acquisition costs and various fees (handling fees and
+management fees, etc.) over the period of which the service is provided. Policy fee income net of certain acquisition costs
+is amortised over the expected life of the contracts and recognised as other income.
+Policy fee income
+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 from long-term insurance contracts are recognised as revenue when due from the policyholders.
+Premiums
+Turnover of the Group represents the total revenues which include the following:
+2.17 Share capital
+2.19 Revenue recognition
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+183
+China Life Insurance Company Limited
+Other equity instruments are Core Tier 2 Capital Securities issued by the Group. These securities contain no contractual
+obligation to deliver cash or another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group; or to be settled in the Group's own equity
+instruments. Therefore, the Group classifies these securities as other equity instruments. Fees, commissions and other
+transaction costs of these securities' issuance are deducted from equity. The distributions of the securities are recognised
+as profit distribution at the time of declaration.
+2.18 Other equity instruments
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+(i) Short-term insurance contracts
+188
+The year of 2018 marked the 40th anniversary of
+China's reform and opening-up. During this year,
+the whole world faced complex and austere economic
+and financial situations and the life insurance sector
+underwent proactive restructuring. Sticking to the
+overall keynote of making progress with stability,
+China Life maintained a stable development and
+made a sturdy beginning of high-quality development
+through accelerating transformation and upgrading,
+and guarding against operational risks. The Company
+was ranked 35th on the "2018 Forbes Global 2000" and
+listed again on the "2018 (the 15th Session) China's 500
+Most Valuable Brands” published by World Brand Lab,
+ranking 5th
+2,931,113 2,572,281
+13.9%
+2,389,303 2,122,101 1,959,236
+318,371 320,933
+-0.8%
+303,621 322,492 284,121
+Earnings per share (basic and diluted)³
+0.39
+1.13
+-65.5%
+2,448,315 2,246,567
+0.66
+1.14
+Equity holders' equity per s
+share³
+11.26
+11.35
+-0.8%
+10.74
+11.41
+10.05
+Ordinary share holders' equity per share³
+1.22
+2,696,951
+2,573,049 2,334,814 2,145,260
+12.7%
+3,104,014 2,753,124
+19,127 34,699
+32,211
+Net profit attributable to ordinary share holders
+of the Company
+11,011
+31,873
+-65.5%
+18,741
+34,514
+32,211
+Net cash inflow/(outflow) from operating activities
+147,552 200,990
+-26.6%
+89,098
+(18,811) 78,247
+As at 31 December
+Total assets
+Investment assets
+Total liabilities
+Total equity holders' equity
+Per share (RMB)
+3,254,403 2,897,591
+12.3%
+10.99
+-64.7%
+11.08
+10.47
+4.69
+6.42
+5.51
+percentage points
+China Life Insurance Company Limited =
+11
+Prelude
+Notes:
+1.
+2.
+87.21
+3.
+In calculating "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.
+Ratio of assets and liabilities = Total liabilities/Total assets
+4.
+5.
+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
+- Derivative financial liabilities 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 - Derivative financial liabilities at the end of the period)/2)
+II. MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS AND
+THE REASONS FOR CHANGE
+RMB million
+Major Items of the
+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. The figures of the past years were adjusted on the same basis.
+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 + Investments in associates and joint ventures
+86.68
+88.59
+percentage points
+increase of 1.30
+percentage points
+decrease of 1.87
+11.13
+10.05
+Net cash inflow/(outflow) from operating activities per share³
+5.22
+7.11
+-26.6%
+3.15
+(0.67)
+2.77
+Major financial ratios
+Weighted average ROE (%)
+3.54
+10.49
+decrease of 6.95
+6.16
+11.56
+12.83
+Ratio of assets and liabilities* (%)
+90.07
+88.77
+Gross investment yield' (%)
+3.29
+5.16
+-0.8%
+32,253
+11,395
+Net profit attributable to equity holders of the Company
+Prelude
+Business Highlights
+¥
+Gross written premiums
+535,826 million
+a year-on-year increase of
+4.7%
+Renewal premiums
+364,678 million
+a year-on-year increase of
+26.6% 1
+Total assets
+China Life Insurance Company Limited
+3,254,403
+from the end of 2017
+million
+Investment assets
+Net investment income
+3,104,014 million 133,017 million
+an increase of
+12.7%
+from the end of 2017
+a year-on-year increase of
+2.4% ↑
+Embedded value
+795,052 million
+an increase of
+12.3%
+During the long course of its development, the Company has accumulated a wealth of
+experience in operation and management and has a stable and professional management
+team that is well versed in the art of management in China's life insurance market. The
+Company's core management team and key personnel comprise those who have in-depth
+knowledge and understanding of the life insurance market in China, including members
+of the Company's senior management, experienced underwriting personnel, insurance
+actuaries and investment managers. During the Reporting Period, there was no movement
+of these personnel which might have a material impact on the Company.
+Professional
+and stable
+core team
+The Company has an extensive customer base. As at 31 December 2018, the Company had
+approximately 285 million long-term individual and group life insurance policies, annuity
+contracts and long-term health insurance policies in force, offering insurance services for
+more than 500 million customers.
+Claims payments include the payment for claims, death, disability and medical benefits.
+The types of allocated assets mainly include deposits, bonds, debt-type financial products, etc. (exclusive of figures of any
+subsidiaries).
+3
+18
+China Life Insurance Company Limited
+During the Reporting Period, the Company completed
+the re-election of the Board, and elected the sixth
+session of the Board. I would like to express my
+gratitude to all directors of the fifth session of the
+Board for their contributions to the development of the
+Company. The Company has significantly improved its
+capability of sustainable development with remarkable
+results in the adjustment of its business structure, and
+its technology-empowered businesses, management and
+served in China's key development strategy as well as
+transformation and upgrading by taking advantage of
+various forms of investment such as direct or indirect
+investment in equities or debts for the purpose of
+facilitating the development of real economy. The
+Company took an initiative to launch special share-
+pledged funds in the industry to actively assist quality
+listed companies in resolving short-term liquidity risk.
+The Company underwrote an in-force insured sum of
+RMB25 trillion, an increase of 40.8% year-on-year.
+More than 14 million claims were settled with total
+claims payments of RMB54.54 billion, an increase of
+23.8% year-on-year. The Company's supplementary
+major medical expenses insurance provided protection
+for more than 400 million urban and rural residents
+and provided over 11 million claims payments. The
+Company intensively participated in poverty alleviation
+programs through insurance products, business
+operation, e-commerce and public relief funds. The
+Company had a total of 37 insurance-based poverty
+alleviation products on sale as at the end of 2018, and
+made the total claims payments of more than RMB3
+billion to poverty-stricken persons in relation to
+supplementary major medical expenses insurance and
+RMB1.52 billion to the registered poverty-stricken
+population.
+We remained true to our original aspiration, assumed
+social responsibilities and served the overall economic
+and social development. The Company proactively
+We consistently strengthened technological innovation
+and strived to improve customer experience. The
+Company went further to implement the “Technology-
+driven China Life" strategy by actively integrating new
+technologies into operation and management in great
+depth. We established digital platforms to facilitate
+the transformation and upgrading of sales force, which
+greatly improved internal management efficiency of the
+sales team and also the service efficiency and quality,
+and expanded intelligent scenarios to create a new
+operation model with China Life characteristics that
+combined both online and offline operations, to realize
+a direct and close interaction among customers, sales
+force and the Company. These undertakings helped
+to effectively satisfy the needs of over 500 million
+customers for insurance coverage and services and
+consistently lifted customer satisfaction.
+We continued to implement our investment strategies
+of making long-term investment, value investment
+and prudent investment. The Company capitalized on
+the opportunity of the periodical interest rate hike to
+further increase its allocation of fixed-income assets with
+long duration. The allocation of fixed-income products³
+for the year amounted to over RMB500 billion, with
+a weighted average expected return of approximately
+5%. In 2018, the net investment yield of the Company
+was 4.64%. Due to the overall downward fluctuation
+of the equity market, the gross investment yield of
+the Company decreased to 3.29% and the net profit
+attributable to equity holders of the Company was
+RMB11,395 million, a decrease of 64.7% year-on-year.
+Chairman's Statement
+17
+China Life Insurance Company Limited
+Calculated according to the premium data of life insurance companies in 2018 released by the CBIRC.
+2
+We consistently optimized our premiums payment
+structure and product mix to continually improve our
+business quality. The Company proactively reduced
+single premiums from the bancassurance channel.
+The
+percentage of first-year regular premiums in first-
+year premiums of long-term insurance was 90.16%,
+an increase of 26.17 percentage points from 2017, and
+the percentage of renewal premiums in gross written
+premiums was 68.06%, an increase of 11.79 percentage
+points from 2017, which showed the stronger driving
+force of the renewal business. The Company made great
+efforts in diversifying the product mix. The percentage
+of premiums of the top-five products in the first-year
+premiums of long-term insurance decreased by 17.86
+percentage points from 2017. Moreover, the protection-
+oriented business developed rapidly, and the percentage
+of premiums from the designated protection-oriented
+insurance products in first-year regular premiums
+increased by 6.73 percentage points compared to 2017.
+The value of one year's sales of the Company was
+RMB49,511 million, the year-on-year decline of which
+was narrowed by 6.02 percentage points compared with
+the first half of 2018, and the new business margin of
+one year's sales was enhanced from 2017.
+8.3% from the end of 2017. Total assets and investment
+assets of the Company reached RMB3.25 trillion
+and RMB3.10 trillion, an increase of 12.3% and
+12.7% year-on-year, respectively. The Company had
+sufficient cash flow and adequate solvency, with its
+core solvency ratio and comprehensive solvency ratio
+being 250.55% and 250.56%, respectively, and received
+one of the highest scores among all insurers during the
+onsite review of Solvency Aligned Risk Management
+Requirements and Assessment (SARMRA).
+We adapted to new situations and forged ahead to
+enhance our comprehensive strengths. The Company's
+gross written premiums amounted to RMB535,826
+million, an increase of 4.7% year-on-year, and secured
+a market share² of 20.4%, an increase of 0.7 percentage
+point from the end of 2017, with its market-leading
+position consolidated. The embedded value of the
+Company was RMB795,052 million, an increase of
+Core Competitiveness
+Prelude
+Profound
+and extensive
+customer
+base
+an increase of
+8.3%
+from the end of 2017
+China Life Insurance Company Limited
+10
+Benefits, claims and expenses
+532,023 506,910
+621,243 608,827
+5.0%
+2.0%
+540,781
+426,230
+522,794
+507,449
+440,766
+362,301 330,105
+463,492
+404,275
+Insurance benefits and claims expenses
+479,219
+466,043
+2.8% 407,045
+352,219
+315,294
+Profit before income tax
+13,921
+41,671
+-66.6%
+23,842
+45,931
+40,402
+-2.5%
+As at
+643,355
+Net premiums earned
+26
+Policy persistency rate
+(14 months)
+91.10%
+a year-on-year increase of
+0.20 percentage point
+Policy persistency rate
+(26 months)
+86.00%
+a year-on-year increase of
+0.30 percentage point
+Percentage of premiums from designated protection-
+oriented products in first-year regular premiums
+a year-on-year increase of
+6.73 percentage points
+Financial Summary
+I. MAJOR FINANCIAL DATA AND INDICATORS FOR THE PAST FIVE YEARS
+Major Financial Data¹
+RMB million
+Under International Financial Reporting Standards (IFRS)
+2018
+2017
+Change
+2016
+2015
+2014
+Prelude
+For the year ended
+Total revenues
+627,419
+As at
+LOOKING BACK ON 2018,
+WE STRIVED AHEAD FOR
+DEVELOPMENT WITH
+CONCERTED EFFORTS.
+31 December
+3.9%
+The steady growth of accident insurance
+business
+Investment income
+125,167
+122,727
+2.0%
+Net realised gains on financial assets
+(19,591)
+42
+N/A
+14,320
+Net fair value gains through
+6,183
+N/A
+profit or loss
+Other income
+Insurance benefits and
+claims expenses
+Investment contract benefits
+Due to the combined impact of an increase
+in interest income from debt investment and
+a decrease in dividends from funds
+A decrease in spread income of stocks in
+available-for-sale securities and an increase
+in equity investment assets qualified for
+impairment
+A decrease in spread income and fair value
+of stocks in securities at fair value through
+profit or loss
+8,098
+(18,278)
+14,881
+Accident insurance business
+The steady growth of life insurance business
+The expansion of health insurance business
+by the Company
+China Life Insurance Company Limited
+13
+Prelude
+RMB million
+Major Items of the
+Consolidated Statement
+of Comprehensive Income
+2018
+2017
+Change
+Main Reasons for Change
+For the year ended 31 December
+Net premiums earned
+532,023
+506,910
+Life insurance business
+436,863
+429,267
+5.0%
+1.8%
+Health insurance business
+80,279
+63,323
+26.8%
+7,493
+8.1%
+479,219
+466,043
+1,985
+35,953
+8,919
+4.3%
+The growth of business
+-77.7%
+Net profit attributable to equity
+11,395
+32,253
+-64.7%
+holders of the Company
+Due to the combined impact of taxable
+income and deferred income tax
+A significant decrease in the income from
+open market equity investments due to the
+overall volatility and downward trend of the
+equity market
+China Life Insurance Company Limited
+14
+Chairman's Statement
+Chairman's Statement
+China Life Insurance Company Limited
+16
+Wang Bin, Chairman
+Chairman's Statement
+The world flourishes and thrives as the spring breeze
+blows. In this beautiful season, I, on behalf of the
+Company's board of directors (the "Board"), hereby
+report to shareholders and the public the Company's
+achievements made in 2018, the direction for future
+development and the blueprint in the new era.
+Consolidated Statement
+37,486
+Note: 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, a three-year bank loan of EUR67 million with a maturity date on 18
+January 2021, and a six-month bank loan of EUR127 million with a maturity date on 11 January 2019 which is automatically
+renewed upon maturity pursuant to the terms of the agreement. 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.
+A decrease in interest paid due to the
+redemptions of subordinated debts
+A continuous increase in the percentage of
+renewal premiums in gross written premiums
+as a result of the Company's enhanced efforts
+2.8%
+The business growth of Pension Company
+An increase in reserves for insurance liabilities
+9,332
+8,076
+15.6%
+An increase in the scale of universal
+insurance accounts
+Policyholder dividends resulting
+19,646
+21,871
+-10.2%
+from participating in profits
+A decrease in investment yield from
+participating accounts
+Underwriting and policy
+62,705
+64,789
+-3.2%
+acquisition costs
+Finance costs
+Administrative expenses
+Income tax
+4,116
+4,601
+-10.5%
+in business restructuring
+comprehensive income and profit distribution
+during the Reporting Period
+02
+-0.8%
+36,185
+-72.6%
+An increase in the scale of corporate bonds in
+securities at fair value through profit or loss
+The needs for liquidity management
+agreements to resell
+Cash and cash equivalents
+50,809
+48,586
+Loans
+450,251
+383,504
+9,905
+4.6%
+17.4%
+An increase in the scale of policy loans and
+debt investments plans
+Investment properties
+Investments in associates and
+joint ventures
+Deferred tax assets
+9,747
+201,661
+3,064
+161,472
+218.1%
+24.9%
+1,257
+The needs for liquidity management
+Securities purchased under
+profit or loss
+1.4%
+Due to the combined impact of total
+31 December
+of Financial Position
+2018
+2017
+Main Reasons for Change
+Term deposits
+559,341
+449,400
+24.5%
+Held-to-maturity securities
+806,717
+717,037
+12.5%
+An increase in the scale of the negotiated deposits
+An increase in the allocation of government
+bonds
+Available-for-sale securities
+870,533
+810,734
+7.4%
+An increase in the allocation of financial bonds
+in available-for-sale securities
+Securities at fair value through
+138,717
+136,809
+N/A
+New investments in investment properties
+The Company steadily increased its allocation in
+investments in associates and joint ventures, and
+the equity of such investments was increased
+Affected by a decrease in the fair value of
+available-for-sale securities
+Change
+12
+120.1%
+The needs for liquidity management
+to repurchase
+Annuity and other insurance
+49,465
+44,820
+10.4%
+An increase in maturities payable
+balances payable
+Interest-bearing loans and
+20,150
+18,794
+7.2%
+An increase in borrowings
+other borrowingso
+Note
+Deferred tax liabilities
+4,871
+N/A
+Equity holders' equity
+318,371
+China Life Insurance Company Limited
+320,933
+87,309
+192,141
+Affected by a decrease in the fair value of
+available-for-sale securities
+accounts
+Securities sold under agreements
+2,025,133
+The accumulation of insurance liabilities from
+new policies and renewal business
+Major Items of the
+As at
+Insurance contracts
+As at
+Consolidated Statement
+31 December
+31 December
+9.4%
+2018
+An increase in the scale of universal insurance
+of Financial Position
+9.9%
+232,500
+255,434
+2,216,031
+Prelude
+Main Reasons for Change
+Change
+Investment contracts
+2017
+3,901
+5/3
+463
+7,744
+1,844
+Total
+25,165
+29,190
+1,388
+2,823
+59,772
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+Total
+12,480
+2,413
+3,901
+128
+2,413
+1,206
+12,480
+1,229
+185
+1,198
+9,829
+18,794
+Debt securities
+-
+- Held-to-maturity securities
+155
+155
+- Loans
+952
+952
+- Available-for-sale securities
+- Securities at fair value
+1,229
+through profit or loss
+435
+18
+5
+Term deposits
+7,744
+Cash and cash equivalents
+1,246
+282
+18,794
+196
+4.2.2 Credit risk
+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)
+Financial Report
+Later than 1
+As at 31 December 2018
+Carrying
+value
+Without
+maturity
+4 RISK MANAGEMENT (continued)
+Not later
+than 1 year
+years
+Later than 3
+years but not
+later than 5
+years
+Later than
+5 years
+Financial assets
+Contractual cash inflows
+Equity securities
+2,690
+422,780
+year but not
+later than 3
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+China Life Insurance Company Limited
+Credit risk is the risk that one party of a financial transaction or the issuer of a financial instrument will fail to discharge
+its obligation and cause another party to incur a financial loss. Because the Group's investment portfolio is restricted
+to the types of investments as permitted by the China Banking and Insurance Regulatory Commission (“CBIRC”) and
+a significant portion of the portfolio is in government bonds, government agency bonds, corporate bonds with higher
+credit rating and term deposits with the state-owned commercial banks, the Group's overall exposure to credit risk is
+relatively low.
+China Life Insurance Company Limited
+195
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.2 Credit risk (continued)
+Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Group manages
+credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction
+structures. Where appropriate, the Group obtains collateral in the form of rights to cash, securities, property and
+equipment to lower the credit risk.
+Credit risk exposure
+The carrying amount of financial assets included on the consolidated statement of financial position represents the
+maximum credit risk exposure at the reporting date without taking account of any collateral held or other credit
+enhancements attached. The Group has no credit risk exposure relating to off-balance sheet items as at 31 December
+2018 and 2017.
+Collateral and other credit enhancements
+Securities purchased under agreements to resell are pledged by counterparties' debt securities or term deposits of which
+the Group could take the ownership if the owner of the collateral defaults. Policy loans and most of premium receivables
+are collateralised by their policies' cash value according to the terms and conditions of policy loan contracts and policy
+contracts, respectively.
+Credit quality
+The Group's debt securities investment mainly includes government bonds, government agency bonds, corporate bonds
+and subordinated bonds or debts, and most of the debt securities are guaranteed by either the Chinese government
+or Chinese government controlled financial institutions. As at 31 December 2018, 99.9% (as at 31 December 2017:
+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 2018, 99.9% (as at 31 December 2017: 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 2018, 99.9% (as at 31 December 2017: 99.8%) of the Group's bank deposits are with the four
+largest state-owned commercial banks, other national commercial banks and China Securities Depository and Clearing
+Corporation Limited (“CSDCC”) in the PRC. The Group believes these commercial banks, and CSDCC have a high
+credit quality. The Group's most other loans excluding policyholder loans, are guaranteed by third parties or with
+pledge, or have the fiscal annual budget income as the source of repayment, or have higher credit rating borrowers. As
+a result, the Group concludes that the credit risk associated with term deposits and accrued investment income thereof,
+statutory deposits-restricted, other loans, and cash and cash equivalents has not caused a material impact on the Group's
+consolidated financial statements as at 31 December 2018 and 2017.
+The credit risk associated with securities purchased under agreements to resell, policy loans and most of premium
+receivables has not caused a material impact on the Group's consolidated financial statements taking into consideration
+their sufficient collateral held and maturity terms of no more than one year as at 31 December 2018 and 2017.
+4.2.3 Liquidity risk
+Liquidity risk is the risk that the Group is unable to obtain funds at a reasonable funding cost when required to meet a
+repayment obligation and fund its asset portfolio within a certain time.
+In the normal course of business, the Group attempts to match the maturity of financial assets to the maturity of
+insurance and financial liabilities.
+Financial Report
+As at 31 December 2018, 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 RMB353
+million (as at 31 December 2017: RMB308 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 RMB4,909 million (as at 31 December 2017: RMB3,541
+million) lower or higher, respectively, as a result of foreign exchange losses or gains on translation of the available-for-
+sale equity securities at fair value. The actual exchange losses in 2018 were RMB194 million (2017: exchange gains of
+RMB52 million).
+1,088
+261
+4,707
+1,076
+9,016
+Debt securities
+- Held-to-maturity securities
+150
+150
+- Loans
+1,766
+1,766
+2,315
+- Available-for-sale securities
+2,240
+- Securities at fair value
+through profit or loss
+627
+19
+Term deposits
+7,502
+Cash and cash equivalents
+1,768
+2,240
+951
+163
+4,511
+422,780
+(ii) Price risk (continued)
+As at 31 December 2018, if the prices of all the Group's equity securities had increased or decreased by 10% with all
+other variables held constant, pre-tax profit for the year would have been RMB5,073 million (as at 31 December 2017:
+RMB3,341 million or RMB5,393 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 RMB24,898 million or RMB34,474 million (as at 31 December 2017: RMB23,423 million or RMB32,651
+million) higher or lower, respectively, as a result of an increase or decrease in fair value of available-for-sale equity
+securities. If prices decreased to the extent that the impairment criteria were met, a portion of such decrease of the
+available-for-sale equity securities would reduce pre-tax profit through impairment.
+(iii) Currency risk
+Currency risk is the volatility of fair value or future cash flows of financial instruments resulted from changes in foreign
+currency exchange rates. The Group's currency risk exposure mainly arises from cash and cash equivalents, term deposits,
+debt investments, equity investments, interest-bearing loans and borrowings denominated in currencies other than the
+functional currency, such as US dollar, HK dollar, GB pound and EUR, etc.
+The following table summarises primary financial assets and financial liabilities denominated in currencies other than
+RMB as at 31 December 2018 and 2017, expressed in RMB equivalent:
+Financial Report
+As at 31 December 2018
+US dollar
+HK dollar GB pound
+EUR
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+9,994
+41,379
+51,373
+- Securities at fair value
+through profit or loss
+287
+42
+72
+4
+For the year ended 31 December 2018
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.1 Market risk (continued)
+(iii) Currency risk (continued)
+Financial Report
+As at 31 December 2017
+US dollar
+HK dollar
+GB pound
+EUR
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+8,697
+28,859
+37,556
+- Securities at fair value
+through profit or loss
+Notes to the Consolidated Financial Statements (continued)
+146
+194
+20,150
+657
+7,502
+2,358
+Total
+28,558
+41,803
+1,257
+2,364
+1,080
+75,062
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+13,108
+2,385
+4,657
+20,150
+Total
+13,108
+2,385
+4,657
+China Life Insurance Company Limited
+Debt securities
+409,528
+80,801
+2,106
+Securities purchased under
+agreements to resell
+36,185
+36,185
+Accrued investment income
+50,641
+44,789
+5,602
+734
+250
+14,121
+14,121
+Cash and cash equivalents
+48,586
+☐
+48,586
+Subtotal
+2,653,350
+409,528
+Premiums receivable
+4,084
+6,333
+Statutory deposits – restricted
+Later than
+5 years
+Financial assets
+Contractual cash inflows
+Equity securities
+4.2.1 Market risk (continued)
+409,528
+Debt securities
+1,255,052
+127,830
+240,582
+Loans
+383,504
+141,679
+105,063
+271,538
+64,386
+Term deposits
+449,400
+104,976
+252,571
+133,013
+1,240,465
+128,753
+2,823
+522,250
+Later than 3
+years but not
+later than 5
+years
+604,552
+1,372,041
+other borrowings
+18,794
+(1,240)
+(18,557)
+Subtotal
+2,411,085
+(2,529)
+(132,358)
+173,367
+Interest-bearing loans and
+20,217
+Net cash inflow/(outflow)
+242,265
+406,999
+389,892
+777,919
+491,510
+(2,823,821)
+China Life Insurance Company Limited
+198
+(4,195,862)
+(44,820)
+44,820
+balances payable
+Financial and insurance liabilities
+Expected cash outflows
+Insurance contracts
+2,025,133
+16,319
+Investment contracts
+232,500
+(15,308)
+221,905
+(29,981)
+47,109
+(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
+471,293
+years
+Later than 1
+year but not
+later than 3
+Not later
+than 1 year
+28
+Premiums receivable
+15,648
+15,648
+Cash and cash equivalents
+50,809
+50,809
+Subtotal
+2,954,779
+540
+422,780
+538,511
+630,903
+1,667,921
+Financial and insurance liabilities
+Expected cash outflows
+Insurance contracts
+2,216,031
+197,289
+222,170
+561,282
+47,834
+48,402
+Accrued investment income
+290,449
+Loans
+450,251
+182,978
+101,149
+Term deposits
+559,341
+172,525
+145,634
+298,644
+88,718
+237,508
+1,417,910
+172,050
+77,961
+Statutory deposits - restricted
+6,333
+782
+739
+6,005
+Securities purchased under
+agreements to resell
+9,905
+9,905
+Investment contracts
+255,434
+(13,098)
+(10,293)
+208,079
+(24,911)
+(5,021,057)
+Net cash inflow/(outflow)
+218,878
+420,100
+486,890
+746,590
+605,992 (3,353,136)
+China Life Insurance Company Limited
+197
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+Financial Report
+Contractual and expected cash flows (undiscounted)
+As at 31 December 2017
+Carrying
+value
+Without
+maturity
+(74,392)
+1,391,310
+(2,680)
+Subtotal
+(13,489)
+(11,422)
+(4,391,739)
+(629,318)
+Contractual cash outflows
+Securities sold under
+agreements to repurchase
+192,141
+(192,141)
+Financial liabilities at fair value
+through profit or loss
+2,680
+(2,680)
+Annuity and other insurance
+balances payable
+49,465
+(49,465)
+Interest-bearing loans and
+other borrowings
+20,150
+(16,977)
+(3,798)
+2,735,901
+4.2 Financial risk (continued)
+2018
+For the year ended 31 December 2018
+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 RMB1,672 million or RMB1,535 million (as at 31 December 2017:
+RMB1,940 million or RMB1,989 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 RMB23,322 million or RMB24,177 million (as at 31
+December 2017: RMB19,731 million or RMB20,559 million) lower or higher, respectively.
+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.
+Sensitivity analysis of long-term insurance contracts
+4.1.3 Sensitivity analysis
+4.1 Insurance risk (continued)
+4 RISK MANAGEMENT (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+190
+China Life Insurance Company Limited
+Financial Report
+(f) Others consist of various long-term insurance contracts with no significant concentration.
+(e) Hong Ying Participating Endowment is a participating endowment insurance contract with the options for single
+premium or regular premium of 3 years, 5 years or 10 years. Its insured period can be 6 years, 10 years or 15 years. This
+product is applicable to healthy policyholders between 30-day-old and 70-year-old. Maturity benefit of a single premium
+policy is paid at the basic sum insured, while that of a regular premium policy is paid at the basic sum insured multiplied
+by the number of years of the premium payments. Disease death benefit incurred within the first policy year is paid at
+the premium received (without interest). Disease death benefit incurred after the first policy year is paid at the basic sum
+insured for a single premium policy or the basic sum insured multiplied by the number of years of premium payments
+for a regular premium policy. When accidents occurred during taking a train, a ship or a flight period, death benefit is
+paid at the basic sum multiplied by 3 insured for a single premium policy or the basic sum multiplied by 3 and times the
+number of years of premium payments insured for a regular premium policy. When accidents occurred out of the period
+of taking a train, a ship or a flight, death benefit is paid at the basic sum multiplied by 2 insured for a single premium
+policy or the basic sum multiplied by 2 and times the number of years of premium payments insured for a regular
+premium policy.
+(d) Kang Ning Whole Life is a whole life insurance contract with the options for single premium or regular premium of
+10 years or 20 years. This product is applicable to healthy policyholders under 70-year-old. The critical illness benefit is
+paid at 200% of the basic sum insured. Both death and disability benefits are paid at 300% of the basic sum insured less
+any critical illness benefits paid.
+(c) Xin Ru Yi Annuity is an annuity insurance contract with the options for regular premium of 3 years, 5 years or
+10 years. Its insured period extends from the effective date of Xin Ru Yi Annuity to the corresponding date when
+policyholders reach the age of 80. This product is applicable to healthy policyholders between 28-day-old and 70-year-
+old. From the effective date to the contractual date starting to claim of Xin Ru Yi Annuity, the annuity payment of
+first policy year is paid at 10% of the first premium of the product, and the following annuity payments are paid at
+the basic sum insured by Xin Ru Yi Annuity. From the first corresponding date after the contractual date starting to
+claim of annuity to the corresponding date when the policyholders reach the age of 80-year-old, the annuity payment
+of first policy year is paid at 110% of the basic sum insured during the insured period if policyholders live to the annual
+corresponding effective date; the following annuity payments increase by 10% of the basic sum on the basis of the
+previous payment. The maturity insurance premium is paid at the premium paid (without interest). The death benefit is
+paid at the larger value of the insurance premium (without interest) and the cash value of the contract at the time of the
+death of the insured.
+4.1.2 Concentration of insurance risks (continued)
+4.1 Insurance risk (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2018
+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 RMB83,634 million or RMB95,212 million (as at 31 December
+2017: RMB70,732 million or RMB80,152 million) higher or lower, respectively.
+Notes to the Consolidated Financial Statements (continued)
+Sensitivity analysis of short-term insurance contracts
+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 RMB551 million (as at 31 December 2017: RMB445 million) lower or higher,
+respectively.
+27,120
+20,497
+16,499
+Year end
+Total
+2018
+2017
+Short-term insurance contracts (accident year)
+2015
+2016
+2014
+Estimated claims expenses
+The following table indicates the claim development for short-term insurance contracts without taking into account the
+impacts of ceded business:
+Sensitivity analysis of short-term insurance contracts (continued)
+4.1.3 Sensitivity analysis (continued)
+4.1 Insurance risk (continued)
+4 RISK MANAGEMENT (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+191
+China Life Insurance Company Limited
+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.
+189
+China Life Insurance Company Limited
+(b) Hong Fu Zhi Zun Annuity is an annuity insurance contract with the options for annual or monthly payment. The
+payment period is divided into 3 years, 5 years or 10 years. Its insured period is twenty years. This product is applicable
+to healthy policyholders between 28-day-old and 60-year-old. From the effective date after one policy year to the
+expiration date, if the policyholders live to the annual corresponding effective date, the annuity payment is paid at 3%
+of the annual premium if the payment period is three years; the annuity payment is paid at 6% of the annual premium if
+the payment period is five years; and the annuity payment is paid at 12% of the annual premium if the payment period
+is ten years. From the effective date to the effective date after one policy year, if the policyholders survive, the special
+survival payment shall be paid according to the basic sum insured by Hong Fu Zhi Zun Annuity. The maturity insurance
+premium is paid at the premium paid (without interest). The death benefit is paid at the insurance premium received
+(without interest) when accidents occurred.
+0.76%
+15,236
+1.22%
+26,741
+Hong Fu Zhi Zun Annuity (b)
+0.99%
+19,771
+2.39%
+52,440
+Xin Fu Ying Jia Annuity (a)
+Liabilities of long-term insurance contracts
+4.1.2 Concentration of insurance risks (continued)
+4.1 Insurance risk (continued)
+4 RISK MANAGEMENT (continued)
+%
+As at 31 December 2017
+RMB million
+%
+As at 31 December 2018
+RMB million
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+4 RISK MANAGEMENT (continued)
+Xin Ru Yi Annuity (c)
+71,571
+3.27%
+53,098
+(a) Xin Fu Ying Jia Annuity is an annuity insurance contract with the options for regular premium of 3 years, 5 years or
+10 years. Its insured period extends from the effective date of Xin Fu Ying Jia Annuity to the corresponding date when
+policyholders reach the age of 88. This product is applicable to healthy policyholders between 28-day-old and 70-year-
+old. From the effective date to the contractual date starting to claim of Xin Fu Ying Jia Annuity, the annuity payment
+of first policy year is paid at 20% of the first premium of the product, and the following annuity payments are paid at
+20% of the basic sum insured by Xin Fu Ying Jia Annuity. From the first corresponding date after the contractual date
+starting to claim of annuity, to the corresponding date when the policyholders reach the age of 88-year-old, annuity is
+paid at 3% of the basic sum insured during the insured period if policyholders live to the annual corresponding effective
+date; annuity is paid at the premium received (without interest) during the insured period if policyholders live to the
+contractual date starting to claim of annuity; the contract terminates and death benefit is paid at the premium received
+(without interest) or the cash value of the contract, whichever greater when death incurred before the contractual date
+starting to claim of annuity; the contract terminates and death benefit is paid at the cash value of the contract when
+death incurred after contractual date starting to claim of annuity; the contract terminates and accidental death benefit
+is paid at the premium received (without interest) less any death benefit paid when accidents occurred and due to which
+death incurred within 180 days. Death benefit and accidental death benefit are paid only once.
+Financial Report
+100.00%
+1,999,066
+100.00%
+2,189,794
+Total
+78.62%
+1,571,747
+77.95%
+33,926
+1,706,843
+3.53%
+70,506
+1.96%
+42,969
+13.44%
+268,708
+13.21%
+289,230
+Kang Ning Whole Life (d)
+2.66%
+Others (f)
+40,601
+Hong Ying Participating Endowment (e)
+17,265
+Unpaid claims
+139,220
+(124,555)
+40,157
+(26,848)
+34,560
+(33,204)
+26,655
+(26,655)
+(21,259)
+(16,589)
+Accumulated claims expenses paid
+21,259
+16,589
+claims expenses
+Estimated accumulated
+4 years later
+192
+China Life Insurance Company Limited
+16,589
+21,259
+16,589
+26,655
+21,259
+16,589
+expenses
+3 years later
+1,356
+14,665
+Notes to the Consolidated Financial Statements (continued)
+1 year later
+193
+China Life Insurance Company Limited
+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.
+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.
+(ii) Price risk
+As at 31 December 2018, 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 RMB145 million (as at 31 December 2017: RMB35 million) lower
+or higher, respectively, mainly as a result of higher or lower interest income on floating rate cash and cash equivalents,
+term deposits, statutory deposits-restricted, debt securities and loans and the fair value losses or gains on debt securities
+assets at fair value through profit or loss. Pre-tax available-for-sale reserve in equity would have been RMB13,749
+million or RMB10,045 million (as at 31 December 2017: RMB11,463 million or RMB8,306 million) lower or higher,
+as a result of a decrease or increase in the fair value of available-for-sale securities.
+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.
+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.
+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.
+(i) Interest rate risk
+4.2.1 Market 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.
+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 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'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.
+4 RISK MANAGEMENT (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+13,309
+2 years later
+4.2 Financial risk
+27,107
+(16,726)
+34,845
+26,851
+21,422
+16,726
+Unpaid claims expenses
+Accumulated claims expenses paid
+claims expenses
+16,726
+Estimated accumulated
+(21,422)
+4 years later
+years later
+3
+26,851
+21,422
+16,726
+2 years later
+34,845
+34,560
+27,303
+21,427
+16,726
+(26,851)
+21,422
+40,601
+(27,165)
+1 year later
+17,127
+(33,476)
+21,262
+40,157
+33,700
+26,897
+20,359
+Year end
+Total
+2017
+16,379
+2016
+2014
+Estimated claims expenses
+140,445
+(125,640)
+The following table indicates the claim development for short-term insurance contracts taking into account the impacts
+of ceded business:
+14,805
+1,369
+Short-term insurance contracts (accident year)
+2015
+13,436
+31 December 2017:
+4.00%-6.60%
+liabilities
+31 December 2018: (1,877)
+31 December 2017: nil
+financial
+Derivative
+The fair value is inversely
+related to weighted
+average cost of capital
+The fair value is inversely
+related to weighted
+average cost of capital
+31 December 2017:
+31 December 2017:
+3.80%-7.50%
+31 December 2018:
+4.00%-6.60%
+Comparable
+companies
+approach
+31 December 2018:
+11%
+The fair value is inversely
+related to the liquidity
+discount
+China Life Insurance Company Limited
+nil
+25
+inputs
+Significant
+unobservable
+31 December 2018:
+3.80%-7.50%
+Total
+Level 2
+Level 3
+208
+RMB million
+inputs
+Financial Report
+Assets measured at fair value
+Available-for-sale securities
+- Equity securities
+Funds
+91,319
+RMB million
+Liquidity discount
+Equity
+securities
+Discounted cash
+flow method
+Comparable
+31 December 2018: 34,388
+31 December 2017: 24,884
+Range
+inputs
+Significant
+unobservable
+Valuation
+techniques
+Liquidity
+Fair value
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2018
+Significant
+observable
+Notes to the Consolidated Financial Statements (continued)
+207
+The table below presents information about the significant unobservable inputs used for primary assets and liabilities at
+fair value classified as Level 3 as at 31 December 2018 and 31 December 2017:
+Weighted average
+cost of capital
+companies
+approach
+31 December 2018:
+5%-25%
+31 December 2018: 79,248
+31 December 2017: 57,333
+securities
+Debt
+Financial Report
+N/A
+The fair value is inversely
+related to the liquidity
+discount
+discount
+between fair value and
+unobservable inputs
+31 December 2017:
+6%-25%
+Weighted average
+cost of capital
+N/A
+N/A
+Net Asset Value
+method
+Discounted cash
+flow method
+31 December 2018: 23,976
+31 December 2017: 21,215
+31 December 2018: 37,847
+31 December 2017: 36,530
+Relationships
+RMB million
+RMB million
+in active
+markets
+Transferred into Level 3
+147,099
+27,646
+7,891
+19,755
+655
+89,111
+57,333
+Opening balance
+Purchases
+RMB million
+RMB million
+RMB million
+RMB million
+Equity securities
+Total
+liabilities
+liabilities
+Total assets
+profit or loss
+(4,566)
+China Life Insurance Company Limited
+China Life Insurance Company Limited
+204
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+180
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+Financial Report
+Securities at fair
+value through
+Derivative
+financial
+Available-for-sale securities
+Debt securities Equity securities
+RMB million
+The following table presents the changes in Level 3 assets and liabilities for the year ended 31 December 2018:
+Level 1
+180
+(467)
+Quoted prices
+Fair value measurement using
+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:
+4 RISK MANAGEMENT (continued)
+4.4 Fair value hierarchy (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+205
+China Life Insurance Company Limited
+(1,877)
+(1,877)
+179,248
+100,000
+79,248
+Closing balance
+(864)
+(864)
+Maturity
+(655)
+(1,122)
+Total gains/(losses) recorded
+in profit or loss
+(1,877)
+(1,877)
+Transferred out of Level 3
+Total gains/(losses) recorded in
+3,024
+3,446
+6,470
+Disposals
+(161)
+(161)
+other comprehensive income
+As at 31 December 2018 and 2017, significant unobservable inputs such as the weighted average cost of capital and
+liquidity discount were used in the valuation of primary assets and liabilities at fair value classified as Level 3. The fair
+value was not significantly sensitive to reasonable changes in these significant unobservable inputs.
+Funds
+For the assets and liabilities measured at fair value on a recurring basis, during the year ended 31 December 2018,
+RMB11,215 million (2017: RMB19,275 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB16,119 million (2017: RMB9,652 million) debt securities were transferred from Level 2
+to Level 1. RMB3,491 million (2017: immaterial) equity securities were transferred from Level 1 to Level 2, whereas no
+material equity securities were transferred from Level 2 to Level 1 (2017: same).
+4,966
+57,133
+62,099
+Securities at fair value through profit or loss
+- Equity securities
+9,825
+67
+9,892
+Common Stocks
+42,475
+896
+655
+44,026
+- Debt securities
+Government bonds
+29
+2,052
+305,172
+Total
+4,811
+4,811
+Others
+66,915
+Others
+62,417
+Corporate bonds
+9,084
+4,310
+4,774
+Government agency bonds
+2,081
+4,498
+474,435
+13,495
+13,295
+(1,877)
+91,344
+Common stocks
+105,326
+8,637
+15,461
+129,424
+Preferred stocks
+31,651
+31,651
+Wealth management products
+40,327
+40,327
+Others
+28
+41,999
+42,027
+Subordinated bonds/debts
+197,133
+191,213
+5,920
+Corporate bonds
+157,765
+200
+119,223
+Government agency bonds
+24,632
+22,196
+2,436
+Government bonds
+- Debt securities
+38,542
+147,099
+926,706
+Liabilities measured at fair value
+RMB million
+RMB million
+RMB million
+13,733
+76,445
+1,061
+91,239
+47,909
+15,197
+63,106
+2,842
+695
+3,537
+(5,598)
+(1,059)
+(6,657)
+(42)
+The assets and liabilities whose fair value measurements are classified under Level 3 above do not have material impact
+on the profit or loss of the Group.
+Financial Report
+147,099
+655
+(3,790)
+(90)
+Equity securities
+(204)
+57,333
+(3,790)
+(90)
+315
+(519)
+(42)
+89,111
+Equity securities
+Debt securities
+RMB million
+Total
+Notes to the Consolidated Financial Statements (continued)
+206
+China Life Insurance Company Limited
+(2,541)
+(12)
+(2,529)
+For the year ended 31 December 2018
+(2,541)
+(12)
+profit or loss
+Investment contracts at fair value through
+(2,529)
+profit or loss
+Financial liabilities at fair value through
+Total
+For the years ended 31 December 2018 and 2017, 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.
+4 RISK MANAGEMENT (continued)
+The following table presents the changes in Level 3 assets for the year ended 31 December 2017:
+profit or loss
+Available-for-sale securities
+value through
+Closing balance
+Maturity
+Disposals
+4.4 Fair value hierarchy (continued)
+other comprehensive income
+Total gains/(losses) recorded in profit or loss
+Transferred out of Level 3
+Transferred into Level 3
+Purchases
+Opening balance
+Securities at fair
+Total gains/(losses) recorded in
+(2,689)
+RMB million
+(1,877)
+For the year ended 31 December 2018
+4 RISK MANAGEMENT (continued)
+4.3 Disclosures about interest in unconsolidated structured entities (continued)
+(i) The unconsolidated structured entities that the Group has interest in (continued)
+The Group believes that the maximum exposure approximates the carrying amount of interest in these unconsolidated
+structured entities. The size of unconsolidated structured entities as well as the Group's carrying amount of the assets
+recognised in the financial statement relating to its interest in unconsolidated structured entities and the Group's
+maximum exposure are shown below (continued):
+As at 31 December 2017
+Size
+RMB Million
+Unconsolidated structured entities
+Carrying amount
+of assets
+RMB Million
+Maximum
+exposure
+RMB Million
+Interest held by the Group
+Funds managed by affiliated entities
+127,706
+3,239
+3,239
+Funds managed by third parties
+Trust schemes managed by
+Notes to the Consolidated Financial Statements (continued)
+201
+China Life Insurance Company Limited
+Investment income
+managed by affiliated entities
+Debt investment schemes
+Note 1
+33,330
+33,330
+and service fee
+Investment income
+managed by third parties
+Note 2
+Note 1
+500
+Others managed by affiliated entities
+9,502
+9,502
+Investment income
+and service fee
+Others managed by third parties -
+Note 2
+Note 1
+110,035
+110,035
+422,006
+and service fee
+Investment income
+Investment income
+and service fee
+Investment income
+Investment income
+97,772
+400
+303,976
+8,676
+8,676
+Note 2
+Others managed by third parties
+Note 1
+107,859
+107,859
+Financial Report
+Investment income
+and service fee
+Investment income
+Note 1: Funds, trust schemes, debt investment schemes and others managed by third parties were sponsored by third party financial
+institutions and the information related to size of these structured entities were not publicly available.
+Note 2: Others included wealth management products, special asset management schemes, and asset-backed plans, etc.
+(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
+As at 31 December 2018, the size of the unconsolidated structured entities that the Group sponsored but had no
+interest was RMB400,419 million (as at 31 December 2017: RMB252,017 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 2018, the management service fee from these structured entities was RMB1,338
+million (2017: RMB736 million), which was recorded as other income. The Group did not transfer assets to these
+structured entities.
+China Life Insurance Company Limited
+202
+Notes to the Consolidated Financial Statements (continued)
+Note 2
+Others managed by affiliated entities
+by third parties
+and service fee
+Investment income
+400
+Investment income
+and service fee
+Investment income
+Investment income
+affiliated entities
+Trust schemes managed by third parties
+Note 1
+75,263
+75,263
+97,772
+Debt investment schemes managed
+36,359
+36,359
+and service fee
+Investment income
+Investment income
+by affiliated entities
+Debt investment schemes managed
+Note 1
+32,209
+32,209
+52,014
+For the year ended 31 December 2018
+32,029
+59,456
+Actual capital
+Minimum capital
+Core solvency ratio
+Comprehensive solvency ratio
+As at 31
+December 2018
+As at 31
+December 2017
+RMB million
+RMB million
+761,353
+706,516
+761,367
+706,623
+303,872
+254,503
+251%
+278%
+251%
+278%
+Core capital
+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):
+4.2.4 Capital management (continued)
+4.2 Financial risk (continued)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Financial Report
+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, 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 RMB85,071 million as at
+31 December 2018 (as at 31 December 2017: RMB83,910 million). As at 31 December 2018, declared dividends of
+RMB74,932 million (as at 31 December 2017: RMB68,731 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.
+According to the solvency ratios results mentioned above, and the unquantifiable evaluation results of operational risk,
+strategic risk, reputational risk and liquidity risk of insurance companies, the CBIRC evaluates the comprehensive
+solvency of insurance companies and supervises insurance companies by classifying them into four categories:
+Although all investment contracts with DPF and investment contracts without DPF contain contractual options
+to surrender that can be exercised immediately by all policyholders at any time, the Group's expected cash flows as
+shown in the above tables are based on past experience and future expectations. Should these contracts be surrendered
+immediately, it would cause a cash outflow of RMB58,669 million and RMB194,290 million, respectively for the year
+ended 31 December 2018 (2017: RMB56,709 million and RMB173,557 million, respectively), payable within one year.
+The Group's objectives for managing capital are to comply with the insurance capital requirements based on the
+minimum capital and actual capital required by the CBIRC, prevent risk in operation and safeguard the Group's ability
+to continue as a going concern so that it can continue to provide returns for equity holders and benefits for other
+stakeholders. The Group replenishes capital to improve the solvency ratio by issuing subordinated bonds and Core Tier
+2 Capital Securities according to the relevant laws and the approval of the relevant authorities.
+The Group is also subject to other local capital requirements, such as statutory deposits-restricted requirement, statutory
+insurance fund requirement, statutory reserve fund requirement and general reserve requirement discussed in detail in
+Note 9.4, Note 20 and Note 37, respectively.
+The Group manages capital to ensure its continuous and full compliance with the regulations mainly through
+monitoring its quarterly solvency ratios, as well as the solvency ratio based on annual stress testing.
+China Life Insurance Company Limited
+199
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+4 RISK MANAGEMENT (continued)
+4.2.4 Capital management
+32,029
+(i) Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are very 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;
+120,797
+629
+629
+Investment income
+Funds managed by third parties
+Trust schemes managed
+Note 1
+3,800
+104,678
+104,678
+2,680
+2,680
+by affiliated entities
+Trust schemes managed by third parties
+Note 1
+89,769
+89,769
+Debt investment schemes
+Funds managed by affiliated entities
+Interest held by the Group
+Maximum
+exposure
+RMB Million
+Unconsolidated structured entities
+Carrying amount
+of assets
+RMB Million
+(iv) Category D: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or
+several risks in operation, strategy, reputation and liquidity are severe.
+According to the Supervision Information System of the China Risk Oriented Solvency System, the latest Integrated
+Risk Rating result of the Company was Category A.
+Financial Report
+China Life Insurance Company Limited
+200
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Financial Report
+(ii) Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are low;
+4 RISK MANAGEMENT (continued)
+The Group's interest in unconsolidated structured entities are recorded as securities at fair value through profit or
+loss, available-for-sale securities and loans. These structured entities typically raise funds by issuing securities or other
+beneficiary certificates. The purpose of these structured entities is primarily to generate management service fees, or
+provide finance to public and private infrastructure construction. Refer to Note 3.5 for the Group's consolidation
+judgments related to structured entities.
+These structured entities that the Group has interest in are guaranteed by third parties with higher credit ratings, or by
+pledging, or by having the fiscal budget income as the source of repayment, or by borrowers with higher credit ratings.
+The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in
+or sponsored.
+(i) The unconsolidated structured entities that the Group has interest in
+The Group believes that the maximum exposure approximates the carrying amount of interest in these unconsolidated
+structured entities. The size of unconsolidated structured entities as well as the Group's carrying amount of the assets
+recognised in the financial statement relating to its interest in unconsolidated structured entities and the Group's
+maximum exposure are shown below:
+As at 31 December 2018
+Size
+RMB Million
+4.3 Disclosures about interest in unconsolidated structured entities
+Total
+118
+1,506
+Government agency bonds
+53,433
+126,840
+180,273
+Corporate bonds
+10,206
+175,514
+28,440
+185,720
+21,314
+200
+21,514
+Others
+1,595
+79,048
+80,643
+Subordinated bonds/debts
+25,853
+2,587
+Government bonds
+44
+92,304
+113,750
+15,871
+13,848
+143,469
+Preferred stocks
+32,707
+32,707
+Wealth
+management products
+31,348
+Others
+34
+53,445
+53,479
+- Debt securities
+Securities at fair value through profit or loss
+92,260
+- Equity securities
+13,891
+Total
+329,243
+480,123
+179,248
+988,614
+Liabilities measured at fair value
+Financial liabilities at fair value
+1,351
+through profit or loss
+(2,680)
+Investment contracts at fair value
+through profit or loss
+(9)
+(9)
+Derivative financial liabilities
+(1,877)
+(2,680)
+79,774
+6,760
+5,204
+72,722
+1,351
+76
+Common stocks
+34,392
+849
+Wealth management products
+1,506
+|||
+13,967
+35,241
+- Debt securities
+Government bonds
+82
+36
+Government agency bonds
+1,556
+Corporate bonds
+7,052
+Others
+Funds
+Common stocks
+31,348
+- Equity securities
+4 RISK MANAGEMENT (continued)
+4.4 Fair value hierarchy (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+203
+China Life Insurance Company Limited
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 3.2.
+At 31 December 2018, assets classified as Level 3 accounted for approximately 18.13% of assets measured at fair value
+on a recurring basis. They primarily include unlisted equity securities and unlisted debt securities. Fair values are
+determined using valuation techniques, including discounted cash flow valuations, the comparable companies approach,
+etc. The determination of Level 3 is primarily based on the significance of certain unobservable inputs.
+As at 31 December 2018, assets classified as Level 2 accounted for approximately 48.57% 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.
+As at 31 December 2018, assets classified as Level 1 accounted for approximately 33.30% 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.
+Under certain conditions, the Group may not receive a price quote from independent third-party pricing services. In
+this instance, the Group's valuation team may choose to apply an internally developed valuation method to the assets or
+liabilities being measured, determine the main inputs for valuation, and analyse the change of the valuation and report it
+to management. Key inputs involved in internal valuation services are not based on observable market data. They reflect
+assumptions made by management based on judgements and experiences. The assets or liabilities valued by this method
+are generally classified as Level 3.
+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.
+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.
+4.4 Fair value hierarchy
+4 RISK MANAGEMENT (continued)
+Funds
+The following table presents the Group's quantitative disclosures of fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2018:
+Fair value measurement using
+Financial Report
+in active
+markets
+Quoted prices
+Financial Report
+RMB million
+Total
+RMB million
+RMB million
+Level 2
+Level 3
+observable
+inputs
+Significant
+unobservable
+Assets measured at fair value
+Available-for-sale securities
+Significant
+RMB million
+Level 1
+inputs
+201,661
+170,407
+161,472 34,229
+7,745
+(2,903)
+(1,010)
+Gross written premiums
+Elimination
+Total
+5 SEGMENT INFORMATION (continued)
+Financial Report
+Revenues
+Total
+429,822
+Others
+39,927
+28,399
+(713)
+5,741
+67,708
+75.00%
+Others (v)
+Equity Method
+28.914
+20,403
+7,684
+582
+(325)
+Subtotal
+42,834
+31,874
+9,179
+(148)
+(265)
+14,436
+5,454
+- Term life
+Net realised gains on financial assets
+41
+2
+42
+Net fair value gains through profit or loss
+5,690
+269
+23
+201
+218
+China Life Insurance Company Limited
+Sino-Ocean, the Group's associate is listed in Hong Kong. On 31 December 2018, the stock price of Sino-Ocean was
+HKD3.45 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 2018.
+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 2018.
+(ii) The 2017 final dividend of HKD0.155 in cash per ordinary share was approved and declared in the Annual General
+Meeting of Sino-Ocean on 18 May 2018. The Company received a cash dividend amounting to RMB284 million. The
+2018 interim dividend of HKD0.140 in cash per ordinary share was approved and declared by the board of directors of
+Sino-Ocean on 22 August 2018. The Company received a cash dividend amounting to RMB274 million.
+On 1 January 2019, CGB began to adopt IFRS 9 and adjusted its equity to reflect the accumulated impact of adopting
+IFRS 9. The adoption of IFRS 9 by CGB has an impact on the Group's equity as at 1 January 2019 accordingly, which
+is still under evaluation.
+(320)
+122,727
+511,966
+(i) On 14 December 2018, the Company subscribed for 1,871,875,329 additional shares offering of CGB at
+RMB6.9511 per share, with a total consideration including the transaction fees of RMB13,014 million. Upon the
+completion of the transaction, the Company held 43.686% equity of CGB after the capital increase, and the proportion
+remained unchanged.
+456
+4,110
+- Whole life
+36,496
+- Endowment
+- Annuity
+198,418
+190,798
+Net premiums earned
+429,267
+63,323
+14,320
+506,910
+Investment income
+Financial Report
+115,316
+1,501
+(766)
+12,812
+5,332
+Co., Ltd. ("Pipeline Company")
+Equity Method
+20,000
+21,347
+I
+1,106
+(1,059)
+(7)
+21,387
+43.86%
+China United Network Communications
+Limited ("China Unicom") (iii)
+Equity Method
+21,829
+21,783
+Sinopec Sichuan to East China Gas Pipeline
+345
+35.00%
+1
+43
+(66)
+(199)
+199
+7,963
+40.00%
+COFCO Futures Company Limited
+("COFCO Futures")
+Equity Method
+1,339
+339
+1,466
+1
+35
+35
+1,501
+1,495
+(63)
+21,892
+161,734
+(1,010)
+Joint ventures
+Joy City Commercial Property Fund L.P.
+("Joy City") (iv)
+Equity Method
+6,281
+6,139
+36
+(388)
+5,787
+66.67%
+Mapleleaf Century Limited (“MCL”) (iv)
+Equity Method
+7,639
+1,383
+(173)
+(2,190)
+25,050
+10.29%
+Others (v)
+Equity Method
+21,984
+9,732
+12,036
+For the year ended 31 December 2017
+Accident
+RMB million
+Notes to the Consolidated Financial Statements (continued)
+1,685
+(444)
+515
+23,524
+Subtotal
+127,573
+129,598
+7,893
+1
+Health
+For the year ended 31 December 2018
+(40,552)
+(6,751)
+(33,801)
+adjustment expenses
+Accident and health claims and claim
+(248,736)
+(28)
+859
+(2,922)
+(245,786)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+Benefits, claims and expenses
+627,419
+(1,579)
+9,703
+15,187
+84,821
+519,287
+Segment revenues
+(1,579)
+1,579
+Including: inter-segment revenue
+8,098
+(1,579)
+8,505
+84
+1,088
+Other income
+Increase in insurance contract liabilities
+(167,090)
+(22,966)
+125
+(5,339)
+Other expenses
+(37,486)
+(2,895)
+(2,982)
+(7,881)
+(23,728)
+Administrative expenses
+(4,116)
+(619)
+(12)
+(181)
+(3,304)
+Finance costs
+(18,278)
+(62,705)
+(4,808)
+(11,806)
+(43,108)
+Underwriting and policy acquisition costs
+(19,646)
+(123)
+(19,523)
+participation in profits
+Policyholder dividends resulting from
+(9,332)
+(312)
+(9,020)
+Investment contract benefits
+(189,931)
+(2,983)
+(487)
+(340)
+(927)
+5 SEGMENT INFORMATION (continued)
+Total
+Elimination
+Others
+For the year ended 31 December 2018
+Accident
+RMB million
+Health
+Life
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+209
+China Life Insurance Company Limited
+Financial assets, securities sold under agreements to repurchase and derivative financial liabilities are allocated among
+segments in proportion to the respective segments' average liabilities of insurance contracts and investment contracts
+at the beginning and end of the year. Insurance and investment contract liabilities are presented under the respective
+segments. The remaining assets and liabilities are not allocated.
+5.3 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.
+expenses
+5.2 Allocation basis of income and
+Other businesses relate primarily to income and cost of the agency business in respect of transactions with CLIC, etc.,
+as described in Note 34, 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)
+Accident insurance business relates primarily to the sale of accident insurance policies.
+(iii) Accident insurance business (Accident)
+Health insurance business relates primarily to the sale of health insurance policies, including those health insurance
+policies without significant insurance risk transferred.
+(ii) Health insurance business (Health)
+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 four operating segments:
+5.1 Operating segments
+5 SEGMENT INFORMATION
+Financial Report
+For the year ended 31 December 2018
+Financial Report
+Revenues
+Gross written premiums
+437,540
+(16,946)
+Net fair value gains through profit or loss
+(19,591)
+(74)
+(70)
+(1,008)
+(18,439)
+Net realised gains on financial assets
+125,167
+1,612
+441
+6,393
+116,721
+Investment income
+(65)
+532,023
+80,279
+436,863
+Net premiums earned
+261,702
+126,318
+- Annuity
+- Endowment
+46,375
+- Whole life
+3,145
+- Term life
+535,826
+14,672
+83,614
+14,881
+Life
+(140)
+1,579
+240,152
+Investment contracts
+2,216,031
+8,466
+125,743
+2,081,822
+Insurance contracts
+3,254,403
+43,695
+47,281
+Liabilities
+Total
+Others
+Property, plant and equipment
+Unallocated
+3,163,427
+245,044
+10,445
+154,864
+2,753,074
+Segment assets
+2,942,485
+220,942
+201,661
+610
+8,975
+9,696
+Others
+43,383
+9,835
+15,282
+255,434
+Derivative financial liabilities
+1,773
+Notes to the Consolidated Financial Statements (continued)
+211
+China Life Insurance Company Limited
+Financial Report
+2,931,113
+Total
+192,654
+Others
+Unallocated
+2,738,459
+26,039
+9,358
+154,488
+2,548,574
+145,889
+Segment liabilities
+22,830
+211
+3,607
+46,328
+Others
+192,141
+3,209
+674
+9,759
+178,499
+Securities sold under agreements to repurchase
+1,877
+7
+97
+72,976
+(3,255)
+2,743,378
+Financial assets (including cash and cash
+Income tax
+13,921
+7,696
+495
+4,100
+1,630
+Segment results
+7,745
+7,745
+Share of profit of associates and joint ventures, net
+(621,243)
+1,579
+(9,752)
+(14,692)
+(80,721)
+(517,657)
+expenses
+Segment benefits, claims and
+(1,097)
+(96)
+(242)
+(759)
+Statutory insurance fund contribution
+1,579
+(5)
+(82)
+(1,492)
+Including: inter-segment expenses
+(7,642)
+(1,985)
+11,936
+China Life Insurance Company Limited
+210
+Assets
+RMB million
+Total
+Elimination
+Others
+As at 31 December 2018
+Accident
+Health
+Life
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+2,638
+342
+202
+equivalents)
+505
+(2,070)
+660
+(10)
+(141)
+(2,579)
+541
+11,395
+Depreciation and amortisation
+to equity holders of the Company
+Other comprehensive income attributable
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+Net profit
+1,589
+29.59%
+8,185
+Equity Method
+(5,122)
+(9,248)
+As at 31 December 2017
+693
+(1,910)
+(15,311)
+(1,068)
+(181)
+46
+187
+444
+16
+Disposals
+(144)
+(632)
+(953)
+Charge for the year
+(998)
+(4,934)
+(8,311)
+As at 1 January 2017
+Accumulated depreciation
+59,259
+1,830
+16,696
+1,403
+6,873
+32,457
+As at 31 December 2017
+(902)
+(48)
+(955)
+(1,203)
+(16,528)
+Impairment
+7 INVESTMENT PROPERTIES
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+215
+China Life Insurance Company Limited
+As at 31 December 2018, the net book value of buildings above which were in process to obtain title certificates was
+RMB6,798 million (as at 31 December 2017: RMB6,209 million).
+42,707
+627
+16,696
+448
+1,751
+23,185
+30,389
+(148)
+485
+426
+1,903
+17,027
+As at 31 December 2017
+As at 1 January 2017
+Net book value
+(24)
+(24)
+As at 31 December 2017
+Disposals
+Charge for the year
+(24)
+(24)
+As at 1 January 2017
+10,548
+Cost
+(195)
+(48)
+Buildings
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+214
+China Life Insurance Company Limited
+47,281
+814
+16,901
+527
+2,215
+26,824
+As at 31 December 2018
+42,707
+627
+16,696
+448
+1,751
+23,185
+As at 1 January 2018
+Net book value
+(25)
+(1)
+(24)
+As at 31 December 2018
+Disposals
+Charge for the year
+(24)
+(24)
+As at 1 January 2018
+Office
+equipment,
+furniture and
+fixtures
+Motor
+Assets under
+Leasehold
+Disposals
+(1,931)
+(1,931)
+properties
+Transfers into investment
+16,454
+13
+15,747
+174
+450
+70
+Additions
+(86)
+312
+(463)
+(7,520)
+7,073
+Transfers upon completion
+45,724
+1,553
+10,548
+1,424
+6,837
+25,362
+As at 1 January 2017
+Financial Report
+Cost
+6 PROPERTY, PLANT AND EQUIPMENT (continued)
+Total
+vehicles construction improvements
+RMB million
+49
+Impairment
+As at 1 January 2018
+Deductions
+profit
+Percentage Accumulated
+As at
+Provision
+Other
+Share of
+Change
+of the
+31 December
+Accounting
+method
+As at
+Movement
+8 INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+217
+China Life Insurance Company Limited
+161,472
+201,661
+(685)
+1,118
+(1,862)
+(2,903)
+7,143
+7,745
+37,110
+34,229
+119,766
+161,472
+2017
+RMB million
+Declared
+equity
+of 31 December
+of equity
+(525)
+(558)
+269
+.
+13,626
+11,245
+Equity Method
+("Sino-Ocean") (ii)
+Sino-Ocean Group Holding Limited
+43.686%
+72,655
+7772
+1,772
+410
+RMB million
+4,410
+53,459
+45.176
+Equity Method
+China Guangfa Bank Co., Ltd. (“CGB") (i)
+Associates
+impairment
+interest
+2018
+movements impairment
+or loss dividends
+cost
+2017
+Cost
+amount of
+13,014
+Additions
+2018
+Other equity movements
+As at 1 January 2017
+Additions
+Cost
+RMB million
+Buildings
+12,449
+4,629
+9,747
+3,064
+(480)
+8
+(186)
+(302)
+10,227
+(14)
+3,366
+6,875
+Buildings
+RMB million
+216
+China Life Insurance Company Limited
+As at 31 December 2018
+As at 1 January 2018
+Fair value
+As at 31 December 2018
+Net book value
+As at 1 January 2018
+As at 31 December 2018
+year
+Deductions
+As at 1 January 2018
+Charge for the
+Accumulated depreciation
+As at 31 December 2018
+As at 31 December 2017
+Accumulated depreciation
+As at 1 January 2017
+Charge for the year
+As at 31 December 2017
+Net book value
+Declared dividends
+Share of profit or loss
+Change of the cost
+As at 1 January
+8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+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 2018 amounted to RMB12,449 million (as at 31
+December 2017: RMB4,629 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 2018, the net book value of investment properties which were in process to obtain title certificates
+was RMB3,407 million (as at 31 December 2017: RMB1,872 million).
+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.
+7 INVESTMENT PROPERTIES (continued)
+Financial Report
+For the year ended 31 December 2018
+As at 31 December
+Notes to the Consolidated Financial Statements (continued)
+2,201
+3,064
+1,191
+(302)
+(58)
+(244)
+3,366
+1,931
+1,435
+As at 31 December 2017
+As at 1 January 2017
+Fair value
+As at 31 December 2017
+As at 1 January 2017
+4,629
+6,000
+(18,047)
+618
+Income tax
+41,671
+8,582
+528
+3,246
+29,315
+Segment results
+7,143
+7,143
+Share of profit of associates and joint ventures, net
+(608,827)
+1,126
+(1,010)
+(14,271)
+(65,877)
+(522,275)
+expenses
+Segment benefits, claims and
+(1,068)
+(111)
+(180)
+(777)
+Statutory insurance fund contribution
+1,126
+(4)
+(51)
+(1,071)
+Including: inter-segment expenses
+(6,426)
+(8,919)
+32,752
+China Life Insurance Company Limited
+212
+Assets
+5 SEGMENT INFORMATION (continued)
+Total
+Elimination
+Others
+As at 31 December 2017
+Accident
+RMB million
+Health
+Life
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+2,240
+(7,912)
+1262
+160
+1,126
+216
+1,513
+327
+(31)
+(370)
+(7,838)
+499
+32,253
+Depreciation and amortisation
+to equity holders of the Company
+Other comprehensive income attributable
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+Net profit
+351
+Financial assets (including cash
+(1,521)
+(376)
+(33,818)
+(5,826)
+(27,992)
+claim adjustment expenses
+Accident and health claims and
+(259,708)
+(25)
+(2,383)
+(257,300)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+Benefits, claims and expenses
+643,355
+(1,126)
+8,969
+14,799
+69,123
+551,590
+Segment revenues
+(1,126)
+1,126
+Including: inter-segment revenue
+7,493
+(1,126)
+7,268
+75
+1,276
+China Life Property & Casualty Insurance
+Company Limited ("CLP&C")
+Increase in insurance contract liabilities
+(152,110)
+(20,249)
+(158)
+(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
+(147)
+(64,789)
+(4,565)
+(8,494)
+(48,781)
+Underwriting and policy acquisition costs
+(21,871)
+(123)
+(21,748)
+participation in profits
+Policyholder dividends resulting from
+(8,076)
+(278)
+(7,798)
+Investment contract benefits
+(172,517)
+(2,949)
+(1,377)
+and cash equivalents)
+114,045
+(270)
+(169)
+Disposals
+(5,634)
+(5,634)
+properties
+Transfers into investment
+12,769
+54
+11,416
+282
+932
+85
+Additions
+(95)
+393
+(5,500)
+123
+4,889
+Transfers upon completion
+59,259
+1,830
+16,696
+1,403
+6,873
+32,457
+As at 1 January 2018
+Financial Report
+Cost
+(345)
+(76)
+(86)
+(946)
+38
+(2,137)
+(212)
+(16,528)
+(1,203)
+I
+(813)
+(5,443)
+(10,414)
+As at 31 December 2018
+293
+257
+30
+Disposals
+6 PROPERTY, PLANT AND EQUIPMENT
+(151)
+(1,196)
+Charge for the year
+(955)
+(5,122)
+(9,248)
+As at 1 January 2018
+Accumulated depreciation
+65,353
+2,191
+16,902
+1,340
+7,658
+37,262
+As at 31 December 2018
+(578)
+2,478,739
+RMB million
+vehicles construction improvements
+218,436
+Investment contracts
+2,025,133
+8,346
+102,190
+1,914,597
+Insurance contracts
+Liabilities
+2,897,591
+Total
+35,713
+Others
+42,707
+Property, plant and equipment
+Unallocated
+2,819,171
+199,894
+9,942
+122,194
+2,487,141
+Segment assets
+2,640,596
+178,575
+161,472
+552
+8,149
+8,402
+Others
+38,422
+9,390
+14,064
+232,500
+Securities sold under agreements to repurchase
+81,163
+Leasehold
+Motor Assets under
+Office
+equipment,
+furniture and
+fixtures
+Buildings
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+213
+China Life Insurance Company Limited
+Financial Report
+2,572,281
+Total
+160,781
+Others
+Unallocated
+Total
+2,411,500
+8,891
+123,209
+2,256,084
+Segment liabilities
+66,558
+21,323
+224
+3,123
+41,888
+Others
+87,309
+1,993
+321
+3,832
+23,316
+(7,530)
+6,183
+Other income
+449,400
+9 FINANCIAL ASSETS (continued)
+9.3 Term deposits
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+Total
+As at 31
+As at 31
+December 2018
+December 2017
+RMB million
+RMB million
+158,920
+323,021
+349,524
+77,400
+2,800
+559,341
+449,400
+Financial Report
+As at 31 December 2018, the Group's term deposits of RMB16,691 million (as at 31 December 2017: same) were
+deposited in banks to back overseas borrowings and are restricted to use.
+In September 2016, CL Hotel Investor, L.P. and Glorious Fortune Forever Limited, subsidiaries of the Company,
+entered into a loan agreement with the New York and Seoul branches of Agricultural Bank of China, respectively. In
+December 2016, Sunny Bamboo Limited and Golden Bamboo Limited, subsidiaries of the Company, entered into a loan
+agreement with the Hong Kong branch of Agricultural Bank of China. The Company arranged deposits with Beijing
+Xicheng branch of Agricultural Bank of China to back these loans. As at 31 December 2018, the amounts of such term
+deposits were RMB6,861 million, RMB7,080 million and RMB750 million, respectively (as at 31 December 2017:
+same).
+On 6 December 2017, New Fortune Wisdom Limited and New Capital Wisdom Limited, subsidiaries of Ningbo
+Meishan Bonded Port Area Guo Yang Guo Sheng Investment Partnership (Limited Partnership) ("Guo Yang Guo
+Sheng"), a subsidiary of the Company, entered into a loan agreement with a subsidiary of Agricultural Bank of China.
+Guo Yang Guo Sheng arranged deposits with Beijing Xicheng branch of the Agricultural Bank of China to back these
+loans. As at 31 December 2018, the amounts of such term deposits and current deposits were RMB2,000 million (as at
+31 December 2017: same) and RMB1,274 million (as at 31 December 2017: RMB1,247 million), respectively.
+9.4 Statutory deposits - restricted
+Contractual maturity schedule:
+Within one year
+After one year but within five years
+Total
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+(i) As at 31 December 2018, maturities of policy loans were within 6 months (as at 31 December 2017: same).
+383,504
+372,884
+293,113
+806,717
+717,037
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+142,165
+107,957
+308,086
+275,547
+450,251
+383,504
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+167,498
+128,856
+138,939
+132,575
+99,501
+90,556
+44,313
+31,517
+450,251
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+500
+5,833
+3,933
+2,400
+13,495
+80,643
+62,099
+496,590
+455,124
+92,304
+91,344
+143,469
+129,424
+Preferred stocks
+32,707
+31,651
+Wealth management products
+31,348
+40,327
+Others (i)
+53,479
+42,027
+Subtotal
+353,307
+334,773
+Available-for-sale securities, at cost
+Equity securities
+Others (i)
+20,636
+20,837
+870,533
+810,734
+(i) Other available-for-sale securities mainly include unlisted equity investments, private equity funds and trust schemes.
+21,514
+197,133
+185,720
+157,765
+6,333
+6,333
+Insurance companies in China are required to deposit an amount that equals 20% of their registered capital with banks
+in compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off
+debts during liquidation proceedings.
+China Life Insurance Company Limited
+223
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+9 FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities
+Financial Report
+Available-for-sale securities, at fair value
+Debt securities
+Government bonds
+Government agency bonds
+288,496
+Corporate bonds
+Others (i)
+Subtotal
+Equity securities
+Funds
+Common stocks
+As at 31
+As at 31
+December 2017
+RMB million
+December 2018
+RMB million
+28,440
+24,632
+180,273
+Subordinated bonds/debts
+279,086
+112,932
+137,840
+148,494
+806,717
+717,037
+109,597
+91,631
+130
+136
+20
+19
+696,970
+625,251
+806,717
+717,037
+Financial Report
+(i) Unlisted debt securities include those traded on the Chinese interbank market.
+As at 31 December 2018, an impairment loss of RMB42 million (2017: nil) for the investment of held-to-maturity
+securities has been made by the Group. In 2018, the Group did not sell the unexpired held-to-maturity securities (2017:
+same).
+Debt securities - fair value hierarchy
+Government bonds
+Government agency
+bonds
+Corporate bonds
+Subordinated bonds/debts
+Total
+As at 31 December 2018
+As at 31 December 2017
+Level 1
+Level 2
+RMB million
+RMB million
+147,079
+200,869
+212,709
+241,808
+3,055
+1,454
+840
+(301)
+China Life Insurance Company Limited
+220
+(i) Including adjustments for the difference of accounting policies, fair value and others.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2018 and 31
+December 2017. The Group had a capital contribution commitment of RMB20,768 million with joint ventures as at
+31 December 2018 (as at 31 December 2017: RMB20,996 million). The capital contribution commitment amount has
+been included in the capital commitments in Note 40.
+9 FINANCIAL ASSETS
+9.1 Held-to-maturity securities
+Debt securities
+Total
+RMB million
+Government bonds
+Corporate bonds
+Subordinated bonds/debts
+Total
+Debt securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed in Singapore
+Unlisted (i)
+Total
+As at 31
+December 2018
+As at 31
+December 2017
+RMB million
+RMB million
+179,943
+125,866
+266,986
+Government agency bonds
+Total
+Level 1
+RMB million
+For the year ended 31 December 2018
+9 FINANCIAL ASSETS (continued)
+9.1 Held-to-maturity securities (continued)
+China Life Insurance Company Limited
+Debt securities - Contractual maturity schedule
+Maturing:
+Within one year
+After one year but within five
+years
+After five years but within ten years
+After ten years
+Total
+222
+9.2 Loans
+Policy loans (i)
+Other loans
+Total
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+After ten years
+Total
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+16,907
+22,496
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+221
+China Life Insurance Company Limited
+RMB million
+Total
+RMB million
+15,387
+175,622
+191,009
+33,496
+90,216
+123,712
+72,455
+204,029
+276,484
+20,281
+203,031
+223,312
+Level 2
+10,965
+220,267
+1,360
+195,177
+196,537
+155,783
+155,783
+149,423
+149,423
+98,807
+744,736
+843,543
+55,137
+637,847
+692,984
+209,302
+China Life Insurance Company Limited
+224
+Notes to the Consolidated Financial Statements (continued)
+21,423
+5,111
+4,276
+48,402
+50,641
+47,834
+44,789
+568
+5,852
+48,402
+50,641
+Financial Report
+China Life Insurance Company Limited
+227
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+10 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+investment contracts:
+Carrying value
+As at 31
+December 2018
+As at 31
+December 2017
+Estimated fair value (i)
+As at 31
+December 2018
+RMB million
+RMB million
+RMB million
+As at 31
+December 2017
+RMB million
+Held-to-maturity securities (ii)
+Loans (iii)
+Term deposits
+Statutory deposits-restricted
+23,486
+24,942
+19,805
+RMB million
+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.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+9 FINANCIAL ASSETS (continued)
+9.7 Securities purchased under agreements to resell
+Maturing:
+Within 30 days
+After 30 but within 90 days
+Total
+9.8 Accrued investment income
+Bank deposits
+Debt securities
+Others
+Available-for-sale securities, at fair value
+Total
+Non-current
+Total
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+9,905
+36,055
+130
+9,905
+36,185
+As at 31
+As at 31
+December 2018
+December 2017
+RMB million
+Current
+136,809
+806,717
+843,543
+(245,803)
+(229,222)
+Financial liabilities at fair value through profit or loss
+(2,680)
+(2,529)
+(2,680)
+(2,529)
+Derivative financial liabilities
+(1,877)
+(1,877)
+Securities sold under agreements to repurchase
+(192,141)
+(87,309)
+(192,141)
+(87,309)
+Interest-bearing loans and borrowings
+(20,150)
+(18,794)
+(20,150)
+(18,794)
+Financial Report
+(i) The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+(ii) The fair value of held-to-maturity securities is determined by reference with other debt securities which are measured by fair value.
+Please refer to Note 4.4.
+(iii) Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore, their fair value was
+classified as Level 1.
+The fair value of policy loans approximated its carrying value. The fair values of other loans and investment contracts
+at amortised cost were determined using valuation techniques, with consideration of the present value of expected cash
+flows arising from contracts using a risk-adjusted discount rate, allowing for the risk-free rate available on the valuation
+date, credit risk and risk margin associated with the future cash flows. The fair values of other loans and investment
+contracts at amortised cost were classified as Level 3.
+11 PREMIUMS RECEIVABLE
+As at 31 December 2018, the carrying value of premiums receivable within one year was RMB15,607 million (as at 31
+December 2017: RMB14,079 million).
+China Life Insurance Company Limited
+228
+(232,500)
+(255,434)
+Investment contracts (iii)
+48,586
+692,984
+450,251
+383,504
+458,669
+375,899
+559,341
+559,341
+449,400
+6,333
+6,333
+6,333
+6,333
+849,897
+789,897
+717,037
+849,897
+Securities at fair value through profit or loss
+138,717
+136,809
+138,717
+136,809
+Securities purchased under agreements to resell
+9,905
+36,185
+9,905
+36,185
+Cash and cash equivalents
+50,809
+48,586
+50,809
+789,897
+135
+138,717
+50,714
+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.
+Debt securities - Contractual maturity schedule
+Maturing:
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+Financial Report
+Within one year
+11,511
+42,410
+After one year but within five years
+170,606
+153,630
+After five years but within ten years
+214,826
+167,552
+After ten years
+99,647
+91,532
+496,590
+455,124
+Total
+China Life Insurance Company Limited
+225
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+9 FINANCIAL ASSETS (continued)
+9.6 Securities at fair value through profit or loss
+810,734
+870,533
+355,610
+373,943
+For the year ended 31 December 2018
+9 FINANCIAL ASSETS (continued)
+9.5 Available-for-sale securities (continued)
+Debt securities
+Listed in Mainland, PRC
+Unlisted
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+Total
+China Life Insurance Company Limited
+As at 31
+As at 31
+December 2017
+RMB million
+53,933
+44,929
+442,657
+410,195
+496,590
+455,124
+102,190
+55,066
+93,384
+41,507
+162
+216,525
+132
+220,587
+December 2018
+RMB million
+53,918
+Debt securities
+Government agency bonds
+Listed in Mainland, PRC
+39,145
+26,776
+Listed in Hong Kong, PRC
+108
+Listed overseas
+202
+292
+Unlisted
+48,548
+55,823
+88,003
+82,891
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+Total
+31,962
+39,442
+97
+79
+6,552
+7,187
+12,103
+7,210
+Debt securities
+Total
+136,809
+138,717
+Corporate bonds
+Others
+Subtotal
+Equity securities
+226
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+118
+2,081
+6,760
+9,084
+79,774
+Government bonds
+66,915
+4,811
+88,003
+82,891
+Funds
+13,967
+9,892
+Common stocks
+35,241
+44,026
+Wealth management products
+1,506
+Subtotal
+50,714
+53,918
+1,351
+785
+97,076
+7,872
+19,907
+2,740
+35,424
+316,940
+9,978
+10,369
+Total equity attributable to equity holders
+of the associates and joint ventures
+158,510
+48,385
+19,907
+2,732
+35,424
+140,144
+9,978
+63,138
+158,510
+Total equity
+11,897
+2,373,291
+249,362
+83,561
+8,986
+36,467
+541,762
+10,243
+10,369
+22,266
+2,214,781
+186,224
+63,654
+6,246
+1,043
+224,822
+265
+Total liabilities
+Total adjustments (i)
+933
+(4,938)
+43.86%
+10.29%
+66.67%
+75.00%
+Gross carrying value of the investments
+72,655
+13,822
+35.00%
+7,963
+21,387
+21,892
+5,787
+5,741
+Impairment
+(1,010)
+Net carrying value of the investments
+1,501
+Total assets
+40.00%
+43.686%
+470
+17,926
+(1,297)
+(2,714)
+Total equity attributable to equity
+holders of the associates and
+joint ventures after adjustments
+29.59%
+159,443
+19,907
+2,732
+35,894
+158,070
+8,681
+7,655
+Proportion of the Group's ownership
+43,447
+72,655
+MCL
+Futures
+RMB million RMB million RMB million RMB million RMB million
+PRC
+43.686%
+Hong Kong, PRC
+29.59%
+PRC
+40.00%
+PRC
+35.00%
+PRC
+43.86%
+PRC
+10.29%
+The British Cayman Islands
+The British Virgin Islands
+66.67%
+75.00%
+MCL
+Joy City
+Joint ventures
+China Unicom
+7,171
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+8 INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)
+(iii) The 2017 final dividend of RMB0.0198 in cash per ordinary share was approved and declared in the Annual
+General Meeting of China Unicom on 9 May 2018. The Company received a cash dividend amounting to RMB63
+million. China Unicom's share price on 28 December 2018 (the last trading day of 2018) was RMB5.17 per share.
+(iv) Glorious Fortune Forever Limited, a subsidiary of the Company, invested in the partnership Joy City, holding
+66.67% of the total partnership interest. China Century Core Fund Limited, a subsidiary of the Company, invested
+in the partnership MCL, holding 75.00% of the total partnership interest. According to the partnership agreement,
+Glorious Fortune Forever Limited and China Century Core Fund Limited, as limited partners of such partnerships,
+cannot control these partnerships on their own, but has joint control with the general partners. Therefore, Joy City and
+MCL are accounted for as joint ventures of the Group.
+(v) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
+Percentage of equity interest held
+(vi) Except for a 36-month restricted period of the investment in China Unicom, the Group has no significant
+restrictions to transact other investments in associates and joint ventures.
+Name
+Country of incorporation Percentage of equity interest held
+Associates
+Sino-Ocean
+CLP&C
+COFCO Futures
+Pipeline Company
+As at 31 December 2018, the major associates and joint ventures of the Group are as follows:
+As at 31 December 2017, the major associates and joint ventures of the Group are as follows:
+Name
+Associates
+10.56%
+The British Cayman Islands
+66.67%
+The British Virgin Islands
+75.00%
+Financial Report
+China Life Insurance Company Limited
+PRC
+219
+For the year ended 31 December 2018
+8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2018 and for the year ended 31 December 2018:
+COFCO Pipeline
+CGB Sino-Ocean
+RMB million RMB million RMB million
+CLP&C
+Company China Unicom
+Notes to the Consolidated Financial Statements (continued)
+Joy City
+43.86%
+35.00%
+CGB
+Sino-Ocean
+CLP&C
+COFCO Futures
+Pipeline Company
+China Unicom
+Joint ventures
+Joy City
+PRC
+MCL
+PRC
+43.686%
+Hong Kong, PRC
+29.79%
+PRC
+40.00%
+PRC
+Country of incorporation
+12,812
+CGB
+1,501
+7,109
+Proportion of the Group's ownership
+43.686%
+29.79%
+40.00%
+35.00%
+43.86%
+10.56%
+66.67%
+75.00%
+Gross carrying value of the investments
+53,459
+14,636
+8,185
+1,466
+9,209
+135,393
+35,985
+2,631
+35,309
+135,393
+10,070
+8,178
+Total adjustments (i)
+2,267
+(2,617)
+21,347
+676
+(1,069)
+Total equity attributable to equity
+holders of the associates and
+joint ventures after adjustments
+116,113
+45,885
+20,463
+(861)
+21,783
+6,139
+5,332
+135
+1935
+5,644
+274,829
+3,055
+1,684
+8430
+820
+859
+Other comprehensive income
+(2,332)
+912
+(35)
+(230)
+7,963
+Total comprehensive income
+(301)
+2,631
+6,259
+Net profit/(loss)
+Impairment
+(1,010)
+Net carrying value of the investments
+53,459
+13,626
+8,185
+1,466
+10,204
+21,347
+6,139
+5,332
+Total revenues
+50,531
+49,236
+61,142
+399
+21,783
+20,463
+185
+113,846
+438
+609
+Other comprehensive income
+4,160
+(1,518)
+(503)
+1
+(245)
+Total comprehensive income
+14,867
+3,148
+(382)
+99
+2,545
+9,056
+9,301
+2,545
+98
+121
+21,892
+48,502
+21,387
+5,787
+5,741
+Total revenues
+48,821
+438
+65,564
+4,746
+290,877
+457
+458
+Net profit/(loss)
+10,707
+4,666
+643
+609
+59,279
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2017 and for the year ended 31 December 2017:
+59,138
+8,020
+934
+266,599
+283
+12,598
+Total equity
+113,846
+58,728
+20,463
+2,631
+307,018
+10,070
+8,178
+Financial Report
+133,166
+1,959,069
+35,309
+20,776
+CGB Sino-Ocean
+Total liabilities
+CLP&C
+COFCO
+Futures
+Pipeline
+Company
+China
+Unicom
+RMB million RMB million RMB million RMB million RMB million RMB million
+Joy City
+MCL
+RMB million RMB million
+Total assets
+Total equity attributable to equity holders
+191,894
+2,072,915
+573,617
+of the associates and joint ventures
+36,243
+10,651
+10,353
+79,601
+RMB million
+2,672
+2,085
+40,601
+9,453
+13,778
+2017
+11,538
+(27,165)
+(21,404)
+(12,876)
+(10,460)
+2018
+RMB million
+11,106
+178
+467
+Gross
+Ceded
+RMB million
+The table below presents movements in unearned premium reserves:
+2017
+2018
+RMB million
+33,926
+Financial Report
+14,805
+12,269
+2,672
+2,536
+13,778
+14,805
+13,778
+11,106
+2,212,398
+Incurred but not reported
+2,186,671
+232
+China Life Insurance Company Limited
+Total, net
+- Unearned premiums
+- Claims and claim adjustment expenses
+1,996,715
+Short-term insurance contracts
+Net
+(2,982)
+Net
+(3,633)
+Total, ceded
+(527)
+Long-term insurance contracts
+14,665
+11,062
+13,674
+11,762
+Notified claims
+Total as at 31 December - Gross
+- Claims arising in prior years
+- Claims arising in current year
+- Cash paid for current year claims
+- Cash paid for prior year claims
+Claims incurred
+Cash paid for claims settled
+Total as at 1 January - Gross
+Incurred but not reported
+Notified claims
+The table below presents movements in claims and claim adjustment expense reserve:
+(c) Movements in liabilities of short-term insurance contracts
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+2,022,151
+Total as at 31 December - Gross
+Gross
+(d) Movements in liabilities of long-term insurance contracts
+Net
+1,825,956
+464,898
+(379,262)
+(385,761)
+1,999,066
+480,496
+RMB million
+RMB million
+2017
+99,618
+2018
+China Life Insurance Company Limited
+- Change in other assumptions (ii)
+Other movements
+- Change in discount rates
+Change in assumptions
+Accretion of interest
+Release of liabilities (i)
+As at 31 December
+78,232
+(6,020)
+6,599
+- At amortised cost
+Investment contracts without DPF
+(370)
+Investment contracts with DPF at amortised cost
+15 INVESTMENT CONTRACTS
+234
+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.
+(ii) For the year ended 31 December 2018, the change in other assumptions was mainly caused by the change in
+morbidity rate assumptions of certain products, which increased insurance contract liabilities by RMB3,877 million.
+This change reflected the Group's most recent experience and future expectations about the morbidity rates as at the
+reporting date. Changes in assumptions other than morbidity rates decreased insurance contract liabilities by RMB931
+million.
+(i) 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.
+1,999,066
+2,189,794
+219
+(551)
+2,424
+2,946
+Premiums
+Ceded
+As at 1 January
+14 INSURANCE CONTRACTS (continued)
+11,762
+(527)
+12,289
+11,062
+(370)
+11,432
+Release
+Increase
+(125)
+10,492
+11,762
+(527)
+12,289
+As at 1 January
+10,367
+(12,289)
+527
+(11,762)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+233
+China Life Insurance Company Limited
+11,762
+(527)
+12,289
+11,062
+(370)
+11,432
+As at 31 December
+(10,367)
+125
+(10,492)
+The table below presents movements in the liabilities of long-term insurance contracts:
+- Unearned premiums (Note 12)
+China Life Insurance Company Limited
+(140)
+6,201
+7,906
+15,466
+8,885
+RMB million
+RMB million
+4,162
+December 2017
+As at 31
+As at 31
+Financial Report
+Total
+Non-current
+Current
+December 2018
+Total
+2,705
+3,050
+33,952
+33,437
+8,019
+9,904
+25,933
+23,533
+3,269
+33,952
+5,140
+7,986
+403
+504
+987
+725
+33,437
+Prepayments to constructors
+Others
+Due from related parties
+Automated policy loans
+104
+140
+527
+370
+64
+731
+4,364
+2,351
+RMB million
+As at 31
+December 2017
+12 REINSURANCE ASSETS
+For the year ended 31 December 2018
+- At fair value through profit or loss
+Notes to the Consolidated Financial Statements (continued)
+3,123
+3,046
+1,241
+695
+Disbursements
+Land use rights
+Investments receivable and prepaid
+13 OTHER ASSETS
+RMB million
+As at 31
+December 2018
+Total
+Non-current
+Current
+Total
+Long-term insurance contracts ceded (Note 14)
+Due from reinsurance companies
+Ceded unearned premiums (Note 14)
+Claims recoverable from reinsurers (Note 14)
+3,046
+4,364
+2,351
+3,123
+229
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+14 INSURANCE CONTRACTS
+- Claims and claim adjustment expenses
+Short-term insurance contracts
+Long-term insurance contracts
+Gross
+Financial Report
+(b) Net liabilities of insurance contracts
+- Unearned premiums
+14 INSURANCE CONTRACTS (continued)
+Notes to the Consolidated Financial Statements (continued)
+231
+China Life Insurance Company Limited
+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 flows. When determining risk margin, the Group considers historical experience, future expectations and
+other factors. The Group determines the risk margin level by itself as the regulations have not imposed any specific
+requirement on it.
+(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.
+For the year ended 31 December 2018
+Total, gross
+As at 31
+December 2018
+RMB million
+- Claims and claim adjustment expenses (Note 12)
+Short-term insurance contracts
+(2,351)
+(3,123)
+Long-term insurance contracts (Note 12)
+Recoverable from reinsurers
+2,025,133
+2,216,031
+12,289
+11,432
+13,778
+14,805
+1,999,066
+2,189,794
+As at 31
+December 2017
+RMB million
+Financial Report
+(104)
+0.90%
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+(ii) The mortality and morbidity assumptions are based on the Group's historical mortality and morbidity experience.
+The assumed mortality rates and morbidity rates vary with the age of the insured and contract type.
+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.
+3.47%-4.86%
+3.31%-4.86%
+Discount rate assumptions
+As at 31 December 2018
+As at 31 December 2017
+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:
+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.
+4.85%
+4.85%
+Discount rate assumptions
+Financial Report
+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:
+(i) For the insurance contracts of which future insurance benefits are affected by investment yields of the corresponding
+investment portfolios, the discount rate assumption is based on expected investment returns of the asset portfolio
+backing these liabilities, considering the impacts of time value on reserves.
+(a) Process used to decide on assumptions
+As at 31 December 2018
+As at 31 December 2017
+The Group bases its morbidity assumptions for critical illness products on analysis of historical experience and
+expectations of future developments. There are two main sources of uncertainty. Firstly, wide-ranging lifestyle changes
+could result in future deterioration in morbidity experience. Secondly, future development of medical technologies and
+improved coverage of medical facilities available to policyholders may bring forward the timing of diagnosing critical
+illness, which demands earlier payment of the critical illness benefits. Both could ultimately result in an inadequate
+reserving of liability if current morbidity assumptions do not properly reflect such trends.
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+China Life Insurance Company Limited
+25.00
+25.00
+0.85%-0.90%
+0.85%-0.90%
+45.00
+45.00
+% of Premium
+RMB Per Policy % of Premium RMB Per Policy
+Group Life
+Individual Life
+As at 31 December 2017
+As at 31 December 2018
+(iii) Expense assumptions are based on expected unit costs with the consideration of previous expense studies and future
+trends. Expense assumptions are affected by certain factors such as future inflation and market competition which
+bring uncertainty to these assumptions. The Group determines expense assumptions based on information obtained at
+the end of each reporting period and risk margin. Components of expense assumptions include the cost per policy and
+percentage of premium as follows:
+(a) Process used to decide on assumptions (continued)
+14 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+230
+0.90%
+Total
+Equity securities
+As at 31
+December 2017
+RMB million
+- at fair value through profit or loss
+Equity securities
+- available-for-sale securities
+- at fair value through profit or loss
+Bank deposits
+Loans
+- available-for-sale securities
+Securities purchased under agreements to resell
+For the year ended 31 December
+2018
+2017
+RMB million
+RMB million
+34,657
+30,669
+Total
+22,991
+-held-to-maturity securities
+21 INVESTMENT INCOME
+252
+127
+14,133
+9,553
+58,426
+47,430
+Debt securities
+58,426
+58,426
+47,430
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+20 STATUTORY INSURANCE FUND
+As required by the CIRC Order [2008] No. 2, “Measures for Administration of Statutory Insurance Fund", all insurance
+companies have to pay the statutory insurance fund contribution from 1 January 2009. The Group is subject to the
+statutory insurance fund contribution, (i) at 0.15% and 0.05% of premiums and accumulated policyholder deposits from
+life policies with guaranteed benefits and life policies without guaranteed benefits, respectively; (ii) at 0.8% and 0.15%
+of premiums from short-term health policies and long-term health policies, respectively; (iii) at 0.8% of premiums
+from accident insurance contracts, at 0.08% and 0.05% of accumulated policyholder deposits from accident investment
+contracts with guaranteed benefits and without guaranteed benefits, respectively. When the accumulated statutory
+insurance fund contributions reach 1% of total assets, no additional contribution to the statutory insurance fund is
+required.
+47,430
+19,608
+3,869
+3,618
+RMB million
+RMB million
+399
+(42)
+(9)
+(114)
+357
+2017
+(123)
+Realised gains
+Impairment
+(11,785)
+(8,163)
+2,808
+(2,643)
+Subtotal
+Subtotal
+2018
+For the year ended 31 December
+Debt securities
+Realised gains
+Impairment
+16,492
+27,019
+1,284
+920
+22,699
+23,827
+22,894
+16,320
+281
+746
+125,167
+122,727
+Financial Report
+For the year ended 31 December 2018, the interest income included in investment income was RMB107,391 million
+(2017: RMB94,788 million). All interest income was accrued using the effective interest method.
+22 NET REALISED GAINS ON FINANCIAL ASSETS
+833
+As at 31
+December 2018
+RMB million
+490
+666
+Total
+Maturing:
+Within 30 days
+Total
+As at 31
+As at 31
+Stock exchange market
+December 2018
+RMB million
+RMB million
+125,788
+75,002
+66,353
+12,307
+192,141
+December 2017
+87,309
+Interbank market
+For the year ended 31 December 2018
+(i) 3.80% when EURIBOR is negative.
+17 DERIVATIVE FINANCIAL LIABILITIES
+Forward contract
+Financial Report
+As at 31
+December 2018
+RMB million
+18 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+As at 31
+December 2017
+1,877
+Note: The derivative financial liability of the Company is a forward contract to purchase equity securities. Its fair value is based on
+active quoted price of the equity security with consideration of liquidity discount, which is classified as Level 3.
+China Life Insurance Company Limited
+235
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+RMB million
+192,141
+87,309
+192,141
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+11,739
+9,614
+11,199
+10,129
+Total
+9,407
+5,268
+5,659
+3,479
+2,668
+1,793
+1,906
+6,252
+Non-current
+Current
+Total
+87,309
+As at 31 December 2018, bonds with a carrying value of RMB139,784 million (as at 31 December 2017: RMB79,543
+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 2018, the carrying value of
+securities deposited in the collateral pool was RMB174,323 million (as at 31 December 2017: RMB139,727 million).
+The collateral is restricted from trading during the period of the repurchase transaction.
+China Life Insurance Company Limited
+236
+19 OTHER LIABILITIES
+Interest payable to policyholders
+Salary and welfare payable
+Payable to the third-party holders of consolidated structured entities
+Brokerage and commission payable
+Payable to constructors
+Agent deposits
+Tax payable
+Stock appreciation rights (Note 31)
+Interest payable of debt instruments
+Others
+689
+165
+(19,948)
+(19,591)
+6,451
+2.40%
+30 September 2019
+6,338
+6,657
+2.30%
+6,142
+27 September 2019
+2,385
+3.54%
+17 June 2019
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+RMB million
+RMB million
+2,413
+As at 31
+December 2017
+11 January 2018
+780
+525
+2.50%
+18 January 2021
+Total
+Credit loans
+3,121
+1.495%
+3,139
+6 December 2020
+Credit loans
+993
+1.50%
+11 January 2019
+Guaranteed loans
+EURIBOR +3.80% (i)
+As at 31
+December 2018
+Interest rate
+Maturity date
+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:
+15 INVESTMENT CONTRACTS (continued)
+Interest credited
+For the year ended 31 December 2018
+232,500
+255,434
+175,335
+12
+196,296
+9
+57,153
+59,129
+Notes to the Consolidated Financial Statements (continued)
+As at 31 December
+16 INTEREST-BEARING LOANS AND BORROWINGS
+2018
+57,153
+59,129
+1,183
+1,236
+(37)
+(38)
+(2,510)
+(3,318)
+4,829
+4,096
+53,688
+57,153
+RMB million
+RMB million
+2017
+Total
+466,043
+25 INVESTMENT CONTRACT BENEFITS
+468,039
+Total
+24 INSURANCE BENEFITS AND CLAIMS EXPENSES
+China Life Insurance Company Limited
+RMB million
+2,006
+(18,938)
+Derivative financial liabilities
+(1,542)
+8,179
+343
+(179)
+188
+(275)
+(1,877)
+(18,278)
+20,150
+Financial liabilities at fair value through profit or loss
+Stock appreciation rights
+18,794
+42
+China Life Insurance Company Limited
+237
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+22 NET REALISED GAINS ON FINANCIAL ASSETS (continued)
+Net realised gains on financial assets are from available-for-sale securities and held-to-maturity securities.
+During the year ended 31 December 2018, the Group recognised an impairment charge of RMB4,542 million (2017:
+RMB619 million) of available-for-sale funds, an impairment charge of RMB3,621 million (2017: RMB2,024 million)
+of available-for-sale common stocks, no impairment of available-for-sale debt securities (2017: RMB114 million) and an
+impairment charge of RMB42 million (2017: nil) of held-to-maturity securities, for which the Group determined that
+objective evidence of impairment existed.
+23 NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+For the year ended 31 December
+2018
+RMB million
+2017
+Financial Report
+Debt securities
+Equity securities
+(1,996)
+Gross
+6,183
+Net
+238
+For the year ended 31 December 2017
+Life insurance death and other benefits
+260,853
+(1,145)
+259,708
+Ceded
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+(283)
+33,818
+173,085
+(568)
+172,517
+Total
+34,101
+(3,167)
+479,219
+Total
+RMB million
+RMB million
+RMB million
+For the year ended 31 December 2018
+Life insurance death and other benefits
+482,386
+(1,891)
+250,627
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+41,056
+(504)
+40,552
+190,703
+(772)
+189,931
+248,736
+26 FINANCE COSTS
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Interest expenses for securities sold under agreements to repurchase
+Dalian Hope Building Company Ltd.
+for interest-bearing loans and borrowings
+(Limited Partnership)
+Management Partnership
+Wuhu Yuanxiang Tianfu Investment
+Hope Building (i)
+("Bai Ning")
+Bai Ning Investment Partnership
+("Yuanxiang Tianfu") (ii)
+99.98% directly
+99.98% directly
+RMB1,680
+Ningbo Meishan Bonded Port Area
+(Limited Partnership) ("Wan Sheng")
+99.98% directly
+RMB4,000
+RMB1,680
+99.998% directly RMB100
+Wuhu Yuanxiang Tianyi Investment
+248
+RMB1,063
+99.98% directly
+RMB533
+RMB533
+99.98% directly
+RMB533
+China Life Insurance Company Limited
+RMB533
+RMB484
+RMB484
+Shengyi Jingsheng
+("Yuanxiang Tianyi") (ii)
+(Limited Partnership)
+Management Partnership
+100.00% indirectly
+RMB3,900
+Shanghai Wansheng Industry Partnership
+("Yuan Shu Yuan Pin")
+USD447
+Wisdom Forever Limited Partnership
+100.00% indirectly
+100.00% indirectly
+New Fortune Wisdom Limited
+100.00% indirectly
+100.00% indirectly
+100.00% indirectly
+99.997% directly
+RMB3,250
+99.997% directly
+RMB3,250
+Guo Yang Guo Sheng
+As at 31 December 2018
+Percentage
+of holding
+New Capital Wisdom Limited
+USD5
+USD452
+100.00% indirectly
+Partnership (Limited Partnership)
+Investment Management
+99.98% directly
+RMB606
+99.98% directly
+RMB606
+Shanghai Yuan Shu Yuan Pin
+("Yuan Shu Yuan Jiu")
+Partnership (Limited Partnership)
+Investment Management
+99.98% directly
+RMB606
+99.98% directly
+RMB606
+Shanghai Yuan Shu Yuan Jiu
+RMB1,063
+100.00% indirectly
+(i) The Group acquired 100% equity of Hope Building in 2018, and the sole purpose for the investment in Hope Building was to hold
+a property.
+(ii) Yuanxiang Tianfu, Yuanxiang Tianyi and Shengyi Jingsheng are new subsidiaries set up by the Group in 2018.
+A pension fund jointly set up by the Company and others
+245
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(e) Registered capital of related parties with control relationship and changes during the
+Under common control of CLIC
+Under common control of CLIC
+year
+party
+As at 31
+December 2017
+million
+CLIC
+RMB4,600
+AMC
+Name of related
+Under common control of CLIC
+Under common control of CLIC
+Relationship with the Company
+Relationship with
+the Company
+Immediate and
+ultimate holding
+company
+China Life Insurance Company Limited
+Financial Report
+(b) Subsidiaries
+Refer to Note 41(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
+China Life Real Estate Co., Limited ("CLRE")
+China Life Insurance (Overseas) Company Limited
+("CL Overseas")
+China Life Investment Holding Company Limited (“CLI”)
+China Life Ecommerce Company Limited ("CL Ecommerce")
+China Life Enterprise Annuity Fund (“EAP")
+RMB4,000
+million
+As at 31
+Decrease
+million
+("Rui Chong Company")
+RMB6,800
+China Life (Beijing) Health Management
+Co., Limited ("CL Health")
+RMB1,730
+RMB1,991
+RMB1,288
+RMB200
+Shanghai Rui Chong Investment Co., Limited
+RMB6,800
+China Life Franklin (Shenzhen) Equity
+Investment Fund Management Co., Limited
+("Franklin Shenzhen Company")
+USD2
+Xi'an Shengyi Jingsheng Real Estate Co., Ltd.
+("Shengyi Jingsheng")
+RMB1,131
+RMB1,730
+| | │
+RMB200
+CL Wealth
+December 2018
+million
+RMB4,600
+RMB4,000
+China Life Pension Company Limited
+("Pension Company")
+RMB3,400
+RMB3,400
+China Life (Suzhou) Pension and
+Retirement Investment Company
+Limited ("Suzhou Pension Company")
+RMB1,991
+CL AMP(i)
+RMB588
+RMB700
+Increase
+million
+Beijing, China 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.
+million
+Amount
+RMB2,746
+Pension Company
+74.27% directly
+60.00% directly
+RMB1,680
+60.00% directly
+and indirectly
+RMB1,680
+of holding
+As at 31 December 2018
+Percentage
+Amount
+million
+million
+million
+of holding
+AMC
+million
+China Life Franklin Asset Management
+50.00% indirectly
+RMB1,095
+RMB595
+85.03% indirectly
+RMB500
+CL AMP
+100.00% directly
+HKD130
+RMB1,586
+RMB1,586
+Suzhou Pension Company
+Company Limited ("AMC HK")
+50.00% indirectly
+74.27% directly
+and indirectly
+RMB2,746
+HKD130
+100.00% directly
+Decrease
+Increase
+Percentage
+(f) Percentages of holding of related parties with control relationship and changes during the year
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+246
+China Life Insurance Company Limited
+Shareholder
+(ii) 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.
+Financial Report
+RMB484
+RMB1,131
+USD2
+RMB484
+(“Hope Building”)
+(i) In July 2018, AMC completed a RMB595 million capital contribution to CL AMP, while other shareholders
+increased RMB105 million. The total capital contribution was RMB700 million. As at 8 August 2018, CL AMP
+completed the business registration modification procedure for the registered capital with the amount increased from
+RMB588 million to RMB1,288 million. The capital increase was in the same proportion, and the percentage of holding
+remained unchanged.
+As at 31 December 2017
+As at 31 December 2018
+Amount
+Amount
+As at 31 December 2017
+Subsidiaries
+Financial Report
+68.37%
+RMB19,324
+68.37%
+RMB19,324
+CLIC
+Percentage
+of holding
+Amount
+million
+Decrease
+million
+Increase
+million
+Percentage
+of holding
+million
+85.03% indirectly
+CL Wealth
+RMB200
+100.00% indirectly
+Franklin Shenzhen Company
+RMB1,730
+CL Health
+100.00% indirectly
+USD1,125
+USD229
+USD0.6
+100.00% indirectly
+China Century Core Fund Limited
+100.00% directly
+RMB2,435
+RMB259
+100.00% directly
+RMB2,176
+USD896
+100.00% directly
+100.00% indirectly
+RMB1,730
+100.00% directly
+Decrease
+Increase
+As at 31 December 2017
+Percentage
+of holding
+Amount
+million
+Subsidiaries (continued)
+(f) Percentages of holding of related parties with control relationship and changes during the year
+(continued)
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+247
+China Life Insurance Company Limited
+100.00% indirectly
+USD2
+USD1.4
+Fortune Bamboo Limited
+million
+100.00% directly
+RMB244
+New Aldgate Limited
+100.00% directly
+RMB6,800
+100.00% directly
+RMB6,800
+Rui Chong Company
+RMB1,167
+100.00% indirectly
+King Phoenix Tree Limited
+100.00% directly
+100.00% directly
+Golden Phoenix Tree Limited
+100.00% indirectly
+RMB200
+100.00% indirectly
+100.00% directly
+RMB1,167
+100.00% directly
+100.00% directly
+RMB1,632
+Sunny Bamboo Limited
+100.00% directly
+RMB1,993
+RMB259
+100.00% directly
+RMB1,734
+Golden Bamboo Limited
+100.00% directly
+100.00% directly
+CL Hotel Investor, L.P.
+100.00% directly
+100.00% directly
+Glorious Fortune Forever Limited
+RMB1,876
+registration Principal business
+Location of
+CLIC
+Total
+RMB million
+(i)
+(ii)
+(iii)
+As at 1 January 2017
+(Charged)/credited to net profit
+RMB million
+(6,408)
+1,615
+1,072
+(1,279)
+745
+(7,768)
+538
+(Charged)/credited to other comprehensive income
+(2,975)
+- Available-for-sale securities
+Others
+RMB million
+6,105
+25
+6
+(86)
+(15)
+342
+Investments
+RMB million
+252
+8,919
+(i) 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.
+(c) As at 31 December 2018 and 2017, 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)
+China Life Insurance Company Limited
+Insurance
+1,985
+3,759
+- Portion of fair value changes on available-for-sale
+securities attributable to participating policyholders
+(1,401)
+(Charged)/credited to other comprehensive income
+1,673
+1,673
+240
+- Available-for-sale securities
+- Portion of fair value changes on available-for-sale
+securities attributable to participating policyholders
+- Others
+4,412
+As at 31 December 2018
+8
+35
+35
+(5,308)
+3,927
+2,638
+8
+278
+2,713
+1,421
+(1,401)
+- Others
+1
+1
+As at 31 December 2017
+(6,737)
+(494)
+2,360
+(4,871)
+As at 1 January 2018
+(6,737)
+(494)
+2,360
+(4,871)
+(Charged)/credited to net profit
+5,319
+(7,847)
+(7,095)
+10,418
+RMB million
+Employee salaries and welfare costs
+Housing benefits
+Contribution to the defined contribution pension plan
+Depreciation and amortisation
+19,268
+RMB million
+18,741
+933
+2,531
+2,357
+2,638
+2,240
+Foreign exchange losses/(gains)
+1,061
+2017
+2018
+For the year ended 31 December
+Interest expenses for bonds payable
+Total
+27 PROFIT BEFORE INCOME TAX
+For the year ended 31 December
+2018
+2017
+RMB million
+RMB million
+3,565
+3,144
+551
+424
+1,033
+4,116
+4,601
+Profit before income tax is stated after charging/(crediting) the following:
+Remuneration in respect of audit services provided by auditors
+1,257
+194
+59
+28 TAXATION (continued)
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC (2017: same)
+is as follows:
+Financial Report
+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
+For the year ended 31 December 2018
+Tax losses utilised from previous periods
+Others
+For the year ended 31 December
+2018
+RMB million
+2017
+RMB million
+13,921
+41,671
+3,480
+Income tax at the effective tax rate
+Notes to the Consolidated Financial Statements (continued)
+239
+China Life Insurance Company Limited
+59
+Financial Report
+28 TAXATION
+Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
+against current tax liabilities and when the deferred income tax relates to the same tax authority.
+(a) The amount of taxation charged to net profit represents:
+Current taxation - Enterprise income tax
+Deferred taxation
+Total tax charges
+For the year ended 31 December
+2018
+RMB million
+2017
+RMB million
+6,397
+(4,412)
+9,457
+(538)
+1,985
+8,919
+(52)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+28 TAXATION (continued)
+AA-
+Subtotal
+Overseas
+244
+A
+A-
+АА
+BBB+
+Not rated
+Subtotal
+Total
+As at 31
+December 2018
+Carrying amount
+RMB Million
+(iii)
+BBB-
+AA+
+China Life Insurance Company Limited
+AAA
+1,502,203
+528,377
+95,480
+(40,447)
+2,169,297
+38,101
+(i) Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale securities and held-to-
+maturity securities.
+Total
+China Life Insurance Company Limited
+243
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+33 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)
+(b) The table below presents the credit risk exposure" (ii) for aforementioned financial assets with contractual terms that
+give rise on SPPI:
+Domestic
+Rating not required (iv)
+653,328
+787,908
+Financial Report
+13,026
+70
+(ii) Credit risk ratings for domestic assets are provided by domestic qualified external rating agencies and credit risk
+ratings for overseas assets are provided by overseas qualified external rating agencies.
+(iii) For financial assets measured at amortised cost, carrying amount before adjusting impairment allowance is disclosed
+here.
+(iv) It mainly includes government bonds and policy financial bonds.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+14,551
+Nature of
+ownership
+State-owned
+Wang Bin
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+Legal
+representative
+14,272
+14,248
+24
+14,539
+12
+1,455,484
+1,755
+493
+118
+14
+24
+2,404
+1,457,888
+The table below presents the financial assets that are not considered to have low credit risk on the reporting date:
+Carrying amount
+RMB Million
+(!!!)*
+As at 31
+December 2018
+Fair value
+RMB Million
+Domestic
+Overseas
+Total
+1,152
+Interest expenses
+(16,932)
+Fair value
+changes for the
+4,493
+10,160
+6,473
+Financial Report
+(7,490)
+(9,131)
+6,213
+(1,413)
+(8,903)
+(11,344)
+1,257
+(4,871)
+29 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 RMB6,987 million (2017: RMB25,550 million).
+(2,213)
+1,980
+3,947
+As at 31
+December 2017
+RMB million
+(i) The deferred tax liabilities arising from the insurance category are mainly related to the change of long-term insurance
+contract liabilities at 31 December 2008 as a result of the first time adoption of IFRSs in 2009 and the temporary differences
+of short-term insurance contract liabilities and policyholder dividends payable.
+(ii) The deferred tax arising from the investments category is mainly related to the temporary differences of unrealised
+gains/(losses) on available-for-sale securities, securities at fair value through profit or loss, and others.
+(iii) The deferred tax arising from the others category is mainly related to the temporary differences of employee salaries
+and welfare costs payable.
+Unrecognised deductible tax losses of the Group amounted to RMB365 million as at 31 December 2018 (as at 31
+December 2017: RMB607 million). Unrecognised deductible temporary differences of the Group amounted to RMB378
+million as at 31 December 2018 (as at 31 December 2017: RMB243 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
+Deferred tax liabilities:
+- deferred tax liabilities to be settled after 12 months
+– deferred tax liabilities to be settled within 12 months
+Subtotal
+Net deferred tax liabilities
+As at 31
+December 2018
+RMB million
+30 EARNINGS PER SHARE
+year ended 31
+December 2018
+RMB million
+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 2018 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 (2017: same).
+241
+According to IFRS 4 Amendments, the Company made the assessment based on the Group's financial position of 31
+December 2015, concluding that the carrying amount of the Group's liabilities arising from contracts within the scope
+of IFRS 4, which includes any deposit components or embedded derivatives unbundled from insurance contracts, was
+significant compared to the total carrying amount of all its liabilities. And the percentage of the total carrying amount of
+its liabilities connected with insurance relative to the total carrying amount of all its liabilities is greater than 90 percent.
+There had been no significant change in the activities of the Group since then that requires reassessment. Therefore, the
+Group's activities are predominantly connected with insurance, meeting the criteria to apply temporary exemption from
+IFRS 9.
+Sino-Ocean and China Unicom, associates of the Group, have both applied IFRS 9 from 1 January 2018. According to
+IFRS 4 Amendments, the Group elects not to apply uniform accounting policies when using the equity method for these
+two associates.
+(a) The table below presents the fair value of the following groups of financial assets (1) under IFRS 9 as at 31 December
+2018 and fair value changes for the year ended 31 December 2018:
+Held for trading financial assets
+Financial assets that are managed and whose performance
+33 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9
+are evaluated on a fair value basis
+- Financial assets with contractual terms that give rise on specified dates
+to cash flows that are solely payments of principal and interest
+on the principal amount outstanding ("SPPI”)
+– Financial assets with contractual terms that do not give rise on SPPI
+Fair value
+as at 31
+December 2018
+RMB million
+138,717
+Other financial assets
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+242
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+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.
+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 2018. As at 31 December 2018, there were
+55.01 million units outstanding and exercisable (as at 31 December 2017: same). As at 31 December 2018, the amount
+of intrinsic value for the vested stock appreciation rights was RMB477 million (as at 31 December 2017: RMB820
+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 25%, an expected dividend yield of no higher
+than 3% and a risk-free interest rate ranging from 1.01% to 1.84%.
+The Company recognised a gain of RMB343 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 2018 (2017:
+fair value losses of RMB179 million). RMB477 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 2018 (as
+at 31 December 2017: RMB820 million and RMB13 million), respectively. There was no unrecognised compensation
+cost for the stock appreciation rights as at 31 December 2018 (as at 31 December 2017: nil).
+32 DIVIDENDS
+Pursuant to the shareholders' approval at the Annual General Meeting on 6 June 2018, a final dividend of RMB0.40
+(inclusive of tax) per ordinary share totalling RMB11,306 million in respect of the year ended 31 December 2017 was
+declared and paid in 2018. The dividend has been recorded in the consolidated financial statements for the year ended
+31 December 2018.
+A distribution of RMB384 million (inclusive of tax) to the holders of Core Tier 2 Capital Securities was approved by
+management in 2018 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 27 March 2019, a final dividend of
+RMB0.16 (inclusive of tax) per ordinary share totalling approximately RMB4,522 million for the year ended 31
+December 2018 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 2018.
+Financial Report
+China Life Insurance Company Limited
+China Life Insurance Company Limited
+3,759
+Rental fee charged by Rui Chong Company
+330
+Total
+256
+Overseas listed (ii)
+Including: Domestic listed
+Owned by other equity holders
+Owned by CLIC (i)
+China Life Insurance Company Limited
+As at 31 December 2018, 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
+As at 31 December 2018
+Registered, authorised, issued and fully paid
+As at 31 December 2017
+No. of shares
+RMB million
+As at 31 December 2018
+No. of shares
+Financial Report
+35 SHARE CAPITAL
+As at 31 December 2018, 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
+2018, 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.
+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.
+(j) Transactions with state-owned enterprises
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+255
+China Life Insurance Company Limited
+RMB million
+No. of shares
+RMB million
+19,323,530,000
+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 listed such securities on the Stock Exchange of Hong Kong Limited on 6 July 2015. The securities were issued in
+the specified denomination of USD200,000 and integral multiples of USD1,000 in excess thereof. After a deduction
+of the issue expense, the total amount of the proceeds raised from this issuance was USD1,274 million or RMB7,791
+million. The issued capital securities have a term of 60 years, extendable upon expiry. Distributions shall be payable
+on the securities semi-annually and the Company has the option to redeem the securities at the end of the fifth year
+after issuance and on any distribution payment date thereafter. The initial distribution rate for the first five interest-
+bearing years is 4.00%, if the Company does not exercise this option, the rate of distribution will be reset based on the
+comparable US treasury yield plus a margin of 2.294% at the end of the fifth
+year and every five years thereafter.
+7,791
+7,791
+7,791
+Total
+7,791
+Core Tier 2 Capital Securities
+As at 31
+December 2018
+RMB million
+Decrease
+RMB million
+Increase
+RMB million
+December 2017
+RMB million
+As at 31
+(a) Basic information
+36 OTHER EQUITY INSTRUMENTS
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange.
+(i) All shares owned by CLIC are domestic listed shares.
+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
+The total compensation package for the Company's key management personnel for the year ended 31 December 2018
+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 2017 has been approved by the relevant
+authorities. The total compensation of 2017 was RMB28 million, including a deferred payment about RMB6 million.
+Financial Report
+28
+20
+15
+(362)
+(9)
+428
+284
+122
+68
+420
+350
+As at 31
+December 2017
+RMB million
+December 2018
+RMB million
+As at 31
+Salaries and other benefits
+(i) Key management personnel compensation
+Amount due to AMC HK
+Amount due to AMC
+Amount due to Pension Company
+Amount due from Pension Company
+The resulting balances due from and to subsidiaries of the Company
+Amount due to CL Ecommerce
+Amount due from CL Ecommerce
+Amount due from Sino-Ocean
+Corporate bonds of Sino-Ocean
+Amount due to CGB
+Amount due from CGB
+Wealth management products of CGB
+Interbank certificates of deposits of CGB
+Amount deposited with CGB
+Amount due to CLI
+Amount due from CLI
+69
+Equity attributable to ordinary equity holders of the Company
+Equity attributable to other equity instruments holders of the Company
+(6)
+2
+RMB million
+2017
+RMB million
+2018
+For the year ended 31 December
+(207)
+(4)
+(10)
+(218)
+(19)
+(28)
+57
+25
+(78)
+(67)
+6
+6
+8
+8
+592
+593
+(31)
+(63)
+1,041
+1,557
+115
+199
+33,385
+61,880
+2
+(265)
+Equity attributable to non-controlling interests
+Equity attributable to ordinary equity holders of non-controlling interests
+Financial Report
+30,152
+33,384
+(717)
+(1,986)
+1,281
+53,860
+As at 1 January 2018
+145,675
+(840)
+30,541
+30,152
+33,384
+(717)
+(1,986)
+1,281
+53,860
+135
+8,445
+3,300
+1,927
+3,218
+(7,912)
+(847)
+21
+145,007
+7
+27,241
+28,225
+30,166
+30,541
+ཎྚིབ། །
+(840)
+Other comprehensive income for the year
+258
+China Life Insurance Company Limited
+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.
+(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 2018, the Company appropriated 10% of net profit
+under CAS which amounted to RMB1,275 million to the general reserve for future uncertain catastrophes, which cannot
+be used for dividend distribution or conversion to share capital increment (2017: RMB3,218 million). In addition,
+pursuant to the CAS, the Group appropriated RMB117 million to the general reserve of its subsidiaries attributable to
+the Company in the consolidated financial statements (2017: RMB82 million).
+(b) Approved at the Annual General Meeting in June 2018, the Company appropriated RMB3,218 million to the
+discretionary reserve fund for the year ended 31 December 2017 based on net profit under CAS (2017: RMB1,927
+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 RMB1,275 million for the year ended 31 December 2018
+(2017: RMB3,218 million).
+Financial Report
+149,293
+(254)
+31,933
+33,370
+34,659
+53
+(5,412)
+1,084
+53,860
+As at 31 December 2018
+(197)
+(197)
+Others
+5,885
+1,392
+3,218
+1,275
+Appropriation to reserves
+(2,070)
+586
+770
+(3,426)
+145,675
+Amount due to CLP&C
+135
+Others
+Share
+premium
+translating
+Statutory
+under
+available-
+Exchange
+differences on
+of investees
+income
+Unrealised comprehensive
+gains/
+(losses) from
+Share of other
+37 RESERVES
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+257
+China Life Insurance Company Limited
+ended 31 December 2018. As at 31 December 2018, there were no accumulated distributions unpaid attributable to
+other equity instrument holders of the Company.
+Refer to Note 32 for the information of distribution to other equity instruments holders of the Company for the year
+4,377
+4,919
+4,377
+4,919
+7,791
+7,791
+313,142
+310,580
+320,933
+318,371
+As at 31
+December 2017
+RMB million
+As at 31
+December 2018
+RMB million
+Other
+As at 31 December 2017
+for-sale
+reserve
+(7,086)
+Other comprehensive income for the year
+(738)
+5,100
+1,146
+53,860
+Appropriation to reserves
+As at 1 January 2017
+(c)
+(b)
+(a)
+RMB million RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+Total
+foreign
+operations
+reserve
+reserve fund
+fund
+method
+securities
+reserves
+General
+Discretionary
+the equity
+Amount due from CLP&C
+Amount due from CLRE
+Amount due from CLIC
+1,382
+1,425
+Capital contribution to CGB
+Commission expenses charged by CGB
+Interest on deposits received from CGB
+Amount due from CL Overseas
+64
+53
+(vi)
+Payment of a business management service fee to CL Ecommerce
+37
+37
+Property leasing income received from CLI
+396
+529
+(ii.d) (ix)
+Payment of an asset management fee to CLI
+78
+83
+(iv)
+Property leasing expenses charged by CLI
+(v)
+112
+13,012
+ལྷུམ།
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+249
+China Life Insurance Company Limited
+1,240
+2,279
+to the Group (Note 8)
+Transactions between other associates and joint ventures and the Group
+Distribution of profits from other associates and joint ventures
+700
+593
+50
+Contribution to EAP
+55
+2
+27
+27
+553
+558
+Project management fee paid to Sino-Ocean
+Interest payment of corporate bonds received from Sino-Ocean
+Cash dividend from Sino-Ocean (Note 8)
+Transactions between Sino-Ocean and the Group
+Transactions between EAP and the Group
+For the year ended 31 December
+2018
+45
+69
+Distribution of profits from AMC to CLIC
+4,638
+7,729
+Payment of dividends from the Company to CLIC
+107
+100
+(ii.a)
+740
+629
+(i) (ix)
+Transactions with CLIC and its subsidiaries
+Policy management fee received from CLIC
+Asset management fee received from CLIC
+Financial Report
+2017
+RMB million
+2018
+RMB million
+Notes
+For the year ended 31 December
+The following table summarises significant transactions carried out by the Group with its significant related parties:
+(g) Transactions with significant related parties
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+128
+125
+Asset management fee received from CL Overseas
+(ii.b)
+66
+Cash dividend from CLP&C (Note 8)
+59
+50
+Rental and a service fee received from CLP&C
+3,030
+2,959
+(iii) (ix)
+Agency fee received from CLP&C
+16
+Payment of rental, project fee and other expenses to CLRE
+16
+44
+47
+Claim and other payments received from CLP&C
+Payment of insurance premium to CLP&C
+14
+14
+(ii.c)
+Asset management fee received from CLP&C
+119
+63
+14
+Notes
+Transactions between CGB and the Group
+2017
+RMB million
+(g) Transactions with significant related parties (continued)
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+252
+China Life Insurance Company Limited
+Financial Report
+income.
+(ii.f) On 18 September 2016, the Company and AMC HK renewed the offshore investment management service agreement, which
+was 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. On 25 December 2017, the
+Company and AMC HK signed a supplementary agreement, changing the fixed rate of the portfolio asset value for assets managed
+on a discretionary basis to 0.375% and the variable rates of it to 0.047% and 0.094%, respectively, according to different compliance
+conditions. Fixed rates for assets managed on a non-discretionary basis are revised to 0.047% and 0.075%, respectively, by various
+asset classes. The supplementary agreement is effective from 1 January 2018 to 31 December 2018. 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 investment management fee was accrued quarterly and paid within 10 working days of the next
+quarter. Asset management fees charged to the Company by AMC HK are eliminated in the consolidated statement of comprehensive
+(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.d) On 30 June 2017, the Company and CLI renewed a management agreement of alternative investment of insurance funds,
+which was retrospectively effective from 1 January 2017 to 31 December 2018. 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. 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.
+Notes: (continued)
+(g) Transactions with significant related parties (continued)
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+251
+China Life Insurance Company Limited
+(ii.c) On 15 May 2018, CLP&C renewed an agreement for the management of insurance funds with AMC, entrusting AMC to manage
+and make investments for its insurance funds, which was retrospectively effective from 1 January 2018 to 31 December 2019. The
+agreement was subject to an automatic one-year renewal if no objections were raised by both parties upon expiry. In accordance with
+the agreement, CLP&C paid AMC a fixed service fee and a variable service fee. The fixed service fee was calculated on a monthly basis
+and payable on an annual basis, by multiplying the average net asset value of assets of each category under management at the beginning
+and the end of any given month by the responding annual investment management fee rate, divided by 12. The variable service fee was
+payable on an annual basis and linked to investment performance.
+(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.
+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 was 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 the principal and interests of debt and equity
+investment schemes, project asset-backed schemes, customised non-standard products) at the beginning and the end of any given month
+by the rate of 0.05%, divided by 12. 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.
+(iii) On 31 January 2018, the Company and CLP&C signed a new framework insurance agency agreement, whereby CLP&C entrusted
+the Company to act as an agent to sell designated P&C insurance products in certain authorised jurisdictions. The agency fee was
+determined based on cost (tax included) plus a margin. The agreement is valid for three years, from 8 March 2018 to 7 March 2021.
+(v) On 19 October 2018, the Company and CGB renewed an insurance agency agreement to distribute insurance products. All
+individual insurance products suitable for distribution through bancassurance channels are included in the agreement. CGB provides
+agency services, including the sale of insurance products, collecting premiums and paying benefits. The Company paid the agency
+commission by multiplying the net amount of total premiums received from the sale of each category individual insurance products
+after deducting the 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 from the signing date to 16 August 2020.
+The resulting balances due from and to significant related parties of the Group
+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 product of CGB and corporate bonds issued by Sino-Ocean.
+(h) Amounts due from/to significant related parties
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+254
+China Life Insurance Company Limited
+Financial Report
+(ix) 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.
+(viii) On 7 May 2018, the Company, CLIC and CLP&C signed an agreement of capital increase. The Company and CLIC agreed the
+transfer of CLP&C's retained earnings to capital, increasing the registered capital of CLP&C from RMB15 billion to RMB18.8 billion.
+The number of CLP&C's shares held by the Company increased by 1.52 billion accordingly. After the capital increase, the Company
+continues to hold 40% of CLP&C's equity.
+(vii) On 28 November 2016, the Company and Pension Company signed an 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 was subject to an automatic one-
+year renewal if no objections were raised by either party upon expiry. On 1 January 2018, the agreement was automatically renewed
+for one year. 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 comprehensive income of the Group.
+Notes: (continued)
+(g) Transactions with significant related parties (continued)
+RMB million
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+253
+China Life Insurance Company Limited
+(vi) On 1 January 2018, the Company and CL Ecommerce renewed an agreement for managing the regional telemarketing centre,
+which was effective from 1 January 2018 and would expire on 31 December 2018. 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.
+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 valid for two years from 1 January 2016, with an automatic
+one-year renewal if no objections were raised by either party upon expiry. On 1 January 2018, the agreement was automatically renewed
+for one year.
+(iv) On 29 December 2017, the Company renewed a property leasing agreement with CLI, effective from 1 January 2018 to 31
+December 2020, pursuant to which CLI leased to the Company certain buildings of its own. Annual rental payable by the Company
+to CLI in relation to the CLI properties is determined either by reference to the market rent, or, the costs incurred by CLI in holding
+and maintaining the properties, plus a margin of approximately 5%. The rental was paid on a semi-annual basis, and each payment was
+equal to one half of the total annual rental.
+(i) On 26 December 2017, the Company and CLIC renewed a renewable insurance agency agreement, effective from 1 January 2018 to
+31 December 2020. The Company performs its duties of insurance agents in accordance with the agreement, but does not acquire any
+rights and profits or assume any obligations, losses and risks as an insurer of the non-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
+RMB8.0 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.
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+Payment of an investment management fee to AMC HK
+Transactions between AMC HK and the Company
+Pension Company
+10
+13
+42
+(vii) ☐ 43
+43
+45
+1,154
+187
+(ii.f)
+1,326
+193
+Marketing fee income for promotion of annuity business from
+Agency fee received from Pension Company for entrusted sales of
+annuity funds and other businesses
+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
+Financial Report
+(g) Transactions with significant related parties (continued)
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Notes:
+(ii.e) (ix)
+18
+Rental received from Pension Company
+Transactions between Suzhou Pension Company and the Company
+Capital contribution to Suzhou Pension Company
+34 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+14
+Financial Report
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+250
+3,944
+70
+426
+Distribution of profits from the Company's other subsidiaries to the Company
+8,247
+China Life Insurance Company Limited
+Transactions between the consolidated structured entities/other subsidiaries
+and the Company
+203
+1,424
+Transactions between other associates and joint ventures and the Company
+Distribution of profits from other associates and joint ventures
+to the Company
+260
+47
+601
+Capital contribution to Rui Chong Company
+Distribution of profits from the consolidated structured entities to
+the Company
+Transactions between Rui Chong Company and the Company
+112,482
+127
+6,252
+87,309
+112,482
+127
+4,985
+87,309
+4,987
+Foreign exchange movement
+At 31 December 2018
+104,832
+Interest expense
+629
+6,252
+3,155
+221,950
+104,724
+consolidated
+holders of
+727
+interest payable
+related to
+agreements
+structured
+financing
+Bonds payable
+252
+9,407
+192,141
+20,150
+4,115
+4,115
+629
+(3,990)
+Changes from financing cash flows
+16,170
+At 1 January 2018
+81,088
+37,998
+At 1 January 2017
+RMB million
+RMB million
+RMB million
+5,488
+RMB million
+RMB million
+Total
+activities
+Other liability-
+entities
+to repurchase
+RMB million
+813
+141,557
+Changes from financing cash flows
+18,794
+At 31 December 2017
+2
+Interest expense
+consolidated structured entities
+Changes arising from losing control of
+(497)
+(497)
+Foreign exchange movement
+(33,558)
+(5,671)
+764
+6,228
+(38,000)
+3,121
+18,794
+to the third-party
+Investment
+Securities
+Investment
+Not applicable
+99.98% directly
+PRC
+Shengyi Jingsheng
+Yuanxiang Tianyi
+PRC
+Investment
+99.98% directly
+PRC
+Investment
+Not applicable
+99.98% directly
+PRC
+Not applicable
+100.00% indirectly
+RMB1,131 million
+Investment
+RMB10,514 million
+Trust/investments received
+Percentage of shares held
+Principal activities
+Shang Xin-Ningbo Wu Lu Si Qiao PPP Collective
+Fund Trust Scheme
+Name
+(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
+December 2018:
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investments in subsidiaries (continued)
+88.02% directly
+99.99% directly
+75.00% directly and indirectly
+Kun Lun Trust⚫ Tianjin Urban Communications
+Construction No. 1 Collective Fund Trust Scheme
+Jiao Yin Guo Xin Shaanxi Coal and Chemical Industry
+Group Co., Ltd. Debt-to-Equity Swap Collective
+Fund Trust Scheme
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+267
+China Life Insurance Company Limited
+Non-controlling interests in subsidiaries are not significant to the Company.
+Investment
+sold under
+Not applicable
+PRC
+Wisdom Forever Limited Partnership
+Investment
+Not applicable
+100.00% indirectly
+The British Virgin Islands
+Investment management
+The British Cayman Islands
+39 PROVISIONS AND CONTINGENCIES
+For the year ended 31 December 2018
+38 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+Changes in liabilities arising from financing activities
+Other
+liability-payable
+Interest-bearing
+loans and
+borrowings
+Notes to the Consolidated Financial Statements (continued)
+100.00% indirectly
+Not applicable
+Investment
+Investment
+RMB484 million
+100.00% indirectly
+PRC
+Investment
+Not applicable
+99.98% directly
+PRC
+Wansheng
+Bai Ning
+Yuanxiang Tianfu
+Yuan Shu Yuan Pin
+Hope Building
+Investment
+Not applicable
+99.98% directly
+PRC
+Yuan Shu Yuan Jiu
+99.98% directly
+New Fortune Wisdom Limited
+The following is a summary of the significant contingent liabilities:
+Financial Report
+(940)
+(1,179)
+(16,107)
+Impairment
+As at 1 January 2017
+(24)
+(24)
+Charge for the year
+Disposals
+As at 31 December 2017
+(24)
+(24)
+Net book value
+As at 1 January 2017
+16,576
+(4,990)
+1,860
+(8,998)
+691
+(4,822)
+(983)
+(1,048)
+(14,941)
+Charge for the year
+(925)
+(612)
+(143)
+(177)
+(1,857)
+Disposals
+15
+444
+186
+46
+As at 31 December 2017
+(8,088)
+422
+477
+Deductions
+As at 31 December 2018
+Accumulated depreciation
+As at 1 January 2018
+Charge for the year
+Deductions
+As at 31 December 2018
+Net book value
+As at 1 January 2018
+As at 31 December 2018
+Fair value
+As at 1 January 2018
+As at 31 December 2018
+1,718
+2,194
+(29)
+3,883
+(317)
+Additions
+10,387
+As at 1 January 2018
+Financial Report
+29,722
+As at 31 December 2017
+22,606
+1,694
+443
+10,951
+619
+36,313
+China Life Insurance Company Limited
+264
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Buildings
+RMB million
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Investment properties
+Cost
+(54)
+As at 1 January 2017
+52,444
+263
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment (continued)
+Financial Report
+Cost
+Office
+equipment
+furniture and
+Motor
+Assets
+under
+Buildings
+fixtures
+vehicles
+construction
+Leasehold
+improvements
+Total
+China Life Insurance Company Limited
+RMB million
+43,192
+14,030
+As at 31 December 2018
+(24)
+(25)
+Net book value
+As at 1 January 2018
+22,606
+1,694
+443
+10,951
+619
+36,313
+As at 31 December 2018
+25,690
+2,150
+522
+800
+Accumulated depreciation
+As at 1 January 2017
+6,682
+(205)
+(205)
+Disposals
+(48)
+(463)
+(192)
+(146)
+(48)
+(897)
+As at 31 December 2017
+31,628
+6,684
+1,383
+10,951
+1,798
+Transfers into investment properties
+24,688
+8,945
+8,280
+1,405
+10,387
+1,525
+44,687
+Transfers
+upon completion
+6,918
+49
+(7,365)
+312
+(86)
+Additions
+70
+416
+170
+9
+13
+(358)
+1,401
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Investment
+Glorious Fortune Forever Limited
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Investment
+CL Hotel Investor, L.P.
+Golden Bamboo Limited
+Sunny Bamboo Limited
+Fortune Bamboo Limited
+USA
+100.00% directly
+Not applicable
+Investment
+Investment
+Investment
+100.00% directly
+RMB1,288 million
+PRC
+100.00% indirectly
+RMB200 million
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Asset management
+Investment in retirement
+properties
+Fund management
+Financial service
+Investment
+The British Jersey Island
+100.00% indirectly
+PRC
+Not applicable
+RMB6,800 million
+85.03% indirectly
+The British Virgin Islands
+Not applicable
+100.00% directly
+RMB1,730 million
+Health
+management
+PRC
+100.00% indirectly
+USD2 million
+Investment
+PRC
+99.997% directly
+Not applicable
+Investment
+The British Virgin Islands
+100.00% indirectly
+Not applicable
+PRC
+100.00% directly
+New Capital Wisdom Limited
+Franklin Shenzhen Company
+Investment
+The British Virgin Islands
+100.00% directly
+Not applicable
+Investment
+The British Virgin Islands
+100.00% directly
+Not applicable
+Investment
+China Century Core Fund Limited
+The British Cayman Islands
+100.00% indirectly
+Not applicable
+Investment
+CL Health
+Guo Yang Guo Sheng
+PRC
+New Aldgate Limited
+King Phoenix Tree Limited
+Rui Chong Company
+As at 31 December 2017
+Fair value
+As at 1 January 2017
+As at 31 December 2017
+China Life Insurance Company Limited
+Buildings
+RMB million
+1,513
+205
+1,718
+(266)
+(51)
+(317)
+1,247
+1,401
+2,377
+As at 1 January 2017
+2,688
+Net book value
+year
+3,525
+2,688
+4,886
+China Life Insurance Company Limited
+265
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Financial Report
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Investment properties (continued)
+Cost
+As at 1 January 2017
+Additions
+As at 31 December 2017
+Accumulated depreciation
+As at 1 January 2017
+Charge for the
+As at 31 December 2017
+The fair value of investment properties of the Company as at 31 December 2018 amounted to RMB4,886 million (as at
+31 December 2017: RMB2,688 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.
+(c) Investments in subsidiaries
+266
+PRC
+74.27% directly
+RMB4,000 million
+RMB3,400 million
+Asset management
+Pension and annuity
+and indirectly
+AMC HK
+Hong Kong, PRC
+50.00% indirectly
+Suzhou Pension Company
+PRC
+100.00% directly
+Not applicable
+RMB1,991 million
+CL AMP
+CL Wealth
+Golden Phoenix Tree Limited
+Pension Company
+60.00% directly
+PRC
+Principal activities
+Unlisted investments at cost
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+43,543
+39,662
+Notes to the Consolidated Financial Statements (continued)
+Disposals
+For the year ended 31 December 2018
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December 2018:
+Financial Report
+Name
+AMC
+Place of incorporation
+and operation
+Percentage of
+equity interest held
+Registered capital
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investments in subsidiaries (continued)
+Pending lawsuits
+Charge for the year
+(24)
+716,346
+Loans
+41(f)
+445,117
+381,253
+Term deposits
+41(g)
+553,428
+444,279
+Statutory deposits-restricted
+41(b)
+5,653
+5,653
+Available-for-sale securities
+41(i)
+806,050
+858,936
+41(e)
+104,039
+Property, plant and equipment
+41(a)
+43,192
+36,313
+Investment properties
+41(b)
+3,525
+1,401
+Investments in subsidiaries
+41(c)
+43,543
+39,662
+Investments in associates and joint ventures
+41(d)
+137,257
+Held-to-maturity securities
+ASSETS
+797,108
+41(j)
+Deferred tax assets
+Cash and cash equivalents
+Total assets
+41(m)
+28,687
+30,480
+41(n)
+1,381
+47,904
+44,186
+3,176,845
+2,831,375
+China Life Insurance Company Limited
+261
+Notes to the Consolidated Financial Statements (continued)
+Other assets
+Securities at fair value through profit or loss
+3,046
+12
+125,304
+127,544
+Securities purchased under agreements to resell
+41(k)
+9,066
+35,761
+Accrued investment income
+41(1)
+47,790
+50,183
+Premiums receivable
+11
+15,648
+14,121
+Reinsurance assets
+4,364
+For the year ended 31 December 2018
+Financial Report
+Statement of financial position
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+(b) Operating lease commitments - as lessee
+The future minimum lease payments under non-cancellable operating leases are as follows:
+260
+Not later than one year
+Later than one year but not later than five
+Later than five
+years
+Total
+years
+81,217
+4,930
+86,582
+5,202
+86,147
+91,784
+China Life Insurance Company Limited
+As at 31
+December 2018
+RMB million
+Total
+Investments
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+488
+493
+The Group involves in certain lawsuits arising from the ordinary course of business. In order to accurately disclose
+the contingent liabilities for pending lawsuits, the Group analysed all pending lawsuits case by case at the end of each
+interim and annual reporting period. A provision will only be recognised if management determines, based on third-
+party legal advice, that the Group has present obligations and the settlement of which is expected to result in an outflow
+of the Group's resources embodying economic benefits, and the amount of such obligations could be reasonably
+estimated. Otherwise, the Group will disclose the pending lawsuits as contingent liabilities. As at 31 December 2018
+and 2017, 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.
+China Life Insurance Company Limited
+259
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+40 COMMITMENTS
+(a) Capital commitments
+The Group had the following capital commitments relating to property development projects and investments:
+Contracted, but not provided for
+Property, plant and equipment
+As at 31 December 2018
+As at 31
+December 2017
+1,049
+1,306
+411
+300
+76
+2,136
+741
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+As at 31
+December 2018
+As at 31
+December 2017
+Notes
+RMB million
+RMB million
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+254
+RMB million
+530
+As at 31
+December 2017
+784
+1,373
+1,101
+52
+44
+2,474
+1,929
+The operating lease payments charged to profit before income tax for the year ended 31 December 2018 were
+RMB1,444 million (2017: RMB1,204 million).
+(c) Operating lease commitments - as lessor
+The future minimum rentals receivable under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five years
+Later than five years
+Total
+As at 31
+December 2018
+RMB million
+RMB million
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Statement of financial position (continued)
+As at 31 December 2018
+120
+(4,887)
+390
+(95)
+Additions
+907
+280
+10,175
+44
+11,488
+Transfers into investment properties
+(2,194)
+(2,194)
+Disposals
+(155)
+4,282
+(253)
+upon completion
+52,444
+Buildings
+fixtures
+Motor
+vehicles
+Assets
+under
+construction
+Leasehold
+improvements
+Total
+RMB million
+Financial Report
+As at 1 January 2018
+31,628
+6,684
+1,383
+10,951
+1,798
+Transfers
+Office
+equipment
+furniture and
+(344)
+(86)
+(2,061)
+Disposals
+25
+238
+293
+38
+594
+As at 31 December 2018
+(10,123)
+(5,308)
+(797)
+(1,346)
+(17,574)
+Impairment
+As at 1 January 2018
+(16,107)
+(14)
+(1,179)
+(205)
+(556)
+(852)
+As at 31 December 2018
+35,837
+7,458
+1,319
+14,031
+2,146
+60,791
+Accumulated depreciation
+As at 1 January 2018
+(8,998)
+(4,990)
+(940)
+Charge for the year
+(1,150)
+(150)
+Cost
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment
+For the year ended 31 December 2018
+1,877
+Securities sold under agreements to repurchase
+41(0)
+188,932
+85,316
+Annuity and other insurance balances payable
+49,465
+44,820
+Premiums received in advance
+46,650
+18,505
+Other liabilities
+41(p)
+46,660
+39,678
+17
+Deferred tax liabilities
+Derivative financial liabilities
+85,071
+Financial Report
+As at 31
+December 2018
+Notes
+RMB million
+As at 31
+December 2017
+RMB million
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+Investment contracts
+14
+15
+2,216,031
+255,434
+2,025,133
+232,500
+Policyholder dividends payable
+83,910
+41(n)
+3,991
+Current income tax liabilities
+147,278
+144,240
+Retained earnings
+100,392
+110,863
+Total equity
+283,726
+291,159
+Total liabilities and equity
+3,176,845
+2,831,375
+Equity
+China Life Insurance Company Limited
+262
+Notes to the Consolidated Financial Statements (continued)
+41(r)
+Reserves
+7,791
+7,791
+Statutory insurance fund
+Total liabilities
+2,441
+6,081
+20
+20
+558
+(24)
+282
+2,540,216
+Share capital
+35
+28,265
+28,265
+Other equity instruments
+41(q)
+2,893,119
+RMB10,001 million
+82
+RMB10,000 million
+Investment management
+70.00% directly and indirectly
+RMB5,000 million
+Investment management
+Kun Lun Trust • Jizhong Energy Group Loan Collective
+Fund Trust Scheme
+99.98% directly
+RMB5,000 million
+Investment management
+Jiao Yin Guo Xin CLI - China Nonferrous Metal
+Collective Fund Trust Scheme
+99.98% directly
+RMB5,000 million
+Investment management
+Financial Report
+RMB5,410 million
+(d) Investments in associates and joint ventures
+As at 1 January
+Investments in associates and joint ventures
+As at 31 December
+2018
+2017
+RMB million
+RMB million
+104,039
+33,218
+76,427
+27,612
+137,257
+104,039
+Investment management
+China Life Insurance Company Limited
+81.02% directly and indirectly
+268
+RMB6,000 million
+Investment management
+Investment management
+Shan Guo Tou⚫ Jing Tou Corporate Trust Loan
+100.00% directly
+RMB10,000 million
+Investment management
+Collective Funds Trust Scheme
+China Life - China Hua Neng Debt-to-Equity Swap
+RMB10,000 million
+Investment management
+Investment Scheme
+Jiao Yin Guo Xin China Aluminium Co., Ltd.
+99.99% directly
+RMB10,000 million
+100.00% directly
+Supply-side Reform Collective Fund Trust Scheme
+Jian Xin Trust - CL Guo Xin Collective Fund Trust Scheme
+China Life - Yanzhou Coal Mining Debt Investment Scheme
+Chongqing Trust Fund • China Life Qing Hai Yellow
+Bridge Heng Yi 604 Collective Fund Trust Scheme
+Bridge Heng Yi 620 Collective Fund Trust Scheme
+100.00% directly
+Investment management
+Collective Fund Trust Scheme
+River Debt-to-Equity Swap Collective Fund Trust Scheme
+Zhong Xin Jing Cheng • Tianjin Port Group Loans
+Investment management
+100.00% directly
+RMB8,000 million
+RMB9,000 million
+100.00% directly
+Investment management
+RMB10,000 million
+99.99% directly
+Investment management
+(3,991)
+2,266
+As at 1 January 2018
+2,266
+(6,737)
+480
+(3,991)
+249
+(Charged)/credited to other comprehensive income
+- Available-for-sale securities
+1,421
+2,792
+4,462
+480
+902
+(Charged)/credited to net profit
+(6,737)
+(Charged)/credited to net profit
+(1,401)
+902
+As at 1 January 2017
+(6,408)
+(2,670)
+1,072
+(998)
+1,535
+731
+As at 31 December 2017
+(7,543)
+805
+- Available-for-sale securities
+4,148
+4,148
+- Portion of fair value changes on
+available-for-sale securities attributable to
+participating policyholders
+(1,401)
+(Charged)/credited to other comprehensive income
+8
+4,410
+4,174
+deferred tax assets to be recovered within 12 months
+Subtotal
+Deferred tax liabilities:
+China Life Insurance Company Limited
+3,265
+1,715
+6,098
+-
+Total
+RMB million
+6,125
+- deferred tax liabilities to be settled after 12 months
+- deferred tax liabilities to be settled within 12 months
+(6,672)
+(7,983)
+(1,310)
+(2,133)
+Subtotal
+9,363
+- deferred tax assets to be recovered after 12 months
+Deferred tax assets:
+As at 31
+December 2017
+RMB million
+2,515
+1,381
+– Portion of fair value changes on
+available-for-sale securities attributable to
+participating policyholders
+8
+As at 31 December 2018
+China Life Insurance Company Limited
+275
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(n) Deferred tax (continued)
+(ii) The analysis of deferred tax assets and deferred tax liabilities during the
+year
+is as follows:
+As at 31
+December 2018
+RMB million
+(5,308)
+RMB million
+As at 31
+December 2018
+Investments
+RMB million
+19,622
+24,779
+23,258
+21,288
+4,910
+4,116
+47,790
+RMB million
+50,183
+44,361
+525
+5,822
+47,790
+50,183
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+47,265
+RMB million
+As at 31
+December 2017
+December 2018
+(1) Accrued investment income
+Bank deposits
+Debt securities
+Others
+Total
+Current
+Non-current
+Total
+China Life Insurance Company Limited
+274
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+9,066
+35,631
+130
+9,066
+35,761
+As at 31
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Others
+(m) Other assets
+Land use rights
+876
+4,479
+2,779
+28,687
+30,480
+21,268
+24,786
+611
+7,419
+28,687
+30,480
+(n) Deferred tax
+(i) The movements in deferred tax assets and liabilities during the year are as follows:
+Deferred tax assets/(liabilities)
+Financial Report
+Insurance
+RMB million
+5,694
+3,050
+3,269
+2,704
+Disbursements
+Automated policy loans
+Due from related parties
+Others
+Total
+Current
+Non-current
+Total
+(7,982)
+As at 31
+December 2017
+RMB million
+RMB million
+8,840
+15,466
+7,326
+5,605
+4,162
+Investments receivable and prepaid
+(10,116)
+(p) Other liabilities
+1,381
+Total
+RMB million
+As at 1 January 2017
+Other comprehensive income
+53,860
+4,959
+30,118
+28,225
+RMB million
+26,954
+for the year
+(8,239)
+(8,239)
+Appropriation to reserves
+3,218
+1,927
+3,218
+144,116
+RMB million
+RMB million
+RMB million
+China Life Insurance Company Limited
+277
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+Financial Report
+(r) Reserves
+Unrealised
+gains/(losses)
+from
+Statutory
+available-for-sale
+Share premium
+securities
+Discretionary
+General
+reserve fund
+reserve
+RMB million
+8,363
+holders.
+As at 31 December 2017
+(3,280)
+53,860
+(6,010)
+34,611
+33,370
+31,447
+147,278
+(s) Provisions and contingencies
+As at 31 December 2018
+The following is a summary of the significant contingent liabilities:
+Pending lawsuits
+278
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+488
+493
+China Life Insurance Company Limited
+5,768
+1,275
+3,218
+33,336
+30,152
+30,172
+144,240
+As at 1 January 2018
+53,860
+(3,280)
+33,336
+30,152
+30,172
+144,240
+Other comprehensive income
+for the year
+(2,730)
+(2,730)
+Appropriation to reserves
+1,275
+53,860
+Net deferred tax liabilities
+Refer to Note 32 for the information of distribution to other equity instruments holders for the year ended 31 December
+2018. As at 31 December 2018, there were no accumulated distributions unpaid attributable to other equity instruments
+7,791
+188,932
+85,316
+As at 31 December 2018, bonds with a carrying value of RMB138,404 million (as at 31 December 2017: RMB78,140
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from repurchase
+transactions entered into by the Company in the interbank market.
+For debt repurchase transactions through the stock exchange, the Company is required to deposit certain exchange-
+traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchange's
+regulation which should be no less than the balance of the related repurchase transaction. As at 31 December 2018,
+the carrying value of securities deposited in the collateral pool was RMB170,873 million (as at 31 December 2017:
+RMB139,314 million). The collateral is restricted from trading during the period of the repurchase transaction.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+85,316
+Total
+As at 31
+December 2017
+RMB million
+Interest payable to policyholders
+11,739
+9,614
+Salary and welfare payable
+10,124
+9,270
+As at 31
+December 2018
+RMB million
+188,932
+85,316
+188,932
+(3,991)
+276
+(o) Securities sold under agreements to repurchase
+Interbank market
+Stock exchange market
+Total
+Maturing:
+Within 30 days
+Total
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+124,518
+73,683
+64,414
+11,633
+Brokerage and commission payable
+Financial Report
+5,268
+Payable to constructors
+46,660
+39,678
+Non-current
+Total
+(q) Other equity instruments
+Equity attributable to equity holders of the Company
+Equity attributable to ordinary equity holders of the Company
+Current
+Equity attributable to other equity instruments holders of the Company
+39,678
+As at 31
+December 2018
+RMB million
+283,726
+275,935
+7,791
+As at 31
+December 2017
+RMB million
+291,159
+283,368
+46,660
+39,678
+46,660
+Total
+3,440
+2,633
+Agent deposits
+1,793
+1,906
+Tax payable
+500
+639
+Stock appreciation rights (Note 31)
+490
+833
+Interest payable of debt instruments
+190
+78
+Others
+13,116
+9,046
+5,659
+After 90 days
+reserve
+fund
+Maturing:
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+156,407
+95,155
+319,821
+381,253
+346,324
+2,800
+553,428
+444,279
+As at 31 December 2018, the Company's term deposits of RMB14,691 million (as at 31 December 2017: same) were
+deposited in banks to back overseas borrowings and are restricted to use. Please refer to Note 9.3 for the details.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(h) Statutory deposits - restricted
+77,200
+Contractual maturity schedule:
+445,117
+44,289
+302,952
+273,296
+445,117
+381,253
+As at 31
+December 2018
+RMB million
+31,517
+As at 31
+RMB million
+167,248
+128,473
+135,164
+130,913
+98,416
+90,350
+December 2017
+Within one year
+After one year but within five years
+Total
+Funds
+As at 31
+December 2018
+As at 31
+December 2017
+RMB million
+RMB million
+28,097
+24,230
+Equity securities
+180,151
+183,508
+195,244
+21,514
+13,495
+73,078
+52,545
+486,348
+157,689
+Subtotal
+Others (i)
+Subordinated bonds/debts
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+500
+3,553
+5,153
+2,100
+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 compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying
+off debts during liquidation proceedings.
+(i) Available-for-sale securities
+Available-for-sale securities, at fair value
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+107,957
+142,165
+As at 31
+December 2017
+RMB million
+As at 31
+December 2018
+RMB million
+241,808
+212,133
+200,178
+147,079
+148,494
+806,050
+716,346
+266,986
+109,506
+696,544
+624,715
+806,050
+716,346
+The estimated fair value of all held-to-maturity securities was RMB842,839 million as at 31 December 2018 (as at 31
+December 2017: RMB692,282 million).
+As at 31 December 2018, an impairment loss of RMB29 million (2017: nil) for the investment of held-to-maturity
+securities has been made by the Company. In 2018, the Company has not sold the unexpired held-to-maturity securities
+(2017: same).
+Debt securities - Contractual maturity schedule
+Maturing:
+91,631
+125,866
+179,852
+As at 31
+December 2017
+RMB million
+Within 30 days
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(e) Held-to-maturity securities
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds/debts
+Total
+Debt securities
+Listed in Mainland, PRC
+Unlisted
+Total
+Unlisted debt securities include those traded on the Chinese interbank market.
+As at 31
+December 2018
+RMB million
+Within one year
+443,203
+After one year but within five years
+After ten years
+China Life Insurance Company Limited
+(f) Loans
+Policy loans
+Other loans
+Total
+270
+Maturing:
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+After one year but within five years
+After five years but within ten years
+Total
+(g) Term deposits
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+Total
+After ten years
+For the year ended 31 December 2018
+Notes to the Consolidated Financial Statements (continued)
+Financial Report
+Total
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+Financial Report
+16,816
+22,385
+137,699
+112,788
+278,851
+288,260
+372,684
+292,913
+806,050
+716,346
+China Life Insurance Company Limited
+269
+After five years but within ten years
+Financial Report
+Within one year
+90,865
+4,323
+77,557
+76,845
+Equity securities
+Funds
+12,456
+8,682
+1,206
+Common stocks
+42,017
+Wealth management products
+1,506
+Subtotal
+47,747
+50,699
+Total
+33,785
+61,516
+71,020
+8,985
+443,203
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j) Securities at fair value through profit or loss
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Others
+Subtotal
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+77
+2,021
+5,254
+125,304
+486,348
+127,544
+Listed in Mainland, PRC
+6,552
+7,187
+11,305
+6,587
+47,747
+50,699
+125,304
+79
+127,544
+China Life Insurance Company Limited
+273
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+Financial Report
+91,971
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(k) Securities purchased under agreements to sell
+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.
+87
+36,846
+29,803
+35,383
+168
+24,974
+292
+Unlisted
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+42,006
+51,579
+77,557
+76,845
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+Total
+Financial Report
+Debt securities
+88,224
+Listed overseas
+163,319
+858,936
+797,108
+China Life Insurance Company Limited
+271
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(i) Available-for-sale securities (continued)
+(i) Other available-for-sale securities mainly include unlisted equity investments and private equity funds, etc.
+Debt securities
+Listed in Mainland, PRC
+Unlisted
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+20,759
+China Life Insurance Company Limited
+20,559
+Equity securities
+Common stocks
+143,431
+97,542
+129,388
+Preferred stocks
+32,707
+31,651
+Wealth management products
+31,348
+40,119
+Others (i)
+52,572
+41,123
+Subtotal
+352,029
+333,146
+Available-for-sale securities, at cost
+Others (i)
+Total
+Total
+As at 31
+December 2017
+272
+Debt securities - Contractual maturity schedule
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+After ten years
+797,108
+Total
+As at 31
+December 2017
+RMB million
+11,379
+41,765
+As at 31
+December 2018
+RMB million
+149,895
+166,622
+As at 31
+December 2018
+RMB million
+858,936
+Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
+equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
+price quotation and wealth management products.
+353,905
+RMB million
+52,950
+44,328
+433,398
+398,875
+486,348
+443,203
+93,349
+102,018
+41,507
+162
+132
+215,342
+218,917
+372,588
+55,066
+210,805
+included in
+Benefits
+salary
+Pension
+scheme
+Deferred
+payment
+included in
+included
+Deferred
+payment
+Actual paid
+total
+salaries
+bonuses
+income
+salary income
+in kind contributions
+Total
+Subtotal of
+in total
+RMB thousand
+Name
+Performance
+related
+320.0
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
+December 2017 are as follows:
+320.0
+Yang Mingsheng
+320.0
+320.0
+300.0
+320.0
+320.0
+300.0
+(i) Yang Mingsheng resigned as executive director on 13 November 2018.
+Basic
+(ii) Wang Bin was appointed as executive director on 3 December 2018.
+(iv) Lin Dairen resigned as executive director on 19 December 2018.
+(v) Yuan Changqing was appointed as non-executive director on 11 February 2018.
+(vi) Wang Sidong resigned as non-executive director on 12 January 2018.
+(vii) Yang Mingsheng, Wang Bin, Su Hengxuan and other non-executive directors did not receive remuneration from
+the Company.
+(viii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+(a) Directors' and chief executive's emoluments (continued)
+(iii) Su Hengxuan was appointed as non-executive director on 11 July 2018 and re-designated as executive director on
+20 December 2018.
+Lin Dairen
+680.4
+1,400.0
+2,484.6
+680.4
+1,804.2
+Xu Haifeng
+1,134.0
+1,134.0
+2,268.0
+680.4
+129.0
+87.6
+2,484.6
+1,804.2
+Robinson Drake Pike
+250.0
+70.0
+320.0
+Leung Oi-Sie Elsie
+320.0
+320.0
+87.6
+129.0
+680.4
+2,268.0
+2,800.0
+840.0
+131.2
+87.6
+3,018.8
+840.0
+2,178.8
+Miao Jianmin
+Liu Jiade
+Liu Huimin
+1,400.0
+Yin Zhaojun
+Chang Tso Tung Stephen
+250.0
+70.0
+320.0
+320.0
+320.0
+Xu Hengping
+1,134.0
+1,134.0
+Wang Sidong
+Tang Xin
+(ii) Operating lease commitments - as lessee
+Robinson Drake Pike
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+1,001
+749
+1,365
+1,080
+52
+44
+2,418
+1,873
+(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 years
+Later than five years
+Total
+Financial Report
+As at 31
+December 2018
+RMB million
+91,514
+90,292
+4,588
+86,926
+Tang Xin
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(t) Commitments
+(i) Capital commitments
+Capital commitments of the Company relating to property development projects and investments:
+Contracted, but not provided for
+Investments
+As at 31
+December 2017
+Property, plant and equipment
+As at 31
+December 2018
+RMB million
+As at 31
+December 2017
+RMB million
+The future minimum lease payments under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five
+years
+Later than five years
+Total
+85,978
+4,314
+Total
+RMB million
+324
+158
+1,790.0
+136.9
+97.7
+2,024.6
+Xu Hengping
+1,432.0
+134.7
+97.7
+1,664.4
+Lin Dairen (iv)
+Xu Haifeng
+134.7
+97.7
+1,664.4
+Yuan Changqing (v)(vii)
+Wang Sidong (vi)(vii)
+Liu Huimin (vii)
+China Life Insurance Company Limited
+Yin Zhaojun (vii)
+Chang Tso Tung Stephen
+1,432.0
+280
+Total
+Pension scheme
+contributions
+524
+177
+124
+9
+972
+344
+China Life Insurance Company Limited
+279
+Financial Report
+RMB thousand
+Notes to the Consolidated Financial Statements (continued)
+42 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 2018 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 2018 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 2018 are as follows:
+Name
+Yang Mingsheng (i)(vii)
+Wang Bin (ii)(vii)
+Su Hengxuan (iii)(vii)
+Remuneration paid Benefits in kind
+For the year ended 31 December 2018
+250.0
+118.8
+320.0
+139.7
+129.0
+79.2
+1,366.7
+139.7
+1,227.0
+Wang Cuifei
+527.5
+914.8
+1,442.3
+196.4
+117.7
+1,756.4
+1,756.4
+Li Guodong
+210.7
+182.6
+393.3
+67.9
+1,158.5
+46.8
+650.2
+Zhan Zhong
+Miao Ping
+1,148.0
+1,148.0
+2,296.0
+688.8
+129.0
+87.6
+2,512.6
+688.8
+1,823.8
+Shi Xiangming
+571.6
+720.2
+1,291.8
+195.2
+127.2
+1,614.2
+1,614.2
+Xiong Junhong
+508.3
+508.0
+508.0
+Financial Report
+489
+12,549
+438
+8,684
+12,987
+Number of individuals
+For the year ended 31 December
+2018
+2017
+4
+1
+For the year ended 31 December 2018, 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 as
+compensation for loss of office (2017: 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.
+43 EVENTS AFTER THE REPORTING PERIOD
+On 20 March 2019, the Company issued the bonds for capital replenishment (the “Bond”) in the national inter-bank
+bond market in a principal amount of RMB35 billion, and completed the issuance on 22 March 2019. The Bond has
+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.
+成己为人
+成人达己
+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.
+70.0
+8,195
+2017
+RMB thousand
+RMB thousand
+2018
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2017 were restated
+based on the finalised amounts determined during 2018.
+The supervisors received the compensation amounts disclosed above during their term of office in 2018 and 2017.
+283
+Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+(c) Five highest paid individuals
+For the year ended 31 December 2018, the five individuals whose emoluments were the highest in the Company include
+three directors (2017: two directors and one supervisor).
+RMB thousand
+Details of the remuneration of the five highest paid individuals are as follows:
+Total
+The emoluments fell within the following bands:
+China Life Insurance Company Limited
+RMB0 RMB1,000,000
+RMB1,000,001 - RMB2,000,000
+RMB2,000,001 - RMB3,000,000
+RMB3,000,001 - RMB4,000,000
+284
+RMB4,000,001 - RMB4,500,000
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+in total
+China Life Insurance Company Limited
+Total
+Xiong Junhong (iii) (ix)
+Luo Zhaohui (iv)(ix)
+Wang Cuifei (v)
+Li Guodong (vi)
+Song Ping (vii)
+Huang Xin (viii)
+Remuneration paid
+Benefits in kind
+Pension scheme
+contributions
+Total
+RMB thousand
+716.0
+65.8
+47.5
+829.3
+626.5
+68.8
+50.2
+745.5
+Shi Xiangming
+Jia Yuzeng (ii)
+Name
+Financial Report
+320.0
+in total
+320.0
+Leung Oi-Sie Elsie
+250.0
+50.0
+300.0
+300.0
+300.0
+593.8
+Financial Report
+The directors and chief executive received the compensation amounts disclosed above during their term of office in 2018
+and 2017.
+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.
+China Life Insurance Company Limited
+281
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2018
+42 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 2018 are as
+follows:
+The compensation amounts disclosed above for these directors and the chief executive for the year ended 31 December
+2017 were restated based on the finalised amounts determined during 2018.
+180.7
+Miao Ping (i)
+902.7
+(b) Supervisors' emoluments (continued)
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2017 are as
+follows:
+Performance
+Subtotal of
+Deferred
+payment
+related
+salary
+included in
+Name
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR MANAGEMENT'S
+REMUNERATION (continued)
+Basic salaries
+income
+salary income
+in kind
+Pension
+scheme
+contributions
+Deferred
+payment
+Actual paid
+128.2
+included
+included
+bonuses
+For the year ended 31 December 2018
+Benefits
+Notes to the Consolidated Financial Statements (continued)
+99.1
+66.5
+442.8
+402.9
+168.4
+670.4
+282.0
+71.3
+472.1
+99.1
+(i) Miao Ping retired as the Chairman of the Board of Supervisors due to the expiration of the fifth session of the
+Board of Supervisors on 6 June 2018.
+282
+China Life Insurance Company Limited
+(x) The above remuneration was calculated based on the relevant employment period during the reporting period.
+(vi) Li Guodong resigned as employee representative supervisor on 2 January 2018.
+(vii) Song Ping was appointed as employee representative supervisor on 15 March 2018.
+(viii) Huang Xin was appointed as employee representative supervisor on 20 June 2018.
+(ix) Xiong Junhong and Luo Zhaohui did not receive remuneration from the Company.
+277.2
+(iv) Luo Zhaohui was appointed as non-employee representative supervisor on 11 February 2018.
+(iii) Xiong Junhong resigned as supervisor on 23 February 2018.
+(ii) Jia Yuzeng was appointed as the Chairman of the Board of Supervisors on 11 July 2018.
+(v) Wang Cuifei retired as employee representative supervisor due to the expiration of the fifth session of the Board of
+Supervisors on 6 June 2018.
+160,000
+Short-team insurance
+premiums
+Embedded value (RMB million)
+As at 31 December 2018
+As at 31 December 2017
+795,052
+8.3%
+734,172
+0
+During the Reporting Period, net profit attributable to equity holders of the Company was RMB11,395 million, a
+decrease of 64.7% year-on-year resulting from a significant decrease in the income from open market equity investments
+of the Company due to the overall volatility and downward trend of the equity market. As at 31 December 2018, the
+embedded value of the Company was RMB795,052 million, an increase of 8.3% from the end of 2017. The value of one
+year's sales was RMB49,511 million, a decrease of 17.6% from 2017, the year-on-year decline of which was narrowed by
+6.02 percentage points compared to the first half of 2018, and the new business margin of one year's sales was enhanced
+from 2017. The number of in-force policies of long-term insurance of the Company was 285 million, an increase of
+6.3% from the end of 2017. The Policy Persistency Rates (14 months and 26 months) reached 91.10% and 86.00%, an
+increase of 0.20 and 0.30 percentage point compared to 2017, respectively.
+2017
+II. BUSINESS ANALYSIS
+(I) Insurance Business
+1. Gross written premiums categorized by business
+For the
+year ended 31 December
+2018
+Management Discussion and Analysis
+1.8%
+RMB million
+Change
+Renewal premiums
+320,000 480,000
+Single premiums
+First-year regular
+premiums
+China Life Insurance Company Limited
+Renewal premiums
+2.
+Life Insurance Business
+3.
+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 = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of
+long-term insurance contracts)
+23
+Management Discussion and Analysis
+During the Reporting Period, the Company continued to optimize its premiums payment structure and product mix.
+By significantly reducing single premiums from the bancassurance channel, first-year regular premiums amounted to
+RMB104,419 million, which accounted for 90.16% in long-term first-year premiums, an increase of 26.17 percentage
+points from 2017; single premiums were RMB11,399 million, a decrease of 82.1% year-on-year, and the percentage
+of single premiums in long-term first-year premiums was reduced to 9.84% from 36.01% of 2017. Renewal premiums
+amounted to RMB364,678 million (an increase of 26.6% year-on-year) and accounted for 68.06% of the gross written
+premiums (an increase of 11.79 percentage points from 2017). Renewal premiums became a more important driving
+factor for business growth. The Company continued to push forward diversification of its products, through which the
+percentage of premiums of the top-five products in long-term first-year premiums decreased by 17.86 percentage points
+from 2017. The protection-oriented businesses developed rapidly and the percentage of premiums from designated
+protection-oriented products in first-year regular premiums increased by 6.73 percentage points from 2017.
+Premium breakdown (RMB million)
+China Life Insurance Company Limited
+Short-team insurance
+premiums
+24
+47,068
+63,671
+2017
+104,419
+288,106
+55,330
+11,399
+2018
+364,678
+Single premiums
+First-year regular
+premiums
+113,121
+First-year business
+0.9%
+429,822
+First-year regular
+9,430
+7,721
+22.1%
+Renewal business
+32,909
+26,863
+22.5%
+Accident Insurance Business
+14,672
+24.6%
+14,436
+First-year business
+14,231
+14,106
+Single
+14,076
+13,962
+0.8%
+First-year regular
+155
+Numbers may not be additive due to rounding.
+1.6%
+33,124
+41,275
+Single
+106,212
+168,909
+-37.1%
+Single
+11,378
+63,653
+-82.1%
+First-year regular
+94,834
+105,256
+-9.9%
+Renewal business
+331,328
+260,913
+27.0%
+Health Insurance Business
+83,614
+67,708
+23.5%
+First-year business
+50,705
+40,845
+24.1%
+437,540
+1.
+“Pull together and we will conquer all difficulties". We
+will remain true to our original aspiration, keep in mind
+our mission, work together and strive to continually
+create value for our shareholders and customers, with
+a view to writing a new chapter that lives up to our
+mission and the new era!
+734,172
+2.68
+Analysis of Specific Items
+36
+Technological Innovation and Operations
+and Services
+Performance of the Corporate
+Social Responsibility
+Future Prospect and Risk Analysis
+41
+43
+43
+25
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Ms. Yang Hong, Mr. Ruan Qi, Mr. Xiao Jianyou, Mr. Li Mingguang, Mr. Su Hengxuan, Mr. Xu Haifeng, Mr. Zhao Lijun, Mr. Zhao Peng, Mr. Zhan Zhong
+I. REVIEW OF BUSINESS OPERATIONS IN 2018
+In 2018, the macro environment was complicated and volatile, and the restructuring of the insurance sector exceeded
+expectation in terms of both the depth and the breadth. Due to the combined effects of multiple factors, the
+development of the Chinese life insurance industry was under pressure. The Company adhered to the overall keynote of
+making progress with stability, implemented the “new development” concepts, made efforts to meet the requirements of
+high-quality development, and overcame obstacles and forged ahead with concerted efforts. The Company continued to
+maintain the value-oriented principle, pushed forward various tasks and achieved a steady momentum of development.
+During the Reporting Period, the Company's gross written premiums amounted to RMB535,826 million, an increase of
+4.7%
+year-on-year. The Company's market share, remaining the first place in the industry, was approximately 20.4%, an
+increase of 0.7 percentage point from the end of 2017. As at 31 December 2018, the embedded value of the Company
+reached RMB795,052 million, an increase of 8.3% from the end of 2017.
+China Life Insurance Company Limited
+22
+In 2018, the Chinese economy slowed down slightly, with interest rate trending down in the bond market and a decline
+in the stock market second only to that in 2008. The Company continued to implement its investment strategies of
+making long-term investment, value investment and prudent investment, and maintained a stable net investment yield
+by seizing the opportunity of the relatively high interest rates at certain stages and increasing allocation in long-term
+fixed-income assets. However, due to a significant decrease in the equity market, both the spread income and the fair
+value through profit or loss of stocks and funds were negative, which caused a significant year-on-year decline of the
+gross investment yield of the Company.
+Key Performance Indicators
+RMB million
+Management Discussion and Analysis
+2018
+From left to right:
+2017
+Business Analysis
+Review of Business Operations in 2018
+144
+Chairman's Statement
+China Life Insurance Company Limited 2
+19
+services were in full swing. The Company, meanwhile,
+firmly held onto the bottom line of risks with its
+enhanced capability on risk control and prevention. All
+of the above were the results of the excellent leadership
+of the previous session of the Board and also the
+diligent work of all employees of the Company. On the
+new journey towards high-quality development, the
+new session of the Board will work together with the
+Company's management to carry forward the business of
+China Life with full confidence and capability.
+LOOKING FORWARD TO THE
+FUTURE, WE WILL REMAIN TRUE
+TO OUR ORIGINAL ASPIRATION
+AND STEP ON A NEW JOURNEY
+OF REVITALIZATION.
+Life insurance is a business of responsibility and care.
+The predecessor of the Company was born in 1949,
+and at the date of its establishment, the Company was
+determined to build itself into a long-standing company
+to deliver insurance protection and care to millions of
+families. This is the original aspiration and mission of
+China Life and also the fundamental impetus to push
+forward generations of its employees.
+Time and tide wait for no man. With confidence
+and expectations, we have entered a new era when
+the Chinese economy has transformed from high-
+speed growth to high-quality development, and
+the transformation and upgrading of the insurance
+sector is moving to a deeper level; customer demands
+diversify further and FinTech is reshaping the insurance
+landscape. Now that the relay baton is in our hands,
+how can we navigate China Life, an ocean liner, to ride
+the wind and waves to lead in the new era? How can
+we maintain the undertaking for which generations
+of China Life employees have devoted their efforts
+and keep it everlasting? Facing new situations and
+requirements for development, we have set a strategic
+target on "China Life Revitalization" based on the
+Company's reality. Not long ago, on the "China Life
+2019 Open Day”, the new session of the Company's
+management released and interpreted the overall
+strategic planning of “China Life Revitalization”. In
+the future, centering on the target of “China Life
+Revitalization", we will continue to focus on business
+value, strengthen sales force, maintain stable growth,
+upgrade technologies, improve customer services
+and safeguard against risks, and make great efforts to
+complete three transformations: the transformation
+from being sales-oriented to attaching equal importance
+to sales and services, the transformation from being
+human-driven to being human- and technology-
+driven, and the transformation from being scale-
+oriented to the coordination of scale and value. We will
+continue to build the four driving engines of "Talent,
+Mechanism, Innovation and Integration" to improve
+our development quality, enhance our urban market
+competence, expand and strengthen the sales force,
+reinforce the brand image and boost the spirit of China
+Life. This is the inheritance and development of the
+original aspiration and mission of the Company which
+is to protect the good life and strive to become a world-
+class life insurance company, and also the mission
+and responsibility of the new session of the Board and
+the management; more importantly, it is the solemn
+commitment of China Life to its investors, shareholders,
+customers and employees. Only in this way can we live
+up to the history, the era and ourselves!
+A journey of a thousand miles begins with a single
+step. The year 2019 marks the beginning of "China
+Life Revitalization", in which we will lay firm steps
+in market-oriented reforms, customer experience
+improvement, stronger competence in the large- and
+medium-sized cities and sales force transformations.
+Furthermore, we will strengthen the management of
+assets and liabilities, push forward the construction
+of a comprehensive risk management system and
+22
+Chairman's Statement
+By Order of the Board
+تھے
+濱
+Wang Bin
+Chairman
+China Life Insurance Company Limited
+20
+Beijing, China
+27 March 2019
+03 Management Discussion and Analysis
+incorporate the compliance concept in the whole process
+of operations so as to lay a sound foundation for the
+development of world-class life insurance company.
+Gross written premiums
+535,826
+511,966
+agent channel
+42,839
+53,170
+6,357
+6,536
+314
+410
+91.10
+90.90
+86.00
+60,117
+85.70
+4.13
+Embedded value
+Number of in-force policies of long-term insurance (hundred million)
+As at
+31 December
+2018
+As at
+31 December
+2017
+795,052
+2.85
+4.69
+49,511
+32,253
+11,395
+Premiums from new policies
+171,148
+223,860
+Including: First-year regular premiums
+104,419
+113,121
+First-year regular premiums with a payment duration
+of ten years or longer
+41,635
+66,003
+Renewal premiums
+364,678
+288,106
+Gross investment income
+95,148
+136,164
+Net profit attributable to equity holders of the Company
+Value of one year's sales
+1
+Including: Exclusive individual
+Bancassurance channel
+Group insurance channel
+Policy Persistency Rate (14 months) (%) 2
+Policy Persistency Rate (26 months) (%) 2
+Surrender Rate (%) 3
+Notes:
+7.6%
+640,000 800,000
+120.000
+79,241
+First-year regular
+389
+272
+Single
+90,629
+90,240
+79,513
+353,668
+408,278
+Exclusive Individual Agent Channel
+31,880
+37.3%
+100,000
+First-year business of long-term insurance
+80,000
+Renewal business
+253,586
+23,239
+First-year regular
+59,777
+8,642
+Single
+80,731
+316,930
+31,881
+113,505
+76,841
+Bancassurance Channel
+9,453
+11,835
+Short-term insurance business
+First-year business of long-term insurance
+43,785
+10.9%
+60,000
+2. Gross written premiums categorized by channel
+25
+China Life Insurance Company Limited
+During the Reporting Period, due to a significant decrease in single premiums and the proactive restructuring of the
+insurance industry, gross written premiums from the life insurance business of the Company amounted to RMB437,540
+million, an increase of 1.8% year-on-year. The Company made great efforts in the development of protection-oriented
+insurance businesses. In particular, gross written premiums from the health insurance business amounted to RMB83,614
+million, an increase of 23.5% year-on-year, and gross written premiums from the accident insurance business were
+RMB14,672 million, an increase of 1.6% year-on-year.
+Note: Single premiums in the above table include premiums from short-term insurance business.
+4.7%
+For the year ended 31 December
+511,966
+Total
+33.6%
+330
+441
+Renewal business
+28
+535,826
+Management Discussion and Analysis
+2018
+RMB million
+59,777
+40,000
+20,000
+0
+-85.5%
+23,239
+8,642
+2017
+2018
+Single premiums
+First-year regular
+premiums
+Renewed premiums
+245,000 sales representatives
+Monthly average active insurance planners for
+long-term business increased by 34.5%
+2017
+20,954
+Renewal business
+20,954
+31,880
+In 2018, economic and financial situations at home and abroad were complicated and challenging, and the insurance
+industry underwent proactive restructuring. The Company adhered to the operating guideline of “prioritizing value,
+strengthening sales force, optimizing business structure, achieving stable growth and safeguarding against risks",
+proactively adjusted its business structure and pushed forward product diversification, and made great efforts on
+developing the designated protection-oriented businesses and short-term insurance business. The Company continually
+implemented the sales force development strategy of quality improvement and size expansion by focusing on quality
+improvement. The Company continued to optimize the structure of sales force by raising recruitment standards,
+tightening performance assessment, improving management and reinforcing dismissal of low-performance agents. As at
+the end of the Reporting Period, the total number of sales force from all channels amounted to 1.722 million and the
+quality of sales force was effectively improved.
+Management Discussion and Analysis
+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.
+2.
+1. Other channels mainly include supplementary major medical expenses insurance, tele-sales, etc.
+Notes:
+Renewal Premiums from the Exclusive
+Individual Agent Channel (RMB million)
+511,966
+Total
+26
+China Life Insurance Company Limited
+15,881
+21,052
+Short-term insurance business
+535,826
+2018
+2017
+0
+43,785
+China Life Insurance Company Limited
+Long-term premiums from the
+bancassurance channel (RMB million)
+Bancassurance Channel. In 2018, the bancassurance channel made more efforts in its business restructuring,
+significantly reduced single premiums, focused on the development of regular premium business, constantly improved
+the quality of sales force, and the new business margin of one year's sales of the channel enhanced consistently. During
+the Reporting Period, single premiums from the channel were significantly reduced to RMB8,642 million from
+RMB59,777 million of 2017, a decrease of 85.5% year-on-year. Accordingly, gross written premiums were RMB76,841
+million, a decrease of 32.3% year-on-year. First-year regular premiums were RMB23,239 million (a year-on-year
+increase of 10.9%), which accounted for 72.89% of long-term first-year business (an increase of 46.93 percentage points
+from 2017). Renewal premiums were RMB43,785 million (a year-on-year increase of 37.3%) which accounted for
+56.98% of the gross written premiums (a year-on-year increase of 28.89 percentage points). The new business margin of
+one year's sales of the channel increased by 10.74 percentage points from 2017. As at the end of the Reporting Period,
+the number of sales representatives in the bancassurance channel was 0.245 million. In particular, the monthly average
+active insurance planners for long-term business in the bancassurance channel increased by 34.5% year-on-year.
+Management Discussion and Analysis
+27
+China Life Insurance Company Limited
+Monthly average productive agents increased by 2.6%
+agents
+1.439 million exclusive individual
+140,000 210,000 280,000 350,000
+253,586
+25.0%
+316,930
+70,000
+1,641
+2,314
+Exclusive Individual Agent Channel. In 2018, the exclusive individual agent channel achieved continuous and steady
+growth and further optimized the business structure by focusing on business value, making efforts on sales management
+transformation and upgrade, strengthening the coordinated development among business, sales force and day-to-
+day management. During the Reporting Period, gross written premiums from the exclusive individual
+agent channel
+amounted to RMB408,278 million, an increase of 15.4% year-on-year. First-year regular premiums were RMB79,241
+million, which accounted for 99.66% of long-term first-year premiums. In particular, the percentages of first-year
+regular premiums with a payment duration of five years or longer and first-year regular premiums with a payment
+duration of ten years or longer in first-year regular premiums were 61.65% and 46.35%, respectively. Renewal premiums
+amounted to RMB316,930 million, an increase of 25.0% year-on-year, which significantly drove the growth of gross
+written premiums from this channel. The new business margin of one year's sales of the channel in the second half of
+2018 increased by 15.27 percentage points compared with the same period of 2017, which narrowed the year-on-year
+decline in the value of one year's sales compared with the first half of 2018. As at the end of the Reporting Period, the
+number of exclusive individual agents was 1.439 million. The monthly average productive agents increased by 2.6%
+year-on-year. Besides, the Company accelerated the systematic operation of new agent development and agent manager
+cultivation in order to enhance management efficiency, and actively accelerated the development of the protection-
+oriented business. The monthly average number of agents selling designated protection-oriented insurance products
+increased by 43.4% year-on-year.
+Short-term insurance business
+943
+1,004
+First-year regular
+3,425
+Single
+4,368
+Renewal business
+3,487
+26,207
+26,404
+Group Insurance Channel
+894
+1,175
+Renewal business
+First-year business of long-term insurance
+1,649
+2,483
+Short-term insurance business
+984
+999
+First-year regular
+80
+2
+Single
+1,064
+937
+935
+18,586
+24,303
+Other Channels¹
+20,840
+21,268
+First-year business of long-term insurance
+14.88%
+Common stocks
+178,710
+5.76%
+173,450
+6.31%
+Funds
+101,236
+3.42%
+3.68%
+Bank wealth management products
+32,854
+1.06%
+409,528
+106,271
+13.68%
+Bonds
+Equity financial assets
+40,327
+1,309,831
+42.20%
+1,188,606
+43.17%
+Debt-type financial products²
+351,277
+11.32%
+301,761
+10.96%
+Other fixed-maturity investments³
+186,787
+6.01%
+154,522
+5.61%
+424,656
+1.46%
+Other fixed-maturity investments include policy loans, statutory deposits-restricted, bank wealth management products, and
+interbank certificates of deposits, etc.
+106,821
+3,104,014
+100.00%
+2,753,124
+100.00%
+China Life Insurance Company Limited
+34
+Total
+Notes:
+The figures as at the end of last year were adjusted on the same basis.
+2.
+3.
+4.
+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.
+16.32%
+1.
+5.87%
+161,472
+6.50%
+3.44%
+94,515
+3.43%
+Investment properties
+9,747
+0.31%
+3,064
+0.11%
+Cash and others
+60,714
+1.96%
+84,771
+3.08%
+Investments in associates and joint ventures
+201,661
+Other equity investments
+449,400
+Life insurance business
+559,341
+19,646
+21,871
+-10.2%
+During the Reporting Period, insurance benefits and claims expenses rose by 2.8% year-on-year due to an increase in
+reserves for insurance liabilities. In particular, health insurance business rose by 17.9% year-on-year due to the health
+insurance business growth; accident insurance business rose by 10.7% year-on-year due to an increase in claims expenses
+of certain business. Investment contract benefits rose by 15.6% year-on-year due to an increase in the scale of the
+universal insurance accounts. Policyholder dividends resulting from participation in profits declined by 10.2% year-on-
+year due to a decrease in investment yield from participating accounts.
+6. Analysis of underwriting and policy acquisition costs and other expenses
+32
+China Life Insurance Company Limited
+For the
+RMB million
+2018
+2017
+Change
+Underwriting and policy acquisition costs
+62,705
+year ended 31 December
+participation in profits
+Policyholder dividends resulting from
+Investment contract benefits
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money market funds as at 31
+December 2018 and 31 December 2017 were RMB4,635 million and RMB6,942 million, respectively.
+412,876
+409,410
+0.8%
+Health insurance business
+Accident insurance business
+59,689
+50,624
+17.9%
+6,654
+6,009
+10.7%
+9,332
+8,076
+15.6%
+64,789
+18.02%
+-3.2%
+4,116
+33
+Management Discussion and Analysis
+1. Investment Portfolios
+As at the end of the Reporting Period, our investment assets categorized by investment object are set out as below:
+Investment category
+RMB million
+China Life Insurance Company Limited
+As at 31 December 2018
+Amount
+Percentage
+Fixed-maturity financial assets
+2,407,236
+77.55%
+2,094,289
+76.06%
+Term deposits
+As at 31 December 2017¹
+Amount
+Percentage
+In 2018, the global economic growth was differentiated, the growth rate of major economies other than that of the
+United States slowed down significantly and the global stock markets saw a widespread decline. The endogenetic
+driving force for the growth of the Chinese economy remained to be enhanced, the marginal pulling effects from
+external demands decreased, and the economic growth decelerated. The interest rate of domestic bond market declined
+in general, and the stock market plummeted. In respect of the allocation of general categories of assets, the Company
+continued to increase its allocation in long-term fixed-income assets at high interest rates to optimize the asset-liability
+matching; selected high-quality debt-type financial products and strictly controlled credit risk; and pushed forward
+structural adjustment of open
+market equity portfolio by selecting stocks with low valuations and high dividends. As at
+the end of the Reporting Period, the Company's investment assets reached RMB3,104,014 million, an increase of 12.7%
+from the end of 2017.
+(II) Investment Business
+Management Discussion and Analysis
+4,601
+-10.5%
+Administrative expenses
+37,486
+35,953
+4.3%
+Other expenses
+7,642
+6,426
+18.9%
+Statutory insurance fund contribution
+1,097
+1,068
+2.7%
+During the Reporting Period, underwriting and policy acquisition costs decreased by 3.2% year-on-year due to the
+continuous increase in the percentage of renewal premiums in gross written premiums resulting from the Company's
+enhanced efforts in business restructuring. Finance costs decreased by 10.5% year-on-year due to a decrease in interest
+paid as a result of the redemptions of subordinated debts. Administrative expenses increased by 4.3% year-on-year as a
+result of business growth.
+Finance costs
+5.
+-94.4%
+6.
+Our cash inflows mainly come from insurance premiums, income from non-insurance contracts, interest income,
+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. We closely monitor and manage these risks.
+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 RMB50,809 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 RMB559,341 million.
+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.
+2. Liquidity Uses
+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.
+We believe that our sources of liquidity are sufficient to meet our current cash requirements.
+1. Liquidity Sources
+China Life Insurance Company Limited
+3. Consolidated Cash Flows
+The Company has established a cash flow testing system, and conducts regular tests to monitor the cash inflows and
+outflows under various scenarios and adjusts the asset portfolio accordingly to ensure sufficient sources of liquidity.
+For the year ended 31 December
+RMB million
+2018
+2017
+37
+(II) Analysis of Cash Flows
+as a result of a significant decrease in the income from open market equity investments due to the overall volatility and
+downward trend of the equity market. Profit before income tax from the health insurance business increased by 26.3%
+year-on-year primarily due to the growth and quality improvement in the short-term health insurance business. Profit
+before income tax from the accident insurance business decreased by 6.3% year-on-year primarily due to the fluctuation
+of the claims expenses of certain accident insurance business. Profit before income tax from other businesses decreased by
+10.3% year-on-year primarily due to the fluctuation in exchange rate of price currency for liabilities of the Company's
+subsidiaries.
+During the Reporting Period, profit before income tax from the life insurance business decreased by 94.4% year-on-year
+Accident insurance business
+495
+528
+-6.3%
+Other businesses
+7,696
+8,582
+-10.3%
+China Life Insurance Company Limited
+36
+5
+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 recognized in other comprehensive income)/((Investment assets
+at the beginning of the period - Securities sold under agreements to repurchase at the beginning of the period - Derivative
+financial liabilities 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 - Derivative financial liabilities at the end of the period) /2)
+6
+The figure of last year was adjusted on the same basis.
+Management Discussion and Analysis
+Change
+26.3%
+Main Reasons for Change
+147,552
+liquidity management, and the
+impact of the redemptions of
+subordinated debts in 2017
+Management Discussion and Analysis
+Foreign exchange gains/(losses) on
+81
+agreements to repurchase from
+time to time as a result of
+(179)
+cash and cash equivalents
+Net increase/decrease) in cash
+2,223
+(18,460)
+N/A
+and cash equivalents
+China Life Insurance Company Limited
+N/A
+Change in account balance
+of securities sold under
+N/A
+(45,595)
+200,990
+-26.6%
+The change in the scale of
+Net cash inflow/(outflow) from
+investing activities
+(238,373)
+(173,676)
+37.3%
+securities at fair value through
+profit or loss
+Uneven distribution of
+cash flows at maturity from
+investment assets for each
+year
+Net cash inflow/(outflow) from
+financing activities
+92,963
+Net cash inflow/(outflow) from
+operating activities
+Other equity investments include private equity funds, unlisted equities, preference shares, equity investment plans, and
+specialized asset management plans, etc.
+3,246
+Health insurance business
+Net income from investment properties
+105
+69
+Investment income from cash and others
+969
+1,546
+27,939
+Net income from investments in associates and joint ventures
+7,143
+Net realized gains on financial assets
+(19,591)
+42
+Net fair value gains through profit or loss
+(18,278)
+7,745
+17,776
+93,242
+106,422
+Cash and others include cash, cash at banks, short-term bank deposits and securities purchased under agreements to resell, etc.
+As at the end of the Reporting Period, among the major types of investments, the percentage of investment in bonds
+changed to 42.20% from 43.17% as at the end of 2017, the percentage of term deposits increased to 18.02% from
+16.32% as at the end of 2017, the percentage of investment in stocks and funds (excluding money market funds)
+changed to 9.03% from 9.73% as at the end of 2017, and the percentage of investment in debt-type financial products
+increased to 11.32% from 10.96% as at the end of 2017.
+2. Investment Income
+For the
+year ended 31 December
+RMB million
+2018
+2017¹
+Management Discussion and Analysis
+Gross investment income²
+Net investment income
+Net income from fixed-maturity investments
+Net income from equity investments
+95,148
+133,017
+136,164
+129,939
+6,183
+4,100
+Net investment yield*
+4.92%
+For the
+year ended 31 December
+RMB million
+2018
+2017
+Change
+(I) Profit before income Tax
+Profit before income tax
+13,921
+41,671
+-66.6%
+1,630
+29,315
+2.8%
+Life insurance business
+III. ANALYSIS OF SPECIFIC ITEMS
+During the Reporting Period, there was no material equity investment or non-equity investment of the Company that
+was subject to disclosure requirements.
+3. Major Investments
+Gross investment yield'
+3.29%
+5.16%
+Notes:
+1. The figures for the same period of last year were adjusted on the same basis.
+2.
+3.
+4.
+5.
+Gross investment income = Net investment income + Net realized gains on financial assets + Net fair value gains through profit or loss
+Net investment income includes interest income from debt investments, interest income from deposits, dividend and bonus from
+equity investments, interest income from loans, net income from investment properties, and net income from investments in
+associates and joint ventures, etc.
+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
+- Derivatives financial liabilities 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 – Derivatives financial liabilities at the end of the period)/2)
+China Life Insurance Company Limited
+35
+The balances of the Company's fixed income investment and equity investment increased along with the continuous
+expansion of its investment scale. In 2018, the Company's net investment income was RMB133,017 million, an increase
+of RMB3,078 million from 2017 and a year-on-year increase of 2.4%. In particular, the yield-to-maturity of new fixed
+income investments increased significantly compared to the existing allocation, however, due to the impact of a decrease
+in dividends from funds, the net investment yield was 4.64%, a decrease of 0.28 percentage point from 2017. Due to the
+effect of a significant decline in stock market, the gross investment income of the Company was RMB95,148 million,
+a decrease of RMB41,016 million from 2017, and the gross investment yield was 3.29%, a decrease of 1.87 percentage
+points from 2017. The comprehensive investment yield taking into account the current net fair value changes of
+available-for-sale securities recognized in other comprehensive income³ was 3.10%, a decrease of 1.47 percentage points
+from 20176.
+Management Discussion and Analysis
+4.64%
+466,043
+38
+Insurance benefits and claims expenses
+Mainly through the channel of
+288
+(國壽鑫福年年年金保險)?
+exclusive individual agents
+China Life Hong Fu Zhi Zun Annuity Insurance
+22,292
+21
+(participating insurance)
+Mainly through the channel of
+exclusive individual agents
+417
+(國壽鴻福至尊年金保險(分红型))2
+China Life Xin Ru Yi Annuity Insurance
+21,960
+(platinum version)
+(國壽鑫如意年金保險(白金版))2
+Mainly through the channel of
+exclusive individual agents
+416
+Management Discussion and Analysis
+Accident insurance
+Health insurance
+Life insurance
+4. Insurance Contracts
+China Life Xin Account Endowment Insurance (universal insurance)
+(exclusive version)(國壽鑫賬戶兩全保險 (萬能型)(尊享版))
+China Life Xin Account Endowment Insurance (universal insurance)
+(diamond version)(國壽鑫賬戶兩全保險(萬能型)(鑽石版))
+China Life Xin Account Annuity Insurance (universal insurance)
+(excellent version)(國壽鑫賬戶年金保險(萬能型)(卓越版))
+Insurance product
+27,120
+For the year ended 31 December
+China Life Insurance Company Limited
+China Life Xin Fu Ying Jia Annuity Insurance, China Life Xin Fu Nian Nian Annuity Insurance and China Life Xin Ru Yi
+Annuity Insurance (platinum version) have been replaced by their upgraded products and are no longer on sale, and the gross
+written premiums are recorded as renewal premiums. China Life Hong Fu Zhi Zun Annuity Insurance (participating insurance)
+is no longer on sale, and its standard premiums from new policies are recorded as first-year reinstatement premiums from policies
+with monthly payment.
+Standard premiums were calculated in accordance with the calculation methods set forth in the “Notice on Establishing the
+Industry Standard of Standard Premiums in the Life Insurance Industry” (Bao Jian Fa [2004] No. 102) and the "Supplementary
+Notice of the 'Notice on Establishing the Industry Standard of Standard Premiums in the Life Insurance Industry' ” (Bao Jian Fa
+[2005] No. 25) of the former China Insurance Regulatory Commission.
+2.
+1.
+Notes:
+(2) Top-three insurance products in terms of net increase in investment contract
+Total of insurance contracts
+China Life Xin Fu Nian Nian Annuity Insurance
+1,597
+Management Discussion and Analysis
+Group Insurance Channel. In 2018, the group insurance channel further pushed forward diversified business
+development, strengthened structural optimization and achieved stable development of various businesses. During the
+Reporting Period, gross written premiums from the group insurance channel were RMB26,404 million, an increase of
+0.8% year-on-year. Short-term insurance premiums from the group insurance channel were RMB21,268 million, an
+increase of 2.1% year-on-year. The Company actively launched the pilot program of tax deferred individual pension
+insurance business and constantly promoted the tax-advantaged health insurance business. As at the end of the Reporting
+Period, the number of direct sales representatives reached 83,000. In particular, the number of direct sales representatives
+with high performance reached 54,000, an increase of 4.3%
+year-on-year.
+83,000 direct sales representatives
+Direct sales representatives with high performance increased by
+4.3%
+Other Channels. During the Reporting Period, gross written premiums from other channels reached RMB24,303
+million, a rapid growth of 30.8% year-on-year. The Company actively developed the policy-oriented health insurance
+businesses, including supplementary major medical expenses insurance and long-term care insurance, which maintained
+leading positions in the market. As at the end of the Reporting Period, the Company carried out over 240 supplementary
+major medical expenses insurance projects, providing services for over 400 million urban and rural residents in 28
+provinces, and undertook 22 long-term care insurance projects on a cumulative basis. The Company actively pushed
+forward the transformation and upgrade of its tele-sales channel and put great efforts in the development of online sales
+from the internet-sales channel.
+China Life Insurance Company Limited 2
+29
+3. Analysis of major insurance products
+(1) Top-five insurance products in terms of gross written premium
+For the year ended 31 December
+RMB million
+Gross written
+Insurance product
+premium
+Standard premiums
+from new policies ¹
+Mainly through the channel of
+exclusive individual agents
+(participating insurance)
+9,599
+31,878
+China Life Sheng Shi Zhen Pin Annuity Insurance
+exclusive individual agents
+(國壽盛世臻品年金保险(分红型))
+(國壽鑫福贏家年金保險)?
+Mainly through the channel of
+38,397
+China Life Xin Fu Ying Jia Annuity Insurance
+Surrenders
+Major sales channel
+1
+496
+Note
+479,219
+23.0%
+Mainly through the channel of
+exclusive individual agents
+344
+RMB million
+As at 31
+December 2018
+As at 31
+December 2017
+Change
+2,081,822
+1,914,597
+8.7%
+125,743
+8,466
+102,190
+8,346
+1.4%
+2,216,031
+2,025,133
+9.4%
+684,082
+2017
+2018
+ended 31 December
+For the year
+5. Analysis of claims and policyholder benefits
+Management Discussion and Analysis
+8,876
+31
+As at the end of the Reporting Period, the reserves of insurance contracts of the Company increased by 9.4% from the
+end of 2017, which is primarily due to the accumulation of insurance liabilities from new policies and renewal business.
+As at the date of the statement of financial position, the reserves of various insurance contracts of the Company passed
+the adequacy test.
+business.
+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
+12.5%
+Management Discussion and Analysis
+607,941
+China Life Insurance Company Limited
+RMB million
+453
+9,165
+Mainly through the channel of
+exclusive individual agents
+Including: residual margin´
+RMB million
+Net increase
+Change
+Surrender value
+11,332
+Mainly through the channel of
+exclusive individual agents
+214
+Major sales channel
+In addition, the Company actively promoted the construction of the “Integrated Aged-care” and “Inclusive Healthcare
+Service" platforms to foster new business growth drivers. The Company consistently participated in and promoted
+offsite settlement and reimbursement for medical expenses across provinces under the new rural cooperative medical
+scheme launched by the National Health Commission, with the relevant business scope expanded from the basic medical
+insurance to the supplementary major medical expenses insurance pilot program. The Company also accelerated the
+construction of a health management service platform, and added more than 40 service projects on the online platform,
+including health information, health self-assessment, disease encyclopedia, sports and health, express channel for critical
+illnesses, shepherd service for out-patient treatment and online medical consultation. The Company actively explored
+the innovative model of "insurance protection + healthcare services" and made preliminary achievements in offline
+medical resource network construction. In addition, the Company created a unique model of cooperation between basic
+medical care and insurance protection, making direct claims payment of basic medical insurance, supplementary major
+medical expenses insurance and commercial insurance. In 2018, the Company continued to push forward the ongoing
+"Integrated Aged-care" project, actively explored the expansion of in-home aged-care services in the community, and
+experimented on improving the quality of aged-care services through the combination of medical care and aged-care.
+China Life Insurance Company Limited
+Management Discussion and Analysis
+42
+China Life Insurance Company Limited
+Management Discussion and Analysis
+Customer experience was consistently improved. In 2018, by focusing on customer experience, the Company
+consistently optimized service processes and scenarios to provide more considerate services. Services offered through
+online channels were enhanced with a year-on-year increase of 62.9% in the number of registered online users. The
+claims reported through online channels increased by 46% year-on-year, and 98.6% of policy loans were processed
+online which helped customers to resolve their urgent needs for funds of over RMB100 billion. The Company also
+expanded the scope of its services and launched the services such as "A Healthy Journey of 10,000 miles”, with a view to
+building an innovative ecology of “Insurance + Health”. To cater to different customer groups, the Company launched
+four service programs, namely "Excellent Teenagers", "Healthy Family”, “Financial Elite" and "Colorful Life", carried
+out a series of online and offline customer festival activities, continued to hold the “Little Painters of China Life”
+activities and organized over 36,000 value-added service activities such as “China Life 700 Running”, serving 27.65
+million customers. As a result, the customer satisfaction and loyalty of the Company were improved in general.
+The efficiency of operations and services was significantly enhanced. In 2018, the Company stepped up technology
+empowerment, accelerated the integration between technologies and business scenarios, and provided more convenient
+and intelligent services to customers with fewer procedures. The utilization rate of paperless insurance application
+reached 90%, and the rate of automatic underwriting increased by 10 percentage points year-on-year. The rate of
+automatic claims settlement increased by 20 percentage points year-on-year, the time required for claims application
+was shortened by 46% year-on-year, and the number of claims settled through direct payment increased by more than
+10 times year-on-year. Such intelligent services covered 5,000 hospitals, providing fast settlement of medical expenses.
+Meanwhile, the Company accelerated the upgrade of service access points and pushed forward the construction of
+intelligent service counters, thus facilitating the transformation of traditional to intelligent counters. Customer call
+centers were upgraded to multimedia coordination centers, and the telephone connection rate increased by 10 percentage
+points year-on-year. The voice service offered by 95519 coordination center and the online robots served 94.21 million
+people on a cumulative basis.
+The Company consistently adhered to the "customer-oriented" operation philosophy, promoted product diversification,
+and strengthened intelligent operations to meet the increasing demands of customers for insurance, with a view to
+offering high-quality services to customers.
+(II) Operations and Services
+41
+China Life Insurance Company Limited
+services.
+Digitalized platform. The Company built an open and digitalized platform with online and offline integration so as to
+provide various kinds of online services efficiently. Through the application of big data in analyzing customer demands,
+the Company recommended multi-level and series of insurance protection plans to customers. With the use of digital
+business cards and the organization of themed activities, the Company clearly presented the profiles of : agents, including
+their service years, service records, cumulative insurance protection amounts and service quality, which enabled its
+customers to have a full picture of the agents and enhanced their trust and mutual interactions. The Company adopted
+digital team management tools, such as digital recruitment and online field office operation, to manage more than one
+million sales agents. 38,000 online field offices and 94,000 online teams were established. In addition, the Company
+built a digital ecology on the platforms through cooperation with partners, consolidating more than 3,000 types of
+In 2018, with its advantages accumulated over years in offline channels, the Company strived to build a FinTech
+ecology with China Life characteristics, established a real-time and intelligent service model featuring online and offline
+integration and effective linkage between front and back ends, which facilitated the rapid development of its business
+and offered insurance products and services for the wider public.
+(I) Technological Innovation
+IV. TECHNOLOGICAL INNOVATION AND OPERATIONS AND SERVICES
+Management Discussion and Analysis
+40
+Details of structured entities controlled by the Company is set out in the Note 41 to the Consolidated Financial
+Statements in this annual report.
+(VI) Structured Entities Controlled by the Company
+Note: For details, please refer to Note 8 and Note 34 in the Notes to the Consolidated Financial Statements in this annual report.
+Intelligent services. The Company established five artificial intelligent platforms of big data, real-time calculation, smart
+voice, facial recognition and deep learning, and incorporated intelligent technologies in each operation process. The
+launch of an offsite electronic signature technology facilitated the rapid completion of insurance applications without
+limits on time and space. An intelligent insurance adjustment engine was constructed to achieve intelligent operation
+throughout the whole process. An intelligent electronic fast pay was launched to provide real-time transfer of funds for
+personal use. The Company applied smart voice technology to replace manual operation, which greatly improved service
+efficiency and reduced labor costs in operation. Intelligent robots were deployed in 13 cities for automatic response
+to questions and providing intelligent guidance at counters. An artificial intelligent model for evaluating risks relating
+to critical illness was established to accurately identify key risks and effectively improve risk control efficiency. The
+Company put more efforts in intelligent operation and maintenance and implemented anomaly detection and fault
+location through data analysis and machine learning models to ensure continuous and stable services protection.
+Widespread interconnection. The Company applied Internet of Things technology in the construction of offline service
+outlets with digitalized operations, added 15,700 new Internet lines to extend full WIFI coverage to all service outlets,
+equipped with 66,000 sets of intelligent devices, and established more than 20,000 digital service outlets adaptive
+to multiple scenarios, intelligent and wireless interconnection, and 3,475 service command centers with real-time
+interaction functions. Over 80% of physical field offices and service outlets were equipped with digital devices. China
+Life IT Center was officially put into operation, which achieved the goal of having three multiple active data centers
+located in Beijing and Shanghai. The Company also built an integrated Cloud, and realized Cloud-enabled information
+services in all aspects, which provided accessible, mobile and convenient services to more than 500 million customers,
+over 1.7 million sales agents and more than 100,000 employees.
+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
+The following table shows our solvency ratios as at the end of the Reporting Period:
+China Life Insurance Company Limited
+352
+Company,
+Management Discussion and Analysis
+China Life Property
+and Casualty
+Insurance
+Company Limited the above insurance businesses; business for the use
+Property loss insurance; liability insurance; credit
+insurance and bond insurance; short-term health
+insurance and accident insurance; reinsurance of
+18,800
+40%
+83,561
+V. PERFORMANCE OF THE CORPORATE SOCIAL RESPONSIBILITY
+19,907
+PRC laws and regulations; other business permitted
+by the CBIRC
+121
+121
+China Guangfa Bank
+Co., Ltd.
+The businesses approved by the CBIRC include
+commercial banking businesses such as public and
+private deposits, loans, payment and settlement, and
+capital business
+19,687
+43.686%
+2,373,291
+158,510
+10,707
+of insurance funds that are permitted by applicable
+For the performance by the Company of its corporate social responsibility during the Reporting Period, please refer
+to the full text of the “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). The specific information on environment is set out in Part 4 of the “Social Responsibility
+04
+VI. FUTURE PROSPECT AND RISK ANALYSIS
+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.
+China Life Insurance Company Limited
+47
+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") in November 2016. Willis Towers Watson, an international firm of consultants,
+performed a review of China Life's embedded value. The review statement from Willis Towers Watson is contained in
+the "Willis Towers Watson's review opinion report on embedded value" section.
+ASSUMPTIONS
+Economic assumptions: The calculations are based upon assumed corporate tax rate of 25% for all years. The investment
+return is assumed to be 5% per annum. 14% grading to 18% (remaining level thereafter) of the investment return is
+assumed to be exempt from income tax. The investment return and tax exempt assumptions are based on the Company's
+strategic asset mix and expected future returns. The risk-adjusted discount rate used is 10% per annum.
+Other operating assumptions such as mortality, morbidity, lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+Embedded Value
+China Life Insurance Company Limited
+48
+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.
+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.
+BACKGROUND
+company.
+(I) Industry Landscape and Development Trends
+Currently, under the background that insurance will return to its due role of protection, the insurance industry
+accelerates its transition to high-quality development and is still at an important stage full of development opportunities.
+In the short term, although the Chinese economy still faces downward pressure, it is still making stable progress in
+general and the economic performance remains within an appropriate range. Policy benefits resulting from the strategy
+of a "Healthy China” and changes in the population structure generate increasing health-care and pension related
+demands. In the near future, there are still great opportunities in the insurance industry and its development will be
+represented by following trends: the first trend is the transformation of overall development from high-speed growth
+to high-quality development. As market players deepen their perception of the essence of insurance, insurance will take
+advantage of long-term operation to provide customers with risk protection and financial planning that cover entire
+life cycles, and protection-based and long-term savings products will still be the major drivers for market growth in the
+future. This in turn will bring the growth of premiums, changes in product structure and premiums payment period.
+The second trend is the transformation of agents from size expansion to equal importance of quantity and quality. In
+recent years, the size of agent teams has increased significantly. However, the professional skills of some agents cannot
+completely cope with the individualized and diversified insurance demands of customers. It will be key in industrial
+competition to invest more in training and management to build a team of agents who are highly competent, well-
+43
+educated and highly skilled. The third trend is that technology, which used to play a supporting role, will become a more
+important factor for development. Currently, advanced technologies such as cloud computing, big data and artificial
+intelligence are booming, and many applications combining insurance and technologies have been launched successfully.
+With a new round of technological innovation and industrial reform emerging, it is foreseeable that FinTech will
+become an important driver for high-quality development of the industry by profoundly empowering each aspect of the
+insurance value chain such as sales services, operation and management, and risk prevention and control.
+(II) Development Strategies and Business Plans
+In 2019, the Company will adhere to the overall keynote of making progress with stability, closely upholding the new
+blueprint of “China Life Revitalization” and the operating guideline of “prioritizing value, strengthening sales force,
+maintaining stable growth, upgrading technologies, improving customer services and safeguarding against risks”. In
+particular, by adopting a “customer-oriented" approach and concentrating on local branches and field offices, the
+Company will focus on value and the individual insurance business, push forward the transformation from being sales-
+oriented to attaching equal importance to sales and services, the transformation from being human-driven to being
+human- and technology-driven and the transformation from being scale-oriented to the coordination of scale and value.
+The Company is committed to a life insurance development path with China Life characteristics. It is the mission of the
+Company to safeguard the happy lives of people and strive to become a world-class life insurance company.
+(III) Potential Risks and Solutions
+Looking forward to 2019, there will be an increasing number of risks and challenges, whether predicable or
+unpredictable. The Company will continue to strengthen its research and analysis of macro-economic trends and
+complex risk factors, and strive to maintain continuous and healthy growth of the Company. The major risk factors that
+may have an impact on the Company's future development strategy and business objectives include:
+Risks relating to macro trends. Since 2018, global economic growth has slowed down and external risks have increased.
+Facing a complex and challenging internal and external environment, it will be increasingly difficult to fulfill goals such
+as stable growth and risk prevention, and accomplish tasks such as economic and social development. In addition, there
+will be more unstable and uncertain factors in economic development. The above potential uncertainties may affect the
+insurance industry continuously through multiple channels such as the real economy, financial markets and consumer
+demands, which may in turn affect the business development of the Company in various aspects.
+Risks relating to insurance business. Currently, the domestic economy faces increasing downward pressure. The growth
+in consumption has slowed down and the growth in effective investment is sluggish. The real economy confronts a
+variety of difficulties, the issues of “difficult financing” and “expensive financing" are yet to be resolved for private
+enterprises and small and micro businesses. There is still a gap between the actual business environment and the
+expectations of market players. In addition, due to the large number and wide range of its branches, personnel and
+business, the Company may face more uncertainties with respect to the risks in relation to funds raising fraud, sales and
+complaints. The above factors may have certain impacts on the stable business growth of the Company.
+Report".
+Management Discussion and Analysis
+44
+Management Discussion and Analysis
+Risks relating to investment business. In the event that the domestic and international economies do not grow as
+expected, the volatility of financial markets may become greater and the market risks relating to investment portfolios
+and credit risk may increase. The Company will probably develop new investment channels, adopt 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. 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 movements.
+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 impact the Company's profitability to a certain extent.
+Risks relating to network security. When any of the unsafe factors such as natural disasters, man-made disasters,
+criminal activities, large-scale network paralysis or any other event that are beyond the control of the Company occurs,
+the computer system
+of the Company may be interrupted or exposed to security vulnerability. The Company has
+adopted various security measures and backup plans to guard against or mitigate system breakdown and has so far not
+experienced situations where such security breakdown and vulnerability affected the Company's operations. In the
+future, the Company will consistently enhance its capability of preventing and controlling network risks.
+The Company will put more effort into analyzing and identifying macro-economic trends, closely monitor market
+developments, strengthen corporate governance in compliance with laws and regulations, and properly handle
+challenges from all aspects, so as to ensure a stable and healthy development of the Company. The Company will
+strengthen its solvency management, improve its assets and liabilities management system, and enhance the capability of
+comprehensive risk management and control. Also, the Company will speed up the construction of “technology-driven
+China Life”, promote application of technical achievements, and use the FinTech to further empower the Company.
+The Company believes that it will have sufficient capital to meet its insurance business expenditures and new general
+investment needs in 2019. At the same time, the Company will make corresponding financing arrangements based on
+capital market conditions to further implement its future business development strategies.
+China Life Insurance Company Limited
+45
+3,429
+Embedded Value
+China Life Insurance Company Limited
+4,593
+Embedded Value
+3,400
+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.
+Comprehensive solvency ratio
+277.65%
+250.56%
+277.61%
+250.55%
+254,503
+303,872
+706,623
+761,367
+706,516
+761,353
+December 2017
+As at 31
+As at 31
+December 2018
+RMB million
+Management Discussion and Analysis
+Core solvency ratio
+Minimum capital
+Actual capital
+Core capital
+(III) Solvency Ratio
+70.74%
+is held by the
+As at the end of the Reporting Period, the Company's comprehensive solvency ratio decreased by 27.09 percentage
+points from the end of 2017, which was due to the impact of various factors, mainly including the business growth of
+the Company and an increase in the scale of investment assets.
+(IV) Sale of Material Assets and Equity
+Insurance product supply was constantly enriched. In 2018, the Company developed a total of 231 new products,
+including 52 life insurance products, 142 health insurance products, 9 accident insurance products and 28 annuity
+insurance products, a total of 193 protection-oriented products and 38 long-term savings products.
+Group pension insurance and annuity; individual
+pension insurance and annuity; short-term health
+insurance; accident insurance; reinsurance of the
+above insurance businesses; business for the use of
+insurance funds that are permitted by applicable
+PRC laws and regulations; pension insurance asset
+management product business; management of
+funds in RMB or foreign currency as entrusted
+by entrusting parties for the retirement benefit
+purpose; ; other businesses permitted by the CBIRC
+China Life Insurance Company Limited
+39
+(V) Business Operations of Our Main Subsidiaries and Affiliates
+RMB million
+Company Name
+Major Business Scope
+Registered
+Capital
+Shareholding
+Total Assets
+and 3.53% is
+held by AMC
+Net Assets
+Net Profit
+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
+4,000
+China Life Asset
+Management
+10,414
+9,243
+1,039
+China Life Pension
+Company Limited
+During the Reporting Period, there was no sale of material assets and equity of the Company.
+60%
+2018
+31 December
+31 December
+31 December
+31 December
+By APE
+By FYP
+60,117
+New Business Margin of One Year's Sales by Channel
+The new business margin of one year's sales for the 12 months ended 31 December 2018 by channel is shown below:
+Table 3
+China Life Insurance Company Limited
+Channel
+Exclusive Individual Agent Channel
+Bancassurance Channel
+2017
+Group Insurance Channel
+Note: Numbers may not be additive due to rounding.
+2018
+2017
+42.2%
+Expected Return on Embedded Value
+C
+Value of New Business in the Period
+D
+D
+Reflects the difference between actual operating experience in 2018 (including mortality, morbidity, lapse, and
+expenses etc.) and the assumptions.
+E
+Compares actual with expected investment returns during 2018.
+F
+Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
+G
+H
+Change in the market value adjustment from the beginning of year 2018 to 31 December 2018 and other adjustments.
+Reflects the gains or losses due to changes in exchange rate.
+I
+Reflects dividends distributed to shareholders during 2018.
+J
+Other miscellaneous items.
+B
+410
+Embedded Value at the Start of Year
+ITEM
+47.2%
+42.2%
+47.3%
+18.7%
+8.0%
+24.3%
+23.2%
+0.8%
+1.1%
+0.9%
+1.1%
+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.
+MOVEMENT ANALYSIS
+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 2018
+RMB million
+A
+314
+49,511
+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.
+6,357
+Embedded Value (A + D)
+E
+363,673
+408,998
+Value of In-Force Business after Cost of Required Capital (B + C)
+D
+(35,050)
+(45,788)
+Cost of Required Capital
+C
+398,723
+454,786
+Value of In-Force Business before Cost of Required Capital
+795,052
+B
+386,054
+Adjusted Net Worth
+A
+Embedded Value
+2017
+2018
+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 2018, the value of one year's sales for the 12 months ended 31 December 2018,
+and the corresponding results as at 31 December 2017 are shown below:
+370,500
+734,172
+F
+Value of One Year's Sales before Cost of Required Capital
+53,170
+42,839
+31 December
+2017
+31 December
+2018
+RMB million
+Total
+Group Insurance Channel
+Bancassurance Channel
+China Life Insurance Company Limited ☑
+Exclusive Individual Agent Channel
+Channel
+Value of One Year's Sales by Channel
+Table 2
+The value of one year's sales for the 12 months ended 31 December 2018 by channel is shown below:
+VALUE OF ONE YEAR'S SALES BY CHANNEL
+Embedded Value
+49
+China Life Insurance Company Limited
+Note: Numbers may not be additive due to rounding.
+60,117
+49,511
+Value of One Year's Sales after Cost of Required Capital (F + G)
+H
+(4,510)
+(5,218)
+Cost of Required Capital
+G
+64,627
+54,728
+6,536
+51
+Base case scenario
+SENSITIVITY RESULTS
+73
+Targeted Poverty Alleviation
+73
+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 CLIC, CLP&C, CLI, Pension Company and China Life E-commerce
+Company Limited ("CLEC”), respectively, the framework agreement between CLI and AMP, the framework agreements
+entered into by Chongqing International Trust Inc. (“Chongqing Trust”) with CLWM and AMC, respectively, and
+the framework agreement between the Company and China Life Capital. These continuing connected transactions
+were subject to the reporting, announcement and annual review requirements but were exempt from the independent
+shareholders' approval requirement under the Listing Rules. CLIC, the controlling shareholder of the Company, holds
+60% of the equity interest in CLP&C and 100% of the equity interest in each of CLI, CLEC and China Life Capital.
+Therefore, each of CLIC, CLP&C, CLI, CLEC and China Life Capital constitutes a connected person of the Company.
+AMC is held as to 60% and 40% by the Company and CLIC, respectively, and is therefore a connected subsidiary of the
+Company. Each of CLWM and AMP is a subsidiary of AMC, and is therefore a connected subsidiary of the Company.
+Chongqing Trust is an associate of CLIC and CLP&C by virtue of its acting as the trustee of a trust scheme of which
+CLP&C is a beneficiary, and is therefore also a connected person of the Company pursuant to Rule 14A.13(2) of the
+Listing Rules.
+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 Trust. Such agreements and the transactions thereunder have been
+approved by the independent shareholders of the Company.
+During the Reporting Period, the Company also carried out certain continuing connected transactions, including the
+asset management agreement between CLIC and AMC, and the framework agreement between the Company and
+CLWM, which were exempt from the reporting, announcement, annual review and independent shareholders' approval
+requirements under Chapter 14A of the Listing Rules.
+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.
+China Life Insurance Company Limited
+55
+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 2017. The Company and CLIC entered into the
+2018 policy management agreement on 26 December 2017, with a term from 1 January 2018 to 31 December 2020.
+Pursuant to the agreement, the Company will continue to accept CLIC's entrustment to provide policy administration
+services relating to the non-transferred policies. For details as to the method of calculation of the service fee, please
+refer to Note 34 in the Notes to the Consolidated Financial Statements. The annual cap for the three years ending 31
+December 2020 is RMB708 million.
+For the year ended 31 December 2018, the service fee paid by CLIC to the Company amounted to RMB629.46 million.
+2. Asset Management Agreements
+(1) Asset Management Agreement between the Company and AMC
+China Life Insurance Company Limited (“China Life") has prepared embedded value results as at 31 December 2018
+("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
+Embedded Value
+52
+China Life Insurance Company Limited
+438,900
+Allowing for diversification in calculation of VIF
+Restriction on Major Assets
+72
+Undertakings
+71
+Scope of work
+Our
+scope
+of work covered:
+a review of the methodology used to develop the embedded value and value of one year's sales as at 31 December
+2018, in accordance with the "CAA Standards of Actuarial Practice: Appraisal of Embedded Value" issued by the
+China Association of Actuaries ("CAA");
+a review of the economic and operating assumptions used to develop the embedded value and value of one year's
+sales as at 31 December 2018; and
+a review of the results of China Life's calculation of the EV Results.
+In carrying out our review, we have relied on the accuracy of audited and unaudited data and information provided by
+China Life.
+Opinion
+Based on the scope of work above, we have concluded that:
+•
+the embedded value methodology used by China Life is in accordance with the "CAA Standards of Actuarial
+Practice: Appraisal of Embedded Value" issued by the CAA;
+the economic assumptions used by China Life are internally consistent, have been set with regard to current
+economic conditions, and have made allowance for the company's current and expected future asset mix and
+investment strategy;
+14.
+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
+Mei-Chee Shum
+27 March 2019
+Benjamin Chen
+China Life Insurance Company Limited
+53
+05 Significant Events
+Material Litigations or Arbitrations
+55
+Major Connected Transactions
+55
+Material Contracts and Their Performance
+SUMMARY OF RESULTS
+48,946
+402,007
+Using 2017 EV appraisal assumptions
+10% increase in expenses
+5.
+42,045
+337,320
+Investment return -50bps
+4.
+481,049
+Investment return +50bps
+3.
+52,166
+428,739
+Risk discount rate -50bps
+2.
+403,510
+47,055
+Risk discount rate +50bps
+1.
+49,511
+408,998
+Required Capital
+Sales after Cost of
+Value of One Year's
+RMB million
+Required Capital
+Value of In-Force
+Business after Cost of
+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:
+390,624
+Embedded Value
+46,457
+10% decrease in expenses
+13.
+50,936
+414,391
+10% decrease in morbidity rates
+12.
+48,090
+403,733
+10% increase in morbidity rates
+11.
+50,519
+409,380
+10% decrease in lapse rates
+10.
+6.
+48,529
+10% increase in lapse rates
+9.
+50,236
+411,761
+and 10% increase in mortality rate for annuity products
+10% decrease in mortality rate for non-annuity products
+8.
+48,787
+406,235
+10% increase in mortality rate for non-annuity products
+and 10% decrease in mortality rate for annuity products
+7.
+52,565
+414,486
+408,527
+57,005
+For the
+(1,131)
+I
+Shareholder Dividend Distribution and Capital Injection
+J
+K
+Embedded Value as at 31 December 2018 (sum A through J)
+734,172
+60,250
+49,511
+277
+(44,462)
+8,785
+Embedded Value
+325
+(11,690)
+(986)
+795,052
+Notes: 1) Numbers may not be additive due to rounding.
+2) Items B through J are explained below:
+B
+Reflects expected impact of covered business, and the expected return on investments supporting the 2018 opening net
+worth.
+C
+Value of one year's sales for the 12 months ended 31 December 2018.
+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 2016-2018 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 34 in the Notes to the Consolidated Financial Statements. The annual
+cap for the three years ended 31 December 2018 was RMB1,500 million. On 28 December 2018, the Company and
+AMC entered into the 2019-2021 asset management agreement, with a term of three years from 1 January 2019 to
+31 December 2021. Pursuant to the agreement, AMC will continue to invest and manage assets entrusted to it by the
+Company on a discretionary basis. The annual cap for the three years ending 31 December 2021 is RMB2,000 million.
+Exchange Gains or Losses
+H
+Other
+G
+58
+China Life Insurance Company Limited
+Significant Events
+As approved by the 2017 Annual General Meeting of the Company, the Company and CLI entered into the 2019 asset
+management agreement for alternative investments on 31 December 2018. Pursuant to the agreement, CLI will continue
+to invest and manage assets entrusted to it by the Company, and the Company will pay CLI the investment management
+service fee, floating management fee, performance-based bonus and real estate operation management service fee in
+respect of the investment and management services provided by CLI to the Company. The agreement took effect from 1
+January 2019, with a term of two years. Unless a party serves the other party a written notice for non-renewal prior to 90
+working days before the expiry date of the agreement, the agreement will be automatically renewed for one year from the
+expiry date thereof.
+The contractual amount of the assets entrusted by the Company to CLI for investment and management would 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 2018 was 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 was RMB990 million or its equivalent in foreign currency.
+57
+China Life Insurance Company Limited
+Market Value and Other Adjustments
+(3) Asset Management Agreement for Alternative Investments between the Company and CLI
+For the year ended 31 December 2018, CLIC paid AMC a service fee of RMB99.78 million.
+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 2016-2018 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 34 in the Notes to the Consolidated
+Financial Statements. The annual caps for the three years ended 31 December 2018 were RMB320 million, RMB310
+million and RMB300 million, respectively. On 29 December 2018, CLIC and AMC entered into the 2019-2021
+asset management agreement, with an entrustment term from 1 January 2019 to 31 December 2021. Pursuant to the
+agreement, AMC will continue to invest and manage assets entrusted to it by CLIC on a discretionary basis. The annual
+caps for the three years ending 31 December 2021 are RMB320 million, RMB310 million and RMB300 million,
+respectively.
+(2) Asset Management Agreement between CLIC and AMC
+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 34 in the Notes to the Consolidated Financial Statements. In addition, the assets entrusted
+by the Company to CLI would also be partially used for the subscription of the related financial products established and
+issued by CLI or of which CLI had participated in the establishment and issuance, and such related financial products
+would be limited to infrastructure investment schemes and project asset-backed schemes.
+Methodology, Model and Assumption Changes
+56
+China Life Insurance Company Limited
+Significant Events
+ended 31 December 2018, the Company paid AMC a service fee of RMB1,325.91 million.
+year
+Operating Experience Variance
+E
+Investment Experience Variance
+F
+Significant Events
+The "Framework Agreement in relation to Asset Management Services" dated 26 January 2016 entered into between
+CLIC and CLWM expired on 31 December 2017. 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. Pricing of
+the transactions under the agreement shall be determined by the parties through arm's length negotiations with reference
+to industry practices. For the three years ending 31 December 2020, the annual caps of the management fee payable by
+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 2018, the management fee paid by CLIC for the asset management services was
+RMB1.35 million, and the advisory fee paid by CLIC for the advisory services was RMB2.98 million.
+(3) Framework Agreement between CLP&C and CLWM
+The "Framework Agreement in relation to Asset Management Services and Other Daily Transactions" dated 9 March
+2016 entered into between CLP&C and CLWM expired on 31 December 2017. CLP&C and CLWM entered
+into the 2018 framework agreement on 29 December 2017, pursuant to which CLP&C will continue to conduct
+certain transactions with CLWM during the period from 1 January 2018 to 31 December 2020, including the asset
+management services, advisory services and other daily transactions permitted by laws and regulations. Pricing of the
+transactions under the agreement shall be determined by the parties through arm's length negotiations with reference
+to industry practices. For the three years ending 31 December 2020, the annual caps of the management fee payable by
+CLP&C for the asset management services are RMB50 million, RMB150 million and RMB240 million, respectively;
+the annual caps of the advisory fee payable by CLP&C for the advisory services are RMB40 million, RMB80 million
+and RMB120 million, respectively; and the annual caps of the fees for other daily transactions are RMB150 million,
+RMB400 million and RMB700 million, respectively.
+For the year ended 31 December 2018, the management fee paid by CLP&C for the asset management services was
+RMB0.56 million, the advisory fee paid by CLP&C for the advisory services was RMB4.79 million, and the fees for
+other daily transactions were RMB0.01 million.
+For the year ended 31 December 2018, the management fee for the asset management services was RMB0.01 million,
+the advisory fee for the advisory services were RMB0 million, and the fees for other daily transactions were RMBO
+million.
+65
+(4) Framework Agreement between CLI and CLWM
+The "Framework Agreement in relation to Asset Management Services and Other Daily Transactions" dated 3 February
+2016 entered into between CLI and CLWM expired on 31 December 2017. CLI and CLWM entered into the 2018
+framework agreement on 20 December 2017, pursuant to which CLI will continue to conduct certain transactions with
+CLWM during the period from 1 January 2018 to 31 December 2020, including the asset management services, advisory
+services and other daily transactions permitted by laws and regulations. Pricing of the transactions under the agreement
+shall be determined by the parties through arm's length negotiations with reference to industry practices. For the three
+years ending 31 December 2020, the annual caps of the management fee for the asset management services are RMB40
+million, RMB80 million and RMB120 million, respectively; the annual caps of the advisory fee for the 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.
+(2) Framework Agreement between CLIC and CLWM
+China Life Insurance Company Limited
+Significant Events
+The "Framework Agreement in relation to Asset Management Services and Other Daily Transactions" dated 30
+December 2015 entered into between the Company and CLWM expired on 31 December 2017. The Company and
+CLWM entered into the 2018 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. Pricing of the transactions under the agreement shall be determined
+by the parties through arm's length negotiations with reference to industry practices. For the three years ending 31
+December 2020, the annual 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.
+China Life Insurance Company Limited
+Significant Events
+For the year ended 31 December 2018, the management fee paid by the Company for the asset management services was
+RMB3.60 million, the fees in connection with the sales agency services paid by CLWM, including the sales commission
+fee, client maintenance fee, handling fee and intermediary fee, were RMB0 million, and the fees for other daily
+transactions were RMB12.27 million.
+For the three years ending 31 December 2021, the annual caps on the contractual amount of assets newly entrusted
+by the Company to CLI for investment and management, as well as the annual caps on the amount of the investment
+management service fee, floating management fee, performance-based bonus and real estate operation management
+service fee payable by the Company to CLI are as follows:
+Amount of Assets Newly
+Entrusted for Investment and
+Management during the Period
+(Including the Amount
+for Subscription of the
+Related Financial Products)
+(RMB million or its
+equivalent in foreign currency)
+Amount of the Investment
+Management Service Fee,
+Floating Management
+Fee, Performance-based
+Bonus and Real Estate
+Operation Management
+Service Fee
+(5) Framework Agreement between Pension Company and CLWM
+64
+Pension Company and CLWM entered into the "Framework Agreement in relation to Daily Connected Transactions"
+on 26 March 2018, pursuant to which Pension Company will conduct certain transactions with CLWM during the
+period from 1 January 2018 to 31 December 2020, including the asset management services, advisory services and other
+daily transactions permitted by laws and regulations. Pricing of the transactions under the agreement shall be determined
+by the parties through arm's length negotiations with reference to industry practices. For the three years ending 31
+December 2020, the annual caps of the management fee payable by 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.
+(1) Framework Agreement between the Company and CLWM
+Significant Events
+(RMB million or its
+68
+China Life Insurance Company Limited
+Significant Events
+For the year ended 31 December 2018, there was no relevant transaction between AMC and Chongqing Trust.
+AMC and Chongqing Trust entered into the "Framework Agreement in relation to Daily Connected Transactions"
+on 7 November 2018. The agreement became effective upon signing by the parties and will expire on 31 December
+2019. Pursuant to the agreement, AMC and Chongqing Trust will conduct the subscription of trust products, asset
+management services and other daily transactions permitted by laws and regulations in their ordinary course of business
+and on normal commercial terms. Pricing of the transactions under the agreement shall be determined by the parties
+through arm's length negotiations with reference to industry practices. For the two years ending 31 December 2019,
+the annual caps of the subscription amount of the trust products are RMB1,200 million and RMB1,800 million,
+respectively (including the trustee's remuneration of no more than RMB100 million and RMB150 million, respectively,
+per year to be received by Chongqing Trust from the trust assets); the annual caps of the management fee for the asset
+management services are RMB100 million and RMB150 million, respectively; and the annual cap of the fees for other
+daily transactions is RMB100 million.
+(3) Framework Agreement between AMC and Chongqing Trust
+For the year ended 31 December 2018, there was no relevant transaction between CLWM and Chongqing Trust.
+CLWM and Chongqing Trust entered into the “Framework Agreement in relation to Daily Connected Transactions”
+on 29 December 2017, with a term from 1 January 2018 to 31 December 2019. Pursuant to the agreement, CLWM
+and Chongqing Trust 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 industry practices. For 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.
+(2) Framework Agreement between CLWM and Chongqing Trust
+67
+For the year ended 31 December 2018, the management fee paid by Pension Company for the asset management services
+was RMB0 million, the advisory fee paid by Pension Company for the advisory services was RMB0.24 million, and the
+fees for other daily transactions were RMB0 million.
+China Life Insurance Company Limited
+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 industry practices. For the three years ending 31 December
+2019, the annual cap 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.
+(1) Framework Agreement between the Company and Chongqing Trust
+6. Framework Agreements with Chongqing Trust
+ended 31 December 2018, there was no relevant transaction between CLEC and CLWM.
+year
+For the
+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. Pricing of the transactions under the agreement shall be determined
+by the parties through arm's length negotiations with reference to industry practices. For the three years ending 31
+December 2020, the annual caps of the management fee payable by CLEC for the asset management services are RMB5
+million, RMB10 million and RMB15 million, respectively; the annual caps of the advisory fee payable by CLEC for the
+advisory services are RMB5 million, RMB10 million and RMB15 million, respectively; and the annual caps of the fees
+for other daily transactions are RMB200 million; RMB300 million and RMB400 million, respectively.
+(6) Framework Agreement between CLEC and CLWM
+Significant Events
+66
+China Life Insurance Company Limited
+For the year ended 31 December 2018, the subscription amount of the trust products was RMB11,439.89 million
+(including the trustee's remuneration of RMB4.92 million received by Chongqing Trust from the trust assets), the
+redemption amount of the trust products was RMB0 million, and the fees for other daily transactions were RMBO
+million.
+equivalent in foreign currency)
+For the year ended 31 December 2018, the amount of the subscription by the Company in the capacity of the limited
+partner of the fund products of which China Life Capital or any of its subsidiaries served as the general partner was
+RMB0 million, and the management fee charged by China Life Capital as the general partner or the manager of the fund
+products was RMB11.75 million.
+For the year ending
+31 December 2020
+For the year ended 31 December 2018, the subscription price and corresponding subscription fee for the subscription of
+fund products was RMB2, 187.00 million, the redemption price and corresponding redemption fee for the redemption of
+fund products was RMB3,514.50 million, the sales commission fee and client maintenance fee paid by AMP was RMBO
+million, the management fee and performance-based fee paid by the Company for the asset management for specific
+clients was RMB27.85 million, and the fees for other daily transactions were RMB1.96 million.
+China Life Insurance Company Limited 5
+61
+For the year ending
+31 December 2019
+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 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.
+For the year ended 31 December 2018, the subscription price and corresponding subscription fee for the subscription of
+fund products was RMB773.27 million, the redemption price and corresponding redemption fee for the redemption of
+fund products was RMB601.77 million, the sales commission fee and client maintenance fee paid by AMP was RMBO
+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 RMB0 million.
+(3) Framework Agreement between CLIC and AMP
+CLIC and AMP entered into the "Framework Agreement in relation to Subscription and Redemption of Fund Products"
+on 30 May 2014. The agreement expired on 31 December 2016. As approved by the First Extraordinary General
+Meeting 2016 of the Company, the 2017-2019 framework agreement was entered into between CLIC and AMP on 16
+December 2016 for a term of three years from 1 January 2017 to 31 December 2019. Pursuant to the agreement, CLIC
+and AMP 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 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.
+Significant Events
+China Life Insurance Company Limited
+62
+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 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.
+Significant Events
+(4) Framework Agreement between CLP&C and AMP
+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 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
+сар
+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.
+of the
+For the year ended 31 December 2018, the subscription price for the fund products was RMB0 million, the redemption
+price for the fund products was RMB0 million, the subscription fee for the fund products was RMB0 million, the
+redemption fee for the fund products was RMB0 million, the sales commission fee and client maintenance fee paid by
+AMP was RMB0 million, the management fee and performance-based fee paid by CLP&C for the asset management for
+specific clients was RMB4.51 million, and the fees for other daily transactions were RMB0.08 million.
+China Life Insurance Company Limited
+63
+(5) Framework Agreement between CLI and AMP
+CLI and AMP entered into the “Framework Agreement in relation to Subscription and Redemption of Fund Products,
+Asset Management for Specific Clients and Other Daily Transactions" on 20 December 2017. The agreement became
+effective upon signing by the parties and 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 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
+of the fees for other daily transactions is RMB50 million.
+cap
+For the year ended 31 December 2018, the subscription price and corresponding subscription fee for the subscription
+of fund products was RMB539.36 million, the redemption price and corresponding redemption fee for the redemption
+of fund products was RMB591.71 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.
+5. Framework Agreements with CLWM
+For the year ended 31 December 2018, the subscription price and corresponding subscription fee for the subscription
+of fund products was RMB1,500 million, the redemption price and corresponding redemption fee for the redemption
+of fund products was RMB1,156.47 million, and the management fee and performance-based fee paid by CLIC for the
+asset management for specific clients was RMB24.81 million.
+(1) Framework Agreement between the Company and AMP
+(2) Framework Agreement between Pension Company and AMP
+Significant Events
+For the year ending
+200,000
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+31 December 2021
+4. Framework Agreements with AMP
+1,391
+Significant Events
+1,982
+2,266
+The above amount of assets entrusted by the Company to CLI for investment and management for the year ending
+31 December 2019 will also include the amount of subscription of the fund products by the Company under the
+cooperation framework agreement for investment management with insurance funds between the Company and China
+Life Capital for the year ending 31 December 2019 (for details, please refer to the section headed “(4) Cooperation
+Framework Agreement for Investment Management with Insurance Funds between the Company and China Life
+Capital" below).
+(including the amount for the subscription
+of the related financial products: 100,000)
+59
+China Life Insurance Company Limited 2
+China Life Insurance Company Limited
+Significant Events
+Since 18 November 2008, the Company and CLP&C have from time to time entered into insurance sales framework
+agreements. The renewed agreement between the parties expired on 7 March 2018. The Company and CLP&C entered
+into the 2018 insurance sales framework agreement on 31 January 2018, with a term of three years from 8 March
+2018 to 7 March 2021. Pursuant to the agreement, CLP&C will continue to entrust the Company to act as an agent
+to sell selected insurance products within the authorized regions, and pay an agency service fee to the Company in
+consideration of the services provided. For details as to the method of calculation of the agency service fee, please refer to
+Note 34 in the Notes to the Consolidated Financial Statements. The annual caps for the three years ending 31 December
+2020 are RMB4,260 million, RMB5,540 million and RMB7,050 million, respectively.
+3. Insurance Sales Framework Agreement
+For the year ended 31 December 2018, CLP&C paid the Company an agency service fee of RMB2,958.77 million.
+the
+The Company entered into the “Cooperation Framework Agreement for Investment Management with Insurance
+Funds" with China Life Capital on 7 June 2018, with a term from 7 June 2018 to 31 December 2019. Pursuant to the
+agreement, the Company will subscribe in the capacity of the limited partner for the fund products of which China Life
+Capital or any of its subsidiaries serves (including individually and jointly with third parties) as the general partner, and/
+or the fund products of which China Life Capital serves as the manager (including the fund manager and co-manager).
+For the two years ending 31 December 2019, the annual cap for the subscription by the Company in the capacity of the
+limited partner of the fund products of which China Life Capital or any of its subsidiaries serves as the general partner is
+RMB5,000 million, and the annual caps for the management fee charged by China Life Capital as the general partner or
+manager of the fund products are RMB150 million and RMB200 million, respectively.
+(4) Cooperation Framework Agreement for Investment Management with Insurance funds between the Company and China
+Life Capital
+For the year ended 31 December 2018, the investment management service fee, floating management fee and
+performance-based bonus paid by the Company to CLI amounted to RMB528.58 million. As at 31 December
+2018, the contractual amount of the assets entrusted by the Company to CLI for investment and management was
+RMB297,636.67 million, among which, the contractual amount of the assets newly entrusted by the Company in 2018
+was RMB61,146.28 million (including the contractual amount of RMB4,600 million for the subscription of the related
+financial products established and issued by CLI or of which CLI had participated in the establishment and issuance, and
+the contractual amount of the assets newly entrusted by the Company of RMB0 million in its co-investment with CLIC
+and CLP&C).
+60
+(II) In accordance with Article 212 of the
+Articles of Association, the Company's profit
+distribution policy is as follows:
+(I) In accordance with Article 211 of the
+Articles of Association, the basic principles of the
+Company's profit distribution are as follows:
+1. The Company shall take the investment return for
+investors into full account and allocate the required
+percentage of the Company's realized distributable
+profits to shareholders as dividends each year;
+2. The Company shall maintain a sustainable and
+steady profit distribution policy and at the same time
+take into consideration the Company's long-term
+interest, general interest of all the shareholders and the
+sustainable development of the Company;
+3. The Company shall give priority to cash dividends as
+its profit distribution manner.
+III. FORMULATION AND
+IMPLEMENTATION OF PROFIT
+DISTRIBUTION POLICY
+China Life Insurance Company Limited
+3. Conditions for distribution of share dividends:
+If the Company's operation is sound and the Board
+of Directors is of the opinion that share dividends
+distribution is in the interest of all the Company's
+shareholders since the Company's stock price does
+not match the Company's share capital, the Company
+may propose a share dividends distribution plan if the
+conditions for cash dividends listed above are satisfied.
+In addition, the Company's profit distribution
+is required to comply with relevant regulatory
+requirements. If the Company's core solvency ratio
+or comprehensive solvency ratio does not meet the
+minimum requirements, the CBIRC may adopt
+regulatory measures against the Company due to its
+failure to meet the minimum requirements, which may
+restrict the Company's ability to distribute dividends to
+its shareholders.
+Corporate Governance
+78
+For details regarding the Company's employees
+(including the number of employees, composition of
+professionals, educational levels, remuneration policy
+and training program), please refer to the section headed
+"Directors, Supervisors, Senior Management and
+Employees" in this annual report.
+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;
+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 the
+Company. 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 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 first meeting of the first session of
+the member representative meeting of the trade union
+of the Company was held in Zhejiang on 22 October
+2018, which put into practice the election system of the
+Company for trade union and promoted such system in
+trade unions at all levels within the Company.
+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;
+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 the 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.
+and Employees
+Directors, Supervisors, Senior Management
+87
+and Shareholders Information
+Changes in Ordinary Shares
+84
+Report of the Board of Supervisors
+75
+91
+Report of the Board of Directors
+73
+China Life Insurance Company Limited
+For the performance by the Company of its social responsibility for poverty alleviation during the Reporting Period,
+please refer to Part 3 of the full text of the “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).
+VI. TARGETED POVERTY ALLEVIATION
+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.
+V. RESTRICTION ON MAJOR ASSETS
+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.
+Significant Events
+06 Corporate Governance
+China Life Insurance Company Limited N
+Report of Corporate Governance
+From left to right:
+(resigned on 12 January 2018 due to adjustment
+of work arrangements)
+Leung Oi-Sie Elsie
+Tang Xin
+Chang Tso Tung Stephen
+Robinson Drake Pike
+Independent Directors
+Yuan Changqing
+Liu Huimin
+Yin Zhaojun
+Wang Sidong
+Non-executive Directors
+(appointed on 11 February 2018)
+109
+(resigned on 13 November 2018 due to the reason of age)
+(resigned on 19 December 2018 due to the reason of age)
+(resigned on 24 January 2019 due to the reason of age)
+(appointed on 3 December 2018)
+Xu Hengping
+Xu Haifeng
+Yang Mingsheng
+Lin Dairen
+Wang Bin (Chairman)
+Su Hengxuan
+Executive Directors
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+Report of the Board of Directors
+Mr. Tang Xin, Mr. Chang Tso Tung Stephen, Mr. Xu Haifeng, Mr. Su Hengxuan, Mr. Wang Bin, Mr. Yuan Changqing, Mr. Liu Huimin,
+Mr. Yin Zhaojun, Mr. Robinson Drake Pike, Ms. Leung Oi-Sie Elsie
+(appointed as a Non-executive Director on 11 July 2018
+and re-designated as an Executive Director
+on 20 December 2018)
+72
+Significant Events
+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.
+As approved by the 15th meeting of the fifth session of the Board of Directors of the Company, Tianjin Branch of the
+Company and Tianjin Branch of CLP&C jointly acquired properties located at the business center district in Tianjin,
+the PRC. On 18 March 2018, Tianjin Branch of the Company and Tianjin Tiantai Property Development Co., Ltd.
+("Tiantai Property") entered into the "Agreement for the Sale and Purchase of Commodity Housing in Tianjin”,
+pursuant to which Tianjin Branch of the Company agreed to acquire the property located at 7-25 floors and 31-47
+floors, Office Tower, No. 38 Qufu Road, Heping District, Tianjin, the PRC, with a gross floor area of 72,855.08 square
+meters, from Tiantai Property at a consideration of RMB1,912,088,604. The property is used as office premises and part
+of it is for leasing purpose. Tiantai Property handed over the property to Tianjin Branch of the Company on 28 June
+2018, and assisted Tianjin Branch of the Company in completing the registration of ownership of the property.
+1. Acquisition of Properties by the Company and CLP&C
+(II) Other Major Connected Transactions
+China Life Insurance Company Limited 2
+(4) the amounts of the above transactions have not exceeded the relevant annual caps.
+and
+(3) the transactions were entered into in accordance with the agreements governing those continuing connected
+transactions, and the terms are fair and reasonable and in the interests of shareholders of the Company as a whole;
+(2) the transactions were conducted on normal commercial terms;
+2. Capital Injection to CLP&C
+(1) the transactions were entered into in the ordinary and usual course of business of the Company;
+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
+(2) for transactions involving the provision of goods or services by the Company, nothing has come to the auditors'
+attention that causes them to believe that the transactions were not, in all material respects, in accordance with the
+pricing policies of the Company;
+(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
+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:
+On 7 May 2018, the Company, CLIC and CLP&C entered into the "Capital Injection Contract of China Life Property
+and Casualty Insurance Company Limited”, pursuant to which the Company and CLIC agreed CLP&C to convert its
+undistributed profits into share capital. As a result, the registered capital of CLP&C increased from RMB15 billion to
+RMB18.8 billion, and its total number of shares increased from 15 billion shares to 18.8 billion shares. In particular,
+the number of shares of CLP&C held by the Company and CLIC increased by 1.52 billion shares and 2.28 billion
+shares, respectively, and their capital injection amounts were RMB1.52 billion and RMB2.28 billion, respectively. As
+the capital increase was made by way of capitalization of CLP&C's undistributed profits, none of the Company or CLIC
+was required to make any cash payment in respect of the capital injection. After the completion of the capital injection,
+CLP&C continues to be held as to 40% by the Company and 60% by CLIC.
+3. Formation of Partnerships
+(1) The Company and Shandong New Kinetic Energy Fund Management Company Limited (“Shandong New Kinetic
+Energy"), each as a limited partner, entered into a partnership agreement with China Life Xinchuang (Shandong)
+Investment Company Limited (“China Life Xinchuang"), as the general partner, on 28 December 2018 for the
+formation of a partnership. The total capital contribution by all partners of the partnership shall be RMB5,000,000,000,
+of which RMB3,950,000,000 shall be contributed by the Company, RMB1,000,000,000 shall be contributed by
+Shandong New Kinetic Energy, and RMB50,000,000 shall be contributed by China Life Xinchuang. China Life
+Capital acted as the manager of the partnership. The partnership intends to invest mainly in equity projects of excellent
+quality involving mixed ownership reforms and strategic emerging industries and to focus on the “top ten” industries in
+Shandong Province, including but not limited to strategic emerging industries such as the new generation of information
+technology, manufacturing of high-end equipment, and new materials, as well as the industries of excellent quality for
+key development in Shandong Province such as tourism and leisure, culture, and modern finance.
+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
+4. Except as otherwise disclosed in this annual report, the Company had no other material contracts 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.
+71
+China Life Insurance Company Limited
+2. The Company neither gave external guarantees nor provided guarantees to its non-wholly owned subsidiaries during
+the Reporting Period.
+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.
+III. MATERIAL CONTRACTS AND THEIR PERFORMANCE
+During the Reporting Period, the Company was not involved in claims, debt transactions or guarantees of a non-
+operating nature with related parties.
+(III) Statement on Claims, Debt Transactions and Guarantees etc. of a Non-operating Nature with
+Related Parties
+Each of China Life Xinchuang, China Life Properties and China Life Capital is an indirect wholly-owned subsidiary
+of CLIC, and therefore a connected person of the Company. The transactions 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
+transactions.
+Significant Events
+committee.
+(2) The Company, as the limited partner, entered into a partnership agreement with China Life Properties Investment
+Management Company Limited (“China Life Properties"), as the general partner, on 29 December 2018 for the
+formation of a partnership. The total initial capital amount of the partnership shall be RMB2,001,000,000, of which
+RMB2,000,000,000 shall be contributed by the Company, and RMB1,000,000 shall be contributed by China Life
+Properties. China Life Capital acted as the manager of the partnership. The initial capital amount of the partnership
+will be used for investing in the projects of Aviation Industry Corporation of China Ltd. and its subsidiaries concerning
+aviation development, mixed ownership reforms, structural adjustment, system transformation of scientific research
+institutes, private placement of listed companies, as well as other projects approved by the investment decision
+70
+China Life Insurance Company Limited
+Significant Events
+77
+75
+China Life Insurance Company Limited
+(III) Compliance by the Company with the
+relevant laws and regulations that have a
+significant impact
+The Company expanded the presence of its intelligent
+mobile service network, launching the innovative
+services of paperless insurance application, online
+preservation, mobile counter and mobile claim. As at
+the end of 2018, the number of paperless insurance
+applications reached 13.89 million, the business volume
+of online preservation amounted to 37.54 million, and
+the number of claims processed via mobile channels
+were nearly 3.56 million, which was estimated to have
+saved nearly 1,000 tonnes of paper on a cumulative
+basis.
+Based on the principles of “participation by all
+employees, use with great care, driven by professional,
+environmental protection with low carbon, costs
+control, conservation and efficiency improvement", the
+Company pushed forward the implementation of energy
+saving and emission reduction. With the introduction of
+energy conservation servers, the power consumption of
+every single server decreased from 10 kWh to 0.7 kWh.
+The Company recycled hazardous wastes, including
+discarded toner cartridge and ink cartridge. Further, the
+Company promoted the construction of green buildings,
+and received a T4 accreditation certificate for its data
+room in China Life Science and Technology Park from
+UPTIME of the United States.
+green
+green
+The development of ecological civilization is a
+millennium strategy of the Chinese nation for its
+sustainable development. Being a non-manufacturing
+financial insurance company with low energy
+consumption and light pollution, the Company paid
+attention to cultivating green and environmental
+protection culture in its daily operation, and complied
+with applicable laws and regulations such as the
+"Environmental Protection Law of the People's Republic
+of China", the "Energy Conservation Law of the
+People's Republic of China", and the "13th Five-Year'
+Energy Saving and Emission Reduction Comprehensive
+Work Plan" in a serious manner. The Company also
+actively launched electronic services, promoted the
+office concept, stepped up its efforts in the conservation
+of energy resources, and encouraged employees to go
+for travel in a bid to mitigate any impacts on the
+environment resulting from its daily operation.
+(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 headed "Management Discussion
+and Analysis" in this annual report. These discussions
+form part of the "Report of the Board of Directors".
+(I) Overall operation of the Company during the
+Reporting Period
+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.
+I. PRINCIPAL BUSINESS
+The Company adhered to the code of conduct of "being
+trustworthy, assuming risks, emphasizing on services and
+being legal compliant" and promoted the compliance
+culture and concepts of "being compliant on a voluntary
+basis, and creating value from compliance”, thereby
+creating the compliance environment of “starting
+from the top level and having responsibility for all to
+be compliant”. The Company strictly observed and
+effectively 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", and
+implemented the spirit and requirements of major
+regulatory documents on product development and
+design, sales management, investment supervision and
+corporate governance, etc., as released by the CBIRC in
+a stringent manner for the purpose of further carrying
+II. BUSINESS REVIEW
+China Life Insurance Company Limited
+(V) Relationship between the Company and its
+employees
+Corporate Governance
+Subject to the widespread provision of counter services,
+the Company built a service line consisting of “product
++ telephone + internet” by actively applying technologies
+such as cloud computing, big data and artificial
+intelligence, and accomplished the goal of synergy
+effect and mutual sharing brought by the Company's
+subscribers, customers, services and products through
+95519 multi-media customer contact center, China
+Life "Life Insurance APP" and the WeChat official
+account, etc., which constantly optimized customer
+experience. In addition, the Company attached great
+importance to the protection of the rights and interests
+of insurance customers, and consistently commenced the
+comprehensive governance for customer complaints so
+as to further improve and optimize services. In 2018, the
+total number of complaints received by the Company
+decreased by 35.71% year on year, and the quantitative
+management indicators in connection with the
+supervision of complaints were positive when compared
+with last year.
+With adherence to the customer-oriented approach all
+along, the Company is committed to offering high-
+quality services to its customers on a continuous
+basis, which made customer satisfaction and customer
+experience as the basic standards for assessing its
+services. The Company has provided insurance policy
+services and value-added services for more than 500
+million customers. In 2018, the evaluation results of
+customer satisfaction and customer loyalty increased by
+1.44% and 3.60% year-on-year, respectively, reaching a
+new record high.
+customers
+(IV) Relationship between the Company and its
+out compliance management responsibilities at all
+levels and in various lines. The Company consistently
+improved the compliance management framework of
+"three lines of defense" in business, compliance and
+audit to ensure that the three lines of defense performed
+their own functions and collaborated with each other,
+which formed a joint force in compliance management.
+The Company also consolidated its foundation in all
+aspects for its steady and healthy development and
+firmly defended the bottom line of the systematic
+risk, which guaranteed the healthy and high-quality
+development of the Company on an ongoing basis.
+The Company strived to satisfy customers' demands,
+expand the scope of value-added services, enhance
+and optimize customer perception, and maintain
+good interaction with its customers. The Company
+organized the customer festival activities of "Hand-in-
+Hand with China Life for the Creation of the Future"
+through online and offline platforms, held 36,000 value-
+added service activities with the theme of health, sports
+and parent-child activities for the year, and offered
+quality services that satisfied the needs of high net-
+worth customers, such as exclusive insurance policy and
+exclusive healthcare.
+Corporate Governance
+76
+China Life Insurance Company Limited
+(II) Information Relating to the Controlling Shareholder and Effective Controller
+2. Industrial and Commercial Bank of China Limited - SSE 50 Exchange Traded Index
+Securities Investment Fund has Industrial and Commercial Bank of China Limited as its fund
+depositary. 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.
+1. HKSCC Nominees Limited is a company that holds shares on behalf of the clients of
+the Hong Kong stock brokers and other participants of the CCASS system. The relevant
+regulations of the HKSE do not require such persons to declare whether their shareholdings
+are pledged or frozen. Hence, HKSCC Nominees Limited is unable to calculate or provide the
+number of shares that are pledged or frozen.
+Details of shareholders
+87
+China Life Insurance Company Limited
+I
++8,396,936
+10,949,667
+0.04%
+0
+National Social Security Fund Portfolio 407
+State-owned legal person
+1
+The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
+0
+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
+Wang Bin
+21 July 2003 (CLIC was formerly known as China Life Insurance Company, a company
+approved and formed by the State Council in January 1999. With the approval of the
+former China Insurance Regulatory Commission in 2003, China Life Insurance Company
+was restructured as CLIC.
+Insurance services including receipt of premiums and payment of benefits in respect of
+the in-force life, health, accident and other types of personal insurance business, and the
+reinsurance business; holding or investing in domestic and overseas insurance companies
+or other financial insurance institutions; funds application business permitted by national
+laws and regulations or approved by the State Council of PRC; other businesses approved
+by insurance regulatory agencies.
+As at 31 December 2018, CLIC held 1,785,098,644 H shares of Town Health
+International Medical Group Limited, representing 23.72% of its total shares.
+12,400,000
+Corporate Governance
+China Life Insurance Company Limited
+88
+Name of company
+0.04%
+Other
+China National Nuclear Corporation
+Overseas legal person
+0
+119,719,900
+0.42%
+State-owned legal person
+Central Huijin Asset Management Limited
+Hong Kong Securities Clearing Company Limited
++129,435,132
+723,937,634
+2.56%
+State-owned legal person
+China Securities Finance Corporation Limited
++1,061,195
+7,320,297,655
+25.90%
+Overseas legal person
+China Life Insurance (Group) Company
+State-owned legal person
+68.37%
+19,323,530,000
+0.11%
+State-owned legal person
+30,709,362
+China International Television Corporation
+0
+15,015,845
+0.05%
+HKSCC Nominees Limited
+- Tianfu Bull No. 53 Asset Management Plan
+of China Limited - China Universal
+- Industrial and Commercial Bank
+China Universal Asset Management Co., Ltd
++5,387,586
+18,175,923
+0.06%
+Other
+Index Securities Investment Fund
+China Limited SSE 50 Exchange Traded
+Industrial and Commercial Bank of
+0
+18,452,300
+0.07%
+State-owned legal person
++7,733,175
+X. PURCHASE, SALE OR
+REDEMPTION OF THE
+COMPANY'S SECURITIES
+Changes in Ordinary Shares and Shareholders Information
+Number of shares
+cash dividends amounting to RMB4,522 million to all
+shareholders of the Company at RMB0.16 per share
+(inclusive of tax). The foregoing profit distribution plan
+is subject to the approval by the 2018 Annual General
+Meeting to be held on 30 May 2019 (Thursday).
+Dividends payable to domestic shareholders are
+declared, valued and paid in RMB. Dividends payable to
+shareholders of the Company's foreign-listed shares are
+declared and valued in RMB and paid in the currency
+of the jurisdiction in which the foreign-listed shares
+are listed (if the Company is listed in more than one
+jurisdiction, dividends shall be paid in the currency
+of the Company's principal jurisdiction of listing as
+determined by the Board). The Company shall pay
+dividends to shareholders of foreign-listed shares
+in conformity with the PRC regulations on foreign
+exchange control. If no such regulations are in place,
+the applicable exchange rate is the average closing rate
+published by the People's Bank of China one week
+before the declaration of the distribution of dividends.
+No public reserve capitalization is provided for in the
+profit distribution plan for the current financial year.
+The profit distribution policy of the Company complied
+with the Articles of Association and the examination and
+approval procedures of the Company, clearly defined
+the dividend distribution standards and percentage and
+the decision-making procedures and system. Small-
+and medium-sized shareholders of the Company have
+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.
+China Life Insurance Company Limited
+79
+2. The dividend distribution of the Company for the recent 3
+Corporate Governance
+years
+is as follows:
+Net profit
+attributable
+to equity
+holders of the
+RMB million
+Percentage of
+amount of
+cash dividends
+Amount
+Transfer
+of public
+reserve into
+share capital
+per ten shares
+In accordance with the profit distribution plan for
+the year 2018 approved by the Board on 27 March
+2019, with the appropriation to its discretionary
+surplus reserve fund of RMB1,275 million (10%
+of the net profit for 2018), the Company, based on
+28,264,705,000 shares in issue, proposed to distribute
+(shares)
+of 2018
+1. Profit distribution plan or public reserves
+capitalization plan for the
+CONTRACTS
+XVIII. MANAGEMENT
+According to the Articles of Association and relevant
+PRC laws, there is no pre-emptive rights for the
+shareholders of the Company. At present, the Company
+does not have any arrangement for share options.
+XVII. 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 2018.
+XVI. 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.
+XV. DIRECTORS' AND
+SUPERVISORS' RIGHTS TO
+ACQUIRE SHARES
+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.
+XIV. INTERESTS OF DIRECTORS
+AND SUPERVISORS (AND THEIR
+CONNECTED ENTITIES) IN
+MATERIAL TRANSACTIONS,
+ARRANGEMENTS OR
+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).
+XIII. 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 “Report of Corporate
+Governance" in this annual report.
+XII. DAY-TO-DAY OPERATIONS
+OF THE BOARD
+No H Share stock appreciation rights of the Company
+were granted or exercised in 2018. The Company will
+deal with such rights and related matters in accordance
+with the PRC governmental policies.
+Corporate Governance
+(III) In accordance with Article 213 of the
+Articles of Association, the procedures of
+reviewing the Company's profit distribution
+proposal is as follows:
+The Company's profit distribution proposal shall
+be 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.
+(IV) Profit distribution plan and public reserves
+capitalization plan
+year
+Company
+in the
+consolidated
+statements
+for the year in
+19,127
+35%
+IV. CHANGES IN ACCOUNTING
+ESTIMATES
+XI. H SHARE STOCK APPRECIATION
+RIGHTS
+V. RESERVES
+Details of the reserves of the Company are set out in
+Note 37 in the Notes to the Consolidated Financial
+Statements in this annual report.
+VI. CHARITABLE DONATIONS
+The total amount of charitable donations made
+by the Company during the Reporting Period was
+approximately RMB198 million.
+VII. 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.
+VIII. SHARE CAPITAL
+Details of the movement in share capital of the
+Company are set out in Note 35 in the Notes to the
+Consolidated Financial Statements in this annual report.
+IX. 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 14 June 2018 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 6 June 2018 for the information on
+income tax in respect of the dividend distributed to H
+Share shareholders during the Reporting Period.
+China Life Insurance Company Limited
+80
+Corporate Governance
+China Life Insurance Company Limited -
+81
+6,784
+35%
+32,253
+11,306
+Amount of
+cash dividends which dividends
+(including tax) were distributed
+in net profit
+attributable
+to equity
+holders of the
+Company in
+the consolidated
+statements
+Year in which
+dividends
+were distributed
+No management or administration contracts for
+the whole or substantial part of any business of the
+Company were entered into during the Reporting
+Period.
+Number of
+bonus stocks
+per ten shares
+(shares)
+2018
+1.6
+2017
+4.0
+2016
+2.4
+4,522
+11,395
+40%
+of dividends
+per ten shares
+(RMB)
+(including tax)
+XIX. MATERIAL GUARANTEES
+Independent Directors of the Company have rendered
+their independent opinions on the Company's external
+guarantees, and are of the view that:
+1. during the Reporting Period, the Company did not
+provide any external guarantee;
+China Life Insurance Company Limited
+Corporate Governance
+Beijing, China
+27 March 2019
+Chairman of the Board of Supervisors
+By Order of the Board of Supervisors
+Jia Yuzeng
+(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 Board of Supervisors of the Company
+reviewed the self-evaluation report on the Company's
+internal control system and did not raise any objection
+against the self-evaluation report of the Board regarding
+the Company's internal control system.
+(IV) 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.
+(III) Acquisition and sale of assets. During the
+Reporting Period, the prices for acquisition and
+sale of assets were fair and reasonable. The Board of
+Supervisors is not aware of any insider trading, any acts
+harming the interests of shareholders or incurring any
+loss to the Company's assets.
+Auditing, respectively.
+(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
+standard and unqualified auditors' reports in respect of
+the financial statements for the year 2018 in accordance
+with the China Standards on Auditing of PRC Certified
+Public Accountants and the International Standards on
+(I) 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 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.
+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".
+II. INDEPENDENT OPINION OF
+THE BOARD OF SUPERVISORS
+ON CERTAIN MATTERS
+85
+(VI) Attending training courses as well as assessment
+and selection activities, and constantly enhancing
+performance of duties by the Supervisors. In 2018, Mr.
+Luo Zhaohui and Mr. Song Ping, members of the Board
+of Supervisors, attended the 4th and 5th special training
+courses of 2018 for directors and supervisors of listed
+companies within Beijing as organized by the Listed
+Companies Association of Beijing, which gave them
+the opportunity to learn and understand the regulatory
+overview of listed companies within Beijing, cases of
+non-compliance of listed companies and their related
+entities, and measures adopted to prevent the occurrence
+of such non-compliance. All members of the Board
+of Supervisors attended the special training courses
+for the performance of duties by directors, supervisors
+and senior management officers and the training
+programs on anti-money laundering as organized by
+the Company. Pursuant to the regulatory requirements
+of the industry, the new Supervisors of the Company
+sat for the examinations of the CBIRC regarding the
+approval of qualifications of new directors, supervisors
+and senior management officers of insurance institutions
+as organized by the CBIRC. The Board of Supervisors
+of the Company participated in the activity of "Research
+on Topics in relation to the Board of Supervisors
+of Listed Companies" as organized by the China
+Association for Public Companies and was awarded the
+"Outstanding Award for Research on Special Topics".
+successively listened to business reports from Hainan
+Branch, Haikou Sub-branch and Qionghai Sub-branch
+of the Company, and exchanged opinions in great
+depth with the person-in-charge, management cadres
+and sales representatives from the local branches during
+seminars. Through investigation and research, the Board
+of 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.
+(V) Actively conducting research and investigation
+activities and examining and understanding the business
+operation of local branches. In November 2018, Mr.
+Jia Yuzeng, the Chairman of the Board of Supervisors,
+and Mr. Luo Zhaohui and Mr. Huang Xin, members
+of the Board of Supervisors, carried out investigation
+and research on Hainan Branch of the Company,
+(IV) Supervising and evaluating the performance
+of duties by Directors. In 2018, the Company
+formulated the "Provisional Measures for Evaluating the
+Performance of Duties by Directors" and commenced
+the evaluation of the performance of duties by Directors
+for the first time in accordance with the requirements
+such as the "Measures for the Administration of
+Independent Directors of Insurance Institutions"
+issued by the CBIRC and the “Operational Guidance
+for Evaluating the Performance of Duties by Directors
+of Insurance Companies" issued by the Insurance
+Association of China and after taking into account the
+actual situation of its corporate governance. Based on
+the performance of duties by Directors in 2018 and
+by reference to the information obtained during their
+participation of meetings of the Board and various
+special committees, the members of the Board of
+Supervisors evaluated and scored the Directors of the
+Company and formed evaluation opinions on them,
+which therefore improved the mechanism for the
+supervision and evaluation of duty performance of
+Directors.
+the Board. All members of the Board of Supervisors
+participated in the meetings of the Nomination and
+Remuneration Committee, the Risk Management
+Committee, and the Strategy and Assets and Liabilities
+Management Committee, respectively, in accordance
+with the work allocation among Supervisors determined
+by the Board of Supervisors, 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.
+86
+During the Reporting Period, the Company and its
+subsidiaries did not purchase, sell or redeem any of the
+Company's listed securities.
+Corporate Governance
+I. CHANGES IN SHARE CAPITAL
+subject to selling
+restrictions
+during the
+Reporting Period
+end of the
+Reporting Period
+Percentage of
+shareholding
+Nature of shareholder
+Name of shareholder
+Number of shares
+Increase/decrease
+held as at the
+China Life Insurance Company Limited
+Number of shares
+Particulars of top ten shareholders of the Company
+No. of H Share shareholders:
+27,841
+No. of A Share shareholders:
+114,811
+No. of A Share shareholders: Total number of ordinary
+134,023
+share shareholders as at
+No. of H Share shareholders: the end of the month prior
+27,923
+to the disclosure of the
+annual report
+Total number of ordinary
+share shareholders as at
+the end of the Reporting
+Period
+III. INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+(I) Total Number of Shareholders and Their Shareholdings
+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.
+II. 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.
+Unit: Shares
+pledged or frozen
+Corporate Governance
+84
+Remuneration paid by the Company to the auditors
+is subject to the approval at the shareholders' general
+meeting, pursuant to which the Board is authorized to
+determine the amount and make payment. Audit fees
+paid by the Company to the auditors will not affect the
+independence of the auditors.
+A resolution was passed at the 2017 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 2018, and Ernst & Young as
+the Hong Kong auditor of the Company for the year
+2018, who will hold office until the conclusion of the
+2018 Annual General Meeting. Ernst & Young Hua
+Ming LLP and Ernst & Young have been serving as the
+Company's auditors for six consecutive years.
+XXV. AUDITORS
+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.
+XXIV. 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 (27 March 2019), 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.
+XXIII. SUFFICIENCY OF PUBLIC
+FLOAT
+Corporate Governance
+82
+China Life Insurance Company Limited
+Corporate Governance
+In 2018, 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.
+XXII. 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 2018.
+XXI. BOARD'S STATEMENT ON
+INTERNAL CONTROL
+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.
+XX. RESPONSIBILITY STATEMENT
+OF DIRECTORS ON FINANCIAL
+REPORTS
+3. the Company has expressly provided in its Articles of
+Association the level of authority required for approving
+external guarantees and the approval procedures.
+2. the Company's internal control system regarding
+external guarantees is in compliance with laws,
+regulations, and the requirements under the "Notice in
+relation to the Standardization of Capital Flows between
+Listed Companies and Connected Parties and Issues
+in relation to External Guarantees Granted by Listed
+Companies"; and
+Remuneration paid by the Company to the auditors in 2018 was as follows:
+Service/Nature
+Audit, review and agreed-up procedures fee
+Including: Internal control audit fee
+(III) Attending and participating in corporate
+governance meetings and actively exercising their
+supervisory role. In 2018, the Board of Supervisors
+attended the 2017 Annual General Meeting and the
+First Extraordinary General Meeting 2018 of the
+Company, and participated in the regular meetings of
+(II) 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. The fifth session of the Board of Supervisors and
+the sixth session of the Board of Supervisors held six
+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.
+arrangements.
+(I) Currently, the sixth session of the Board of
+Supervisors comprises Mr. Jia Yuzeng, Mr. Luo
+Zhaohui, Mr. Tang Yong, Mr. Song Ping and Mr.
+Huang Xin, with Mr. Jia Yuzeng acting as the Chairman
+of the Board of Supervisors. Of the members of the
+Board of Supervisors, Mr. Jia Yuzeng, Mr. Luo Zhaohui
+and Mr. Tang Yong are Non-employee Representative
+Supervisors, and Mr. Song Ping and Mr. Huang Xin
+are Employee Representative Supervisors. 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 as a Non-employee
+Representative Supervisor due to adjustment of work
+arrangements. In June 2018, Mr. Miao Ping and Ms.
+Wang Cuifei retired from their positions as Supervisors
+of the Company due to the expiry of the term of the
+fifth session of the Board of Supervisors. In February
+2019, Mr. Shi Xiangming resigned from his position as
+a Supervisor of the Company due to adjustment of work
+I. ACTIVITIES OF THE BOARD
+OF SUPERVISORS
+Report of the Board of Supervisors
+From left to right: Mr. Huang Xin, Mr. Tang Yong, Mr. Jia Yuzeng, Mr. Luo Zhaohui, Mr. Song Ping
+83
+China Life Insurance Company Limited
+China Life Insurance Company Limited ☑
+27 March 2019
+By Order of the Board
+Wang Bin
+Chairman
+At the 2018 Annual General Meeting to be held on
+30 May 2019, the Board will propose a resolution
+to re-appoint Ernst & Young Hua Ming LLP as the
+PRC auditor and the auditor for US Form 20-F of the
+Company for the year 2019, and Ernst & Young as the
+Hong Kong auditor of the Company for the
+year 2019.
+64.51
+4.88
+11.14
+59.63
+Fees (RMB million)
+Total
+Non-audit services fee
+Beijing, China
+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.
+As at
+An increase in the scale of universal
+insurance accounts
+Value of one year's sales
+44,780
+million
+Net investment yield
+4.38%
+Comprehensive
+solvency ratio
+262.41%
+Annual Report 2021 | Prelude
+LO
+5
+Financial Summary
+MAJOR FINANCIAL DATA AND INDICATORS FOR THE PAST FIVE YEARS¹
+RMB million
+8.8%
+Under International Financial Reporting Standards (IFRS)
+Major Financial Data
+2021
+Net premiums earned
+643,379
+627,472
+729,499
+2.5%
+805,049
+million
+824,930
+2017
+2018
+2019
+Change
+2020
+For the year ended
+Total revenues
+50,921
+equity holders of
+the Company
+Net profit attributable to
+"Assessment and Selection of the 2021 Evergreen Awards"
+Caijing
+"Social Responsibility Award of the Year"
+The "19th Financial Annual Champion Awards"
+Hexun.com
+"Influential Insurance Company of the Year"
+"Sustainable and Green Development Award"
+"Bronze Prize for Global Innovator"
+China Securities Journal
+"Assessment and Selection of Investment Golden Bull Awards for
+China's Insurance Industry in 2021"
+"Assessment and Selection of the 12th 'Golden Wealth Management""
+Shanghai Securities News
+"Annual Insurance Protection Brand Top Award"
+of the Ark Prizes for China's Insurance Industry in 2021"
+Securities Times
+"Assessment and Selection
+"Ark Prize for Golden Insurance Service in 2021"
+"Ark Prize for Technological Progress of China's
+Insurance Industry in 2021"
+"Investment Golden Bull Award for Insurance Company"
+611,251
+4
+European Financial Management and
+Marketing Association (EFMA) and Accenture
+"Efma-Accenture Innovation in Insurance Awards"
+million
+214,057
+investment income
+Gross
+million
+1,203,008
+Annual Report 2021 | Prelude
+Embedded value
+4,891,085
+million
+618,327
+Total assets
+Gross written premiums
+Business Highlights
+million
+High-quality Development in 2021"
+604,666
+560,278
+10,998
+31,869
+286,448
+304,019
+-5.8%
+286,028
+147,551
+200,990
+As at 31 December
+Total assets
+Investment assets²
+Total liabilities
+Total equity holders' equity
+4,891,085 4,252,466
+4,716,401 4,095,491
+4,404,427 3,795,529
+478,585 450,056
+15.0% 3,726,791
+15.2% 3,573,199
+16.0% 3,317,432
+6.3% 403,779
+3,254,460 2,897,656
+3,104,065 2,753,176
+2,931,146 2,572,308
+318,393 320,967
+Per share (RMB)
+11.36
+11.26
+14.29
+6.3%
+15.92
+16.93
+57,887
+Equity holders' equity per share³
+0.39
+2.05
+1.7%
+1.77
+1.80
+Earnings per share (basic and diluted)³
+1.13
+1.7%
+50,056
+50,921
+509,467
+6.5%
+580,801
+618,754
+Insurance benefits and claims
+608,855
+479,219
+621,310
+3.5%
+758,239
+784,763
+Benefits, claims and expenses
+506,910
+532,023
+677,722
+1.1%
+466,043
+Profit before income tax
+holders of the Company
+Net profit attributable to ordinary
+share holders of the Company
+Net cash inflow/(outflow) from
+operating activities
+32,249
+11,382
+58,281
+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 centralization 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.
+50,257
+expenses
+50,921
+41,667
+13,907
+59,788
+-7.3%
+54,476
+50,495
+Net profit attributable to equity
+"Ark Prize for Insurance Company with
+3
+Annual Report 2021 | Prelude
+Restriction on Major Assets
+133
+Consolidated Statement of
+and Rectification
+131
+Consolidated Statement of
+Financial Position
+Regulations, Penalties Imposed
+49
+Alleged Violation of Laws and
+124
+Independent Auditor's Report
+48
+Undertakings
+Performance
+124
+FINANCIAL REPORT
+48
+116
+Index of Information Disclosure
+119
+Announcements
+Definitions and Material Risk Alert
+123
+49
+40
+Material Litigations or Arbitrations
+40
+Major Connected Transactions
+40
+08
+Material Contracts and Their
+40
+Comprehensive Income
+Performance of Environmental
+and Social Responsibilities
+49
+65
+Directors, Supervisors, Senior
+68
+Management and Employees
+Report of Corporate Governance
+88
+Changes in Ordinary Shares and
+Shareholders Information
+82
+Long history
+and excellent
+brand
+The predecessor of the Company, one of the first batch of enterprises to underwrite insurance
+business in China, was approved by the Chinese Government for establishment in October 1949.
+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
+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.
+Prominent
+principal
+business and
+sound financial
+strength
+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.
+Convenient
+services
+and superb
+customer
+experience
+Core Competitiveness
+Basic Information of the Company
+61
+52
+Consolidated Statement of
+135
+Changes in Equity
+Consolidated Statement of
+136
+Cash Flows
+Report of the Board of Supervisors
+06
+138
+Financial Statements
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+42
+52
+Notes to the Consolidated
+116
+OTHER INFORMATION
+34
+Honors and Awards
+Annual Report 2021 | Prelude
+2
+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.
+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.
+Professional
+and stable
+core team
+"2021 Forbes Global 2000", ranking 49th
+and innovation
+empowerment
+China Life Insurance Company Limited
+Stock Code: 2628
+點諧中國
+Annual Report
+2021
+The Company is a life insurance company
+established in Beijing, China on 30 June 2003
+according to the Company Law and the Insurance
+Law of the People's Republic of China. The
+Company was successfully listed on the New
+York Stock Exchange, the Hong Kong Stock
+Exchange and the Shanghai Stock Exchange on
+17 and 18 December 2003, and 9 January 2007,
+respectively. The Company's registered capital is
+RMB28,264,705,000.
+中国人寿保险股份有限公司
+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.
+"2021 Fortune China 500 List”, ranking 8th
+Fortune China
+"Assessment and Selection of the 3rd New Fortune Best Listed Company"
+New Fortune
+"New Fortune Best Listed Company"
+"Gold Medal List of Chinese Financial Institution"
+Financial Times
+"Golden Dragon Award – 2021 Best Listed Insurance Company"
+Forbes
+"Assessment and Selection of the 11th China Securities 2021 'Golden Bauhinia' Awards"
+"Listed Company with the Best Investment Value
+for the 14th Five-Year Plan Period"
+"Best Listed Company"
+21st Century Business Herald
+Institutional Investor
+"2021 Best Life Insurance Company in Asia"
+"Most Respected Enterprise in Asia (Insurance Industry)"
+Hong Kong Tai Kung Wen Wei Media Group,
+the Listed Companies Association of Beijing,
+Hong Kong Chinese Enterprises Association,
+the Chinese Financial Association of Hong Kong,
+the Chinese Securities Association of Hong Kong,
+the Hong Kong Chartered Governance Institute and
+Hong Kong Securities Professionals Association
+Ordinary share holders' equity
+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 2021, the Company had
+approximately 323 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.
+01
+19
+Analysis of Specific Items
+29
+Technology Empowerment and
+Operations and Services
+Future Prospect
+32
+222
+Business Analysis
+33
+04
+EMBEDDED VALUE
+05
+SIGNIFICANT EVENTS
+07
+32
+33
+CONTENTS
+15
+15
+PRELUDE
+Core Competitiveness
+Honors and Awards
+Business Highlights
+Financial Summary
+2
+Review of Business Operations
+in 2021
+2
+02
+LETTER TO SHAREHOLDERS
+12
+03
+MANAGEMENT
+DISCUSSION AND ANALYSIS
+3560
+16.93
+1.3%
+Leading
+technologies
+10.12
+5.22
+7.11
+operating activities per share³
+Major financial ratios
+Weighted average ROE (%)
+10.97
+11.83
+decrease
+16.47
+3.54
+10.49
+of 0.86
+percentage
+Gearing ratio (%)
+90.05
+89.25
+point
+increase
+89.02
+90.07
+88.77
+of 0.80
+percentage
+Gross investment yield 5 (%)
+4.98
+5.30
+point
+decrease
+-5.8%
+5.24
+10.76
+Net cash inflow/(outflow) from
+-51.1%
+The change in fair value of financial
+assets
+Equity holders' equity
+478,585
+450,056
+6.3%
+Note:
+8
+Due to the combined impact of total
+comprehensive income and profit
+distribution during the Reporting Period
+Interest-bearing loans and other borrowings include a three-year bank loan of EUR330 million with a maturity date on 8 September 2023, a five-year
+bank loan of GBP275 million with a maturity date on 25 June 2024, a five-year bank loan of USD860 million with a maturity date on 16 September
+2024, and a six-month bank loan of EUR127 million with a maturity date on 13 January 2022, which is automatically renewed upon maturity pursuant
+to the terms of the agreement, and a six-month bank loan of EUR78 million with a maturity date on 5 January 2022, which is automatically renewed
+upon maturity pursuant to the terms of the agreement. All the above are fixed rate bank loans. Interest-bearing loans and other borrowings also
+include a five-year bank loan of USD970 million with a maturity date on 27 September 2024, and an eighteen-month bank loan of EUR110 million
+with a maturity date on 9 March 2022, both of which are floating rate loans.
+Annual Report 2021 | Prelude
+288,212
+313,594
+Investment contracts
+The accumulation of insurance liabilities
+from new policies and renewals
+New investments in associates and joint
+ventures and an increase in the equity of
+associates and joint ventures
+15.0%
+2,973,225
+3,419,899
+15.92
+6.3%
+14.01
+10.99
+11.08
+per share³
+10.13
+3.29
+5.16
+of 0.32
+Held-to-maturity securities
+1,533,753
+545,678
+1,189,369
+-3.0%
+29.0%
+An increase in the allocation of
+government bonds
+Available-for-sale securities
+1,429,287
+1,215,603
+17.6%
+An increase in the allocation of bonds in
+available-for-sale securities
+Securities at fair value
+206,771
+161,570
+The needs for liquidity management
+6.7%
+7.7%
+56,655
+239,584
+257,953
+60,440
+Cash and cash equivalents
+Investments in associates
+and joint ventures
+The needs for liquidity management
+62.5%
+7,947
+12,915
+Securities purchased under
+agreements to resell
+28.0%
+529,488
+Term deposits
+Main Reasons for Change
+Change
+6
+Annual Report 2021 | Prelude
+percentage
+point
+Notes:
+1.
+2.
+3.
+4.
+5.
+The financial data of previous years for this report have been restated due to a business combination under common control this year. For details, please
+refer to Note 35 in the Notes to the Consolidated Financial Statements in this annual report.
+Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities + Held-to-maturity
+securities + Term deposits + Derivative financial assets + Securities purchased under agreements to resell + Loans + Statutory deposits-restricted +
+Investment properties + Investments in associates and joint ventures
+15,286
+In calculating the percentage change of the "Earnings per share (basic and diluted)", "Equity holders' equity per share", "Ordinary share holders' equity
+per share" and "Net cash inflow/(outflow) from operating activities per share", the tail differences of the basic figures have been taken into account.
+Gearing ratio = Total liabilities/Total assets
+Annual Report 2021 | Prelude
+7
+MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
+REASONS FOR CHANGE
+RMB million
+Major Items of the
+As at
+Insurance contracts
+Consolidated Statement
+31 December
+of Financial Position
+2021
+31 December
+2020
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the
+end of the previous year - Securities sold under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of
+the previous year + Investment assets at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative
+financial liabilities at the end of the period)/2)
+An increase in the allocation of debt-type
+assets in securities at fair value through
+profit or loss
+through profit or loss
+-4.4%
+7,481
+Deferred tax liabilities
+other borrowings Note
+The fluctuation of exchange rate
+19,556
+18,686
+Interest-bearing loans and
+An increase in maturities payable
+3.2%
+balances payable
+56,818
+Annuity and other insurance
+agreements to repurchase
+The needs for liquidity management
+95.9%
+122,249
+239,446
+Securities sold under
+55,031
+Executive Director
+-
+attend
+Wang Bin
+8/10
+3/3
+Yin Zhaojun
+Non-executive Director
+Liu Huimin
+Non-executive Director
+Number of Number of
+meetings meetings
+attended in attended by
+person/ proxies/
+Number of Number of
+meetings meetings
+required to required to
+attend
+2/10
+Type of Director
+10/10
+Attendance records of the resigned Directors of the
+Company at the Board meetings convened during the
+Reporting Period are as follows:
+0/5
+0/2
+2/2
+Independent Director
+Zhai Haitao
+5/5
+Independent Director
+Lam Chi Kuen
+0/10
+1/1
+Independent Director
+Leung Oi-Sie Elsie
+Name of Director
+0/1
+2. All Directors who were unable to attend any meeting of the Board have
+authorized other Directors to attend and vote at the meeting on their
+behalf.
+0/5
+12
+11
+10
+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
+whistleblowing mechanism of the Company.
+The Company established its Audit Committee on 30
+June 2003. In 2021, the Audit Committee comprised only
+Independent Directors. Currently, the Audit Committee
+of the seventh session of the Board comprises Mr.
+Lam Chi Kuen¹¹, Mr. Tang Xin and Mr. Zhai Haitao 12, all
+being Independent Directors, with Mr. Lam Chi Kuen
+acting as the Chairman. Due to consecutively serving
+as Independent Directors for six years, Mr. Chang Tso
+Tung Stephen and Mr. Robinson Drake Pike successively
+resigned from their respective positions as a member and
+the Chairman of the Audit Committee.
+AUDIT COMMITTEE
+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
+up basic rules and regulations of the Company, submitting
+to the Board any requests for appointment or removal of
+senior management officers and exercising other rights
+granted to him under the Articles of Association and by the
+Board. The President is fully accountable to the Board for
+the operations of the Company.
+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 10. During the Reporting Period
+and up to the date of this report, Mr. Su Hengxuan has
+served as the President of the Company. The President is
+responsible for the day-to-day operations of the Company,
+mainly including implementing strategies, policies,
+operation plans and investment schemes approved by the
+Board, formulating the Company's internal management
+structure and fundamental management policies, drawing
+CHAIRMAN AND PRESIDENT
+During the Reporting Period, no Independent Director had
+raised any objection against the proposals and matters
+considered by the Board of the Company.
+5/5
+In 2021, Mr. Tang Xin, Ms. Leung Oi-Sie Elsie, Mr. Lam
+Chi Kuen and Mr. Zhai Haitao, all being the Independent
+Directors of the Company, carried out investigation and
+research on the investment sector of the Company,
+listened to the reports concerning the investment
+management structure and investment system of the
+Company, and discussed and communicated in respect
+of the relevant issues. Through the investigation and
+research, the Board further understood the development
+and status of the Company's investment business in
+great depth and examined the effectiveness of the
+implementation of decisions of the Board.
+Annual Report 2021 | Corporate Governance
+All Independent Directors diligently fulfilled their
+responsibilities and faithfully performed their duties by
+attending meetings of the Board and the specialized
+Board committees in 2021, examining and approving
+the Company's business development, its financial
+management and connected transactions, participating
+in the establishment of specialized Board committees,
+providing professional and constructive advice in respect
+of major decisions of the Company, seriously listening
+to the reports from relevant personnel, understanding
+the daily operations and any possible operational risks of
+the Company in a timely manner, and expressing their
+opinions and exercising their functions and powers at
+Board meetings, thus actively performing their duties
+as Independent Directors in an effective manner. At
+the annual special meeting between the Chairman and
+the Independent Directors, all Independent Directors
+put forward their own views and opinions on various
+aspects such as the macro-environment, industry
+development, policies of the insurance industry, and
+corporate governance, etc., and gave advices and
+recommendations on matters including the development
+strategy of the Company, development of business, and
+risk management. 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 2021, 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.
+Performance of duties by Independent Directors
+In 2021, all Independent Directors of the Board of the
+Company possessed extensive experience in various
+fields, such as macro economy, 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.
+0/10
+1. The number of meetings attended in person includes meetings
+attended by the Directors on-site and by way of telephone or video
+conference.
+Notes:
+110000
+Chang Tso Tung Stephen Independent Director
+0/8
+8/8
+Independent Director
+Robinson Drake Pike
+89
+10/10
+Independent Director
+Tang Xin
+24 March 2021
+meetings
+27 April 2021
+Description
+Seven proposals, including the "Proposal in relation to the New Business
+Plan of the Company for the Years from 2021 to 2023" and the "Proposal in
+relation to the 'Statement of the Company on Risk Preference for the Year
+2021, were considered and approved.
+Ninth meeting of the Risk Management The "Report on the Case Prevention of the Company for the Year 2020"
+and Consumer Rights Protection
+Committee of the sixth session of
+the Board
+4/5
+24 August 2021
+27 October 2021
+Second meeting of the Risk
+Management and Consumer Rights
+Protection Committee of the seventh
+session of the Board
+15 December 2021
+Third meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the seventh session of
+the Board
+was debriefed.
+Four proposals, including the "Proposal in relation to the Amendments to
+the 'Statement of the Company on Risk Preference for the Year 2021'"
+and the "Proposal in relation to the 'Report on the Enterprise-wide Risk
+Management of the Company for the Second Quarter of 2021'", were
+considered and approved.
+The "Proposal in relation to the 'Report on the Enterprise-wide Risk
+Management of the Company for the Third Quarter of 2021'" was
+considered and approved.
+First meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the seventh session of
+the Board
+Five proposals, including the "Proposal in relation to the Risk Compliance
+Analysis on the Strategic Asset Allocation Plan of the Company for the
+Years from 2022 to 2024" and the "Proposal in relation to the Work Report
+on the Fraudulent Risk Management of the Company for the Year 2021",
+were considered and approved, and the "Audit Report on the Solvency Risk
+Management System of the Company for the Year 2021" was debriefed.
+The meetings convened are as follows:
+Annual Report 2021 | Corporate Governance
+0/3
+Attendance records of the resigned Directors at meetings are as follows:
+Number of meetings
+Number of meetings
+attended in person/
+attended by proxies/
+Name of member
+97
+Number of meetings
+Number of meetings
+required to attend
+Yin Zhaojun
+Liu Huimin
+Notes:
+1. The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+2.
+All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+required to attend
+1/5
+Performance of duties by the Risk Management
+and Consumer Rights Protection Committee
+Reviewing the risk analysis on major matters concerning
+the business operation and management of the Company.
+In 2021, the Risk Management and Consumer Rights
+Protection Committee reviewed the risk analysis on
+major matters concerning the business operation and
+management of the Company, reviewed and approved the
+proposals in relation to the risk compliance analysis on the
+strategic asset allocation plan for the years from 2022 to
+2024, the risk compliance analysis on the asset allocation
+plan for the year 2022 and the overseas investment plan
+and investment authorization for the year 2022, and
+gave guiding opinions on risk control for major matters
+concerning the business operation and management
+of the Company in accordance with the regulatory
+requirements of the CBIRC on the China Risk Oriented
+Solvency System (C-ROSS).
+Su Hengxuan
+Executive Director
+9/10
+1/10
+Li Mingguang
+Executive Director
+7/10
+1/10
+3/10
+Executive Director
+2/4
+2/4
+Wang Junhui
+Non-executive Director
+9/10
+1/10
+Huang Xiumei
+In 2021, the Risk Management and Consumer Rights
+Protection Committee performed its duties and functions
+in strict compliance with the "Procedural Rules for the
+Risk Management and Consumer Rights Protection
+Committee Meetings". All members performed their
+obligations in a responsible manner and reviewed the
+proposals in relation to the internal control system of
+the Company, its risk management and construction
+in compliance with law. 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.
+9/10
+Yuan Changqing
+98 Annual Report 2021 | Corporate Governance
+2/5
+3/5
+0/5
+5/5
+Independent Director, Chairperson of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Non-executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Independent Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Meetings and attendance
+Non-executive Director
+During the Reporting Period, five regular Board meetings
+and five ad-hoc Board meetings were held by the Board of
+the Company, of which seven meetings were convened
+by a combination of physical meeting and participation
+through communication tools, and the remaining meetings
+were convened by written resolutions with voting through
+communication tools. Attendance records of the current
+individual Directors are as follows:
+Number of
+meetings
+attended in attended by
+proxies/
+Number of
+meetings
+required to
+Name of Director
+Type of Director
+person/
+Number of
+meetings
+required to
+attend
+attend
+Number of
+meetings
+Meetings convened
+meetings
+Eighth meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the sixth session of
+the Board
+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, 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.
+13
+Mr. Lam Chi Kuen became a member of the Nomination and Remuneration Committee in February 2022.
+Annual Report 2021 | Corporate Governance 93
+Meetings and attendance
+During the Reporting Period, three 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
+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 Mr. Tang
+Xin, an Independent Director, Mr. Yuan Changqing, a
+Non-executive Director, and Mr. Lam Chi Kuen 13, an
+Independent Director, with Mr. Tang Xin acting as the
+Chairman. Due to consecutively serving as an Independent
+Director for six years, Mr. Robinson Drake Pike resigned
+from his position as a member of the Nomination and
+Remuneration Committee.
+Position
+person/
+Number of
+Number of
+meetings
+attended by
+proxies/
+Number of
+meetings
+meetings
+required
+required
+to attend
+Number of
+meetings
+attended in
+NOMINATION AND REMUNERATION COMMITTEE
+Examining the internal audit functions of the Company. In
+2021, the Audit Committee reviewed proposals including
+the proposal on the 2020 internal audit work and the
+proposal on the internal audit work report for the first half
+of 2021, and discussed any matters of concerns through
+communication in a timely and effective manner, with a
+view to further understanding the duties of the Company's
+audit departments and supervising the effectiveness
+of the internal audit function. The Audit Committee
+I was of the view that the internal audit function of the
+Company was effective during the Reporting Period. In the
+selection and appointment of external auditors, the Audit
+Committee performed its duty of review in compliance
+with laws and issued its review opinions.
+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 the
+"Standard Regulations on Corporate Internal Control"
+and relevant requirements, as well as Section 404 of the
+U.S. Sarbanes-Oxley Act. The Audit Committee earnestly
+performed its duties and responsibilities and monitored
+the Company to carry out its work in compliance with laws
+and regulations pursuant to the relevant requirements
+of the CBIRC, the SSE and the HKSE. As required by its
+duties and responsibilities, the Audit Committee reviewed
+the annual and half-year compliance reports of the
+Company to ensure that its work was conducted strictly
+according to the relevant regulatory requirements in a
+reasonable and efficient manner.
+24 March 2021
+18th meeting of the Audit Committee
+of the sixth session of the Board
+27 April 2021
+19th meeting of the Audit Committee
+of the sixth session of the Board
+24 August 2021
+First meeting of the Audit Committee
+of the seventh session of the Board
+27 October 2021
+Second meeting of the Audit Committee
+of the seventh session of the Board
+15 December 2021
+Third meeting of the Audit Committee
+of the seventh session of the Board
+Description
+Eleven proposals, including the "Proposal in relation to the Financial
+Report of the Company for the Year 2020" and the "Proposal in relation to
+the Remuneration of Auditors of the Company for the Year 2020", were
+considered and approved, and the report of Ernst & Young Hua Ming LLP
+on the audit for the year 2020 was debriefed.
+Five proposals, including the "Proposal in relation to the Financial Report
+of the Company for the First Quarter of 2021" and the "Proposal in relation
+to the Appointment of Auditors of the Company for the Year 2021", were
+considered and approved, and the report of Ernst & Young Hua Ming LLP
+on the results of agreed-upon procedures for the first quarter of 2021
+and the report of PriceWaterhouseCoopers Zhong Tian LLP on matters
+associated with independence were debriefed.
+Three proposals, including the "Proposal in relation to the Financial Report
+of the Company for the First Half of 2021", were considered and approved,
+and the report of PricewaterhouseCoopers Zhong Tian LLP on the interim
+review for 2021 was debriefed.
+Three proposals, including the "Proposal in relation to the Financial Report
+of the Company for the Third Quarter of 2021, were considered and
+approved, and the report of PricewaterhouseCoopers Zhong Tian LLP on
+the agreed-upon procedures for the Third Quarter of 2021 was debriefed.
+The "Prior Approval for the Scope of Additional Services of
+PricewaterhouseCoopers" was considered and approved.
+Performance of duties by the Audit Committee
+In 2021, the Audit Committee performed its relevant
+duties and functions in strict compliance with the
+"Procedural Rules for the 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 any proposals
+considered and discussed at the meetings.
+Reviewing and approving financial reports. The Audit
+Committee, according to its duties, reviewed and
+approved annual, interim and quarterly financial reports of
+the Company. The Audit Committee was of the view that
+the financial reports of the Company reflected the overall
+situation of the Company in a true, accurate and complete
+manner, and gave its written opinion in this regard. By
+reviewing and monitoring the completeness of financial
+statements, annual report and accounts, interim report
+and quarterly reports of the Company, and examining
+significant matters such as financial statements and
+reports, the Audit Committee guaranteed the accuracy
+and completeness of the financial information disclosed
+by the Company and the consistency of its financial
+reports. Prior to the audit conducted by the accounting
+firm and the review of the annual report, the Audit
+Committee communicated the relevant situations with the
+auditors and listened to the report in connection with the
+arrangement of the audit. Before issuing opinion on audit
+by the accounting firm, the Audit Committee commenced
+in-depth communications with it so as to understand
+whether there were any issues arisen during the audit.
+92 Annual Report 2021 | Corporate Governance
+Assessing the work of and strengthening communications
+with external auditors. 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. 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.
+to attend
+Meetings convened
+Independent Director, Chairman of the
+Nomination and Remuneration Committee of
+the seventh session of the Board
+93
+1.
+The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+2. All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+3. Mr. Zhai Haitao served as a member of the Nomination and Remuneration Committee from October 2021 to February 2022.
+94 Annual Report 2021 | Corporate Governance
+The meetings convened are as follows:
+Meetings convened
+24 March 2021
+14th meeting of the Nomination and
+Remuneration Committee of
+the sixth session of the Board
+Notes:
+27 April 2021
+27 October 2021
+First meeting of the Nomination and
+Remuneration Committee of
+the seventh session of the Board
+Description
+17 proposals, including the "Proposal in relation to the Remuneration of
+Directors and Supervisors of the Company", the "Proposal in relation to the
+Remuneration of Senior Management of the Company" and the nomination
+of the candidates for Directors of the seventh session of the Board, were
+considered and approved.
+Three proposals, including the "Proposal in relation to the Nomination
+of Mr. Liu Yuejin as an Assistant to the President of the Company" and
+the "Proposal in relation to the Nomination of Ms. Zhang Di as the Chief
+Investment Officer of the Company", were considered and approved.
+Five proposals, including the "Proposal in relation to the Nomination of
+Ms. Zhang Di as an Assistant to the President of the Company" and the
+"Proposal in relation to the Nomination of Mr. Liu Fengji as the Person in
+Charge of Audit of the Company", were considered and approved.
+Performance of duties by the Nomination and
+Remuneration Committee
+In 2021, the Nomination and Remuneration Committee
+performed its relevant duties and functions in strict
+compliance with the "Procedural Rules for the Nomination
+and Remuneration Committee Meetings". All members
+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.
+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, knowledge and
+experience), fully reviewed the professional qualifications
+and industrial background of the candidates for Directors
+and members of the Board committees and the
+independence of Independent Directors, and submitted
+the opinions in relation thereto to the Board. It also
+conducted a careful assessment on the qualifications,
+skills, knowledge and experience of candidates for senior
+management officers to ensure that the candidates met
+the requirements set by the Company, and submitted a
+review opinion to the Board and agreed to submit such
+proposals to the Board for consideration.
+15th meeting of the Nomination and
+Remuneration Committee of
+the sixth session of the Board
+0/2
+2/2
+Robinson Drake Pike
+0/3
+Non-executive Director, member of the
+Yuan Changqing
+Nomination and Remuneration Committee of
+the seventh session of the Board
+0/3
+3/3
+Independent Director, member of the
+Zhai Haitao
+Nomination and Remuneration Committee of
+the seventh session of the Board
+1/1
+0/1
+Attendance records of the resigned Director at meetings are as follows:
+Number of meetings
+Number of meetings
+attended in person/
+attended by proxies/
+Name of member
+Number of meetings
+Number of meetings
+required to attend
+required to attend
+3/3
+The meetings convened are as follows:
+Tang Xin
+Annual Report 2021 | Corporate Governance
+Annual Report 2021 | Corporate Governance 95
+Proposing remuneration policy of Directors, Supervisors
+and senior management officers of the Company. The
+Nomination and Remuneration Committee took into
+account various factors such as business development
+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.
+Tang Xin
+Wang Junhui
+Li Mingguang
+Leung Oi-Sie Elsie
+to attend
+Carrying out the evaluation of the performance of duties
+by Directors, Supervisors and senior management officers
+of the Company and their performance appraisal. The
+Nomination and Remuneration Committee reviewed
+proposals on the results of evaluating the performance
+of duties by Directors for the year 2020, the results of
+performance appraisal of senior management officers
+for the year 2020 and the performance target contract of
+senior management for the year 2021, the remuneration
+of Directors and Supervisors of the Company, and the
+remuneration of senior management officers of the
+Company, and made recommendations to the Board
+in respect of matters such as the determination of
+performance target, performance appraisal procedures
+and results.
+required
+Given that Mr. Wang Bin, a former Executive Director of the Company, was not able to perform his role and duties as a Director, Mr. Yuan Changqing,
+a Non-Executive Director of the Company, was elected at the sixth meeting of the seventh session of the Board of the Company on 13 January 2022 to
+assume the role and duties of the Chairman of the Board.
+Mr. Lam Chi Kuen became a member of the Audit Committee in June 2021 and the Chairman of the Audit Committee in February 2022.
+Mr. Zhai Haitao became the Chairman of the Audit Committee in October 2021 and a member of the Audit Committee in February 2022.
+90
+Annual Report 2021 | Corporate Governance
+Meetings and attendance
+required
+RISK MANAGEMENT AND CONSUMER RIGHTS
+PROTECTION COMMITTEE
+The Company established its Risk Management
+Committee on 30 June 2003. In December 2019, the
+Board renamed 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.
+Currently, the Risk Management and Consumer Rights
+Protection Committee of the seventh session of the
+Board comprises Ms. Leung Oi-Sie Elsie, an Independent
+Director, Mr. Li Mingguang, an Executive Director, Mr.
+Wang Junhui 14, a Non-executive Director, and Mr. Tang
+Xin 15, an Independent Director, with Ms. Leung Oi-Sie
+Elsie acting as the Chairperson. Due to the adjustment of
+work arrangements, Mr. Yin Zhaojun and Mr. Liu Huimin
+successively resigned from their positions as members
+of the Risk Management and Consumer Rights Protection
+Committee.
+91
+proxies/
+Number of
+person/
+Number of
+Position
+Name of member
+meetings
+attended by
+Number of
+Number of
+meetings
+attended in
+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:
+Meetings and attendance
+Annual Report 2021 | Corporate Governance
+96
+Mr. Tang Xin became a member of the Risk Management and Consumer Rights Protection Committee in July 2021.
+15
+Mr. Wang Junhui became a member of the Risk Management and Consumer Rights Protection Committee in February 2021.
+14
+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 as delegated by
+the Board or on its own initiative and the management's
+response to these findings, dealing with major risk
+emergency events or crisis events or major disagreement
+in risk management, and supervising and directing the
+senior management and the relevant departments to
+resolve any issues identified during the rectification
+process in a timely manner.
+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
+to attend
+Number of
+meetings
+attended in
+3/3
+0/2
+2/2
+required to attend
+required to attend
+Number of meetings
+Number of meetings
+Position
+Name of member
+0/3
+Chang Tso Tung Stephen
+meetings
+required
+to attend
+0/2
+12
+0/5
+99
+03
+0/3
+Number of meetings
+Number of meetings
+Robinson Drake Pike
+Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+attended by proxies/
+required
+person/
+Number of
+Number of
+meetings
+attended by
+proxies/
+Number of
+Attendance records of the resigned Directors at meetings are as follows:
+3/3
+5/5
+2/2
+to attend
+Zhai Haitao
+attended in person/
+meetings
+Independent Director, Chairman of the Audit
+Committee of the seventh session of the Board
+Independent Director, member of the Audit
+Committee of the seventh session of the Board
+Independent Director, member of the Audit
+Committee of the seventh session of the Board
+Lam Chi Kuen
+Tang Xin
+Name of member
+Mr. Lam Chi Kuen became a member of the Connected Transactions Control Committee in June 2021.
+19
+Mr. Zhai Haitao became a member of the Connected Transactions Control Committee in October 2021.
+102 Annual Report 2021 | Corporate Governance
+Attendance records of the resigned Directors at meetings are as follows:
+18
+Chang Tso Tung Stephen
+Robinson Drake Pike
+attended in person/
+Ninth meeting of the Connected
+Transactions Control Committee of
+the sixth session of the Board
+0/2
+26 May 2021
+Eighth meeting of the Connected
+Transactions Control Committee of
+the sixth session of the Board
+24 March 2021
+Meetings convened
+The meetings convened are as follows:
+Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+0/3
+0/2
+2/2
+3/3
+required to attend
+required to attend
+Number of meetings
+attended by proxies/
+Number of meetings
+Number of meetings
+Number of meetings
+2/2
+5/5
+Zhai Haitao
+proxies/
+Number of
+meetings
+meetings
+required
+required
+to attend
+to attend
+Tang Xin
+Independent Director, Chairman of the
+Connected Transactions Control Committee of
+the seventh session of the Board
+24 August 2021
+0/5
+Independent Director, member of the
+Leung Oi-Sie Elsie
+Connected Transactions Control Committee of
+the seventh session of the Board
+5/5
+96
+0/5
+Independent Director, member of the
+Lam Chi Kuen
+Connected Transactions Control Committee of
+3/3
+0/3
+the seventh session of the Board
+Independent Director, member of the
+Connected Transactions Control Committee of
+the seventh session of the Board
+First meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+106 Annual Report 2021 | Corporate Governance
+Second meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+The Company has established a well-developed, effective
+and practical information disclosure management
+system in strict compliance with the regulatory laws and
+regulations of its listed jurisdictions and the insurance
+industry, internal rules and regulations as well as self-
+regulatory requirements 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 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.
+The Company has created 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 in the
+three listing venues. In addition, investors may call the
+investor relations hotline of the Company at 86-10-
+63631329 or email to the investor relations email box
+at ir@e-chinalife.com if they have any further inquiries.
+The Company will respond to such enquiries in a timely
+manner.
+Annual Report 2021 | Corporate Governance 105
+In 2021, the Company further proceeded with the
+construction of its information disclosure regulation
+system, and continued to make amendments to improve
+the regulations in connection with the information
+disclosure affairs management and the registration
+and management of persons who have knowledge of
+inside information as required by the revised rules of
+the CSRC and the SSE, which led to the successful and
+efficient implementation of the basic regulation system
+of information disclosure. For the disclosure by way of
+provisional announcements, the Company fulfilled its
+obligation of information disclosure in a timely manner
+by publishing timely announcements with respect to the
+progress of such matters as significant matters, major
+investments and connected transactions in its listed
+jurisdictions or on the media satisfying the conditions
+prescribed by the CSRC, the official website of the
+Company and the website of Insurance Association of
+China. For the disclosure by way of periodic reports, the
+Company constantly enhanced the quality of information
+disclosure with its focus primarily on investor concerns,
+and delivered corporate value to the market and investors
+in an approachable, simple and clear, and graphically
+illustrated manner. The Company also regularly organized
+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 2021, the
+Company was awarded Grade A in the assessment by the
+SSE of information disclosure of listed companies for the
+year of 2020-2021.
+The Company took active actions to respond to any
+uncertainties brought by the social, economic and financial
+environments both internationally and domestically, and
+developed investor relations in a proactive way with
+its stringent attitude and innovative thinking. It kept
+abreast with the development pace of technology era 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, and mitigated the negative impacts
+brought by the pandemic. The works conducted by the
+Company for investor relations mainly included holding
+general meetings and results briefings, 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 2021, the
+Company communicated with more than 5,200 investors
+and analysts, including more than 2,600 investors
+who attended results briefings online and offline. The
+Company held over 170 online and offline meetings with
+approximately 1,500 investors and analysts for the year,
+and communicated with more than 1,100 institutional
+investors by attending a total of 46 investors' meetings
+held locally or internationally. It also communicated
+with more than 90 investors in 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 click-through
+rate of 35,000 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 2021, the Company won various awards, including
+the "Precedent for the Best Practices of the Office of
+the Board of Directors of Listed Company for 2021" by
+the China Association for Public Companies, the "Best
+Investor Activity" by the Investor Relations Magazine, the
+"Most Progress in Investor Relations Award" by Hong
+Kong Investor Relations Association, the "Interaction
+of Medium and Small Investor Relations Award" and
+the "Institutional Friendly Communication Award" by
+www.p5W.net, and the "Best Communication with the
+Capital Market Award" and the "Best Digital Investor
+Relations Award" in the 5th Excellent IR in China. With
+the outstanding achievements of its practice in investor
+relations management, the Company was among the first
+batch of companies to have been selected for inclusion
+of its investor relations precedents into the case study
+collection of the SSE for investor relations management.
+108 Annual Report 2021 | Corporate Governance
+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.
+A relatively well-developed internal control system
+has been established in terms of team-building, sales
+and operations, and system management for the sales
+channels, such as individual insurance, bancassurance,
+group insurance and health insurance. This internal
+control system regulates the relevant authorizations
+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 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 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.
+It is the responsibility of the Board of the Company to
+establish and effectively implement well-established
+internal control systems, assess their effectiveness and
+disclose the report on the internal control assessment.
+The Board and the Audit Committee are responsible for
+leading the implementation of internal control measures
+of the Company, and the Board of Supervisors supervises
+the internal control assessments performed by the Board.
+The Company has established the Risk Management
+Department in its headquarters and branches. The
+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.
+Pursuant to the requirements of the "Notice on the Proper
+Preparation for Disclosure of 2021 Annual Reports of
+Companies Listed on the Main Board" and the "Business
+Guide for the Periodic Reports of Listed Companies"
+promulgated by the SSE, the Company shall release an
+Internal Control Self-assessment Report simultaneously
+with the publication of its 2021 annual report. Meanwhile,
+the Company, as an overseas private issuer, was required
+to provide a specific assessment report on its internal
+control system relating to financial reporting for the year
+ended 31 December 2021 in its Form 20-F (U.S. Annual
+Report) to be 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 2021. Such assessments
+are conducted on an annual basis and in two stages,
+namely, interim assessment and supplementary test. The
+Company has 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 2021.
+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 to
+be submitted to the SEC.
+Annual Report 2021 | Corporate Governance 107
+The "Measures for the Administration of Connected Transactions of Insurance Companies" (Yin Bao Jian Fa [2019] No. 35) was abolished on 1 March
+2022, and the "Measures for the Administration of Connected Transactions of Banking and Insurance Institutions" (Order of the China Banking
+and Insurance Regulatory Commission [2022] No. 1) was implemented. The relevant amendments to the Articles of Assocation are in line with the
+requirements of the two aforesaid regulatory provisions.
+20
+The Company has been devoting significant effort towards
+the promotion of internal control and the establishment of
+internal control related systems. In accordance with the
+requirements of Section 404 of the "U.S. Sarbanes-Oxley
+Act", the "Standard Regulations on Corporate Internal
+Control", the "Implementation Guidelines for Corporate
+Internal Control", the "Guidance on Internal Control for
+Companies Listed on the Shanghai Stock Exchange",
+the "Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited", and the "Basic
+Standards of Internal Control for Insurance Companies"
+issued by the CBIRC, the Company has carried out a lot
+of work on its internal control system establishment,
+rules implementation and risk management by strictly
+following its corporate governance structure. The
+Company has also formulated and issued the "Internal
+Control Implementation Manual of China Life Insurance
+Company Limited (2021 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, the HKSE, the U.S.
+Securities and Exchange Commission (the "SEC") and
+the New York Stock Exchange, with respect to corporate
+internal control.
+The amendments to the Articles of Association as
+described above shall come into effect after the approval
+from the CBIRC.
+Companies" (Yin Bao Jian Fa [2019] No. 35) and the
+"Guiding Opinions on Banking and Insurance Institutions
+Strengthening the Building of Working Systems and
+Mechanisms for Protection of Consumer Rights and
+Interests" (Yin Bao Jian Fa [2019] No. 38).
+In accordance with the relevant requirements of the
+Company Law, the "Reply of the State Council on the
+Adjustment of the Notice Period for General Meeting
+and Other Matters Applicable to the Overseas Listed
+Companies" (Guo Han [2019] No. 97), and the "Measures
+for the Administration of Connected Transactions of
+Insurance Companies" (Yin Bao Jian Fa [2019] No. 35) 20
+and the "Guiding Opinions on Banking and Insurance
+Institutions Strengthening the Building of Working
+Systems and Mechanisms for Protection of Consumer
+Rights and Interests" (Yin Bao Jian Fa [2019] No. 38)
+issued by the CBIRC, the amendments to the Articles
+of Association were put to vote and adopted by way
+of special resolution at the First Extraordinary General
+Meeting 2021 held on 16 December 2021. The major
+amendments to the Articles of Association mainly
+include: 1. revising the notice period for general meeting,
+removing the requirements for shareholders who intend
+to attend a general meeting to give written reply to the
+Company and for minimum percentage of voting rights
+and relevant procedures for convening general meetings,
+and optimizing the provisions with respect to the change
+of registration by the holders of H shares prior to the
+date of a general meeting in accordance with Article 102
+of the Company Law and the relevant requirements of
+the "Reply of the State Council on the Adjustment of the
+Notice Period for General Meeting and Other Matters
+Applicable to the Overseas Listed Companies" (Guo
+Han [2019] No. 97); and 2. revising the provisions of the
+Articles of Association with respect to the specialized
+committees of the Board, establishing a new Connected
+Transactions Control Committee under the Board of
+Directors of the Company, and adding the new provisions
+with respect to the composition of the Connected
+Transactions Control Committee; as well as changing
+the name of the Risk Management Committee under
+the Board of the Company to the Risk Management and
+Consumer Rights Protection Committee, in accordance
+with the relevant requirements of the "Measures for the
+Administration of Connected Transactions of Insurance
+CHANGES OF THE ARTICLES OF ASSOCIATION
+meetings
+attended by
+INFORMATION DISCLOSURE AND INVESTOR
+RELATIONS
+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 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.
+15 December 2021
+Third meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+Description
+Four proposals, including the "Proposal in relation to the Execution
+of a Supplemental Agreement to the 'Agreement for the Entrusted
+Management of Retained Assets' between the Company and China Life
+Investment Management Company Limited" and the "Proposal in relation
+to the 'Report on the Overall Status of Connected Transactions of the
+Company for the Year 2020'", were considered and approved.
+Two proposals, including the "Proposal in relation to the Participation
+by the Company in the Capital Increase of CGB", were considered and
+approved.
+Two proposals, including the "Proposal in relation to an Increase in
+Revolving Investment for Project Qihang", were considered and approved.
+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" was considered
+and approved.
+Nine proposals, including the "Proposal in relation to the Renewal of the
+'Policy Management Agreement' between the Company and China Life
+Insurance (Group) Company" and the "Proposal in relation to the Renewal
+of the Asset Management Agreement between the Company and China
+Life Franklin Asset Management Company Limited", were considered and
+approved.
+Annual Report 2021 | Corporate Governance 103
+Performance of duties by the Connected
+Transactions Control Committee
+In 2021, 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.
+Determining connected parties of the Company. In 2021,
+the Connected Transactions Control Committee reviewed
+the "Report on Determining a List of Connected Parties
+of the Company as of 31 December 2020" and the
+"Report on Determining a List of Connected Parties of the
+Company as of 30 June 2021", and reported to the Board
+in respect thereof.
+27 October 2021
+Approving connected transactions. In 2021, the
+Connected Transactions Control Committee reviewed
+connected transaction projects, such as the participation
+by the Company in the capital increase of CGB, its
+investment in Project Eyas, investment in China
+Life Smart Healthcare Fund Project, renewal of the
+"Policy Management Agreement" with CLIC, renewal
+of the "Framework Agreement for Daily Connected
+Transactions" with Pension Company, renewal of the
+framework agreement for the connected transaction
+regarding bonds distribution with AMC, renewal of the
+framework agreement for connected transactions with
+Sino-Ocean Group and other framework agreements for
+daily connected transactions, and the execution of the
+"Agreement for Entrusted Investment and Management
+and Operating Services with respect to Alternative
+Investments with Insurance Funds" with CLI, fully
+discussed the necessity, feasibility and risks of the
+projects and made recommendations to the Board in
+respect thereof.
+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 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.
+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 the insurance
+administrative and regulatory authorities of the PRC. The
+Company currently possesses the "Insurance Permit"
+(Number: 000005) issued by the CBIRC. The Company is
+independently engaged in the businesses as prescribed
+in its business scope according to law, has separate sales
+and agency channels and is licensed to use licensed
+trademarks without consideration. The completeness and
+independence of the Company's business operations will
+not be adversely affected by its relationship with related
+parties.
+104 Annual Report 2021 | Corporate Governance
+PERFORMANCE APPRAISAL AND INCENTIVES
+FOR SENIOR MANAGEMENT
+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.
+The remuneration for senior management mainly comprises
+position compensation, performance rewards, welfare
+benefits and medium and long term incentives.
+SHAREHOLDERS' INTERESTS
+To safeguard shareholders' interests, in addition to the
+right to participate in the Company's affairs by attending
+shareholders' general meetings, shareholders have the
+right to convene extraordinary shareholders' general
+meetings under certain circumstances.
+Reviewing the implementation of the system for
+connected transactions management. In 2021, the
+Connected Transactions Control Committee reviewed the
+implementation of the Company's system for connected
+transactions management and the report on connected
+transactions, considered and approved the "Proposal in
+relation to the 'Report on the Overall Status of Connected
+Transactions of the Company for the Year 2020'", and
+submitted the review opinions to the Board.
+Number of
+required
+to attend
+Number of
+meetings
+attended in
+Independent Director, Chairman of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+Executive Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+3/3
+0/3
+person/
+Number of
+3/6
+Leung Oi-Sie Elsie
+Independent Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+6/6
+0/6
+Wang Junhui
+Non-executive Director, member of
+the Strategy and Assets and Liabilities
+Management Committee of the seventh
+session of the Board
+2/6
+4/6
+Huang Xiumei
+Executive Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+Attendance records of the resigned Director at meetings are as follows:
+Name of member
+Chang Tso Tung Stephen
+1/3
+2/3
+Number of meetings
+Su Hengxuan
+Number of meetings
+Lam Chi Kuen
+required
+Providing its opinions for the review of the proposals
+on risk management to the Board. In 2021, the Risk
+Management and Consumer Rights Protection Committee
+closely monitored and controlled and effectively prevented
+internal and external risks of the Company, assisted the
+Board in reviewing the assessment reports on business
+risk and internal control of the Company according to
+the national and international regulatory requirements.
+The Risk Management and Consumer Rights Protection
+Committee provided its opinions for the review of 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 2020 and the work plan for the year 2021, the
+report on case prevention for the year 2020, the statement
+of the Company on risk preference for the year 2021, the
+audit report on the solvency risk management system
+of the Company for the year 2021, the reputational risk
+management report and the work report on fraudulent risk
+management, which offered professional support to the
+Board's decision-making in a scientific manner.
+Reviewing the system of the Company in relation
+to consumer rights protection. In 2021, the Risk
+Management and Consumer Rights Protection Committee
+reviewed the report on the customer rights protection
+of the Company for the year 2020 and the proposal for
+customer rights protection of the Company for 2021, and
+submitted the review opinions to the Board.
+STRATEGY AND ASSETS AND LIABILITIES
+MANAGEMENT COMMITTEE
+The Company established the Strategy Committee on 30
+June 2003. In October 2010, the proposal to establish the
+Strategy and Investment Decision Committee on the basis
+of the Strategy Committee was reviewed and approved
+at the ninth meeting of the third session of the Board.
+In June 2018, the proposal to establish the Strategy and
+Assets and Liabilities Management Committee on the
+basis of the Strategy and Investment Decision Committee
+was reviewed and approved at the twenty-fourth meeting
+of the fifth session of the Board. Currently, the Strategy
+and Assets and Liabilities Management Committee of the
+seventh session of the Board comprises Mr. Zhai Haitao 16
+and Ms. Leung Oi-Sie Elsie, all being the Independent
+Directors, Mr. Su Hengxuan and Ms. Huang Xiumei¹7, all
+being the Executive Directors, and Mr. Wang Junhui, a
+Non-executive Director, with Mr. Zhai Haitao acting as the
+Chairman. Due to consecutively serving as an Independent
+Director for six year, Mr. Chang Tso Tung Stephen
+resigned from his position as the Chairman of the Strategy
+and Assets and Liabilities Management Committee.
+The Strategy and Assets and Liabilities Management
+Committee is mainly responsible for the drawing-up
+of long-term development strategies of the Company,
+conducting studies on important matters concerning
+assets and liabilities management and the relevant
+policies and systems, the system for the application and
+management of insurance funds, and major strategic
+investment decisions of the Company, and making
+recommendations in respect thereof.
+16
+Mr. Zhai Haitao became the Chairman of the Strategy and Assets and Liabilities Management Committee in February 2022.
+17
+Ms. Huang Xiumei became a member of the Strategy and Assets and Liabilities Management Committee in July 2021.
+Annual Report 2021 | Corporate Governance
+99
+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
+Number of
+meetings
+attended in
+person/
+Number of
+Number of
+meetings
+attended by
+proxies/
+Number of
+meetings
+meetings
+to attend
+attended in person/
+3/6
+Number of meetings
+Description
+Four proposals, including the "Proposal in relation to the New Business
+Plan of the Company for the Years from 2021 to 2023" and the "Proposal
+in relation to the Final Assessment Report for the Outline of the '13th Five-
+Year Development Plan' of the Company", were considered and approved.
+Two proposals, including the "Proposal in relation to the General Mandate
+for the Issue of H Shares of the Company", were considered and approved,
+and the "Report on the Situation Relevant to the Assets and Liabilities
+Management of the Company for 2020" was debriefed.
+Two proposals, including the "Proposal in relation to the Participation
+by the Company in the Capital Increase of CGB", were considered and
+approved.
+Two proposals, including the "Proposal in relation to the 'Statement of the
+Company on Risk Preference for the Year 2021'", were considered and
+approved.
+The "Proposal in relation to the Implementation of Tasks and the
+Performance Appraisal of the Company for 2020" was considered and
+approved.
+Ten proposals, including the "Proposal in relation to the Strategic Asset
+Allocation Plan of the Company for the Years from 2022 to 2024" and the
+"Proposal in relation to the Asset Allocation Plan of the Company for the
+Year 2022", were considered and approved.
+Performance of duties by the Strategy and Assets
+and Liabilities Management Committee
+In 2021, all members of the Strategy and Assets and
+Liabilities Management Committee attended meetings in a
+timely manner, reviewed the proposals on the application
+of the Company's insurance funds, annual investments,
+major strategic projects, assets and liabilities management
+and annual related reports. Members of the Strategy and
+Assets and Liabilities Management Committee diligently
+performed their duties. During meetings of the Strategy
+and Assets and Liabilities Management Committee, all
+members actively participated in discussions and gave
+professional advices on any proposals considered and
+discussed at the meetings.
+Reviewing annual asset allocation plan and entrusted
+investments of the Company. In 2021, the Strategy and
+Assets and Liabilities Management Committee reviewed
+the proposals on investment plans such as the annual
+asset allocation plan of the Company and the annual
+investment plan of the Company for self-use real estate,
+the proposals on authorization of investments such as
+the annual authorization by the Company of investment
+in non self-use real estate, the annual authorization of
+investment entrusted by the Company in connection with
+Renminbi liberalization and the annual authorization by
+the Company of investment in equity investment funds,
+and the proposals on investment guidelines such as the
+management guidelines on the investment made by CLI
+under the entrustment of the Company, and submitted its
+opinions to the Board in this regard.
+Reviewing the systems of the Company concerning assets
+and liabilities management. In 2021, the Strategy and
+Assets and Liabilities Management Committee reviewed
+and approved the proposals on the amendments to the
+statement of the Company on risk preference for the year
+2021 and the amendments to the rules on enterprise-
+wide risk management of the Company, and submitted its
+review opinions to the Board.
+Annual Report 2021 | Corporate Governance 101
+Discussing the Company's development plans and major
+strategic projects. In 2021, the Strategy and Assets
+and Liabilities Management Committee reviewed the
+proposals on the final assessment report for the outline of
+the "13th five-year development plan" of the Company,
+its strategic asset allocation plan for the years from 2022
+to 2024, asset allocation plan for the year 2022, the
+Company's participation in the capital increase of CGB
+and its investment in Project Eyas, and made significant
+recommendations to the Board.
+CONNECTED TRANSACTIONS CONTROL
+COMMITTEE
+The Company established its Connected Transactions
+Control Committee on 29 October 2019. In October 2019,
+the "Proposal in relation to the Establishment of the
+Connected Transactions Control Committee of the Board
+of Directors" was reviewed 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 Mr. Tang
+Xin, Ms. Leung Oi-Sie Elsie, Mr. Lam Chi Kuen 18 and Mr.
+Zhai Haitao 19, all being the Independent Directors, with
+Mr. Tang Xin acting as the Chairman. Due to consecutively
+serving as Independent Directors for six years, Mr.
+Chang Tso Tung Stephen and Mr. Robinson Drake Pike
+successively resigned from their positions as members of
+the Connected Transactions Control Committee.
+attended by proxies/
+Meetings and attendance
+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:
+Name of member
+Position
+Third meeting of the Strategy and
+Assets and Liabilities Management
+Committee of the seventh session
+of the Board
+15 December 2021
+The principal duties of the Connected Transactions
+Control Committee are to confirm connected parties of
+the Company, manage, examine and approve connected
+transactions to control risks relating to connected
+transactions, and focus on the compliance and necessity
+of connected transactions and the fairness of their pricing,
+which provide an important basis for the Board's decision-
+making in connected transaction management.
+27 October 2021
+Second meeting of the Strategy and
+Assets and Liabilities Management
+Committee of the seventh session
+of the Board
+Number of meetings
+required to attend
+3/3
+0/3
+Notes:
+1.
+The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+2.
+All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+3. Mr. Lam Chi Kuen served as the Chairman of the Strategy and Assets and Liabilities Management Committee from July 2021 to February 2022.
+required to attend
+The meetings convened are as follows:
+100 Annual Report 2021 | Corporate Governance
+17th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+26 May 2021
+16th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+24 August 2021
+15th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+24 March 2021
+Meetings convened
+27 April 2021
+First meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the seventh session of the Board
+Risk Management System
+monitoring of sale risk pre-warning, and risk management
+data mart. The informatization and intellectualization of
+risk management improved significantly, and the risk
+management capability of the Company reached a new
+level, which provided a strong support to the high-quality
+development of the Company.
+The Company has established an organizational 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 organizational structure for risk
+management covering the corporate governance level,
+the headquarters level, the provincial branches level, the
+local or city branches level, and the county sub-branches
+level. With the reliance on the 5-tier risk management
+and control structure, the Company has put in place
+three lines of defense that focus on risk management:
+the first line of defense consists of branches and sub-
+branches at all levels and various functional departments
+that identify, assess, address, monitor and report risks
+at the front end of business; the second line of defense
+is composed of the Risk Management and Consumer
+Rights Protection Committee of the Board, as well 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 organize and
+commence any work in relation to risk management.
+By establishing the organizational structure of risk
+control, the Company has gradually established a criss-
+cross network of risk control system, with the risk
+management departments at all levels as leading bodies,
+the relevant functional departments as main bodies, the
+vertical decision-making control system and horizontal
+interactive collaboration mechanism as supporting
+systems and the comprehensive risk management as
+focus, thus laying a strong foundation for the Company to
+achieve a comprehensive risk management system with
+full coverage, all-employee participation and effective
+workflows.
+110 Annual Report 2021 | Corporate Governance
+Work in relation to Risk Management
+Pursuant to the requirements of the CBIRC on the China
+Risk Oriented Solvency System (C-ROSS), the Company
+pushed forward the establishment of a solvency risk
+management system, and built a "1+7+N" comprehensive
+risk management system with the "Comprehensive Risk
+Management Rules" as the general principles, seven
+types of risks (including insurance risk, market risk,
+credit risk, operational risk, strategic risk, 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 actively implemented
+key risk monitoring and risk pre-warning classification
+management, and consistently reinforced the mechanism
+for formation, transmission and application of the risk
+preference system, which created a system for the 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 helped enhanced its risk management standard in
+all aspects.
+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.
+In 2021, the Company vigorously promoted the
+informatization of risk management, actively applied.
+the latest advanced technologies such as big data and
+artificial intelligence, and further optimized and upgraded
+the intelligent application of anti-money laundering in
+greath depth, thus making significant breakthroughs in
+the intelligent identification of illegal fund-raising risks,
+rate.
+The major risks of the Company in the course of operation
+and management include insurance risk, market risk,
+credit risk, operational risk, strategic risk, reputational risk,
+liquidity risk, information safety risk and ESG risk.
+Insurance Risk
+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
+The Company assessed and monitored insurance risks
+through sensitivity analysis and other actuarial appraisal
+techniques, with a focus on the impact of mortality
+rate, morbidity rate, lapse rate and other relevant
+assumptions on the Company's operating results.
+The Company managed insurance risks through the
+following mechanisms and processes: (1) establishing
+an organizational structure and a system for insurance
+risk management, so that insurance risk management
+can be performed within a scientific, comprehensive and
+effective management system; (2) devising a system for
+risk limit indicators and carrying out normal monitoring
+analysis, so as to contain risks within a controllable range;
+(3) implementing an effective product development and
+management system to strictly control product pricing
+risks, and strengthening empirical analysis to offer support
+to pricing assumptions and assessing assumptions, in
+order to prevent and control insurance risks from the
+front end of products; (4) 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; and (5)
+transferring and mitigating insurance risk through a
+scientific and reasonable reinsurance arrangement.
+In 2021, 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.
+Annual Report 2021 | Corporate Governance
+111
+Market Risk
+Risk Management
+Risk Identification and Control
+Company has also fostered the concept of compliance
+creating value, and promoted a good interaction between
+the compliance management functional department of
+the Company and external regulators, for the purpose of
+enhancing the overall compliance management standard
+of the Company and ensuring the achievement of its goal
+of high-quality development.
+112 Annual Report 2021 | Corporate Governance
+Annual Report 2021 | Corporate Governance 109
+In order to address the market risks, the Company
+continued to pay attention to the risk exposures of interest
+rate, equity prices, real estate prices and exchange rate,
+monitored value at risk/mark to market (VaR/MTM), yield
+volatility, duration and other key market risk indicators
+on a regular basis, set up a 2-tier risk limit indicator and
+corresponding threshold values, carried out sensitivity
+analysis and stress test to measure the risk losses to
+the Company under stress scenarios, 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 CBIRC and
+the internal management provisions of the Company.
+According to the results of the risk indicator monitoring
+and stress test, the market risk of the Company was
+within a normal controllable range. The Company primarily
+adopted the following risk control measures in 2021:
+(1) stepping up efforts on the study of macro economy,
+currency and financial policies to assess domestic and
+international economic and market trends in a timely
+manner; (2) reviewing the risks of major assets and the
+characteristics of their returns on a regular basis, so as
+to constantly optimize the model of assets allocation; (3)
+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; and (5) facilitating the establishment of systems
+to improve risk monitoring and pre-warning functions
+and simultaneously increasing the frequency and scope
+of emergency exercises to acquire more experience in
+Strategic Risk
+reporting mechanisms; (2) establishing a loss data room
+for operational risks to carry out the loss data collection
+and analysis of operational risks on a regular basis; (3)
+establishing a key indicator room for operational risks
+to organize regular monitoring of any risks that may
+cause losses and to take relevant control measures
+against them; (4) conducting self-assessments on the
+operational risk management and effect on a regular
+basis and identifying any issues in the management and
+control of operational risks, with a view to constantly
+increasing the capability of the Company in operational risk
+management; and (5) promoting a culture of operational
+risk management by organizing and conducting training
+courses on operational risk management. In 2021, the
+operational risk management was satisfactory, and
+losses from operational risks were controllable. With the
+continual improvement of the operational risk control
+system, the management foundation of the Company was
+strengthened consistently and the quality and efficiency of
+risk management were further enhanced.
+The Company consistently implemented regulatory
+requirements and its operational risk management
+strategies, optimized the operational risk management
+system, and regulated the operational risk management
+processes, so as to enhance the effectiveness of
+operational risk management policies, systems and
+process management on an ongoing basis. The Company
+established an operational risk management system
+that combines three management tools, namely self-
+assessment of operational risk and its control, loss
+data room for operational risks and key risk indicators
+monitoring, and further reinforced the operational risk
+management at all levels of branches, so as to facilitate
+the vertical expansion of operational risk management
+network and achieve the integration of operational risk
+management and control with its business development.
+In the meanwhile, the Company reported operational risk
+governance to the senior management on a quarterly
+basis. The operational risk control measures adopted by
+the Company mainly included the following: (1) carrying
+out the classification management for operational
+risk and developing an operational risk management
+process compatible with the nature, scale and risk
+characteristics of the Company's business, including
+the identification, assessment, control, monitoring and
+Operational risk refers to the risk of direct or indirect
+losses arising from incomplete internal operational
+processes, personnel, systems or external events.
+Operational Risk
+Reinsurance credit risk refers to the credit risk that may
+possibly be faced by the Company in connection with
+the obligations to be undertaken by reinsurers due to
+their failure to perform reinsurance contracts. To address
+the reinsurance credit risks, the Company adopted the
+following measures: (1) properly setting self-retained
+risk limits through an effective reinsurance management
+system, and using reinsurance as an effective tool to
+transfer risks to reinsurers with a high level of solvency;
+(2) reviewing the relevant information of a reinsurer in
+the reinsurance registration system in strict compliance
+with the regulatory requirements prior to the execution
+of a reinsurance contract to ensure that the reinsurer
+in cooperation with the Company satisfies with the
+regulatory requirements; and (3) conducting credit
+assessment on reinsurers through internal rating to select
+reinsurers that have higher credit standing to mitigate
+credit risks.
+Reinsurance Credit Risk
+To address the credit risks of investment business,
+the Company developed and continuously improved
+the organizational structure of credit risk management,
+and constantly optimized the process for credit risk
+management. Meanwhile, the Company established
+and made amendments to the management system
+and strengthened the implementation of such system
+pursuant to the regulatory requirements and management
+practices; strengthened the research on risks and kept
+on improving risk analysis, assessment, monitoring, pre-
+warning and emergency response standard. By relying
+on information technology, the Company consistently
+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 2021: (1) further improving the
+centralized credit rating process and system functions
+to enhance the credit risk management standard; (2)
+optimizing 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.
+Credit Risk of Investment Business
+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 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.
+Credit Risk
+emergency response.
+The Company has formulated the "Measures for
+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 2021, there has been no major error in
+periodic report disclosures of the Company. In order to
+cope with the latest regulatory requirements, enhance
+the confidentiality of its inside information, and register
+and submit information concerning persons who have
+knowledge of inside information, the Company, after
+taking into account the regulatory requirements, has
+revised during the Reporting Period the "Measures for
+the Administration of Registration of Persons Who Have
+Knowledge of Inside Information of China Life Insurance
+Company Limited". For the purpose of strengthening
+the its emergency management for the information
+disclosure of emergencies, the Company has, after
+taking into account the regulatory requirements, revised
+the "Measures for the Emergency Management for the
+Information Disclosure of Emergencies of China Life
+Insurance Company Limited" during the Reporting Period
+and, after taking into account the regulatory requirements,
+revised the "Rules for the Administration of Information
+Disclosure of China Life Insurance Company Limited" and
+the "System of Internal Reporting of Material Information
+of China Life Insurance Company Limited" in 2018. In
+particular, the internal report on material information has
+been included in the indicator system under the internal
+control report of the Company. Persons responsible
+for reporting material information 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.
+The Company has established a well-developed system
+relating to investment decisions in accordance with the
+relevant laws and regulations and based on the actual
+situation of investment management. The system defines
+the approval and decision-making authority, authorization
+mechanism and specific decision-making procedures for
+investment management. All major investment decisions
+shall be approved and implemented in strict compliance
+with the internal decision-making process of the Company
+and the requirements of its investment management
+system. The Investment Decisions Committee is a
+permanent body of the Company for investment decisions,
+which is responsible for reviewing major investments and
+providing support to any investment decisions made by
+the management.
+The Company has established a comprehensive
+information technology system to cover all aspects of
+IT work and formed a closed-loop control mechanism
+focusing on centralized review and publication, periodic
+inspection and continuous improvement. By conducting
+measures such as the inspection and evaluation of system
+implementation on a regular basis, the Company has
+facilitated the effective implementation of the system
+and enhanced the standardization and normalization 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 2021, the Company conducted several
+internal and external risk assessments to promote
+construction by inspection, with a view to consistently
+enhancing its capability of managing information safety
+risks.
+The Risk Management Department, the Audit Department
+and the Legal and Compliance Department of the
+Company are responsible for the supervision and
+inspection of its internal control measures. The Company
+identifies issues in the areas of system design, control
+implementation and risk management in a timely manner
+through the adoption of various measures such as
+walk-through test, control test and risk analysis. It also
+eliminates loopholes, guards against risks and reduces
+losses by adopting various measures to improve systems,
+enhance legal compliance and pursue responsible
+persons. In 2021, the Company actively adapted to the
+stringent regulatory environment in the PRC and overseas
+financial industry and strictly complied with the regulatory
+requirements to constantly improve the organizational
+structure of internal audit and further strengthen the
+mechanism for internal audit management, which
+effectively performed the supervisory role of audit. The
+Company carried out the economic responsibility audit on
+managers at all levels, performed a series of special audits
+closely related to the Company's reform for development,
+and conducted a variety of regular audits on anti-money
+laundering, connected transactions, assets and liabilities
+management, solvency system construction, internal
+control over the application of insurance funds, protection
+of customers' rights and interests, compliance of
+intermediary business, and insurance fraud management
+pursuant to regulatory requirements. Meanwhile, the
+Company has put more efforts on the application of audit
+results, and played a proactive role to supervise and
+direct the implementation of rectification measures for
+any issues identified in audit, facilitating the standardized
+management and compliance operation of the Company.
+The Company has formulated regulations with respect to
+the reporting, investigation, handling of and responsibility
+attribution for cases involving any violations of laws and
+regulations by employees, each being implemented
+by the Legal and Compliance Department, which
+ensures that cases involving any violations of laws and
+regulations by employees are handled in a timely manner,
+and the persons involved will be attributed to proper
+responsibility. The Legal and Compliance Department
+reports the criminal cases involving practitioners and
+manages the responsibility attribution of such cases in
+accordance with regulations such as the "Measures for
+the Administration of Criminal Cases Involving Banking
+and Insurance Institutions (for Trial Implementation)"
+issued by the CBIRC and internal policies such as the
+"Measures for the Administration of Criminal Cases (for
+Trial Implementation)" and the "Implementing Rules for
+Responsibility Attribution of Cases". The Company has
+constantly optimized three lines of defense for compliance
+management to establish an efficient compliance
+management system, with a view to identifying, guarding
+against and mitigating material compliance risks. The
+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.
+Huangpu District,
+Shanghai, PRC
+Reputational Risk
+China Life
+601628
+China Life
+Stock Code
+Stock Short Name
+Exchanges on which the
+Stocks are Listed
+Shanghai Stock Exchange
+The Stock Exchange of
+Hong Kong Limited
+ADR
+H Share
+A Share
+Stock Type
+STOCK INFORMATION
+12/F, Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing,
+P.R. China
+2628
+The Company's website at www.e-chinalife.com
+www.sse.com.cn
+China Securities Journal (www.cs.com.cn)
+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
+CSRC's Designated Website for
+the Company's Annual Report
+Disclosure
+Media and Websites for the
+Company's A Share Disclosure
+INFORMATION DISCLOSURE AND PLACE FOR OBTAINING THE REPORT
+* 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
+ir@e-chinalife.com
+86-10-66575112
+86-10-66575112
+HKExnews website of Hong Kong Exchanges and
+Clearing Limited at www.hkexnews.hk
+86-10-63631191
+New York Stock Exchange
+Annual Report 2021 | Other Information 117
+The Company set up a relatively well-developed system
+for strategic risk management, and established an
+organizational system for strategic risk management
+with the ultimate responsibility assumed by the Board,
+under the direct leadership of the management and
+with the division of labour and collaboration among
+the relevant functional departments. By taking into full
+account various factors such as market conditions, risk
+preference and capital position, the Company made
+planning for its medium- and long-term development
+and put the same into practice in annual business plans
+and work plans, so as to strengthen the formulation,
+approval, implementation and evaluation of whole
+process management of strategic and development
+planning. The Company also created an indicator system
+for the daily monitoring of strategic risks to monitor and
+analyze strategic risks on a regular basis, which ensured
+an effective execution of the Company's strategic risk
+management. In 2021, the soundness of the Company's
+strategic risk management system and the effectiveness
+of its implementation were maintained.
+118 Annual Report 2021 | Other Information
+Yip Siu Foon, Linda
+Name of the Certified Auditor:
+Central, Hong Kong
+Address: 22/F, Prince's Building,
+PricewaterhouseCoopers
+International Auditor
+Debevoise & Plimpton LLP
+Address: 60 Wall Street, New York, NY 10005
+Address: Shops 1712-1716, 17th Floor,
+Hopewell Centre, 183 Queen's Road East,
+Wanchai, Hong Kong
+Name of the Signing Auditors:
+Zhou Xing, Tu Yi
+LFC
+Center, 2 Link Suqare,
+202 Hubin Road,
+Address: 11/F,
+PricewaterhouseCoopers
+Zhong Tian LLP
+Domestic Auditor
+King & Wood Mallesons
+Latham & Watkins LLP
+Deutsche Bank
+Computershare Hong Kong
+Investors Services Limited
+Auditors of the Company
+International Legal Advisers
+Domestic Legal Adviser
+Depositary of ADR
+H Share Registrar and
+Transfer Office
+OTHER RELEVANT INFORMATION
+PricewaterhouseCoopers
+Annual Report 2021 | Corporate Governance 113
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Securities Representative
+Customer Service Hotline
+Investor Relations Hotline
+Telephone
+Registered Office Address/
+Current Office Address
+Postal Code
+Legal Representative
+Registered Name in English
+Registered Name in Chinese
+BASIC INFORMATION OF THE COMPANY
+INFORMATION
+OTHER
+Annual Report 2021 | Corporate Governance 115
+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 effectiveness, 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.
+Fax
+For 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.
+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 of the Company
+reviews and confirms the assessment results, taking into
+consideration the key issues as part of its formulation of
+an overall strategy, and exercising its supervisory function
+with respect to the management of such issues and
+their performance. In 2021, the Company established an
+ESG risk management system, through which five ESG
+risks were identified as follows: information safety risk,
+climate change risk, corruption risk, human resources
+and customer relationship management risk, and talent
+attraction and retention risk. The Company has devised
+the management strategy against the above risks in order
+to keep track with the risk development trend in a timely
+ESG Risk
+In 2021, the Company paid great attention and actively
+implemented the Data Security Law of the PRC for the
+purpose of protecting the legitimate rights and interests
+of customers. It optimized its data governance structure,
+refined the responsibilities of divisions at all levels for data
+management, and improved the related data management
+regulations. The Company assessed the sophistication
+of data management capability against the national
+benchmarks, defined the targets to be protected for
+data security and the key areas for protection, achieved
+the classified security protection for the full life cycle
+such as the collection, transmission and storage of data,
+established a 3-dimensional data security protection
+system based on classified protection, and consistently
+strengthened the management and control of data
+security, in order to ensure that the data was manageable
+and controllable.
+114 Annual Report 2021 | Corporate Governance
+The Company attached great importance to information
+safety risk management. Firstly, the Company set up
+organizations to offer protection for information safety. It
+established the information safety functional departments
+at the headquarters and provincial levels for performing
+the duty of information safety management at each level.
+Secondly, the Company developed various systems
+and strictly implemented such systems to ensure the
+standardization of information management. Thirdly, the
+Company optimized 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 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 of risks for the entire network
+with the help from the enterprise general control center,
+thus achieving the centralized analysis and coordinated
+disposal of various safety risks. In addition, the Company
+constantly stepped up efforts on education for the safety
+awareness of employees to foster a corporate culture of
+'everyone places emphasis on safety", and conducted
+several assessments on internal and external risks,
+which further enhanced the capability of the Company in
+information safety risk management. In 2021, there was
+no circumstance where the Company's operation was
+affected due to the breakdown of computers or security
+breach.
+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.
+Information Safety Risk
+The Company established a system for liquidity risk
+management to define the organizational structure and
+responsibilities of liquidity risk management. Further,
+the Company developed the processes covering the
+identification, evaluation, monitoring, response and
+disposal, reporting, and rectification of liquidity risk, and
+organized regular emergency exercises on liquidity risks.
+Overall, the liquidity risk of the Company was insignificant.
+The Company will constantly step up its effort on liquidity
+risk management pursuant to the regulatory requirements
+and its own regulations to ensure the performance of its
+obligation to give insurance benefits as scheduled.
+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.
+Liquidity Risk
+In 2021, the Company constantly made improvements
+to its system for reputational risk management to
+optimize relevant working mechanism and further
+enhance the standard of reputational risk management.
+For the improvement of system establishment, a sound
+mechanism for the evaluation and responsibility attribution
+of reputional risk was established to consolidate the main
+management responsibilities, strengthen the governance
+of reputational risk sources, and mitigate hidden
+reputational risk in an active and effective manner. 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 any
+reputational risk incdients and effectively protect brand
+reputation. The Company also continued to offer training
+courses and exercises on reputational risk management to
+raise the risk awareness of all employees, which helped
+cultivate a culture of reputational risk management.
+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 systems to prevent reputational risk.
+manner.
+Li Yinghui
+Website
+Hong Kong Office Address
+86-10-63631329
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Li Mingguang
+Board Secretary
+Email
+Fax
+Telephone
+Office Address
+Name
+CONTACT INFORMATION
+116 Annual Report 2021 | Other Information
+852-29192628
+Email
+16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
+Hung Hom, Kowloon, Hong Kong
+www.e-chinalife.com
+86-10-66575722
+95519
+86-10-63631329
+86-10-63633333
+100033
+16 Financial Street, Xicheng District, Beijing, P.R. China
+and the legal representative of the Company)
+Yuan Changqing (assuming the roles and duties of the Chairman of the Board
+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
+ir@e-chinalife.com
+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.
+Announcement of Premium Income
+2021/8/12
+47
+48
+Announcement of Premium Income
+Announcement - Election of Employee Representative Supervisor
+Announcement of Premium Income
+Notice of Board Meeting
+Voluntary Announcement - Convening of 2021 Interim Results Briefing
+Announcement of Unaudited Interim Results for the Six Months Ended
+30 June 2021
+2021/7/14
+2021/8/2
+2021/8/13
+2021/8/16
+2021/8/25
+49
+Announcement - Proposed Amendments to the Articles of Association
+2021/8/25
+50
+Announcement on the Progress of Connected Transaction in relation to a Partnership
+2021/8/25
+51
+Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of 2021)
+2021/8/25
+62
+46
+Overseas Regulatory Announcement
+45
+43
+Supplemental Notice of Annual General Meeting
+2021/5/25
+36
+Supplemental Form of Proxy of Holders of H Shares for use at the Annual General
+Meeting of the Company to be held on Wednesday, 30 June 2021
+2021/5/25
+37
+38
+39
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement of Premium Income
+2021/5/25
+2021/5/25
+2021/6/15
+40
+40
+Announcement - Approval of Qualification of Independent Director by the CBIRC
+and Resignation of Independent Director
+2021/6/30
+41
+41
+Announcement - Resolutions Passed at the Annual General Meeting, Election
+of Members of the Seventh Session of the Board of Directors and the Board of
+Supervisors, Change of Auditors and Distribution of Final Dividend
+2021/6/30
+Announcement on Qualification of Executive Director
+2021/7/6
+42
+44
+35
+-
+52
+60
+61
+22 22
+Reply Slip of Holders of H Shares
+2021/9/28
+Notification Letter and Change Request Form to Registered Shareholders
+2021/9/28
+62
+Notification Letter and Request Form to Non-Registered Shareholders
+2021/9/28
+63
+Announcement of Premium Income
+2021/10/15
+64
+Announcement - Approval of Qualification of Independent Director by the CBIRC
+and Retirement of Independent Director
+2021/10/18
+65
+Notice of Board Meeting
+2021/10/18
+99
+66
+Announcement - Approval of Qualification of Supervisors by the CBIRC and
+Resignation of Supervisor
+2021/10/19
+2021/9/28
+China Life Insurance Company Limited -
+Form of Proxy of Holders of H Shares for use at the First Extraordinary General
+Meeting 2021 of the Company to be held on Thursday, 16 December 2021
+2021/9/28
+2021/8/25
+Announcement on Changes in Accounting Estimates
+53
+Announcement of Premium Income
+2021/9/13
+54
+2021 Interim Report
+2021/9/15
+120 Annual Report 2021 | Other Information
+Serial No.
+Items
+55
+56
+57
+40
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Proposed Amendments to the Articles of Association, the Procedural Rules for
+the Shareholders' General Meetings and the Procedural Rules for the Board of
+Directors' Meetings and Notice of the First Extraordinary General Meeting 2021
+Notice of the First Extraordinary General Meeting 2021
+Date of disclosure
+2021/9/15
+2021/9/15
+2021/9/28
+58
+59
+62
+2021/5/25
+34
+Announcement - Re-election of Employee Representative Supervisors
+2021/2/25
+10
+Notice of Board Meeting
+2021/3/11
+11
+2021/3/12
+12
+13
+23
+Voluntary Announcement - Convening of 2020 Annual Results Briefing
+Announcement of Results for the Year Ended 31 December 2020
+2021/3/17
+14
+China Life Insurance Company Limited 2020 Environmental, Social and Governance
+& Social Responsibility Report
+2021/3/25
+17
+567
+15
+16
+Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of 2020)
+Announcement - Nomination of Directors
+2021/3/25
+2021/3/25
+Announcement - Nomination of Non-employee Representative Supervisor
+2021/2/22
+2021/3/25
+Announcement of Premium Income
+8
+2
+3
+Serial No.
+Items
+Announcement on the Progress of Connected Transaction in relation to the
+Formation of the Partnership
+Announcement of Premium Income
+Announcement - Resignation of Non-executive Director
+Date of disclosure
+2021/1/5
+2021/1/13
+2021/1/18
+4
+5
+Election of Language and Means of Receipt of Corporate Communication
+Reply Form
+2021/1/18
+2021/1/18
+6
+Announcement - Forfeiture of Unclaimed Dividends
+2021/2/5
+7
+Announcement - Resignation of Non-executive Director
+2021/2/7
+00
+9
+Appointment of Auditors for the Year 2021, General Mandate to Issue H Shares and
+Supplemental Notice of Annual General Meeting
+18
+2021/3/25
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement - Estimated Profit Increase for the First Quarter of 2021
+2021/4/15
+2021/4/15
+2021/4/21
+Annual Report 2021 | Other Information 119
+Serial No.
+Items
+Date of disclosure
+29
+2021 First Quarter Report
+2021/4/28
+30
+Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2021)
+2021/4/28
+31
+Announcement - Proposed Change of Auditors
+2021/4/28
+32
+Overseas Regulatory Announcement - China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+2021/4/28
+33
+Announcement of Premium Income
+2021/5/13
+28
+Overseas Regulatory Announcement - China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+27
+2021/4/15
+19
+Announcement of Premium Income
+2021/4/13
+20
+Notice of Board Meeting
+2021/4/14
+21
+Annual Report 2020
+2021/4/15
+22
+22
+Reports of the Board of Directors & the Board of Supervisors for 2020, Financial
+Report and Profit Distribution Plan for 2020, Remuneration of Directors &
+Supervisors, Election of Directors, Election of Non-employee Representative
+Supervisors, Renewal of Liability Insurance for Directors, Supervisors & Senior
+Management, Continued Donations to China Life Foundation, Duty Report of
+the Independent Directors for 2020, Report on the Overall Status of Connected
+Transactions for 2020 & Notice of AGM
+2021/4/15
+23
+23
+Notice of Annual General Meeting
+2021/4/15
+2 22
+24
+Form of Proxy of Holders of H Shares for use at the Annual General Meeting of the
+Company to be held on Wednesday, 30 June 2021
+2021/4/15
+25
+Reply Slip of H Share Shareholders
+26
+67
+2021 Third Quarter Report
+2021/10/28
+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.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
+Independence
+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:
+. Long-term insurance contract liabilities
+•
+Impairment tests for investments in associates and joint ventures
+•
+Fair value of level 3 financial assets
+Annual Report 2021 | Financial Report 125
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+Key Audit Matter
+Long-term insurance contract liabilities
+Refer to Notes 2.12 and 15 to the consolidated financial
+statements.
+At 31 December 2021, the Group had long-term insurance
+contract liabilities with the amount of RMB3,379.60 billion,
+accounting for 76.73% of the Group's total liabilities.
+The Group uses the discounted cash flow method to
+estimate the reserve of long-term insurance contracts
+which includes a reasonable estimate of liability, a risk
+margin and a residual margin.
+We have identified the Group's long-term insurance
+contract liabilities as a key audit matter due to:
+.
+The complexity of the actuarial models to develop the
+reserve of long-term insurance contracts;
+BASIS FOR OPINION
+Significant judgements involved in the actuarial
+assumptions related to mortality rates, morbidity rates,
+lapse rates, discount rates and expenses assumptions.
+Changes in these assumptions could have significant
+effects on long-term insurance contract liabilities.
+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 2021, and of its consolidated financial performance and its consolidated cash flows for the year
+then ended in accordance with International Financial Reporting Standards ("IFRSS") and have been properly prepared in
+compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+the notes to the consolidated financial statements, which include significant accounting policies and other explanatory
+information.
+Renminbi Yuan
+Material Risk Alert:
+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 and ESG 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.
+21 Except for "the Company" referred to in the Consolidated Financial Statements.
+Annual Report 2021 | Other Information 123
+FINANCIAL
+REPORT
+Independent Auditor's Report
+pwc
+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 131 to 252, which comprise:
+*
+the consolidated statement of financial position as at 31 December 2021;
+the consolidated statement of comprehensive income for the year then ended;
+*
+the consolidated statement of changes in equity for the year then ended;
+124 Annual Report 2021 | Financial Report
+Independent Auditor's Report (continued)
+OPINION (continued)
+What we have audited (continued)
+•
+the consolidated statement of cash flows for the year then ended; and
+Our opinion
+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
+Environment, Social and Governance
+How our audit addressed the Key Audit Matter
+With the assistance of our actuarial experts, we performed
+the following audit procedures:
+Annual Report 2021 | Financial Report 127
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+Key Audit Matter
+Fair value of level 3 financial assets
+Refer to Note 4.4 to the consolidated financial
+statements.
+At 31 December 2021, the Group held level 3 financial
+assets measured at fair value, with a carrying value of
+RMB349.13 billion, accounting for 7.14% of the Group's
+total assets.
+These level 3 financial assets primarily include unlisted
+equity securities and unlisted debt securities, which are
+accounted for as available-for-sale securities at fair value
+or securities at fair value through profit or loss. The fair
+values of these financial assets are measured using
+valuation techniques based on significant unobservable
+inputs.
+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.
+How our audit addressed the Key Audit Matter
+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.
+With the assistance of our valuation experts, we performed
+the following audit procedures:
+•
+Evaluating the appropriateness of the Group's valuation
+techniques, significant assumptions by referring to
+industry practices and valuation guidelines;
+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;
+Independently developing fair value estimates and
+comparing them to the Group's valuation results on a
+sample basis.
+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.
+OTHER INFORMATION
+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.
+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.
+128 Annual Report 2021 | Financial Report
+Based on the above procedures, we found that the
+significant estimates and judgements involved in impairment
+tests for investments in associates and joint ventures were
+supportable by the evidence we gathered.
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls
+over the Group's long-term insurance contract liabilities
+estimation processes, including controls over management's
+review of the actuarial models, the actuarial assumptions,
+the actuarial methodologies and the data inputs used.
+Comparing the significant assumptions used by the
+Group in the impairment tests to the historical business
+results of these investments and industry data to assess
+the reasonableness of the assumptions used.
+Comparing the discount rates used by the Group in the
+impairment tests with the discount rates developed by
+using the weighted average cost of capital model;
+•
+•
+•
+•
+Comparing the methodologies, actuarial models and
+actuarial assumptions used by the Group to recognised
+actuarial practices;
+Testing the completeness and accuracy of the underlying
+insurance policy data used in the valuation on a sample
+basis;
+Assessing the reasonableness of the actuarial
+assumptions by considering the Group's rationale for the
+actuarial judgements applied along with comparison to
+industry data and historical experience;
+Performing an independent actuarial modelling and
+recalculation of the long-term insurance contract
+liabilities on a sample basis and comparing our result to
+the result from the Group's actuarial models;
+Performing analytical procedures over the movement of
+long-term insurance contract liabilities considering the
+appropriateness of changes in the actuarial assumptions
+in the reporting period.
+Based on the above procedures, we found that the actuarial
+models applied and key assumptions adopted to estimate
+the reserve for long-term insurance contracts were
+supportable by the evidence we gathered.
+126 Annual Report 2021 | Financial Report
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+Key Audit Matter
+Impairment tests for investments in associates and joint
+ventures
+How our audit addressed the Key Audit Matter
+Refer to Notes 3.3 and 9 to the consolidated financial
+statements.
+At 31 December 2021, the Group held investments in
+associates and joint ventures, with a carrying value of
+RMB257.95 billion, accounting for 5.27% of the Group's
+total assets.
+According to the impairment testing results performed
+by the Group, no impairment loss was recognised
+for the year ended 31 December 2021. The Group
+had accumulatively recognised impairment provision
+of RMB3.22 billion by the end of 2021 on these
+investments.
+We have identified the impairment tests for investments
+in associates and joint ventures as a key audit matter due
+to the significant estimates and judgements involved in
+management's assessment including discount rates and
+expected future cash flows.
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls over
+the Group's impairment tests for these investments, including
+controls over management's review of the impairment test
+methodology and the significant assumptions used in the
+valuation.
+With the assistance of our valuation experts, we performed
+the following audit procedures:
+• Evaluating the appropriateness of the Group's
+impairment methodology by referring to valuation
+guidelines and industry practices;
+Testing the completeness and accuracy of the underlying
+key data used by the Group in the cash flows projections;
+Articles of Association of China Life Insurance Company Limited
+Securities Law of the People's Republic of China
+Insurance Law of the People's Republic of China
+Supplemental Form of Proxy of Holders of H Shares for use at the First
+Extraordinary General Meeting 2021 of the Company to be held on Thursday,
+16 December 2021
+2021/11/29
+Annual Report 2021 | Other Information 121
+Serial No.
+Items
+Date of disclosure
+77
+78
+79
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement of Premium Income
+2021/11/29
+2021/11/29
+2021/12/13
+Announcement
+Resolutions Passed at the First Extraordinary General Meeting
+80
+2021/12/16
+2021
+81
+Announcement - Connected Transaction – Formation of Partnership
+2021/12/16
+82
+Announcement - Renewal of Continuing Connected Transactions under the Policy
+Management Agreement
+76
+2021/12/16
+2021/11/29
+75
+-
+68
+Announcement – Supplementary Information regarding Compensation of Directors,
+Supervisors and Senior Management Members in 2020
+2021/10/28
+69
+69
+Announcement - Continuing Connected Transactions under the Agreement for
+Entrusted Investment and Management and Operating Services with respect to
+Alternative Investments with Insurance Funds
+2021/10/28
+70
+Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of 2021)
+2021/10/28
+71
+Overseas Regulatory Announcement China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+2021/10/28
+72
+Announcement of Premium Income
+2021/11/12
+73
+Announcement on the Progress of Connected Transaction in relation to a Partnership
+2021/11/19
+74
+Renewal of Continuing Connected Transactions and Supplemental Notice of the
+First Extraordinary General Meeting 2021
+2021/11/29
+Supplemental Notice of the First Extraordinary General Meeting 2021
+Announcement
+-
+83
+CBIRC
+CSRC
+HKSE
+SSE
+Company Law
+Insurance Law
+Securities Law
+Articles of Association
+China or PRC
+ESG
+RMB
+China Life Insurance Company Limited and its subsidiaries
+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 AMP Asset Management Company Limited, an indirect non-wholly
+owned subsidiary of the Company
+China Life Wealth Management Company Limited, an indirect non-wholly
+owned subsidiary of the Company
+China Guangfa Bank Co., Ltd., an associate of the Company
+China Life Property and Casualty Insurance Company Limited, a non-wholly
+owned subsidiary of CLIC
+China Life Investment Management Company Limited, the former China Life
+Investment Holding Company Limited, a wholly-owned subsidiary of CLIC
+China Life Capital Investment Company, an indirect wholly-owned subsidiary
+of CLIC
+Ministry of Finance of the People's Republic of China
+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
+Ministry of Finance
+China Life Capital
+CLI
+CLP&C
+Connected Transactions
+Equity Investment Plans
+_
+Investment in Partnerships through
+2021/12/16
+Announcement
+-
+Connected Transactions - Acquisition of Creditor's Rights on the
+84
+2021/12/16
+Trust Loan through Asset-backed Plan
+85
+1
+Supplemental Announcement
+Formation of Partnerships
+2021/12/29
+122 Annual Report 2021 | 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 Company21
+CLIC
+AMC
+Pension Company
+AMP
+CLWM
+CGB
+Connected Transactions in relation to the
+INDEX OF INFORMATION DISCLOSURE ANNOUNCEMENTS
+2021/3/25
+Investment income
+53,339
+60,440
+56,655
+Analysis of balances of cash and cash equivalents
+Cash at banks and in hand
+Short-term bank deposits
+60,256
+56,536
+184
+119
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+Annual Report 2021 | Financial Report 137
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+1 ORGANISATION AND PRINCIPAL ACTIVITIES
+China Life Insurance Company Limited (the "Company") was established in the People's Republic of China ("China" or
+the "PRC") on 30 June 2003 as a joint stock company with limited liability as part of a group restructuring of China Life
+Insurance (Group) Company ("CLIC", formerly China Life Insurance Company) and its subsidiaries (the "Restructuring").
+The Company and its subsidiaries are hereinafter collectively referred to as the "Group". The Group's principal activities
+are the writing of life, health, accident and other types of personal insurance business; reinsurance business for personal
+insurance business; fund management business permitted by national laws and regulations or approved by the State
+Council of the People's Republic of China, etc.
+The Company is a joint stock company incorporated in the PRC with limited liability. The address of its registered office is
+16 Financial Street, Xicheng District, Beijing, the PRC. The Company is listed on the New York Stock Exchange, the Stock
+Exchange of Hong Kong Limited, and the Shanghai Stock Exchange.
+These consolidated financial statements are presented in millions of Renminbi ("RMB million") unless otherwise stated.
+These consolidated financial statements have been approved and authorised for issue by the Board of Directors on 24
+March 2022.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
+These policies have been consistently applied to all the years presented, unless otherwise stated.
+2.1 Basis of preparation
+The Group has prepared these consolidated financial statements in accordance with International Financial Reporting
+Standards ("IFRSS"), amendments to IFRSS and interpretations issued by the International Accounting Standards Board
+("IASB"). These consolidated financial statements also comply with the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the applicable
+disclosure requirements of the Hong Kong Companies Ordinance. The Group has prepared the consolidated financial
+statements under the historical cost convention, except for financial assets and liabilities at fair value through profit or
+loss, available for sale securities, insurance contract liabilities and certain property, plant and equipment at deemed cost
+as part of the Restructuring process. The preparation of financial statements in compliance with IFRSS requires the use of
+certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
+Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
+and estimates are significant to the consolidated financial statements are disclosed in Note 3.
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2021
+56,655
+End of the year
+Beginning of the year
+Cash and cash equivalents
+(372)
+(161)
+6,822
+(1,517)
+(1,478)
+Cash paid for redemption of other equity instruments
+(9,060)
+Capital injected into subsidiaries by non-controlling interests
+22,850
+22,846
+Cash received related to other financing activities
+Standards/Amendments
+1,069
+(750)
+(1,592)
+Net cash inflow/(outflow) from financing activities
+111,139
+(7,760)
+Foreign exchange gains/(losses) on cash and cash equivalents
+(71)
+(144)
+Net increase in cash and cash equivalents
+3,785
+3,316
+Cash paid related to other financing activities
+Payment of lease liabilities
+IFRS 9, IAS 39, IFRS 7, IFRS 4
+Content
+178,387
+154,497
+Net realised gains on financial assets
+23
+20,344
+14,583
+Net fair value gains through profit or loss
+24
+4,943
+21,900
+Other income
+10,005
+9,403
+Total revenues
+824,930
+805,049
+BENEFITS, CLAIMS AND EXPENSES
+Insurance benefits and claims expenses
+Life insurance death and other benefits
+25
+(121,354)
+(113,609)
+Accident and health claims and claim adjustment expenses
+25
+(55,030)
+22
+Investment income
+604,666
+611,251
+Interest Rate Benchmark Reform - Phase 2
+Covid-19-Related Rent Concessions beyond
+30 June 2021
+Effective for
+annual periods
+beginning on or after
+1 January 2021
+1 April 2021
+138 Annual Report 2021 | Financial Report
+RMB million
+RMB million
+(Restated
+Note 35(f) (ii)
+REVENUES
+and IFRS 16 Amendments
+Amendments to IFRS 16
+Gross written premiums
+550
+618,327
+612,265
+Net written premiums
+(8,015)
+610,312
+(6,053)
+606,212
+Net change in unearned premium reserves
+939
+(1,546)
+Net premiums earned
+Less: premiums ceded to reinsurers
+(52,395)
+Cash received from borrowings
+(20,834)
+(5,862)
+(3,263)
+-
+Interest received – securities at fair value through profit or loss
+Dividends received – securities at fair value through profit or loss
+3,753
+4,120
+826
+775
+Net cash inflow/(outflow) from operating activities
+286,448
+304,019
+CASH FLOWS FROM INVESTING ACTIVITIES
+Disposals and maturities:
+Disposals of debt investments
+37,708
+36,774
+Maturities of debt investments
+Disposals of equity investments
+Disposals of property, plant and equipment
+Disposals of subsidiaries
+Purchases:
+Debt investments
+Equity investments and subsidiaries
+Income tax paid
+40,598
+47,129
+Receivables and payables
+Depreciation and amortisation
+50,495
+54,476
+(178,387)
+(154,497)
+(25,287)
+(36,483)
+445,472
+419,866
+5,287
+5,162
+196,596
+Foreign exchange losses/(gains)
+(119)
+Net gains on investments of associates and joint ventures
+(10,328)
+(7,666)
+Changes in operating assets and liabilities:
+Increase in securities at fair value through profit or loss, net
+(44,527)
+(21,954)
+Financial liabilities at fair value through profit or loss
+(1,478)
+3,004
+(645)
+Dividends paid to non-controlling interests
+198,640
+308,406
+Net cash inflow/(outflow) from investing activities
+(393,731)
+(292,799)
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+136 Annual Report 2021 | Financial Report
+Consolidated Statement of Cash Flows (continued)
+For the year ended 31 December 2021
+2021
+2020
+RMB million
+RMB million
+(Restated
+Note 35(f)(ii))
+CASH FLOWS FROM FINANCING ACTIVITIES
+Increase in securities sold under agreements to repurchase, net
+117,211
+4,912
+Interest paid
+(8,194)
+(3,779)
+Repayment of borrowings
+(6,505)
+Dividends paid to equity holders of the Company
+(18,089)
+(25,858)
+(35,479)
+Increase in policy loans, net
+29,590
+341
+559
+57
+2,175
+(745,973)
+(593,917)
+(409,676)
+(338,306)
+Property, plant and equipment
+(5,475)
+(7,469)
+Investments in associates and joint ventures
+385,308
+(7,072)
+Decrease/(Increase) in term deposits, net
+17,748
+(10,947)
+Increase in securities purchased under agreements to resell, net
+(2,804)
+(3,850)
+Interest received
+142,311
+126,848
+Dividends received
+32,177
+(14,942)
+Increase in insurance contract liabilities
+25
+(442,370)
+controlling
+Total
+interests
+Other
+equity
+Share
+capital instruments
+Retained
+Reserves
+earnings
+RMB million RMB million
+RMB million
+RMB million RMB million RMB million
+(Note 36)
+(Note 37)
+28,265
+7,791
+197,266
+170,458
+5,580
+409,360
+50,257
+1,116
+51,373
+25,699
+Non-
+Attributable to equity holders of the Company
+As at 31 December 2021
+Total transactions with owners
+1,505
+1,167
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+134 Annual Report 2021 | Financial Report
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2021
+As at 1 January 2020 (Restated Note 35(f) (ii)
+Net profit
+Other comprehensive income
+Total comprehensive income
+Transactions with owners
+Appropriation to reserves (Note 37)
+51
+Dividends paid
+Others
+Total transactions with owners
+As at 31 December 2020
+As at 1 January 2021
+Net profit
+Other comprehensive income
+Total comprehensive income
+Transactions with owners
+Appropriation to reserves (Note 37)
+Dividends paid (Note 33)
+Dividends to non-controlling interests
+Reserves to retained earnings (Note 37)
+Others
+Dividends to non-controlling interests
+75,956
+25,750
+50,257
+1,491
+52,412
+(4,608)
+14
+(4,594)
+(4,608)
+50,921
+1,505
+47,818
+15,378
+(15,378)
+(18,089)
+(18,089)
+(359)
+(359)
+45
+(45)
+305
+46
+351
+15,728
+(33,512)
+(313)
+50,921
+456,937
+6,881
+183,856
+1,167
+77,123
+- 16,025
+(16,025)
+(20,834)
+(20,834)
+(174)
+(174)
+(7,791)
+(1,055)
+308
+_____ _- 25,699
+(8,538)
+14,970
+(36,859)
+134
+(29,546)
+28,265
+237,935
+183,856
+6,881
+456,937
+28,265
+237,935
+(7,791)
+46,358
+77,123
+47,863
+Net gains on investments of associates and joint ventures
+9
+10,328
+7,666
+Including: share of profit of associates and joint ventures
+10,328
+8,336
+Profit before income tax
+28
+Income tax
+29
+22
+50,495
+54,476
+1,917
+(3,103)
+Net profit
+52,412
+51,373
+Attributable to:
+- Equity holders of the Company
+50,921
+50,257
+(758,239)
+(784,763)
+Total benefits, claims and expenses
+(12,270)
+(414,797)
+Investment contract benefits
+26
+(10,628)
+(9,846)
+Policyholder dividends resulting from participation in profits
+(26,511)
+(28,279)
+Underwriting and policy acquisition costs
+(65,744)
+(84,361)
+- Non-controlling interests
+Finance costs
+(5,598)
+(3,747)
+Administrative expenses
+(40,808)
+(37,706)
+Statutory insurance fund contribution
+21
+(1,253)
+(1,229)
+Other expenses
+(15,467)
+27
+1,491
+1,116
+Basic and diluted earnings per share
+1,260
+672
+Exchange differences on translating foreign operations
+(398)
+(986)
+Income tax relating to components of other comprehensive income
+29
+1,098
+(8,482)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+joint ventures under the equity method
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods:
+joint ventures under the equity method
+Other comprehensive income for the year, net of tax
+Total comprehensive income for the year, net of tax
+Attributable to:
+· Equity holders of the Company
+- Non-controlling interests
+(4,490)
+25,406
+(59)
+344
+(4,549)
+25,750
+Share of other comprehensive income of associates and
+Insurance contracts
+Share of other comprehensive income of associates and
+(1,793)
+31
+RMB1.80
+RMB1.77
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+Annual Report 2021 | Financial Report 133
+Consolidated Statement of Comprehensive Income (continued)
+For the year ended 31 December 2021
+Other comprehensive income
+2021
+2020
+Note
+(3,959)
+RMB million
+(Restated
+Note 35(f) (ii)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods:
+Fair value gains on available-for-sale securities
+17,065
+52,547
+Amount transferred to net profit from other comprehensive income
+(21,722)
+(14,386)
+Portion of fair value changes on available-for-sale securities
+attributable to policyholders equity
+RMB million
+Net realised and unrealised gains on financial assets
+28,265
+6,630
+As at
+2020
+Notes
+RMB million
+RMB million
+(Restated
+Note 35(f) (ii))
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+Investment contracts
+15
+3,419,899
+2,973,225
+16
+313,594
+288,212
+Policyholder dividends payable
+124,949
+122,510
+Interest-bearing loans and borrowings
+17
+18,686
+19,556
+Lease liabilities
+2,182
+31 December
+2,664
+As at
+(continued)
+45,200
+Premiums receivable
+12
+20,361
+20,730
+Reinsurance assets
+13
+Total equity
+6,095
+Other assets
+Deferred tax assets
+Cash and cash equivalents
+Total assets
+14
+39,559
+29,040
+29
+121
+60,440
+4,891,085
+87
+56,655
+4,252,466
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+Annual Report 2021 | Financial Report 131
+Consolidated Statement of Financial Position
+As at 31 December 2021
+31 December
+2021
+Bonds payable
+18
+34,994
+339
+384
+4,404,427
+3,795,529
+Share capital
+Reserves
+Retained earnings
+37
+38
+36
+(18,097)
+28,265
+28,265
+249,055
+Adjustments for:
+237,935
+201,265
+183,856
+478,585
+450,056
+8,073
+6,881
+486,658
+4,891,085
+456,937
+4,252,466
+21
+191
+248
+15,286
+34,992
+Financial liabilities at fair value through profit or loss
+3,416
+3,732
+Securities sold under agreements to repurchase
+19
+239,446
+122,249
+Annuity and other insurance balances payable
+56,818
+55,031
+Premiums received in advance
+51,097
+48,699
+Other liabilities
+Deferred tax liabilities
+Current income tax liabilities
+Statutory insurance fund
+Total liabilities
+Equity
+20
+29
+22
+133,676
+104,476
+7,481
+53,021
+Attributable to equity holders of the Company
+10.8
+7,947
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (continued)
+•
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the group audit. We remain solely responsible for our audit opinion.
+We communicate with 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.
+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.
+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.
+The engagement partner on the audit resulting in this independent auditor's report is Yip Siu Foon, Linda.
+PricewaterhouseCoopers
+Certified Public Accountants
+Hong Kong,
+24 March 2022
+130 Annual Report 2021 | Financial Report
+ASSETS
+Consolidated Statement of Financial Position
+As at 31 December 2021
+As at
+As at
+31 December
+31 December
+2021
+Notes
+RMB million
+2020
+RMB million
+Independent Auditor's Report (continued)
+(Restated
+Annual Report 2021 | Financial Report 129
+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.
+Profit before income tax
+CASH FLOWS FROM OPERATING ACTIVITIES
+(Restated
+Note 35(f) (ii)
+RMB million
+2020
+RMB million
+2021
+For the year ended 31 December 2021
+Consolidated Statement of Cash Flows
+Annual Report 2021 | Financial Report 135
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+486,658
+8,073
+201,265
+Independent Auditor's Report (continued)
+RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH
+GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+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 IFRSS 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.
+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.
+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.
+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.
+As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
+throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations, or the override of internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the directors.
+Note 35(f)(ii))
+Property, plant and equipment
+Right-of-use assets
+10.1
+1,533,753
+1,189,369
+Loans
+10.2
+666,087
+658,535
+Term deposits
+10.3
+529,488
+545,678
+Statutory deposits - restricted
+10.4
+6,333
+Available-for-sale securities
+10.5
+1,429,287
+Securities at fair value through profit or loss
+10.6
+206,771
+249,055
+6,333
+1,215,603
+161,570
+Securities purchased under agreements to resell
+10.7
+12,915
+Held-to-maturity securities
+239,584
+257,953
+9
+6 9
+Notes
+2020
+2021
+For the year ended 31 December 2021
+Consolidated Statement of Comprehensive Income
+132 Annual Report 2021 | Financial Report
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+Accrued investment income
+Yuan Changqing
+Director
+Approved and authorised for issue by the Board of Directors on 24 March 2022.
+Su Hengxuan
+Director
+54,398
+52,747
+7
+2,518
+3,076
+Investment properties
+8
+13,374
+14,217
+Investments in associates and joint ventures
+Total liabilities and equity
+Non-controlling interests
+As a lessee (continued)
+2.7 Leases (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+COVID-19-Related Rent Concessions
+148 Annual Report 2021 | Financial Report
+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.
+2.8 Investment properties
+Investment properties are interests in land use rights and buildings that are held to earn rental income and/or for capital
+appreciation, rather than for the supply of services or for administrative purposes.
+Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
+investment properties are stated at cost less accumulated depreciation and any impairment loss.
+Depreciation is computed on the straight-line basis over the estimated useful lives. The estimated useful lives of
+investment properties are 15 to 35 years.
+Notes to the Consolidated Financial Statements (continued)
+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.
+An investment property is derecognised when either it has been disposed of or when the investment property is
+permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the
+retirement or disposal of an investment property are recognised in the statement of comprehensive income in the year of
+retirement or disposal. A transfer to, or from, an investment property is made when, and only when, there is evidence of
+a change in use.
+2.9 Financial assets
+2.9.a Classification
+The Group classifies its financial assets into the following categories: securities at fair value through profit or loss, held-
+to-maturity securities, loans and receivables and available-for-sale securities. Management determines the classification
+of its financial assets at initial recognition which depends on the purpose for which the assets are acquired. The Group's
+investments in securities fall into the following four categories:
+(i) Securities at fair value through profit or loss
+This category has two sub-categories: securities held for trading and those designated as at fair value through profit or
+loss at inception. Securities are classified as held for trading at inception if acquired principally for the purpose of selling
+in the short-term or if they form part of a portfolio of financial assets in which there is evidence of taking short-term profit.
+The Group may classify other financial assets as at fair value through profit or loss if they meet the criteria in IAS 39 and
+designated as such at inception.
+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.
+Annual Report 2021 | Financial Report 147
+2.6 Property, plant and equipment
+After the commencement date of a lease, when there is a change in in-substance fixed payments, a change in the
+amounts expected to be payable under a residual value guarantee, a change in future lease payments resulting from a
+change in an index or a rate used to determine those payments, a change in the assessment or actual exercise situation
+of a purchase option, an extension option or a termination option, the Group uses the changed present value of lease
+payments to remeasure the lease liability 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.
+IFRS 17 - Insurance Contracts
+The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
+No mandatory effective
+date yet determined but
+available for adoption
+1 January 2023
+1 January 2023
+1 January 2023
+1 January 2022
+1 January 2022
+1 January 2022
+1 January 2022
+beginning on or after
+Effective for
+annual periods
+Sale or Contribution of Assets between an Investor and
+its Associate or Joint Venture
+Deferred Tax related to Assets and Liabilities arising from
+a Single Transaction
+Classification of Liabilities as Current or Non-current
+Insurance Contracts
+Onerous Contracts - Cost of Fulfilling a Contract
+Annual Improvements to IFRS Standards 2018-2020
+Cycle
+Proceeds before intended use
+Update Reference to the Conceptual Framework
+Property, Plant and Equipment:
+Content
+In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance
+contracts covering recognition and measurement, presentation and disclosure, which replaces IFRS 4 Insurance
+Contracts.
+In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies
+for measurement purposes, IFRS 17 provides a comprehensive model (the general model) for insurance contracts,
+supplemented by the variable fee approach for contracts with direct participation features and the premium allocation
+approach mainly for short-duration which typically applies to certain non-life insurance contracts.
+The main features of the new accounting model for insurance contracts are as follows:
+•
+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. In December 2021,
+the IASB issued the amendment to IFRS 17, which permit entities that first apply IFRS 17 and IFRS 9 at the same time to
+present comparative information about a financial asset as if the classification and measurement requirements of IFRS 9
+had been applied to that financial asset before. The Group is currently assessing the impact of the implementation of the
+standard.
+Extensive disclosures to provide information on the recognised amounts from insurance contracts and the nature and
+extent of risks arising from these contracts.
+Insurance services results are presented separately from the insurance finance income or expense;
+Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct
+investment components) are not presented in the statement of comprehensive income, but are recognised directly in
+the statement of financial position;
+IFRS 17 Insurance Contracts (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2021 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+IFRS 10 and IAS 28
+Amendments
+Notes to the Consolidated Financial Statements (continued)
+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;
+The effect of changes in discount rates will be reported in either profit or loss or OCI, determined by an accounting
+policy choice;
+Certain changes in the expected present value of future cash flows are adjusted against the contractual service margin
+and thereby recognised in profit or loss over the remaining coverage period;
+A contractual service margin represents the unearned profitability of the insurance contracts and is recognised in profit
+or loss over the coverage period;
+The fulfilment cash flows including the expected present value of future cash flows and explicit risk adjustment,
+remeasured every reporting period;
+•
+•
+•
+•
+Annual Report 2021 | Financial Report 141
+Amendment to IAS 12
+Amendments to IAS 1
+IFRS 17
+Amendments to IAS 37
+Annual improvements
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 139
+The Group has adopted the amendment on 1 April 2021. Because the Group was not provided with a significant amount
+of rent concessions arising as a direct consequence of COVID-19, the amendment did not have any significant impact on
+the Group's consolidated financial statements.
+In March 2021, the IASB has extended by one year the application period of the practical expedient in IFRS 16 Leases to
+help lessees accounting for covid-19-related rent concessions.
+In May 2020, the IASB issued the amendment to IFRS 16 Leases to provide an optional relief to lessees from applying
+IFRS 16's guidance on lease modification accounting for rent concessions arising as a direct consequence of COVID-19.
+The amendment does not apply to lessors.
+IFRS 16 Amendment - Covid-19-Related Rent Concessions beyond 30 June 2021
+The Group had certain interest-bearing bank borrowings denominated in US dollars and Euros based on the London
+Interbank Offered Rate ("LIBOR") and the Europe Interbank Offered Rate ("EURIBOR") as at 31 December 2021. If the
+interest rates of these borrowings are replaced by alternative benchmark rates in a future period, the Group will apply this
+practical expedient upon the modification of these borrowings when the "economically equivalent" criterion is met and
+expects that no significant modification gain or loss will arise as a result of applying the amendments to these changes.
+2.1 Basis of preparation (continued)
+The amendments are effective for annual periods beginning on or after 1 January 2021 and shall be applied
+retrospectively, but entities are not required to restate the comparative information.
+Changes to contractual cash flows. When changing the basis for determining contractual cash flows for financial
+assets and liabilities (including lease liabilities), the reliefs have the effect that the changes that are required by an
+interest rate benchmark reform (that is, are necessary as a direct consequence of IBOR reform and are economically
+equivalent) will not result in an immediate gain or loss in the income statement.
+In August 2020, the IASB issued IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark
+Reform - Phase 2. The amendments address issues not dealt with in the previous amendments which affect financial
+reporting when an existing interest rate benchmark is replaced with an alternative benchmark rate. The key reliefs
+provided by the Phase 2 amendments are as follows:
+Phase 2
+IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark Reform
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2021 (continued)
+2.1 Basis of preparation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Hedge accounting. The hedge accounting reliefs will allow most IAS 39 or IFRS 9 hedge relationships that are directly
+affected by IBOR reform to continue. However, additional ineffectiveness might need to be recorded.
+Except for IFRS 17, there are no other new accounting standards, amendments or IFRIC interpretations that are not yet
+effective but would be expected to have a significant impact on the financial position and performance of the Group.
+2.1.2 New accounting standards and amendments that are effective for the financial year ended 31
+December 2021 but temporary exemption is applied by the Group
+IFRS 9
+Standards/Amendments
+Amendments to IFRS 3
+Amendments to IAS 16
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2021
+2.1 Basis of preparation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+140 Annual Report 2021 | Financial Report
+The Group does not apply the hedge accounting currently, so the Group expects that the new hedge accounting model
+under IFRS 9 will have no impact on the Group's consolidated financial statements.
+Hedge accounting
+Standards/Amendments
+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 believes 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.
+Equity instruments would generally be measured at fair value through profit or loss unless the Group elects to measure
+at FVOCI for certain equity investments not held for trading. This will result in unrealised gains and losses on equity
+instruments currently classified as available-for-sale securities being recorded in income going forward. Currently, these
+unrealised gains and losses are recognised in other comprehensive income ("OCI"). If the Group elects to record equity
+investments at FVOCI, gains and losses would be recognised in retained earnings when the instruments be 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. The Group analysed the contractual cash flow
+characteristics of financial assets as at 31 December 2021 and made relevant disclosures in Note 34.
+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 that the adoption of IFRS 9
+will have a significant impact on the consolidated financial statements. The Group has 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. Refer to Note 34 for more details.
+IFRS 9 Financial Instruments
+1 January 2018
+Effective for
+annual periods
+beginning on or after
+Financial Instruments
+Content
+Impairment
+2.2 Consolidation
+The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year
+ended 31 December 2021. 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);
+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
+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.
+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.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 145
+Office equipment, furniture and fixtures
+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.
+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.
+2.4 Segment reporting
+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.
+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.
+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.
+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'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.
+2.3 Associates and joint ventures (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.5 Foreign currency translation
+For the year ended 31 December 2021
+Motor vehicles
+Estimated useful lives
+15 to 35 years
+3 to 11 years
+4 to 8 years
+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.
+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.
+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.
+Subsequent measurement
+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.
+At the commencement date of the lease, the Group recognises right-of-use assets representing the right to use the
+leased assets, including buildings and land use rights, etc. The Group measures the lease liability at the present value
+of the lease payments that are not paid at that date, except for short-term leases and leases of low-value assets. In
+calculating the present value of the lease payments, the lease payments are discounted using the interest rate implicit in
+the lease. If that rate cannot be readily determined, the Group uses its own incremental borrowing rate.
+Initial measurement
+As a lessee
+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.
+Leasehold improvements
+2.7 Leases
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+146 Annual Report 2021 | Financial Report
+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.
+Over the shorter of the remaining term
+of the lease and the useful lives
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+The Group assesses whether there is any indication that a right-of-use asset may be impaired at the end of reporting
+period. If any such indication exists, the Group performs the impairment test. An impairment loss is recognised in net
+profit for the amount by which the carrying amount of the right-of-use asset exceeds its recoverable amount, which is the
+higher of the right-of-use asset's net selling price and value in use.
+Notes to the Consolidated Financial Statements (continued)
+Investments in associates and joint ventures are accounted for using the equity method of accounting and are initially
+recognised at cost.
+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.
+2.2 Consolidation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+• derecognises the cumulative translation differences recorded in equity;
+Notes to the Consolidated Financial Statements (continued)
+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 Group's voting rights and potential voting rights.
+rights arising from other contractual arrangements; and
+•
+the contractual arrangement with the other vote holders of the investee;
+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 ability to use its power over the investee to affect its returns.
+.
+exposure, or rights, to variable returns from its involvement with the investee; and
+142 Annual Report 2021 | Financial Report
+144 Annual Report 2021 | Financial Report
+•
+recognises the fair value of any investment retained;
+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.
+2.3 Associates and joint ventures
+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.
+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.
+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.
+Transactions with non-controlling interests
+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.
+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.
+recognises the fair value of the consideration received;
+2.2 Consolidation (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 143
+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.
+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.
+reclassifies the Group's share of components previously recognised in OCI to profit or loss or retained earnings, as
+appropriate, as the Group had directly disposed of the related assets or liabilities.
+recognises any surplus or deficit in profit or loss; and
+•
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+The Group partly adopts the simplified method for rental concessions arising as a direct consequence of COVID-19
+reached by the Group and the lessor on the existing lease contracts of buildings. The Group treats the reduced or
+exempted rent concessions as variable lease payments. When a concession agreement is reached to relieve the original
+rent payment obligation, the undiscounted cash amount will be used to offset the cost of the related asset or expense,
+and adjust the related liablity.
+Notes to the Consolidated Financial Statements (continued)
+158 Annual Report 2021 | Financial Report
+2.12 Insurance contracts and investment contracts (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 151
+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:
+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.
+(ii) Long-term insurance contracts
+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.
+2.12.2 Insurance 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.
+(i) Short-term insurance contracts
+2.12.2.a Recognition and measurement
+2.12.2 Insurance contracts
+The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by the Group
+are classified as insurance contracts and investment contracts. Insurance contracts are those contracts that transfer
+significant insurance risk. They may also transfer financial risk. Investment contracts are those contracts that transfer
+financial risk without significant insurance risk. A number of insurance and investment contracts contain a discretionary
+participating feature ("DPF"). This feature entitles the policyholders to receive additional benefits or bonuses that are, at
+least in part, at the discretion of the Group.
+2.12.1 Classification
+2.12 Insurance contracts and investment contracts
+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.
+2.11 Cash and cash equivalents
+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.
+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.
+All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
+categorised within the fair value hierarchy, described in Notes 4.4, 8, 11 and 41(c) based on the lowest level input that is
+significant to the fair value measurement as a whole.
+2.12.2.a Recognition and measurement (continued)
+(a) The reasonable estimate of liability for long-term insurance contracts is the present value of reasonable estimates of
+future cash outflows less future cash inflows. The expected future cash inflows include cash inflows of future premiums
+arising from the undertaking of insurance obligations, with consideration of decrement mostly from death and surrenders.
+The expected future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of the following:
+2.12.2.b Liability adequacy test
+2.12.2 Insurance contracts (continued)
+2.12 Insurance contracts and investment contracts (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+152 Annual Report 2021 | Financial Report
+The insurance components are accounted for as insurance contracts; and the non-insurance components are accounted
+for as investment contracts (Note 2.12.3), which are stated in the investment contract liabilities.
+•
+(ii) Long-term insurance contracts (continued)
+insurance 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 contracts.
+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 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 amortisation 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.
+additional non-guaranteed benefits, such as policyholder dividends; and
+guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals,
+maturities and surrenders;
+•
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+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.
+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.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.9 Financial assets (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 149
+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.
+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.
+2.9.c Impairment of financial assets other than securities at fair value through profit or loss
+Financial assets other than those accounted for as at fair value through profit or loss are adjusted for impairment, where
+there are declines in value that are considered to be 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:
+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
+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.
+(ii) Held-to-maturity securities
+2.9 Financial assets (continued)
+2.9.a Classification (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+2.9.b Recognition and measurement
+2.10 Fair value measurement (continued)
+•
+a breach of contract, such as a default or delinquency in payments;
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+150 Annual Report 2021 | Financial Report
+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 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.
+The principal or the most advantageous market must be accessible by the Group at the measurement date.
+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
+•
+significant financial difficulty of the issuer or debtor;
+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:
+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.
+the market price of the equity securities was more than 20% below their cost for a period of at least six months at the
+reporting date; and
+the market price of the equity securities was more than 50% below their cost at the reporting date;
+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
+•
+2.10 Fair value measurement
+2.12.2.c Reinsurance contracts held
+non-insurance components
+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.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+156 Annual Report 2021 | Financial Report
+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.
+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.
+2.23 Provisions and contingencies
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+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.
+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.
+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.
+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.
+2.22 Current and deferred income taxation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 155
+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.
+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.
+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.
+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.
+The residual margin relating to the long-term insurance contracts is amortised over the expected life of the contracts,
+based on the assumptions (mortality rates, morbidity rates, lapse rates, discount rates, expenses assumption and policy
+dividend assumptions) that are determined at inception of the contracts and remain unchanged for the duration of the
+contracts.
+The 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.
+3.3 Impairment of investments in associates and joint ventures
+For the description of valuation techniques, please refer to Note 4.4. Using different valuation techniques and parameter
+assumptions may lead to some differences of fair value estimations.
+fair values 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.
+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.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and liabilities,
+are set out below. It is possible that actual results may be different from the estimates and judgements referred to below.
+3.1 Estimates of future benefit payments and premiums arising from long-term insurance contracts
+The determination of the liabilities under long-term insurance contracts is based on estimates of future benefit payments,
+premiums and relevant expenses made by the Group and the margins. Assumptions about mortality rates, morbidity
+rates, lapse rates, discount rates, expense assumptions and policy dividend assumptions are made based on the most
+recent historical analysis and current and future economic conditions. The liability uncertainty arising from uncertain future
+benefit payments, premiums and relevant expenses is reflected in the risk margin.
+•
+The Group considers a wide range of factors in the impairment assessment as described in Note 2.9.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
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 157
+The impact of the various assumptions and their changes are described in Note 15.
+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.
+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:
+2.22 Current and deferred income taxation
+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.
+2.21 Finance costs
+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. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
+2.16 Derivative instruments
+Bonds payable are initially recognised at fair value and subsequently measured at amortised cost using the effective
+interest rate method. Amortised cost is calculated by taking into account any discount or premium at acquisition and
+transaction costs.
+2.15 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.
+2.14 Securities sold under agreements to repurchase
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+Interest expenses for bonds payable, securities sold under agreements to repurchase, interest-bearing loans, borrowings
+and lease liabilities are recognised within finance costs in net profit using the effective interest rate method.
+2.17 Employee benefits
+Notes to the Consolidated Financial Statements (continued)
+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.
+2.13 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 dividends 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.
+2.12.4 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.
+revenue.
+For investment contracts with or without DPF, the Company's policy fee income mainly consists of acquisition cost
+and various fees (handling fees and management fees, etc.) over the period of which the service is provided. Policy fee
+income net of certain acquisition cost is amortised over the expected life of the contracts by period and recognised in
+2.12.3 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.
+Annual Report 2021 | Financial Report 153
+Pension benefits
+For the year ended 31 December 2021
+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.
+Investment income
+The policy fee income for investment contracts mainly consists of acquisition costs and various fees (handling fees and
+management fees, etc.) over the period of which the service is provided. Policy fee income net of certain acquisition costs
+is amortised over the expected life of the contracts and recognised as other income.
+Policy fee income
+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 from long-term insurance contracts are recognised as revenue when due from the policyholders.
+Premiums
+Turnover of the Group represents the total revenues which include the following:
+2.20 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 unfavourable to the Group; or to be settled in the Group's own equity
+instruments. Therefore, the Group classifies these securities as other equity instruments. Fees, commissions and
+other transaction costs of these securities' issuance are deducted from equity. The distributions of the securities are
+recognised as profit distribution at the time of declaration.
+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.
+Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of equity instruments are
+shown in equity as a deduction, net of tax, from the proceeds.
+2.19 Other equity instruments
+Stock appreciation rights
+Compensation under the stock appreciation rights is measured based on the fair value of the liabilities incurred and is
+expensed over the vesting period. Valuation techniques including option pricing models are used to estimate fair value
+of relevant liabilities. The liability is re-measured at the end of each reporting period to its fair value until settlement. Fair
+value changes in the vesting period are included in administrative expenses and changes after the vesting period are
+included in net fair value gains through profit or loss in net profit. The related liability is included in other liabilities.
+154 Annual Report 2021 | Financial Report
+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.
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.18 Share capital
+Notes to the Consolidated Financial Statements (continued)
+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 Insurance risk (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 159
+4.1.2 Concentration of insurance risks
+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.
+4.1.1 Types of insurance risks
+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 2021, 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 41(d) for the
+details.
+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 is carried out by the Company's Risk Management Committee under policies approved by the
+Company's Board of Directors.
+4 RISK MANAGEMENT
+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.
+3.5 Determination of control over investee
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Insurance operations of the Group are mainly located in the PRC. There are no significant differences among the regions
+where the Group underwrites insurance contracts.
+4.1 Insurance risk
+The table below presents the Group's major products of long-term insurance contracts:
+564,943 (3,781,475)
+(i) Interest rate risk
+33,926
+40,601
+49,727
+52,589
+56,938
+34,845
+42,785
+51,051
+52,057
+34,328
+41,945
+50,972
+34,328
+34,328
+2 years later
+3 years later
+Estimated accumulated
+claims expenses
+34,328
+41,945
+50,972
+Accumulated claims expenses paid
+(34,328)
+(41,945)
+Unpaid claims expenses
+(50,275)
+697
+52,057
+(49,157)
+2,900
+56,938
+(34,301)
+22,637
+236,240
+(210,006)
+26,234
+4 years later
+41,945
+1 year later
+RMB Million
+4 RISK MANAGEMENT (continued)
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+(d) Kang Ning Whole Life is a whole life insurance contract with the options for single premium or regular premium of
+10 years or 20 years 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.
+(e) Hong Ying Participating Endowment is a participating endowment insurance contract with the options for single
+premium or regular premium of 3 years, 5 years or 10 years. Its insured period can be 6 years, 10 years or 15 years. This
+product is applicable to healthy policyholders between 30-day-old and 70-year-old. Maturity benefit of a single premium
+policy is paid at the basic sum insured, while that of a regular premium policy is paid at the basic sum insured multiplied
+by the number of years of the premium payments. Disease death benefit incurred within the first policy year is paid at
+the premium received (without interest). Disease death benefit incurred after the first policy year is paid at the basic sum
+insured for a single premium policy or the basic sum insured multiplied by the number of years of premium payments for
+a regular premium policy. When accidents occurred during taking a train, a ship or a flight period, death benefit is paid at
+the basic sum multiplied by 3 insured for a single premium policy or the basic sum multiplied by 3 and times the number
+of years of premium payments insured for a regular premium policy. When accidents occurred out of the period of taking
+a train, a ship or a flight, death benefit is paid at the basic sum multiplied by 2 insured for a single premium policy or the
+basic sum multiplied by 2 and times the number of years of premium payments insured for a regular premium policy.
+(f) Others consist of various long-term insurance contracts with no significant concentration.
+4.1.3 Sensitivity analysis
+Sensitivity analysis of long-term insurance contracts
+Liabilities for long-term insurance contracts and liabilities unbundled from universal life insurance contracts and unit-linked
+insurance contracts with insurance risk are calculated based on the assumptions on mortality rates, morbidity rates, lapse
+rates and discount rates. Changes in insurance contract reserve assumptions reflect the Company's actual operating
+results and changes in its expectation of future events. The Company considers the potential impact of future risk factors
+on its operating results and incorporates such potential impact in the determination of assumptions.
+Holding all other variables constant, if mortality rates and morbidity rates were to increase or decrease from the current
+best estimate by 10%, pre-tax profit for the year would have been RMB39,459 million or RMB40,963 million (as at 31
+December 2020: RMB34,590 million or RMB35,955 million) lower or higher, respectively.
+Holding all other variables constant, if lapse rates were to increase or decrease from the current best estimate by 10%,
+pre-tax profit for the year would have been RMB399 million or RMB472 million higher or lower, respectively (as at 31
+December 2020: RMB707 million or RMB646 million lower or higher).
+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 RMB130,439 million or RMB152,136 million (as at 31 December
+2020: RMB114,536 million or RMB131,732 million) higher or lower, respectively.
+162 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+Year end
+For the year ended 31 December 2021
+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 RMB740 million (as at 31 December 2020: RMB733 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:
+Short-term insurance contracts (accident year)
+Estimated claims expenses
+2017
+2018
+2019
+2020
+2021
+Total
+4 RISK MANAGEMENT (continued)
+The following table indicates the claim development for short-term insurance contracts taking into account the impacts of
+ceded business:
+Estimated claims expenses
+2017
+50,315
+(49,629)
+686
+51,260
+(48,406)
+2,854
+55,862
+(33,580)
+22,282
+232,924
+(207,102)
+25,822
+Annual Report 2021 | Financial Report 163
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk
+The Group's activities are exposed to a variety of financial risks. The key financial risk is that proceeds from the sale of
+financial assets will not be sufficient to fund the obligations arising from the Group's insurance and investment contracts.
+The most important components of financial risk are market risk, credit risk and liquidity risk.
+The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
+potential adverse effects on the financial performance of the Group. Risk management is carried out by a designated
+department under policies approved by management. The responsible department identifies, evaluates and manages
+financial risks in close cooperation with the Group's operating units. The Group provides written principles for overall risk
+management, as well as written policies covering specific areas, such as managing market risk, credit risk, and liquidity
+risk.
+The Group manages financial risk by holding an appropriately diversified investment portfolio as permitted by laws and
+regulations designed to reduce the risk of concentration in any one specific industry or issuer. The structure of the
+investment portfolio held by the Group is disclosed in Note 10.
+Unpaid claims expenses
+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.
+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 2021, 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 RMB830 million (as at 31 December 2020: RMB627 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 RMB18,831 million
+(as at 31 December 2020: RMB13,906 million) lower or higher, as a result of a decrease or increase in the fair value of
+available-for-sale securities.
+164 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.2.1 Market risk (continued)
+(ii) Price risk
+Price risk arises mainly from the volatility of prices of equity securities held by the Group. Prices of equity securities are
+determined by market forces. The Group is subject to increased price risk mainly because China's capital markets are
+relatively volatile.
+The Group manages price risk by holding an appropriately diversified investment portfolio as permitted by laws and
+regulations designed to reduce the risk of concentration in any one specific industry or issuer.
+As at 31 December 2021, 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 RMB6,371 million (as at 31 December 2020:
+RMB6,596 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 RMB49,804
+million (as at 31 December 2020: RMB45,939 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
+4.2.1 Market risk
+(41,442)
+(34,045)
+Accumulated claims expenses paid
+Year end
+1 year later
+2 years later
+Short-term insurance contracts (accident year)
+2018
+2019
+2020
+2021
+Total
+RMB Million
+33,700
+40,157
+49,175
+51,994
+55,862
+34,560
+42,280
+41,442
+34,045
+claims expenses
+Estimated accumulated
+4 years later
+3 years later
+For the year ended 31 December 2021
+34,045
+34,045
+50,315
+41,442
+34,045
+51,260
+50,414
+41,442
+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.
+Notes to the Consolidated Financial Statements (continued)
+(c) 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. There are 12 age ranges for policyholders to choose to receive care money, which are: thirty, thirty-five, forty, forty-
+five, fifty, fifty-five, sixty, sixty-five, seventy, seventy-five, eighty, and eighty-five years old. From the effective date to
+the contractual date starting to claim of Xin Fu Ying Jia Annuity, the annuity payment of first policy year is paid at 20%
+of the first premium of the product, and the following annuity payments are paid at 20% of the basic sum insured by
+Xin Fu Ying Jia Annuity. From the first corresponding date after the contractual date starting to claim of annuity, to the
+corresponding date when the policyholders reach the age of 88-year-old, annuity is paid at 3% of the basic sum insured
+during the insured period if policyholders live to the annual corresponding effective date; annuity is paid at the premium
+received (without interest) during the insured period if policyholders live to the contractual date starting to claim of
+annuity; the contract terminates and death benefit is paid at the premium received (without interest) or the cash value of
+the contract, whichever greater when death incurred before the contractual date starting to claim of annuity; the contract
+terminates and death benefit is paid at the cash value of the contract when death incurred after contractual date starting
+to claim of annuity; the contract terminates and accidental death benefit is paid at the premium received (without interest)
+less any death benefit paid when accidents occurred and due to which death incurred within 180 days. Death benefit and
+accidental death benefit are paid only once.
+0.03%
+Others (f)
+429,419
+79.09%
+416,859
+77.74%
+Total
+542,974
+100.00%
+536,150
+100.00%
+Insurance benefits of long-term
+insurance contracts
+Xin Xiang Zhi Zun Annuity
+137
+(Celebration Version) (a)
+0.08%
+21
+0.03%
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+145
+0.17%
+58
+0.07%
+Xin Fu Ying Jia Annuity (c)
+1,826
+2.16%
+1,823
+2.17%
+Kang Ning Whole Life (d)
+67
+5,653
+0.01%
+Hong Ying Participating Endowment (e)
+For the year ended 31 December
+2021
+2020
+Product name
+RMB million
+%
+RMB million
+%
+Premiums of long-term insurance contracts
+Xin Xiang Zhi Zun Annuity
+(Celebration Version) (a)
+40,851
+7.52%
+42,657
+66
+7.96%
+34,094
+6.28%
+34,828
+6.50%
+Xin Fu Ying Jia Annuity (c)
+23,114
+4.26%
+24,116
+4.50%
+Kang Ning Whole Life (d)
+15,430
+2.84%
+17,553
+3.27%
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+6.70%
+5,075
+6.05%
+114,111
+3.89%
+Kang Ning Whole Life (d)
+365,246
+10.81%
+338,286
+11.52%
+Hong Ying Participating Endowment (e)
+14,479
+0.43%
+24,398
+0.83%
+Others (f)
+2,684,791
+4.15%
+79.43%
+80.53%
+Total
+3,379,603
+100.00%
+2,936,533
+100.00%
+160 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+(a) Xin Xiang Zhi Zun Annuity (Celebration Version) is an annuity insurance contract with the options for regular premium
+of 3 years and 5 years paid annually or monthly. Its insured period is 10 years. This product is applicable to healthy
+policyholders between 28-day-old and 68-year-old. From the first effective date after the fifth policy years to the expiration
+period, if the policyholders live to the annual corresponding effective date, the annuity payment shall be paid at 60% of
+annual premium according to the basic sum insured if the payment period is 3 years; and the annuity payment shall be paid
+at 100% of annual premium according to the basic sum insured if the payment period is 5 years. If the policyholders live
+to the annual corresponding effective date of the expiration period, the contract terminates and maturity benefit is paid
+at the basic sum insured. If death incurred over insured period, the contract terminates and death benefit is paid at the
+premium received (without interest).
+(b) Xin Xiang Jin Sheng Annuity (A Version) is an annuity insurance contract with the options for regular premium
+of 3 years and 5 years paid annually or monthly. Its insured period is 15 years. This product is applicable to healthy
+policyholders between 28-day-old and 65-year-old. From the effective date to the contractual date starting to claim of Xin
+Xiang Jin Sheng Annuity (A Version) after the fifth policy years or sixth policy years, if the policyholders live to the annual
+corresponding effective date, the annuity payment shall be paid at 50% of annual premium according to the basic sum
+insured if the payment period is 3 years; and the annuity payment shall be paid at 100% of annual premium according
+to the basic sum insured if the payment period is 5 years. From the first effective date after the seventh policy years
+to the expiration period, if the policyholders live to the annual corresponding effective date, the annuity payment shall
+be paid at 24% of annual premium according to the basic sum insured if the payment period is 3 years; and the annuity
+payment shall be paid at 32% of annual premium according to the basic sum insured if the payment period is 5 years.
+If the policyholders live to the annual corresponding effective date of the expiration period, the contract terminates and
+maturity benefit is paid at the basic sum insured. If death incurred over insured period, the contract terminates and death
+benefit is paid at the premium received (without interest).
+2,364,798
+140,196
+Xin Fu Ying Jia Annuity (c)
+2.18%
+Hong Ying Participating Endowment (e)
+10,315
+12.22%
+11,393
+13.59%
+Others (f)
+66,412
+78.67%
+65,484
+78.09%
+Total
+84,418
+100.00%
+83,854
+100.00%
+As at 31 December 2021
+RMB million
+168 Annual Report 2021 | Financial Report
+64,055
+3.01%
+101,608
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+1.05%
+30,885
+Annual Report 2021 | Financial Report 161
+2.17%
+(Celebration Version) (a)
+Xin Xiang Zhi Zun Annuity
+Liabilities of long-term insurance contracts
+%
+As at 31 December 2020
+RMB million
+%
+73,283
+The following table summarises primary financial assets and financial liabilities denominated in currencies other than RMB
+as at 31 December 2021 and 2020, expressed in RMB equivalent:
+4.2 Financial risk (continued)
+Financial assets
+1 year but 3 years but
+not later
+than
+not later
+Later
+than
+than
+3 years
+5 years
+5 years
+RMB Million
+Financial assets
+Contractual cash inflows
+Equity securities
+699,457
+Later than Later than
+699,457
+2,470,354
+231,604
+Loans
+666,087
+376,766
+461,413
+138,241
+508,864 3,029,545
+110,345
+137,705
+Term deposits
+529,488
+144,271
+372,571
+Statutory deposits - restricted
+Debt securities
+(undiscounted)
+Contractual and expected cash flows
+than
+1 year
+As at 31 December 2021, 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 RMB640 million
+(as at 31 December 2020: RMB339 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 RMB8,440 million (as at 31 December 2020: RMB11,593 million) lower or higher,
+respectively, as a result of foreign exchange of the available-for-sale equity securities at fair value. The actual exchange
+gains in 2021 were RMB645 million (2020: exchange gains in RMB119 million).
+166 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+As at 31 December 2021
+4.2.2 Credit risk
+Credit risk is the risk that one party of a financial transaction or the issuer of a financial instrument will fail to discharge
+its obligation and cause another party to incur a financial loss. Because the Group's investment portfolio is restricted
+to the types of investments as permitted by the China Banking and Insurance Regulatory Commission ("CBIRC") and a
+significant portion of the portfolio is in government bonds, government agency bonds, corporate bonds with higher credit
+rating and term deposits with the state-owned commercial banks, the Group's overall exposure to credit risk is relatively
+low.
+Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Group manages
+credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction
+structures. Where appropriate, the Group obtains collateral in the form of rights to cash, securities, property and
+equipment to lower the credit risk.
+Credit risk exposure
+The carrying amount of financial assets included on the consolidated statement of financial position represents the
+maximum credit risk exposure at the reporting date without taking account of any collateral held or other credit
+enhancements attached. The Group has no credit risk exposure relating to off-balance sheet items as at 31 December
+2021 and 2020.
+Collateral and other credit enhancements
+Securities purchased under agreements to resell are pledged by counterparties' debt securities or term deposits of which
+the Group could take the ownership if the owner of the collateral defaults. Policy loans and most of premium receivables
+are collateralised by their policies' cash value according to the terms and conditions of policy loan contracts and policy
+contracts, respectively.
+Credit quality
+The Group's debt securities investment mainly includes government bonds, government agency bonds, corporate bonds
+and subordinated bonds, and most of the debt securities are guaranteed by either the Chinese government or Chinese
+government controlled financial institutions. As at 31 December 2021, 100.0% (as at 31 December 2020: 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 2021, 100.0% (as at 31 December 2020: 100.0%) 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.
+As at 31 December 2021, 99.5% (as at 31 December 2020: 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 most other loans excluding policyholder loans, are guaranteed by third parties or with pledge, or have
+the fiscal annual budget income as the source of repayment, or have higher credit rating borrowers. As a result, the Group
+concludes that the credit risk associated with term deposits and accrued investment income thereof, statutory deposits
+- restricted, other loans, and cash and cash equivalents has not caused a material impact on the Group's consolidated
+financial statements as at 31 December 2021 and 2020.
+The credit risk associated with securities purchased under agreements to resell, policy loans and most of premium
+receivables has not caused a material impact on the Group's consolidated financial statements taking into consideration
+their sufficient collateral held and maturity terms of no more than one year as at 31 December 2021 and 2020.
+maturity
+Without
+Carrying
+value
+As at 31 December 2021
+Not later
+The following tables set forth the contractual and expected undiscounted cash flows for financial assets and liabilities and
+insurance liabilities:
+6,333
+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.
+4.2.3 Liquidity risk
+4.2 Financial risk (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 167
+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.
+19,556
+1,936
+53,822
+181
+-
+(239,679)
+Financial liabilities at fair value
+through profit or loss
+3,416
+(3,416)
+Annuity and other insurance
+balances payable
+56,818
+(56,818)
+Interest-bearing loans and
+other borrowings
+18,686
+Bonds payable
+239,446
+34,994
+2,182
+Subtotal
+4,089,035
+Net cash inflow/(outflow)
+427,497
+(3,416)
+696,041
+(2,552)
+(332)
+(1,093)
+(220,233)
+(17,122)
+(37,996)
+(1,067)
+46,426
+(203)
+(29)
+(108,269) (6,948,725)
+676,936 1,025,643
+Lease liabilities
+to repurchase
+Securities sold under agreements
+Contractual cash outflows
+Securities purchased under
+agreements to resell
+12,915
+12,658
+346
+Accrued investment income
+51,097
+49,133
+1,964
+Premiums receivable
+20,361
+20,361
+Cash and cash equivalents
+60,440
+60,440
+Subtotal
+4,516,532
+(957,814)
+(202,368) (5,990,882)
+94,302
+86,132
+16,479
+111,912
+(31,671)
+313,594
+3,419,899
+4,682
+Investment contracts
+Expected cash outflows
+Financial and insurance liabilities
+673,212 3,167,250
+979,217
+897,169
+699,457
+Insurance contracts
+19,556
+4.2 Financial risk (continued)
+2,444
+1,920
+198
+289
+Total
+31,795
+76,789
+698
+1,500
+56
+991
+18
+11
+61
+296
+Cash and cash equivalents
+7,785
+2,466
+111,773
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+11,668
+Total
+5,172
+2,366
+4,652
+2,366
+4,652
+18,686
+18,686
+3
+Annual Report 2021 | Financial Report 165
+-
+Term deposits
+Equity securities
+- Available-for-sale securities
+US dollar HK dollar
+GB pound
+EUR
+Others
+Total
+10,989
+75,694
+86,683
+- Securities at fair value through
+profit or loss
+4,776
+897
+391
+7,785
+1,433
+8,424
+Debt securities
+- Held-to-maturity securities
+131
+131
+- Loans
+1,292
+1,292
+- Available-for-sale securities
+4,696
+4,696
+- Securities at fair value through
+profit or loss
+206
+927
+Notes to the Consolidated Financial Statements (continued)
+11,668
+4 RISK MANAGEMENT (continued)
+297
+21
+11
+10
+339
+Term deposits
+For the year ended 31 December 2021
+7,990
+Cash and cash equivalents
+598
+1,297
+358
+140
+7
+profit or loss
+2,400
+28,228
+109,975
+729
+1,370
+864
+141,166
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+11,940
+Total
+11,940
+2,444
+5,172
+Total
+3,615
+7,990
+- Securities at fair value through
+4.2 Financial risk (continued)
+4.2.1 Market risk (continued)
+(iii) Currency risk (continued)
+As at 31 December 2020
+US dollar
+HK dollar
+GB pound
+3,615
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+9,711
+108,493
+EUR
+- Available-for-sale securities
+118,204
+1,445
+1,445
+220
+220
+Debt securities
+- Held-to-maturity securities
+- Loans
+847
+1,219
+350
+185
+4,352
+- Securities at fair value through
+profit or loss
+6,953
+1 year
+Financial assets
+3 years
+5 years
+5 years
+RMB Million
+Contractual cash inflows
+287,939
+700,748
+700,748
+Debt securities
+1,865,794
+136,885
+349,334
+than
+Equity securities
+than
+160,499
+than
+Loans
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+As at 31 December 2020
+Carrying
+value
+Without
+maturity
+Contractual and expected cash flows
+(undiscounted)
+Not later
+than
+Later than
+Later than
+1 year but 3 years but
+not later not later
+Later
+658,535
+235,901
+219,840
+Notes to the Consolidated Financial Statements (continued)
+176 Annual Report 2021 | Financial Report
+(3,742)
+(10)
+(3,732)
+(3,742)
+For the year ended 31 December 2021
+Total
+profit or loss
+Investment contracts at fair value through
+(3,732)
+profit or loss
+Financial liabilities at fair value through
+Liabilities measured at fair value
+(10)
+1,356,567
+4 RISK MANAGEMENT (continued)
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2020:
+105,650
+38,486
+Opening balance
+Purchases
+RMB million
+RMB million
+RMB million
+RMB million
+4.4 Fair value hierarchy (continued)
+RMB million
+Equity
+securities
+Total
+Derivative
+financial
+assets
+Securities
+at fair value
+through
+profit or loss
+Debt
+securities
+Available-for-sale securities
+Debt
+securities
+128,899
+19,953
+293,924
+495,927
+221
+41
+16,835
+48,858
+524
+48,334
+104
+262
+16,731
+- Debt securities
+Others
+Common stocks
+Funds
+- Equity securities
+Securities at fair value through profit or loss
+| | |
+566,716
+Government bonds
+1,302
+Total
+2,752
+2,752
+Others
+86,803
+9
+336
+83,837
+Corporate bonds
+4,422
+3,450
+972
+Government agency bonds
+1,638
+2,957
+16
+428
+234,993
+Discount rate
+N/A
+N/A
+N/A
+approach
+Net asset value
+method
+Discounted cash
+flow method
+31 December 2021: 36,556
+31 December 2020: 36,697
+31 December 2021: 116,245
+31 December 2020: 84,212
+Debt
+The fair value is inversely related to the
+discounts for lack of marketability
+Relationships
+Discounts for lack 31 December 2021: 11%-30%
+31 December 2020: 12%-35%
+of marketability
+companies
+Comparable
+31 December 2021:28,245
+31 December 2020: 28,162
+between fair value and
+unobservable inputs
+Equity
+securities
+securities
+Discounted cash
+flow method
+4,705
+198,442
+203,147
+Subordinated bonds
+16,880
+94,149
+31 December 2021: 160,499
+31 December 2020: 143,905
+111,029
+178 Annual Report 2021 | Financial Report
+The fair value is inversely related to
+discount rate
+The fair value is inversely related to
+discount rate
+31 December 2021: 3.21%-9.78%
+31 December 2020: 3.88% -9.82%
+31 December 2021: 2.69% -9.93%
+31 December 2020: 3.80%-6.07%
+Discount rate
+Others
+Range
+inputs
+techniques
+Maturity
+(6,276)
+(307)
+7,780
+7,127
+(5,969)
+Disposals or exercises
+(884)
+653
+Total gains/(losses) recorded in
+(128)
+(121)
+(7)
+Total gains/(losses) recorded in
+profit or loss
+58,439
+other comprehensive income
+(884)
+Closing balance
+143,905
+Fair value
+Significant
+unobservable
+Valuation
+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 2021 and 31 December 2020:
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 177
+As at 31 December 2021 and 2020, 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. The fair value
+was not significantly sensitive to reasonable changes in these significant unobservable inputs.
+For the years ended 31 December 2021 and 2020, 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 on a recurring basis, during the year ended 31 December 2021,
+RMB16,499 million (2020: RMB12,084 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB31,764 million (2020: RMB9,825 million) debt securities were transferred from Level 2 to
+Level 1. RMB4,196 million equity securities were transferred from Level 1 to Level 2 (2020: no equity securities were
+transferred from Level 1 to Level 2), whereas RMB5,520 million equity securities were transferred from Level 2 to Level
+1 (2020: no material equity securities were transferred from Level 2 to Level 1).
+The assets and liabilities whose fair value measurements are classified under Level 3 above do not have material impact
+on the profit or loss of the Group.
+293,924
+150,010
+144,721
+143,905
+816
+Others
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2021:
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+174 Annual Report 2021 | Financial Report
+Opening balance
+(3,425)
+(3,416)
+(3,425)
+Total
+(9)
+profit or loss
+Investment contracts at fair value through
+(9)
+(3,416)
+Purchases
+Total gains/(losses) recorded in other
+143,905
+RMB million
+RMB million
+RMB million
+Debt
+securities
+Equity
+securities
+Transfer into Level 3
+Total
+RMB million
+Available-for-sale securities
+Debt
+securities
+Closing balance
+Maturity
+Disposals or exercises
+comprehensive income
+Securities
+at fair value
+through
+profit or loss
+profit or loss
+Financial liabilities at fair value through
+Liabilities measured at fair value
+45,649
+17,794
+266
+5
+2,173
+43,476
+271
+222
+Others
+Common stocks
+Funds
+Equity securities
+Securities at fair value through profit or loss
+161,054
+17,572
+- Debt securities
+Government bonds
+153
+43,250
+1,615,779
+349,127
+90,425
+45
+7,989
+5,643
+83,734
+43,150
+784,845
+481,807
+Total
+100
+Others
+6,646
+2,346
+Government agency bonds
+Corporate bonds
+1,393
+1,240
+27,415
+Corporate bonds
+150,010
+43,661
+293,924
+96,232
+41,401
+11,038
+13,013
+13,013
+Wealth management products
+Others
+148,671
+53,778
+Preferred stocks
+301,249
+22,994
+278,255
+Common stocks
+97,476
+53,778
+97,476
+Debt securities
+5,838
+81,795
+75,551
+6,244
+Subordinated bonds
+136,025
+133,617
+Government bonds
+2,408
+169,013
+143,716
+25,297
+Government agency bonds
+49,256
+43,418
+Corporate bonds
+Funds
+- Equity securities
+Available-for-sale securities
+Annual Report 2021 | Financial Report 175
+349,127
+45
+188,583
+160,499
+(14,894)
+Notes to the Consolidated Financial Statements (continued)
+(14,894)
+1,861
+(2,212)
+(2,876)
+4,073
+36
+36
+71,076
+(2,876)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.4 Fair value hierarchy (continued)
+Assets measured at fair value
+RMB million
+RMB million
+RMB million
+RMB million
+inputs
+Level 3
+inputs
+Level 2
+Level 1
+Total
+Significant
+unobservable
+Significant
+observable
+in active
+markets
+Quoted prices
+Fair value measurement using
+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 2020:
+9
+555
+259,753
+31,464
+Notes to the Consolidated Financial Statements (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+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):
+170 Annual Report 2021 | Financial Report
+Core capital
+Minimum capital
+Core solvency ratio
+Comprehensive solvency ratio
+As at
+31 December
+2021
+Actual capital
+RMB million
+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.
+The Group's objectives for managing capital are to comply with the insurance capital requirements based on the minimum
+capital and actual capital required by the CBIRC, prevent risk in operation and safeguard the Group's ability to continue
+as a going concern so that it can continue to provide returns for equity holders and benefits for other stakeholders. The
+Group replenishes capital to improve the solvency ratio by issuing Core Tier 2 Capital Securities and bonds for capital
+replenishment according to the relevant laws and the approval of the relevant authorities.
+(331)
+(76,598)
+(41)
+(6,417,225)
+540,179 (3,981,528)
+The amounts set forth in the tables above for insurance and investment contracts in each column are the undiscounted
+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.
+Annual Report 2021 | Financial Report 169
+The Group is also subject to other local capital requirements, such as statutory deposits-restricted requirement, statutory
+insurance fund requirement, statutory reserve fund requirement and general reserve requirement discussed in detail in
+Note 10.4, Note 21 and Note 37, respectively.
+Notes to the Consolidated Financial Statements (continued)
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.3 Liquidity risk (continued)
+The liquidity analysis above does not include policyholder dividends payable of RMB124,949 million as at 31 December
+2021 (as at 31 December 2020: RMB122,510 million). As at 31 December 2021, declared dividends of RMB86,506
+million (as at 31 December 2020: RMB82,154 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
+(undiscounted) as shown in the above tables are based on past experience and future expectations. Should these
+contracts be surrendered immediately, it would cause a cash outflow of RMB68,289 million and RMB242,540 million,
+respectively for the year ended 31 December 2021 (2020: RMB64,445 million and RMB220,973 million, respectively),
+payable within one year.
+4.2.4 Capital management
+For the year ended 31 December 2021
+128,789
+1,033,817
+1,020,756
+1,055,768
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.3 Disclosures about interest in unconsolidated structured entities (continued)
+(i) The unconsolidated structured entities that the Group has interest in
+The Group believes that the maximum exposure approximates the carrying amount of interest in these unconsolidated
+structured entities. The size of unconsolidated structured entities as well as the Group's carrying amount of the assets
+recognised in the financial statements relating to its interest in unconsolidated structured entities and the Group's
+maximum exposure are shown below:
+Unconsolidated structured entities
+Notes to the Consolidated Financial Statements (continued)
+Carrying
+amount
+of assets
+As at 31 December 2021
+RMB million
+RMB million
+Funds managed by affiliated entities
+168,466
+Size
+As at
+31 December
+2020
+RMB million
+Annual Report 2021 | Financial Report 171
+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.
+1,031,947
+1,066,939
+402,341
+396,749
+254%
+260%
+262%
+The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in or
+sponsored.
+269%
+(ii) Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are low;
+(iii) Category C: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or
+several risks in operation, strategy, reputation and liquidity are high;
+(iv) Category D: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or
+several risks in operation, strategy, reputation and liquidity are severe.
+According to the Supervision Information System of the China Risk Oriented Solvency System, the latest Integrated Risk
+Rating result of the Company was Category A.
+4.3 Disclosures about interest in unconsolidated structured entities
+The Group's interest in unconsolidated structured entities are recorded as securities at fair value through profit or
+loss, available-for-sale securities and loans. These structured entities typically raise funds by issuing securities or other
+beneficiary certificates. The purpose of these structured entities is primarily to generate management service fees,
+or provide finance to public and private infrastructure construction. Refer to Note 3.5 for the Group's consolidation
+judgements related to structured entities.
+According to the solvency ratios results mentioned above, and the unquantifiable evaluation results of operational
+risk, strategic risk, reputational risk and liquidity risk of insurance companies, the CBIRC evaluates the comprehensive
+solvency of insurance companies and supervises insurance companies by classifying them into four categories:
+(1,250)
+(36,498)
+(2,996)
+44,197
+565
+438
+Premiums receivable
+20,730
+20,730
+45,200
+Cash and cash equivalents
+56,655
+Subtotal
+3,907,620
+700,748
+577,976
+905,028
+56,655
+616,777 2,435,697
+Accrued investment income
+7,947
+129,813
+Term deposits
+545,678
+75,364
+329,191
+197,867
+7,947
+2,260,215
+173,729
+1,753
+6,333
+297
+6,098
+720
+Securities purchased under
+agreements to resell
+Statutory deposits - restricted
+Financial and insurance liabilities
+Expected cash outflows
+Insurance contracts
+other borrowings
+19,556
+Bonds payable
+34,992
+Lease liabilities
+2,664
+Interest-bearing loans and
+Subtotal
+Net cash inflow/(outflow)
+407,959
+(3,732)
+697,016
+(2,044)
+(328)
+(1,273)
+(19,951)
+558,025
+(4,384)
+(14,680)
+3,499,661
+(55,031)
+55,031
+balances payable
+Investment contracts
+2,973,225
+288,212
+190,123 151,280
+(29,149) (13,861)
+(93,971) (5,618,867)
+68,882 (798,317)
+Contractual cash outflows
+Securities sold under agreements
+to repurchase
+122,249
+(122,249)
+Financial liabilities at fair value
+through profit or loss
+3,732
+(3,732)
+Annuity and other insurance
+9,860
+Maximum
+exposure
+RMB million
+9,860
+Interest held by
+the Group
+Funds managed by third parties
+Level 1 fair value is based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
+can obtain at the measurement date.
+Other than Level 1 quoted prices, Level 2 fair value is based on valuation techniques using significant inputs, that are
+observable for the asset being measured, either directly or indirectly, for substantially the full term of the asset through
+corroboration with observable market data. Observable inputs generally used to measure the fair value of securities
+classified as Level 2 include quoted market prices for similar assets in active markets; quoted market prices in markets
+that are not active for identical or similar assets and other market observable inputs. This level includes the debt securities
+for which quotations are available from pricing services providers. Fair values provided by pricing services providers are
+subject to a number of validation procedures by management. These procedures include a review of the valuation models
+utilised and the results of these models, as well as the recalculation of prices obtained from pricing services at the end of
+each reporting period.
+Under certain conditions, the Group may not receive a price quote from independent third-party pricing services. In this
+instance, the Group's valuation team may choose to apply an internally developed valuation method to the assets or
+liabilities being measured, determine the main inputs for valuation, and analyse the change of the valuation and report it
+to management. Key inputs involved in internal valuation services are not based on observable market data. They reflect
+assumptions made by management based on judgements and experiences. The assets or liabilities valued by this method
+are generally classified as Level 3.
+As at 31 December 2021, assets classified as Level 1 accounted for approximately 29.82% 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 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 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 Group adopted this price of the debt securities traded on
+the Chinese interbank market at the reporting date as their fair market value and classified the investments as Level 1:
+Open-ended funds also have active markets. Fund management companies publish the net asset value of these funds on
+their websites on each trade date. Investors subscribe for and redeem units of these funds in accordance with the funds'
+net asset value published by the fund management companies on each trade date. The Company adopted the unadjusted
+net asset value of the funds at the reporting date as their fair market value and classified the investments as Level 1.
+As at 31 December 2021, assets classified as Level 2 accounted for approximately 48.57% 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.
+Annual Report 2021 | Financial Report 173
+4.4 Fair value hierarchy
+Notes to the Consolidated Financial Statements (continued)
+4 RISK MANAGEMENT (continued)
+4.4 Fair value hierarchy (continued)
+At 31 December 2021, assets classified as Level 3 accounted for approximately 21.61% of assets measured at fair
+value on a recurring basis. They primarily include unlisted equity securities and unlisted debt securities. Fair values are
+determined using valuation techniques, including discounted cash flow valuations, the comparable companies approach,
+etc. The determination of Level 3 is primarily based on the significance of certain unobservable inputs.
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 3.2.
+The following table presents the Group's quantitative disclosures of the fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2021:
+Assets measured at fair value
+For the year ended 31 December 2021
+Available-for-sale securities
+- Equity securities
+Funds
+(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
+As at 31 December 2021, the size of the unconsolidated structured entities that the Group sponsored but had no
+interest was RMB633,503 million (as at 31 December 2020: RMB686,989 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 2021, the management service fee from these structured entities was RMB1,995
+million (2020: RMB2,092 million), which was recorded as other income. The Group did not transfer assets to these
+structured entities.
+4 RISK MANAGEMENT (continued)
+Others managed by affiliated entities Note 2
+290,937
+12,681
+12,681
+Others managed by third parties Note 2
+Note 1
+4.3 Disclosures about interest in unconsolidated structured entities (continued)
+75,551
+Investment income
+and service fee
+Investment income
+Note 1: Funds, trust schemes, debt investment schemes and others managed by third parties were sponsored by third party financial institutions and the
+information related to size of these structured entities were not publicly available.
+Note 2: Others included wealth management products, special asset management schemes, and asset-backed plans, etc.
+172 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+75,551
+Fair value measurement using
+Quoted prices
+in active
+markets
+Wealth management products
+5,005
+5,005
+Others
+21,010
+49,530
+52,127
+136,456
+Debt securities
+Government bonds
+9,208
+49,353
+58,561
+Government agency bonds
+206,996
+52,127
+Preferred stocks
+256,441
+Significant
+observable
+Significant
+unobservable
+Total
+Level 1
+inputs
+Level 2
+inputs
+Level 3
+RMB million
+RMB million
+RMB million
+RMB million
+94,895
+94,895
+Common stocks
+233,347
+23,094
+third parties
+228,289
+and service fee
+Investment income
+27,747
+Debt investment schemes managed by
+third parties
+Note 1
+51,172
+51,172
+and service fee
+Investment income
+Others managed by affiliated entities Note 2
+affiliated entities
+28,368
+14,150
+Others managed by third parties Note 2
+Note 1
+107,372
+107,372
+Investment income
+and service fee
+Investment income
+14,150
+Unconsolidated structured entities
+Investment income
+15,770
+Note 1
+97,988
+97,988
+Trust schemes managed by affiliated entities
+1,994
+1,296
+15,770
+Investment income
+and service fee
+Investment income
+1,296 Investment income
+Note 1
+62,702
+62,702
+Investment income
+Debt investment schemes managed by
+39,817
+Trust schemes managed by third parties
+Carrying
+amount
+Size
+Investment income
+Trust schemes managed by third parties
+Note 1
+63,229
+63,229
+Investment income
+1,298
+Debt investment schemes managed by
+9,172
+9,172
+Investment income
+affiliated entities
+Debt investment schemes managed by
+Note 1
+18,275
+1,298
+2,096
+Trust schemes managed by affiliated entities
+of assets
+As at 31 December 2020
+RMB million
+RMB million
+Funds managed by affiliated entities
+158,182
+8,232
+Maximum
+exposure
+RMB million
+8,232
+Interest held by
+the Group
+Investment income
+Funds managed by third parties
+Note 1
+99,649
+99,649
+and service fee
+Investment income
+27,747
+(i) Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are very low;
+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.
+17,443
+120,393
+653,097
+Segment revenues
+(2,448)
+2,448
+Including: inter-segment revenue
+9,403
+(2,448)
+10,492
+75
+1,284
+Other income
+21,900
+2,967
+58
+1,148
+17,727
+Net fair value gains through profit or loss
+14,583
+139
+44
+877
+13,523
+Net realised gains on financial assets
+154,497
+16,539
+3,870
+17,468
+805,049
+(150)
+(28,129)
+participation in profits
+Policyholder dividends resulting from
+(9,846)
+(352)
+(9,494)
+Investment contract benefits
+(414,797)
+(220)
+(32,445)
+(382,132)
+Increase in insurance contract liabilities
+(52,395)
+(7,408)
+(44,987)
+claim adjustment expenses
+Accident and health claims and
+(113,609)
+(33)
+(4,714)
+(108,862)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+Benefits, claims and expenses
+(2,448)
+462
+9,202
+140,963
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 181
+4,404,427
+316,360
+Total
+Others
+Unallocated
+4,088,067
+29,052
+11,120
+266,201
+3,781,694
+Segment liabilities
+115,128
+22,102
+379
+5,276
+87,371
+Others
+239,446
+6,950
+672
+14,536
+217,288
+repurchase
+For the year ended 31 December 2021
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2020
+Life
+Investment income
+604,666
+15,975
+109,091
+479,600
+Net premiums earned
+294,897
+109,275
+73,747
+- Annuity
+- Endowment
+- Whole life
+(28,279)
+2,674
+612,265
+16,583
+115,089
+480,593
+Gross written premiums
+Revenues
+RMB million
+Total
+Elimination
+Others
+Accident
+Health
+- Term life
+Securities sold under agreements to
+Underwriting and policy acquisition costs
+(15,921)
+Life
+Property, plant and equipment
+Unallocated
+Segment assets
+Others
+Financial assets
+Assets
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+182 Annual Report 2021 | Financial Report
+- 5,162
+607
+351
+1,118
+3,086
+Depreciation and amortisation
+25,699
+402
+78
+1,534
+23,685
+attributable to equity holders of
+the Company
+1,116
+50,257
+Health
+Other comprehensive income
+As at 31 December 2020
+Others
+Insurance contracts
+Liabilities
+Total
+Others
+4,252,466
+46,626
+52,747
+4,153,093
+356,860
+11,639
+237,498
+3,547,096
+265,274
+239,584
+675
+14,939
+10,076
+3,887,819
+117,276
+10,964
+222,559
+3,537,020
+RMB million
+Total
+Elimination
+Accident
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+(4,851)
+(241)
+(1,051)
+(8,575)
+Other expenses
+(1,229)
+(94)
+(302)
+(833)
+Statutory insurance fund contribution
+(37,706)
+(3,020)
+(2,649)
+(8,677)
+(23,360)
+Administrative expenses
+(3,747)
+(759)
+(7)
+(183)
+(2,798)
+Finance costs
+(84,361)
+(2,284)
+(5,315)
+2,448
+(12,270)
+Including: inter-segment expenses
+(2,292)
+51,373
+(3,103)
+54,476
+14,220
+572
+11,611
+28,073
+8,336
+8,336
+Net profit
+Income tax
+Segment results
+(60,841)
+and joint ventures
+7,666
+(758,239)
+2,448
+(10,914)
+(15,967)
+(108,782)
+(625,024)
+Including: share of profit of associates
+Net gains on investments of associates and
+joint ventures
+Segment benefits, claims and expenses
+2,448
+(8)
+7,666
+2,767,642
+313,594
+296,104
+Insurance benefits and claims expenses
+Benefits, claims and expenses
+824,930
+(3,134)
+20,896
+17,051
+126,908
+663,209
+Segment revenues
+(3,134)
+3,134
+Including: inter-segment revenue
+10,005
+(3,134)
+11,826
+85
+1,228
+Other income
+4,943
+1,952
+9
+187
+2,795
+Net fair value gains through profit or loss
+20,344
+Life insurance death and other benefits
+262
+(114,657)
+(41)
+(1,598)
+(4,835)
+(21,021)
+(38,290)
+Underwriting and policy acquisition costs
+(26,511)
+(144)
+(26,367)
+participation in profits
+Policyholder dividends resulting from
+(10,628)
+(405)
+(10,223)
+Investment contract benefits
+(442,370)
+(208)
+(28,956)
+(413,206)
+Increase in insurance contract liabilities
+(55,030)
+(6,954)
+(48,076)
+claim adjustment expenses
+Accident and health claims and
+(121,354)
+(6,656)
+58
+1,256
+18,768
+Accident
+Health
+Life
+For the year ended 31 December 2021
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 179
+Financial assets, securities sold under agreements to repurchase and derivative financial liabilities are allocated among
+segments in proportion to the respective segments' average liabilities of insurance contracts and investment contracts
+at the beginning and end of the year. Insurance and investment contract liabilities are presented under the respective
+segments. The remaining assets and liabilities are not allocated.
+5.3 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.
+5.2 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 35, 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)
+Accident insurance business relates primarily to the sale of accident insurance policies.
+(iii) Accident insurance business (Accident)
+Health insurance business relates primarily to the sale of health insurance policies, including those health insurance
+policies without significant insurance risk transferred.
+(ii) Health insurance business (Health)
+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 four operating segments:
+5.1 Operating segments
+5 SEGMENT INFORMATION
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Others
+RMB million
+Elimination
+Total
+Net realised gains on financial assets
+178,387
+611,251
+6,856
+496
+10,831
+160,204
+Investment income
+16,488
+114,549
+480,214
+Net premiums earned
+(65,744)
+311,096
+97,791
+- Endowment
+69,923
+- Whole life
+2,501
+- Term life
+618,327
+16,407
+120,609
+481,311
+Gross written premiums
+Revenues
+- Annuity
+17,490
+Finance costs
+(308)
+Elimination
+Others
+Accident
+As at 31 December 2021
+For the year ended 31 December 2021
+Health
+Life
+Unallocated
+Segment assets
+Others
+Financial assets
+Assets
+5 SEGMENT INFORMATION (continued)
+Notes to the Consolidated Financial Statements (continued)
+180 Annual Report 2021 | Financial Report
+5,287
+641
+368
+1,359
+2,919
+Depreciation and amortisation
+(4,563)
+1,097
+(16)
+188 Annual Report 2021 | Financial Report
+Total
+(354)
+RMB million
+9,893
+Investment contracts
+3,419,899
+10,069
+228,899
+3,180,931
+Insurance contracts
+Liabilities
+4,891,085
+55,916
+54,398
+Total
+Others
+Property, plant and equipment
+4,780,771
+481,777
+12,237
+275,662
+4,011,095
+284,459
+257,953
+569
+4,496,312
+223,824
+11,668
+259,618
+16,044
+4,001,202
+(5,290)
+attributable to equity holders of
+the Company
+1,491
+(9)
+(196)
+(2,929)
+Including: inter-segment expenses
+(15,467)
+3,134
+(8,063)
+(270)
+(1,307)
+(8,961)
+Other expenses
+(1,253)
+(99)
+(367)
+(787)
+Statutory insurance fund contribution
+(40,808)
+(3,452)
+(2,948)
+(11,069)
+(23,339)
+Administrative expenses
+(5,598)
+(668)
+(14)
+3,134
+Segment benefits, claims and expenses
+(640,438)
+(118,309)
+50,921
+Other comprehensive income
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+52,412
+Net profit
+1,917
+Income tax
+50,495
+1,682
+8,599
+(4,608)
+22,771
+10,328
+10,328
+and joint ventures
+Including: share of profit of associates
+10,328
+10,328
+associates and joint ventures
+Net gains on investments of
+(784,763)
+3,134
+(13,781)
+(15,369)
+Segment results
+195,487
+(148)
+2,973,225
+10,096
+(1,410)
+As at 31 December 2021
+As at 1 January 2021
+Net book value
+As at 31 December 2021
+As at 1 January 2021
+Impairment
+As at 31 December 2021
+Charge for the year
+Deductions
+(2,355)
+As at 1 January 2021
+Accumulated depreciation
+5,372
+2
+5,370
+As at 31 December 2021
+(1,033)
+(1)
+(1,032)
+Deductions
+973
+1
+972
+Additions
+(2,853)
+5,432
+33-3
+(2,356)
+Deductions
+1,158
+1
+1,157
+Additions
+4,688
+2
+4,686
+As at 1 January 2020
+RMB million
+Total
+Others
+Buildings
+Cost
+2,518
+1
+2,517
+3,076
+1
+3,075
+(2,854)
+(1)
+913
+(1,411)
+(1)
+(1)
+2
+5,430
+As at 1 January 2021
+Disposals
+Charge for the year
+(25)
+(24)
+As at 1 January 2020
+Impairment
+(21,230)
+(1,821)
+(891)
+(5,433)
+(13,085)
+As at 31 December 2020
+1,360
+137
+139
+776
+308
+Disposals
+(2,873)
+(377)
+(189)
+(725)
+(1,582)
+Charge for the year
+(19,717)
+As at 31 December 2020
+Net book value
+As at 1 January 2020
+As at 31 December 2020
+RMB million
+Total
+Others
+Buildings
+Cost
+(a) Right-of-use assets
+7 LEASES
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 185
+As at 31 December 2021, the net book value of buildings above which were in process to obtain title certificates was
+RMB9,605 million (as at 31 December 2020: RMB6, 159 million).
+52,747
+(413)
+977
+461
+2,658
+37,319
+51,758
+1,038
+14,377
+523
+2,884
+32,936
+(25)
+(24)
+EE
+11,332
+(1)
+(414)
+As at 31 December 2020
+8 INVESTMENT PROPERTIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 187
+16,626
+17,285
+13,374
+14,217
+(1,597)
+(429)
+(1,168)
+14,971
+(414)
+15,385
+As at 31 December 2021
+As at 1 January 2021
+Fair value
+As at 31 December 2021
+As at 1 January 2021
+Net book value
+As at 31 December 2021
+Accumulated depreciation
+As at 1 January 2021
+Additions
+As at 31 December 2021
+As at 1 January 2021
+Additions
+Cost
+Cost
+As at 1 January 2020
+Additions
+As at 31 December 2020
+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 2021 amounted to RMB16,626 million (as at
+31 December 2020: RMB17,285 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 2021, the net book value of investment properties which were in process to obtain title certificates
+was RMB981 million (as at 31 December 2020: RMB1,044 million).
+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.
+17,285
+14,870
+14,217
+12,141
+(1,168)
+(411)
+(757)
+RMB million
+15,385
+12,898
+Buildings
+RMB million
+As at 31 December 2020
+As at 1 January 2020
+Fair value
+As at 31 December 2020
+As at 1 January 2020
+Net book value
+As at 31 December 2020
+Additions
+As at 1 January 2020
+Accumulated depreciation
+2,487
+(1,581)
+Buildings
+1,840
+As at 1 January 2020
+Net book value
+As at 31 December 2020
+As at 1 January 2020
+Impairment
+(2,356)
+(1)
+(2,355)
+As at 31 December 2020
+330
+1
+329
+Deductions
+(1,518)
+(1)
+(1,517)
+Charge for the year
+(1,168)
+(1)
+(1,167)
+As at 1 January 2020
+Accumulated depreciation
+5,432
+2
+5,430
+As at 31 December 2020
+3,519
+3,075
+1
+1
+2
+1
+1,518
+260
+332
+113
+96
+1,411
+RMB million
+RMB million
+2020
+31 December
+31 December
+2021
+As at
+1,893
+As at
+Total
+Expense relating to leases of low-value assets
+(except for short-term lease liabilities)
+Depreciation charge of right-of-use assets
+Expense relating to short-term leases
+Interest on lease liabilities
+(b) The amounts recognised in profit or loss in relation to leases are as follows:
+7 LEASES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+186 Annual Report 2021 | Financial Report
+The Group's right-of-use assets include the above assets and land use rights disclosed in Note 14.
+The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
+year ended 31 December 2021 (2020: same).
+3,520
+3,076
+8 INVESTMENT PROPERTIES
+(841)
+912
+(11,811)
+Disposals
+(209)
+(209)
+Transfers into investment properties
+5,403
+3,267
+5
+716
+(456)
+1,415
+(211)
+182
+(7,601)
+7,208
+Transfers upon completion
+74,002
+2,798
+11,333
+Additions
+(456)
+(46)
+(548)
+(149)
+(778)
+(1,799)
+Charge for the year
+(21,230)
+(1,821)
+(891)
+(5,433)
+(13,085)
+As at 1 January 2021
+Accumulated depreciation
+77,479
+2,432
+6,790
+1,311
+8,351
+58,595
+As at 31 December 2021
+(1,506)
+1,352
+8,091
+50,428
+As at 1 January 2021
+Segment liabilities
+114,339
+23,288
+370
+6,013
+84,668
+Others
+122,249
+5,665
+358
+7,070
+(5,484)
+Investment contracts
+271,757
+16,455
+288,212
+Securities sold under agreements to
+repurchase
+109,156
+3,233,223
+(379)
+225,025
+28,953
+RMB million
+Total
+construction improvements
+vehicles
+fixtures
+Buildings
+Motor Assets under
+Office
+equipment,
+furniture and
+Cost
+6 PROPERTY, PLANT AND EQUIPMENT
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 183
+3,795,529
+Total
+297,504
+Others
+Unallocated
+3,498,025
+10,824
+(3,105)
+Leasehold
+271
+Additions
+(121)
+322
+(6,456)
+3
+6,010
+Transfers upon completion
+71,500
+222
+2,619
+1,364
+8,368
+44,771
+As at 1 January 2020
+RMB million
+Total
+construction improvements
+Leasehold
+14,378
+131
+5,509
+6,488
+50,428
+8,091
+1,352
+11,333
+2,798
+74,002
+Accumulated depreciation
+As at 1 January 2020
+Disposals
+As at 31 December 2020
+(1,767)
+(143)
+(143)
+(906)
+(575)
+Disposals
+(2,098)
+(2,098)
+Transfers into investment properties
+Motor Assets under
+vehicles
+fixtures
+626
+Office
+equipment,
+furniture and
+(1)
+(24)
+As at 31 December 2021
+Disposals
+Charge for the year
+(25)
+44
+(24)
+As at 1 January 2021
+Impairment
+(23,056)
+Buildings
+(1,670)
+(996)
+(5,777)
+(14,613)
+As at 31 December 2021
+1,279
+530
+(25)
+Net book value
+(1)
+434
+762
+As at 1 January 2021
+54,398
+184 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+6 PROPERTY, PLANT AND EQUIPMENT (continued)
+315
+For the year ended 31 December 2021
+2,574
+6,789
+As at 31 December 2021
+52,747
+977
+Cost
+11,332
+461
+2,658
+37,319
+43,958
+193,939
+618,327
+612,265
+Premiums from new policies
+175,864
+Policy Persistency Rate (26 months)¹ (%)
+Surrender Rate² (%)
+Including: First-year regular premiums
+Value of one year's sales
+115,421
+First-year regular premiums with a payment duration of
+ten years or longer
+41,682
+56,398
+442,463
+418,326
+Gross investment income
+214,057
+198,596
+Net profit attributable to equity holders of the Company
+50,921
+Policy Persistency Rate (14 months)1 (%)
+50,257
+98,410
+Renewal premiums
+An increase in the scale of universal insurance
+2020
+Annual Report 2021 | Management Discussion and Analysis 15
+From left to right:
+44,780
+During the Reporting Period, the Company adhered to
+the strategic core of "Three Major Transformations, Dual
+Centers and Dual Focuses, Asset-liability Interaction,"
+and upheld the operational guideline of "prioritizing
+business value, strengthening sales force, achieving
+stable growth, upgrading technology, optimizing customer
+services and guarding against risks." By concentrating
+efforts and overcoming difficulties with strong resilience,
+the Company steadfastly promoted its high-quality
+development while proceeding with routine pandemic
+prevention and control, and achieved stable and sound
+business operations as whole, with its market leading
+position further solidified. The quality and efficiency of
+its operations and services were significantly improved,
+digital transformation was sped up, and its comprehensive
+strengths were greatly enhanced.
+Ms. Zhang Di, Mr. Zhao Guodong, Mr. Zhan Zhong, Ms. Huang Xiumei, Mr. Su Hengxuan, Mr. Li Mingguang, Mr. Ruan Qi, Ms. Yang Hong, Mr. Liu Yuejin
+The Company pushed forward the "Dingxin Project"
+in greater depth and made breakthroughs in several
+aspects. The optimization of business modes achieved
+remarkable results. As the customer-centric sales
+deployment of "Yi Ti Duo Yuan" was further deepened,
+the individual agent business sector consistently
+prioritized business value and made great efforts in
+improving the quality of its sales force. The diversified
+business sector further optimized its business modes,
+which saw improved capability of business value creation.
+The achievements of market-oriented reforms were
+continuously consolidated. The market-oriented
+investment management system was further advanced,
+the classification management system of branches
+was continuously improved, and intensified efforts
+were made in promoting the assessment, incentive and
+restraint mechanisms for managers in key cities with
+optimized human resource management. The efficiency
+of technology empowerment continued to improve.
+The management system based on tech products
+was comprehensively implemented to facilitate the
+integration of technology and business operations, and
+digital transformation was pushed forward continuously.
+China Life "Internet of Things" fully covered all business
+units and sales outlets across China, and technology
+empowerment demonstrated significant effectiveness.
+The upgrading of operation model achieved
+remarkable results. Key breakthroughs were made for
+the operation model of "multiple accesses at the front-
+end, intelligent centralization at the headquarters and
+comprehensive sharing for operations", and the service
+efficiency and experience, operation control foundation
+and operational risk control capability were significantly
+enhanced.
+16 Annual Report 2021 | Management Discussion and Analysis
+Key Performance Indicators of 2021
+RMB million
+2021
+accounts
+benefits
+7.9%
+9,846
+10,628
+Investment contract
+An increase in the change of insurance contract
+liabilities
+claims expenses
+6.5%
+580,801
+618,754
+Insurance benefits and
+Gross written premiums
+58,373
+Renewal premiums
+442,463
+42,945
+Short-term Single
+insurance
+premiums
+premiums 2,101
+75,353
+premiums
+98,410
+2021
+Short-term Single
+insurance premiums
+2,402
+premiums
+76,116
+First-year
+regular
+premiums
+115,421
+2020
+Renewal premiums
+418,326
+Value of one year's sales (RMB million)
+2021
+2020
+44,780 ▼
+58,373 ▼
+Embedded value (RMB million)
+As at 31 December 2021
+1,203,008 ▼
+18 Annual Report 2021 | Management Discussion and Analysis
+In 2021, the worldwide COVID-19 pandemic continued
+to evolve, and the domestic economy was facing triple
+pressures of shrinking demands, supply disruption, and
+weakened expectations of growth amid a complicated
+and challenging international environment. Under the
+unprecedented pressures, such as the decelerated
+release of insurance demands and decline of sales force,
+the growth of life insurance industry further slowed
+down in terms of premiums. In addition, the insurance
+industry regulator continued to promote the return to its
+original role by the insurance sector, further improved
+system building, and bolstered regulations in the areas
+of insurance product management, sales channel
+development, market behaviors, operations and services
+as well as corporate governance, with an aim at the high-
+quality development of the industry.
+As at 31 December 2020
+First-year
+regular
+(RMB million)
+Gross written premiums breakdown
+In 2021, the Company maintained stable and sound
+business operations and achieved satisfactory results in
+investment. It updated the discount rate assumptions
+for reserves of traditional insurance contracts based on
+market information as at the date of the statement of
+financial position. Taking the above factors into account,
+net profit attributable to equity holders of the Company
+was RMB50,921 million, an increase of 1.3% year on year.
+57,669
+80.50
+85.70
+81.10
+82.40
+1.20
+1.09
+As at
+As at
+31 December
+31 December
+2021
+Including: Individual agent business sector
+2020
+Number of long-term in-force policies (hundred million)
+1,203,008
+3.23
+1,072,140
+3.17
+Notes:
+1.
+2.
+The Persistency Rate for long-term individual life insurance policy is an important operating performance indicator for life insurance companies. It
+measures the ratio of in-force policies in a pool of policies after a certain period of time. It refers to the proportion of policies that are still effective during
+the designated month in the pool of policies whose issue date was 14 or 26 months ago.
+Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of long-term insurance
+contracts)
+Annual Report 2021 | Management Discussion and Analysis
+17
+During the Reporting Period, while the life insurance
+industry was under pressure and the growth of
+premiums continued to slow down, the Company
+prioritized business value and pushed forward
+transformation and upgrade, and maintained the
+industry leadership position in both business scale and
+value. In 2021, the Company's gross written premiums
+amounted to RMB618,327 million, an increase of 1.0%
+year on year, and renewal premiums reached RMB442,463
+million, an increase of 5.8% year on year. As at the end
+of the Reporting Period, the embedded value of the
+Company reached RMB1,203,008 million, an increase of
+12.2% from the end of 2020. Due to the impact of the
+pandemic and the slowdown in the release of demands
+for insurance consumption, premiums from new policies
+were RMB175,864 million, a decrease of 9.3% year on
+year. The first-year regular premiums were RMB98,410
+million, a decrease of 14.7% year on year; in particular,
+first-year regular premiums with a payment duration of
+ten years or longer were RMB41,682 million, a decrease
+of 26.1% year on year. In 2021, the value of one year's
+sales of the Company was RMB44,780 million, a decrease
+of 23.3% year on year. The number of long-term in-force
+policies was 323 million, an increase of 1.9% from the end
+of 2020. The surrender rate was 1.20%, an increase of
+0.11 percentage point year on year.
+During the Reporting Period, in the face of a complex
+and changing market situation, the Company always
+maintained its strategic consistency, reinforced asset-
+liability management, firmly implemented its medium-
+to long-term strategic plan of asset allocation, and
+continuously optimized its allocation management
+by centering on the investment value creation chain.
+In 2021, the Company flexibly made tactical allocations
+in response to the market change, taking into account
+short-term income stability, prevention of key risks, and
+long-term opportunities. The gross investment income
+amounted to RMB214,057 million, an increase of 7.8%
+year on year, and the gross investment yield was 4.98%.
+Embedded value
+REVIEW OF BUSINESS OPERATIONS
+IN 2021
+84,361
+Management
+Discussion
+A decrease in regular premiums of new policies
+-22.1%
+65,744
+Underwriting and policy
+participation in profits
+A decrease in investment income from the
+participating accounts
+resulting from
+-6.3%
+28,279
+26,511
+Policyholder dividends
+6.4%
+9,403
+10,005
+An increase in the profits of certain associates
+Due to the market value fluctuation of
+securities at fair value through profit or loss and
+investment operations
+An increase in spread income of stocks in
+available-for-sale securities
+Other income
+ventures
+of associates and joint
+34.7%
+7,666
+10,328
+Net gains on investments
+-77.4%
+acquisition costs
+Finance costs
+5,598
+3,747
+An increase in the income of management
+service fees by subsidiaries
+12.2%
+HIGH-QUALITY
+DEVELOPMENT
+PURSUING THE
+$
+9
+Annual Report 2021 | Prelude
+Due to the stable and sound business
+operations of the Company, satisfactory
+results in investment, and updated discount
+rate assumptions for reserves of traditional
+insurance contracts based on market
+information as at the date of the statement of
+financial position
+Due to the combined impact of income tax
+payable and deferred income tax
+Company
+equity holders of the
+1.3%
+21,900
+50,257
+Net profit attributable to
+N/A
+3,103
+(1,917)
+Income tax
+Due to the expiration of policies on temporary
+expenses deduction
+8.2%
+37,706
+40,808
+Administrative expenses
+An increase in interest paid for securities sold
+under agreements to repurchase
+49.4%
+50,921
+4,943
+Net fair value gains through
+profit or loss
+financial assets
+2020
+2021
+of Comprehensive Income
+Consolidated Statement
+Major Items of the
+For the year ended 31 December
+Dear Shareholders,
+The
+year 2021 marked a starting point for China to build
+a new development landscape. Being committed to
+the new development concept at a new development
+stage, the Company fully implemented the national
+strategy and deployment, and made its contributions
+to the new development landscape. With stability
+as the top priority, we worked hard and overcame
+many difficulties to push forward the high-quality
+development of the Company, achieving steady
+progress and setting up a good start for the 14th Five-
+Year Plan period.
+During the Reporting Period, the Company's gross
+written premiums amounted to RMB618,327 million,
+and the embedded value reached RMB1,203,008
+million, maintaining the leading position in the industry
+in both business scale and value. Our total assets were
+RMB4,891,085 million, increasing by 15.0% from the
+end of 2020. Net profit attributable to equity holders
+of the Company was RMB50,921 million, an increase
+of 1.3% year on year. As at the end of the Reporting
+Period, the core solvency ratio and the comprehensive
+solvency ratio were 253.70% and 262.41%,
+respectively, which remained at a high level. The Board
+has proposed to distribute an annual cash dividend of
+RMB0.65 per share (inclusive of tax), and such proposal
+will be submitted to the 2021 Annual General Meeting
+for review and discussion.
+Looking back at 2021, the domestic economy was
+facing several challenges, such as a complicated
+and severe international environment and sporadic
+outbreaks of the pandemic, and development of the
+insurance industry saw great pressure with the release
+of demands for insurance consumption slowing down,
+and the industry still in the throes of transformation
+and upgrade. China Life, being people-centered,
+actively responded to major challenges by focusing
+on its principal businesses, made arduous efforts in
+coordinating pandemic prevention and control as well
+as operation management, and achieved prominent
+progress in a variety of fields, such as serving the
+overall national development, business performance,
+transformation and innovation and risk control, etc.,
+which further enhanced the Company's comprehensive
+strengths. In the evaluation of operations of insurance
+companies by the Insurance Association of China, the
+Company was awarded Grade A for six consecutive
+years. In 2021, the Company ranked 49th and 8th in
+the Forbes Global 2000 and the Fortune China 500,
+respectively, and received many honors, such as "Best
+Listed Company and Listed Company with the Best
+Investment Value for the 14th Five-Year Plan Period"
+from the 11th China Securities 2021 "Golden Bauhinia”
+Awards and "Most Respected Enterprise in Asia
+(insurance industry)" from the Institutional Investor.
+Change
+We proactively leveraged advantages of our
+principal businesses to serve the overall national
+development. We firmly took the responsibility of
+serving the overall interests of national development,
+and acted as a main force in implementing the national
+strategies of Healthy China program and proactively
+responding to population aging. We actively participated
+in the construction of a multi-level social security
+system. The supplementary major medical expenses
+insurance programs covered over 350 million people,
+the long-term care insurance programs covered 23
+million people, the city-customized commercial medical
+insurance programs covered over 10 million people,
+and the pilot programs for the exclusive commercial
+pension insurance were carried out in an orderly
+manner. By sticking to the role of the financial industry
+in serving the real economy, the Company focused on
+major national strategies and continuously improved the
+quality and efficiency of its services. Our investments
+in the real economy in aggregate have exceeded
+RMB2.7 trillion, with new investments during the
+Reporting Period amounting to nearly RMB770 billion.
+Investments in serving the national strategy for regional
+developments have exceeded RMB1.4 trillion in total.
+Our green investments have accumulatively exceeded
+RMB300 billion, aiming at facilitating the green
+development strategy of "peak carbon emissions and
+carbon neutrality". With the establishment of a green
+investment standard system, AMC, the Company's
+non-wholly owned subsidiary, has launched the first
+ESG bond index and ESG equity index in the domestic
+insurance asset management industry. We fully
+advanced rural revitalization strategy, optimizing the
+rural revitalization-related insurance product supply and
+consistently supporting the development of key regions
+in need of assistance in China.
+We demonstrated strong resilience and consistently
+maintained industry leadership in both business
+scale and value. In 2021, the insurance industry
+developed under multiple challenges. Prioritizing
+business value creation, the Company's gross written
+premiums reached a new high after exceeding RMB600
+billion in 2020, and the embedded value increased by
+12.2% after exceeding RMB1 trillion, both maintaining
+its leading position in the industry. Due to the overall
+transformation of the industry, the value of one year's
+sales of the Company decreased from the high base
+to RMB44,780 million, and the decline was within a
+reasonable range, which was a hard-won result. The
+Company consistently optimized the investment fund
+allocation towards major assets categories and the
+assets and liabilities were well coordinated. During
+the Reporting Period, the Company achieved a gross
+investment income of RMB214,057 million, an increase
+of 7.8% year on year, and realised a gross investment
+yield of 4.98%.
+We focused on enhancing the growth drivers
+through continuously deepening reforms and
+innovation. We maintained strategic consistency and
+implemented the "Dingxin Project" in greater depth,
+laying a solid foundation for the steady development of
+the Company at a new stage. As the sales deployment
+of "Yi Ti Duo Yuan" was further deepened, we
+actively explored on the sales system reform and
+firmly promoted the transformation of the largest sales
+force in the industry to become more professional
+and specialized. The number of our high-performance
+agents was stable, and the foundation of our sales.
+force remained solid. The market-oriented incentive,
+assessment and restraint mechanism was further
+promoted, and the Company's investment center
+witnessed prominent results in its market-oriented
+reforms. Being customer-centric, we proceeded with
+the reform in insurance product supply to improve
+the multi-dimensional and multi-level product system.
+We strengthened service innovation and centralized
+operations, and continuously improved our customer
+experience with "convenient, quality and caring"
+services, with the proportion of highly satisfied
+customers remained at a high level. The Company
+constantly implemented the strategy of "Inclusive
+Healthcare" and "Integrated Aged-care" to expand new
+development space for long-term deployment.
+We enhanced technology-driven development and
+the digital transformation was further advanced.
+In the digital era, we constantly strengthened the
+driving and supporting role of technology innovation,
+accelerated the digital transformation under the
+principle of "Collective Wisdom, Agility, and Iteration",
+enhanced the technology-empowered value creation
+and proceeded with creating a digital insurance
+ecosystem to facilitate the construction of Digital China
+Life. We comprehensively upgraded the technological
+architecture, reinforced the integration of technology
+and business operations, and pushed forward the
+whole process of operation and management to be
+more digitalized and intelligent. Our technological
+adaptability was greatly improved with technology
+empowerment becoming increasingly prominent. Our
+capacity of data governance and security management
+was also firmly enhanced.
+We coordinated development and security and
+consistently strengthened our risk management
+and control. We upheld a systematic concept to
+strengthen asset-liability management, adhered to
+robust and prudent operations and firmly held on to the
+bottom line of no systematic financial risks. By strictly
+implementing the regulatory requirements, optimizing
+the enterprise-wide risk management system and
+improving the risk management mechanism, we
+consistently strengthened our risk control measures
+and risk management capability. In the integrated risk
+rating for insurance industry conducted by CBIRC, the
+Company has received the rating of Class A for 15
+consecutive quarters.
+As a company listed in three listing venues, China
+Life committed to the best practices of corporate
+governance, and a sound and effective corporate
+governance structure has played an important role
+in promoting the steady operation and development
+of the Company. During the Reporting Period, we
+successfully completed the election of and formed
+the seventh session of the Board of Directors and
+the Board of Supervisors, further improving the
+governance structure and effectiveness. China Life
+will continue to push forward the construction of
+a corporate governance system well aligned with
+the characteristics of Chinese state-owned financial
+enterprises and put into more efforts to promote the
+high-quality development of the Company.
+Annual Report 2021 | Letter to Shareholders 13
+2022 is an important year for fully building a
+modern socialist country and marching towards
+the second Centenary Goal. At present, China's
+economic development faces triple pressures of
+shrinking demands, supply disruption, and weakened
+expectations of growth, which are also seen in the
+life insurance industry to some extent. Despite
+complicated situations, we firmly believe that the long-
+term positive fundamentals of China's life insurance
+industry remain unchanged. From the perspective of
+macro environment, China's economy will maintain
+the sound development momentum in the long-term,
+and the overall social situation will remain stable. As
+the financial reform and opening up is accelerated
+in all aspects, high-quality development has become
+the key for the life insurance industry to achieve new
+progresses. With the in-depth development of the
+insurance supply, China will remain as one of the largest
+incremental markets of life insurance around the world.
+From the perspective of public demands, as awareness
+of insurance increases and consumption demands are
+upgraded, the demands for risk management, wealth
+management and health management will continue
+to expand, and the life insurance industry will open
+up a broader development space. The life insurance
+industry is still at an important stage full of strategic
+opportunities, and the long-term development situation
+remains promising.
+"To see a thousand miles afar, we should ascend
+a higher mountain". China Life and its predecessor
+are the participants, who witnessed and promoted
+the commencement, development and progress of
+China's insurance industry, and grow together with
+the industry. Standing at a new starting point, we will
+strengthen our judgement on the current situation
+and future trend, and properly analyze challenges and
+opportunities. With the focus on serving the national
+development and the goal of "Protecting People's Good
+Life", we will seize strategic development opportunities
+and carry out various tasks in a down-to-earth manner.
+By sticking to the original role of insurance, we will
+consistently deepen the supply-side reforms and
+improve our capacity of insurance service supply with
+steady progress. Besides, we will lead the high-quality
+development of the industry with our own high-quality
+development, aiming to building a world-class life
+insurance company and rewarding the shareholders and
+people from all walks of life with satisfactory operating
+performances.
+Board of Directors of
+China Life Insurance Company Limited
+24 March 2022
+14 Annual Report 2021 | Letter to Shareholders
+12 Annual Report 2021 | Letter to Shareholders
+and Analysis
+Main Reasons for Change
+611,251
+39.5%
+14,583
+20,344
+Net realised gains on
+An increase in interest income from debt-type
+investments
+15.5%
+154,497
+178,387
+3.2%
+15,975
+16,488
+Great efforts made by the Company in the
+development of health insurance business
+Net premiums earned
+RMB million
+business
+Accident insurance
+5.0%
+109,091
+114,549
+Health insurance business
+0.1%
+479,600
+480,214
+Life insurance business
+1.1%
+604,666
+Investment income
+1,072,140 ▼
+Letter to Shareholders
+Being committed to the new development concept
+at a new development stage, the Company fully
+implemented the national strategy and deployment,
+and made its contributions to the new development
+landscape. With stability as the top priority, we
+worked hard and overcame many difficulties to
+push forward the high-quality development of the
+Company, achieving steady progress and setting
+up a good start for the 14th Five-Year Plan period.
+For the year ended 31 December 2021
+10 FINANCIAL ASSETS (continued)
+10.2 Loans
+Policy loans (i)
+Other loans
+Total
+Impairment
+Net value
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+After ten years
+Total
+Impairment
+Net value
+(i) As at 31 December 2021, maturities of policy loans were within 6 months (as at 31 December 2020: same).
+10.3 Term deposits
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+Total
+As at
+As at
+Notes to the Consolidated Financial Statements (continued)
+31 December
+RMB million
+1,533,753
+1,099,926
+1,225,540
+Debt securities - Contractual maturity schedule
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+After ten years
+Total
+As at
+As at
+31 December
+2021
+RMB million
+31 December
+2020
+RMB million
+55,370
+25,520
+147,786
+146,463
+163,479
+206,134
+1,167,118
+811,252
+1,189,369
+Annual Report 2021 | Financial Report 193
+31 December
+2021
+27,606
+669,906
+660,978
+(3,819)
+(2,443)
+666,087
+658,535
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+135,301
+63,090
+394,187
+480,848
+1,740
+529,488
+545,678
+As at 31 December 2021, the Group's term deposits of RMB2,641 million (as at 31 December 2020: RMB750 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.
+32,154
+114,885
+106,319
+287,196
+2020
+RMB million
+RMB million
+236,209
+200,730
+433,697
+460,248
+669,906
+660,978
+(3,819)
+(2,443)
+125,614
+666,087
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+348,940
+231,291
+182,493
+658,535
+1,638,271
+1,487,819
+150,452
+10.1 Held-to-maturity securities
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Total
+Debt securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted (i)
+Total
+(i) Unlisted debt securities include those traded on the Chinese interbank market.
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+349,370
+10 FINANCIAL ASSETS
+265,198
+For the year ended 31 December 2021
+192 Annual Report 2021 | Financial Report
+208
+2,823
+12,525
+339
+185
+Other comprehensive income
+(1,944)
+630
+1,991
+(1,706)
+(25)
+650
+Total comprehensive income
+11,868
+5,305
+3,721
+203
+2,823
+10,819
+314
+835
+(i) Including adjustments for the difference of accounting policies, fair value and others.
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2021 and 31 December
+2020. The Group had a capital contribution commitment of RMB20,730 million with associates and joint ventures as at 31
+December 2021 (as at 31 December 2020: RMB25,364 million). The capital contribution commitment amount has been
+included in the capital commitments in Note 40.
+Notes to the Consolidated Financial Statements (continued)
+911,451
+617,515
+209,627
+314,113
+382,413
+37,134
+238,636
+275,770
+74,241
+895,343
+969,584
+71,715
+559,488
+631,203
+7,911
+211,882
+219,793
+4,433
+205,440
+209,873
+66,481
+66,481
+12,332
+96,362
+108,694
+Total
+68,300
+Subordinated bonds
+Corporate bonds
+Government agency bonds
+201,988
+63,305
+104,668
+1,533,753
+1,189,369
+246,134
+215,671
+87
+148
+44
+70
+194 Annual Report 2021 | Financial Report
+1,287,488
+1,533,753
+1,189,369
+As at 31 December 2021, no accumulated impairment loss for the investment of held-to-maturity securities has been
+recognised by the Group (2020: RMB20 million).
+Debt securities - fair value hierarchy
+As at 31 December 2021
+Level 1
+Level 2
+Total
+RMB million RMB million
+RMB million
+As at 31 December 2020
+Level 1
+Level 2
+RMB million RMB million
+Total
+RMB million
+Government bonds
+973,480
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+10 FINANCIAL ASSETS (continued)
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+Unlisted
+Listed in Mainland, PRC
+Debt securities
+10.5 Available-for-sale securities (continued)
+10 FINANCIAL ASSETS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 195
+(i) Other available-for-sale securities mainly include unlisted equity investments, private equity funds, trust schemes and perpetual bonds.
+1,215,603
+20,606
+20,279
+1,429,287
+614,187
+615,464
+148,671
+As at
+206,996
+As at
+31 December
+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 quotations, wealth management products and private equity funds.
+1,215,603
+1,429,287
+634,793
+635,743
+325,768
+321,866
+278
+28
+108,493
+75,694
+200,254
+238,155
+580,810
+793,544
+538,656
+707,399
+42,154
+86,145
+RMB million
+RMB million
+2020
+2021
+31 December
+13,013
+5,005
+53,778
+Subtotal
+Others (i)
+Wealth management products
+Preferred stocks
+Common stocks
+Funds
+Equity securities
+Subtotal
+Others (i)
+Subordinated bonds
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+Available-for-sale securities, at fair value
+10.5 Available-for-sale securities
+Insurance companies in China are required to deposit an amount that equals 20% of their registered capital with banks in
+compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
+during liquidation proceedings.
+6,333
+6,333
+6,333
+4,613
+1,720
+RMB million
+Available-for-sale securities, at cost
+Equity securities
+Others (i)
+Total
+52,127
+301,249
+256,441
+97,476
+94,895
+580,810
+793,544
+144,721
+161,054
+81,795
+111,029
+Debt securities - Contractual maturity schedule
+136,025
+169,013
+259,753
+49,256
+58,561
+RMB million
+RMB million
+31 December
+2020
+2021
+31 December
+As at
+As at
+203,147
+Maturing:
+Within one year
+After one year but within five years
+Subtotal
+62,948
+112,827
+Unlisted
+262
+273
+Listed overseas
+72
+23
+Listed in Hong Kong, PRC
+32,333
+29,934
+Listed in Mainland, PRC
+Debt securities
+161,570
+206,771
+Total
+65,955
+63,714
+262
+271
+48,858
+45,649
+143,057
+95,615
+Equity securities
+Listed in Mainland, PRC
+10.4 Statutory deposits - restricted
+Contractual maturity schedule:
+Within one year
+After one year but within five years
+Total
+As at
+As at
+31 December
+31 December
+2021
+65,955
+16,835
+63,714
+12,312
+4,213
+4,849
+Subtotal
+Unlisted
+Listed overseas
+80
+736
+51,629
+45,817
+Listed in Hong Kong, PRC
+10,033
+2020
+17,794
+143,057
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+580,810
+793,544
+147,344
+258,479
+271,394
+318,992
+125,202
+179,476
+36,870
+36,597
+RMB million
+RMB million
+31 December
+2020
+2021
+31 December
+As at
+As at
+196 Annual Report 2021 | Financial Report
+Total
+After ten years
+After five years but within ten years
+10 FINANCIAL ASSETS (continued)
+10.6 Securities at fair value through profit or loss
+As at
+As at
+2,752
+43,250
+86,803
+90,425
+4,422
+7,989
+1,638
+1,393
+Subtotal
+Others
+Common stocks
+95,615
+Funds
+Subtotal
+Others
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+RMB million
+RMB million
+2020
+31 December
+31 December
+2021
+Equity securities
+62,513 51,429
+Equity Method
+4,675
+3,022
+(1,042)
+(130)
+49,015
+Subtotal
+153,562
+188,155
+5,610
+11,737
+(3,181)
+697
+203,018
+(3,217)
+Joint ventures
+5,610
+Joy City Commercial Property
+6,281
+5,779
+111
+(354)
+10
+5,546
+66.67%
+Mapleleaf Century Limited ("MCL")
+Equity Method
+7,656
+4,736
+(1,004)
+505
+4,237
+Fund L.P. ("Joy City")
+41,555
+48,001
+Equity Method
+98
+90
+1T
+(15)
+(3)
+1,692
+35.00%
+Sinopec Sichuan to East China Gas
+Pipeline Co., Ltd.
+("Pipeline Company")
+Equity Method
+20,000
+20,676
+1,335
+35
+109
+(608)
+Others (iv)
+22,644 10.29%
+(22)
+(369)
+602
+22,433
+75.00%
+21,801
+("China Unicom") (iii)
+Communications Limited
+China United Network
+43.86%
+21,438
+35
+Equity Method
+1,612
+Others (iv)
+48,576 40,914
+Sino-Ocean
+CLP&C
+COFCO Futures
+Pipeline Company
+China Unicom
+Joint ventures
+Joy City
+MCL
+190 Annual Report 2021 | Financial Report
+1,730
+Percentage of
+equity interest held
+PRC
+43.686%
+Hong Kong, PRC
+29.59%
+CGB
+PRC
+PRC
+35.00%
+PRC
+43.86%
+PRC
+10.29%
+The British Cayman Islands
+66.67%
+The British Virgin Islands
+75.00%
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+As at 31 December 2020, the major associates and joint ventures of the Group are as follows:
+Name
+40.00%
+Associates
+Name
+As at 31 December 2021, the major associates and joint ventures of the Group are as follows:
+5,790
+(516)
+(945)
+(91)
+45,152
+Subtotal
+5,790
+(1,409)
+(1,299)
+424
+54,935
+Total
+216,075
+239,584
+11,400
+10,328
+(4,480)
+(v) There is no significant restriction for the Group to dispose of its other associates and joint ventures.
+(iv) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
+On 31 December 2021, the stock price of China Unicom was RMB3.93 per share.
+(iii) The 2020 final dividend of RMB0.0669 in cash per ordinary share was approved and declared in the Annual General
+Meeting of China Unicom on 11 May 2021. The Company received a cash dividend of RMB213 million. The 2021 interim
+dividend of RMB0.0488 in cash per ordinary share was approved and declared in the Annual General Meeting of China
+Unicom on 23 September 2021. The Company received a cash dividend equivalent to RMB156 million.
+Sino-Ocean, the Group's associate is listed in Hong Kong. On 31 December 2021, the stock price of Sino-Ocean was
+HKD1.82 per share. As at 31 December 2020, the cumulative impairment loss of RMB3,217 million for the investment
+in Sino-Ocean had been recognised by the Group. The Group performed an impairment test to this investment valued
+using the discounted future cash flow method on 31 December 2021 and no further impairment loss should be made. The
+impairment test involved significant assumptions including selling prices of properties under development, rental prices
+of investment properties and discount rates, and the Group used 10% as the discount rate of cash flow for properties
+under development and investment properties (As at 31 December 2020: 10% for properties under development and
+investment properties).
+(ii) The 2020 final dividend of HKD0.09 in cash per ordinary share was approved and declared in the Annual General
+Meeting of Sino-Ocean on 21 May 2021. The Company received a cash dividend equivalent to RMB168 million. The 2021
+interim dividend of HKD0.055 in cash per ordinary share was approved and declared by the Board of Directors of Sino-
+Ocean on 19 August 2021. The Company received a cash dividend equivalent to RMB103 million.
+Equity Method
+(i) The 2020 final dividend of RMB0.077 in cash per ordinary share was approved and declared in the Annual General
+Meeting of CGB on 30 June 2021. The Company received a cash dividend of RMB662 million.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 189
+(3,217)
+257,953
+1,121
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+1,339
+Equity Method
+("COFCO Futures")
+Current
+Total
+Others
+Bank deposits
+Debt securities
+10.8 Accrued investment income
+Total
+Above 30 days
+Within 30 days
+Maturing:
+10.7 Securities purchased under agreements to resell
+10 FINANCIAL ASSETS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 197
+Non-current
+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 quotations.
+206,771
+Total
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+As at 1 January
+Change of the cost
+Share of profit or loss
+Declared dividends
+Other equity movements
+Impairment
+As at 31 December
+2021
+2020
+RMB million
+239,584
+161,570
+Total
+198 Annual Report 2021 | Financial Report
+As at
+45,200
+51,097
+1,003
+2,066
+44,197
+49,031
+45,200
+51,097
+6,176
+6,462
+26,454
+31,900
+12,570
+12,735
+RMB million
+RMB million
+2020
+As at
+31 December
+2021
+31 December
+2020
+RMB million
+RMB million
+RMB million
+11,896
+1,019
+12,915
+7,947
+As at
+31 December
+2021
+As at
+31 December
+7,947
+11,400
+222,983
+13,997
+10,328
+79,974
+5,819
+109
+Sino-Ocean Group Holding Limited
+("Sino-Ocean") (ii)
+Equity Method
+11,245
+11,285
+589
+(271)
+26
+(662)
+1,048
+86,179
+43.686%
+296
+11,899
+COFCO Futures Company Limited
+40.00%
+10,151
+(527)
+(214)
+272
+45,176
+10,620
+Equity Method
+("CLP&C")
+Insurance Company Limited
+China Life Property and Casualty
+(3,217)
+29.59%
+6,000
+Associates
+Equity Method
+China Guangfa Bank Co., Ltd.
+8,336
+(4,480)
+(5,253)
+1,121
+228
+(707)
+257,953
+239,584
+Movement
+As at
+Share of
+Accounting
+method
+31 December
+Change of
+profit
+Declared
+Cost
+Associates
+RMB Million
+RMB Million
+impairment
+interest
+amount of
+("CGB") (i)
+of equity
+As at
+Other
+equity Provision 31 December
+movements of impairment 2021
+dividends
+or loss
+the cost
+2020
+Percentage Accumulated
+CGB
+Place of incorporation
+CLP&C
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+Total assets
+3,027,972
+263,528
+106,930
+20,567
+34,933
+582,475
+10,306
+24,196
+RMB million
+Total liabilities
+193,806
+80,379
+17,512
+1,068
+251,001
+85
+13,342
+Total equity
+218,150
+69,722
+26,551
+3,055
+33,865
+331,474
+2,809,822
+RMB million
+RMB million
+MCL
+28
+Other comprehensive income
+2,416
+(35)
+(766)
+(8)
+(27)
+15
+Total comprehensive income
+19,892
+5,056
+(145)
+273
+3,081
+14,389
+348
+445
+Joy City
+China
+Unicom
+Pipeline
+Company
+COFCO
+Futures
+CLP&C
+Sino-Ocean
+10,221
+CGB
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+For the year ended 31 December 2021
+Sino-Ocean
+Annual Report 2021 | Financial Report 191
+475
+447
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2020 and for the year ended 31 December 2020:
+10,854
+Total equity attributable to equity holders of
+the associates and joint ventures
+Gross carrying value of the investments
+79,974
+14,502
+10,620
+1,612
+20,676
+22,433
+5,779
+4,736
+Impairment
+(3,217)
+Net carrying value of the investments
+79,974
+11,285
+10,620
+1,612
+20,676
+13,812
+Net profit/(loss)
+853
+360
+306,490
+5,259
+75.00%
+2,193
+61,271
+80,525
+Total revenues
+4,736
+5,779
+22,433
+77,990
+333
+66.67%
+43.86%
+173,159
+52,273
+26,551
+3,048
+33,865
+147,709
+10,221
+10,854
+Total adjustments (i)
+2,612
+(6,528)
+427
+16,981
+(1,552)
+(4,540)
+Total equity attributable to equity holders of
+the associates and joint ventures
+35.00%
+40.00%
+29.59%
+43.686%
+Proportion of the Group's ownership
+6,314
+10.29%
+8,669
+34,292
+3,048
+26,551
+45,745
+175,771
+after adjustments
+164,690
+14,416
+Notes to the Consolidated Financial Statements (continued)
+281
+RMB million RMB million
+RMB million
+Total assets
+3,359,985
+281,252
+120,178
+25,153
+37,099
+593,284
+RMB million RMB million RMB million
+10,258
+3,081
+Total liabilities
+3,125,484
+204,805
+RMB million RMB million
+94,756
+1,476
+257,074
+232
+13,035
+Total equity
+234,501
+76,447
+25,422
+3,285
+35,623
+336,210
+10,026
+11,160
+Total equity attributable to equity holders of
+21,868
+MCL
+Joy City
+China
+Unicom
+COFCO Futures
+Pipeline Company
+China Unicom
+Joint ventures
+Joy City
+MCL
+Place of incorporation
+Percentage of
+equity interest held
+PRC
+43.686%
+Hong Kong, PRC
+29.59%
+PRC
+40.00%
+PRC
+35.00%
+Pipeline
+Company
+COFCO
+Futures
+CLP&C
+Sino-Ocean
+CGB
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2021 and for the year ended 31 December 2021:
+the associates and joint ventures
+75.00%
+The British Virgin Islands
+The British Cayman Islands
+10.29%
+PRC
+43.86%
+PRC
+66.67%
+189,510
+24,195
+25,422
+15,116
+10,151
+1,692
+21,438
+22,644
+5,546
+4,237
+Impairment
+(3,217)
+Net carrying value of the investments
+86,179
+11,899
+10,151
+1,692
+21,438
+22,644
+5,546
+621
+5,091
+17,476
+Net profit/(loss)
+897
+352
+86,179
+331,665
+6,846
+82,549
+55,074
+74,905
+Total revenues
+4,237
+5,583
+Gross carrying value of the investments
+68,645
+66.67%
+75.00%
+3,277
+35,623
+149,217
+10,026
+11,160
+464
+(7,257)
+405
+16,509
+(1,707)
+(5,511)
+Total equity attributable to equity holders of
+the associates and joint ventures
+after adjustments
+Total adjustments (i)
+29.59%
+43.86%
+35.00%
+40.00%
+43.686%
+10.29%
+5,649
+Proportion of the Group's ownership
+165,726
+36,028
+3,277
+25,422
+47,817
+8,319
+189,974
+22 INVESTMENT INCOME
+Annual Report 2021 | Financial Report 207
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+2021
+21 STATUTORY INSURANCE FUND
+Debt securities
+104,476
+133,676
+As required by the CIRC Order [2008] No. 2, "Measures for Administration of Statutory Insurance Fund", all insurance
+companies have to pay the statutory insurance fund contribution from 1 January 2009. The Group is subject to the
+statutory insurance fund contribution, (i) at 0.15% and 0.05% of premiums and accumulated policyholder deposits from
+life policies with guaranteed benefits and life policies without guaranteed benefits, respectively; (ii) at 0.8% and 0.15%
+of premiums from short-term health policies and long-term health policies, respectively; (iii) at 0.8% of premiums from
+accident insurance contracts, at 0.08% and 0.05% of accumulated policyholder deposits from accident investment
+contracts with guaranteed benefits and without guaranteed benefits, respectively. When the accumulated statutory
+insurance fund contributions reach 1% of total assets, no additional contribution to the statutory insurance fund is
+required.
+-held-to-maturity securities
+Loans
+- at fair value through profit or loss
+Equity securities
+- available-for-sale securities
+at fair value through profit or loss
+Bank deposits
+Securities purchased under agreements to resell
+Total
+104,476
+For the year ended 31 December
+- available-for-sale securities
+133,676
+5,352
+133,676
+2020
+RMB million
+67,862
+42,654
+17,866
+16,139
+12,874
+11,318
+7,057
+2,497
+2,594
+1,467
+1,811
+1,528
+1,320
+717
+889
+291
+493
+23,222
+20,201
+104,476
+RMB million
+As at 1 January
+56,830
+Equity securities
+Realised gains (i)
+Impairment (ii)
+Subtotal
+Total
+(i) Realised gains were generated mainly from available-for-sale securities.
+198
+(1,359)
+1,287
+288
+(1,161)
+1,575
+42,867
+24,925
+(21,362)
+(11,917)
+21,505
+13,008
+20,344
+14,583
+(ii) During the year ended 31 December 2021, the Group recognised an impairment charge of RMB8 million on available-for-sale funds (2020: RMB111
+million); an impairment charge of RMB21,354 million on available-for-sale stock securities (2020: RMB11,732 million); no impairment charge on
+available-for-sale other equity securities (2020: RMB74 million); an impairment reversal of RMB17 million on available-for-sale debt securities (2020:
+RMB16 million); an impairment charge of RMB1,376 million on loans (2020: an impairment reversal of RMB275 million) and no impairment charge of
+held-to-maturity securities (2020: RMB3 million), for which the Group determined that objective evidence of impairment existed.
+208 Annual Report 2021 | Financial Report
+RMB million
+Subtotal
+RMB million
+Realised gains (i)
+Impairment (ii)
+RMB million
+44,757
+29,491
+22,695
+4,079
+3,482
+27,806
+24,185
+912
+798
+25,949
+32,970
+350
+25,860
+31,948
+772
+178,387
+154,497
+For the year ended 31 December 2021, the interest income included in investment income was RMB149,669 million
+(2020: RMB129,514 million). Interest income was mainly accrued using the effective interest method.
+23 NET REALISED GAINS ON FINANCIAL ASSETS
+For the year ended 31 December
+2021
+2020
+RMB million
+Debt securities
+2020
+3,353
+31 December
+Discount rate assumptions
+4.85%
+4.85%
+For the insurance contracts of which future insurance benefits are not affected by investment yields of the corresponding
+investment portfolios, the discount rate assumption is based on the "Yield curve of reserve computation benchmark for
+insurance contracts", published on the "China Bond" website with consideration of liquidity spreads, taxation and other
+relevant factors. The assumed spot discount rates with risk margin are as follows:
+As at 31 December 2021
+As at 31 December 2020
+Discount rate assumptions
+2.88% 4.80%
+3.09% 4.80%
+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 the consideration of risk margin.
+(ii) The mortality and morbidity assumptions are based on the Group's historical mortality and morbidity experience. The
+assumed mortality rates and morbidity rates vary with the age of the insured and contract type.
+The Group bases its mortality assumptions on China Life Insurance Mortality Table (2010-2013), adjusted where
+appropriate to reflect the Group's recent historical mortality experience. The main source of uncertainty with life insurance
+contracts is that epidemics and wide-ranging lifestyle changes could result in deterioration in future mortality experience,
+thus leading to an inadequate reserving of liability. Similarly, improvements in longevity due to continuing advancements
+in medical care and social conditions may expose the Group to longevity risk.
+The Group bases its morbidity assumptions for critical illness products on analysis of historical experience and
+expectations of future developments. There are two main sources of uncertainty. Firstly, wide-ranging lifestyle changes
+could result in future deterioration in morbidity experience. Secondly, future development of medical technologies and
+improved coverage of medical facilities available to policyholders may bring forward the timing of diagnosing critical
+illness, which demands earlier payment of the critical illness benefits. Both could ultimately result in an inadequate
+reserving of liability if current morbidity assumptions do not properly reflect such trends.
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+Annual Report 2021 | Financial Report 201
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+15 INSURANCE CONTRACTS (continued)
+(a) Process used to decide on assumptions (continued)
+(iii) Expense assumptions are based on expected unit costs with the consideration of previous expense studies and future
+trends. Expense assumptions are affected by certain factors such as future inflation and market competition which bring
+uncertainty to these assumptions. The Group determines expense assumptions based on information obtained at the end
+of each reporting period and risk margin. Components of expense assumptions include the cost per policy and percentage
+of premium as follows:
+As at 31 December 2021
+As at 31 December 2020
+Individual Life
+Group Life
+RMB Per Policy
+% of Premium
+RMB Per Policy
+% of Premium
+45.00
+45.00
+0.85% 0.90%
+0.85% 0.90%
+25.00
+0.90%
+As at 31 December 2021
+As at 31 December 2020
+25.00
+In developing the discount rate assumptions, the Group considers investment experience, the current investment
+portfolio and the 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:
+(a) Process used to decide on assumptions
+RMB million
+RMB million
+9,493
+1,559
+8,011
+8,056
+5,327
+5,866
+3,522
+2,257
+717
+728
+101
+187
+8,884
+6,865
+39,559
+29,040
+30,713
+19,717
+8,846
+9,323
+39,559
+29,040
+(i) The Group's right-of-use assets include the above land use rights and right-of-use assets disclosed in Note 7.
+200 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+15 INSURANCE CONTRACTS
+(i) For the insurance contracts of which future insurance benefits are affected by investment yields of the corresponding
+investment portfolios, the discount rate assumption is based on expected investment returns of the asset portfolio
+backing these liabilities, considering the impacts of time value on reserves.
+0.90%
+(iv) The lapse rates and other assumptions are affected by certain factors, such as future macro-economy, availability of
+financial substitutions, and market competition, which bring uncertainty to these assumptions. The lapse rates and other
+assumptions are determined with reference to creditable past experience, current conditions, future expectations and
+other information.
+(v) The Group applies a consistent method to determine risk margin. The Group considers risk margin for the discount
+rate, mortality and morbidity and expense assumptions to compensate for the uncertain amount and timing of future cash
+flows. When determining risk margin, the Group considers historical experience, future expectations and other factors.
+The Group determines the risk margin level by itself as the regulations have not imposed any specific requirement on it.
+The Group adopts 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.
+21,991
+14,062
+14,701
+3,419,899
+2,973,225
+(4,910)
+(4,228)
+(412)
+(209)
+(823)
+(523)
+(6,145)
+(4,960)
+3,374,693
+2,932,305
+25,822
+13,239
+21,782
+14,178
+3,413,754
+2,968,265
+Notified claims
+Incurred but not reported
+Total as at 1 January – Gross
+Cash paid for claims settled
+- Cash paid for current year claims
+· Cash paid for prior year claims
+Claims incurred
+- Claims arising in current year
+2021
+26,234
+2,936,533
+3,379,603
+RMB million
+202 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+15 INSURANCE CONTRACTS (continued)
+(b) Net liabilities of insurance contracts
+Gross
+Long-term insurance contracts
+Short-term insurance contracts
+- Claims and claim adjustment expenses
+- Unearned premiums
+Total, gross
+Recoverable from reinsurers
+Long-term insurance contracts (Note 13)
+Short-term insurance contracts
+2020
+- Claims and claim adjustment expenses (Note 13)
+Total, ceded
+Net
+Long-term insurance contracts
+Short-term insurance contracts
+- Claims and claim adjustment expenses
+- Unearned premiums
+Total, net
+(c) Movements in liabilities of short-term insurance contracts
+The table below presents movements in claims and claim adjustment expense reserve:
+As at
+As at
+31 December
+2021
+31 December
+2020
+RMB million
+- Unearned premiums (Note 13)
+2020
+31 December
+As at
+529,488
+545,667
+6,333
+1,409,008
+206,771
+6,333
+1,194,997
+161,570
+6,333
+1,409,008
+206,771
+6,333
+1,194,997
+161,570
+Securities purchased under agreements
+to resell
+12,915
+7,947
+12,915
+Cash and cash equivalents
+60,440
+Investment contracts (iii)
+(313,594)
+56,655
+(288,212)
+60,440
+(299,727)
+7,947
+56,655
+(276,521)
+Financial liabilities at fair value through
+profit or loss
+(3,416)
+(3,732)
+(3,416)
+(3,732)
+Securities sold under agreements
+to repurchase
+(239,446)
+545,667
+(122,249)
+529,488
+686,005
+2021
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+11 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+investment contracts:
+Carrying value
+Estimated fair value (i)
+As at
+As at
+31 December
+2021
+31 December
+2020
+RMB million
+RMB million
+As at
+31 December
+2021
+RMB million
+As at
+31 December
+2020
+RMB million
+Held-to-maturity securities (ii)
+Loans (iii)
+Term deposits
+Statutory deposits - restricted
+Available-for-sale securities, at fair value
+Securities at fair value through profit or loss
+1,533,753
+666,087
+1,189,369
+658,535
+1,638,271
+1,225,540
+667,545
+(239,446)
+(122,249)
+Bonds payable
+Due from related parties
+Prepayments to constructors
+Others
+Total
+Current
+Non-current
+Total
+As at
+As at
+31 December
+2021
+31 December
+2020
+RMB million
+4,910
+RMB million
+4,228
+485
+1,135
+823
+523
+412
+209
+6,630
+6,095
+1,720
+1,867
+4,910
+4,228
+6,630
+6,095
+As at
+Tax prepaid
+Automated policy loans
+Disbursements
+Land use rights (i)
+(34,994)
+(34,992)
+(35,898)
+(35,602)
+Interest-bearing loans and borrowings
+(18,686)
+(19,556)
+(18,686)
+(19,556)
+(i)
+The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+(ii) The fair value of held-to-maturity securities is determined by reference with other debt securities which are measured by fair value. Please refer to
+Note 4.4.
+(iii) Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore, their fair value was classified as Level 1.
+The fair value of policy loans approximated its carrying value. The fair values of other loans and investment contracts at amortised cost were determined
+using valuation techniques, with consideration of the present value of expected cash flows arising from contracts using a risk-adjusted discount rate,
+allowing for the risk-free rate available on the valuation date, credit risk and risk margin associated with the future cash flows. The fair values of other
+loans and investment contracts at amortised cost were classified as Level 3.
+12 PREMIUMS RECEIVABLE
+31 December
+2021
+As at 31 December 2021, the carrying value of premiums receivable within one year was RMB19,935 million (as at 31
+December 2020: RMB20,458 million).
+199
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+13 REINSURANCE ASSETS
+Long-term insurance contracts ceded (Note 15)
+Due from reinsurance companies
+Ceded unearned premiums (Note 15)
+Claims recoverable from reinsurers (Note 15)
+Total
+Current
+Non-current
+Total
+14 OTHER ASSETS
+Investments receivable and prepaid
+Annual Report 2021 Financial Report
+RMB million
+3,673
+4,319
+8 September 2023
+25 June 2024
+16 September 2024
+1.80%
+563
+1.50%
+913
+626
+1,015
+EURLIBOR+3.00% (i)
+794
+883
+3.10%
+2,383
+2,648
+3.08%
+2,366
+2,444
+3.30%
+5,483
+5,611
+27 September 2024
+USD LIBOR+1.00% (ii)
+6,184
+6,329
+18,686
+19,556
+(i)
+3.00% when EURIBOR is negative.
+(ii) 1.00% when USD LIBOR is negative.
+Annual Report 2021 | Financial Report 205
+9 March 2022
+13 January 2022
+5 January 2022
+Credit loans
+288,212
+2021
+2020
+RMB million
+RMB million
+64,950
+61,657
+4,910
+5,000
+(2,711)
+(3,008)
+(41)
+(39)
+1,436
+Notes to the Consolidated Financial Statements (continued)
+1,340
+64,950
+As at
+31 December
+As at
+31 December
+Maturity date
+Interest rate
+2021
+2020
+RMB million
+RMB million
+Credit loans
+Credit loans
+Total
+Credit loans
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+68,544
+313,594
+For the year ended 31 December 2021
+As at 31 December 2021, all bonds payable were the bonds for capital replenishment (the "Bond") with a total carrying
+value of RMB34,994 million (as at 31 December 2020: RMB34,992 million), and the fair value of RMB35,898 million (as
+at 31 December 2020: RMB35,602 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:
+24,275
+239,446
+122,249
+237,371
+2,075
+122,101
+140
+8
+239,446
+122,249
+As at 31 December 2021, bonds with a carrying value of RMB199,211 million (as at 31 December 2020: RMB113,454
+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 2021, the carrying value of
+securities deposited in the collateral pool was RMB298,043 million (as at 31 December 2020: RMB256,062 million). The
+collateral is restricted from trading during the period of the repurchase transaction.
+206 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+20 OTHER LIABILITIES
+Payable to the third-party holders of consolidated structured entities
+Interest payable to policyholders
+Salary and welfare payable
+Brokerage and commission payable
+Payable to constructors
+Agency deposits
+Interest payable of debt instruments
+RMB million
+Stock appreciation rights (Note 32)
+Others
+Total
+Current
+Non-current
+Total
+As at
+31 December
+As at
+58,325
+97,974
+181,121
+RMB million
+As at
+31 December
+Issue date
+Maturity date
+Interest rate p.a.
+22 March 2019
+Total
+22 March 2029
+4.28%
+2021
+RMB million
+35,000
+As at
+31 December
+2020
+RMB million
+35,000
+35,000
+35,000
+18 BONDS PAYABLE
+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%.
+19 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+Interbank market
+Stock exchange market
+Total
+Maturing:
+Within 30 days
+More than 30 days within 90 days
+After 90 days
+Total
+As at
+31 December
+As at
+31 December
+2021
+RMB million
+2020
+Bonds payable are measured at amortised cost as described in Note 2.15.
+10
+Tax payable
+223,252
+As at 31 December
+2021
+2020
+RMB million
+RMB million
+Gross
+Ceded
+Net
+Gross
+Ceded
+Net
+14,701
+(523)
+14,178
+13,001
+(369)
+12,632
+14,062
+(823)
+13,239
+14,701
+(523)
+14,178
+(14,701)
+523
+(14,178)
+(13,001)
+369
+(12,632)
+Release
+Increase
+As at 1 January
+(c) Movements in liabilities of short-term insurance contracts (continued)
+The table below presents movements in unearned premium reserves:
+2,781
+9
+17,672
+15,623
+21,991
+18,404
+(32,804)
+(17,783)
+(16,682)
+56,938
+52,589
+- Claims arising in prior years
+(611)
+484
+14,062
+Total as at 31 December - Gross
+21,991
+Notified claims
+4,197
+4,319
+Incurred but not reported
+22,037
+17,672
+Total as at 31 December - Gross
+26,234
+21,991
+Annual Report 2021 | Financial Report 203
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+15 INSURANCE CONTRACTS (continued)
+26,234
+(823)
+(34,301)
+14,701
+For the year ended 31 December 2020, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
+products, which increased insurance contract liabilities by RMB2,081 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 RMB1,391 million.
+204 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+16 INVESTMENT CONTRACTS
+Investment contracts with DPF at amortised cost
+Investment contracts without DPF
+- At amortised cost
+-
+At fair value through profit or loss
+Total
+The table below presents movements of investment contracts with DPF:
+As at 1 January
+(ii) For the year ended 31 December 2021, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
+products, which increased insurance contract liabilities by RMB5,897 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 RMB1,677 million.
+Deposits received
+Policy fees deducted from account balances
+Interest credited
+As at 31 December
+17 INTEREST-BEARING LOANS AND BORROWINGS
+As at
+As at
+31 December
+31 December
+2021
+RMB million
+68,544
+RMB million
+13,239
+245,041
+Deposits withdrawn, payments on death and other benefits
+(i) The release of liabilities mainly consists of release due to death or other benefits and related expenses, release of residual margin and change of
+reserves for claims and claim adjustment expenses.
+2020
+(211)
+(523)
+14,178
+2,936,533
+(d) Movements in liabilities of long-term insurance contracts
+The table below presents movements in the liabilities of long-term insurance contracts:
+Premiums
+Release of liabilities (i)
+Accretion of interest
+Change in assumptions
+- Change in discount rates
+- Change in other assumptions (ii)
+Other movements
+As at 31 December
+2021
+64,950
+RMB million
+7,574
+1,022
+3,379,603
+35,071
+30,701
+129,679
+148,504
+2020
+(288,959)
+RMB million
+536,150
+542,974
+(287,705)
+2,521,331
+3,472
+2,936,533
+87
+(15,286)
+17,174
+(32,373)
+121
+(7,481)
+2021
+RMB million
+22,354
+(29,714)
+As at
+31 December
+2020
+31 December
+Annual Report 2021 Financial Report 211
+As at
+Net deferred tax assets
+Net deferred tax liabilities
+RMB million
+Notes to the Consolidated Financial Statements (continued)
+As at 1 January 2020
+29 TAXATION (continued)
+(c) As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows:
+(continued)
+As at 31 December 2021 and 31 December 2020, deferred income tax was calculated in full on temporary differences
+under the liability method using the principal tax rate of 25%. The movements in net deferred income tax assets and
+liabilities during the period were as follows:
+Net deferred tax assets/(liabilities)
+Deferred tax assets
+Deferred tax liabilities
+(Charged)/Credited to net profit
+(Charged)/Credited to other
+comprehensive income
+- Available-for-sale securities
+- Portion of fair value changes on
+available-for-sale securities attributable
+to participating policyholders
+-
+- Others
+As at 31 December 2020
+As at 1 January 2021
+For the year ended 31 December 2021
+(c) As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows:
+498
+3,103
+Profit before income tax
+Tax computed at the statutory tax rate
+Adjustment on current income tax of previous period
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC (2020: same)
+is as follows:
+(Charged)/Credited to net profit
+(Charged)/Credited to other
+Non-taxable income (i)
+Expenses not deductible for tax purposes (i)
+Unused tax losses
+Others
+Income tax at the effective tax rate
+For the year ended 31 December
+2021
+2020
+(i) Non-taxable income mainly includes interest income from government bonds, dividend income from applicable equity securities, etc. Expenses not
+deductible for tax purposes mainly include donations and other expenses that do not meet the criteria for deduction according to the relevant tax
+regulations.
+RMB million
+50,495
+54,476
+12,624
+(412)
+(464)
+(14,425)
+(10,787)
+276
+202
+27
+(7)
+35
+(1,917)
+RMB million
+13,619
+(22,386)
+- Available-for-sale securities
+(15,199)
+2,862
+3,534
+345
+6,741
+448
+7,644
+677
+(27)
+(18,202)
+3,198
+677
+448
+(27)
+2,853
+(7,360)
+The deferred tax liabilities arising from the insurance category are mainly related to the change of long-term insurance contract liabilities at 31 December
+2008 as a result of the first time adoption of IFRSS in 2009 and the temporary differences of short-term insurance contract liabilities and policyholder
+dividends payable.
+(ii) The deferred tax arising from the investments category is mainly related to the temporary differences of unrealised gains/(losses) on available-for-sale
+securities, securities at fair value through profit or loss, and others.
+(iii) The deferred tax arising from the others category is mainly related to the temporary differences of employee salaries and welfare costs payable.
+Unrecognised deductible tax losses of the Group amounted to RMB3, 173 million as at 31 December 2021 (as at 31
+December 2020: RMB3,300 million). Unrecognised deductible temporary differences of the Group amounted to RMB1
+million as at 31 December 2021 (as at 31 December 2020: RMB1 million).
+212 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+29 TAXATION (continued)
+(d) The analysis of net deferred tax assets and deferred tax liabilities is as follows:
+29 TAXATION (continued)
+- deferred tax assets to be recovered within 12 months
+Subtotal
+- deferred tax assets to be recovered after 12 months
+Deferred tax assets:
+(i)
+comprehensive income
+(22,386)
+(15,199)
+· Portion of fair value changes on
+available-for-sale securities attributable
+to participating policyholders
+- Others
+As at 31 December 2021
+Insurance
+Investments
+RMB million
+RMB million
+Others
+RMB million
+Total
+RMB million
+(i)
+(ii)
+4,334
+(iii)
+1,787
+(14,673)
+1,759
+2,914
+(61)
+(10,202)
+3,485
+990
+(9,446)
+(9,446)
+990
+(26)
+(26)
+4,334
+2,853
+1,557
+For the year ended 31 December 2021
+26 INVESTMENT CONTRACT BENEFITS
+3,103
+125,998
+(4,644)
+121,354
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+56,327
+(1,297)
+55,030
+443,053
+(683)
+442,370
+Total
+625,378
+(6,624)
+618,754
+For the year ended 31 December 2020
+Life insurance death and other benefits
+117,129
+(3,520)
+113,609
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+53,073
+(678)
+52,395
+415,186
+(389)
+414,797
+Total
+Life insurance death and other benefits
+For the year ended 31 December 2021
+RMB million
+Net
+Deferred tax liabilities:
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+24 NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+Debt securities
+Equity securities
+Stock appreciation rights
+Financial liabilities at fair value through profit or loss
+Derivative financial instruments
+585,388
+Total
+3,470
+(583)
+22,997
+202
+255
+202
+(648)
+(121)
+4,943
+21,900
+25 INSURANCE BENEFITS AND CLAIMS EXPENSES
+Gross
+RMB million
+Ceded
+RMB million
+1,069
+(4,587)
+580,801
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+2020
+RMB million
+20,928
+19,534
+1,412
+1,318
+3,273
+2,455
+5,287
+5,162
+(645)
+(119)
+53
+63
+RMB million
+29 TAXATION
+(a) The amount of taxation charged to net profit represents:
+Current taxation - Enterprise income tax
+Deferred taxation
+Total tax charges
+210 Annual Report 2021 | Financial Report
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+4,824
+(6,741)
+6,588
+(3,485)
+(1,917)
+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.
+Notes to the Consolidated Financial Statements (continued)
+2021
+Foreign exchange gains
+Annual Report 2021 | Financial Report 209
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+27 FINANCE COSTS
+Interest expenses for securities sold under agreements to repurchase
+Interest expenses for bonds payable
+Interest expenses for interest-bearing loans and borrowings
+Interest on lease liabilities
+Total
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+3,523
+Remuneration in respect of audit services provided by auditors
+1,565
+1,503
+479
+566
+96
+5,598
+113
+3,747
+28 PROFIT BEFORE INCOME TAX
+Profit before income tax is stated after charging/(crediting) the following:
+For the year ended 31 December
+Employee salaries and welfare costs
+Housing benefits
+Contribution to the defined contribution pension plan
+Depreciation and amortisation
+1,500
+- deferred tax liabilities to be settled after 12 months
+RMB million
+Net deferred tax liabilities
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+CLIC
+Location of
+registration
+Beijing, China
+Principal business
+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.
+Relationship
+with the Company
+Immediate and
+ultimate holding
+company
+Nature of
+ownership
+State-owned
+Legal
+representative
+Bai Tao
+(the change of
+registration with
+the department in
+charge of industrial
+and commercial
+administration is in
+progress)
+Annual Report 2021 | Financial Report 217
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Subsidiaries
+Refer to Note 41(d) for the basic and related information of subsidiaries.
+(c) Associates and joint ventures
+Refer to Note 9 for the basic and related information of associates and joint ventures.
+(d) Other related parties
+Significant related parties
+China Life Real Estate Co., Limited ("CLRE")
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS
+China Life Insurance (Overseas) Company Limited ("CL Overseas")
+(iii) For financial assets measured at amortised cost, the carrying amount before adjusting impairment allowance is disclosed here.
+(iv) Mainly including government bonds and policy financial bonds.
+4,970
+1,937,416
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)
+(c) The table below presents financial assets without low credit risk for aforementioned financial assets with contractual
+terms that give rise to SPPI:
+Domestic
+Overseas
+Total
+Domestic
+Overseas
+Total
+As at 31 December 2021
+Carrying
+amount (iii)
+Fair value
+RMB Million
+RMB Million
+9,631
+7,274
+9,631
+7,274
+As at 31 December 2020
+Carrying
+amount (iii)
+Fair value
+RMB Million
+RMB Million
+7,367
+24
+4,966
+4
+7,391
+(ii) Credit risk ratings for domestic assets are provided by domestic qualified external rating agencies and credit risk ratings for overseas assets are provided
+by overseas qualified external rating agencies.
+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")
+Relationship with the Company
+RMB200
+Shanghai Rui Chong Investment Co., Limited
+RMB6,800
+("Rui Chong Company")
+China Life (Beijing) Health Management
+RMB1,530
+Co., Limited ("CL Health")
+China Life Franklin (Shenzhen) Equity
+USD2
+RMB1,288
+700
+RMB200
+RMB6,100
+RMB1,530
+USD2
+Investment Fund Management Co., Limited
+("Franklin Shenzhen Company")
+Xi'an Shengyi Jingsheng Real Estate Co., Ltd.
+RMB1,131
+("Shengyi Jingsheng")
+Dalian Hope Building Company Ltd.
+RMB484
+RMB1,131
+RMB484
+("Hope Building")
+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.
+218 Annual Report 2021 | Financial Report
+- deferred tax liabilities to be settled within 12 months
+Subtotal
+CL Wealth
+CL AMP
+("Suzhou Pension Company")
+Retirement Investment Company Limited
+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
+(e) Registered capital of related parties with control relationship and changes during the year
+As at
+31 December
+As at
+31 December
+Name of related party
+2020
+Increase
+Decrease
+million
+million
+2,439,186
+million
+RMB4,600
+2021
+million
+RMB4,600
+AMC
+RMB4,000
+RMB4,000
+China Life Pension Company Limited
+RMB3,400
+RMB3,400
+("Pension Company")
+China Life (Suzhou) Pension and
+RMB1,991
+190
+RMB2,181
+CLIC
+3,873
+RMB1,288
+24
+As at 31 December 2021, there were 55.01 million units outstanding and exercisable (as at 31 December 2020: same). As
+at 31 December 2021, the amount of intrinsic value for the vested stock appreciation rights was RMB278 million (as at 31
+December 2020: RMB480 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 14% to 30%, an expected dividend yield of no higher
+than 6.05% and a risk-free interest rate ranging from -0.01% to 0.25%.
+The Company recognised a gain of RMB202 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 2021 (2020:
+fair value gain of RMB255 million). RMB278 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 2021 (as at 31
+December 2020: RMB480 million and RMB13 million), respectively. There was no unrecognised compensation cost for
+the stock appreciation rights as at 31 December 2021 (as at 31 December 2020: nil).
+33 DIVIDENDS
+Pursuant to the shareholders' approval at the Annual General Meeting on 30 June 2021, a final dividend of RMB0.64
+(inclusive of tax) per ordinary share totalling RMB18,089 million in respect of the year ended 31 December 2020 was
+declared and paid in 2021. The dividend has been recorded in the consolidated financial statements for the year ended 31
+December 2021.
+Pursuant to a resolution passed at the meeting of the Board of Directors on 24 March 2022, a final dividend of RMB0.65
+(inclusive of tax) per ordinary share totalling approximately RMB18,372 million for the year ended 31 December 2021 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 2021.
+214 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9
+According to IFRS 4 Amendments, the Company made the assessment based on the Group's financial position of 31
+December 2015, concluding that the carrying amount of the Group's liabilities arising from contracts within the scope
+of IFRS 4, which includes any deposit components or embedded derivatives unbundled from insurance contracts, was
+significant compared to the total carrying amount of all its liabilities. The percentage of the total carrying amount of its
+liabilities connected with insurance relative to the total carrying amount of all its liabilities is greater than 90 percent.
+There had been no significant change in the activities of the Group since then that requires reassessment. Therefore, the
+Group's activities are predominantly connected with insurance, meeting the criteria to apply temporary exemption from
+IFRS 9.
+Sino-Ocean, China Unicom, CGB and certain associates of the Group, have adopted IFRS 9. According to IFRS 4
+Amendments, the Group elected not to apply uniform accounting policies when using the equity method for these
+associates.
+(a) The tables below present the fair value of the following groups and fair value changes for the years of major financial
+assets (i) under IFRS 9:
+For the year ended 31 December
+Held for trading financial assets
+Financial assets that are managed and whose performance are evaluated on
+a fair value basis
+Other financial assets
+- Financial assets with contractual terms that give rise on specified dates
+to cash flows that are solely payments of principal and interest on the
+principal amount outstanding ("SPPI")
+- Financial assets with contractual terms that do not give rise to SPPI
+Total
+Held for trading financial assets
+Financial assets that are managed and whose performance are evaluated on
+a fair value basis
+Other financial assets
+- Financial assets with contractual terms that give rise to SPPI
+-
+– Financial assets with contractual terms that do not give rise to SPPI
+Total
+2021
+RMB million
+206,771
+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.
+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.
+32 STOCK APPRECIATION RIGHTS
+For the year ended 31 December 2021
+As at
+4,846
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+14,695
+10,882
+7,659
+6,292
+2020
+RMB million
+161,570
+22,354
+(28,107)
+(2,864)
+(4,266)
+(29,714)
+(32,373)
+(7,360)
+(15,199)
+30 NET PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
+Net profit attributable to equity holders of the Company is recognised in the financial statements of the Company to the
+extent of RMB42,865 million (2020: RMB44,594 million).
+31 EARNINGS PER SHARE
+There is no difference between the basic and diluted earnings per share. The basic and diluted earnings per share for the
+year ended 31 December 2021 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 (2020: same).
+Annual Report 2021 | Financial Report 213
+Notes to the Consolidated Financial Statements (continued)
+17,174
+2,559,014
+958,340
+3,724,125
+(26,850)
+929,597
+Not rated
+Subtotal
+Total
+216 Annual Report 2021 | Financial Report
+Carrying amount (iii)
+As at
+As at
+31 December
+2021
+RMB Million
+31 December
+2020
+RMB Million
+832,127
+1,592,582
+6,551
+80
+3,000
+2,434,340
+719,142
+1,207,034
+4,197
+170
+3,000
+1,933,543
+25
+4,331
+3,654
+13
+45
+75
+1,978,361
+13
+112
+BBB+
+BBB-
+A-
+427
+A+
+for the year ended 31 December
+A
+3,069,528
+2021
+2020
+RMB million
+22,414
+92,219
+(11,064)
+14,959
+55,151
+111,719
+66,501
+(i)
+4,541
+Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale securities and held-to-maturity securities.
+Overseas
+Subtotal
+AA-
+AA
+AA+
+AAA
+Fair value changes
+Annual Report 2021 | Financial Report 215
+Domestic
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)
+(b) The table below presents the credit risk exposure (ii) for aforementioned financial assets with contractual terms that
+give rise to SPPI:
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Rating not required (iv)
+Insurance premium received from CGB
+Sino-Ocean
+Transaction between other associates and joint ventures
+Dividends from Sino-Ocean (Note 9)
+Interest of corporate bonds received from Sino-Ocean
+3,268
+2,938
+662
+550
+17
+190
+189
+145
+26
+88
+3
+271
+178
+Rental fee received from CGB
+(iv)
+124
+(ii.b)
+Dividends from CGB (Note 9)
+135
+52
+and the Group
+71
+CLHI
+Payment of a operation management service fee to CLHI
+(vi)
+112
+106
+CL Overseas
+Asset management fee received from CL Overseas
+79
+73
+For the year ended 31 December
+Transactions with associates and joint ventures
+2021
+Notes
+RMB million
+2020
+RMB million
+CGB
+Interest on deposits received from CGB
+Commission expenses charged by CGB
+Dividends from other associates and joint ventures (Note 9)
+Agency fee received from Pension Company for entrusted sales of
+4,254
+Agency fee received
+annuity funds and other businesses
+Rental received
+Rental received from Pension Company
+Capital increase in subsidiaries
+2,742
+15
+2,089
+18
+432
+Dividends from the other subsidiaries
+220
+738
+301
+(v)
+70
+10
+57
+40
+103
+70
+127
+Dividends from Pension Company
+Dividends from AMC
+Dividends from subsidiaries
+222 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+Transaction between EAP and the Group
+Contribution to EAP
+Transactions between other subsidiaries and the Company
+For the year ended 31 December
+Notes
+2021
+RMB million
+1,357
+2020
+RMB million
+1,140
+For the year ended 31 December
+2021
+2020
+Notes
+RMB million
+RMB million
+Payment of an asset management fee
+Payment of an asset management fee to AMC
+Payment of an asset management fee to AMC HK
+(ii.e) (vii)
+(ii.f)
+3,333
+651
+As at 31 December 2021
+Percentage
+of holding
+(ii.d) (vii)
+As at 31 December 2020
+Amount
+million
+Percentage
+of holding
+Increase
+Decrease
+million
+million
+RMB1
+99.99%
+("CL Jiayuan")(i)
+6,064
+directly
+99.99%
+directly
+3,865
+RMB3,865
+99.98%
+indirectly
+90.81%
+directly
+65
+Amount
+million
+RMB6,065
+Management Company Limited
+China Life Jiayuan (Xiamen) Health
+Limited ("CL Hangzhou Hotel")(i)
+68
+Beijing China Life Pension Industry
+RMB9
+99.90%
+495
+RMB504
+99.90%
+Investment Fund (Limited Partnership)
+directly
+directly
+("CL Pension Industry")
+220 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
+Subsidiaries
+China Life Qihang Phase I (Tianjin) Equity
+Investment Fund Partnership (Limited
+Partnership) ("CL Qihang Fund I")
+China Life Xing Wan (Tianjin) Enterprise
+Management Partnership (Limited
+Partnership) ("CL Xing Wan")(i)
+China Life Insurance Sales Company Limited
+("CL Sales")(ii)
+China Life (Hangzhou) Hotel Company
+- RMB65
+588
+99.99%
+300
+(ii.a)
+12,663
+14,253
+554
+564
+156
+125
+(iii) (vii)
+1,634
+(i) (vii)
+2,289
+271
+78
+54
+(ii.c)
+52
+41
+CLI
+Payment of asset management fee to CLI
+Payment of real estate purchase to CLI
+Property leasing expenses charged by CLI
+214
+RMB million
+RMB million
+Notes
+RMB300
+99.99%
+indirectly
+(i)
+CL Xing Wan, CL Hangzhou Hotel, CL Jiayuan were newly included in the consolidated financial statements of the Group for the year ended
+31 December 2021.
+(ii) For the year ended 31 December 2021, the Company injected capital of RMB500 million to CL Sales, a wholly owned subsidiary of CLIC, and acquired
+90.81% of the shareholders' equity. Both parties are under common control by CLIC which is not transitory before and after the combination. Therefore,
+this is a business combination under common control. The financial statements of the Group were restated based on the financial statements as at 31
+December 2021 obtained from the merged party on the date of combination.
+Annual Report 2021 | Financial Report 221
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties
+Transactions with CLIC and its subsidiaries
+CLIC
+Distribution of dividends from the Company and AMC to CLIC
+Policy management fee received from CLIC
+Asset management fee received from CLIC
+CLP&C
+Agency fee received from CLP&C
+Dividends from CLP&C (Note 9)
+Rental and a service fee received from CLP&C
+Asset management fee received from CLP&C
+For the year ended 31 December
+2021
+2020
+indirectly
+Capital contribution to China Life Qihang Fund I
+Amount due to AMC HK
+Capital contribution to CG Investments
+Amount due from Pension Company
+46
+39
+Amount due to Pension Company
+(114)
+(43)
+Amount due from Rui Chong Company
+604
+114
+(8)
+Note:
+(i) Key management personnel compensation
+Salaries and other benefits
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+15
+28
+Board of directors of the Company approved and announced on 26 May 2021 to subscribe 918,578,836 shares of Guangfa Bank's additional stock issue at
+RMB8.7364 per share, amounted to RMB8,025 million. As at 31 December 2021, the Company has finished the capital injection to Guangfa Bank and was
+awaiting the final regulatory approval. Therefore the capital contribution was recorded as other account receivable.
+(1,293)
+(717)
+Amount due to AMC
+8,384
+603
+Amount due from CGB Note
+9,138
+1,240
+Amount due to CGB
+(80)
+(51)
+Corporate bonds of Sino-Ocean
+356
+361
+Amount due from Sino-Ocean
+7
+7
+Amount due from CL Ecommerce
+3
+12
+Amount due to CL Ecommerce
+(15)
+(17)
+The resulting balances due from and to subsidiaries of the Company
+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.
+Wealth management products and other financial instruments of CGB
+226 Annual Report 2021 | Financial Report
+For the year ended 31 December 2021
+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
+RMB million
+28,265
+Annual Report 2021 | Financial Report 227
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+37 RESERVES
+Unrealised
+Other
+gains/ comprehensive
+(losses)
+Partnership) ("CL Guang De")
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange.
+No. of shares
+As at 31 December 2021
+28,265
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(j) Transactions with state-owned enterprises
+Under IAS 24 Related Party Disclosures ("IAS 24"), business transactions between state-owned enterprises controlled
+by the PRC government are within the scope of related party transactions. CLIC, the ultimate holding company of the
+Group, is a state-owned enterprise. The Group's key business is insurance and investment related and therefore the
+business transactions with other state-owned enterprises are primarily related to insurance and investment activities. The
+related party transactions with other state-owned enterprises were conducted in the ordinary course of business. Due to
+the complex ownership structure, the PRC government may hold indirect interests in many companies. Some of these
+interests may, in themselves or when combined with other indirect interests, be controlling interests which may not be
+known to the Group. Nevertheless, the Group believes that the following captures the material related parties and has
+applied IAS 24 exemption and disclosed only qualitative information.
+As at 31 December 2021, 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 2021, a large portion of group insurance business of the Group was with state-owned enterprises; the
+majority of bancassurance commission charges were paid to state-owned banks and postal offices; and the majority of the
+reinsurance agreements of the Group were entered into with a state-owned reinsurance company.
+36 SHARE CAPITAL
+As at 31 December 2021
+No. of shares
+As at 31 December 2020
+RMB million
+No. of shares
+RMB million
+Registered, authorised, issued and fully paid
+Ordinary shares of RMB1 each
+28,264,705,000
+As at 31 December 2021, the Company's share capital was as follows:
+Owned by CLIC (i)
+Owned by other equity holders
+Including: domestic listed
+Total
+overseas listed (ii)
+(i)
+All shares owned by CLIC are domestic listed shares.
+28,265 28,264,705,000
+Notes to the Consolidated Financial Statements (continued)
+Capital contribution to CL Pension Industry
+71,419
+Amount deposited with CGB
+14,429
+Annual Report 2021 | Financial Report 223
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+Notes:
+(i)
+On 26 December 2017, the Company and CLIC renewed a renewable insurance agency agreement, effective from 1 January 2018 to 31 December
+2020. The Company performs its duties of insurance agents in accordance with the agreement, but does not acquire any rights and profits or assume
+any obligations, losses and risks as an insurer of the non-transferable policies. The policy management fee was payable semi-annually, and is equal to
+the sum of (1) the number of policies in force as at the last day of the period, multiplied by RMB8.0 per policy and (2) 2.5% of the actual premiums and
+deposits received during the period, in respect of such policies. The policy management fee income is included in other income in the consolidated
+statement of comprehensive income. On 31 December 2020, the Company and the CLIC renewed the insurance agency agreement. This agreement
+is effective from 1 January 2021 to 31 December 2021.
+15,947
+(ii.a) In December 2018, CLIC renewed an asset management agreement with AMC, entrusting AMC to manage and make investments for its insurance
+funds. The agreement is effective from 1 January 2019 to 31 December 2021. In accordance with the agreement, CLIC paid AMC a basic service
+fee at the rate of 0.05% per annum for the management of insurance funds. The service fee was calculated on a monthly basis and payable on a
+seasonal basis, by multiplying the average book value of the assets under management (after deducting the funds and interests of positive repurchase
+transactions and deducting the principal and interests of debt and equity investment schemes, project asset-backed schemes and customised
+non-standard products) at the beginning and the end of any given month by the rate of 0.05%, divided by 12. According to specific projects, debt
+investment schemes, equity investment plans, project asset-backed plans, and customised non-standard products are based on the contractual
+agreed rate, without paying for an extra management fee. At the end of each year, CLIC assessed the investment performance of the assets managed
+by AMC, compared the actual results against benchmark returns and made adjustment to the basic service fee. In July 2020, CLIC revised the asset
+management agreement with AMC, effective from 1 July 2020 to 31 December 2022. The annual rate of the basic service fee has been changed from
+0.05% to 0.08%, and the other terms mentioned above remain unchanged.
+(ii.c)
+On 10 February 2021, CLP&C renewed an agreement for the management of insurance funds with AMC, entrusting AMC to manage and make
+investments for its insurance funds, effective from 1 January 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.
+(ii.d) On 31 December 2018, the Company and CLI renewed a management agreement of alternative investment of insurance funds, effective from 1
+January 2019 to 31 December 2020. 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. On 1 January 2021, the agreement was automatically renewed
+for one year. In accordance with the agreement, the Company entrusted CLI to engage in investment, operation and management of equities, real
+estate and related financial products, and securitised financial products under the instructions of the annual guidelines. The Company paid CLI an
+asset management fee and a performance related bonus based on the agreement. For fixed-income projects, the management fee rate was between
+0.05% and 0.6% according to different ranges of returns; for non-fixed-income projects, the management fee rate for invested projects was 0.3%,
+the management fee rates for newly signed projects were between 0.05% and 0.3% according to CLI's involvement in project management and
+the performance-related bonus is based on the internal return rate upon expiry of the project. In addition, the Company adjusts the investment
+management fees for fixed-income projects and non-fixed-income projects based on the annual evaluation results on CLI's performance. The
+adjustment (variable management fee) ranges from negative 10% to positive 15% of the investment management fee in the current period.
+(ii.e) On 28 December 2018, the Company and AMC renewed the agreement for the management of insurance funds, effective from 1 January 2019 to 31
+December 2021. In accordance with the agreement, the Company entrusted AMC to manage and make investments for its insurance funds and paid
+AMC a fixed investment management service fee and a variable investment management service fee. The fixed annual service fee was calculated
+and payable on a seasonal basis, by multiplying the average net value of the assets under management by the rate of 0.05%; the variable investment
+management service fee was payable annually, based on the results of performance evaluation, at 20% of the fixed service fee per annum. On 1 July
+2020, the Company and AMC revised the agreement for the management of insurance funds, effective from 1 July 2020 to 31 December 2022. The
+calculation method of the fixed annual service fee has been changed from five ten thousandths of the net value of the total investment assets to daily
+accrued fixed service fee 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 other terms above remain unchanged. Asset management fees charged to the Company by AMC are eliminated in the
+consolidated statement of comprehensive income.
+224 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+Notes (continued):
+(ii.f)
+(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.
+700
+Distribution of profits from the consolidated structured entities
+to the Company
+Transactions between the consolidated structured entities
+and the Company
+Capital contribution to CL Guang De
+6,064
+495
+451
+321
+285
+Capital contribution to CL Hotel Investors, L.P.
+190
+95
+Capital contribution to Suzhou Pension Company
+190
+205
+Capital contribution to Yuanxiang Tianfu
+15
+Capital contribution to Yuanxiang Tianyi
+15
+Capital contribution to Shanghai Wansheng
+12
+12
+Capital reduction of subsidiaries
+Capital reduction from Rui Chong
+(iii)
+69,148
+(iv)
+(vi)
+348
+59
+43
+258
+251
+Amount due to CLP&C
+Amount due from CLI
+Amount due to CLI
+(17)
+342
+(22)
+32
+(445)
+(447)
+Amount due from CLRE
+2
+2
+Amount due to CLHI
+(40)
+(38)
+51
+Amount due from CLP&C
+Amount due from CL Overseas
+The resulting balances due from and to significant related parties of the Group
+Amount due from CLIC
+(vii)
+On 31 December 2018, the Company and AMC HK renewed the management agreement of insurance funds investment, which is effective from
+1 January 2019 to 31 December 2021. In accordance with the agreement, the Company entrusted AMC HK to manage and make investments for
+its insurance funds and paid AMC HK an asset management fee on a seasonal basis and the maximum investment management fee paid annually
+is RMB30 million. The management fee rate for financial products, such as investment plans, project asset-backed plans, customised products and
+insurance asset management products, set up by AMC HK in the industry permitted by regulatory policies, is set according to contractual terms.
+The management fee rate for the directive investment operation of term deposits, common stocks, funds, financial products and other investment
+products, universal account B-2 and entrusted assets account alike was 0.02%; the management fee rate for unlisted equity investment was 0.3%;
+the management fee rate for customised investment portfolio was agreed upon the management fee of market-oriented entrusted investment. Asset
+management fees charged to the Company by AMC HK are eliminated in the consolidated statement of comprehensive income.
+On 31 January 2018, the Company and CLP&C signed an insurance agency framework agreement, whereby CLP&C entrusted the Company to act as
+an agent to sell designated P&C insurance products in certain authorised jurisdictions. The agency fee was determined based on cost (tax included)
+plus a margin. The agreement is effective for three years, from 8 March 2018 to 7 March 2021. On 20 February 2021, CLP&C and the Company
+renewed the agreement, effective for two years, from 8 March 2021 to 7 March 2023.
+CLP&C and CL Sales signed the Strategic Cooperation Agreement on 22 July 2019. According to the agreement, CL Sales, as an agent of insurance
+products, provides intermediary services for CLP&C. The two parties determine the specific commissions and the standard of sales management fee
+through fair negotiation, based on the local market price and the paid- in premium which exclude value-added tax and deducte the premium from batch
+reduction. This agreement is valid for three years, from 22 July 2019 to 21 July 2022.
+On 19 October 2018, the Company and CGB renewed an insurance agency agreement to distribute insurance products. All individual insurance
+products suitable for distribution through bancassurance channels are included in the agreement. CGB provides agency services, including the sale
+of insurance products, collecting premiums and paying benefits. The Company paid the agency commission by multiplying the net amount of total
+premiums received from the sale of each category individual insurance products after deducting the surrender premiums in the hesitation period,
+by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed based on arm's length
+transactions. The commissions are payable on a monthly basis. On 22 August 2020, the Company and CGB renewed an insurance agency agreement
+to distribute insurance products, effective from the signing date to 22 August 2022.
+On 28 December 2018, the Company and CGB signed another insurance agency agreement to distribute corporate group insurance products. The
+corporate group insurance products suitable for distribution through bancassurance channels are included in the agreement. The Company paid the
+agency commission by multiplying the net amount of total premiums received from the sale of each category group insurance product after deducting
+the surrender premiums, by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed by
+reference to comparable market prices of independent third-parties. The commissions are paid on a monthly basis. The agreement is effective for two
+years from 1 January 2019, with an automatic one-year renewal if no objections were raised by either party upon expiry.
+On 1 January 2019, the Company and Pension Company renewed an entrusted agency agreement for pension business acted by life business.
+The agreement is effective from 1 January 2019 to 31 December 2021. The business means that Pension Company entrusted the Company to sell
+enterprise annuity funds, pension security business, occupational pension business and the third-party asset management business. The commissions
+agreed upon in the agreement include the daily business commissions and the annual promotional plans commissions. According to the agreement,
+the commissions for the entrusting service of enterprise annuity fund management, which is the core business of Pension Company, are calculated
+at 30% to 80% of the annual entrusting management fee revenues, depending on the duration of the agreement. The commissions for account
+management service are calculated at 60% of the first year's account management fee and were only charged for the first year, regardless of the
+duration of the agreement. The commissions for investment management services, in accordance with the duration of the agreement, are calculated
+at 60% to 3% of the annual investment management fee (excluding risk reserves for investment), decreasing annually. The commissions of the group
+pension plan are, in accordance with the duration of the contracts, calculated at 50% to 3% of the annual investment management fee, 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
+commissions of occupation annuity and third-party asset management business are in accordance with the provision of annual promotional plans,
+which should be determined by both parties on a separate occasion. The commissions charged to Pension Company by the Company are eliminated
+in the consolidated statement of comprehensive income of the Group.
+On 25 November 2020, the Company and CLHI signed a new aged-care projects management service agreement, effective from 1 January 2020 to
+31 December 2021. 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 seasonal basis, by multiplying the total amount of the
+investments under management (based on the daily weighted average investment amount) by the annual rate of 2.7%.
+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.
+Annual Report 2021 | Financial Report 225
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(h) Amounts due from/to significant related parties
+The following table summarises the balances due from and to significant related parties. The balances of the Group are
+all unsecured. The 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
+31 December
+2021
+As at
+31 December
+2020
+RMB million
+RMB million
+(v)
+directly
+(965)
+Investment Fund Partnership (Limited
+Increase
+Decrease
+million
+million
+RMB19,324
+68.37%
+Amount
+million
+RMB19,324
+of holding
+68.37%
+Percentage
+Subsidiaries
+Amount of holding
+Increase
+million
+million
+Decrease
+million
+Amount
+As at 31 December 2021
+Percentage
+of holding
+AMC
+Pension Company
+As at 31 December 2020
+Percentage
+RMB1,680
+Percentage
+of holding
+As at 31 December 2021
+loss under the
+for-sale
+securities
+reserves
+Other
+Share
+premium
+to profit or
+on translating
+to profit or
+comprehensive
+income non-
+reclassifiable
+Amount
+million
+Other
+differences
+reclassifiable
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f) Percentages of holding of related parties with control relationship and changes during the year
+Shareholder
+As at 31 December 2020
+CLIC
+Exchange
+60.00%
+million
+RMB1,680
+60.00%
+directly
+CL AMP
+RMB1,095
+85.03%
+RMB1,095
+85.03%
+indirectly
+indirectly
+CL Wealth
+directly
+RMB200
+RMB200
+100.00%
+indirectly
+indirectly
+Golden Phoenix Tree Limited
+100.00%
+100.00%
+directly
+directly
+100.00%
+100.00%
+RMB2,181
+190
+directly
+directly
+RMB2,746
+74.27%
+RMB2,746
+74.27%
+directly and
+directly and
+indirectly
+indirectly
+China Life Franklin Asset Management
+HKD130
+50.00%
+HKD130
+50.00%
+Company Limited ("AMC HK")
+indirectly
+indirectly
+Suzhou Pension Company
+RMB1,991
+100.00%
+Statutory Discretionary
+General
+foreign
+loss under the
+5,096
+Appropriation to reserves
+(4,608)
+(104)
+(388)
+1,233
+(5,349)
+for the year
+Other comprehensive income
+5,009
+237,935
+(989)
+43,047
+40,502
+45,525
+1,402
+54,268
+93
+53,905
+As at 1 January 2021
+182
+5,273
+15,378
+Other comprehensive income
+income
+228 Annual Report 2021 | Financial Report
+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.
+(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 2021, the Company appropriated 10% of net profit under CAS which amounted to RMB5,096 million to the general reserve
+for future uncertain catastrophes, which cannot be used for dividend distribution or conversion to share capital increment (2020: RMB5,009 million).
+In addition, pursuant to the CAS, the Group appropriated RMB177 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2020: RMB150 million).
+(b) Approved at the Annual General Meeting in 30 June 2021, the Company appropriated RMB5,009 million to the discretionary reserve fund for the year
+ended 31 December 2020 based on net profit under CAS (2020: RMB5,857 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 RMB5,096 million for the year ended 31 December 2021 (2020: RMB5,009 million).
+249,055
+123
+(1,377)
+48,320
+45,511
+50,621
+2,635
+48,919
+305
+305
+398
+53,905
+As at 31 December 2021
+45
+45
+to retained earnings
+Others
+237,935
+King Phoenix Tree Limited
+182
+43,047
+34,645
+40,516
+756
+28,594
+1,148
+53,905
+As at 1 January 2020
+(c)
+(b)
+37,888
+(a)
+RMB million RMB million RMB million RMB million RMB million
+RMB million RMB million RMB million
+Total
+equity method
+operations
+reserve
+reserve fund
+reserve fund
+equity method
+RMB million RMB million
+(24)
+(162)
+197,266
+40,502
+45,525
+1,402
+54,268
+93
+53,905
+As at 31 December 2020
+(1,055)
+(1,055)
+Others
+16,025
+5,159
+5,857
+5,009
+Appropriation to reserves
+25,699
+344
+646
+25,674
+for the year
+Other comprehensive income
+(989)
+directly
+100.00%
+indirectly
+Shanghai Wansheng Industry Partnership
+RMB4,012
+99.98%
+12 - RMB4,024
+99.98%
+(Limited Partnership) ("Shanghai
+directly
+directly
+Wansheng")
+Partnership) ("Yuan Shu Yuan Pin")
+Ningbo Meishan Bonded Port Area Bai
+99.98%
+-- RMB1,680
+99.98%
+Ning Investment Partnership (Limited
+directly
+directly
+Partnership) ("Bai Ning")
+Hope Building
+RMB484
+RMB1,680
+directly
+directly
+Management Partnership (Limited
+100.00%
+indirectly
+indirectly
+Wisdom Forever Limited Partnership
+USD452
+100.00%
+-- USD452
+100.00%
+indirectly
+indirectly
+Shanghai Yuan Shu Yuan Jiu Investment
+Management Partnership (Limited
+Partnership) ("Yuan Shu Yuan Jiu")
+Shanghai Yuan Shu Yuan Pin Investment
+RMB571
+99.98%
+RMB571
+99.98%
+directly
+directly
+RMB571
+99.98%
+RMB571
+99.98%
+100.00%
+100.00%
+RMB484
+indirectly
+CBRE Global Investors U.S. Investments I,
+RMB3,660
+99.99%
+35
+30
+RMB1,093
+100.00%
+indirectly
+451
+indirectly
+RMB4,111
+LLC ("CG Investments")
+directly
+directly
+China Life Guangde(Tianjin) Equity
+RMB295
+99.95%
+321
+RMB616
+99.95%
+99.99%
+100.00%
+RMB1,063
+Shengyi Jingsheng
+indirectly
+Wuhu Yuanxiang Tianfu Investment
+RMB533
+99.98%
+15
+- RMB548
+99.98%
+Management Partnership (Limited
+directly
+directly
+Partnership) ("Yuanxiang Tianfu")
+Wuhu Yuanxiang Tianyi Investment
+RMB533
+99.98%
+15
+- RMB548
+99.98%
+Management Partnership (Limited
+directly
+directly
+Partnership) ("Yuanxiang Tianyi")
+100.00%
+100.00%
+New Fortune Wisdom Limited
+indirectly
+100.00%
+directly
+directly
+Golden Bamboo Limited
+RMB1,993
+100.00%
+RMB1,993
+100.00%
+directly
+RMB285
+directly
+RMB1,876
+100.00%
+RMB1,876
+100.00%
+directly
+directly
+Fortune Bamboo Limited
+RMB2,435
+100.00%
+Sunny Bamboo Limited
+190
+100.00%
+RMB95
+indirectly
+Rui Chong Company
+RMB6,800
+100.00%
+- 700 RMB6,100
+100.00%
+directly
+directly
+New Aldgate Limited
+RMB1,167
+100.00%
+RMB1,167
+100.00%
+directly
+directly
+Glorious Fortune Forever Limited
+100.00%
+100.00%
+directly
+directly
+CL Hotel Investor, L.P.
+RMB2,435
+100.00%
+directly
+directly
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
+Subsidiaries
+As at 31 December 2020
+As at 31 December 2021
+Amount
+Percentage
+of holding
+Guo Yang Guo Sheng
+million
+RMB2,835
+Increase
+million
+Decrease
+million
+89.997%
+Amount
+million
+RMB2,835
+Percentage
+of holding
+89.997%
+directly
+directly
+New Capital Wisdom Limited
+100.00%
+100.00%
+For the year ended 31 December 2021
+indirectly
+Notes to the Consolidated Financial Statements (continued)
+indirectly
+China Century Core Fund Limited
+USD1,125
+100.00%
+USD1,125
+100.00%
+indirectly
+indirectly
+CL Health
+RMB1,530
+100.00%
+RMB1,530
+100.00%
+directly
+directly
+Franklin Shenzhen Company
+USD2
+100.00%
+USD2
+100.00%
+indirectly
+Annual Report 2021 | Financial Report 219
+from
+available-
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+PRC
+Total
+Others
+Buildings
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Right-of-use assets
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 233
+50,159
+968
+10,567
+456
+2,525
+35,643
+As at 31 December 2020
+49,230
+RMB million
+As at 1 January 2021
+Additions
+Deductions
+836
+5,061
+1
+4,877
+(1,019)
+836
+5,060
+1,028
+As at 1 January 2021
+As at 31 December 2021
+As at 1 January 2021
+Impairment
+As at 31 December 2021
+As at 1 January 2021
+Charge for the year
+Deductions
+Accumulated depreciation
+As at 31 December 2021
+Net book value
+13,657
+518
+2,763
+137
+138
+771
+308
+Disposals
+(2,762)
+(372)
+1,354
+(189)
+(1,511)
+Charge for the year
+(19,106)
+(1,543)
+(823)
+(5,329)
+(11,411)
+(690)
+(1,020)
+As at 31 December 2020
+(5,248)
+31,264
+As at 1 January 2020
+Net book value
+(25)
+(1)
+(24)
+As at 31 December 2020
+(12,614)
+Disposals
+(25)
+(24)
+As at 1 January 2020
+Impairment
+(20,514)
+(1,778)
+(874)
+Charge for the year
+As at 1 January 2020
+4,877
+(2,238)
+(2,238)
+391
+391
+(1,453)
+(1,176)
+(1,176)
+(1,453)
+5,061
+1
+5,060
+(490)
+(490)
+1,103
+1,103
+4,448
+1
+(2,238)
+3,271
+2,822
+1
+3,272
+Fair value
+As at 31 December 2021
+As at 1 January 2021
+Net book value
+As at 31 December 2021
+Additions
+As at 1 January 2021
+4,447
+Accumulated depreciation
+Additions
+As at 1 January 2021
+Cost
+(c) Investment properties
+The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
+year ended 31 December 2021 (2020: same).
+2,823
+1
+As at 31 December 2021
+RMB million
+Total
+Others
+234 Annual Report 2021 | Financial Report
+2,239
+1
+2,238
+As at 31 December 2021
+2,823
+1
+Notes to the Consolidated Financial Statements (continued)
+2,822
+1
+(2,639)
+909
+1
+908
+(1,309)
+(1,309)
+(2,638)
+(2,238)
+For the year ended 31 December 2021
+Cost
+Buildings
+As at 31 December 2020
+As at 1 January 2020
+Net book value
+As at 31 December 2020
+As at 1 January 2020
+Impairment
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Right-of-use assets (continued)
+As at 31 December 2020
+Charge for the year
+As at 1 January 2020
+Accumulated depreciation
+As at 31 December 2020
+Deductions
+Additions
+As at 1 January 2020
+Deductions
+Accumulated depreciation
+70,698
+2,746
+6,351
+1,287
+8,008
+55,345
+As at 31 December 2021
+(1,333)
+(548)
+(45)
+(440)
+(300)
+Disposals
+(209)
+(209)
+Transfers into investment properties
+4,424
+2,372
+73,363
+Accumulated depreciation
+As at 1 January 2021
+530
+43
+420
+264
+Disposals
+(2,965)
+(372)
+3,140
+(148)
+(1,705)
+Charge for the year
+(20,514)
+(1,778)
+(874)
+(5,248)
+(12,614)
+(740)
+2
+675
+607
+Buildings
+Assets
+Office
+equipment
+furniture and
+Cost
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+fixtures
+Annual Report 2021 | Financial Report 231
+4,726,351
+405,913
+424,606
+143,577
+153,265
+Total liabilities and equity
+Total equity
+4,127,416
+1,257
+Motor
+vehicles
+Leasehold
+Additions
+(217)
+174
+(7,148)
+6,757
+Transfers upon completion
+70,698
+under
+2,746
+1,330
+7,773
+48,281
+As at 1 January 2021
+RMB million
+Total
+construction improvements
+10,568
+As at 31 December 2021
+(14,055)
+(5,568)
+(121)
+318
+(6,451)
+2
+6,010
+Transfers upon completion
+68,361
+Additions
+2,571
+1,341
+8,092
+42,699
+As at 1 January 2020
+RMB million
+Total
+Leasehold
+improvements
+13,658
+under
+construction
+147
+131
+10,568
+1,330
+7,773
+48,281
+As at 31 December 2020
+(1,761)
+(143)
+580
+(142)
+(575)
+Disposals
+(2,098)
+(2,098)
+Transfers into investment properties
+6,317
+5,459
+(901)
+As at 1 January 2021
+vehicles
+Assets
+As at 1 January 2021
+Net book value
+(25)
+(1)
+(24)
+As at 31 December 2021
+Disposals
+35,643
+Charge for the year
+(1)
+(24)
+As at 1 January 2021
+Impairment
+(22,222)
+(1,620)
+(979)
+(25)
+Motor
+2,525
+10,567
+Office
+equipment
+furniture and
+fixtures
+Buildings
+Cost
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+232 Annual Report 2021 | Financial Report
+456
+51,116
+6,350
+308
+2,440
+41,266
+As at 31 December 2021
+50,159
+968
+752
+As at 31 December 2021
+Buildings
+RMB million
+6,796
+90.81%directly
+99.99% directly
+99.99% indirectly
+PRC
+CL Jiayuan (i)
+PRC
+CL Hangzhou Hotel (i)
+PRC
+CL Sales (i)
+Investment
+Not applicable
+99.98% indirectly
+PRC
+CL Xing Wan (ii)
+Investment
+Not applicable
+99.99% directly
+RMB544 million
+RMB65 million
+RMB1,500 million
+Insurance Agent
+Hotel Management
+Health Consultation
+58.69% directly RMB75,716 million Investment management
+Principal
+activities
+received
+Trust/
+investments
+Percentage
+of shares held
+-
+CL Asset - Yuanliu No.1 Insurance Asset
+Management Product
+PRC
+Name
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 237
+Non-controlling interests in subsidiaries are not significant to the Company.
+(ii) The above subsidiaries are registered as limited liability partnerships in accordance of the Law of the People's Republic of China on Partnerships.
+(i) The above subsidiaries are registered as limited companies in accordance of the Company Law of the People's Republic of China.
+(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
+December 2021:
+China Life Qihang Fund I (ii)
+Investment
+Not applicable
+99.98% directly
+PRC
+Investment
+Not applicable
+99.98% directly
+PRC
+Investment
+Not applicable
+Not applicable
+PRC
+Investment
+RMB484 million
+100.00% indirectly
+PRC
+Investment
+Not applicable
+99.98% directly
+CL Investment China Eastern Airlines Group Equity 100.00% directly
+China Life
+Investment
+PRC
+99.90% directly
+PRC
+CL Pension Industry (ii)
+Investment
+Not applicable
+99.95% directly
+PRC
+Shengyi Jingsheng (i)
+CL Guang De (ii)
+Not applicable
+99.99% directly
+USA
+CG Investments
+Investment
+RMB1,131 million
+100.00% indirectly
+Investment
+-
+China Hua Neng Debt-to-Equity Swap
+Shan Guo Tou Jing Tou Corporate Trust Loan
+Collective Funds Trust Scheme
+RMB6,000 million
+99.98% directly
+Zhong Xin Jin Cheng •Tianjin Port Group
+Investment management
+RMB7,600 million
+89.47% directly
+CL - Dian Tou Clean Energy Equity Investment
+Scheme (series I)
+Investment management
+Investment management
+Investment management
+84.00% directly
+88.61% directly
+CL Hua Neng International Development of
+Infrastructure Debt Investment Scheme
+Jiang Su Trust •Xin Bao Sheng No.144 (Jing Tou)
+Collective Fund
+Investment management
+RMB8,000 million
+86.25% directly
+RMB8,000 million
+RMB7,900 million
+Kun Lun Trust China Metallurgical No.1
+Loans Collective Fund Trust Scheme
+CL An Bao An Ji Half-year Debt Collective
+Fund Scheme
+RMB6,166 million Investment management
+238 Annual Report 2021 | Financial Report
+Investment management
+RMB5,750 million
+93.91% directly
+Tianjin Metro Infrastructure Debt
+Investment Scheme
+China Life
+Trust Scheme
+89.15% directly
+Investment management
+72.41% directly
+Guang Da Hui Ying No. 11 Collective Fund
+Investment Scheme
+Investment management
+RMB6,000 million
+and indirectly
+71.67% directly
+CL Investment-COSCO Marine Debt
+RMB5,800 million
+99.98% directly
+RMB8,758 million Investment management
+Collective Fund Trust Scheme
+99.99% directly RMB10,000 million Investment management
+Investment management
+Investment management
+RMB10,000 million
+RMB10,000 million
+100.00% directly
+100.00% directly
+Investment management
+RMB11,000 million
+99.99% directly RMB10,000 million Investment management
+Jiao Yin Guo Xin Jing Tou Corporate
+Collective Fund
+Debt-to-Equity Collective Funds Trust Scheme
+Chongqing Trust Fund Guo Rong No.4
+Jiao Yin Guo Xin CL Shanxi Coal Mining
+Guang Da Hui Ying No. 8 Collective Fund
+Bai Rui Heng Yi No.817 Collective Fund Trust
+Scheme (Zhong Guo Guo Xin)
+Jian Xin Trust - CL Guo Xin Collective Fund
+Trust Scheme
+Trust Scheme
+Jiao Yin Guo Xin China Aluminium Co., Ltd.
+Supply-side Reform Collective Fund
+•
+88.02% directly
+89.00% directly
+90.00% directly
+and indirectly
+Investment management
+Investment management
+-
+Shang Xin Ningbo Wu Lu Si Qiao PPP
+China Eastern Airlines Equity Instrument
+Investment Collective Fund Trust Scheme
+Collective Funds
+Investment management
+Investment management
+RMB9,000 million
+RMB9,000 million
+99.99% directly
+RMB10,000 million
+RMB10,000 million
+100.00% directly
+-
+RMB9,982 million Investment management
+91.95% directly
+RMB9,996 million Investment management
+85.00% directly
+and indirectly
+75.00% directly RMB10,000 million Investment management
+China Life Yanzhou Coal Mining Debt Investment
+Zhong Hang Trust Fund Tian Qi [2020] No.372
+Retained earnings
+PRC
+Not applicable
+Pension Company (i)
+Name
+AMC (i)
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December 2021:
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+88,951
+170,387
+RMB million
+31 December
+2020
+2021
+RMB million
+31 December
+As at
+As at
+236 Annual Report 2021 | Financial Report
+AMC HK
+Suzhou Pension Company (i)
+CL AMP (i)
+CL Wealth (i)
+Not applicable
+RMB2,181 million
+100.00% directly
+50.00% indirectly
+Hong Kong, PRC
+and indirectly
+Principal activities
+Asset management
+Pension and annuity
+Registered capital
+RMB4,000 million
+RMB3,400 million
+Unlisted investments at cost
+74.27% directly
+60.00% directly
+PRC
+Percentage of
+equity interest held
+Place of incorporation
+and operation
+Rui Chong Company (i)
+New Aldgate Limited
+King Phoenix Tree Limited
+Golden Phoenix Tree Limited
+PRC
+(d) Investments in subsidiaries
+The fair value of investment properties of the Company as at 31 December 2021 amounted to RMB8,190 million (as at 31
+December 2020: RMB7,878 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.
+7,878
+As at 31 December 2020
+As at 1 January 2020
+Additions
+Cost
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investment properties (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 235
+Accumulated depreciation
+8,190
+6,191
+6,162
+(823)
+(189)
+(634)
+7,014
+218
+7,878
+PRC
+As at 1 January 2020
+As at 31 December 2020
+5,462
+6,162
+3,914
+(634)
+(161)
+(473)
+6,796
+Additions
+2,409
+Buildings
+RMB million
+As at 31 December 2020
+As at 1 January 2020
+Fair value
+As at 31 December 2020
+As at 1 January 2020
+Net book value
+4,387
+PRC
+85.03% indirectly
+100.00% indirectly
+Hong Kong, PRC
+The British Jersey Island
+Wisdom Forever Limited Partnership
+Investment
+Not applicable
+100.00% indirectly
+The British Virgin Islands
+Investment
+Not applicable
+The British Virgin Islands
+The British Cayman Islands
+89.997% directly
+Investment
+USD2 million
+Health management
+Investment
+Not applicable
+RMB1,530 million
+100.00% indirectly
+100.00% directly
+100.00% indirectly
+PRC
+PRC
+PRC
+100.00% indirectly
+Investment
+99.98% directly
+PRC
+Investment
+Not applicable
+99.98% directly
+PRC
+Yuanxiang Tianyi (ii)
+Not applicable
+Yuanxiang Tianfu (ii)
+Hope Building (i)
+Yuan Shu Yuan Jiu (ii)
+Yuan Shu Yuan Pin (ii)
+Bai Ning (ii)
+Investment
+Not applicable
+100.00% indirectly
+Shanghai Wansheng (ii)
+Investment
+Investment
+100.00% directly
+100.00% directly
+Hong Kong, PRC
+Glorious Fortune Forever Limited
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+Not applicable
+Investment
+Investment
+Financial service
+Asset management
+Investment in
+retirement properties
+Fund management
+RMB1,288 million
+RMB200 million
+Not applicable
+Not applicable
+RMB6,100 million
+100.00% indirectly
+100.00% directly
+PRC
+100.00% directly
+Investment
+Not applicable
+Investment
+Golden Bamboo Limited
+Sunny Bamboo Limited
+Fortune Bamboo Limited
+Investment
+Not applicable
+100.00% directly
+The British Virgin Islands
+The British Virgin Islands
+The British Cayman Islands
+Investment
+Not applicable
+100.00% directly
+CL Hotel Investor, L.P.
+The British Virgin Islands
+Not applicable
+100.00% directly
+USA
+New Fortune Wisdom Limited
+Guo Yang Guo Sheng (ii)
+New Capital Wisdom Limited
+Franklin Shenzhen Company (i)
+China Century Core Fund Limited
+CL Health (i)
+Investment
+234,071
+Cost
+41(r)
+41(b)
+Right-of-use assets
+50,159
+51,116
+41(a)
+Property, plant and equipment
+2,239
+ASSETS
+RMB million
+Notes
+2020
+2021
+As at
+31 December
+31 December
+RMB million
+As at
+2,823
+41(c)
+1,188,509
+1,531,640
+41(f)
+Held-to-maturity securities
+157,401
+162,984
+Investment properties
+41(e)
+88,951
+170,387
+41(d)
+Investments in subsidiaries
+6,162
+6,191
+Investments in associates and joint ventures
+Loans
+As at 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+Total
+Later than five years
+Later than one year but not later than five years
+Not later than one year
+As lessor, the future minimum rentals receivable under non-cancellable operating leases are as follows:
+(b) Operating lease commitments
+230 Annual Report 2021 | Financial Report
+82,017
+3,063
+1,528
+78,954
+94,770
+RMB million
+RMB million
+96,298
+Statement of financial position
+As at
+31 December
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+2,487
+2,219
+193
+142
+As at
+768
+1,526
+781
+RMB million
+RMB million
+2020
+2021
+31 December
+1,296
+41(g)
+646,998
+638,849
+Policyholder dividends payable
+2,973,225
+3,419,899
+56
+16
+15
+313,594
+124,949
+Investment contracts
+Liabilities
+LIABILITIES AND EQUITY
+4,127,416
+4,726,351
+Total assets
+50,692
+Insurance contracts
+53,593
+288,212
+Lease liabilities
+Premiums received in advance
+55,031
+56,818
+Annuity and other insurance balances payable
+116,584
+232,496
+122,510
+41(p)
+34,992
+34,994
+18
+Bonds payable
+2,416
+1,889
+Securities sold under agreements to repurchase
+Cash and cash equivalents
+24,479
+33,821
+120,191
+41(k)
+Securities at fair value through profit or loss
+1,370,035
+41(j)
+Available-for-sale securities
+1,187,153
+127,404
+5,653
+41(i)
+Statutory deposits - restricted
+521,886
+491,332
+41(h)
+Term deposits
+5,653
+Securities purchased under agreements to resell
+41(1)
+3,463
+41(n)
+Other assets
+6,095
+6,630
+13
+Reinsurance assets
+20,730
+20,361
+12
+Premiums receivable
+44,582
+49,717
+41(m)
+Accrued investment income
+5,888
+2020
+48,699
+2021
+31 December
+control of consolidated
+Changes arising from losing
+(806)
+(806)
+Foreign exchange movement
+21,226
+structured entities
+(3,639)
+4,912
+(1,618)
+317
+cash flows
+Changes from financing
+198,941
+21,254
+1,327
+(751)
+New leases
+2,664
+34,992
+19,556
+At 31 December 2020
+(78)
+(78)
+(751)
+Others
+3,632
+113
+2
+Interest expense
+1,156
+1,156
+3,747
+122,249
+21,400
+3,091
+sold under
+agreements to
+repurchase
+Lease
+liabilities
+Bonds
+payable
+bearing
+loans and
+borrowings
+Securities
+Interest-
+holders of
+consolidated
+interest
+liability-
+payable to
+Other
+Other liability-
+Changes in liabilities arising from financing activities
+38 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+the third-party
+118,088
+payable
+structured
+34,990
+20,045
+At 1 January 2020
+RMB million
+RMB million
+RMB million
+related to
+RMB million
+RMB million
+RMB million
+Total
+activities
+entities
+financing
+RMB million
+42,654
+1,320
+223,435
+31 December
+As at
+As at
+The following is a summary of the significant contingent liabilities:
+39 PROVISIONS AND CONTINGENCIES
+For the year ended 31 December 2021
+31 December
+Notes to the Consolidated Financial Statements (continued)
+363,529
+359
+67,862
+239,446
+2,182
+34,994
+Annual Report 2021 | Financial Report 229
+18,686
+2021
+RMB million
+As at
+As at
+Total
+Property, plant and equipment
+Investments
+Contracted, but not provided for
+2020
+The Group had the following capital commitments relating to property development projects and investments:
+40 COMMITMENTS
+The Group involves in certain lawsuits arising from the ordinary course of business. In order to accurately disclose the
+contingent liabilities for pending lawsuits, the Group analysed all pending lawsuits case by case at the end of each interim
+and annual reporting period. A provision will only be recognised if management determines, based on third-party legal
+advice, that the Group has present obligations and the settlement of which is expected to result in an outflow of the
+Group's resources embodying economic benefits, and the amount of such obligations could be reasonably estimated.
+Otherwise, the Group will disclose the pending lawsuits as contingent liabilities. As at 31 December 2021 and 2020, 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.
+Pending lawsuits
+403
+506
+RMB million
+(a) Capital commitments
+At 31 December 2021
+207
+354
+(6,461)
+25,208
+117,211
+(1,517)
+cash flows
+Changes from financing
+134,441
+223,435
+42,654
+122,249
+2,664
+34,992
+19,556
+At 1 January 2021
+1,320
+Foreign exchange movement
+(870)
+(870)
+(147)
+Others
+5,598
+5,500
+96
+243,076
+Interest expense
+1,086
+1,086
+New leases
+(368)
+(368)
+structured entities
+control of consolidated
+Changes arising from losing
+31 December
+53,021
+2
+15,909
+Other liabilities
+41(q)
+61,487
+59,219
+Deferred tax liabilities
+41(0)
+6,581
+Statutory insurance fund
+21
+28,265
+384
+Total liabilities
+Equity
+Share capital
+Reserves
+4,301,745
+3,721,503
+36
+28,265
+339
+Within one year
+31 December
+As at
+Total
+After one year but within five years
+47,409
+Contractual maturity schedule:
+As at 31 December 2021, the Company's term deposits of RMB750 million (as at 31 December 2020: RMB750 million)
+were deposited in banks to back overseas borrowings and are restricted to use. Please refer to Note 10.3 for the details.
+646,998
+638,849
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(h) Term deposits
+Maturing:
+Within one year
+After one year but within five years
+After five years but within ten years
+Total
+As at
+31 December
+As at
+31 December
+2021
+RMB million
+2020
+RMB million
+127,401
+60,324
+363,931
+459,822
+1,740
+491,332
+521,886
+(i) Statutory deposits - restricted
+(2,443)
+2021
+RMB million
+Others (i)
+Total
+As at
+31 December
+As at
+31 December
+2021
+2020
+RMB million
+RMB million
+58,446
+49,148
+258,864
+168,912
+201,911
+134,513
+111,029
+81,795
+149,151
+130,734
+779,401
+565,102
+93,312
+96,308
+Equity securities
+Available-for-sale securities, at cost
+Subtotal
+Others (i)
+RMB million
+1,600
+4,053
+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 compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
+during liquidation proceedings.
+Annual Report 2021 | Financial Report 241
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j) Available-for-sale securities
+As at
+31 December
+2020
+Available-for-sale securities, at fair value
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Others (i)
+Subtotal
+Equity securities
+Funds
+Common stocks
+Preferred stocks
+Wealth management products
+Debt securities
+(3,819)
+RMB million
+650,817
+Total
+(g) Loans
+Policy loans
+Other loans
+Total
+Impairment
+Net value
+Maturing:
+After ten years
+Within one year
+Total
+Impairment
+Net value
+240 Annual Report 2021 | Financial Report
+As at
+31 December
+2021
+As at
+31 December
+2020
+After one year but within five years
+After five years but within ten years
+After ten years
+After five years but within ten years
+After one year but within five years
+Within one year
+209,068
+201,343
+63,305
+104,668
+1,531,640
+1,188,509
+245,879
+1,285,761
+215,457
+973,052
+1,531,640
+1,188,509
+The estimated fair value of all held-to-maturity securities was RMB1,636,030 million as at 31 December 2021 (as at 31
+December 2020: RMB1,224,617 million).
+Annual Report 2021 | Financial Report 239
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(f) Held-to-maturity securities (continued)
+As at 31 December 2021, no accumulated impairment loss for the investment of held-to-maturity securities has been
+recognised by the Company (as at 31 December 2020: same).
+Debt securities - Contractual maturity schedule
+Maturing:
+RMB million
+641,292
+RMB million
+25,267
+646,998
+638,849
+As at
+31 December
+2021
+RMB million
+As at
+31 December
+(2,443)
+2020
+348,708
+231,084
+168,954
+279,286
+101,456
+103,666
+31,699
+27,256
+256,291
+(3,819)
+641,292
+650,817
+147,684
+146,287
+163,348
+205,928
+1,165,592
+811,027
+1,531,640
+1,188,509
+As at
+As at
+31 December
+2021
+31 December
+2020
+RMB million
+RMB million
+236,209
+200,730
+414,608
+440,562
+55,016
+617,515
+301,106
+53,778
+68,569
+62,009
+2,715
+5,851
+1,469
+1,156
+RMB million
+2020
+31 December
+As at
+As at
+31 December
+2021
+RMB million
+565,102
+779,401
+137,665
+256,313
+266,057
+313,145
+124,578
+174,433
+36,802
+35,510
+7,143
+RMB million
+1,485
+74,238
+64
+56
+39,540
+28,118
+74,238
+76,159
+47,889
+52,676
+26,132
+217
+231
+23,252
+127,404
+120,191
+53,166
+44,032
+262
+266
+43,133
+31,537
+9,771
+12,229
+76,159
+4,849
+RMB million
+2021
+Government bonds
+Debt securities
+(k) Securities at fair value through profit or loss
+Total
+After ten years
+After five years but within ten years
+After one year but within five years
+Within one year
+Maturing:
+Debt securities - Contractual maturity schedule
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j) Available-for-sale securities (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+242 Annual Report 2021 | 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 quotations, wealth management products and private equity funds.
+1,187,153
+1,370,035
+622,051
+590,634
+313,421
+277,607
+Government agency bonds
+2020
+Corporate bonds
+Subtotal
+As at
+31 December
+31 December
+As at
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+Unlisted
+Listed overseas
+Listed in Mainland, PRC
+Debt securities
+Total
+Subtotal
+Others
+Common stocks
+Funds
+Equity securities
+Others
+52,127
+4,213
+9,349
+2021
+2020
+RMB million
+RMB million
+85,531
+41,466
+693,870
+523,636
+779,401
+565,102
+237,305
+199,859
+75,694
+108,493
+44,582
+49,717
+6,191
+6,832
+26,093
+30,761
+12,298
+31 December
+12,124
+31 December
+As at
+5,005
+13,013
+163,620
+137,287
+570,355
+601,492
+20,279
+1,370,035
+20,559
+1,187,153
+(i)
+Other available-for-sale securities mainly include unlisted equity investments, private equity funds and perpetual bonds.
+Debt securities
+Listed in Mainland, PRC
+Unlisted
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+Listed overseas
+Unlisted
+Subtotal
+Total
+As at
+11,009
+RMB million
+31 December
+(n) Other assets
+Total
+Non-current
+Current
+Total
+Others
+Debt securities
+Bank deposits
+(m) Accrued investment income
+Total
+Within 30 days
+Maturing:
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(I) Securities purchased under agreements to sell
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 243
+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 quotations.
+127,404
+120,191
+53,166
+44,032
+Investments receivable and prepaid
+2020
+Land use rights
+Automated policy loans
+As at
+As at
+31 December
+2021
+RMB million
+5,888
+3,463
+5,888
+3,463
+RMB million
+RMB million
+2020
+2021
+As at
+31 December
+31 December
+As at
+244 Annual Report 2021 | Financial Report
+Total
+Non-current
+Current
+Total
+Others
+Due from related parties
+Tax prepaid
+Disbursements
+910,151
+154,501
+2,900
+349,116
+Other available-for-sale
+Unrealised gains/
+(losses) from
+Share
+premium
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(r) Reserves
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+59,219
+278
+61,487
+246 Annual Report 2021 | Financial Report
+Total
+59,219
+61,487
+Non-current
+Current
+59,219
+61,487
+Total
+19,372
+reserves
+securities
+Statutory
+reserve fund
+Discretionary
+25,297
+for the year
+Other comprehensive income
+194,168
+37,304
+34,645
+40,468
+27,891
+53,860
+20,983
+As at 1 January 2020
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+reserve
+reserve fund
+General
+Total
+RMB million
+Appropriation to reserves
+Others
+291
+2021
+RMB million
+As at
+31 December
+As at
+31 December
+(q) 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 2021, the carrying
+value of securities deposited in the collateral pool was RMB292,323 million (as at 31 December 2020: RMB250,407
+million). The collateral is restricted from trading during the period of the repurchase transaction.
+As at 31 December 2021, bonds with a carrying value of RMB194,593 million (as at 31 December 2020: RMB111,233
+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.
+116,584
+232,496
+140
+8
+116,436
+230,421
+2,075
+116,584
+232,496
+20,683
+55,572
+95,901
+176,924
+RMB million
+RMB million
+2020
+RMB million
+Interest payable to policyholders
+Salary and welfare payable
+Stock appreciation rights (Note 32)
+634
+434
+Tax payable
+1,249
+1,271
+Interest payable of debt instruments
+1,811
+1,467
+493
+Agency deposits
+2,324
+Payable to constructors
+7,051
+5,351
+Brokerage and commission payable
+10,060
+11,500
+16,139
+17,866
+2,410
+5,009
+5,857
+5,009
+2021
+RMB million
+2020
+RMB million
+112,194
+1,485
+94,586
+3,051
+113,679
+97,637
+(ii) Operating lease commitments
+As lessor, the future minimum rentals receivable under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five years
+Later than five years
+Total
+248 Annual Report 2021 | Financial Report
+As at
+As at
+31 December
+2021
+31 December
+As at
+31 December
+31 December
+As at
+Total
+243,076
+(s) Provisions and contingencies
+The following is a summary of the significant contingent liabilities:
+Pending lawsuits
+As at
+31 December
+2021
+As at
+31 December
+RMB million
+2020
+RMB million
+2020
+506
+Annual Report 2021 | Financial Report 247
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(t) Commitments
+(i) Capital commitments
+Capital commitments of the Company relating to property development projects and investments:
+Contracted, but not provided for
+Investments
+Property, plant and equipment
+403
+RMB million
+RMB million
+548
+234,071
+42,313
+40,502
+45,477
+53,188
+(1,269)
+53,860
+As at 1 January 2021
+234,071
+Other comprehensive income
+42,313
+45,477
+53,188
+(1,269)
+53,860
+As at 31 December 2020
+(1,269)
+(1,269)
+Others
+15,875
+40,502
+2020
+for the year
+(5,584)
+553
+833
+953
+142
+162
+1,523
+1,668
+50,573
+47,604
+(5,584)
+(1,381)
+(112)
+(500)
+53,360
+As at 31 December 2021
+Others
+15,201
+5,096
+5,009
+5,096
+Appropriation to reserves
+(612)
+2021
+As at
+31 December
+31 December
+RMB million
+2020
+2021
+31 December
+31 December
+As at
+As at
+44,582
+49,717
+980
+2,043
+43,602
+47,674
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
+December 2021: (continued)
+Name
+Bai Rui Fu Cheng No.424 Collective Fund
+Trust Scheme (Wu Han Metro)
+RMB million
+9,129
+1,554
+7,479
+Notes to the Consolidated Financial Statements (continued)
+24,479
+33,821
+7,572
+7,599
+16,907
+26,222
+24,479
+33,821
+•
+3,574
+714
+590
+2,257
+2,686
+3,522
+3,673
+5,349
+5,324
+7,509
+4,940
+For the year ended 31 December 2021
+Percentage
+of shares held
+96.36% directly
+received
+Debt securities
+Listed in Mainland, PRC
+Unlisted
+Total
+Unlisted debt securities include those traded on the Chinese interbank market.
+2021
+2020
+RMB million
+RMB million
+157,401
+5,583
+162,984
+45,511
+157,401
+As at
+As at
+31 December
+31 December
+2021
+RMB million
+2020
+RMB million
+Total
+Subordinated bonds
+Government agency bonds
+Corporate bonds
+Government bonds
+Principal
+activities
+RMB5,486 million Investment management
+Kun Lun Trust Tianjin Urban Communications
+99.99% directly
+RMB5,001 million Investment management
+Construction No. 1 Collective Fund Trust Scheme
+CL Investment - COSCO Marine Debt
+100.00% directly
+RMB5,000 million Investment management
+Trust/
+investments
+Investment Scheme (series II)
+Collective Fund Trust Scheme
+90.00% directly
+RMB5,000 million Investment management
+(e) Investments in associates and joint ventures
+As at 1 January
+Investments in associates and joint ventures
+As at 31 December
+(f) Held-to-maturity securities
+Debt securities
+Wu Kuang Trust - Xing Fu No.137
+264,983
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(o) Deferred tax
+As at 1 January 2020
+- deferred tax liabilities to be settled after 12 months
+16,057
+21,190
+6,006
+7,358
+10,051
+13,832
+Deferred tax liabilities:
+- deferred tax assets to be recovered within 12 months
+Subtotal
+(25,141)
+- deferred tax assets to be recovered after 12 months
+31 December
+2020
+RMB million
+RMB million
+2021
+31 December
+As at
+As at
+(6,581)
+448
+(ii) The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
+Deferred tax assets:
+2,890
+(27,921)
+(2,630)
+As at
+Total
+After 90 days
+After 30 days within 90 days
+Within 30 days
+Maturing:
+Total
+Stock exchange market
+Interbank market
+- deferred tax liabilities to be settled within 12 months
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(p) Securities sold under agreements to repurchase
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 245
+(15,909)
+(6,581)
+Net deferred tax liabilities
+(31,966)
+(27,771)
+Subtotal
+(4,045)
+For the year ended 31 December 2021
+(i) The movements in deferred tax assets and liabilities during the year are as follows:
+Deferred tax assets/(liabilities)
+(17,115)
+As at 31 December 2021
+(15,077)
+1,710
+1,787
+1,557
+Total
+RMB million
+Others
+RMB million
+RMB million
+RMB million
+Investments
+Insurance
+2,630
+- Available-for-sale securities
+(Charged)/Credited to net profit
+As at 1 January 2021
+As at 31 December 2020
+policyholders
+sale securities attributable to participating
+- Portion of fair value changes on available-for-
+- Available-for-sale securities
+(Charged)/Credited to other comprehensive income
+(Charged)/Credited to net profit
+(Charged)/Credited to other comprehensive income
+448
+7,644
+(10,890)
+3,413
+- Portion of fair value changes on available-for-
+sale securities attributable to participating
+policyholders
+1,413
+1,413
+7,467
+344
+4,261
+2,862
+(15,909)
+(84)
+2,546
+4,334
+(15,909)
+2,546
+(22,789)
+4,334
+990
+990
+(9,422)
+(9,422)
+(22,789)
+28
+FSC™ C019970
+responsible sources
+370.0
+Zhao Peng (iii)
+Yuan Changqing (ii)
+Liu Huimin (ii)
+Yin Zhaojun (ii)
+Wang Junhui (ii)
+Chang Tso Tung Stephen (iv)
+751.8
+250.0
+320.0
+Robinson Drake Pike
+250.0
+70.0
+320.0
+Tang Xin
+70.0
+250.0
+2,732.0
+139.9
+income
+income
+in kind contributions
+Total
+Deferred
+payment
+included
+in total
+Actual paid
+86.1
+included
+in total
+Su Hengxuan (i)
+Li Mingguang
+1,253.0
+1,253.0
+2,506.0
+751.8
+RMB thousand
+bonuses
+70.0
+Leung Oi-Sie Elsie
+The directors and chief executive received the compensation amounts disclosed above during their term of office in 2021
+and 2020.
+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.
+250 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+The compensation amounts disclosed above for these directors and the chief executive for the year ended 31 December
+2020 were restated based on the finalised amounts determined during 2021.
+(b) Supervisors' emoluments
+Name
+Jia Yuzeng
+Han Bing (i)
+Cao Qingyang
+Wang Xiaoqing
+Lai Jun (ii)
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2021 are as
+follows:
+320.0
+(vi) The above remuneration was calculated based on the relevant employment period during the reporting period.
+(iv) Chang Tso Tung Stephen resigned as independent director on 19 October 2020. He continued to perform as independent director until 28 June 2021,
+when the qualification of new independent director was approved by CBIRC.
+250.0
+50.0
+300.0
+320.0
+320.0
+320.0
+(v) Wang Bin did not receive remuneration from the Company and resigned as chairman and executive director in February 2022.
+320.0
+320.0
+300.0
+300.0
+(i) Su Hengxuan did not receive remuneration from the Company.
+(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
+(iii) Zhao Peng was appointed as executive director from February to April 2020. He did not receive remuneration from the Company.
+320.0
+salaries
+scheme
+Benefits
+Huang Xiumei (iii)
+626.5
+70.5
+98.0
+49.7
+1,511.0
+746.7
+Yuan Changqing (ii)
+160.0
+Yin Zhaojun (iv)
+Wang Junhui (ii)
+Lam Chi Kuen (v)
+Zhai Haitao (v)
+Tang Xin
+Leung Oi-Sie Elsie
+Chang Tso Tung Stephen (vi)
+Liu Huimin (iv)
+Robinson Drake Pike (vi)
+1,253.0
+Su Hengxuan (i)
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+42 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 2021 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 2021 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 2021 are as follows:
+Li Mingguang
+Name
+Benefits
+paid
+in kind
+Pension scheme
+contributions
+Total
+RMB thousand
+Remuneration
+(i)
+Su Hengxuan did not receive remuneration from the Company.
+210.0
+42 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 2020 are as follows:
+Name
+Deferred
+payment
+For the year ended 31 December 2021
+Performance
+included
+Pension
+Basic
+related
+of salary
+in salary
+Subtotal
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 249
+(vii) Wang Bin did not receive remuneration from the Company and resigned as chairman and executive director in February 2022.
+(viii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+70.0
+360.0
+160.0
+300.0
+210.0
+70.0
+370.0
+360.0
+160.0
+300.0
+(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
+(iii) Huang Xiumei was appointed as executive director in July 2021.
+(iv) Yin Zhaojun, Liu Huimin resigned as non-executive director in January 2021 and February 2021.
+(v) Lam Chi Kuen, Zhai Haitao were appointed as independent director in June 2021 and October 2021.
+(vi) Chang Tso Tung Stephen resigned as independent director in October 2020 and continued to perform as independent director until June 2021; Robinson
+Drake Pike resigned as independent director in June 2021 and continued to perform as independent director until October 2021.
+Niu Kailong (ii)
+Remuneration
+1,980.2
+Benefits Pension scheme
+in kind contributions
+145.5
+29.9
+115.6
+(i)
+Luo Zhaohui resigned as shareholder representative supervisor in July 2020 and did not receive remuneration from the Company.
+(ii) Song Ping resigned as employee representative supervisor in January 2020.
+(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+8.5
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2020 were restated
+based on the finalised amounts determined during 2021.
+Annual Report 2021 | Financial Report 251
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+(c) Five highest paid individuals
+For the year ended 31 December 2021, the five individuals whose emoluments were the highest in the Company include
+one director and one supervisor (2020: one director and one supervisor).
+The supervisors received the compensation amounts disclosed above during their term of office in 2021 and 2020.
+Details of the remuneration of the five highest paid individuals are as follows:
+20.2
+116.8
+1,888.4
+1,888.4
+Wang Xiaoqing
+518.4
+940.1
+1,458.5
+29.9
+206.9
+1,781.0
+1,781.0
+Luo Zhaohui (i)
+Song Ping (ii)
+42.1
+74.7
+115.6
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+Total
+The emoluments fell within the following bands:
+TM
+中国人寿保险股份有限公司
+China Life Insurance Company Limited
+Office Address: 16 Financial Street, Xicheng District, Beijing, P. R. China
+Telephone
+Website
+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.
+E-mail
+: www.e-chinalife.com
+ir@e-chinalife.com
+FSC
+www.fsc.org
+MIX
+Paper from
+: 86-10-63633333
+252 Annual Report 2021 | Financial Report
+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.
+RMBO 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
+2021
+2020
+RMB thousand
+6,985.3
+490.2
+7,475.5
+RMB thousand
+13,940.1
+430.5
+14,370.6
+Number of individuals
+For the year ended 31 December
+2021
+5
+2020
+paid
+For the year ended 31 December 2021, 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 (2020: nil).
+127.6
+207.9
+132 I
+959.3
+19.7
+21.2
+153.8
+(i)
+Han Bing resigned as shareholder representative supervisor in October 2021.
+(ii) Lai Jun and Niu Kailong were appointed as employee representative supervisor and shareholder representative supervisor in October 2021. Niu Kailong
+did not receive remuneration from the Company.
+112.9
+(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+Deferred
+payment
+Basic
+Performance
+related
+Subtotal
+included
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2020 are as
+follows:
+842.3
+127.5
+113.4
+1,552.9
+Total
+RMB thousand
+1,253.0
+139.5
+98.0
+1,490.5
+250.6
+49.0
+58.5
+358.1
+114.8
+139.6
+944.4
+601.4
+of salary
+in salary
+690.0
+Pension
+scheme
+86.1
+3,089.5
+859.2
+2,230.3
+Han Bing
+505.5
+139.4
+976.2
+129.7
+1,818.7
+1,818.7
+Cao Qingyang
+Benefits
+593.6
+207.3
+859.2
+1,481.7
+1,432.0
+2,864.0
+salaries
+bonuses
+income
+Name
+in kind contributions
+Total
+income
+Actual paid
+included
+in total
+RMB thousand
+Jia Yuzeng
+1,432.0
+Deferred
+payment
+included
+in total
+(國壽鑫賬戶兩全保險(萬能型)(鑽石版))
+China Life Xin Zun Bao Whole Life Insurance (universal insurance)
+3,718
+(celebration version)
+Mainly through the channel of exclusive individual
+agents
+Insurance product
+20
+24 Annual Report 2021 | Management Discussion and Analysis
+(國壽鑫尊寶終身壽險(萬能型)(慶典版))
+Insurance contracts
+419
+Mainly through the channel of exclusive individual
+agents
+(diamond version)
+7,858
+China Life Xin Account Endowment Insurance (universal insurance)
+(國壽鑫賬戶兩全保險(萬能型)(尊享版))
+Surrender
+payment
+156
+12,580
+Major sales channel
+contracts
+Life insurance
+(exclusive version)
+China Life Xin Account Endowment Insurance (universal insurance)
+Mainly through the channel of exclusive individual
+agents
+Health insurance
+228,899
+10,069
+3,419,899
+Total of insurance contracts
+-0.2%
+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.
+in investment
+837,293
+835,400
+15.0%
+2,973,225
+-0.3%
+10,096
+17.1%
+195,487
+14.9%
+2,767,642
+3,180,931
+Change
+2020
+2021
+RMB million
+31 December
+As at
+31 December
+As at
+Including: Residual margin Note
+Accident insurance
+Net increase
+First-year business
+For the year ended 31 December
+First-year business
+First-year regular
+Single
+Renewal business
+Health Insurance Business
+First-year regular
+Single
+Renewal business
+Accident Insurance Business
+First-year business
+First-year regular
+Single
+Renewal business
+Total
+2021
+2020
+RMB million
+Change
+481,311
+480,593
+0.1%
+86,882
+As at the end of the Reporting Period, the reserves of
+insurance contracts of the Company were RMB3,419,899
+million, 15.0% up from RMB2,973,225 million as at
+the end of 2020, primarily due to the accumulation of
+Life Insurance Business
+RMB million
+For the year ended 31 December
+Figures of Gross Written Premiums
+Top three insurance products in terms of net increase in investment contracts
+China Life Xin Xiang Jin Sheng Annuity Insurance (Type A) and China Life Xin Fu Ying Jia Annuity Insurance have been replaced by their upgraded
+products and are no longer on sale, and premiums from insurance business were recorded as renewal premiums.
+Standard premiums were calculated in accordance with the calculation methods set forth in the "Notice on Establishing the Industry Standard of Standard
+Premiums in the Life Insurance Industry" (Bao Jian Fa [2004] No. 102) and the "Supplementary Notice of the 'Notice on Establishing the Industry Standard
+of Standard Premiums in the Life Insurance Industry'" (Bao Jian Fa [2005] No. 25) of the former China Insurance Regulatory Commission.
+2.
+1.
+Notes:
+1,231
+Mainly through the channel of
+exclusive individual agents
+23,114
+(國壽鑫福贏家年金保險)2
+China Life Xin Fu Ying Jia Annuity Insurance
+(國壽城鄉居民大病團體醫療保險(A型))
+Urban Citizens (Type A)
+Health Insurance for Rural and
+China Life Critical Illness Group
+(國壽鑫享金生年金保險(A款))2
+Insurance (Type A)
+34,094
+China Life Xin Xiang Jin Sheng Annuity
+(國壽鑫耀東方年金保險)
+Annuity Insurance
+China Life Xin Yao Dong Fang
+BUSINESS ANALYSIS
+Gross written premiums categorized by business
+Analysis of claims and policyholder benefits
+For the year ended 31 December
+20
+RMB million
+Change
+2,273,425
+Bonds
+13.32%
+545,678
+11.23%
+529,488
+75.12%
+3,076,340
+77.86%
+3,672,262
+Percentage
+Amount
+As at 31 December 2020
+As at 31 December 2021
+Percentage
+Amount
+Fixed-maturity financial assets
+Term deposits
+Investment category
+RMB million
+As at the end of the Reporting Period, the Company's investment assets categorized by investment object are set out as
+below:
+Investment portfolios
+26 Annual Report 2021 | Management Discussion and Analysis
+divergence. The Company always adhered to its strategic
+consistency, prioritized asset-liability management in
+using insurance funds, firmly implementing its medium-
+to long-term strategic plan of asset allocation, and making
+flexible tactical allocations in response to the market
+change. Firstly, the Company seized the opportunity of
+a relatively high interest rate in the first half of 2021 and
+increased allocation to assets with long durations such
+as government bonds to further narrow the duration gap.
+Secondly, the Company prudently controlled equity risk
+exposures in open market to reduce portfolio volatility.
+and secure the investment gains. Thirdly, the Company
+strengthened the innovation in alternative investment
+models, and positioned for sectors with prime prospects
+to establish a diversified investment portfolio.
+In 2021, domestic bond yields fluctuated within a tight
+range, which rose at first and then fell down, and the
+interest rate pivot trended downwards on the whole.
+The A-share market was volatile, with significant sector
+48.20%
+Investment Business
+1,718,639
+Debt-type financial products¹
+108,205
+2.39%
+112,689
+Funds³
+8.55%
+350,107
+6.41%
+302,090
+Common stocks
+17.10%
+700,748
+14.83%
+699,457
+Equity financial assets
+8.75%
+358,382
+9.02%
+425,565
+Other fixed-maturity investments²
+11.08%
+453,641
+9.41%
+443,784
+41.97%
+During the Reporting Period, underwriting and policy
+acquisition costs declined by 22.1% year on year due to a
+decrease in regular premiums from new policies. Finance
+costs rose by 49.4% year on year due to an increase
+in interest paid for securities sold under agreements to
+repurchase. Administrative expenses rose by 8.2% year
+on year due to the expiration of policies on temporary
+expenses deduction.
+26.1%
+2.0%
+1,229
+7.9%
+9,846
+10,628
+26,511
+-6.0%
+7,661
+7,203
+1.9%
+82,146
+83,688
+7.5%
+490,994
+527,863
+6.5%
+2020
+580,801
+618,754
+2021
+During the Reporting Period, insurance benefits and
+claims expenses rose by 6.5% year on year due to an
+increase in the change of insurance contract liabilities. In
+particular, due to steady growth of life insurance business,
+insurance benefits and claims expenses of life insurance
+business rose by 7.5% year on year. Insurance benefits
+and claims expenses of health insurance business rose
+by 1.9% year on year, and insurance benefits and claims
+Policyholder dividends resulting from participation in profits
+Investment contract benefits
+Accident insurance business
+Health insurance business
+Life insurance business
+Insurance benefits and claims expenses
+28,279
+-6.3%
+expenses of accident insurance business declined by
+6.0% year on year. Investment contract benefits rose
+by 7.9% year on year due to an increase in the scale of
+the universal insurance accounts. Policyholder dividends
+resulting from participation in profits declined by 6.3%
+year on year due to a decrease in investment income from
+the participating accounts.
+Annual Report 2021 | Management Discussion and Analysis
+1,253
+12,270
+15,467
+8.2%
+37,706
+40,808
+49.4%
+3,747
+5,598
+-22.1%
+84,361
+insurance liabilities from new policies and renewals. As
+at the date of the statement of financial position, the
+reserves of various insurance contracts of the Company
+passed the liability adequacy test.
+65,744
+2020
+2021
+RMB million
+Statutory insurance fund contribution
+Other expenses
+Administrative expenses
+Finance costs
+Underwriting and policy acquisition costs
+For the year ended 31 December
+Analysis of underwriting and policy acquisition costs and other expenses
+25
+Change
+-19.7%
+First-year regular premiums
+106,001
+Gross written premiums of
+individual agent business sector
+(RMB million)
+▼ 82,254
+2021
+2020
+▼ 99,555
+114,311
+Agents of individual agent
+business sector
+820,000
+509,489 ▼
+511,044 ▼
+16,110 ▼
+2021
+49,326 ▼
+19.6%
+15,748 ▼
+41,240 ▼
+2020
+First-year regular premiums
+Account managers of
+bancassurance channel
+25,000
+Annual Report 2021 | Management Discussion and Analysis
+21
+Gross written premiums of
+bancassurance channel (RMB million)
+Group Insurance Channel The group insurance
+channel insisted on the coordination of business scale
+and profitability and achieved stable development in
+all business lines. During the Reporting Period, gross
+written premiums from the channel were RMB29,162
+million, an increase of 1.0% year on year. Short-term
+insurance premiums from the channel were RMB25,694
+million, an increase of 2.9% year on year. As at the
+end of the Reporting Period, the number of direct sales
+representatives was 45,000, among which the high-
+performance personnel increased by 13.0% from the end
+of 2020.
+Bancassurance Channel With equal emphasis on
+business scale and value, the bancassurance channel
+consistently pushed forward sound and healthy
+development. During the Reporting Period, gross written
+premiums from the channel amounted to RMB49,326
+million, an increase of 19.6% year on year. First-year
+regular premiums were RMB16,110 million, an increase
+of 2.3% year on year; in particular, first-year regular
+premiums with a payment duration of five years or longer
+were RMB6,743 million, an increase of 35.3% year
+on year. Renewal premiums amounted to RMB32,792
+million (a year-on-year increase of 30.6%), accounting
+for 66.48% of gross written premiums from the channel
+(a year-on-year increase of 5.59 percentage points).
+The bancassurance channel constantly enhanced the
+professional service support capability of the sales team,
+and the quality of which was steadily improved. As at the
+end of the Reporting Period, the number of the channel's
+account managers was 25,000, the quarterly average
+active managers remained stable, and the productivity per
+manager increased continuously.
+Diversified Business Sector
+2
+8
+26
+180
+76
+83
+Short-term insurance business
+30,246
+Total
+618,327
+30,838
+612,265
+Notes:
+1. Premiums of individual agent business sector included premiums acquired by the general sales team and the upsales team.
+2. Premiums of other channels mainly included premiums of government-sponsored health insurance business and online sales, etc.
+Insurance Business
+Analysis of insurance business
+In 2021, facing persistent impacts of the COVID-19
+pandemic and a challenging market environment, the
+industry faced unprecedented pressure for transformation.
+The Company continued to deepen the customer-centric
+sales deployment of "Yi Ti Duo Yuan", focusing on
+business restructuring and making breakthroughs, and
+stressing precise allocation of resources on the basis of
+standardized management. The individual agent business
+sector consistently prioritized business value and further
+promoted operation differentiation between sales teams.
+The diversified business sector achieved progress while
+maintaining stability and coordinated effectively with
+the individual agent business sector by concentrating
+on specialized operations, quality and efficiency
+enhancement, and transformation and innovation. As at
+the end of the Reporting Period, the number of total sales
+force of the Company was approximately 890,000.
+Individual Agent Business Sector
+The individual agent business sector pursued high-
+quality development, consistently deepened business
+restructuring, and achieved steady business development.
+During the Reporting Period, gross written premiums
+from the sector were RMB509,489 million, a decrease
+of 0.3% year on year. Renewal premiums amounted to
+RMB407,973 million, an increase of 4.3% year on year.
+20 Annual Report 2021 | Management Discussion and Analysis
+First-year regular premiums were RMB82,254 million,
+a decrease of 17.4% year on year, of which first-year
+regular premiums with a payment duration of ten years
+or longer were RMB41,580 million, a decrease of 26.0%
+year on year. In 2021, the value of one year's sales of the
+sector was RMB42,945 million, a decrease of 25.5% year
+on year, and new business margin of one year's sales by
+annual premium equivalent was 42.2%, a decrease of 5.9
+percentage points year on year.
+Affected by sporadic outbreaks of the pandemic and the
+challenging market environment, the whole industry had
+difficulties in agent recruitment and retention, and the size
+of sales force consequently declined to a certain extent.
+The Company adhered to the sales force development
+strategy of improving quality with stabilised quantity,
+and made great efforts in enhancing its quality. As at the
+end of the Reporting Period, the number of agents of the
+sector was 820,000, including 519,000 agents from the
+general sales team and 301,000 agents from the upsales
+team. The monthly average productive agents decreased
+compared with the previous year, however, the number of
+high-performance agents was stable, and the foundation
+of sales force remained solid. Although the sector's
+development was under pressure, the Company adhered
+to the strategy of "productive agents-driven business"
+and made solid stride in business restructuring. The 4.0
+version of the regular agent management system was
+fully promoted and implemented, and transformation of
+sales team was pushed forward aiming at becoming more
+specialized and professional.
+Pushing forward "Dingxin Project" deployment in great
+depth, the diversified business sector concentrated on
+specialized operation as well as quality and efficiency
+enhancement, and actively developed the bancassurance,
+group insurance, and health insurance businesses.
+188
+Gross written premiums of
+group insurance channel (RMB million)
+2020
+China Life Xin Xiang Zhi Zun Annuity
+Insurance (Celebration Version)
+(國壽鑫享至尊年金保險(慶典版))
+RMB million
+Gross written
+premiums
+40,851
+Standard
+premiums
+from new
+policies¹
+Major sales channel
+Surrender
+payment
+75
+Mainly through the channel of
+exclusive individual agents
+834
+39,573
+11,908
+Mainly through the channel of
+exclusive individual agents
+293
+Mainly through the channel of
+586
+exclusive individual agents
+25,112
+Insurance product
+2021
+For the year ended 31 December
+23
+Short-term insurance premiums
+Direct sales representatives
+45,000
+High-performance
+personnel increased by
+↑13.0%
+from the
+% end of 2020
+25,694 ▼ 29,162 ▼
+2.9%
+24,970 ▼ 28,872 ▼
+Other Channels In 2021, gross written premiums from
+other channels were RMB30,350 million, a decrease of
+2.4% year on year. The Company proactively participated
+in a variety of government-sponsored health insurance
+businesses. As at the end of the Reporting Period, the
+Company carried out over 200 supplementary major
+medical expenses insurance programs, covering more
+than 350 million people. It also undertook over 400 health
+care entrusted programs, providing services to more than
+100 million people; 61 long-term care insurance programs
+in 17 provinces and cities, covering 23 million people;
+and 170 supplementary medical insurance programs
+in 22 provinces and cities, covering 91 million people.
+The Company also participated in the construction of a
+multi-level social security system and implemented 54
+city-customized commercial medical insurance projects
+in 15 provinces and cities, covering more than 10 million
+people.
+In addition, the Company greatly developed the online
+insurance business and provided customers with high-
+quality service experience through online-to-offline
+sales and online direct sales. In full compliance with the
+regulatory requirements of the CBIRC with respect to
+the online insurance business, the Company optimized
+its online organization and business system, featuring
+centralized operation and unified management, and
+offered a variety of products for different scenarios and
+customers. During the Reporting Period, the Company's
+online insurance business grew rapidly, which was mostly
+achieved through online-to-offline integration with sales
+channels of individual agents, bancassurance and group
+insurance. Total premiums¹ under the CBIRC caliber were
+RMB34,969 million, reaching a record high once again. In
+the future, the Company will further strengthen the online-
+to-offline integration of its online insurance business,
+actively explore on the dedicated online life insurance
+business, and provide customers with more convenient
+online insurance services.
+1
+Including premiums from online insurance business acquired by different sales channels of the Company.
+22 Annual Report 2021 | Management Discussion and Analysis
+Integrated Financial Sector
+Being customer-centric, the Company fully leveraged
+the resource advantages of the fellow members of
+CLIC and actively engaged in the construction of a "Life
+Insurance plus" integrated financial ecosystem, turning
+the integrated financial advantages into a driving force for
+the high-quality development of the Company. In 2021,
+due to the impact of the comprehensive reform on auto
+insurance and the slower growth of this sector, premiums
+from CLP&C cross-sold by the Company were RMB21,107
+million, with the number of insurance policies increased
+by 18.0% year on year. Additional first-year receipts of
+enterprise annuity funds and pension security products of
+AMP cross-sold by the Company were RMB28,197 million.
+The Company entrusted CGB to sell its bancassurance
+products, with the first-year regular premiums recording
+a relatively stable growth. The number of new debit cards
+and credit cards jointly issued by the Company and CGB
+reached 1,224,000. Meanwhile, in order to satisfy the
+diverse needs of its customers, the Company worked with
+CGB and CLP&C to carry out various operation activities
+to provide customers with a series of quality financial and
+insurance service solutions.
+By integrating online and offline as well as internal and
+external healthcare resources, the Company improved
+its health management and service capabilities and
+actively participated in the Healthy China program. China
+Life Inclusive Healthcare Service Platform continued
+to diversify its services while upgrading its system
+functions. As at the end of the Reporting Period, more
+than a hundred types of services were available on the
+platform, and the size of the accumulated registered users
+of the platform led the industry with an increase of over
+35% from the end of 2020. The Company continued to
+formulate the China Life aged care system and deployed
+towards high-quality resources in the aged care industry
+such as rehabilitation, medical care, hospital, health care
+big data, and health industrial parks through the China
+Life Integrated Aged Care Fund. In 2021, the China Life
+Integrated Aged Care Fund reserved a batch of pension
+and retirement projects that could meet the diversified
+and multi-level demands of customers in strategic regions
+such as Beijing-Tianjin-Hebei, the Yangtze River Economic
+Belt, and the Guangdong-Hong Kong-Macao Greater Bay
+Area.
+Analysis of insurance products
+Adhering to the customer-centric product development
+concept and the original role of insurance, the Company
+fully implemented major national strategies including
+Healthy China program, proactively responding to
+population aging and rural revitalization, accelerated
+insurance product innovation and advanced the supply-
+side reform of insurance products to create a diversified
+product system.
+By closely integrating the Healthy China program with its
+own business development, the Company consistently
+optimized and upgraded its health insurance products and
+strengthened the innovative research and development
+of illness insurance products and medical insurance
+products, etc., in terms of the insured customer group,
+scope of cover, and protection functions, so as to offer
+diversified health protections. The Company actively
+served the national strategy of responding to population
+aging and deepened its research in insurance coverage
+and benefits. By leveraging the advantages of the long-
+term risk protection of insurance products and the long-
+term application of insurance fund, the Company launched
+the exclusive commercial pension insurance and special
+annuity insurance products for the elderly customers. It
+also developed exclusive insurance products to facilitate
+rural revitalization strategy, proactively playing its role in
+protecting people's well-being.
+In 2021, the Company newly developed and upgraded a
+total of 160 products, including 12 life insurance products,
+138 health insurance products, two accident insurance
+products, and eight annuity insurance products. Out of
+these products, 144 were protection-oriented insurance
+products, and 16 were long-term savings insurance
+products.
+Annual Report 2021 | Management Discussion and Analysis
+Top five insurance products in terms of gross written premiums
+84,820
+28
+31,109
+-0.9%
+11
+12
+-8.3%
+15,851
+545
+618,327
+16,000
+-0.9%
+571
+612,265
+-4.6%
+1.0%
+Note: Single premiums in the above table include premiums from short-term insurance business.
+During the Reporting Period, gross written premiums from
+the life insurance business of the Company amounted to
+RMB481,311 million, rising by 0.1% year on year. Gross
+written premiums from the health insurance business
+reached RMB120,609 million, rising by 4.8% year on year.
+Gross written premiums from accident insurance business
+were RMB16,407 million, a year-on-year decrease
+of 1.1%.
+Annual Report 2021 | Management Discussion and Analysis 19
+Gross written premiums categorized by channel
+For the year ended 31 December
+RMB million
+2021
+2020
+Individual Agent Business Sector¹
+509,489
+511,044
+First-year business of long-term insurance
+16,012
+82,514
+15,862
+16,583
+-20.0%
+2,062
+2,204
+-6.4%
+394,429
+372,388
+5.9%
+120,609
+115,089
+4.8%
+73,120
+69,722
+4.9%
+13,579
+9,408
+44.3%
+59,541
+60,314
+-1.3%
+47,489
+45,367
+4.7%
+16,407
+-1.1%
+First-year business of long-term insurance
+99,838
+82,254
+374
+Group Insurance Channel
+29,162
+First-year business of long-term insurance
+1,846
+28,872
+2,040
+First-year regular
+44
+110
+Single
+1,802
+1,930
+Renewal business
+1,622
+1,862
+Short-term insurance business
+25,694
+24,970
+Other Channels²
+First-year regular
+Single
+Renewal business
+30,350
+411
+First-year regular
+Short-term insurance business
+32,792
+99,555
+Single
+260
+283
+Renewal business
+407,973
+391,272
+Short-term insurance business
+19,002
+19,934
+Bancassurance Channel
+49,326
+41,240
+First-year business of long-term insurance
+16,123
+15,757
+First-year regular
+16,110
+15,748
+Single
+13
+9
+Renewal business
+25,109
+2.79%
+Through other channels
+284,678
+14,583
+20,344
+8,336
+10,328
+1,841
+1,216
+(50)
+55
+Net fair value gains through profit or loss
+24,983
+127,673
+148,453
+162,783
+188,770
+198,596
+214,057
+Net realised gains on financial assets
+Share of profit of associates and joint ventures
+28,718
+4,943
+21,900
+Disposal gains and impairment losses of associates and joint ventures
+25,112
+Other equity investments4
+28 Annual Report 2021 | Management Discussion and Analysis
+2
+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, and the
+financing entities were primarily large central-owned
+enterprises and state-owned enterprises. As at the end of
+the Reporting Period, over 97% of the credit bonds and
+over 99% of the debt-type financial products held by the
+Company 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
+In 2021, the Company's net investment income was
+RMB188,770 million, rising by 16.0% year on year, an
+increase of RMB25,987 million from 2020. Since the
+Company consistently increased its allocation to bonds
+with long durations in recent years, and the income
+from investments in associates and joint ventures also
+increased, the net investment yield was 4.38% for 2021,
+up by 4 basis points from 2020. The gross investment
+income of the Company reached RMB214,057 million,
+rising by 7.8% year on year, an increase of RMB15,461
+million from 2020. Gross investment yield was 4.98%,
+down by 32 basis points from 2020. Affected by the
+fluctuation in the equity market, the comprehensive
+investment yield² taking into account the current net fair
+value changes of available-for-sale securities recognized
+in other comprehensive income was 4.87%, down by 146
+basis points from 2020.
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the
+end of the previous year - Securities sold under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of
+the previous year + Investment assets at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative
+financial liabilities at the end of the period)/2)
+Net investment yield = (Net investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the end of the
+previous year - Securities sold under agreements to repurchase at the end of the previous year + Investment assets at the end of the period - Securities
+sold under agreements to repurchase at the end of the period)/2)
+2.
+1.
+Notes:
+5.30%
+4.98%
+Gross investment yield²
+4.34%
+4.38%
+Net investment yield¹
+(670)
+Net income from investment properties
+Investment income from cash and others
+Net income from fixed-maturity investments
+Net income from equity investments
+Comprehensive investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase + Current net fair value
+changes of available-for-sale securities recognised in other comprehensive income)/((Investment assets at the end of the previous year - Securities sold
+under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of the previous year + Investment assets
+at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative financial liabilities at the end of the
+period)/2)
+Gross investment income
+Total
+5.85%
+239,584
+5.47%
+257,953
+Investments in associates and joint ventures
+1.58%
+64,602
+4,716,401
+1.56%
+Cash and others5
+0.35%
+14,217
+0.28%
+13,374
+Investment properties
+Net investment income
+6.03%
+73,355
+100.00%
+5.76%
+100.00%
+2020
+2021
+4,095,491
+RMB million
+For the year ended 31 December
+Investment income
+27
+Annual Report 2021 | Management Discussion and Analysis
+from 13.32% as at the end of 2020, the percentage
+of investment in debt-type financial products changed
+to 9.41% from 11.08% as at the end of 2020, and the
+percentage of investment in stocks and funds (excluding
+money market funds) changed to 8.75% from 11.31% as
+at the end of 2020.
+As at the end of the Reporting Period, the Company's
+investment assets reached RMB4,716,401 million, an
+increase of 15.2% from the end of 2020. Among the
+major types of investments, the percentage of investment
+in bonds rose to 48.20% from 41.97% as at the end of
+2020, the percentage of term deposits changed to 11.23%
+236,330
+Other equity investments include private equity funds, unlisted equities, preference shares, equity investment plans and bank wealth management
+products, etc.
+5.
+4.
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money market funds as at 31 December 2021 and
+31 December 2020 were RMB1,961 million and RMB1,206 million, respectively.
+3.
+Other fixed-maturity investments include policy loans, statutory deposits-restricted, and interbank certificates of deposits, etc.
+Cash and others include cash, cash at banks, short-term deposits, and securities purchased under agreements to resell, etc.
+Notes:
+1. Debt-type financial products include debt investment schemes, trust schemes, project asset-backed plans, credit asset-backed securities, specialized
+asset management plans, and asset management products, etc.
+2.
+60%
+16,658
+14,324
+2,760
+3,400
+70.74%
+is held by
+the Company,
+5,889
+1,158
+and 3.53%
+is held by
+AMC
+18,800
+40%
+120,178
+25,422
+8,305
+4,000
+Shareholding
+Net Assets
+1,066,939
+China Life Asset
+402,341
+396,749
+253.70%
+260.10%
+262.41%
+268.92%
+Net Profit
+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.
+Sale of Material Assets and Equity
+During the Reporting Period, there was no sale of material
+assets and equity of the Company.
+Major Subsidiaries and Associates of the Company
+Company Name
+Major Business Scope
+RMB million
+Registered
+Capital
+Total Assets
+As at the end of the Reporting Period, the Company's
+comprehensive solvency ratio decreased by 6.51
+percentage points from the end of 2020, primarily due
+to the continuous growth of insurance business and
+investment assets, dividends payment, and a decline of
+discount rate in solvency reserve.
+30 Annual Report 2021 | Management Discussion and Analysis
+10
+China Life Pension
+Company Limited
+Intelligence upgrading, further enhancing technology
+empowerment. China Life "Internet of Things" covered
+all business units and scales outlets of the Company
+across China and technology services were accessible
+to the frontline. It fulfilled centralized management and
+control of 240,000 electronic appliances in 12 categories
+throughout the Company with the establishment of
+an online Digital Twin, and its service efficiency was
+improved by 70% compared with 2020. The "China
+Life 'Internet of Things' Edge Computing, Intelligent
+Perception and Digital Presentation" won the 2021
+FinTech and Digital Transformation Innovation award. The
+Company also comprehensively developed its intelligent
+services, with its intelligent robots serving in various
+business fields, such as sales, services, operations,
+finance, risk control, and among others. Its big data-
+empowered scenarios were increased by 84% compared
+with 2020 and the daily average intelligent services.
+reached more than 5 million person-times.
+Interactive traffic, constantly amplifying the digital
+ecological effects. The online socialized collaboration
+system, which seamlessly connected with mobile phones,
+desktops, large screens and various digital applications,
+comprehensively improved the communication and
+interaction experience of the customers, salespersons,
+and employees of the Company. The Company enriched
+its digital insurance ecosystem continuously, releasing
+3,256 standardized services in total on its digital platform,
+a year-on-year increase of 92%, launched nearly 1,000
+ecological applications, and carried out nearly 400,000
+services and activities with different cooperative
+institutions.
+Operations and Services
+In 2021, being customer-centric, the Company adhered
+to the operational objectives of "efficiency first,
+technology-driven, value increase and first-class customer
+experience", accelerated the transformation of operations
+and services to be more Internet-based and intelligent,
+and continued to provide customers with high-quality and
+"convenient, quality and caring" services. As a result,
+its customer experience continued to be improved and
+customer appraisal remained at a high level.
+Online services were growing rapidly. The Company
+upgraded various online service points of contact, with the
+registered users of China Life Insurance APP reaching 112
+million, a year-on-year increase of 21%, and the monthly
+average active users increasing by 18.1% year on year.
+The online processing rate of policy administration and
+claims settlement for individual insurance rose to 88.3%
+and 98.7%, respectively. More than 780 million electronic
+notification messages were sent, services provided by
+Online Customer Service Agent increased by nine folds
+year on year, and the average waiting time for customers
+over the counter was shortened significantly year on year.
+Intelligent service capacity was significantly
+enhanced. The Company upgraded and promoted its
+intelligent business models so that the service efficiency
+for new policies of long-term individual insurance was
+improved by 37.2% year on year, and the intelligent
+approval rates of underwriting, policy administration and
+claims settlement reached 93.4%, 99.1% and 73.1%,
+respectively. Application scenarios of Internet-based
+intelligent customer services were expanded, and services
+provided by intelligent robots reached over 75 million
+times. As the digital services were fully implemented,
+percentage of non-manual customer services in the
+contact center reached 88.9%.
+32 Annual Report 2021 | Management Discussion and Analysis
+Customer experience was further improved. Claims
+settlement services provided by the Company were
+efficient and warm. In 2021, "Direct Claims Payment"
+provided claims payments to over six million customers.
+"Claims Settlement for Critical Illness within One Day"
+benefited 170,000 customer-times, with payment amount
+up by 32.3% year on year. Door-to-door services were
+provided to more than 117,000 customers difficult to
+reaching the counters. Scenario-based services benefited
+various groups of customers. The Company also led the
+industry to launch the senior-friendly version of China
+Life App, and introduced several senior-oriented services,
+such as the "sit and wait" service over the counters. The
+Company carried out a variety of value-added services
+continuously, such as "Immunity Enhancement Program",
+"Little Painters of China Life" and "Customer Festival",
+etc., all themed on "health, parent-child education and
+enjoying life".
+FUTURE PROSPECT
+Industry Landscape and Development Trends
+Overall, the life insurance industry in China is still at
+an important stage full of strategic opportunities with
+the high-quality development as its key development
+theme. At present and in the near future, China's
+economy remains resilient, and the long-term positive
+economic fundamentals featuring ample development
+potential and room to maneuver will remain unchanged.
+With the promotion of common prosperity, the size of
+China's middle class will continue to grow, meaning
+more effective demands for the life insurance market.
+The consistent promotion of the Healthy China program
+and the national strategy of proactively responding
+to population aging will also provide broader space
+for the development of the industry. With market
+players speeding up their reform and transformation,
+the foundation for the high-quality development of the
+industry will be further consolidated. Meanwhile, the
+industry has witnessed continuous breakthroughs in
+technological innovations with the accelerated digital
+transformation of the industry. Technologies such as
+cloud computing, big data, artificial intelligence, and the
+"Internet of Things" has greatly empowered various
+aspects of the value chain, such as sales service,
+operation management, and risk prevention and control,
+etc. With domestic insurance industry consistently
+promoting its opening up, it will see more diversified
+industry players, and the market sophistication will be
+improved further.
+Development Strategies and Business Plans of
+the Company
+In 2022, the Company will uphold the guideline of making
+progress while maintaining stability and adhere to the
+original function of insurance, constantly deepen the
+supply-side reforms, give full play to the protection role
+of insurance, and continue to pursue the high-quality
+development of the Company by enhancing its capability of
+value creation, digital operations, innovation of insurance
+products and services as well as risk prevention and control.
+Potential Risks
+The internal and external environment has become more
+complex, challenging and uncertain since unprecedented
+global changes and the impact of the global pandemic
+continue to evolve. China's economy is facing triple
+pressures of shrinking demands, supply disruption, and
+weakened expectations of growth, which also bring
+challenges to the steady development of the insurance
+industry. As the impact of the COVID-19 pandemic still
+exists, various regions and cities have taken more stringent
+prevention and control measures, which have restricted
+the on-site marketing and training activities and will thus
+greatly affect business development and agent recruitment
+and management. Since the traditional sales force-driven
+business development mode has encountered difficulties,
+market players are actively seeking transformation by
+making unremitting efforts in adjusting business structure
+and improving the quality of the sales force, and the
+industry will be still under pressure in the short term.
+The Company will take a variety of measures to actively
+respond to such risks and challenges. It will adhere to the
+principle of making progress while maintaining stability,
+continue to push forward reform and transformation, and
+strive to improve the quality of its business operation
+and management. As to the capital market, with market
+interest rate trending downwards and the volatility in
+the equity market increasing, credit default events occur
+frequently and the investment income of insurance funds
+will be likely subject to higher fluctuation in the short
+term. The Company will continue to prioritize asset-
+liability management, deepen its research on specialized
+investment, further optimize its asset allocation mix
+and flexibly adjust its investment strategies to respond
+to market changes. Furthermore, the Company will
+continuously focus on and enhance the analysis of the
+related complex risk factors and make great stride in
+pursuing its high-quality development.
+The Company believes that it will have sufficient capital
+to meet its insurance business expenditures and new
+general investment needs in 2022. 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.
+Annual Report 2021 | Management Discussion and Analysis 33
+1,055,768
+Agile delivery, significantly enhancing the response
+to changes by technology. The Company widely
+implemented the tech products-based management
+system, and facilitated the comprehensive circulation
+of technology-based operations with a digital operation
+mechanism featuring full data and full chain tracing. More
+updated functions and services were launched at a high
+frequency, and technology products were iterated and
+optimized more than 40 times on a daily basis to quickly
+respond to market changes, offering more accurate and
+efficient services to customers.
+Technological innovation, leading to the upgrade of
+technology architecture as a whole. With the support
+of the strong computing power of China Life Hybrid Cloud
+and the openness and compatibility of the digital platform,
+the Company fulfilled the upgrade to a distributed
+architecture for all core systems, from computing,
+storage, database and middleware to application software.
+Its technology-supporting capacity realised a leap-forward
+development with the data processing capacity improved
+by 10 times and the elastic capacity scaling time of
+computing resources reduced to minute level.
+In 2021, the Company accelerated technological
+innovation, strengthened digital-driven operations,
+deepened technology-empowered value creation,
+continued to build a digital insurance ecosystem, and
+promoted the integration of technologies with business
+operations. The leading and supporting role of its
+technological innovation was continuously enhanced.
+Technology Empowerment
+China Life Property
+and Casualty
+Insurance Company
+Limited
+China Guangfa Bank
+Co., Ltd.
+Management and utilization of proprietary funds; acting as agent
+or trustee for asset management business; consulting business
+relevant to the above businesses; other asset management
+business permitted by applicable PRC laws and regulations
+Group pension insurance and annuity; individual pension insurance
+and annuity; short-term health insurance; accident insurance;
+reinsurance of the above insurance businesses; business for the
+use of insurance funds that are permitted by applicable PRC laws
+and regulations; pension insurance asset management product
+business; management of funds in RMB or foreign currency as
+entrusted by entrusting parties for the retirement benefit purpose;
+other businesses permitted by the CBIRC
+Property loss insurance; liability insurance; credit insurance
+and 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 CBIRC
+Taking public deposits; granting short-term, mid-term and long-
+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
+notarization businesses; other businesses approved by the CBIRC
+and other relevant authorities
+19,687
+43.686%
+Management
+Company Limited
+3,359,985
+17,476
+Note: For details, please refer to Note 9 and Note 41(d) in the Notes to the Consolidated Financial Statements in this annual report.
+Structured Entities Controlled by the Company
+Details of structured entities controlled by the Company is set out in the Note 41(d) to the Consolidated Financial
+Statements in this annual report.
+Annual Report 2021 | Management Discussion and Analysis
+31
+621
+TECHNOLOGY EMPOWERMENT AND
+OPERATIONS AND SERVICES
+234,501
+1,031,947
+Change
+2020
+572
+194.1%
+14,220
+22.7%
+During the Reporting Period, profit before income tax
+from the life insurance business decreased by 18.9%
+year on year. The change in investment yield, and the
+change in accrued cost of reserve as a result of business
+accumulation, etc., contributed to the above result
+comprehensively. Profit before income tax from the health
+insurance business decreased by 25.9% year on year due
+to an increase in claims expenses of certain insurance
+businesses. Profit before income tax from the accident
+insurance business increased by 194.1% due to business
+quality improvement. Profit before income tax from other
+businesses increased by 22.7%, primarily due to an
+increase in the profits of certain associates.
+Analysis of Cash Flows
+Liquidity sources
+The Company's cash inflows mainly come from insurance
+premiums, income from non-insurance contracts, interest
+income, dividends and bonus, and proceeds from sale
+and maturity of investment assets. The primary liquidity
+risks with respect to these cash inflows are the risk of
+surrender by contract holders and policyholders, as well as
+the risks of default by debtors, interest rate fluctuations
+and other market volatilities. The Company closely
+monitors and manages these risks.
+The Company's cash and bank deposits can provide it
+with a source of liquidity to meet normal cash outflows.
+As at the end of the Reporting Period, the balance of cash
+and cash equivalents was RMB60,440 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 RMB529,488 million.
+The Company's investment portfolio also provides it with
+a source of liquidity to meet unexpected cash outflows.
+It 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.
+Liquidity uses
+The Company's principal cash outflows primarily relate to
+the payables for the liabilities associated with its various
+life insurance, annuity, accident insurance and health
+insurance products, operating expenses, income taxes
+and dividends that may be declared and paid to its equity
+holders. Cash outflows arising from its insurance activities
+primarily relate to benefit payments under these insurance
+products, as well as payments for policy surrenders,
+withdrawals and policy loans.
+The Company believes that its sources of liquidity are
+sufficient to meet its current cash requirements.
+Annual Report 2021 | Management Discussion and Analysis 29
+Consolidated cash flows
+The Company established a cash flow testing system, and conducted regular tests to monitor the cash inflows and
+outflows under various scenarios and adjusted the asset portfolio accordingly to ensure sufficient sources of liquidity.
+For the year ended 31 December
+1,682
+17,443
+-25.9%
+11,611
+8,599
+The Company insisted on a prudent investment philosophy
+and carried out comprehensive risk management to
+prevent various investment risks. Based on a disciplined
+and scientific internal rating system and a multi-
+dimensional management mechanism of risk limits, the
+Company scrutinized credit profiles of targets and risk
+exposure concentration before investment in a prudent
+manner and carried out ongoing tracking after investment,
+effectively managing the credit risks through early
+ANALYSIS OF SPECIFIC ITEMS
+Profit before Income Tax
+For the year ended 31 December
+identification, early warning, and early disposal. Under a
+market environment where credit default events occurred
+frequently, no credit default event occurred for the
+Company in 2021.
+Major investments
+During the Reporting Period, there was no material equity
+investment or non-equity investment of the Company that
+is subject to disclosure requirements.
+RMB million
+Change
+RMB million
+Profit before income tax
+2021
+2020
+50,495
+54,476
+-7.3%
+22,771
+28,073
+-18.9%
+Life insurance business
+Health insurance business
+Accident insurance business
+Other businesses
+2021
+2020
+EMBEDDED VALUE
+-50.7%
+cash and cash equivalents
+Net increase in cash and
+cash quivalents
+3,785
+3,316
+14.1%
+Solvency Ratio
+(144)
+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
+Core capital
+Actual capital
+Minimum capital
+Core solvency ratio
+Comprehensive solvency ratio
+As at
+RMB million
+As at
+31 December
+2021
+31 December
+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:
+1,020,756
+(71)
+The needs for liquidity
+management
+Main Reasons for Change
+Net cash inflow/(outflow) from
+operating activities
+286,448
+304,019
+-5.8%
+The change of allocation in
+Net cash inflow/(outflow) from
+(393,731)
+Foreign exchange gains/(losses) on
+(292,799)
+investing activities
+securities at fair value through profit
+or loss
+The needs for investment
+management
+Net cash inflow/(outflow) from
+111,139
+(7,760)
+N/A
+financing activities
+34.5%
+BACKGROUND
+528,691
+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
+J
+Reflects dividends distributed to shareholders during 2021.
+Other miscellaneous items.
+Annual Report 2021 | Embedded Value
+SENSITIVITY RESULTS
+Sensitivity tests were performed using a range of alternative assumptions. In each of the sensitivity tests, only the
+assumption referred to was changed, with all other assumptions remaining unchanged. The results are summarized
+below:
+Sensitivity Results
+Value of In-Force
+Business after Cost
+of Required Capital
+RMB million
+Value of One year's
+Sales after Cost
+of Required Capital
+2.
+3.
+Base case scenario
+1. Risk discount rate +50bps
+Risk discount rate -50bps
+Investment return +50bps
+4. Investment return -50bps
+H Reflects the gains or losses due to changes in exchange rate.
+G Change in the market value adjustment from the beginning of year 2021 to 31 December 2021 and other adjustments.
+|
+Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
+(2,711)
+(7,614)
+38,575
+(173)
+(18,089)
+(2,471)
+1,203,008
+Notes: 1. Numbers may not be additive due to rounding.
+528,691
+2.
+B Reflects expected impact of covered business, and the expected return on investments supporting the 2021 opening net worth.
+C
+Value of one year's sales for the 12 months ended 31 December 2021.
+D
+Reflects the difference between actual operating experience in 2021 (including mortality, morbidity, lapse, and expenses etc.) and the
+assumptions.
+E
+Compares actual with expected investment returns during 2021.
+F
+Items B through J are explained below:
+(6,392)
+44,780
+42,688
+528,559
+43,925
+10. 10% decrease in lapse rates
+528,752
+45,661
+11. 10% increase in morbidity rates
+520,500
+42,717
+12. 10% decrease in morbidity rates
+537,058
+46,853
+13. Using 2020 EV appraisal assumptions
+527,279
+44,273
+14. Allowing for diversification in calculation of VIF
+574,225
+38 Annual Report 2021 | Embedded Value
+45,594
+532,101
+8. 10% decrease in mortality rate for non-annuity products
+and 10% increase in mortality rate for annuity products
+10% increase in lapse rates
+9.
+554,272
+47,042
+630,761
+53,202
+427,018
+36,362
+5.
+10% increase in expenses
+504,849
+522,276
+6.
+10% decrease in expenses
+535,107
+47,995
+7.
+10% increase in mortality rate for non-annuity products
+and 10% decrease in mortality rate for annuity products
+525,259
+43,970
+41,566
+44,780
+84,962
+1,072,140
+ITEM
+A Adjusted Net Worth
+B Value of In-Force Business before Cost of Required Capital
+C Cost of Required Capital
+D Value of In-Force Business after Cost of Required Capital (B + C)
+E Embedded Value (A + D)
+F Value of One Year's Sales before Cost of Required Capital
+G Cost of Required Capital
+H Value of One Year's Sales after Cost of Required Capital (F + G)
+Including: Value of One Year's Sales of Individual Agent Business Sector
+Note: Numbers may not be additive due to rounding.
+RMB million
+31 December
+31 December
+2021
+2020
+674,317
+568,587
+593,137
+The embedded value as at 31 December 2021, the value of one year's sales for the 12 months ended 31 December 2021,
+and the corresponding results as at 31 December 2020 are shown below:
+Components of Embedded Value and Value of One Year's Sales
+SUMMARY OF RESULTS
+35
+Annual Report 2021 | Embedded Value
+the assumptions used and hence the potential of the
+business. However, the information on embedded value
+and value of one year's sales should not be viewed as
+a substitute of financial measures under the relevant
+accounting basis. Investors should not make investment
+decisions based solely on embedded value information
+and the value of one year's sales.
+It is important to note that actuarial standards with respect
+to the calculation of embedded value are still evolving.
+There is still no universal standard which defines the
+form, calculation methodology or presentation format of
+the embedded value of an insurance company. Hence,
+differences in definition, methodology, assumptions,
+accounting basis and disclosures may cause inconsistency
+when comparing the results of different companies.
+Also, the calculation of embedded value and value of one
+year's sales involves substantial technical complexity
+and estimates can vary materially as key assumptions
+are changed. Therefore, special care is advised when
+interpreting embedded value results.
+The values shown below do not consider the future
+financial impact of transactions between the Company and
+CLIC, CLI, AMC, Pension Company, CLP&C, and etc.
+34 Annual Report 2021 | Embedded Value
+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:
+565,797
+Net assets, defined as assets less corresponding policy
+liabilities and other liabilities valued; and
+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") in November
+2016. Deloitte Consulting performed a review of China
+Life's embedded value. The review statement from
+Deloitte Consulting 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 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 10% per annum.
+Other operating assumptions such as mortality, morbidity,
+lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+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.
+(64,446)
+(62,244)
+503,553
+36 Annual Report 2021 | Embedded Value
+MOVEMENT ANALYSIS
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
+Analysis of Embedded Value Movement in 2021
+ITEM
+A Embedded Value at the Start of Year
+B Expected Return on Embedded Value
+C Value of New Business in the Period
+D Operating Experience Variance
+Note: 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.
+E Investment Experience Variance
+G Market Value and Other Adjustments
+H Exchange Gains or Losses
+Shareholder Dividend Distribution and Capital Changes
+|
+J
+Others
+K Embedded Value as at 31 December 2021 (sum A through J)
+RMB million
+F Methodology, Model and Assumption Changes
+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.
+48.1%
+41.6%
+42.2%
+1,203,008
+1,072,140
+50,474
+64,354
+(5,693)
+(5,981)
+44,780
+58,373
+47.9%
+42,945
+The new business margin of one year's sales of individual agent business sector for the 12 months ended 31 December
+2021 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
+31 December
+2021
+2020
+57,669
+37
+For the three years ending 31 December 2024, the annual
+caps on the contractual amount of assets newly entrusted
+by the Company to CLI for investment and management,
+as well as the annual caps on the 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 as follows:
+Framework Agreement between CLI and AMP
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB8,909.41 million,
+the redemption price and corresponding redemption fee
+for the redemption of fund products were RMB4,067.58
+million, the sales commission fee and client maintenance
+fee paid by AMP were RMB1.39 million, the management
+fee (including the performance-based fee) paid by the
+Company for the asset management for specific clients
+was RMB65.84 million, and the fees for other daily
+transactions were RMB1.28 million.
+44 Annual Report 2021 | Significant Events
+Framework Agreement between CLIC and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLIC and AMP entered into the
+2020-2022 framework agreement on 6 September 2019,
+with a term of three years from 1 January 2020 to 31
+December 2022. Pursuant to the agreement, CLIC and
+AMP will continue to conduct certain daily transactions,
+including the subscription and redemption 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 the three years
+ending 31 December 2022, the annual cap of the
+subscription price and corresponding subscription fee
+for the subscription of fund products is RMB10,000
+million; the annual cap of the redemption price and
+corresponding redemption fee for the redemption of fund
+products is RMB10,000 million; and the annual cap of
+the management fee (including the performance-based
+fee) payable by CLIC for the private asset management is
+RMB100 million.
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB0 million, the
+redemption price and corresponding redemption fee for
+the redemption of fund products were RMB101.40 million,
+and the management fee (including the performance-
+based fee) paid by CLIC for the private asset management
+was RMB26.37 million.
+Framework Agreement between CLP&C and AMP
+Framework Agreement between the Company and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, the Company and AMP entered into
+the 2020-2022 framework agreement on 31 December
+2019, with a term of three years from 1 January 2020
+to 31 December 2022. Pursuant to the agreement, the
+Company and AMP will continue to conduct certain daily
+transactions, including the subscription and redemption of
+fund products, sales agency services, asset management
+for specific clients and other daily transactions permitted
+by laws and regulations. Pricing of the transactions
+under the agreement shall be determined by the parties
+through arm's length negotiations with reference
+to industry practices. For the three years ending 31
+December 2022, the annual cap of the subscription price
+and corresponding subscription fee for the subscription
+of fund products is RMB72,600 million; the annual cap
+of the redemption price and corresponding redemption
+fee for the redemption of fund products is RMB72,600
+million; the annual caps of the sales commission fee and
+client maintenance fee payable by AMP are RMB700
+million, RMB800 million and RMB900 million, respectively;
+the annual caps of the management fee (including the
+performance-based fee) payable by the Company for
+the asset management for specific clients are RMB300
+million, RMB400 million and RMB500 million, respectively;
+and the annual cap of the fees for other daily transactions
+is RMB100 million.
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLP&C and AMP entered into the
+2020-2022 framework agreement on 3 December 2019,
+with a term of three years from 1 January 2020 to 31
+December 2022. Pursuant to the agreement, CLP&C and
+AMP will continue to conduct certain daily transactions,
+including the subscription and redemption of fund
+products, asset management for specific clients and other
+daily transactions permitted by laws and regulations.
+Pricing of the transactions under the agreement shall
+be determined by the parties through arm's length
+negotiations with reference to industry practices. For the
+three years ending 31 December 2022, the annual cap of
+the subscription price for the fund products is RMB10,000
+million; the annual cap of the redemption price for the
+fund products is RMB10,000 million; the annual cap of the
+subscription fee for the fund products is RMB100 million;
+For the year ended 31 December 2021, the subscription
+price for the fund products was RMBO million, the
+redemption price for the fund products was RMBO
+million, the subscription fee for the fund products was
+RMBO million, the redemption fee for the fund products
+was RMBO million, the management fee (including the
+performance-based fee) paid by CLP&C for the asset
+management for specific clients was RMB15.75 million,
+and the fees for other daily transactions were RMB0.13
+million.
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLI and AMP entered into the 2020-
+2022 framework agreement on 17 February 2020, with a
+term of three years from 1 January 2020 to 31 December
+2022. Pursuant to the agreement, CLI and AMP will
+continue to conduct certain daily transactions, including
+the subscription and redemption of fund products, asset
+management for specific clients, advisory services and
+other daily transactions permitted by laws and regulations.
+Pricing of the transactions under the agreement shall
+be determined by the parties through arm's length
+negotiations with reference to industry practices. For the
+three years ending 31 December 2022, the annual cap
+of the subscription price and corresponding subscription
+fee for the subscription of fund products is RMB10,000
+million; the annual cap of the redemption price and
+corresponding redemption fee for the redemption of
+fund products is RMB10,000 million; the annual cap of
+the management fee (including the performance-based
+fee) payable by CLI and its subsidiaries for the asset
+management for specific clients is RMB150 million;
+the annual cap of the management fee (including the
+performance-based fee) payable by the subsidiaries
+of AMP for the asset management for specific clients
+is RMB150 million; the annual cap of the advisory fee
+payable by CLI and its subsidiaries for the advisory
+services is RMB150 million; the annual cap of the advisory
+fee payable by AMP and its subsidiaries for the advisory
+services is RMB150 million; and the annual cap of the fees
+for other daily transactions is RMB150 million.
+Annual Report 2021 | Significant Events
+45
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB2,832.27 million,
+the redemption price and corresponding redemption fee
+for the redemption of fund products were RMB3,466.89
+million, the management fee (including the performance-
+based fee) paid by CLI and its subsidiaries for the asset
+management for specific clients was RMB0 million, the
+management fee (including the performance-based fee)
+paid by the subsidiaries of AMP for the asset management
+for specific clients was RMB0 million; the advisory fee
+paid by CLI and its subsidiaries for the advisory services
+was RMBO million; the advisory fee paid by AMP and its
+subsidiaries for the advisory services was RMBO million,
+and the fees for other daily transactions were RMB3.50
+million.
+Framework Agreement between the Company
+and Chongqing Trust
+the annual cap of the redemption fee for the fund products
+is RMB100 million; the annual cap of the management fee
+(including the performance-based fee) payable by CLP&C
+for the asset management for specific clients is RMB100
+million; and the annual cap of the fees for other daily
+transactions is RMB100 million.
+The Company and Chongqing Trust entered into the 2020-
+2022 framework agreement on 27 December 2019, with a
+term of three years from 1 January 2020 to 31 December
+2022. Pursuant to the agreement, the Company and
+Chongqing Trust will continue to conduct the subscription
+and redemption of trust 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 industry practices. For the three years ending
+31 December 2022, the annual cap of the total amount
+of subscription and redemption of the trust products
+is RMB30,000 million; the annual cap of the trustee's
+remuneration is RMB500 million; and the annual cap of the
+fees for other daily transactions is RMB100 million.
+Framework Agreements with AMP
+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.
+Unless a party serves the other party a written notice
+for non-renewal within 30 days before the expiration
+of the 2021 insurance sales framework agreement, the
+agreement will be automatically extended for one year
+from the expiration thereof to 7 March 2024. Pursuant to
+the agreement, CLP&C will entrust the Company to act
+as an agent to sell selected insurance products within
+the authorized regions, and pay an agency service fee to
+the Company in consideration of the services provided.
+For details as to the method of calculation of the agency
+service fee, please refer to Note 35 in the Notes to the
+Consolidated Financial Statements. The annual caps for
+the three years ending 31 December 2023 are RMB3,500
+million, RMB3,830 million and RMB4,240 million,
+respectively.
+65,000
+65,000
+65,000
+Fees for the Investment and
+Management Services and
+the Entrusted Operation Fee
+(RMB million or its
+equivalent in foreign currency)
+2,000
+2,000
+Annual Report 2021 | Significant Events
+For the year ended 31 December 2021, CLP&C paid the
+Company an agency service fee of RMB1,541.99 million.
+For the year ended 31 December 2021, the investment
+management service fee, floating management fee,
+performance-based bonus and real estate operation
+management service fee paid by the Company to CLI
+amounted to RMB587.63 million, and the contractual
+amount of assets newly entrusted by the Company to
+Annual Report 2021 | Significant Events
+43
+Cooperation Framework Agreement for Investment
+Management with Insurance Funds between the
+Company and China Life Capital
+The Company and China Life Capital entered into the
+2020-2022 framework agreement on 31 December 2019,
+with a term from 1 January 2020 to 31 December 2022.
+Pursuant to the agreement, the Company will continue
+to subscribe in the capacity of the limited partner for
+the fund products of which China Life Capital or any of
+its subsidiaries serves (individually and jointly with third
+parties) as the general partner, and/or the fund products of
+which China Life Capital serves as the manager (including
+the fund manager and co-manager). For the three years
+ending 31 December 2022, 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 RMB200 million.
+For the year ended 31 December 2021, 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 RMB136.31 million.
+Insurance Sales Framework Agreement
+CLI for investment and management was RMB23,326.50
+million. For the year ended 31 December 2021, the
+amount for the subscription of the related financial
+products established and issued by CLI or of which CLI
+had participated in the establishment and issuance was
+RMB23,326.50 million.
+Contractual Amount of
+Assets Newly Entrusted for
+Investment and Management
+during the Period
+(RMB million or its
+equivalent in foreign currency)
+For the year ended 31 December 2021, the total amount
+of subscription and redemption of the trust products was
+RMB2,266.63 million, the trustee's remuneration was
+RMB16.47 million, and the fees for other daily transactions
+were RMB0 million.
+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:
+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.
+MATERIAL CONTRACTS AND THEIR
+PERFORMANCE
+47
+Annual Report 2021 | Significant Events
+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 neither gave external guarantees nor
+provided guarantees to its holding subsidiaries during the
+Reporting Period.
+The Company has complied with the disclosure
+requirement under Chapter 14A of the Listing Rules in
+respect of the above one-off connected transactions.
+INDEPENDENT ACTUARIES REVIEW
+OPINION REPORT ON EMBEDDED
+VALUE OF CHINA LIFE INSURANCE
+COMPANY LIMITED
+As approved at the fifth meeting of the seventh session of
+the Board of Directors, the Company signed a subscription
+letter on 27 December 2021 for the subscription of "China
+Life Chengxin No. 1 Asset-backed Plan" ("Asset-back
+Plan") with an amount of RMB1,999,845,375. The Asset-
+back Plan was established by AMC as the manager/trustee
+of the plan, and the proceeds from the Asset-backed Plan
+will be used for the acquisition from Chongqing Trust
+of the creditor's rights on the trust units in Phase II of
+"Chongqing Trust - XCMG Assembled Funds Trust Plan".
+The trust plan, with a total size of RMB2,000,000,000 and
+an interest rate of 4.75% per annum, was established
+on 13 May 2020 and will expire on 13 May 2025. As at
+27 December 2021, the sum of the outstanding principal
+under such trust plan and its accrued and undistributed
+interests amounted to RMB1,999,845,375.
+Acquisition of Creditor's Rights on Trust Loan
+through Asset-backed Plan
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company and CLP&C
+intend to contribute no more than RMB2,400,000,000
+and RMB600,000,000, respectively, to CLI - Xindian No.
+1 Equity Investment Plan ("Xindian EIP") established by
+CLI and enter into an entrustment contract with CLI by 31
+December 2022 for such purpose. All funds under Xindian
+EIP will be used for the subscription of limited partnership
+interest in Beijing Xindian No. 1 Equity Investment Fund
+Partnership (Limited Partnership)("Xindian Partnership").
+CLI will, on behalf of Xindian EIP and as a limited partner,
+enter into a partnership agreement with Guangzhou
+Jinhong (as the general partner) and China Huadian
+Corporation Ltd. (as a limited partner). The total capital
+contribution by all partners of Xindian Partnership shall
+be RMB6,001,000,000. China Life Jinshi will serve as the
+manager of Xindian Partnership. Xindian Partnership will
+primarily invest in equity interests of unlisted enterprises
+in the clean energy sectors such as wind power,
+photovoltaic power and energy storage.
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company and CLI entered
+into an entrustment contract on 11 January 2022,
+pursuant to which the Company will contribute no more
+than RMB1,500,000,000 to CLI - Xinyuan No. 1 Equity
+Investment Plan ("Xinyuan EIP") established by CLI. All
+funds under Xinyuan EIP will be used for the subscription
+of limited partnership interest in Beijing Xinyuan No. 1
+Equity Investment Fund Partnership (Limited Partnership)
+("Xinyuan Partnership"). CLI will, on behalf of Xinyuan
+EIP and as a limited partner, enter into a partnership
+agreement with Guangzhou Jinhong Asset Management
+Co., Ltd. ("Guangzhou Jinhong") and National Energy
+(Beijing) Private Equity Fund Management Co., Ltd.
+(each as a general partner), and Beijing Guoneng
+Green and Low-Carbon Development Investment Fund
+(Limited Partnership) and China Longyuan Power Group
+Corporation Limited (each as a limited partner). The total
+capital contribution by all partners of Xinyuan Partnership
+shall be RMB3,002,000,000. China Life Jinshi Asset
+Management Company Limited ("China Life Jinshi") will
+serve as the manager of Xinyuan Partnership. Xinyuan
+Partnership will primarily invest in green and low-carbon
+investment targets (such as wind power, photovoltaic
+power, energy storage and other clean energy projects).
+Investment in Partnerships through Equity
+Investment Plans
+Each of CLP&C, CLCD, CLEI, CLI, Guangzhou Jinhong,
+China Life Jinshi and Chongqing Trust 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.
+Confirmation by Auditor
+Entrusted investment management during the Reporting
+Period or any 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, CLI and its subsidiaries and Pension
+Company. 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 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.
+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
+1. nothing has come to the auditors' attention that
+causes them to believe that the disclosed continuing
+connected transactions have not been approved by the
+Company's Board of Directors;
+2. for transactions involving the provision of goods or
+services by the Company, nothing has come to the
+auditors' attention that causes them to believe that
+the transactions were not, in all material respects, in
+accordance with the pricing policies of the Company;
+3. nothing has come to the auditors' attention that causes
+them to believe that the transactions were not entered
+into, in all material respects, in accordance with the
+relevant agreements governing such transactions; and
+4. nothing has come to the auditors' attention that causes
+them to believe that the amounts of the continuing
+connected transactions have exceeded the total
+amount of the annual caps set by the Company.
+Confirmation by Independent Directors
+The Company's Independent Directors have reviewed
+the above continuing connected transactions which
+were subject to the reporting, announcement and/or
+independent shareholders' approval requirements, and
+confirmed that:
+1. the transactions were entered into in the ordinary and
+usual course of business of the Company;
+2. the transactions were conducted on normal
+commercial terms;
+3. the transactions were entered into in accordance with
+the agreements governing those continuing connected
+transactions, and the terms are fair and reasonable and
+in the interests of shareholders of the Company as a
+whole; and
+Except as otherwise disclosed in this report, the Company
+had no other material contracts during the Reporting
+Period.
+4. the amounts of the above transactions have not
+exceeded the relevant annual caps.
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company, CLP&C and
+Wuxi Fengrun Investment Co., Ltd. (each as a limited
+partner) entered into a partnership agreement with China
+Life Chengda (Shanghai) Healthcare Equity Investment
+Management Company Limited ("CLCD", as the general
+partner) and Chengda Fengzhi (Shanghai) Corporate
+Management Center (Limited Partnership) (as the special
+limited partner) on 31 December 2021 for the formation
+of China Life Chengda (Wuxi) Equity Investment Center
+(Limited Partnership)(the "Partnership"). The total capital
+contribution by all partners of the Partnership shall be
+RMB10,000,000,000, of which RMB7,500,000,000
+shall be contributed by the Company. China Life Equity
+Investment Company Limited ("CLEI") will serve as the
+manager of the Partnership. The Partnership will have
+a term of eight years, and will primarily make direct
+or indirect investment in private equity projects in the
+medical health and technological innovation sectors.
+Annual Report 2021 | Significant Events
+48
+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.
+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.
+Other Major Connected Transaction
+Formation of China Life Chengda (Wuxi) Equity
+Investment Center (Limited Partnership)
+For the year ending 31 December 2022
+For the year ending 31 December 2023
+For the year ending 31 December 2024
+2,000
+service fee and performance award in respect of the
+investment and management services provided by CLI to
+the Company. For the entrusted operation, CLI will 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 will pay CLI the entrusted
+operating fee in this regard. Such agreement took effect
+from 1 January 2022, with a term of two years ending on
+31 December 2023. Unless a party serves the other party
+a written notice for non-renewal prior to 90 working days
+before the expiry date of the agreement, the agreement
+will be automatically renewed for one year from the expiry
+date thereof.
+The economic assumptions used by China Life have
+taken into account the current investment market
+conditions and the investment strategy of China Life;
+The operating assumptions used by China Life have
+taken into account the past experience and the
+expectation of future experience; and
+• The embedded value results are consistent with its
+methodology and assumptions used. The overall result
+is reasonable.
+For and on behalf of
+Deloitte Consulting (Shanghai) Co., Ltd.
+Eric Lu
+Yu Jiang
+24 March 2022
+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;
+Annual Report 2021 | Embedded Value
+SIGNIFICANT
+EVENTS
+During the Reporting Period, the Company was not
+involved in any material litigation or arbitration.
+MAJOR CONNECTED TRANSACTIONS
+Continuing Connected Transactions
+During the Reporting Period, the following continuing
+connected transactions were carried out by the Company
+pursuant to Rule 14A.76(2) of the Rules Governing the
+Listing of Securities on the HKSE (the "Listing Rules"),
+including the asset management agreement between
+the Company and AMC, the insurance sales framework
+agreement between the Company and CLP&C, the
+framework agreement between the Company and
+Chongqing International Trust Inc. ("Chongqing Trust"),
+and the framework agreement between the Company
+and China Life Capital. These continuing connected
+transactions were subject to the reporting, announcement
+and annual review requirements but were exempt from
+the independent shareholders' approval requirement
+under the Listing Rules. CLIC, the controlling shareholder
+of the Company, holds 60% of the equity interest in
+CLP&C and 100% of the equity interest in China Life
+Capital. Therefore, each of CLIC, CLP&C 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. 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 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, CLIC, CLP&C and CLI, respectively, and the
+asset management agreement for alternative investments
+between the Company and CLI. Such agreements and
+the transactions thereunder have been approved by the
+independent shareholders of the Company. CLIC holds
+100% of the equity interest in CLI. Therefore, CLI is a
+connected person of the Company. AMP is a subsidiary
+of AMC, and is therefore a connected subsidiary of the
+Company.
+39
+40
+•
+Opinion
+China Life Insurance Company Limited ("China Life").
+has prepared embedded value results as at 31 December
+2021 ("EV Results"). The disclosure of these EV Results,
+together with a description of the methodology and
+assumptions that have been used, are shown in the
+Embedded Value section.
+China Life has 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").
+Scope of work
+Our scope of work covered:
+•
+•
+Based on the scope of work above, we have concluded
+that:
+•
+a review of the economic and operating assumptions
+used to develop embedded value and value of one
+year's sales as at 31 December 2021; and
+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
+2020 to 31 December 2021, and the sensitivity results
+of value of in-force business and value of one year's
+sales.
+Basis of Opinion, Reliance and Limitation
+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.
+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.
+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.
+a review of the methodology used to develop the
+embedded value and value of one year's sales as at
+31 December 2021, in accordance with the "CAA
+Standards of Actuarial Practice: Appraisal of Embedded
+Value", issued by the China Association of Actuaries
+("CAA");
+Annual Report 2021 | Significant Events
+MATERIAL LITIGATIONS OR
+ARBITRATIONS
+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.
+development and the revised structure of service fees.
+Pursuant to the 2020-2022 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 35 in the Notes to the Consolidated
+Financial Statements. The annual cap for the three years
+ending 31 December 2022 is RMB500 million.
+For the year ended 31 December 2021, CLIC paid AMC a
+service fee of RMB156.45 million.
+Asset Management Agreement for Alternative
+Investments between the Company and CLI
+As approved by the 2017 Annual General Meeting of the
+Company, the Company and CLI entered into the 2019
+asset management agreement for alternative investments
+on 31 December 2018. Such agreement took effect
+from 1 January 2019 and expired on 31 December 2021.
+Pursuant to the agreement, CLI agreed to invest and
+manage assets entrusted to it by the Company (including
+equity, real estate, related financial products and quasi-
+securitization financial products), on a discretionary basis,
+within the scope of utilization of insurance funds as
+specified by regulatory authorities and in accordance with
+the requirements of applicable laws and regulations and
+the investment guidelines given by the Company, and the
+Company agreed to pay CLI the investment management
+service fee, floating management fee, performance-based
+bonus and real estate operation management service fee
+in respect of the investment and management services
+provided by CLI to the Company. For details as to the
+method of calculation of the investment management
+service fee, floating management fee, performance-based
+bonus and real estate operation management service fee,
+please refer to Note 35 in the Notes to the Consolidated
+Financial Statements. In addition, the assets entrusted by
+the Company to CLI would also be partially used for the
+subscription of the related financial products established
+and issued by CLI or of which CLI had participated in the
+establishment and issuance, and such related financial
+products would be limited to infrastructure investment
+schemes and project asset-backed schemes.
+For the three years ended 31 December 2021, the
+annual caps on the contractual amount of assets newly
+entrusted by the Company to CLI for investment and
+management, as well as the annual caps on the amount
+of the investment management service fee, floating
+management fee, performance-based bonus and real
+estate operation management service fee payable by the
+Company to CLI are as follows:
+For the year ended
+31 December 2019
+For the year ended
+31 December 2020
+For the year ended
+Amount of Assets Newly
+Entrusted for Investment and
+Management during the Period
+(including the Amount
+for Subscription of the Related
+Financial Products)
+(RMB million or its
+equivalent in foreign currency)
+200,000
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+Amount of the Investment
+Management Service Fee,
+Floating Management Fee,
+Performance-based Bonus
+and Real Estate Operation
+Management Service Fee
+(RMB million or its
+equivalent in foreign currency)
+1,391
+1,982
+2,266
+31 December 2021
+(including the amount for the subscription
+of the related financial products: 100,000)
+42
+Annual Report 2021 | Significant Events
+As approved by the 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 on
+27 December 2021. Pursuant to the agreement, the
+Company will 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 covers
+the equity/real estate direct investments, equity/real
+estate funds, non-standard financial products and quasi-
+securitization 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-securitization financial products
+entrusted for investment under the new projects. CLI will
+continue to 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 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
+41
+Annual Report 2021 | Significant Events
+46
+Policy Management Agreement
+The Company and CLIC entered into the 2021 policy
+management agreement on 31 December 2020, with
+a term from 1 January 2021 to 31 December 2021.
+Pursuant to the agreement, the Company accepted CLIC's
+entrustment to provide policy administration services
+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 35 in the Notes to the Consolidated Financial
+Statements. The annual cap in respect of the service.
+fee paid by CLIC to the Company for the year ended 31
+December 2021 was RMB599 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 continue to accept CLIC's
+entrustment to provide policy administration services
+relating to the non-transferred policies. 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.
+For the year ended 31 December 2021, the service fee
+paid by CLIC to the Company amounted to RMB553.66
+million.
+Asset Management Agreements
+Asset Management Agreement between the Company
+and AMC
+The Company and AMC entered into the 2019-2021
+asset management agreement on 28 December 2018,
+with a term from 1 January 2019 to 31 December 2021.
+In order to optimize the structure of service fees and
+further enhance the performance incentives for AMC,
+the Company and AMC entered into the 2020-2022
+asset management agreement on 1 July 2020 to replace
+the 2019-2021 asset management agreement, and to
+revise the annual caps in light of the needs for business
+development and the revised structure of service fees.
+Pursuant to the 2020-2022 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 35 in the Notes to the
+Consolidated Financial Statements. The annual caps for
+the three years ending 31 December 2022 are RMB3,000
+million, RMB4,000 million and RMB 5,000 million,
+respectively.
+For the year ended 31 December 2021, the Company paid
+AMC a service fee of RMB2,741.56 million.
+Asset Management Agreement between CLIC and AMC
+CLIC and AMC entered into the 2019-2021 asset
+management agreement on 29 December 2018, with an
+entrustment term from 1 January 2019 to 31 December
+2021. In order to optimize the structure of service fees
+and further enhance the performance incentives for
+AMC, CLIC and AMC entered into the 2020-2022 asset
+management agreement on 1 July 2020 to replace
+the 2019-2021 asset management agreement, and to
+revise the annual caps in light of the needs for business
+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.
+INFORMATION OF TAX DEDUCTION FOR
+MATERIAL TRANSACTIONS, ARRANGEMENTS
+OR CONTRACTS
+INTERESTS OF DIRECTORS AND SUPERVISORS
+(AND THEIR CONNECTED ENTITIES) IN
+Annual Report 2021 | Corporate Governance
+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
+I can only be terminated by the Company with payment of
+compensation (other than statutory compensation).
+DIRECTORS' AND SUPERVISORS' SERVICE
+CONTRACTS
+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.
+No H Share stock appreciation rights of the Company were
+granted or exercised in 2021. The Company will deal with
+such rights and related matters in accordance with the
+PRC national policies.
+H SHARE STOCK APPRECIATION RIGHTS
+During the Reporting Period, the Company and its
+subsidiaries did not purchase, sell or redeem any of the
+Company's listed securities.
+PURCHASE, SALE OR REDEMPTION OF THE
+COMPANY'S 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 9 July 2021 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 30 June 2021 for the information on
+income tax in respect of the dividend distributed to H Share
+shareholders during the Reporting Period.
+HOLDERS OF LISTED SECURITIES
+57
+Details of the movement in share capital of the Company
+are set out in Note 36 in the Notes to the Consolidated
+Financial Statements in this annual report.
+CHANGES IN ACCOUNTING ESTIMATES
+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.
+In accordance with Article 217 of the Articles
+of Association, the basic principles of the
+Company's profit distribution are as follows:
+FORMULATION AND IMPLEMENTATION OF
+PROFIT DISTRIBUTION POLICY
+For information such as the environmental policies and
+performance of the Company during the Reporting Period,
+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 ESG Report 2021
+separately disclosed by the Company on the website of
+the SSE (www.sse.com.cn) and the HKExnews website
+of the Hong Kong Exchanges and Clearing Limited
+(www.hkexnews.hk).
+Annual Report 2021 | Corporate Governance 55
+For details regarding the Company's employees (including
+the number of employees, composition of professionals,
+educational levels, remuneration policy and training
+program), please refer to the section headed "Directors,
+Supervisors, Senior Management and Employees" in this
+annual report.
+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
+2021, the Company held four extraordinary employee
+representative meetings, during which the "Report on
+the Candidates for Employee Representative Supervisors
+of the Seventh Session of the Board of Supervisors", the
+"Provisional Measures of China Life Insurance Company
+Limited for the Responsibility Attribution of Directors,
+Supervisors and Senior Management", the "Enterprise
+Annuity Plan of China Life Insurance (Group) Company",
+the "Implementing Rules for the Enterprise Annuity Plan
+of China Life Insurance Company Limited", the "Report
+on the Candidates for Additional Employee Representative
+Supervisors of the Seventh Session of the Board of
+Supervisors", the "Measures for the Administration of
+Remuneration of Senior Management of Branches of
+China Life Insurance Company Limited", the "Measures
+for the Administration of Remuneration of Employees of
+Branches of China Life Insurance Company Limited" and
+the "Measures for the Administration of Fringe Benefits of
+Branches of China Life Insurance Company Limited" were
+considered and approved.
+development to apply education and training in the entire
+process of growth of cadre 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 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 team management mechanism with the
+characteristics of focus on basic level, combination
+of training and working of employees, hierarchical
+responsibility and unified regulation; 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 local level, and was compatible with the high-
+quality development requirements of the Company. The
+Company also emphasized on the growth and cultivation
+of employees by stepping up its effort on the development
+of training system for employees, pursued innovation for
+Relationship between the Company and its
+employees
+Please also refer to the "Technology Empowerment
+and Operations and Services" in the section headed
+"Management Discussion and Analysis" in this annual
+report and Part Two of the ESG Report 2021 separately
+disclosed by the Company.
+The Company attached great importance to the protection
+of consumers' rights and interests, improved the top-level
+design for facilitating the establishment of systems and
+mechanism, and developed a multi-dimensional mechanism
+for protection of consumers' rights and interests covering
+product and service review, internal assessment,
+information disclosure, complaint management, promotion
+and education of financial knowledge and emergency
+response, etc., which integrated the protection of
+consumers' rights and interests into every aspect of
+corporate governance and business operation and
+management. In 2021, the Company carried out over
+40,000 educational and promotion activities in connection
+with the protection of consumers' rights and interests, with
+the cumulative number of participants reaching 150 million.
+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.
+Relationship between the Company and its
+customers
+54 Annual Report 2021 | Corporate Governance
+On 30 December 2021, the CBIRC issued the "Regulatory Rules for the Solvency of Insurance Companies (II)", which were implemented on 1 January
+2022. The former "Regulatory Rules for the Solvency of Insurance Companies" were abolished simultaneously.
+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.
+3
+1. 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;
+2. The Company shall maintain a sustainable and steady
+profit distribution policy and at the same time take
+into consideration the Company's long-term interest,
+general interest of all the shareholders and the
+sustainable development of the Company;
+3. The Company shall give priority to cash dividends as its
+profit distribution manner.
+In accordance with Article 218 of the Articles of
+Association, the Company's profit distribution
+policy is as follows:
+PROPERTY, PLANT AND EQUIPMENT
+The total amount of charitable donations made by the
+Company during the Reporting Period was approximately
+RMB218.88 million.
+CHARITABLE DONATIONS
+Details of the reserves of the Company are set out in Note
+37 in the Notes to the Consolidated Financial Statements
+in this annual report.
+RESERVES
+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.
+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 capitalization is provided for in the profit
+distribution plan for the year.
+SHARE CAPITAL
+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.
+In accordance with the profit distribution plan for the
+year 2021 approved by the Board on 24 March 2022,
+with the appropriation to its discretionary surplus reserve
+fund of RMB5,096 million (10% of the net profit for
+2021), the Company, based on 28,264,705,000 shares in
+issue, proposed to distribute cash dividends amounting
+to approximately RMB18,372 million (representing
+36% of the net profit attributable to equity holders of
+the Company in the consolidated statements) to all
+shareholders of the Company at RMB0.65 per share
+(inclusive of tax). The foregoing profit distribution plan
+is subject to the approval by the 2021 Annual General
+Meeting. 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
+Profit distribution plan and public reserves
+capitalization plan for the year 2021
+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
+I give timely reply to concerns of small- and medium-sized
+shareholders.
+In accordance with Article 219 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 CBIRC may adopt regulatory measures against
+the Company due to its failure to meet the minimum
+requirements, which may restrict the Company's ability to
+distribute dividends to its shareholders.
+3. Conditions for distribution of share dividends: If
+the Company's operation is sound and the Board
+of Directors is of the opinion that share dividends
+distribution is in the interest of all the Company's
+shareholders since the Company's stock price does
+not match the Company's share capital, the Company
+may propose a share dividends distribution plan if the
+conditions for cash dividends listed above are satisfied.
+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;
+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;
+56 Annual Report 2021 | Corporate Governance
+DIRECTORS' AND SUPERVISORS' RIGHTS TO
+ACQUIRE SHARES
+CORPORATE
+GOVERNANCE
+DISCLOSURE OF INTERESTS OF DIRECTORS,
+SUPERVISORS AND THE CHIEF EXECUTIVE IN
+THE SHARES OF THE COMPANY
+Notes:
+Tang Xin
+INDEPENDENT
+DIRECTORS
+(resigned on 15 January 2021 due to the adjustment of
+work arrangements)
+(resigned on 7 February 2021 due to the adjustment of
+work arrangements)
+Yin Zhaojun
+Yuan Changqing
+Wang Junhui
+Liu Huimin
+NON-EXECUTIVE
+DIRECTORS
+(appointed on 1 July 2021)
+Su Hengxuan
+Li Mingguang
+Huang Xiumei
+EXECUTIVE
+DIRECTORS
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+REPORT OF THE BOARD OF DIRECTORS
+the "Provisions on the Administration of Insurance
+Companies", the "Provisions of the China Banking and
+Insurance Regulatory Commission on Administrative
+Licensing Procedures", the "Measures of the China
+Banking and Insurance Regulatory Commission on
+Administrative Punishment", the "Provisions on the
+Supervision and Administration of Insurance Agents",
+the "Standards for the Corporate Governance of Banking
+and Insurance Institutions", the "Provisions on the
+Administration of Solvency of Insurance Companies",
+the "Regulatory Rules for the Solvency of Insurance
+Companies", the "Provisions on the Administration
+of Reinsurance Business", the "Measures for the
+Administration of Licenses of Banking and Insurance
+Institutions", the "Measures for Oversight of Online
+Insurance Business", the "Notice of the General Office of
+the China Banking and Insurance Regulatory Commission
+on Further Regulating Matters Related to the Online
+Personal Insurance Business of Insurance Institutions",
+the “Notice of the General Office of the China Banking
+and Insurance Regulatory Commission on Regulating
+Issues Related to Short-term Health Insurance Business",
+the "Measures for the Supervision and Administration
+of Accident Insurance Business", the "Measures for the
+Regulatory Evaluation of Consumers' Rights and Interests
+Protection of Banking and Insurance Institutions" and
+the "Measures for the Administration of the Handling.
+of Banking and Insurance Consumer Complaints",
+consistently made improvement to its systems and
+mechanism, and implemented the spirit and requirements
+of major regulatory documents on product development
+and design, sales management, solvency management,
+reinsurance management, investment supervision and
+corporate governance, etc., as released by the CBIRC
+in a stringent manner for the purpose of further carrying
+out compliance management responsibilities at all levels
+and in various lines. The Company consistently improved.
+the compliance management framework of "three lines
+of defense" to ensure that the three lines of defense
+performed their own functions and collaborated with
+each other, which formed a joint force in compliance
+management. The Company also consolidated its
+foundation in all aspects for its steady and healthy
+development and firmly defended the bottom line of the
+systematic risk, which guaranteed the healthy and high-
+quality development of the Company on an ongoing basis.
+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 corporate governance and commits
+to the best practices of corporate governance, so
+as to further improve governance structure and
+effectiveness.
+GOVERNANCE
+PRACTICING THE
+BEST CORPORATE
+Annual Report 2021 | Significant Events 49
+For the performance by the Company of its social
+responsibility during the Reporting Period, please
+refer to the full text of the "2021 Environment, Social
+and Governance (ESG) Report" ("ESG Report 2021")
+separately disclosed by the Company on the website
+of the SSE (www.sse.com.cn) and the HKExnews
+website of the Hong Kong Exchanges and Clearing
+Limited (www.hkexnews.hk). The specific information
+on environment is set out in Part Two of the ESG Report
+2021, and the specific information on the consolidation of
+achievements in poverty alleviation and rural revitalization
+undertakings, etc. is set out in Part One of the ESG Report
+2021.
+PERFORMANCE OF ENVIRONMENTAL
+AND SOCIAL RESPONSIBILITIES
+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.
+RESTRICTION ON MAJOR ASSETS
+After the Reporting Period, as at the date of disclosure
+of this report, based on the information disclosed on 8
+January 2022 on the website of the Central Commission
+for Discipline Inspection and the National Supervisory
+Commission, Mr. Wang Bin, the former Secretary of the
+Party Committee and the former Chairman of the Board
+of Directors of CLIC, is currently under the disciplinary
+review and investigation by the Central Commission
+for Discipline Inspection and the National Supervisory
+Commission for suspected serious violation of disciplines
+and laws. Mr. Wang Bin is also the former Chairman of the
+Board and the former Executive Director of the Company.
+Given that Mr. Wang Bin was not able to perform his
+role and duties as the Chairman of the Board during the
+period of review and investigation, Mr. Yuan Changqing,
+a Non-Executive Director of the Company, was elected at
+the sixth meeting of the seventh session of the Board of
+Directors of the Company to assume the roles and duties
+of the Chairman of the Board and the legal representative
+of the Company during the period commencing from the
+date of passing of the Board resolution and ending on the
+effective date of the appointment of a new Chairman of
+the Board. The Board received a resignation letter from
+Mr. Wang Bin on 23 February 2022. As Mr. Wang Bin was
+not able to perform his role and duties as a Director, he
+had resigned from his positions as the Chairman of the
+Board and an Executive Director of the Company. The
+resignation took effect on the same day. Please refer to
+the announcements published by the Company on the
+website of the HKSE on 9 January 2022, 13 January 2022
+and 23 February 2022, respectively.
+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
+not 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 supervison 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.
+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
+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 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.
+Leung Oi-Sie Elsie
+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.
+Lam Chi Kuen
+Chang Tso Tung Stephen
+Robinson Drake Pike
+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 2021.
+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.
+PENSION PLAN
+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. 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 made 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.
+58 Annual Report 2021 | Corporate Governance
+Compliance by the Company with the relevant
+laws and regulations that have a significant
+impact
+In 2021, the Company developed a system for addressing
+climate change, paid attention to and studied the impacts
+of climate change on its sustainable development, fully
+identified opportunities and challenges arising therefrom
+in three aspects, namely products, operations and
+investments, and devised any plans to address such
+change, so as to enhance its own resilience in defending
+against climate risk.
+The Company consistently promoted the paperless
+application for new insurance policies and facilitated
+the utilization of electronic insurance policies, thereby
+reducing carbon emissions incurred during the process
+of application for new insurance policies. In 2021, the
+paperless insurance application rate of long-term individual
+insurance reached 99.9%, which saved approximately
+1,343 tons of paper during the process of the application
+of new policies. The intelligent online operation system
+was also established to save approximately 2,214 tons
+of paper in every aspect of its business operations.
+With the acceleration of technological innovation, the
+Company effectively supported the demands for remote
+working from a daily average number of over 90,000
+users, offering a brand new experience of "working on
+the same platform, communicating without boundary and
+being interactive in multi-screen" for its employees and
+sales agents. Besides, more than 280,000 meetings were
+convened via the webcast and over 320 million online
+messages were sent out on a real-time basis for the year.
+53
+Annual Report 2021 | Corporate Governance
+The Company kicked off green investment to serve the
+development of green finance. In 2021, the Company
+incorporated ESG assessment into its decision-making
+process for investment in alternative investment projects
+and was proactively engaged in the implementation of
+high-quality projects with both ecological benefits and
+potential investment returns, thus recording an additional
+green investment of over RMB50 billion and a cumulative
+green investment of over RMB300 billion for the year.
+AMC, the major platform of the Company for investment,
+further deepened its cooperation and communication
+with UNPRI and other international organizations and
+formulated the "Basic Guiding Rules of China Life Asset
+Management Company Limited for ESG/Green Investment
+(for Trial Implementation)" for the purpose of further
+developing its ESG investment management system.
+With its commitment to "ensuring a healthy and friendly
+environment for the accomplishment of 'carbon neutrality'
+objective", the Company practiced the concepts of
+responsible investment and green operations on a
+voluntarily basis and took active actions in responding
+to climate change, thus firmly pursuing the high-quality
+development with green and low carbon approach.
+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 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".
+Overall operation of the Company during the
+Reporting Period
+BUSINESS REVIEW
+PRINCIPAL BUSINESS
+Mr. Lam Chi Kuen, Mr. Tang Xin, Ms. Huang Xiumei, Mr. Li Mingguang, Mr. Yuan Changqing, Mr. Su Hengxuan, Mr. Wang Junhui, Ms. Leung Oi-Sie Elsie,
+Mr. Zhai Haitao
+From left to right:
+52 Annual Report 2021 | Corporate Governance
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+2.
+1. The Board of the Company received a resignation letter from Mr. Wang Bin on 23 February 2022. As Mr. Wang Bin was not able to perform his role and
+duties as a Director, he had resigned from his positions as the Chairman of the Board and an Executive Director of the Company.
+(retired on 28 June 2021 due to the expiration of his term of office)
+(retired on 13 October 2021 due to the expiration of his term of office)
+(appointed on 14 October 2021)
+(appointed on 29 June 2021)
+Zhai Haitao
+The Company adhered to the code of conduct of "being
+trustworthy, assuming risks, emphasizing on services.
+and being legal compliant" and promoted the compliance
+culture and concepts of "being compliant on a voluntary
+basis, and creating value from compliance", thereby
+creating the compliance environment of "starting
+from the top level and having responsibility for all to
+be compliant". The Company strictly observed and
+effectively 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",
+No
+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.
+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:
+147,078
+No. of H Share shareholders:
+25,326
+Unit: Shares
+Name of shareholder
+Nature of shareholder
+Percentage of
+shareholding
+Number of shares
+held as at the
+end of the
+Reporting Period
+No. of H Share shareholders:
+25,415
+Increase/decrease
+during the
+Reporting Period
+Number of shares
+subject to selling
+pledged or frozen
+restrictions
+China Life Insurance (Group) Company
+State-owned legal person
+68.37%
+19,323,530,000
+HKSCC Nominees Limited
+Number of shares
+Overseas legal person
+No. of A Share shareholders:
+151,802
+INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+Total number of shareholders and their shareholdings
+6
+As Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his duties as a Director nor participate in a Director self-
+assessment in the evaluation of the performance of duties by Directors for 2021, he was excluded from the scope of such evaluation.
+Annual Report 2021 | Corporate Governance
+63
+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 maintained strict principles of diligence and
+integrity and performed their duties conscientiously. The
+Board of Supervisors is not aware of any of them having
+violated any law, regulation, or any provision in the Articles
+of Association or harmed the interests of the Company in
+the course of discharging their duties.
+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 2021 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.
+Total number of ordinary
+share shareholders as at
+the end of the Reporting
+Period
+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.
+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
+Jia Yuzeng
+Chairman of the Board of Supervisors
+24 March 2022
+64 Annual Report 2021 | Corporate Governance
+CHANGES IN ORDINARY SHARES AND SHAREHOLDERS INFORMATION
+CHANGES IN SHARE CAPITAL
+During the Reporting Period, there was no change in the total number of shares and the share capital of the Company.
+ISSUE AND LISTING OF SECURITIES
+As at the end of the Reporting Period, the Company had not issued any securities in the last three years. During the
+Reporting Period, there was no change in the total number of shares and the share structure of the Company due to bonus
+issues or placings, nor were there any internal employees' shares.
+Internal control system and self-evaluation report
+on internal control. During the Reporting Period, the
+Company sought to improve its internal control system,
+and consistently enhanced the effectiveness of such
+system. The Board of Supervisors of the Company
+reviewed the self-evaluation report on the Company's
+internal control system and did not raise any objection
+against the self-evaluation report of the Board regarding
+the Company's internal control system.
+25.93%
+7,327,931,503
++596,257
+15,015,845
+of China Limited China Universal
+- Tianfu Bull No. 53 Asset Management Plan
+Industrial and Commercial Bank of China Limited
+- SSE 50 Exchange Traded Index Securities
+Investment Fund
+Other
+0.05%
+14,177,504
++1,780,228
+China International Television Corporation
+0.05%
+State-owned legal person
+10,000,000
+Li Zhuo
+Domestic natural person
+0.03%
+9,530,133
++9,530,033
+Annual Report 2021 | Corporate Governance
+65
+Notes:
+0.04%
+Other
+- Industrial and Commercial Bank
+China Universal Asset Management Co., Ltd
+China Securities Finance Corporation Limited
+State-owned legal person
+2.51%
+708,240,246
+-15,697,388
+Central Huijin Asset Management Limited
+State-owned legal person
+0.41%
+117,165,585
+-2,554,315
+Hong Kong Securities Clearing Company Limited
+Overseas legal person
+0.20%
+57,106,771
++8,685,066
+Guosen Securities Co., Ltd.
+- Founder Fubon CSI Insurance Theme
+Index Security Investment Fund
+Other
+0.08%
+22,334,683
++18,520,041
+Attending training courses and constantly enhancing
+performance of duties by the Supervisors. In 2021,
+all members of the Board of Supervisors attended the
+training programs on anti-money laundering and a training
+course on the "Standards for the Corporate Governance
+of Banking and Insurance Institutions" offered by The
+Insurance Association of China. Mr. Jia Yuzeng, the
+Chairman of the Board of Supervisors, attended a special
+training course for directors and supervisors of listed
+companies within Beijing as organized by the Listed
+Companies Association of Beijing (the "LCAB") and the
+"Special Training Course for the Supervisory Committee
+of Listed Companies" offered by the China Association
+for Public Companies. Mr. Niu Kailong, Mr. Cao Qingyang
+and Ms. Wang Xiaoqing, being the Supervisors, attended
+a special training course for directors and supervisors of
+listed companies within Beijing as organized by the LCAB,
+respectively.
+Actively conducting research and investigation
+activities, examining and understanding the business
+operations of the Company. In November 2021,
+the members of the Board of Supervisors conducted
+investigation and research activities on the investment
+sector of the Company, listened to reports concerning
+the investment management structure and investment
+system of the Company, and had discussion and
+communication among themselves with respect to the
+relevant issues. Through the investigation and research,
+the Board of Supervisors comprehended the risk
+prevention and control mechanism for the investment
+business of the Company in great depth, and further
+discussed matters in relation to the optimization of the risk
+prevention and control mechanism, the implementation
+of the "Dingxin Project" and the promotion of the high-
+quality development of the Company.
+Organizing the evaluations of the performance
+of duties by Directors and Supervisors. Firstly, an
+evaluation of the performance of duties by Directors
+was commenced in accordance with the "Measures
+for the Evaluation of the Performance of Duties by
+Directors and Supervisors of the Company". Secondly, an
+evaluation of the performance of duties by Supervisors
+was organized and commenced in accordance with the
+"Measures for the Evaluation of the Performance of
+Duties by Directors and Supervisors of the Company".
+After the final evaluation by the Board of 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 2021.
+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.
+Service/Nature
+RMB million
+Fees
+Audit, review and agreed-upon
+procedures fee
+46.51
+Including: Internal control audit fee
+8.50
+Non-audit services fee (tax services
+and consultation services)
+The Company is taking active actions to proceed with
+the selection and appointment of its auditors for the
+year 2022, 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.
+Total
+47.64
+60 Annual Report 2021 | Corporate Governance
+By Order of the Board
+Yuan Changqing
+Non-executive Director
+24 March 2022
+REPORT OF THE BOARD OF SUPERVISORS
+From left to right:
+Mr. Lai Jun, Mr. Cao Qingyang, Mr. Jia Yuzeng, Mr. Niu Kailong, Ms. Wang Xiaoqing
+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
+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.
+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
+1.13
+The Company had engaged Ernst & Young Hua Ming LLP
+and Ernst & Young for eight consecutive years, being the
+maximum consecutive tenure of service permitted under
+the "Administrative Measures for the Appointment of
+Accounting Firms by State-owned Financial Enterprises"
+(《國有金融企業選聘會計師事務所管理辦法》)(Caijin [2020]
+No. 6) issued by the Ministry of Finance, and the Company
+was therefore required to change the auditors. Ernst &
+Young Hua Ming LLP, the PRC auditor and the auditor
+for the Form 20-F of the Company for the year 2020, and
+Ernst & Young, the Hong Kong auditor of the Company for
+the year 2020, had retired as the auditors of the Company
+upon conclusion of the 2020 Annual General Meeting. The
+Company had communicated with the accounting firms
+originally engaged by it in connection with the change of
+accounting firms, and such accounting firms did not raise
+any objection against the change.
+Remuneration paid by the Company to PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers in 2021 was
+as follows:
+Remuneration paid by the Company to the auditors is
+subject to the approval at the shareholders' general
+meeting, pursuant to which the Board is authorized to
+determine the amount and make payment. Audit fees
+paid by the Company to the auditors will not affect the
+independence of the auditors.
+MANAGEMENT CONTRACTS
+No management or administration contracts for the whole
+or substantial part of any business of the Company were
+entered into during the Reporting Period.
+MATERIAL GUARANTEES
+Independent Directors of the Company have rendered
+their independent opinions on the Company's external
+guarantees, and are of the view that:
+1. during the Reporting Period, the Company did not
+provide any external guarantee;
+2. the Company's internal control system regarding external
+guarantees is in compliance with the requirements of
+relevant laws and regulations; and
+3. the Company has expressly provided in its Articles of
+Association the level of authority required for approving
+external guarantees and the approval procedures.
+RESPONSIBILITY STATEMENT OF DIRECTORS
+ON FINANCIAL REPORTS
+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 on-going operations 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 2021.
+MAJOR CUSTOMERS
+In 2021, 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.
+SUFFICIENCY OF PUBLIC FLOAT
+Based on the information publicly available to the
+Company and within the knowledge of the Directors as at
+the Latest Practicable Date (24 March 2022), not less than
+25% of the issued share capital of the Company (being
+the minimum public float applicable to the shares of the
+Company) was held in public hands.
+COMPLIANCE WITH THE CORPORATE
+GOVERNANCE CODE
+The Company has applied the principles of the Corporate
+Governance Code (the "CG Code") as set out in Appendix
+14 to the Listing Rules, and has complied with all code
+provisions of the CG Code during the Reporting Period.
+Annual Report 2021 | Corporate Governance
+59
+AUDITORS
+Following the consideration and approval by the
+shareholders at the 2020 Annual General Meeting of the
+Company, PricewaterhouseCoopers Zhong Tian LLP has
+been appointed as the PRC auditor and the auditor for
+the Form 20-F of the Company for the year 2021, and
+PricewaterhouseCoopers has been appointed as the Hong
+Kong auditor of the Company for the year 2021, who
+will hold office until the conclusion of the 2021 Annual
+General Meeting. In 2021, PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers served as
+the Company's auditors for the first year.
+manner.
+PRE-EMPTIVE RIGHTS AND ARRANGEMENTS
+FOR SHARE OPTIONS
+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
+in compliance with law, financial reports, connected
+transactions and internal control, etc. during the Reporting
+Period.
+61
+Jia Yuzeng
+Niu Kailong
+6/6
+0/6
+2/2
+0/2
+Cao Qingyang
+6/6
+0/6
+of meetings
+required to attend
+Wang Xiaoqing
+Lai Jun
+2/2
+ន ន
+0/6
+0/2
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, the appointment of Mr. Niu Kailong as a Supervisor
+became effective on 14 October 2021.
+As elected by the sixth extraordinary meeting of the third session of the employee representative meeting of the Company and upon approval by the
+CBIRC, the appointment of Mr. Lai Jun as a Superviors became effective on 14 October 2021.
+62
+Annual Report 2021 | Corporate Governance
+Attending and participating in corporate governance
+meetings and actively exercising their supervisory
+role. In 2021, the Board of Supervisors attended the 2020
+Annual General Meeting of the Company and the First
+Extraordinary General Meeting 2021, and participated
+in the regular meetings of the Board. All members of
+the Board of Supervisors participated in the regular
+meetings of the Audit Committee, the Nomination and
+Remuneration Committee, the Risk Management and
+Consumer Rights Protection Committee, the Strategy and
+Assets and Liabilities Management Committee, and the
+Connected Transactions Control Committee, respectively,
+in accordance with the work allocation among Supervisors
+determined by the Board of Supervisors. By attending
+these meetings, all Supervisors diligently discharged
+their duties, oversaw the procedures for convening
+meetings, carefully listened to the matters considered
+at the meetings, and participated in discussions when
+necessary, thus proactively pushing forward the further
+enhancement of corporate governance.
+6/6
+required to attend
+Name of Supervisor
+of meetings
+Meetings of the Board of Supervisors are convened by
+the Chairman of the Board of Supervisors. According to
+the Articles of Association, the Company formulated the
+"Procedural Rules for the Board of Supervisors Meetings"
+and established protocols for the Board of Supervisors
+meetings. Board of Supervisors meetings are categorized
+as regular or ad-hoc meetings in accordance with the
+degree of pre-planning involved. There are at least three
+regular meetings each year, mainly to adopt and review
+financial reports and periodic reports, and examine the
+financial condition and internal control of the Company.
+Ad-hoc meetings are convened when necessary.
+Currently, the seventh session of the Board of Supervisors
+of the Company comprises Mr. Jia Yuzeng, Mr. Niu
+Kailong, Mr. Cao Qingyang, Ms. Wang Xiaoqing and
+Mr. Lai Jun5, with Mr. Jia Yuzeng acting as the Chairman
+of the Board of Supervisors. Mr. Jia Yuzeng and Mr. Niu
+Kailong are Non-employee Representative Supervisors,
+whereas Mr. Cao Qingyang, Ms. Wang Xiaoqing and
+Mr. Lai Jun are Employee Representative Supervisors. In
+October 2021, Mr. Han Bing resigned from his position
+as a Supervisor of the Company due to the adjustment of
+work arrangements.
+MEETINGS AND ATTENDANCE
+During the Reporting Period, six meetings were held by
+the Board of Supervisors of the Company. Attendance
+records of individual Supervisors are as follows:
+Attendance records of the resigned Supervisor at the
+meetings of the Board of Supervisors are as follows:
+Number of
+Number of
+meetings attended meetings attended
+in person/number by proxies/number
+Name of Supervisor
+Han Bing
+of meetings
+required to attend
+4/4
+of meetings
+required to attend
+0/4
+Note: The number of meetings attended in person includes meetings
+attended by the Supervisors on-site and by way of telephone or
+video conference.
+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
+2021, the Board of Supervisors held six 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.
+4
+5
+Number of
+meetings attended
+Number of
+meetings attended
+in person/number by proxies/number
+Annual Report 2021 | Corporate Governance
+68 Annual Report 2021 | Corporate Governance
+1. HKSCC Nominees Limited is a company that holds shares on behalf of the clients of the Hong Kong stock brokers and other participants of the CCASS
+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 2021, 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.
+September 1961 Since 11 February 2018
+Male
+Non-executive Director
+Yuan Changqing
+ten thousands
+(before tax)
+in RMB
+the Company
+ten thousands
+the Company
+Period in RMB
+fund paid by
+parties of
+received
+emolument
+from connected
+the Reporting
+during
+Whether
+emoluments
+received from
+the Company
+Total
+Other benefits,
+social insurance,
+housing
+provident
+fund and
+enterprise
+annuity
+Salary/
+Remuneration
+paid in RMB
+ten thousands
+Term
+Gender Date of Birth
+Yes
+Su Hengxuan
+Executive Director
+President
+Male
+June 1967
+Female
+Vice President
+Huang Xiumei
+since 1 July 2021,
+Executive Director
+Appointed as an Executive Director
+No
+151.10
+25.80
+125.30
+Position
+since 16 August 2019,
+Vice President since November 2014,
+Chief Actuary since March 2012,
+Board Secretary since June 2017
+Chief Actuary
+July 1969
+Male
+Li Mingguang
+Vice President
+Executive Director
+Appointed as an Executive Director
+President since April 2019
+Yes
+since 20 December 2018,
+February 1963
+Board Secretary
+125.30
+Name
+67
+10%
+China Life Insurance
+Company Limited
+68.37%
+China Life Insurance
+(Group) Company
+National Council for Social
+Security Fund
+90%
+of the PRC
+Ministry of Finance
+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:
+As at 31 December 2021, CLIC held 1,785,098,644 H shares of Town Health
+International Medical Group Limited, representing 23.72% of its total shares.
+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 agency.
+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.)
+Bai Tao (the change of registration with the department in charge of industrial and
+commercial administration is in progress)
+China Life Insurance (Group) Company
+Shareholdings in other
+subsidiaries and affiliates
+listed in China or abroad
+during the Reporting Period
+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
+China Universal Asset Management Co., Ltd - Industrial and Commercial Bank of China Limited - China Universal - Tianfu Bull No. 53 Asset
+Management Plan has Industrial and Commercial Bank of China Limited as its asset trustee. Industrial and Commercial Bank of China Limited - SSE
+50 Exchange Traded Index Securities Investment Fund has Industrial and Commercial Bank of China Limited as its fund depositary. Save as above, the
+Company was not aware of any connected relationship and concerted parties as defined by the "Measures for the Administration of the Takeover of
+Listed Companies" among the top ten shareholders of the Company.
+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.
+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.
+66 Annual Report 2021 | Corporate Governance
+INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY
+HELD BY SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS UNDER HONG KONG LAWS AND
+REGULATIONS
+So far as is known to the Directors, Supervisors and
+the chief executive of the Company, as at 31 December
+2021, 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
+Annual Report 2021 | Corporate Governance
+The letter "L" denotes a long position. The letter "S" denotes a short position.
+(Note): BlackRock, Inc. was interested in a total of 461,251,819 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 4,749,000 H shares, 7,569,000 H shares,
+120,413,588 H shares, 157,902,000 H shares, 921,000 H shares, 26,902,045 H shares, 861,000 H shares, 4,736,000 H shares, 16,378,329 H
+shares, 16,450,130 H shares, 713,000 H shares, 61,780,448 H shares, 814,000 H shares, 14,928,733 H shares, 426,000 H shares, 14,187,720 H
+shares, 2,962,021 H shares, 2,710,000 H shares, 32,000 H shares and 5,815,805 H shares, respectively. All of these entities are either controlled
+or indirectly controlled subsidiaries of BlackRock, Inc. Of these 461,251,819 H shares, 159,000 H shares were cash settled unlisted derivatives.
+BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 652,000 H shares (0.01%). Of these 652,000 H
+shares, 551,000 H shares were cash settled unlisted derivatives.
+0.00%
+0.01%
+1.63%
+6.20%
+461,251,819 (L)
+652,000 (S)
+H Shares
+Interest in controlled
+corporation
+BlackRock, Inc. (Note)
+68.37%
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+92.80%
+A Shares
+Beneficial owner
+China Life Insurance (Group)
+Company
+the total number
+of shares in issue
+Percentage of
+Percentage of
+the respective
+class of shares
+Number of
+shares held
+Class of
+shares
+Capacity
+Name of substantial
+shareholder
+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:
+19,323,530,000 (L)
+23.96
+Appointed as an Executive Director
+No
+24.09
+60.14
+Since 27 December 2019
+Female October 1965
+Employee Representative
+Supervisor
+Wang Xiaoqing
+Supervisor
+No
+94.44
+25.44
+69.00
+Since 12 July 2019
+May 1963
+Male
+Cao Qingyang
+Employee Representative
+2.
+69
+Representative Supervisor
+Yes
+September 1974 Since 14 October 2021
+Male
+Niu Kailong
+84.23
+20
+149.26
+Lai Jun
+149.05
+23.75
+125.30
+Since July 2019
+April 1968
+Male
+Vice President
+No
+149.05
+23.75
+125.30
+Non-employee
+Since April 2018
+Male
+Vice President
+Ruan Qi
+Zhan Zhong
+No
+15.38
+4.09
+11.29
+Since 14 October 2021
+May 1964
+Male
+Employee Representative
+Supervisor
+July 1966
+Supervisors
+No
+149.05
+0
+36.00
+Since 20 July 2016
+Female April 1939
+Independent Director
+Leung Oi-Sie Elsie
+No
+37.00
+0
+37.00
+September 1971
+36.00
+Male
+Tang Xin
+Yes
+Since 16 August 2019
+July 1971
+Male
+Non-executive Director
+Wang Junhui
+Charge of Finance since May 2020
+Person in Charge of Finance
+Vice President and Person in
+No
+Independent Director
+No
+Since 7 March 2016
+Yes
+23.75
+Lam Chi Kuen
+125.30
+Since 11 July 2018
+June 1962
+Male
+Jia Yuzeng
+Chairman of the Board of
+7.00
+0
+7.00
+January 1969
+Since 14 October 2021
+Male
+Independent Director
+Zhai Haitao
+No
+21.00
+0
+21.00
+Since 29 June 2021
+April 1953
+Male
+Independent Director
+March 1963
+6.07
+14.43
+20.50
+Male
+3.
+Person in Charge of
+Audit
+Yang Chuanyong
+Supervisor
+Resigned due to the
+No adjustment of work
+-18 October 2021
+December 2020
+- October 2021
+2. 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.
+Total
+1
+I
+85.49
+16.82
+102.31
+| |
+Notes:
+1.
+None of the resigned or retired Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting
+Period.
+4.
+35.81
+arrangements
+10.75
+October 1951
+November 1971
+Independent Director
+The emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and senior management during the
+Reporting Period.
+Male
+30.00
+0
+30.00
+Pike
+- 13 October 2021
+Yes
+Resigned due to the
+failure to perform his
+role and duties as
+a Director
+Resigned due to the
+Yes adjustment of work
+arrangements
+Resigned due to the
+Yes adjustment of work
+arrangements
+Retired due to the
+No expiration of term of
+office
+Retired due to the
+No expiration of term of
+office
+Resigned due to the
+No adjustment of work
+arrangements
+16.00
+12 July 2019
+Han Bing
+Representative
+Male
+25.06
+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 is currently subject to review and approval. The result of the review will be disclosed when the final
+amount is confirmed.
+0
+PERSONAL PROFILE OF CURRENT DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND
+COMPANY SECRETARY
+Annual Report 2021 | Corporate Governance 75
+Mr. Cao Qingyang, born in 1963, Chinese
+Mr. Cao became a Supervisor of the Company in July 2019. He has been the General
+Manager of the Product Development Department of the Company since February
+2011. From 2008 to 2011, he successively served as the Deputy General Manager
+of Tianjin Branch and the Group Leader of the Statistics Working Group of the
+Company. From 2004 to 2008, he successively served as the General Manager of the
+Investor Relations Department, the Deputy Secretary-General of the Board Secretariat
+and concurrently the General Manager of the Investor Relations Department, and
+the Deputy Secretary-General of the Board Secretariat of the Company. Mr. Cao
+graduated from Nankai University in 2004, majoring in finance with a doctoral degree in
+economics.
+Ms. Wang Xiaoqing, born in 1965, Chinese
+Ms. Wang became a Supervisor of the Company in December 2019. She has
+successively been the Deputy General Manager and the General Manager of the Risk
+Management Department of the Company since April 2018. From May 2016 to April
+2018, she served as the Secretary to the Discipline Inspection Committee of Tibet
+Autonomous Region Branch of the Company. From 2010 to 2016, she successively
+served as an Assistant to the General Manager and the Deputy General Manager of the
+County Insurance Management Department, and the Deputy General Manager of the
+Audit Department of the Company. From 2003 to 2010, she successively served as the
+Deputy Division Chief of the Training Division, the Deputy Division Chief of the Business
+Inspection Division, the Division Chief of the Agent Management Division, the Senior
+Manager of the Integrated Development Division of the Individual Insurance Sales
+Department of the Company, and the Deputy General Manager of No. 5 Sales Office
+in Beijing Branch of the Company. Ms. Wang graduated from Nanjing Communication
+Engineering College in 1988, majoring in radio communication engineering with a
+bachelor's degree in engineering.
+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 to 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 the Central Party
+School of the Chinese Communist Party, majoring in economics and management. He is
+a senior economist.
+76
+Annual Report 2021 | Corporate Governance
+SENIOR MANAGEMENT
+Mr. Su Hengxuan, please see the section "Directors" for his personal profile.
+Mr. Li Mingguang, please see the section "Directors" for his personal profile.
+Ms. Huang Xiumei, please see the section "Directors" for her personal profile.
+Mr. Ruan Qi, born in 1966, Chinese
+Mr. Niu became a Supervisor of the Company in October 2021. He is the General
+Manager of the Strategic Planning Department/Office of the Board of Directors (in
+preparation) of China Life Insurance (Group) Company and the President of China
+Life Institute of Finance. Mr. Niu successively worked at PICC Property and Casualty
+Company Limited, the People's Insurance Company (Group) of China Limited and
+PICC Reinsurance Company Limited. He served as the Deputy General Manager of the
+Strategic Planning Department of the People's Insurance Company (Group) of China
+Limited from April 2017, 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 October 2017, the
+person in charge of the Strategy and Investment Management Department of China
+Life Healthcare Investment Company Limited from July 2020, and the Deputy General
+Manager (responsible for daily operations) of the Strategic Planning Department of
+China Life Insurance (Group) Company from August 2020. Mr. Niu graduated from
+Nankai University with a doctoral degree in finance. He is an associate researcher (social
+science) and senior economist.
+Mr. Ruan became the Vice President of the Company in April 2018. 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 of Fujian
+Branch, and the Deputy Manager (responsible for daily operations) and the Manager of
+the Information Technology Department of the Company from 2000 to 2004. Mr. Ruan,
+a senior engineer, graduated from Beijing Institute of Posts and Telecommunications
+in August 1987, majoring in computer science and communications with a bachelor's
+degree in engineering, and from Xiamen University with a master's degree in business
+administration for senior management (EMBA) in December 2007.
+Mr. Zhan became the Vice President of the Company in July 2019. He was an Employee
+Representative Supervisor of the Company from July 2015 to August 2017. Mr. Zhan
+successively served as the General Manager (at the general manager level of the
+provisional branches) of the Individual Insurance Sales Department and the Marketing
+Director of the Company from 2014 to 2019. He served as the Deputy General Manager
+(responsible for daily operations) and the General Manager of the Company's Qinghai
+Branch from 2013 to 2014. From 2009 to 2013, Mr. Zhan successively served as the
+Deputy General Manager (responsible for daily operations) and the General Manager
+of the Individual Insurance Sales Department of the Company. From 2005 to 2009,
+he successively served as the General Manager of the Individual Insurance Sales
+Department of the Company's Guangdong Branch and an Assistant to the General
+Manager of the Company's Guangdong Branch. From 1996 to 2005, he successively
+served as the Director of the Marketing Department of Chengdu High-tech Sub-branch
+of Zhongbao Life Insurance Company, an Assistant to the Manager and the Manager
+of the Marketing Department of Chengdu Branch, and the Deputy General Manager of
+Chengdu Branch of Taikang Life Insurance Company. Mr. Zhan graduated from Kunming
+Institute of Technology in July 1989, majoring in industrial electric automation with a
+bachelor's degree in engineering.
+Annual Report 2021 | Corporate Governance
+77
+Ms. Yang Hong, born in 1967, Chinese
+Ms. Yang became the Vice President of the Company in July 2019. She successively
+served as the General Manager of the Operation Service Center and the Operation
+Director of the Company from 2018 to 2019. Ms. Yang successively served as the
+Deputy General Manager (responsible for daily operations) and the General Manager of
+the Research and Development Center, the General Manager (at the general manager
+level of the provincial branches) of the Business Management Department and the
+General Manager (at the general manager level of the provincial branches) of the
+Process and Operation Department of the Company from 2011 to 2018. From 2002
+to 2011, she successively served as an Assistant to the General Manager and the
+Deputy General Manager of the Business Management Department, and the General
+Manager of the Customer Service Department of the Company. Ms. Yang graduated
+from the Computer Science Department of Jilin University in 1989, majoring in system
+structure with a bachelor's degree of science, and from the School of Economics
+and Management of Tsinghua University in 2013 with a master's degree in business
+administration for senior management.
+Mr. Zhao Guodong, born in 1967, Chinese
+Mr. Zhao became an Assistant to the President of the Company in October 2019. He
+has been the General Manager of the Company's Jiangsu Branch since July 2018. He
+successively served as the Deputy General Manager (responsible for daily operations)
+and the General Manager of Chongqing Branch, the General Manager of Hunan Branch
+of the Company from 2016 to 2018, the Deputy General Manager of each of Fujian
+Branch and Hunan Branch of the Company from 2007 to 2016, 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 TV
+University in 2006, majoring in business administration.
+Mr. Liu Yuejin, born in 1967, Chinese
+Mr. Liu became an Assistant to the President of the Company in June 2021. He is the
+General Manager of Guangdong Branch of the Company. Mr. Liu joined the Company in
+1996, and successively served as an Assistant to the General Manager and the Deputy
+General Manager of the Company's Guizhou Branch and the Deputy General Manager
+of Shanxi Branch, the Person in Charge, the Deputy General Manager (responsible for
+daily operations) and the General Manager of Guizhou Branch, and the General Manager
+of Chongqing Branch from 2010 to 2020. Prior to joining the Company, he worked at the
+Department of Finance of Shanxi Province. Mr. Liu graduated from Shanxi Institute of
+Finance and Economics, majoring in planning and statistics with a bachelor's degree in
+economics.
+78
+Annual Report 2021 | Corporate Governance
+11 July 2015
+Mr. Zhan Zhong, born in 1968, Chinese
+Mr. Niu Kailong, born in 1974, Chinese
+Mr. Jia became the Chairman of the Board of Supervisors of the Company in July 2018.
+He has been an Executive Director of the Insurance Society of China since July 2020
+and a Director of China Insurance Security Fund Co., Ltd. since December 2020. During
+the period from 2006 to March 2018, he successively served as a Supervisor, the
+General Manager of the Human Resources Department, an Assistant to the President,
+the Vice President, the Board Secretary, an Executive Director and the Compliance
+Officer of China Life Pension Company Limited. During the period from 2004 to 2006,
+he served as the General Manager of the Work Department of the Trade Union, the
+Executive Deputy Director of the Trade Union and a Supervisor of the Company.
+During the period from 1988 to 2004, he successively served as the Division Head of
+the General Office and a secretary (at the deputy division level) of the PRC Ministry
+of Supervision, the Deputy Director (responsible for daily operations) of the Minister
+Office of the General Supervision Office under the Supervision Department of the
+Central Commission for Discipline Inspection, and an inspector (at the division level),
+supervisor, inspector (at the deputy bureau level) and special supervisor of the General
+Office of the Central Commission for Discipline Inspection. Mr. Jia graduated from
+the Open University of Hong Kong in 2003, majoring in business administration with a
+master's degree in business administration.
+Mr. Jia Yuzeng, born in 1962, Chinese
+DIRECTORS
+Mr. Yuan Changqing, born in 1961, Chinese
+Mr. Yuan became a Non-executive Director of the Company in February 2018. He
+has been performing duties as the acting Chairman of the Board of Directors of the
+Company since January 2022, and is the Deputy Secretary to the Party Committee,
+Vice Chairman and President of China Life Insurance (Group) Company (the controlling
+shareholder of the Company). Mr. Yuan served as the Deputy Secretary to the Party
+Committee and the Chairman of the Supervisory 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 served
+as the Chairman of Everbright Securities Company Limited. During the period from
+1995 to 2008, he successively 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. Su Hengxuan, born in 1963, Chinese
+Mr. Su became an Executive Director of the Company in December 2018. He has
+been the President of the Company since April 2019, the Vice President of China Life
+Insurance (Group) Company since December 2017 and a Director of China Guangfa
+Bank Co., Ltd. since September 2020. He was the President of China Life Pension
+Company Limited from March 2015 to February 2018. Mr. Su successively served
+various positions in the Company from 2000 to 2015, including the Deputy General
+Manager of Henan Branch, the General Manager of the Individual Insurance Department
+of the Company, the General Manager of the Individual Insurance Sales Department of
+the Company, an Assistant to the President and the Vice President of the Company.
+Mr. Su graduated from Wuhan University and the University of Science and Technology
+of China and obtained a doctoral degree in management science and engineering from
+the University of Science and Technology of China in 2011. Mr. Su, a senior economist,
+has over 35 years of experience in the operation and management of life insurance
+business.
+Annual Report 2021 | Corporate Governance 71
+Mr. Li Mingguang, born in 1969, Chinese
+Mr. Li became an Executive Director of the Company in August 2019. He has been
+the Vice President of the Company since November 2014, the Chief Actuary of the
+Company since March 2012, the Chief Actuary of China Life Pension Company Limited
+since May 2012 and the Board Secretary of the Company since June 2017. Mr. Li
+joined the Company in 1996 and subsequently served as the Deputy Division Chief,
+the Division Chief, an Assistant to the General Manager of the Product Development
+Department, the Responsible Actuary of the Company and the General Manager of
+the Actuarial Department. He graduated from Shanghai Jiaotong University with a
+bachelor's degree in computer science in 1991, Central University of Finance and
+Economics majoring in monetary banking (actuarial science) with a master's degree in
+1996 and Tsinghua University with an EMBA in 2010, and also studied in University of
+Pennsylvania in the United States in 2011. Mr. Li is a Fellow of the China Association
+of Actuaries (FCAA) and a Fellow of the Institute and Faculty of Actuaries (FIA). He was
+the Chairman of the first session of the China Actuarial Working Committee and the
+Secretary-general of both the first and the second sessions of the China Association
+of Actuaries. He is currently the Vice Chairman of the China Association of Actuaries.
+Mr. Li receives a special government allowance from the State Council.
+Ms. Huang Xiumei, born in 1967, Chinese
+Ms. Huang became an Executive Director of the Company in July 2021. She has been
+the Vice President and the Person in Charge of Finance of the Company since May
+2020. Ms. Huang has been a Director of China Life Asset Management Company
+Limited since June 2021, a Director of Sino-Ocean Group Holding Limited since March
+2021, and a Director of China Life Franklin Asset Management Company Limited since
+February 2021. From 2018 to 2021, she served as a Director of China Life Pension
+Company Limited. From 2016 to 2020, she served as the Vice President, the Board
+Secretary and the Person in Charge of Finance of China Life Pension Company Limited.
+From 2014 to 2016, she served as the Financial Controller and the General Manager of
+the Financial Management Department of the Company. From 2005 to 2014, Ms. Huang
+held various positions at the Company's Fujian Branch, including an Assistant to the
+General Manager, the Deputy General Manager, the Branch Head, the Deputy General
+Manager (responsible for daily operations) and the General Manager. From 1999 to
+2005, she served as the Deputy Division Chief of the Planning and Finance Division,
+the Manager of the Planning and Finance Department and the Manager of the Finance
+Department of the Company's Fujian Branch, and during the period from 2004 to 2005,
+she concurrently served as the Deputy General Manager of the Company's Fuzhou
+Branch. Ms. Huang graduated from Fuzhou University, majoring in accounting with a
+bachelor's degree. She is a senior accountant.
+72
+Annual Report 2021 | Corporate Governance
+Mr. Wang Junhui, born in 1971, Chinese
+Mr. Wang became a Non-executive Director of the Company in August 2019. He has
+been the Chief Investment Officer of China Life Insurance (Group) Company and the
+President of China Life Asset Management Company Limited since August 2016. He
+has been the Chairman of China Life AMP Asset Management Company Limited since
+December 2016 and a Director of China United Network Communications Group Co.,
+Ltd. since March 2021. From 2004 to 2016, he successively served as an Assistant
+to the President and the Vice President of China Life Asset Management Company
+Limited, and the President of China Life Investment Holding Company Limited. From
+2002 to 2004, he successively served as the Director of the Investment Department and
+an Assistant to the General Manager of Harvest Fund Management Co., Ltd. Mr. Wang
+graduated from the School of Computer Science of Beijing University of Technology
+with a bachelor's degree in software in 1995 and from Chinese Academy of Fiscal
+Sciences of the Ministry of Finance of the PRC with a doctoral degree in finance in 2008.
+He is a senior economist.
+Mr. Tang Xin, born in 1971, Chinese
+Mr. Tang became an Independent Director of the Company in March 2016. He is a
+professor of the School of Law of Tsinghua University, the 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, a member of the
+Legal Professional Advisory Committee of the Shenzhen Stock Exchange, the Chairman
+of the Independent Director Committee of the China Association for Public Companies,
+a member of the Legislative Affair Committee of the Asset Management Association of
+China and an Independent Director of each of Harvest Fund Management Co., Ltd. and
+Bank of Guizhou Co., Ltd. Mr. Tang was elected as a member of the first and second
+sessions of the Merger, Acquisition and Reorganization Review Committee of the China
+Securities Regulatory Commission from 2008 to 2010. He served as an Independent
+Director of China Spacesat Co., Ltd. from 2008 to 2014, an Independent Director of
+each of SDIC Power Holdings Co., Ltd. and Changjiang Securities Company Limited
+from 2009 to 2013, and an Independent Director of Beijing Rural Commercial Bank
+Co., Ltd. from 2009 to 2015. Mr. Tang graduated from Renmin University of China with
+bachelor's, master's and doctoral degrees in law.
+Annual Report 2021 | Corporate Governance
+73
+Ms. Leung Oi-Sie Elsie, born in 1939, Chinese
+Ms. Leung became an Independent Director of the Company in July 2016. She was the
+first Secretary for Justice of Hong Kong, a member of the Executive Council of Hong
+Kong, the Deputy Director of the Hong Kong Basic Law Committee of the Standing
+Committee of the 2nd, 3rd and 4th National People's Congress and a consultant
+of lu, 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 served as an Independent Non-executive Director of United Company
+RUSAL Plc from December 2009 to June 2021. She has been an Independent Non-
+executive Director of China Resources Power Holdings Company Limited since April
+2010, and an Independent Non-executive Director of PetroChina Company Limited since
+June 2017.
+Mr. Lam Chi Kuen, born in 1953, Chinese
+Mr. Lam became an Independent Director of the Company in June 2021. He is currently
+an Independent Non-executive Director of China Cinda Asset Management Co., Ltd.
+and an Independent Non-executive Director of 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 Haitao, born in 1969, Chinese
+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.
+74
+Annual Report 2021 | Corporate Governance
+SUPERVISORS
+70 Annual Report 2021 | Corporate Governance
+Robinson Drake
+Non-employee
+23.80
+No
+No
+2 2 2
+44.02
+11.52
+32.50
+Since June 2021
+April 1967
+Male
+Assistant to the President
+Liu Yuejin
+88.80
+65.00
+Since October 2019
+November 1967
+No
+Male
+Appointed as an Assistant to the
+Assistant to the President
+Chief Investment Officer
+Since December 2021
+No
+93.01
+24.67
+68.34
+Since July 2018
+October 1969
+October 1969
+Male
+Male
+Compliance Officer
+Person in Charge of Audit
+Liu Fengji
+Xu Chongmiao
+since January 2022
+Chief Investment Officer
+No
+President since December 2021,
+Zhang Di
+Assistant to the President
+Zhao Guodong
+149.09
+fund and
+during
+Whether
+emoluments
+received from
+the Company
+provident
+housing
+Total
+social insurance,
+Other benefits,
+Salary/
+Remuneration
+paid in RMB
+ten thousands
+Term
+Gender Date of Birth
+Position
+Name
+- 28 June 2021
+enterprise
+annuity
+the Reporting
+received
+emolument
+from connected
+23.79
+125.30
+Since July 2019
+February 1967
+Female
+Vice President
+Yang Hong
+No
+ten thousands
+in RMB
+the Company
+ten thousands
+the Company
+Period in RMB
+fund paid by
+parties of
+(before tax)
+Total
+Female January 1968
+258.41
+November 1958
+Male
+1,159.07
+Chairman of the Board
+Executive Director
+Wang Bin
+Reason for changes
+the Company
+- 23 February 2022
+parties of
+during
+ten thousands
+the Company
+Period in RMB
+paid by
+the Reporting
+annuity fund
+from connected
+paid in RMB
+ten thousands
+31 July 2017
+Non-executive Director Male
+16.00
+November 1948
+Male
+Independent Director
+20 October 2014
+Chang Tso Tung
+Stephen
+(before tax)
+Liu Huimin
+ten thousands
+- 15 January 2021
+July 1965
+Non-executive Director Male
+Yin Zhaojun
+31 July 2017
+-7 February 2021
+June 1965
+in RMB
+Term
+3 December 2018
+Previous Position
+Ms. Huang Xiumei was elected as an Executive Director of the seventh session of the Board of the Company at the 2020 Annual General Meeting of
+the Company. Pursuant to the "Provisions on the Administration of the Qualifications for the Directors, Supervisors and Senior Managers of Insurance
+Companies", the appointment of Ms. Huang Xiumei as an Executive Director of the seventh session of the Board of the Company became effective on
+1 July 2021.
+On 30 June 2021, the 2020 Annual General Meeting was convened by the Company for the election of the seventh session of the Board of Supervisors,
+and the first meeting of the seventh session of the Board of Supervisors was convened on the same day for the election of Mr. Jia Yuzeng as the
+Chairman of the seventh session of the Board of Supervisors of the Company.
+Given that Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his role and duties as a Director, Mr. Yuan Changqing,
+a Non-executive Director of the Company, was elected at the sixth meeting of the seventh session of the Board of Directors of the Company on 13
+January 2022 to assume the role and duties of the Chairman of the Board.
+On 30 June 2021, the 2020 Annual General Meeting was convened by the Company for the election of the seventh session of the Board.
+8.
+7.
+6.
+5.
+4. 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 are subject to review and approval. The result of the review will be disclosed when the final
+amount is confirmed.
+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.
+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.
+Gender Date of Birth
+Notes:
+1,417.48
+As elected by the 2019 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Lam Chi Kuen served as an Independent Director
+of the Company from 29 June 2021.
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Zhai Haitao served as an Independent Director of
+the Company from 14 October 2021.
+1.
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Niu Kailong served as a Non-employee
+Representative Supervisor of the Company from 14 October 2021.
+received
+emolument
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+Whether
+Total
+emolument
+received from
+housing
+provident fund
+and enterprise
+Name
+Remuneration
+Salary
+the Company
+RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Annual Report 2021 | Corporate Governance 69
+As considered and approved by the fourth meeting of the seventh session of the Board of the Company, Mr. Liu Fengji served as a temporary Person
+in Charge of Audit of the Company from October 2021. Upon approval by the CBIRC, he became the Person in Charge of Audit of the Company from
+December 2021.
+As considered and approved by the thirty-fifth meeting of the sixth session of the Board and the fourth meeting of the seventh session of the Board of
+the Company and upon approval by the CBIRC, Ms. Zhang Di served as an Assistant to the President of the Company from December 2021 and the Chief
+Investment Officer from January 2022.
+As considered by the thirty-fifth meeting of the sixth session of the Board of the Company and upon approval by the CBIRC, Mr. Liu Yuejin served as an
+Assistant to the President of the Company from June 2021.
+As elected by the sixth extraordinary meeting of the third session of the employee representative meeting of the Company and upon approval by the
+CBIRC, Mr. Lai Jun served as an Employee Representative Supervisor of the Company from 14 October 2021.
+Other benefits,
+social insurance,
+www.e-chinalife.com
+www.sse.com.cn
+www.hkexnews.hk
+Index for websites on which
+resolutions were published
+First Extraordinary General Meeting 2021 16 December 2021
+Annual Report 2021 | Corporate Governance 83
+30 June 2021
+Session of the meeting
+Date of the meeting
+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 of Directors and the Board of Supervisors, review
+and approval of the annual budget and final accounts of the
+Company, and any other matters required by the Articles
+of Association to be approved by way of resolution of the
+shareholders' general meeting. The Company ensures
+that all shareholders are equally treated so as to ensure
+that the rights of all shareholders are protected, including
+the right of access to information in relation to, and the
+right to vote in respect of, major matters of the Company.
+The Company has the ability to operate and manage its
+business autonomously, and is separate and independent
+from its controlling shareholder in its business operations,
+personnel, assets and financial matters.
+Shareholders' General Meeting
+During the Reporting Period, the Company won the
+Tianma Award- "Best Board of Directors" for the first
+time in the 12th China Listed Company Investor Relations
+assessment and selection hosted by Securities Times.
+It was also awarded Grade A in the assessment by the
+SSE of information disclosure of listed companies for the
+year 2020-2021, the "Most Respected Enterprise in Asia
+(Insurance Industry)" by Institutional Investor, the "Best
+Listed Company" by New Fortune Magazine, the "Best
+Investor Activity" by Investor Relations Magazine, the
+"Best Listed Company" and the "Listed Company with
+the Best Investment Value for the 14th Five-Year Plan
+Period" in the 11th China Securities 2021 Golden Bauhinia
+Awards, as well as the "Most Progress in Investor
+Relations Award" by Hong Kong Investor Relations
+Association.
+www.sse.com.cn
+www.hkexnews.hk
+www.e-chinalife.com
+-
+2020 Annual General Meeting
+Date of publication of
+resolutions
+Attendance records of the current Directors at the
+shareholders' general meetings convened during the
+Reporting Period:
+16 December 2021
+The Company has intensified its management of
+subsidiaries on an ongoing basis. The Board considered
+and approved the "Proposal in relation to the Nomination
+of the Candidates for Directors of the Fifth Session of
+the Board of Directors of China Life Asset Management
+Company Limited", the "Proposal in relation to the
+Nominiation of the Candidates for Directors of China Life
+Pension Company Limited" and the "Proposal in relation
+to the Provision of Shareholders' Letters of Undertaking to
+Banking and Insurance Institutions".
+(in preparation) and President of
+China Life Institute of Finance
+Planning Department/Office of
+the Board of Directors
+meetings
+Type of Director
+Name of Director
+30 June 2021
+general
+Number of
+meetings
+attended
+in person
+Number of
+84 Annual Report 2021 | Corporate Governance
+Four proposals, including the amendments to the Articles
+of Association, amendments to the "Procedural Rules for
+the Shareholders' General Meetings" and the execution of
+an agreement for connected transactions with CLI, were
+considered and approved by a combination of on-site and
+online voting at the First Extraordinary General Meeting
+2021 held in Beijing on 16 December 2021.
+and approved by a combination of on-site and online
+voting, and the "Duty Report of the Independent Directors
+of the Board of Directors of the Company for the Year
+2020" and the "Report on the Overall Status of Connected
+Transactions of the Company for the Year 2020" were
+debriefed and reviewed at the 2020 Annual General
+Meeting held in Beijing on 30 June 2021.
+Twenty-four proposals, including the "Proposal in relation
+to the Report of the Board of Directors of the Company
+for the Year 2020", the "Proposal in relation to the Report
+of the Board of Supervisors of the Company for the Year
+2020", the "Proposal in relation to the Financial Report of
+the Company for the Year 2020", the "Proposal in relation
+to the Profit Distribution Plan of the Company for the Year
+2020", the "Proposal in relation to the Remuneration of
+Directors and Supervisors of the Company", the proposal
+in relation to the election of Executive Directors, Non-
+executive Directors and Independent Directors of the
+seventh session of the Board of the Company and the
+proposal in relation to the election of Non-employee
+Representative Supervisors of the seventh session of the
+Board of Supervisors of the Company, were considered
+shareholders'
+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.
+Fourth meeting of
+The Board of Supervisors of the Company has carried out
+its work and performed its duties in accordance with the
+Articles of Association and the "Procedural Rules for the
+Board of Supervisors Meetings". Members of the Board of
+Supervisors attended the shareholders' general meetings
+and the Board of Supervisors meetings, participated in the
+Board meetings and the meetings of the specialized Board
+committees based on their work allocation, and conducted
+investigations on local branches to have an in-depth
+understanding of the implementation of the decisions
+made by the Board, so as to diligently perform their role of
+supervision.
+Audit
+Committee
+7
+the Company can operate in a more systematic manner,
+make decisions in a more scientific way, and boost the
+confidence of investors.
+REPORT OF CORPORATE GOVERNANCE
+OVERVIEW OF CORPORATE GOVERNANCE
+As at 31 December 2021, the Company had approximately
+19,000 branches.
+Branches
+Shareholders'
+General
+Meeting
+system that covers source cultivation, follow-up cultivation
+and whole-process cultivation, continued to further develop
+the systems for training courses and training management,
+stepped up its efforts to build a team of part-time lecturers,
+pushed forward the integration of talents selection,
+cultivation, utilization and retention, and consistently
+enhanced the suitability and effectiveness of education and
+training plans for employees, with a view to facilitating the
+business development of the Company and the healthy
+team development of cadre employees.
+Training Plans
+The Company has established a remuneration and incentive
+system with reference to employee's positions, the
+Company's performance and market conditions.
+Remuneration Policy for Employees
+81
+Annual Report 2021 | Corporate Governance
+Since December 2017
+In 2021, the Company prioritized morals and also
+emphasized on capabilities, pursued the problem-
+based approach for offering targeted training courses
+for employees, adopted a classified and hierarchical
+management system to cover all employees, and focused
+on reforms and innovation for joint development and
+sharing. The Company integrated real situations into its
+education and training and put stringent management into
+practice, concentrated on the development of a quality
+The Company has consistently made improvements to
+its systems relating to corporate governance. Pursuant to
+the relevant regulatory requirements and after taking into
+account its actual operation, the Company has formulated
+the "Measures for the Evaluation of the Performance of
+Duties by Directors and Supervisors" and the "Provisional
+Measures for the Administration of Undertakings of
+Substantial Shareholders" to further strengthen the
+evaluation and management of the performance of duties
+by Directors and Supervisors and the administration of
+undertakings of substantial shareholders.
+Board of
+Directors
+Nomination and
+Remuneration
+Committee
+and Assets and Liabilities Management Committee, and
+the Connected Transactions Control Committee. These
+specialized Board committees conduct studies on specific
+matters, hold meetings both on a regular and an ad-
+hoc basis, communicate with the senior management,
+provide advice and recommendations for the Board's
+consideration, and deal with matters entrusted or
+authorized by the Board, for the purposes of improving the
+Board's efficiency and intensifying the Board's functions.
+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 five specialized Board
+committees, i.e. the Audit Committee, the Nomination
+and Remuneration Committee, the Risk Management and
+Consumer Rights Protection Committee, the Strategy
+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.
+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 meetings, Board meetings
+and Board of Supervisors meetings of the Company have
+been functioning independently and coordinately.
+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.
+Board Secretary
+Company Secretary
+Board of Directors' Office/
+Investor Relations
+Department
+Board of
+Supervisors
+Annual Report 2021 | Corporate Governance
+Including branches at the provincial or prefecture level, sub-branches, sales offices and sales & services offices.
+(Corporate Governance Structure Chart)
+Control Committee
+Connected
+Transactions
+Strategy and Assets and
+Liabilities Management
+Committee
+Risk Management
+and Consumer Rights
+Protection Committee
+82
+the seventh session of the Board
+Since August 2016
+80 Annual Report 2021 | Corporate Governance
+The Board is the standing decision-making body of
+the Company and its main duties include: performing
+the function of corporate governance of the Company,
+convening shareholders' general meetings, implementing
+resolutions passed at such meetings, improving the
+Company's corporate governance policies, approving the
+Company's development strategies and operation plans,
+formulating and supervising the Company's financial
+policies, annual budgets and financial reports, providing
+an objective evaluation on the Company's operating
+results in its financial reports and other disclosure
+documents, dealing with senior management personnel
+matters, arranging for Directors and senior management
+to attend various training courses, attaching importance
+to the enhancement of their professional quality,
+reviewing the compliance policies of the Company,
+assessing the internal control systems of the Company
+and reviewing the compliance by the Company with the
+Corporate Governance Code. The day-to-day management
+and operation of the Company are delegated to the
+management. The responsibilities of Non-executive
+Directors and Independent Directors include, without
+limitation, regularly attending meetings of the Board
+and the specialized Board committees of which they are
+members, providing opinions at meetings of the Board and
+the specialized Board committees, resolving any potential
+conflict of interest, serving on the Audit Committee, the
+Nomination and Remuneration Committee and other
+specialized Board committees, and inspecting, supervising
+and reporting on the performance of the Company. The
+Board is accountable to the shareholders of the Company
+and reports to them.
+Currently, the Board of the Company comprises nine
+members, including three 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 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 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.
+Annual Report 2021 | Corporate Governance
+85
+In 2021, Independent Directors of the Board of the
+Company possessed extensive experience in various
+fields, such as macro economy, 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.
+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 knowledge will be considered in the selection of
+candidates for Directors. Currently, the Board comprises
+nine members with extensive experience in various
+fields, such as finance and insurance, macro economy,
+financial accounting, law and management. The diversified
+composition of the Board is as follows:
+Directors by type:
+Non-executive Independent
+Director
+Director
+Executive
+Director
+3 persons
+BOARD
+2 persons
+Directors by location:
+Directors by gender:
+Male
+7 persons
+Female
+2 persons
+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 2021, 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 and annual reports of the Company
+and to deal with other related matters. The practice
+of obtaining Board consent through the circulation of
+written resolutions does not constitute a regular Board
+meeting. An ad-hoc Board meeting may be convened in
+urgent situations if requisitioned by any of the following:
+shareholders representing over one-tenth of voting
+shares, Directors constituting more than one-third of the
+total number of Directors, the Board of Supervisors, more
+than two Independent Directors, the Chairman of the
+Board or the President of the Company. If the resolution
+to be considered at such ad-hoc Board meetings has been
+circulated to all the Directors and more than half of the
+Directors having voting rights approve such resolution by
+signing the resolution in writing, the ad-hoc Board meeting
+need not be physically convened and such resolution in
+writing shall become an effective resolution.
+Mainland China
+Hong Kong, China
+6 persons
+4 persons
+3 persons
+Chang Tso Tung Stephen Independent Director
+Robinson Drake Pike
+Independent Director
+Attendance records of the resigned Directors at the
+shareholders' general meetings convened during the
+Reporting Period:
+Number of
+meetings
+attended
+in
+person
+Number of
+shareholders'
+general
+Name of Director
+Type of Director
+meetings
+required
+to attend
+for the year
+Wang Bin
+1
+Executive Director
+1
+Yin Zhaojun
+Non-executive Director
+0
+0
+Liu Huimin
+Non-executive Director
+0
+0
+0
+0
+2
+1
+86 Annual Report 2021 | Corporate Governance
+Session of the meeting
+9
+8
+The Company has consistently improved its corporate
+governance structure, regulated the acts of Directors in
+performing their duties, and optimized the mechanism
+for supervising and evaluating the performance of
+duties by Directors. Pursuant to the "Measures for the
+Evaluation of the Performance of Duties by Directors
+and Supervisors of Banking and Insurance Institutions
+(for Trial Implementation)" published by the CBIRC, the
+"Operational Guidance for Evaluating the Performance of
+Duties by Directors of Insurance Companies" issued by
+the Insurance Association of China, the "Measures for the
+Evaluation of the Performance of Duties by Directors and
+Supervisors of the Company" released by 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 2021.
+the Corporate Governance of Banking and Insurance
+Institutions" offered by the Insurance Association of
+China. Mr. Li Mingguang, an Executive Director of
+the Company, attended a special training course for
+directors and supervisors of listed companies within
+Beijing as organized by the LCAB. Ms. Huang Xiumei, an
+Executive Director of the Company, attended a special
+training course on financial risk prevention and control
+of companies and a special training course for directors
+and supervisors of listed companies within Beijing, as
+organized by LCAB. Mr. Wang Junhui, a Non-Executive
+Director of the Company, attended a special training
+course for directors and supervisors of listed companies
+within Beijing as organized by LCAB. Ms. Leung Oi-
+Sie Elsie and Mr. Lam Chi Kuen, all being Independent
+Directors of the Company, attended a follow-up training
+course for independent directors of listed companies as
+organized by the SSE.
+In 2021, all members of the Board developed and
+refreshed their knowledge and skills by attending
+special training courses covering topics such as macro
+economy and the development of the insurance
+industry. All members of the Board of Directors of the
+Company attended the training programs on anti-money
+laundering and a training course on the "Standards for
+Currently, the seventh session of the Board comprises the
+following members: Mr. Su Hengxuan, Mr. Li Mingguang
+and Ms. Huang Xiumei, all being Executive Directors, Mr.
+Yuan Changqing and Mr. Wang Junhui, all being Non-
+executive Directors, and Mr. Tang Xin8, Ms. Leung Oi-
+Sie Elsie, Mr. Lam Chi Kuen and Mr. Zhai Haitao, all being
+Independent Directors, with Mr. Yuan Changqing, a Non-
+executive Director of the Company, performing duties as
+the acting Chairman of the Board. Due to the adjustment
+of work arrangements, Mr. Yin Zhaojun and Mr. Liu Huimin
+successively resigned from their positions as Directors.
+Due to consecutively serving as Independent Directors for
+six years, Mr. Chang Tso Tung Stephen and Mr. Robinson
+Drake Pike successively resigned from their positions as
+Directors. Due to the failure to perform his duties as a
+Director, Mr. Wang Bin resigned from his positions as the
+Chairman of the Board and an Executive Director of the
+Company.
+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.
+87
+Annual Report 2021 | Corporate Governance
+Note: For details of the above Board resolutions, please refer to the announcements regarding the Board resolutions as published by the Company on the
+website of the SSE (www.sse.com.cn).
+23 proposals, including the "Proposal in relation to
+the Asset Strategic Allocation Plan of the Company for
+the Years from 2022 to 2024", were considered and
+approved.
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+15 proposals, including the "Proposal in relation to
+the Third Quarter Report of the Company for 2021",
+were considered and approved.
+Five proposals, including the "Proposal in relation to
+the Composition of Specialized Committees of
+the Seventh Session of the Board of Directors of
+the Company", were considered and approved.
+The "Proposal in relation to the Solvency Report of
+the Company for the Second Quarter of 2021" was
+considered and approved.
+Four proposals, including the "Proposal in relation to
+the Participation by the Company in the Capital Increase
+of CGB", were considered and approved.
+Ten proposals, including the "Proposal in relation to the
+'First Quarter Report of the Company for 2021'", were
+considered and approved.
+42 proposals, including the "Proposal in relation to
+the Financial Report of the Company for the Year 2020",
+were considered and approved.
+Three proposals, including the "Proposal in relation to
+the 'Product Tracing Report of the Company for 2020"",
+were considered and approved.
+The "Proposal in relation to the Solvency Report of the
+Company for the Fourth Quarter of 2020" was considered
+and approved.
+the seventh session of the Board
+16 December 2021
+Fifth meeting of
+the seventh session of the Board
+28 October 2021
+12 proposals, including the "Proposal in relation to
+the Financial Report of the Company for the First Half of
+2021", were considered and approved.
+Board meetings convened during the Reporting Period are as follows:
+As Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his duties as a Director nor participate in a Director self-
+assessment in the evaluation of the performance of duties by Directors for 2021, he was excluded from the scope of such evaluation.
+Annual Report 2021 | Corporate Governance
+32nd meeting of
+the sixth session of the Board
+Date of the meeting Resolutions adopted at the meeting
+22 January 2021
+33rd meeting of
+25 February 2021
+the sixth session of the Board
+34th meeting of
+25 March 2021
+the sixth session of the Board
+35th meeting of
+88
+28 April 2021
+36th meeting of
+26 May 2021
+the sixth session of the Board
+First meeting of
+30 June 2021
+the seventh session of the Board
+Second meeting of
+22 July 2021
+the seventh session of the Board
+Third meeting of
+25 August 2021
+the sixth session of the Board
+Since March 2021
+1
+Zhai Haitao
+College Diploma
+24,715
+Secondary School
+1,455
+Unit: Persons
+Others
+2,532
+Number of employees of the Company
+101,459
+Total
+103,262
+68,671
+Number of employees of
+the Company's major subsidiaries
+Employees in total
+103,262
+Resigned and retired employees of
+the Company and its major
+25
+subsidiaries for which
+extra costs have to be incurred
+China Life Insurance (Group) Company Chief Investment Officer
+China Life Insurance (Group) Company General Manager of the Strategic
+Niu Kailong
+Wang Junhui
+1,803
+China Life Insurance (Group) Company Vice President
+5,889
+Unit: Persons
+REMUNERATION OF DIRECTORS, SUPERVISORS
+AND SENIOR MANAGEMENT
+Decision-making procedures for the remuneration of
+Directors, Supervisors and senior management: the
+remuneration of Directors and Supervisors are approved
+by shareholders at general meetings, whereas the
+remuneration of senior management is approved by the
+Board of Directors.
+Basis for determination of the remuneration of Directors,
+Supervisors and senior management: the remuneration
+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.
+Actual payment of remuneration to Directors, Supervisors
+and senior management: during the Reporting Period,
+the remuneration actually received by all Directors,
+Supervisors and senior management (including the
+resigned Directors, Supervisors and senior management)
+from the Company totaled RMB15.1979 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
+2021 has not yet been determined.
+EMPLOYEES AND BRANCHES
+Employees
+As at the end of the Reporting Period, the composition of
+the employees of the Company and its major subsidiaries
+is as follows:
+Structure of Expertise
+Class of Expertise
+Management and administration
+Sales and sales management
+Finance and auditing
+Unit: Persons
+Number of
+Employees
+Number of
+Employees
+19,275
+4,696
+Insurance verification, claim processing
+and customer services
+23,829
+Other expertise and technicians
+Others
+5,134
+3,773
+103,262
+Total
+Education Level
+Education Level
+Master and above
+Bachelor
+46,555
+Independent Director
+Su Hengxuan
+Since May 2017
+Li Mingguang
+Executive Director
+2
+2
+Huang Xiumei
+Executive Director
+1
+0
+Wang Junhui
+Non-executive Director
+2
+2
+1
+Independent Director
+2
+2
+Leung Oi-Sie Elsie
+Independent Director
+2
+2
+Lam Chi Kuen
+Independent Director
+2
+2
+Tang Xin
+Yuan Changqing
+2
+Su Hengxuan
+Term
+China Life Insurance (Group) Company Vice Chairman, President
+Position
+Name of shareholders
+Name
+POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IN
+SHAREHOLDERS OF THE COMPANY
+Mr. Heng is the managing partner of Morison Heng, Certified Public Accountants. Mr.
+Heng holds a Master of Science degree of the Imperial College of Science, Technology
+and Medicine, the University of London. Mr. Heng is a member of The Hong Kong
+Institute of Certified Public Accountants and a fellow of The Association of Chartered
+Certified Accountants. Mr. Heng has over 15 years of experience in accounting and
+auditing for private and public companies and financial consultancy. Mr. Heng serves
+as an Independent Non-executive Director of Lee & Man Chemical Company Limited,
+Matrix Holdings Limited, Best Food Holding Company Limited and Veson Holdings
+Limited, all of which are listed on the main board of the HKSE.
+Mr. Heng Victor Ja Wei, born in 1977, British
+COMPANY SECRETARY
+79
+Annual Report 2021 | Corporate Governance
+Executive Director
+Mr. Liu became the Person in Charge of Audit of the Company in December 2021.
+He served as a temporary Person in Charge of Audit of the Company from October to
+December 2021, and is the General Manager of the Audit Department of the Company.
+Mr. Liu joined the Company in 1992, and successively served as an Assistant to the
+General Manager of the Company's Tianjin Branch, the Deputy General Manager of
+Ningxia Hui Autonomous Region Branch, the Person in Charge, the Deputy General
+Manager (responsible for daily operations) and the General Manager of Qinghai Branch,
+and the General Manager of Tianjin Branch from 2011 to 2021. Mr. Liu graduated from
+Tianjin Institute of Finance and Economics in 1992, majoring in finance (insurance
+direction) with a bachelor's degree in economics, and from Nankai University in 2013,
+majoring in business administration for senior management with a master's degree in
+business administration.
+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.
+Mr. Xu Chongmiao, born in 1969, Chinese
+Ms. Zhang became an Assistant to the President of the Company in December 2021.
+She has been the Chief Investment Officer of the Company since January 2022.
+Ms. Zhang joined the Company in 2001, and successively served as an Assistant to
+the General Manager, the Deputy General Manager, the Deputy General Manager
+(responsible for daily operations), and the General Manager of the Investment
+Management Department and the General Manager of the Investment Management
+Center of the Company from 2010. Prior to joining the Company, she worked at
+companies including Beijing Zhongbaoxin Real Estate Development Company Limited
+and PICC Trust and Investment Company, etc. Ms. Zhang graduated from Northern
+Jiaotong University, majoring in transportation management and engineering with a
+bachelor's degree in engineering.
+Ms. Zhang Di, born in 1968, Chinese
+required
+to attend
+for the year
+Yuan Changqing
+Non-executive Director
+2
+0
+Mr. Liu Fengji, born in 1969, Chinese
+The Company implements good corporate governance
+policies and firmly believes that through fostering sound
+corporate governance, further enhancing its transparency
+and establishing an effective system of accountability,