4
4.
3.
2.
1.
Notes:
point
percentage
Annual Report 2021 | Prelude
6
of 0.32
5.
5.16
5.24
point
decrease
5.30
4.98
Gross investment yield 5 (%)
of 0.80
percentage
88.77
90.07
89.02
point
increase
3.29
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
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
Available-for-sale securities
An increase in the allocation of
government bonds
-3.0%
29.0%
545,678
1,189,369
1,533,753
Held-to-maturity securities
529,488
Term deposits
Main Reasons for Change
Change
31 December
2020
2021
of Financial Position
31 December
Consolidated Statement
As at
As at
Major Items of the
RMB million
MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
REASONS FOR CHANGE
7
Annual Report 2021 | Prelude
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)
89.25
1,429,287
90.05
of 0.86
percentage
6.3%
15.92
16.93
Equity holders' equity per share³
0.39
2.05
1.7%
1.77
1.80
Earnings per share (basic and diluted)³
14.29
Per share (RMB)
15.0% 3,726,791
15.2% 3,573,199
16.0% 3,317,432
6.3% 403,779
4,891,085 4,252,466
4,716,401 4,095,491
4,404,427 3,795,529
478,585 450,056
Total equity holders' equity
Total liabilities
Investment assets²
Total assets
As at 31 December
200,990
147,551
286,028
3,254,460 2,897,656
3,104,065 2,753,176
2,931,146 2,572,308
318,393 320,967
11.26
11.36
Ordinary share holders' equity
10.49
3.54
16.47
decrease
11.83
10.97
Weighted average ROE (%)
Major financial ratios
operating activities per share³
7.11
5.22
10.12
-5.8%
10.76
10.13
Net cash inflow/(outflow) from
per share³
11.08
10.99
14.01
6.3%
15.92
16.93
Gearing ratio (%)
-5.8%
1,215,603
An increase in the allocation of bonds in
available-for-sale securities
"Ark Prize for Golden Insurance Service in 2021"
"Ark Prize for Technological Progress of China's
Insurance Industry in 2021"
Securities Times
"Assessment and Selection
of the Ark Prizes for China's Insurance Industry in 2021"
"Annual Insurance Protection Brand Top Award"
Shanghai Securities News
"Assessment and Selection of the 12th 'Golden Wealth Management""
"Investment Golden Bull Award for Insurance Company"
China Securities Journal
"Assessment and Selection of Investment Golden Bull Awards for
China's Insurance Industry in 2021"
"Influential Insurance Company of the Year"
"Sustainable and Green Development Award"
Hexun.com
High-quality Development in 2021"
The "19th Financial Annual Champion Awards"
Caijing
"Assessment and Selection of the 2021 Evergreen Awards"
"Bronze Prize for Global Innovator"
Annual Report 2021 | Prelude
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.
Due to the combined impact of total
comprehensive income and profit
distribution during the Reporting Period
8
Note:
6.3%
450,056
"Social Responsibility Award of the Year"
"Ark Prize for Insurance Company with
3
Annual Report 2021 | Prelude
Annual Report 2021 | Prelude
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.
2
Annual Report 2021 | Prelude
Honors and Awards
"2021 Forbes Global 2000", ranking 49th
"2021 Fortune China 500 List”, ranking 8th
Forbes
Fortune China
"Most Respected Enterprise in Asia (Insurance Industry)"
"2021 Best Life Insurance Company in Asia"
Institutional Investor
21st Century Business Herald
"Best Listed Company"
"Listed Company with the Best Investment Value
for the 14th Five-Year Plan Period"
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
"Assessment and Selection of the 11th China Securities 2021 'Golden Bauhinia' Awards"
"Golden Dragon Award – 2021 Best Listed Insurance Company"
Financial Times
"Gold Medal List of Chinese Financial Institution"
"New Fortune Best Listed Company"
New Fortune
"Assessment and Selection of the 3rd New Fortune Best Listed Company"
478,585
17.6%
Equity holders' equity
-51.1%
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
Insurance contracts
The needs for liquidity management
6.7%
7.7%
56,655
239,584
257,953
60,440
The accumulation of insurance liabilities
from new policies and renewals
Cash and cash equivalents
Investments in associates
and joint ventures
62.5%
7,947
12,915
Securities purchased under
agreements to resell
An increase in the allocation of debt-type
assets in securities at fair value through
profit or loss
through profit or loss
28.0%
161,570
206,771
Securities at fair value
The needs for liquidity management
Investment contracts
313,594
288,212
15,286
7,481
Deferred tax liabilities
other borrowings Note
The fluctuation of exchange rate
-4.4%
19,556
18,686
Interest-bearing loans and
balances payable
An increase in maturities payable
3.2%
55,031
56,818
Annuity and other insurance
agreements to repurchase
The needs for liquidity management
95.9%
122,249
239,446
Securities sold under
An increase in the scale of universal
insurance accounts
8.8%
The change in fair value of financial
assets
304,019
1.13
31,869
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
133
Undertakings
124
FINANCIAL REPORT
48
Material Contracts and Their
08
40
Major Connected Transactions
40
Material Litigations or Arbitrations
40
Performance
Restriction on Major Assets
49
Comprehensive Income
68
Directors, Supervisors, Senior
65
Changes in Ordinary Shares and
Shareholders Information
61
Report of the Board of Supervisors
52
52
42
Report of the Board of Directors
CORPORATE GOVERNANCE
Financial Statements
138
Notes to the Consolidated
06
Cash Flows
136
Consolidated Statement of
286,448
135
Consolidated Statement of
49
Performance of Environmental
and Social Responsibilities
40
123
Definitions and Material Risk Alert
Announcements
03
12
LETTER TO SHAREHOLDERS
02
3560
2
2
Financial Summary
Business Highlights
Honors and Awards
Core Competitiveness
PRELUDE
01
CONTENTS
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.
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.
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.
2021
Annual Report
點諧中國
Stock Code: 2628
China Life Insurance Company Limited
中国人寿保险股份有限公司
MANAGEMENT
Management and Employees
DISCUSSION AND ANALYSIS
Review of Business Operations
in 2021
119
Index of Information Disclosure
116
Basic Information of the Company
116
OTHER INFORMATION
34
32
07
SIGNIFICANT EVENTS
05
EMBEDDED VALUE
04
33
33
222
32
Technology Empowerment and
Operations and Services
Future Prospect
29
Analysis of Specific Items
19
Business Analysis
15
15
Report of Corporate Governance
Changes in Equity
82
Insurance benefits and claims
608,855
621,310
88
3.5%
758,239
784,763
Benefits, claims and expenses
506,910
532,023
618,754
560,278
604,666
611,251
Net premiums earned
643,379
627,472
729,499
2.5%
805,049
824,930
Total revenues
1.1%
580,801
6.5%
509,467
10,998
57,887
1.7%
50,056
50,921
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
1.3%
50,257
50,921
Net profit attributable to equity
41,667
13,907
59,788
-7.3%
54,476
50,495
Profit before income tax
expenses
466,043
479,219
2017
2018
677,722
Change
1,203,008
Embedded value
million
4,891,085
million
618,327
Total assets
Gross written premiums
Business Highlights
European Financial Management and
Marketing Association (EFMA) and Accenture
"Efma-Accenture Innovation in Insurance Awards"
million
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.
and innovation
empowerment
Leading
technologies
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.
Convenient
services
and superb
customer
experience
The Company sticks to the original role of insurance and further explores the huge potentials of
the life insurance market. The Company has a sound institutional and services network, with its
business outlets and services counters covering both urban and rural areas across China, which
forms a powerful distribution and services network and through which the Company maintains its
leading position in China's life insurance market and becomes the life insurance service provider
within the reach of customers. Through the long-term development and accumulation, China Life
has solid financial strength comparable to world-class enterprises in the world, with its total assets
ranking No. 1 in the life insurance industry in China. As one of the largest institutional investors in
China, the Company becomes one of the largest insurance asset management companies in China
through its controlling shareholding in China Life Asset Management Company Limited.
2019
Prominent
principal
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.
Long history
and excellent
brand
Core Competitiveness
Professional
and stable
core team
Gross
business and
sound financial
strength
214,057
investment income
2020
For the year ended
2021
Under International Financial Reporting Standards (IFRS)
RMB million
MAJOR FINANCIAL DATA AND INDICATORS FOR THE PAST FIVE YEARS¹
Financial Summary
5
LO
Annual Report 2021 | Prelude
262.41%
Major Financial Data
4.38%
Comprehensive
solvency ratio
million
50,921
million
equity holders of
the Company
44,780
million
Net investment yield
Value of one year's sales
Net profit attributable to
97
Annual Report 2021 | Corporate Governance
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.
2.
1. The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
Notes:
Liu Huimin
Yin Zhaojun
attended by proxies/
Number of meetings
Name of member
attended in person/
Number of meetings
Number of meetings
Attendance records of the resigned Directors at meetings are as follows:
The meetings convened are as follows:
0/3
required to attend
Meetings convened
15 December 2021
Eighth meeting of the Risk Management
and Consumer Rights Protection
Committee of the sixth session of
the Board
3/3
98 Annual Report 2021 | Corporate Governance
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).
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.
Performance of duties by the Risk Management
and Consumer Rights Protection Committee
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 "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.
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.
was debriefed.
Third meeting of the Risk Management
and Consumer Rights Protection
Committee of the seventh session of
the Board
Second meeting of the Risk
Management and Consumer Rights
Protection Committee of the seventh
session of the Board
27 October 2021
First meeting of the Risk Management
and Consumer Rights Protection
Committee of the seventh session of
the Board
24 August 2021
the Board
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
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.
Description
27 April 2021
24 March 2021
1/5
Number of meetings
required to attend
2/5
required to attend
required to attend
2/2
0/2
3/3
0/3
Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
Annual Report 2021 | Corporate Governance
91
The meetings convened are as follows:
Number of meetings
Meetings convened
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
24 March 2021
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.
Number of meetings
attended in person/
Tang Xin
Lam Chi Kuen
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
meetings
required
to attend
2/2
5/5
3/3
Attendance records of the resigned Directors at meetings are as follows:
attended by proxies/
Name of member
Robinson Drake Pike
meetings
required
to attend
0/2
12
0/5
99
03
0/3
Number of meetings
Number of meetings
Chang Tso Tung Stephen
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.
required
required
to attend
to attend
Tang Xin
Independent Director, Chairman of the
Nomination and Remuneration Committee of
the seventh session of the Board
3/3
93
0/3
Non-executive Director, member of the
meetings
Yuan Changqing
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
Nomination and Remuneration Committee of
the seventh session of the Board
meetings
proxies/
Number of
meetings
attended by
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.
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.
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.
NOMINATION AND REMUNERATION COMMITTEE
The Company established the Management Training
and Remuneration Committee on 30 June 2003. On 16
March 2006, the Board resolved to change the name of
the Management Training and Remuneration Committee
to the Nomination and Remuneration Committee, with
a majority of Independent Directors on the committee.
Currently, the Nomination and Remuneration Committee
of the 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.
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.
4/5
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
Position
Number of
meetings
attended in
person/
Number of
Number of
Zhai Haitao
attended in person/
proxies/
Number of
Number of
Wang Junhui
Non-executive Director
9/10
1/10
Tang Xin
Independent Director
10/10
0/10
Leung Oi-Sie Elsie
Independent Director
2/4
10/10
Lam Chi Kuen
Independent Director
5/5
Zhai Haitao
Independent Director
2/2
0/5
0/2
Attendance records of the resigned Directors of the
Company at the Board meetings convened during the
Reporting Period are as follows:
Name of Director
Type of Director
0/10
Number of Number of
meetings meetings
attended in attended by
person/ proxies/
Number of Number of
meetings meetings
required to required to
attend
2/4
Huang Xiumei
Meetings and attendance
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
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
Executive Director
Yuan Changqing
9/10
1/10
Su Hengxuan
Executive Director
9/10
1/10
Li Mingguang
Executive Director
7/10
3/10
Non-executive Director
-
attend
Wang Bin
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
up basic rules and regulations of the Company, submitting
to the Board any requests for appointment or removal of
senior management officers and exercising other rights
granted to him under the Articles of Association and by the
Board. The President is fully accountable to the Board for
the operations of the Company.
BOARD OF SUPERVISORS
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".
AUDIT COMMITTEE
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.
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.
10
11
12
CHAIRMAN AND PRESIDENT
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,
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
During the Reporting Period, five meetings were held by the Audit Committee of the Board of the Company. Attendance
records of individual members are as follows:
Name of member
Position
Number of
meetings
attended in
person/
Number of
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.
During the Reporting Period, no Independent Director had
raised any objection against the proposals and matters
considered by the Board of the Company.
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.
89
Executive Director
8/10
2/10
Yin Zhaojun
Non-executive Director
Liu Huimin
Non-executive Director
1/1
0/1
5/5
0/5
Robinson Drake Pike
Independent Director
8/8
0/8
Chang Tso Tung Stephen Independent Director
110000
Notes:
1. The number of meetings attended in person includes meetings
attended by the Directors on-site and by way of telephone or video
conference.
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.
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.
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.
Annual Report 2021 | Corporate Governance
meetings
attended by
attended by proxies/
Annual Report 2021 | Corporate Governance 93
Number of meetings
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.
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.
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
RISK MANAGEMENT AND CONSUMER RIGHTS
PROTECTION COMMITTEE
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.
meetings
attended by
Name of member
Position
person/
Number of
Description
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
Tang Xin
Wang Junhui
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.
Li Mingguang
to attend
to attend
required
required
meetings
meetings
proxies/
Number of
Leung Oi-Sie Elsie
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.
Annual Report 2021 | Corporate Governance 95
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
24 March 2021
Meetings convened
The meetings convened are as follows:
94 Annual Report 2021 | Corporate Governance
3. Mr. Zhai Haitao served as a member of the Nomination and Remuneration Committee from October 2021 to February 2022.
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.
27 April 2021
The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
Notes:
0/2
2/2
Robinson Drake Pike
required to attend
required to attend
Number of meetings
1.
15th meeting of the Nomination and
Remuneration Committee of
the sixth session of the Board
14th meeting of the Nomination and
Remuneration Committee of
the sixth session of the Board
First meeting of the Nomination and
Remuneration Committee of
the seventh session of the Board
Performance of duties by the Nomination and
Remuneration Committee
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.
Name of member
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.
27 October 2021
0/3
0/2
2/2
3/3
required to attend
required to attend
Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
Number of meetings
attended by proxies/
Number of meetings
Number of meetings
Number of meetings
Robinson Drake Pike
Chang Tso Tung Stephen
Name of member
Attendance records of the resigned Directors at meetings are as follows:
102 Annual Report 2021 | Corporate Governance
Mr. Zhai Haitao became a member of the Connected Transactions Control Committee in October 2021.
19
Mr. Lam Chi Kuen became a member of the Connected Transactions Control Committee in June 2021.
attended in person/
The meetings convened are as follows:
Third meeting of the Connected
Transactions Control Committee of
the seventh session of the Board
24 March 2021
If the number of Directors is less than the number
stipulated in the Company Law or two-thirds of the
number specified by the Articles of Association, or the
uncovered losses incurred amount to one-third of the
Company's total share capital or if the Board or the Board
of Supervisors deems necessary, or more than half of the
Directors (including at least two Independent Directors)
request, or shareholders holding 10% or more shares of
the Company make a requisition, the Board shall convene
an extraordinary shareholders' general meeting within two
months. Where shareholders holding 10% or more shares
request an extraordinary shareholders' general meeting,
such shareholders shall make a request in writing to
the Board with a clear agenda. The Board shall, upon
receipt of such a written request, convene a meeting as
soon as possible. If the Board fails to convene a meeting
within 30 days of the receipt of such a written request,
shareholders making such a request may convene a
meeting by themselves at the cost of the Company within
four months of the receipt by the Board of such a written
request.
In accordance with the Articles of Association, when the
Company convenes the shareholders' general meeting,
shareholders individually or in aggregate holding 3% or
more of the shares of the Company shall have the right
to submit proposals to the Company. The Company
should include such matters that fall into the scope of
the functions and powers of the shareholders' general
meeting in the agenda of the meeting. Shareholders
individually or in aggregate holding 3% or more of the
shares of the Company may submit provisional proposals
in writing to the convenor sixteen days prior to the
shareholders' general meeting. The provisional proposals
shall fall into the scope of the functions and powers of the
shareholders' general meeting and specify explicit topics
and specific resolution matters.
Shareholders may put forward enquiries to the Board
through the Board Secretary or the Company Secretary, or
put forward proposals at shareholders' general meetings
through their proxies. The Company has made available its
contact details in its correspondence with shareholders to
enable such enquiries or proposals to be properly directed.
INFORMATION DISCLOSURE AND INVESTOR
RELATIONS
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.
106 Annual Report 2021 | Corporate Governance
CHANGES OF THE ARTICLES OF ASSOCIATION
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
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).
The amendments to the Articles of Association as
described above shall come into effect after the approval
from the CBIRC.
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.
Internal Control
The Company has been devoting significant effort towards
the promotion of internal control and the establishment of
internal control related systems. In accordance with the
requirements of Section 404 of the "U.S. Sarbanes-Oxley
Act", the "Standard Regulations on Corporate Internal
Control", the "Implementation Guidelines for Corporate
Internal Control", the "Guidance on Internal Control for
Companies Listed on the Shanghai Stock Exchange",
the "Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited", and the "Basic
Standards of Internal Control for Insurance Companies"
issued by the CBIRC, the Company has carried out a lot
of work on its internal control system establishment,
rules implementation and risk management by strictly
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.
20
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.
Annual Report 2021 | Corporate Governance 107
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.
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.
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.
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 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.
108 Annual Report 2021 | Corporate Governance
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.
Meetings convened
SHAREHOLDERS' INTERESTS
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.
Eighth meeting of the Connected
Transactions Control Committee of
the sixth session of the Board
26 May 2021
Ninth meeting of the Connected
Transactions Control Committee of
the sixth session of the Board
24 August 2021
First meeting of the Connected
Transactions Control Committee of
the seventh session of the Board
27 October 2021
Second meeting of the Connected
Transactions Control Committee of
the seventh session of the Board
15 December 2021
18
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.
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.
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.
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 remuneration for senior management mainly comprises
position compensation, performance rewards, welfare
benefits and medium and long term incentives.
0/2
96
Connected Transactions Control 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
Independent Director, member of the Strategy
and Assets and Liabilities Management
Committee of the seventh session of the Board
Number of meetings
attended in person/
attended by proxies/
Number of meetings
Number of meetings
required to attend
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.
Number of meetings
Leung Oi-Sie Elsie
3/6
3/6
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
required
to attend
required
to attend
Lam Chi Kuen
Su Hengxuan
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
3. Mr. Lam Chi Kuen served as the Chairman of the Strategy and Assets and Liabilities Management Committee from July 2021 to February 2022.
2/2
100 Annual Report 2021 | Corporate Governance
Meetings convened
person/
Number of
Number of
meetings
attended by
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
Number of
meetings
attended in
5/5
Independent Director, member of the
Leung Oi-Sie Elsie
Connected Transactions Control Committee of
the seventh session of the Board
5/5
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
Zhai Haitao
0/5
Position
Name of member
During the Reporting Period, five meetings were held by the Connected Transactions Control Committee of the Board of
the Company. Attendance records of individual members are as follows:
24 March 2021
15th meeting of the Strategy and Assets
and Liabilities Management Committee
of the sixth session of the Board
16th meeting of the Strategy and Assets
and Liabilities Management Committee
of the sixth session of the Board
26 May 2021
17th meeting of the Strategy and Assets
and Liabilities Management Committee
of the sixth session of the Board
24 August 2021
First meeting of the Strategy and Assets
and Liabilities Management Committee
of the seventh session of the Board
27 October 2021
Second meeting of the Strategy and
Assets and Liabilities Management
Committee of the seventh session
of the Board
15 December 2021
Third meeting of the Strategy and
Assets and Liabilities Management
Committee of the seventh session
of the Board
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.
The principal duties of the Connected Transactions
Control Committee are to confirm connected parties of
the Company, manage, examine and approve connected
transactions to control risks relating to connected
transactions, and focus on the compliance and necessity
of connected transactions and the fairness of their pricing,
which provide an important basis for the Board's decision-
making in connected transaction management.
Meetings and attendance
The meetings convened are as follows:
27 April 2021
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.
118 Annual Report 2021 | Other Information
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.
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.
manner.
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
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.
114 Annual Report 2021 | Corporate Governance
Annual Report 2021 | Corporate Governance 115
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
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.
Reputational Risk
Information safety risk refers to the operational, legal
and reputational risks caused by natural factors, human
factors, technological loopholes or management defects
in the process of applying information technology in the
Company.
Annual Report 2021 | Corporate Governance 113
OTHER
BASIC INFORMATION OF THE COMPANY
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
Hong Kong Office Address
Email
INFORMATION
Website
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
Fax
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.
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.
Strategic Risk
Insurance Risk
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.
Risk Identification and Control
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.
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,
The Company followed the requirements under anti-
money laundering laws and regulations, kept on improving
the system for money-laundering risk management and
performed the anti-money laundering obligations under
the law, with a view to enhancing both the quality and
efficiency of its anti-money laundering work. Meanwhile,
pursuant to external regulatory requirements, the
Company conducted special governance on illegal fund-
raising activities and carried out the self-inspection and
rectification in key risk areas, which effectively improved
the Company's precaution capability in key risk areas.
Pursuant to the requirements of the 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.
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
Work in relation to Risk Management
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.
Risk Management System
Risk Management
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.
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
Annual Report 2021 | Corporate Governance 109
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.
110 Annual Report 2021 | Corporate Governance
rate.
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
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
112 Annual Report 2021 | Corporate Governance
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.
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
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.
Market Risk
111
16 Financial Street, Xicheng District, Beijing, P.R. China
100033
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.
86-10-63631329
International Legal Advisers
Domestic Legal Adviser
Depositary of ADR
H Share Registrar and
Transfer Office
OTHER RELEVANT INFORMATION
Annual Report 2021 | Other Information 117
LFC
Auditors of the Company
New York Stock Exchange
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
2628
H Share
Computershare Hong Kong
Investors Services Limited
King & Wood Mallesons
Latham & Watkins LLP
Yip Siu Foon, Linda
Name of the Certified Auditor:
Central, Hong Kong
Address: 22/F, Prince's Building,
PricewaterhouseCoopers
International Auditor
Debevoise & Plimpton LLP
Deutsche Bank
Address: 60 Wall Street, New York, NY 10005
Name of the Signing Auditors:
Zhou Xing, Tu Yi
Huangpu District,
Shanghai, PRC
86-10-63633333
PricewaterhouseCoopers
Address: 11/F,
PricewaterhouseCoopers
Zhong Tian LLP
Domestic Auditor
Address: Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong
A Share
Center, 2 Link Suqare,
202 Hubin Road,
Stock Type
86-10-63631329
16 Financial Street, Xicheng District,
Beijing, P.R. China
Li Mingguang
Board Secretary
Email
Fax
Telephone
Securities Representative
Office Address
CONTACT INFORMATION
116 Annual Report 2021 | Other Information
16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
Hung Hom, Kowloon, Hong Kong
ir@e-chinalife.com
www.e-chinalife.com
86-10-66575722
95519
Name
Li Yinghui
852-29192628
86-10-63631191
16 Financial Street, Xicheng District,
Beijing, P.R. China
STOCK INFORMATION
12/F, Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing,
P.R. China
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
HKExnews website of Hong Kong Exchanges and
Clearing Limited at www.hkexnews.hk
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
CSRC's Designated Website for
the Company's Annual Report
Disclosure
86-10-66575112
23
13
12
2021/3/12
Announcement of Premium Income
Notice of Board Meeting
2021/3/11
10
Voluntary Announcement - Convening of 2020 Annual Results Briefing
Announcement of Results for the Year Ended 31 December 2020
2021/2/25
11
2021/3/17
Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of 2020)
Announcement - Nomination of Directors
14
China Life Insurance Company Limited 2020 Environmental, Social and Governance
& Social Responsibility Report
2021/3/25
17
567
15
16
2021/3/25
2021/3/25
Announcement - Nomination of Non-employee Representative Supervisor
2021/3/25
Announcement - Re-election of Employee Representative Supervisors
2021/3/25
2021/2/22
Announcement - Resignation of Non-executive Director
9
INDEX OF INFORMATION DISCLOSURE ANNOUNCEMENTS
1
2
3
Serial No.
Items
Announcement on the Progress of Connected Transaction in relation to the
Formation of the Partnership
Announcement of Premium Income
18
Date of disclosure
2021/1/5
2021/1/13
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
8
Announcement of Premium Income
Overseas Regulatory Announcement - China Life Insurance Company Limited -
Announcement on Changes in Accounting Estimates
2021/1/18
19
2021/10/19
62
67
2021 Third Quarter Report
2021/10/28
-
68
Announcement - Approval of Qualification of Supervisors by the CBIRC and
Resignation of Supervisor
Announcement – Supplementary Information regarding Compensation of Directors,
Supervisors and Senior Management Members in 2020
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
2021/10/28
71
66
2021/10/18
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
99
2021/9/28
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
63
61
Overseas Regulatory Announcement China Life Insurance Company Limited -
Announcement on Changes in Accounting Estimates
72
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
78
80
2021
81
Announcement - Connected Transaction – Formation of Partnership
2021/12/16
82
Announcement - Renewal of Continuing Connected Transactions under the Policy
Management Agreement
2021/12/16
2021/12/16
2021/10/28
77
Items
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
Date of disclosure
2021/11/29
Supplemental Notice of the First Extraordinary General Meeting 2021
2021/11/29
76
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.
75
60
2021/9/28
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
43
44
45
46
47
48
Announcement of Premium Income
42
Announcement - Election of Employee Representative Supervisor
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
2021/8/12
2021/8/13
Announcement of Premium Income
2021/8/16
2021/7/6
2021/6/30
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
Announcement on Qualification of Executive Director
2021/5/25
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
2021/6/15
2021/8/25
49
Announcement - Proposed Amendments to the Articles of Association
Serial No.
Items
55
56
57
40
Notification Letter and Change Request Form to Registered Shareholders
120 Annual Report 2021 | Other Information
Notification Letter and Request Form to Non-Registered Shareholders
Date of disclosure
2021/9/15
2021/9/15
2021/9/28
58
2021/9/28
59
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
2021/9/15
2021 Interim Report
54
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
Overseas Regulatory Announcement
-
China Life Insurance Company Limited -
52
2021/8/25
Announcement on Changes in Accounting Estimates
53
Announcement of Premium Income
2021/9/13
Announcement
-
83
Connected Transactions
Equity Investment Plans
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;
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.
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 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.
With the assistance of our actuarial experts, we performed
the following audit procedures:
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.
•
•
•
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.
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.
Long-term insurance contract liabilities
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:
Refer to Notes 2.12 and 15 to the consolidated financial
statements.
. 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
•
126 Annual Report 2021 | Financial Report
Independent Auditor's Report (continued)
KEY AUDIT MATTERS (continued)
2021/3/25
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;
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.
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;
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
Independently developing fair value estimates and
comparing them to the Group's valuation results on a
sample basis.
Refer to Note 4.4 to the consolidated financial
statements.
Fair value of level 3 financial assets
Key Audit Matter
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;
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;
Testing the completeness and accuracy of the underlying
key data used by the Group in the cash flows projections;
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.
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.
Annual Report 2021 | Financial Report 127
Independent Auditor's Report (continued)
KEY AUDIT MATTERS (continued)
BASIS FOR OPINION
36
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.
AMP
CLWM
CGB
CLP&C
CLI
China Life Capital
Ministry of Finance
Pension Company
CBIRC
HKSE
SSE
Company Law
Insurance Law
Securities Law
Articles of Association
China or PRC
CSRC
ESG
AMC
China Life, the Company21
_
Investment in Partnerships through
2021/12/16
Announcement
-
Connected Transactions - Acquisition of Creditor's Rights on the
84
CLIC
2021/12/16
85
Supplemental Announcement
Formation of Partnerships
Connected Transactions in relation to the
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:
Trust Loan through Asset-backed Plan
RMB
China Life Insurance Company Limited and its subsidiaries
China Life Insurance (Group) Company, the controlling shareholder of the
Company
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;
Independent Auditor's Report
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
*
FINANCIAL
REPORT
Annual Report 2021 | Other Information 123
21 Except for "the Company" referred to in the Consolidated Financial Statements.
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
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
Environment, Social and Governance
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.
Our opinion
2021/5/25
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.
Serial No.
27
26
2021/4/15
Reply Slip of H Share Shareholders
25
2021/4/15
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
24
2 22
2021/4/15
Notice of Annual General Meeting
23
23
2021/4/15
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
22
22
2021/4/15
Annual Report 2020
21
2021/4/14
Notice of Board Meeting
20
2021/4/13
Announcement of Premium Income
28
2021/4/15
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
2021/4/28
2021/5/25
Appointment of Auditors for the Year 2021, General Mandate to Issue H Shares and
Supplemental Notice of Annual General Meeting
34
2021/5/13
Announcement of Premium Income
33
2021/4/28
Overseas Regulatory Announcement - China Life Insurance Company Limited -
Announcement on Changes in Accounting Estimates
32
2021/4/15
35
Announcement - Proposed Change of Auditors
2021/4/28
Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2021)
30
2021/4/28
2021 First Quarter Report
29
Date of disclosure
Items
Annual Report 2021 | Other Information 119
2021/4/21
31
Supplemental Notice of Annual General Meeting
40,598
47,129
Receivables and payables
Income tax paid
(5,862)
3,004
(1,478)
Financial liabilities at fair value through profit or loss
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
249,055
28,265
(18,097)
(313)
(33,512)
15,728
351
46
305
(45)
45
(359)
(359)
(18,089)
(18,089)
(15,378)
15,378
47,818
1,505
RMB million
(3,263)
2020
(Restated
Note 35(f) (ii)
(21,954)
(44,527)
Increase in securities at fair value through profit or loss, net
Changes in operating assets and liabilities:
(7,666)
(10,328)
Net gains on investments of associates and joint ventures
(119)
(645)
Foreign exchange losses/(gains)
5,162
5,287
419,866
445,472
(36,483)
(25,287)
(154,497)
(178,387)
54,476
50,495
Depreciation and amortisation
Insurance contracts
Net realised and unrealised gains on financial assets
Investment income
Adjustments for:
Profit before income tax
CASH FLOWS FROM OPERATING ACTIVITIES
RMB million
-
138 Annual Report 2021 | Financial Report
3,753
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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
Annual Report 2021 | Financial Report 129
Independent Auditor's Report (continued)
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.
As at
As at
As at 31 December 2021
Consolidated Statement of Financial Position
ASSETS
130 Annual Report 2021 | Financial Report
GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
24 March 2022
Certified Public Accountants
PricewaterhouseCoopers
The engagement partner on the audit resulting in this independent auditor's report is Yip Siu Foon, Linda.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
Hong Kong,
RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH
Investments in associates and joint ventures
(7,469)
Disposals of equity investments
Maturities of debt investments
36,774
37,708
Disposals of debt investments
Disposals and maturities:
Disposals of property, plant and equipment
CASH FLOWS FROM INVESTING ACTIVITIES
286,448
Net cash inflow/(outflow) from operating activities
775
50,921
826
4,120
304,019
Interest received – securities at fair value through profit or loss
Dividends received – securities at fair value through profit or loss
Disposals of subsidiaries
Debt investments
(5,475)
Property, plant and equipment
(338,306)
(409,676)
(593,917)
(745,973)
Purchases:
57
2,175
341
308,406
385,308
198,640
196,596
Equity investments and subsidiaries
559
(4,608)
(4,594)
(9,846)
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
Total transactions with owners
As at 31 December 2020
As at 31 December 2021
Non-
controlling
Total
interests
Other
equity
Share
capital instruments
Retained
Reserves
earnings
Attributable to equity holders of the Company
RMB million RMB million
Total transactions with owners
Dividends to non-controlling interests
(59)
344
(4,549)
25,750
47,863
77,123
46,358
75,956
1,505
Others
1,167
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)
Dividends paid
The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
RMB million
RMB million RMB million RMB million
(Note 36)
308
(8,538)
(7,791)
14,970
(36,859)
134
(29,546)
28,265
237,935
(1,055)
183,856
456,937
28,265
237,935
183,856
6,881
456,937
50,921
1,491
52,412
6,881
(7,791)
(174)
(174)
(Note 37)
28,265
7,791
197,266
170,458
5,580
409,360
50,257
1,116
51,373
25,699
51
25,750
_____ _- 25,699
50,257
1,167
77,123
- 16,025
(16,025)
(20,834)
(20,834)
25,406
(4,490)
- Non-controlling interests
· Equity holders of the Company
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
9
22
54,476
1,917
(3,103)
Net profit
52,412
51,373
Attributable to:
- Equity holders of the Company
50,921
50,495
Net gains on investments of associates and joint ventures
(758,239)
(784,763)
Policyholder dividends resulting from participation in profits
(26,511)
(28,279)
Underwriting and policy acquisition costs
(65,744)
(84,361)
Finance costs
27
(5,598)
(3,747)
Administrative expenses
(40,808)
(37,706)
Statutory insurance fund contribution
21
(1,253)
(1,229)
Other expenses
(15,467)
(12,270)
Total benefits, claims and expenses
50,257
31 December
- Non-controlling interests
1,116
(1,793)
(3,959)
Share of other comprehensive income of associates and
joint ventures under the equity method
1,260
672
Exchange differences on translating foreign operations
(398)
(986)
attributable to policyholders equity
Income tax relating to components of other comprehensive income
1,098
(8,482)
Other comprehensive income that may be reclassified to
profit or loss in subsequent periods
Other comprehensive income that will not be reclassified to
profit or loss in subsequent periods:
Share of other comprehensive income of associates and
joint ventures under the equity method
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
Attributable to:
29
Portion of fair value changes on available-for-sale securities
(14,386)
(21,722)
Basic and diluted earnings per share
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
RMB million
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
1,491
31 December
10.2
Notes
(10,628)
26
Investment contract benefits
(414,797)
(442,370)
25
Increase in insurance contract liabilities
(52,395)
(55,030)
25
Accident and health claims and claim adjustment expenses
(113,609)
(121,354)
25
BENEFITS, CLAIMS AND EXPENSES
Insurance benefits and claims expenses
Life insurance death and other benefits
805,049
824,930
(7,072)
Total revenues
(14,942)
17,748
Independent Auditor's Report (continued)
(292,799)
(393,731)
Net cash inflow/(outflow) from investing activities
(25,858)
(35,479)
Increase in policy loans, net
29,590
32,177
Dividends received
126,848
142,311
Interest received
(3,850)
(2,804)
Increase in securities purchased under agreements to resell, net
(10,947)
Decrease/(Increase) in term deposits, net
The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
9,403
Other income
Net written premiums
612,265
618,327
550
Less: premiums ceded to reinsurers
Gross written premiums
REVENUES
(Restated
Note 35(f) (ii)
RMB million
RMB million
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.
(8,015)
610,312
10,005
(6,053)
Net change in unearned premium reserves
21,900
4,943
24
Net fair value gains through profit or loss
14,583
20,344
23
Net realised gains on financial assets
154,497
178,387
22
Investment income
604,666
611,251
Net premiums earned
(1,546)
939
606,212
Su Hengxuan
Director
136 Annual Report 2021 | Financial Report
For the year ended 31 December 2021
The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
119
184
56,536
60,256
Short-term bank deposits
Cash at banks and in hand
Analysis of balances of cash and cash equivalents
56,655
60,440
53,339
56,655
End of the year
Beginning of the year
Cash and cash equivalents
3,316
3,785
Annual Report 2021 | Financial Report 137
Net increase in cash and cash equivalents
Notes to the Consolidated Financial Statements
1 ORGANISATION AND PRINCIPAL ACTIVITIES
1 January 2021
beginning on or after
Effective for
annual periods
Covid-19-Related Rent Concessions beyond
30 June 2021
Interest Rate Benchmark Reform - Phase 2
Content
and IFRS 16 Amendments
Amendments to IFRS 16
IFRS 9, IAS 39, IFRS 7, IFRS 4
Standards/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 2021
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.
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 24
March 2022.
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.
For the year ended 31 December 2021
Consolidated Statement of Cash Flows (continued)
(144)
Foreign exchange gains/(losses) on cash and cash equivalents
(20,834)
(18,089)
Dividends paid to equity holders of the Company
(6,505)
Repayment of borrowings
(3,779)
(8,194)
Interest paid
4,912
117,211
Increase in securities sold under agreements to repurchase, net
CASH FLOWS FROM FINANCING ACTIVITIES
(Restated
Note 35(f)(ii))
RMB million
RMB million
2020
2021
Dividends paid to non-controlling interests
(71)
Cash received from borrowings
(372)
(7,760)
111,139
Net cash inflow/(outflow) from financing activities
(1,592)
(750)
Cash paid related to other financing activities
1,069
Cash received related to other financing activities
22,846
22,850
Capital injected into subsidiaries by non-controlling interests
(9,060)
Cash paid for redemption of other equity instruments
(1,478)
(1,517)
6,822
(161)
Payment of lease liabilities
2021
Yuan Changqing
Director
Total liabilities and equity
Other assets
6,095
6,630
13
Reinsurance assets
20,730
20,361
12
Premiums receivable
45,200
51,097
10.8
Accrued investment income
7,947
12,915
10.7
Securities purchased under agreements to resell
Deferred tax assets
6,333
1,215,603
161,570
Cash and cash equivalents
14
As at
31 December
As at
31 December
2021
(continued)
As at 31 December 2021
Consolidated Statement of Financial Position
Annual Report 2021 | Financial Report 131
The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
4,252,466
87
56,655
60,440
4,891,085
121
29
1 April 2021
29,040
39,559
Total assets
2020
206,771
Securities at fair value through profit or loss
Investments in associates and joint ventures
14,217
13,374
8
Investment properties
3,076
2,518
7
52,747
54,398
6 9
Right-of-use assets
Property, plant and equipment
Note 35(f)(ii))
(Restated
2020
RMB million
RMB million
9
10.6
257,953
Held-to-maturity securities
1,429,287
10.5
Available-for-sale securities
6,333
10.4
Statutory deposits - restricted
545,678
529,488
10.3
Term deposits
658,535
666,087
(4,608)
Loans
1,189,369
1,533,753
10.1
239,584
Approved and authorised for issue by the Board of Directors on 24 March 2022.
Notes
RMB million
Share capital
3,795,529
4,404,427
384
339
21
191
248
15,286
7,481
104,476
133,676
22
29
20
Equity
Total liabilities
Reserves
Statutory insurance fund
Retained earnings
38
Total equity
Non-controlling interests
Attributable to equity holders of the Company
4,252,466
456,937
486,658
4,891,085
6,881
8,073
450,056
478,585
183,856
201,265
237,935
249,055
28,265
28,265
36
37
RMB million
Current income tax liabilities
Other liabilities
18,686
17
Interest-bearing loans and borrowings
122,510
124,949
Policyholder dividends payable
288,212
313,594
16
2,973,225
3,419,899
15
Investment contracts
Insurance contracts
Liabilities
LIABILITIES AND EQUITY
(Restated
Note 35(f) (ii))
19,556
Deferred tax liabilities
Lease liabilities
2,664
53,021
48,699
Premiums received in advance
55,031
56,818
Annuity and other insurance balances payable
122,249
239,446
19
Securities sold under agreements to repurchase
3,732
3,416
Financial liabilities at fair value through profit or loss
34,992
34,994
18
Bonds payable
2,182
14
For the year ended 31 December 2021
For the year ended 31 December 2021
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.
2.7 Leases
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
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.
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
Estimated useful lives
15 to 35 years
3 to 11 years
4 to 8 years
Leasehold improvements
Motor vehicles
Office equipment, furniture and fixtures
Buildings
Depreciation is computed on a straight-line basis to write down the cost of each asset to its residual value over its
estimated useful lives as follows:
Depreciation
Impairment and gains or losses on disposals
Subsequent measurement
The Group applies the straight-line method in depreciating the right-of-use assets. If it is reasonably certain that
ownership of a leased asset transfers to the Group at the end of the lease term, the leased asset is depreciated under
the remaining useful life of the asset. If it cannot be reasonably determined that ownership of a leased asset transfers to
the Group at the end of the lease term, the Group depreciates the right-of-use asset from the commencement date to the
earlier of the end of the lease term or the end of the useful life of the right-of-use asset.
The Group uses a constant periodic rate of interest to calculate interest on the lease liability in each period during the
lease term and recognises the interest in profit or loss.
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:
2.9.a Classification
2.9 Financial assets
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.
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.
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.
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.
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.
2.8 Investment properties
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.
As a lessor
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.
COVID-19-Related Rent Concessions
As a lessee (continued)
2.7 Leases (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 147
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.
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.
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 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.
(i) Securities at fair value through profit or loss
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)
2.2 Consolidation (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 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
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;
•
• derecognises the cumulative translation differences recorded in equity;
derecognises the carrying amount of any non-controlling interests;
•
derecognises the assets (including goodwill) and liabilities of the subsidiary;
•
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
the Group loses control over a subsidiary, it:
Profit or loss and each component of OCI are attributed to the equity holders of the Company and to the non-controlling
interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting
policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full upon consolidation.
2.2 Consolidation (continued)
recognises the fair value of any investment retained;
The investments in subsidiaries are accounted for only in the Company's statement of financial position at cost less
impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost
also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the
basis of dividends received and receivable.
Transactions with non-controlling interests
The Group treats transactions with non-controlling interests that do not result in loss of controls as equity transactions.
For shares purchased from non-controlling interests, the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposal of
shares to non-controlling interests are also recorded in equity.
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 145
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
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)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
144 Annual Report 2021 | Financial Report
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
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.
2.6 Property, plant and equipment
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.
148 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
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.
Classification and measurement
IFRS 9 requires that the Group classifies debt instruments based on the combined effect of application of business
models (hold to collect contractual cash flows, hold to collect contractual cash flows and sell financial assets or other
business models) and contractual cash flow characteristics (solely payments of principal and interest on the principal
amount outstanding or not). Debt instruments not giving rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding would be measured at fair value through profit or loss. Other debt
instruments giving rise to cash flows that are solely payments of principal and interest on the principal amount
outstanding would be measured at amortised cost, fair value through other comprehensive income ("FVOCI") or fair
value through profit or loss, based on their respective business models. The Group analysed the contractual cash flow
characteristics of financial assets as at 31 December 2021 and made relevant disclosures in Note 34.
Equity instruments would generally be measured at fair value through profit or loss unless the Group elects to measure
at FVOCI for certain equity investments not held for trading. This will result in unrealised gains and losses on equity
instruments currently classified as available-for-sale securities being recorded in income going forward. Currently, these
unrealised gains and losses are recognised in other comprehensive income ("OCI"). If the Group elects to record equity
investments at FVOCI, gains and losses would 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.
Impairment
IFRS 9 replaces the "incurred loss" model with the "expected credit loss" model which is designed to include forward-
looking information. The Group is in the process of developing and testing the key models required under IFRS 9 and
analysing the impact on the expected loss provision; the Group 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.
Hedge accounting
The Group does not apply the hedge accounting currently, so the Group expects that the new hedge accounting model
under IFRS 9 will have no impact on the Group's consolidated financial statements.
140 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
IFRS 9 Financial Instruments
For the year ended 31 December 2021
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 2021
Standards/Amendments
Amendments to IFRS 3
Amendments to IAS 16
Amendments to IAS 37
Annual improvements
Amendments to IAS 1
IFRS 17
Amendment to IAS 12
IFRS 10 and IAS 28
Amendments
Content
Update Reference to the Conceptual Framework
Property, Plant and Equipment:
Proceeds before intended use
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1 January 2018
Effective for
annual periods
beginning on or after
Financial Instruments
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.1 Basis of preparation (continued)
2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
financial year beginning on 1 January 2021 (continued)
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark Reform
Phase 2
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:
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.
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.
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.
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.
IFRS 16 Amendment - Covid-19-Related Rent Concessions beyond 30 June 2021
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.
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.
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.
Annual Report 2021 | Financial Report 139
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.1 Basis of preparation (continued)
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
Standards/Amendments
IFRS 9
Content
Onerous Contracts - Cost of Fulfilling a Contract
Annual Improvements to IFRS Standards 2018-2020
Cycle
Classification of Liabilities as Current or Non-current
Insurance Contracts
Deferred Tax related to Assets and Liabilities arising from
a Single Transaction
Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
For the year ended 31 December 2021
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 2021 (continued)
IFRS 17 Insurance Contracts (continued)
Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct
investment components) are not presented in the statement of comprehensive income, but are recognised directly in
the statement of financial position;
Insurance services results are presented separately from the insurance finance income or expense;
Extensive disclosures to provide information on the recognised amounts from insurance contracts and the nature and
extent of risks arising from these contracts.
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.
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.
2.2 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);
exposure, or rights, to variable returns from its involvement with the investee; and
.
the ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
the contractual arrangement with the other vote holders of the investee;
•
rights arising from other contractual arrangements; and
the Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the subsidiary.
142 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 141
The effect of changes in discount rates will be reported in either profit or loss or OCI, determined by an accounting
policy choice;
Effective for
annual periods
beginning on or after
1 January 2022
1 January 2022
1 January 2022
1 January 2022
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1 January 2023
1 January 2023
No mandatory effective
date yet determined but
available for adoption
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
IFRS 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 recognition of insurance revenue and insurance service expenses in the statement of comprehensive income
based on the concept of services provided during the period;
1 January 2023
Notes to the Consolidated Financial Statements (continued)
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.
Housing benefits
All full-time employees of the Group are entitled to participate in various government-sponsored housing funds. The Group
contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees. The Group's
liability in respect of these funds is limited to the contributions payable in each year.
Stock appreciation rights
Compensation under the stock appreciation rights is measured based on the fair value of the liabilities incurred and is
expensed over the vesting period. Valuation techniques including option pricing models are used to estimate fair value
of relevant liabilities. The liability is re-measured at the end of each reporting period to its fair value until settlement. Fair
value changes in the vesting period are included in administrative expenses and changes after the vesting period are
included in net fair value gains through profit or loss in net profit. The related liability is included in other liabilities.
154 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.18 Share capital
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.
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.
Other equity instruments are Core Tier 2 Capital Securities issued by the Group. These securities contain no contractual
obligation to deliver cash or another financial asset; or to exchange financial assets or financial liabilities with another
entity under conditions that are potentially unfavourable to the Group; or to be settled in the Group's own equity
instruments. Therefore, the Group classifies these securities as other equity instruments. Fees, commissions and
other transaction costs of these securities' issuance are deducted from equity. The distributions of the securities are
recognised as profit distribution at the time of declaration.
2.20 Revenue recognition
Turnover of the Group represents the total revenues which include the following:
Premiums
Premiums from long-term insurance contracts are recognised as revenue when due from the policyholders.
Premiums from the sale of short duration accident and health insurance products are recorded when written and are
accreted to earnings on a pro-rata basis over the term of the related policy coverage.
Policy fee income
The policy fee income for investment contracts mainly consists of acquisition costs and various fees (handling fees and
management fees, etc.) over the period of which the service is provided. Policy fee income net of certain acquisition costs
is amortised over the expected life of the contracts and recognised as other income.
Investment income
2.19 Other equity instruments
2.21 Finance costs
Pension benefits
Embedded derivatives that are not closely related to their host contracts and meet the definition of a derivative are
separated and fair valued through profit or loss. The Group does not separately measure embedded derivatives that
meet the definition of an insurance contract or embedded derivatives that are closely 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).
The benefits to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets.
Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the
reinsured insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance liabilities are
primarily premiums payable for reinsurance contracts and are recognised as expenses when due.
The Group assesses its reinsurance assets for impairment as at the end of reporting period. If there is objective evidence
that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable
amount and recognises that impairment loss in net profit.
2.12.3 Investment contracts
For investment contracts with or without DPF, the Company's policy fee income mainly consists of acquisition cost
and various fees (handling fees and management fees, etc.) over the period of which the service is provided. Policy fee
income net of certain acquisition cost is amortised over the expected life of the contracts by period and recognised in
revenue.
Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment contracts are
carried at amortised cost.
2.12.4 DPF in long-term insurance contracts and investment contracts
DPF is contained in certain long-term insurance contracts and investment contracts. These contracts are collectively
called participating contracts. The Group is obligated to pay to the policyholders of participating contracts as a group at the
higher of 70% of accumulated surplus available and the rate specified in the contracts. The accumulated surplus available
mainly arises from net investment income and gains and losses arising from the assets supporting these contracts. To the
extent unrealised gains or losses from available-for-sale securities are attributable to policyholders, shadow adjustments
are recognised in OCI. The surplus owed to policyholders is recognised as policyholder 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.
2.13 Financial liabilities at fair value through profit or loss
2.17 Employee benefits
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.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.14 Securities sold under agreements to repurchase
The Group retains substantially all the risk and rewards of ownership of securities sold under agreements to repurchase
which generally mature within 180 days from the transaction date. Therefore, securities sold under agreements to
repurchase are classified as secured borrowings. The Group may be required to provide additional collateral based on the
fair value of the underlying securities. Securities sold under agreements to repurchase are recorded at amortised cost,
i.e., their cost plus accrued interest at the end of the reporting period. It is the Group's policy to maintain effective control
over securities sold under agreements to repurchase which includes maintaining physical possession of the securities.
Accordingly, such securities continue to be carried on the consolidated statement of financial position.
2.15 Bonds payable
Bonds payable are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest rate method. Amortised cost is calculated by taking into account any discount or premium at acquisition and
transaction costs.
2.16 Derivative instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at their fair value. The resulting gain or loss of derivative financial instruments is recognised in
net profit. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
Annual Report 2021 | Financial Report 153
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.
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.
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 judgements exercised in the valuation of insurance contract liabilities (including contracts with DPF) affect the
amounts recognised in the consolidated financial statements as insurance contract benefits and insurance contract
liabilities.
The impact of the various assumptions and their changes are described in Note 15.
Annual Report 2021 | Financial Report 157
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.2 Financial instruments
The Group's principal investments are debt securities, equity securities, term deposits and loans. The critical estimates
and judgements are those associated with the recognition of impairment and the measurement of fair value.
The Group considers a wide range of factors in the impairment assessment as described in Note 2.9.c.
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.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When the fair values of financial assets and liabilities recorded in the
consolidated statement of financial position cannot be measured based on quoted prices in active markets, their fair value
is measured using valuation techniques which require a degree of judgements. The methods and assumptions used by
the Group in measuring the fair value of financial instruments are as follows:
debt securities: fair values are generally based upon current bid prices. Where current bid prices are not readily
available, fair values are estimated using either prices observed in recent transactions, values obtained from current
bid prices of comparable investments or valuation techniques when the market is not active.
equity securities: fair values are generally based upon current bid prices. Where current bid prices are not readily
available, fair values are estimated using either prices observed in recent transactions or commonly used market
pricing models. Equity securities, for which fair values cannot be measured reliably, are recognised at cost less
impairment.
securities purchased under agreements to resell, policy loans, term deposits, interest-bearing loans and borrowings,
and securities sold under agreements to repurchase: the carrying amounts of these assets in the consolidated
statement of financial position approximate fair value.
fair values of other loans are obtained from valuation techniques.
For the description of valuation techniques, please refer to Note 4.4. Using different valuation techniques and parameter
assumptions may lead to some differences of fair value estimations.
3.3 Impairment of investments in associates and joint ventures
The Group assesses whether there are any indicators of impairment for investments in associates and joint ventures
at the end of each reporting period. Investments in associates and joint ventures are tested for impairment when there
are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of
investments in associates and joint ventures exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use. The calculation of the fair value less costs of disposal is based on available data from
binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental
costs for disposing of investments in associates and joint ventures. When value in use calculations are undertaken, the
Group must estimate the expected future cash flows from investments in associates and joint ventures and choose a
suitable discount rate in order to calculate the present value of those cash flows.
3.4 Income tax
158 Annual Report 2021 | Financial Report
•
2.22 Current and deferred income taxation
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.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
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.
Annual Report 2021 | Financial Report 155
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.22 Current and deferred income taxation (continued)
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Substantively enacted tax rates
are used in the determination of deferred income tax.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint
ventures except where the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not be reversed in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Conversely, previously unrecognised deferred tax assets are reassessed by the end of each reporting period
and are recognised to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised.
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.
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.
2.23 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.
156 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
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.
2.12.2.c Reinsurance contracts held
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.
2.12.2.b Liability adequacy test
a breach of contract, such as a default or delinquency in payments;
it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganisation; and
•
the disappearance of an active market for that financial asset because of financial difficulties.
In evaluating whether a decline in value is impairment for equity securities, the Group also considers the extent or the
duration of the decline. The quantitative factors include the following:
the market price of the equity securities was more than 50% below their cost at the reporting date;
the market price of the equity securities was more than 20% below their cost for a period of at least six months at the
reporting date; and
the market price of the equity securities was below their cost for a period of more than one year (including one year)
at the reporting date.
When the decline in value is considered impairment, held-to-maturity debt securities are written down to their present
value of estimated future cash flows discounted at the securities' effective interest rates, available-for-sale debt
securities and equity securities are written down to their fair value, and the change is recorded in net realised gains
on financial assets in the period the impairment is recognised. The impairment loss is reversed through net profit if in
a subsequent period the fair value of a debt security increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised through net profit. The impairment losses recognised in net profit on
equity instruments are not reversed through net profit.
significant financial difficulty of the issuer or debtor;
2.10 Fair value measurement
•
in the principal market for the asset or liability, or
in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
150 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
The Group measures financial instruments, such as securities at fair value through profit or loss and available-for-sale
securities, at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
measurement of assets and liabilities is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
•
2.9 Financial assets (continued)
For the year ended 31 December 2021
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 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial assets (continued)
2.9.a Classification (continued)
(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
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:
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.
Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase or sell assets.
Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through
profit or loss, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the
rights to receive cash flows from the investments have expired or when they have been transferred and the Group has
also transferred substantially all risks and rewards of ownership.
Securities at fair value through profit or loss and available-for-sale securities are carried at fair value. Equity investments
that do not have a quoted price in an active market and whose fair value cannot be reliably measured are carried at cost,
net of allowance for impairments. Held-to-maturity securities are carried at amortised cost using the effective interest
method. Investment gains and losses on sales of securities are determined principally by specific identification. Realised
and unrealised gains and losses arising from changes in the fair value of the securities at fair value through profit or
loss category, and the change of fair value of available-for-sale debt securities due to foreign exchange impact on the
amortised cost are included in net profit in the period in which they arise. The remaining unrealised gains and losses
arising from changes in the fair value of available-for-sale securities are recognised in OCI. When securities classified
as available-for-sale securities are sold or impaired, the accumulated fair value adjustments are included in net profit as
realised gains on financial assets.
Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at amortised
cost.
Loans are carried at amortised cost, net of allowance for impairment.
The Group purchases securities under agreements to resell substantially identical securities. These agreements are
classified as secured loans and are recorded at amortised cost, i.e., their costs plus accrued interests at the end of the
reporting period, which approximates fair value. The amounts advanced under these agreements are reflected as assets
in the consolidated statement of financial position. The Group does not take physical possession of securities purchased
under agreements to resell. Sale or transfer of the securities is not permitted by the respective clearing house on which
they are registered while the lent capital is outstanding. In the event of default by the counterparty, the Group has the
right to the underlying securities held by the clearing house.
Annual Report 2021 | Financial Report 149
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9.b Recognition and measurement
2.10 Fair value measurement (continued)
•
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.
(a) The reasonable estimate of liability for long-term insurance contracts is the present value of reasonable estimates of
future cash outflows less future cash inflows. The expected future cash inflows include cash inflows of future premiums
arising from the undertaking of insurance obligations, with consideration of decrement mostly from death and surrenders.
The expected future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of the following:
•
guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals,
maturities and surrenders;
additional non-guaranteed benefits, such as policyholder dividends; and
reasonable expenses incurred to manage insurance contracts or to process claims, including maintenance expenses
and claim settlement expenses. Future administration expenses are included in the maintenance expenses.
Expenses are determined based on expense analysis with consideration of future inflation and the Group's expense
management control.
On each reporting date, the Group reviews the assumptions for reasonable estimates of liability and risk margins, with
consideration of all available information, taking into account the Group's historical experience and expectation of future
events. Changes in assumptions are recognised in net profit. Assumptions for the amortisation of residual margin are
locked in at policy issuance and are not adjusted at each reporting date.
(b) Margin has been taken into consideration while computing the reserve of insurance contracts, measured separately
and recognised in net profit in each period over the life of the contracts. At the inception of the contracts, the Group does
not recognise Day 1 gain, whereas on the other hand, Day 1 loss is recognised in net profit immediately.
Margin comprises risk margin and residual margin. Risk margin is the reserve accrued to compensate for the uncertain
amount and timing of future cash flows. At the inception of the contract, the residual margin is calculated net of certain
acquisition costs, mainly consist of underwriting and policy acquisition costs, by the Group representing Day gain and
will be amortised over the life of the contracts. For insurance contracts of which future returns are affected by investment
yields of corresponding investment portfolios, their related residual margins are amortised based on estimated future
participating dividends payable to policyholders. For insurance contracts of which future returns are not affected by
investment yields of corresponding investment portfolios, their related residual margins are amortised based on sum
assured of outstanding policies. The subsequent measurement of the residual margin is independent from the reasonable
estimate of future discounted cash flows and risk margin. The assumption changes have no effect on the subsequent
measurement of the residual margin.
(c) The Group has considered the impact of time value on the reserve calculation for insurance contracts.
(iii) Universal life contracts and unit-linked contracts
Universal life contracts and unit-linked contracts are unbundled into the following components:
insurance components
•
non-insurance components
The insurance components are accounted for as insurance contracts; and the non-insurance components are accounted
for as investment contracts (Note 2.12.3), which are stated in the investment contract liabilities.
152 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
2.12.2 Insurance contracts (continued)
(ii) Long-term insurance contracts (continued)
2.12.2.a Recognition and measurement (continued)
2.12 Insurance contracts and investment contracts (continued)
2.12 Insurance contracts and investment contracts (continued)
2.12.2 Insurance contracts (continued)
2.11 Cash and cash equivalents
Cash amounts represent cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
with original maturities of 90 days or less, whose carrying value approximates fair value.
2.12 Insurance contracts and investment contracts
2.12.1 Classification
The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by the Group
are classified as insurance contracts and investment contracts. Insurance contracts are those contracts that transfer
significant insurance risk. They may also transfer financial risk. Investment contracts are those contracts that transfer
financial risk without significant insurance risk. A number of insurance and investment contracts contain a discretionary
participating feature ("DPF"). This feature entitles the policyholders to receive additional benefits or bonuses that are, at
least in part, at the discretion of the Group.
2.12.2 Insurance contracts
2.12.2.a Recognition and measurement
(i) Short-term insurance contracts
Premiums from the sale of short duration accident and health insurance products are recorded when written and are
accreted to earnings on a pro-rata basis over the term of the related policy coverage. Reserves for short duration
insurance products consist of unearned premium reserve and expected claims and claim adjustment expenses reserve.
Actual claims and claim adjustment expenses are charged to net profit as incurred.
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.
Reserves for claims and claim adjustment expenses consist of the reserves for reported and unreported claims and
reserves for claims expenses with respect to insured events. In developing these reserves, the Group considers the
nature and distribution of the risks, claims cost development, and experiences in deriving the reasonable estimated
amount and the applicable margins. The methods used for reported and unreported claims include the case-by-case
estimation method, average cost per claim method, chain ladder method, etc. The Group calculates the reserves for
claims expenses based on the reasonable estimates of the future payments for claims expenses.
(ii) Long-term insurance contracts
Long-term insurance contracts include whole life insurance, term life insurance, endowment insurance and annuity
policies with significant life contingency risk. Premiums are recognised as revenue when due from policyholders.
The Group uses the discounted cash flow method to estimate the reserve of long-term insurance contracts. The reserve
of long-term insurance contracts consists of a reasonable estimate of liability, a risk margin and a residual margin. The
long-term insurance contract liabilities are calculated using various assumptions, including assumptions on mortality rates,
morbidity rates, lapse rates, discount rates, and expense assumptions, and based on the following principles:
Annual Report 2021 | Financial Report 151
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The unearned premium reserve represents the portion of the premiums written net of certain acquisition costs relating to
the unexpired terms of coverage.
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
Annual Report 2021 | Financial Report 167
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.
19,556
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.
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.
4.2 Financial 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 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.
4.2.2 Credit risk
4 RISK MANAGEMENT (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
166 Annual Report 2021 | Financial Report
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).
Notes to the Consolidated Financial Statements (continued)
Credit risk exposure
For the year ended 31 December 2021
maturity
4.2 Financial risk (continued)
19,556
3 years
than
than
Later
not later
than
1 year but 3 years but
not later
Later than Later than
4 RISK MANAGEMENT (continued)
(undiscounted)
than
1 year
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:
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.
Liquidity risk is the risk that the Group is unable to obtain funds at a reasonable funding cost when required to meet a
repayment obligation and fund its asset portfolio within a certain time.
4.2.3 Liquidity risk
Contractual and expected cash flows
5,172
350
5,172
339
10
11
21
297
profit or loss
3,615
3,615
- Securities at fair value through
Term deposits
- Available-for-sale securities
1,445
220
220
- Held-to-maturity securities
- Loans
Debt securities
6,953
847
1,219
5 years
1,445
2,444
7,990
Cash and cash equivalents
2,444
11,940
Total
11,940
other borrowings
Interest-bearing loans and
Financial liabilities
141,166
864
7,990
1,370
109,975
28,228
Total
2,400
7
140
358
1,297
598
729
5 years
4.1.2 Concentration of insurance risks (continued)
Financial assets
(56,818)
56,818
balances payable
Annuity and other insurance
(3,416)
3,416
through profit or loss
Financial liabilities at fair value
(239,679)
Interest-bearing loans and
-
to repurchase
Securities sold under agreements
Contractual cash outflows
(957,814)
(202,368) (5,990,882)
94,302
86,132
16,479
111,912
(31,671)
313,594
3,419,899
239,446
Investment contracts
other borrowings
Bonds payable
185
(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.
168 Annual Report 2021 | Financial Report
564,943 (3,781,475)
676,936 1,025,643
(108,269) (6,948,725)
(29)
(203)
(1,067)
46,426
18,686
(37,996)
(2,552)
(332)
(1,093)
(220,233)
(3,416)
696,041
427,497
Net cash inflow/(outflow)
4,089,035
Subtotal
2,182
Lease liabilities
34,994
(17,122)
RMB Million
Insurance contracts
Financial and insurance liabilities
6,333
Statutory deposits - restricted
372,571
144,271
529,488
Term deposits
137,705
110,345
508,864 3,029,545
1,936
461,413
138,241
666,087
Loans
231,604
2,470,354
Debt securities
699,457
699,457
Equity securities
Contractual cash inflows
376,766
Expected cash outflows
4,682
Securities purchased under
673,212 3,167,250
979,217
897,169
699,457
4,516,532
Subtotal
60,440
60,440
Cash and cash equivalents
53,822
181
20,361
Premiums receivable
1,964
49,133
51,097
Accrued investment income
346
12,658
12,915
agreements to resell
20,361
4,352
34,045
118,204
5,075
6.05%
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
%
6.70%
5,653
Kang Ning Whole Life (d)
2.17%
100.00%
536,150
100.00%
Insurance benefits of long-term
insurance contracts
Xin Xiang Zhi Zun Annuity
(Celebration Version) (a)
67
0.08%
As at 31 December 2020
RMB million
21
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
0.03%
%
Liabilities of long-term insurance contracts
Xin Xiang Zhi Zun Annuity
0.83%
Others (f)
2,684,791
79.43%
2,364,798
80.53%
Total
3,379,603
100.00%
24,398
2,936,533
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).
(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.
100.00%
542,974
0.43%
Hong Ying Participating Endowment (e)
(Celebration Version) (a)
73,283
2.17%
30,885
1.05%
Xin Xiang Jin Sheng Annuity (A Version) (b)
101,608
3.01%
64,055
14,479
2.18%
140,196
4.15%
114,111
3.89%
Kang Ning Whole Life (d)
365,246
10.81%
338,286
11.52%
Xin Fu Ying Jia Annuity (c)
Annual Report 2021 | Financial Report 161
Total
416,859
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.
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 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.
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
(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.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.5 Determination of control over investee
The Group applies its judgement to determine whether the control indicators set out in Note 2.2 indicate that the Group
controls structured entities such as funds and asset management products.
The Group issues certain structured entities (e.g. funds and asset management 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.
4 RISK MANAGEMENT
Risk management is carried out by the Company's Risk Management Committee under policies approved by the
Company's Board of Directors.
The Group issues contracts that transfer insurance risk or financial risk or both. This section summarises these risks and
the way the Group manages them.
4.1 Insurance risk
4.1.1 Types of insurance risks
162 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
4 RISK MANAGEMENT (continued)
33,926
- Securities at fair value through
profit or loss
2 years later
1 year later
Year end
RMB Million
Total
2021
2020
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.
2019
2017
Estimated claims expenses
Short-term insurance contracts (accident year)
The following table indicates the claim development for short-term insurance contracts without taking into account the
impacts of ceded business:
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 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
4.1.3 Sensitivity analysis (continued)
4.1 Insurance risk (continued)
2018
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.
Annual Report 2021 | Financial Report 159
Notes to the Consolidated Financial Statements (continued)
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
6.28%
2.84%
3.27%
Hong Ying Participating Endowment (e)
66
0.01%
137
0.03%
Others (f)
429,419
79.09%
17,553
77.74%
34,094
7.96%
For the year ended 31 December 2021
4 RISK MANAGEMENT (continued)
4.1 Insurance risk (continued)
4.1.2 Concentration of insurance risks
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.
The table below presents the Group's major products of long-term insurance contracts:
For the year ended 31 December
2021
2020
Xin Xiang Jin Sheng Annuity (A Version) (b)
Product name
%
RMB million
%
Premiums of long-term insurance contracts
Xin Xiang Zhi Zun Annuity
(Celebration Version) (a)
40,851
7.52%
42,657
RMB million
Notes to the Consolidated Financial Statements (continued)
The Group manages insurance risks through two types of reinsurance agreements, ceding on a quota share basis or
a surplus basis, to cover insurance liability risk. Reinsurance contracts cover almost all products, which contain risk
liabilities. The products reinsured include: life insurance, accident and health insurance or death, disability, accident,
illness and assistance in terms of product category or function, respectively. These reinsurance agreements spread
insured risk to a certain extent and reduce the effect of potential losses to the Group. However, the Group's direct
insurance liabilities to the policyholder are not eliminated because of the credit risk associated with the failure of
reinsurance companies to fulfil their responsibilities.
4 RISK MANAGEMENT (continued)
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
Term deposits
7,785
-
Cash and cash equivalents
1,920
927
1,433
391
897
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
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 2021 and 2020, expressed in RMB equivalent:
As at 31 December 2021
Financial assets
Equity securities
198
- Available-for-sale securities
GB pound
EUR
Others
Total
10,989
75,694
86,683
- Securities at fair value through
profit or loss
4,776
US dollar HK dollar
289
Total
31,795
Annual Report 2021 | Financial Report 165
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
4 RISK MANAGEMENT (continued)
4.2 Financial risk (continued)
4.2.1 Market risk (continued)
(iii) Currency risk (continued)
As at 31 December 2020
US dollar
18,686
HK dollar
EUR
Others
Total
Financial assets
Equity securities
- Available-for-sale securities
9,711
For the year ended 31 December 2021
108,493
GB pound
(ii) Price risk
18,686
2,366
76,789
698
1,500
56
991
18
11
61
296
4,652
7,785
2,466
111,773
Financial liabilities
Interest-bearing loans and
other borrowings
11,668
Total
11,668
2,366
3
4.2.1 Market risk (continued)
4,652
4 RISK MANAGEMENT (continued)
Unpaid claims expenses
(50,275)
697
52,057
(49,157)
2,900
56,938
(34,301)
22,637
236,240
(210,006)
26,234
41,945
The following table indicates the claim development for short-term insurance contracts taking into account the impacts of
ceded business:
Estimated claims expenses
(41,945)
2017
1 year later
2 years later
Short-term insurance contracts (accident year)
2018
2019
2020
2021
Total
RMB Million
Year end
33,700
(34,328)
50,972
4.1 Insurance risk (continued)
40,601
4.2 Financial risk (continued)
49,727
52,589
56,938
34,845
42,785
51,051
Accumulated claims expenses paid
52,057
41,945
50,972
34,328
3 years later
4 years later
Estimated accumulated
claims expenses
34,328
41,945
34,328
40,157
34,328
4.2.1 Market risk
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
55,862
(33,580)
22,282
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.
(i) Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate due to changes
in market interest rates. The Group's financial assets are principally composed of term deposits, debt securities and
loans which are exposed to interest rate risk. Changes in the level of interest rates could have a significant impact on
the Group's overall investment return. Many of the Group's insurance policies offer guaranteed returns to policyholders.
These guarantees expose the Group to interest rate risk.
The Group manages interest rate risk through adjustments to portfolio structure and duration, and, to the extent possible,
by monitoring the mean duration of its assets and liabilities.
The sensitivity analysis for interest rate risk illustrates how changes in interest income and the fair value of future cash
flows of a financial instrument will fluctuate because of changes in market interest rates at the end of the reporting
period.
164 Annual Report 2021 | Financial Report
For the year ended 31 December 2021
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.
49,175
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.
51,260
(48,406)
2,854
Notes to the Consolidated Financial Statements (continued)
34,045
34,560
42,280
55,862
50,414
51,260
50,315
(49,629)
686
41,442
50,315
34,045
3 years later
41,442
51,994
Estimated accumulated
claims expenses
34,045
41,442
Accumulated claims expenses paid
(34,045)
(41,442)
Unpaid claims expenses
4 years later
99,649
Trust schemes managed by affiliated entities
and service fee
Investment income
99,649
Note 1
RMB million
Investment income
Interest held by
the Group
Maximum
exposure
RMB million
8,232
8,232
158,182
Funds managed by affiliated entities
Funds managed by third parties
2,096
97,988
1,298
Note 1
Debt investment schemes managed by
RMB million
affiliated entities
Investment income
9,172
9,172
18,275
Debt investment schemes managed by
Investment income
63,229
63,229
Note 1
Trust schemes managed by third parties
Investment income
1,298
As at 31 December 2020
Investment income
Size
15,770
39,817
Debt investment schemes managed by
Investment income
62,702
62,702
15,770
Note 1
Investment income
and service fee
Investment income
1,296 Investment income
1,296
1,994
Trust schemes managed by affiliated entities
27,747
97,988
Trust schemes managed by third parties
affiliated entities
Debt investment schemes managed by
third parties
Note 1
amount
Carrying
Unconsolidated structured entities
Investment income
and service fee
Investment income
107,372
107,372
Note 1
Others managed by third parties Note 2
14,150
14,150
28,368
Others managed by affiliated entities Note 2
and service fee
Investment income
51,172
51,172
of assets
27,747
RMB million
third parties
256,441
23,094
233,347
Common stocks
94,895
94,895
Preferred stocks
RMB million
RMB million
inputs
Level 3
inputs
Level 2
Level 1
Total
Significant
unobservable
RMB million
Significant
observable
52,127
Wealth management products
Government agency bonds
Note 1
58,561
49,353
9,208
Government bonds
52,127
Debt securities
136,456
49,530
21,010
Others
5,005
5,005
206,996
in active
markets
Quoted prices
Fair value measurement using
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
172 Annual Report 2021 | Financial Report
Note 2: Others included wealth management products, special asset management schemes, and asset-backed plans, etc.
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.
Investment income
and service fee
Investment income
4 RISK MANAGEMENT (continued)
75,551
Note 1
Others managed by third parties Note 2
12,681
12,681
290,937
Others managed by affiliated entities Note 2
75,551
4.3 Disclosures about interest in unconsolidated structured entities (continued)
(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
As at 31 December 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.
4.4 Fair value hierarchy
Available-for-sale securities
- Equity securities
Funds
Assets measured at fair value
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:
For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 3.2.
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.
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 173
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.
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.
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.
and service fee
Investment income
Funds managed by third parties
balances payable
Maximum
exposure
RMB million
9,860
Annuity and other insurance
(3,732)
3,732
through profit or loss
Financial liabilities at fair value
(122,249)
55,031
122,249
Securities sold under agreements
Contractual cash outflows
(93,971) (5,618,867)
68,882 (798,317)
190,123 151,280
(29,149) (13,861)
288,212
2,973,225
to repurchase
Investment contracts
(55,031)
other borrowings
(2,996)
(14,680)
(4,384)
(2,044)
(328)
(1,273)
(19,951)
558,025
(3,732)
697,016
407,959
Interest-bearing loans and
Net cash inflow/(outflow)
Subtotal
2,664
Lease liabilities
34,992
Bonds payable
19,556
3,499,661
Insurance contracts
Expected cash outflows
Financial and insurance liabilities
agreements to resell
Securities purchased under
720
6,098
297
6,333
7,947
Statutory deposits - restricted
197,867
329,191
75,364
545,678
Term deposits
31,464
2,260,215
173,729
1,753
7,947
Accrued investment income
45,200
616,777 2,435,697
905,028
577,976
700,748
3,907,620
Subtotal
56,655
56,655
Cash and cash equivalents
20,730
20,730
Premiums receivable
438
565
44,197
(36,498)
Interest held by
the Group
(1,250)
(331)
(76,598)
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'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.
4.3 Disclosures about interest in unconsolidated structured entities
According to the Supervision Information System of the China Risk Oriented Solvency System, the latest Integrated Risk
Rating result of the Company was Category A.
(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;
The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in or
sponsored.
(ii) Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
liquidity risk are low;
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:
269%
262%
260%
254%
396,749
(i) Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
liquidity risk are very low;
402,341
Annual Report 2021 | Financial Report 171
For the year ended 31 December 2021
9,860
168,466
Funds managed by affiliated entities
RMB million
RMB million
As at 31 December 2021
Notes to the Consolidated Financial Statements (continued)
of assets
Carrying
amount
Unconsolidated structured entities
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:
(i) The unconsolidated structured entities that the Group has interest in
4.3 Disclosures about interest in unconsolidated structured entities (continued)
4 RISK MANAGEMENT (continued)
Size
1,031,947
1,066,939
1,055,768
As at
31 December
2020
RMB million
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.
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
(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.
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.
4.2.3 Liquidity risk (continued)
4.2 Financial risk (continued)
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.
4 RISK MANAGEMENT (continued)
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 169
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.
540,179 (3,981,528)
(6,417,225)
(41)
For the year ended 31 December 2021
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.
170 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
1,020,756
RMB million
2021
31 December
As at
Comprehensive solvency ratio
Core solvency ratio
Minimum capital
Actual capital
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)
For the year ended 31 December 2021
4 RISK MANAGEMENT (continued)
128,789
1,033,817
228,289
2,752
Corporate bonds
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
566,716
495,927
Total
2,752
129,813
Others
293,924
86,803
Total
(3,732)
Equity
securities
Total
Derivative
financial
assets
Securities
at fair value
through
profit or loss
Debt
securities
Available-for-sale securities
(3,742)
The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2020:
4 RISK MANAGEMENT (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
176 Annual Report 2021 | Financial Report
(3,742)
(10)
4.4 Fair value hierarchy (continued)
9
83,837
2,957
Others
Common stocks
Funds
- Equity securities
Securities at fair value through profit or loss
144,721
- Debt securities
143,905
Others
81,795
75,551
6,244
Subordinated bonds
136,025
816
| | |
16,731
104
Corporate bonds
4,422
3,450
972
Government agency bonds
1,638
1,302
336
Government bonds
262
221
41
16,835
48,858
524
48,334
Debt
securities
133,617
RMB million
RMB million
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
inputs
techniques
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:
Range
4.4 Fair value hierarchy (continued)
The fair value is inversely related to the
discounts for lack of marketability
approach
Net asset value
method
Discounted cash
flow method
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
31 December 2021: 36,556
31 December 2020: 36,697
31 December 2021: 116,245
31 December 2020: 84,212
Discounted cash
flow method
securities
Debt
Discount rate
N/A
N/A
N/A
31 December 2021: 160,499
31 December 2020: 143,905
4 RISK MANAGEMENT (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Total gains/(losses) recorded in
(128)
(121)
(7)
Total gains/(losses) recorded in
profit or loss
58,439
other comprehensive income
234,993
16
128,899
19,953
105,650
38,486
Opening balance
Purchases
RMB million
RMB million
428
653
Disposals or exercises
7,127
(5,969)
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
143,905
Closing balance
(884)
(884)
Maturity
(6,276)
(307)
7,780
RMB million
2,408
Corporate bonds
169,013
Total
(9)
profit or loss
Investment contracts at fair value through
(3,416)
profit or loss
(3,425)
Financial liabilities at fair value through
43,250
1,615,779
349,127
90,425
45
7,989
5,643
83,734
43,150
784,845
Liabilities measured at fair value
481,807
(3,416)
(3,425)
Closing balance
Maturity
Disposals or exercises
comprehensive income
Total gains/(losses) recorded in other
Transfer into Level 3
(9)
Purchases
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
Total
100
Others
Funds
Equity securities
Securities at fair value through profit or loss
161,054
160,499
555
Common stocks
Others
94,149
16,880
Subordinated bonds
203,147
198,442
4,705
111,029
Others
17,572
222
6,646
2,346
Government agency bonds
Corporate bonds
1,393
1,240
153
Government bonds
- Debt securities
271
45,649
17,794
266
5
2,173
43,476
Available-for-sale securities
Debt
securities
RMB million
Securities
at fair value
through
profit or loss
Total
22,994
278,255
Common stocks
97,476
97,476
Funds
301,249
- Equity securities
Assets measured at fair value
RMB million
RMB million
RMB million
RMB million
inputs
Level 3
Available-for-sale securities
Preferred stocks
53,778
53,778
143,716
25,297
Government agency bonds
49,256
43,418
5,838
Government bonds
Debt securities
148,671
96,232
41,401
11,038
13,013
13,013
Wealth management products
Others
inputs
Level 2
259,753
Level 1
Significant
unobservable
4,073
36
36
71,076
293,924
9
(2,212)
(2,876)
150,010
43,661
143,905
RMB million
RMB million
RMB million
Debt
securities
Equity
securities
27,415
1,861
(2,876)
(14,894)
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:
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 175
349,127
45
188,583
160,499
(14,894)
Total
219,840
than
658,535
1 year but 3 years but
not later not later
Later than
Later than
than
Not later
Contractual and expected cash flows
(undiscounted)
Later
Without
maturity
As at 31 December 2020
4.2 Financial risk (continued)
4 RISK MANAGEMENT (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
235,901
Carrying
value
than
4.2.3 Liquidity risk (continued)
1 year
Loans
than
287,939
349,334
1,865,794
Debt securities
700,748
136,885
Equity securities
Contractual cash inflows
3 years
Financial assets
RMB Million
5 years
700,748
5 years
Deductions
(1,518)
(1)
(1,517)
(1,168)
(1)
(1,167)
329
As at 1 January 2020
Charge for the year
1
As at 31 December 2020
As at 31 December 2020
(2,355)
(1)
(2,356)
Impairment
As at 1 January 2020
Net book value
As at 1 January 2020
As at 31 December 2020
3,519
3,075
Accumulated depreciation
330
5,432
Total
5,430
3,075
1
3,076
2,517
1
2,518
Cost
Buildings
Others
1
RMB million
2
As at 1 January 2020
2
4,688
Additions
1,157
1
1,158
Deductions
(413)
(1)
(414)
As at 31 December 2020
4,686
1
31 December
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).
Cost
As at 1 January 2021
Additions
As at 31 December 2021
Accumulated depreciation
As at 1 January 2021
Additions
As at 31 December 2021
Net book value
As at 1 January 2021
As at 31 December 2021
Fair value
As at 1 January 2021
As at 31 December 2021
15,385
(414)
14,971
(1,168)
(429)
(1,597)
14,217
13,374
17,285
16,626
Annual Report 2021 | Financial Report 187
Notes to the Consolidated Financial Statements (continued)
RMB million
Buildings
1,893
1,840
The Group's right-of-use assets include the above assets and land use rights disclosed in Note 14.
186 Annual Report 2021 | Financial Report
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
7 LEASES (continued)
(b) The amounts recognised in profit or loss in relation to leases are as follows:
Interest on lease liabilities
Depreciation charge of right-of-use assets
Expense relating to short-term leases
Expense relating to leases of low-value assets
(except for short-term lease liabilities)
Total
8 INVESTMENT PROPERTIES
3,520
3,076
As at
31 December
2021
(2,854)
2020
RMB million
RMB million
96
1,411
113
332
1,518
260
1
2
As at
(1)
RMB million
(1,411)
Others
Accident
Health
Life
For the year ended 31 December 2020
5 SEGMENT INFORMATION (continued)
For the year ended 31 December 2021
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
Elimination
Total
RMB million
Revenues
154,497
3,870
462
9,202
140,963
Investment income
604,666
15,975
109,091
479,600
Net premiums earned
5,276
294,897
73,747
- Annuity
- Endowment
- Whole life
2,674
- Term life
612,265
16,583
115,089
480,593
Gross written premiums
109,275
913
87,371
239,446
257,953
569
4,496,312
223,824
11,668
259,618
16,044
9,893
4,001,202
For the year ended 31 December 2021
Total
Elimination
Others
Accident
As at 31 December 2021
For the year ended 31 December 2021
Health
Life
Unallocated
Segment assets
Others
Financial assets
(2,356)
(1)
284,459
4,011,095
275,662
12,237
6,950
672
14,536
217,288
repurchase
Securities sold under agreements to
313,594
17,490
296,104
Investment contracts
3,419,899
Others
10,069
3,180,931
Insurance contracts
Liabilities
4,891,085
55,916
54,398
Total
Others
Property, plant and equipment
4,780,771
481,777
228,899
8 INVESTMENT PROPERTIES (continued)
2,487
As at 1 January 2020
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
262
58
1,256
20,896
(3,134)
824,930
Benefits, claims and expenses
(144)
(26,367)
participation in profits
Policyholder dividends resulting from
(10,628)
(405)
(10,223)
Investment contract benefits
(442,370)
(208)
(28,956)
18,768
(413,206)
(55,030)
(6,954)
(48,076)
claim adjustment expenses
Accident and health claims and
(121,354)
(41)
(6,656)
(114,657)
Life insurance death and other benefits
Insurance benefits and claims expenses
Increase in insurance contract liabilities
Net realised gains on financial assets
178,387
611,251
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
Accident
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.
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)
(iv) Other businesses (Others)
(26,511)
Others
Elimination
6,856
496
10,831
160,204
Investment income
16,488
114,549
480,214
Net premiums earned
311,096
- Annuity
RMB million
97,791
69,923
- Whole life
2,501
- Term life
618,327
16,407
120,609
481,311
Gross written premiums
Revenues
Total
- Endowment
Cost
Underwriting and policy acquisition costs
(21,021)
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)
(354)
(5,290)
attributable to equity holders of
the Company
1,491
50,921
Other comprehensive income
- Non-controlling interests
- Equity holders of the Company
Attributable to
52,412
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.
Additions
As at 31 December 2020
Accumulated depreciation
As at 1 January 2020
Additions
As at 31 December 2020
Net book value
As at 1 January 2020
As at 31 December 2020
Fair value
As at 1 January 2020
Net profit
As at 31 December 2020
12,898
Net realised gains on financial assets
15,385
(757)
(411)
(1,168)
12,141
14,217
14,870
17,285
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.
Buildings
RMB million
1,917
Income tax
50,495
(270)
(1,307)
(8,961)
Other expenses
(1,253)
(99)
(367)
(787)
Statutory insurance fund contribution
(40,808)
(3,452)
(8,063)
(2,948)
(23,339)
Administrative expenses
(5,598)
(668)
(14)
(308)
(4,608)
Finance costs
(65,744)
(1,598)
(4,835)
(11,069)
(38,290)
3,134
Including: inter-segment expenses
17,443
1,682
8,599
22,771
Segment results
10,328
10,328
and joint ventures
Including: share of profit of associates
10,328
10,328
(15,467)
associates and joint ventures
(784,763)
3,134
(13,781)
(15,369)
(118,309)
(640,438)
Segment benefits, claims and expenses
3,134
(9)
(196)
(2,929)
Net gains on investments of
13,523
Including: inter-segment revenue
44
6 PROPERTY, PLANT AND EQUIPMENT (continued)
Notes to the Consolidated Financial Statements (continued)
184 Annual Report 2021 | Financial Report
54,398
762
6,789
315
2,574
43,958
As at 31 December 2021
52,747
977
11,332
461
2,658
37,319
As at 1 January 2021
Net book value
(25)
(1)
(24)
As at 31 December 2021
Disposals
For the year ended 31 December 2021
Cost
Office
equipment,
furniture and
Buildings
5,509
131
626
222
Additions
(121)
322
(6,456)
3
6,010
Transfers upon completion
Charge for the year
71,500
14,378
1,364
8,368
44,771
As at 1 January 2020
RMB million
Total
construction improvements
Leasehold
Motor Assets under
vehicles
fixtures
2,619
6,488
(25)
(24)
6,790
1,311
8,351
58,595
As at 31 December 2021
(1,506)
(548)
(46)
(456)
(456)
Disposals
(209)
(209)
Transfers into investment properties
5,403
3,267
5
716
1,415
Additions
(211)
182
(7,601)
2,432
77,479
Accumulated depreciation
As at 1 January 2021
As at 1 January 2021
Impairment
(23,056)
(1,670)
(996)
(5,777)
(14,613)
As at 31 December 2021
1,279
44
434
(1)
271
(3,105)
(379)
(149)
(778)
(1,799)
Charge for the year
(21,230)
(1,821)
(891)
(5,433)
(13,085)
Disposals
Transfers into investment properties
(2,098)
(2,098)
5,432
2
5,430
As at 1 January 2021
RMB million
Total
Others
Buildings
Cost
(a) Right-of-use assets
7 LEASES
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.
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
977
11,332
461
2,658
37,319
51,758
Additions
972
1
973
(1)
33-3
(2,853)
912
(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
1,038
As at 31 December 2021
(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
Charge for the year
Deductions
14,377
523
2,884
(189)
(725)
(1,582)
Charge for the year
(19,717)
(1,581)
(841)
(5,484)
(11,811)
As at 1 January 2020
Accumulated depreciation
(377)
74,002
11,333
1,352
8,091
50,428
As at 31 December 2020
(1,767)
(143)
(143)
(906)
(575)
Disposals
2,798
7,208
(2,873)
308
32,936
(25)
(24)
EE
As at 31 December 2020
As at 1 January 2020
Net book value
As at 31 December 2020
Disposals
Charge for the year
(25)
Disposals
(24)
Impairment
(21,230)
(1,821)
(891)
(5,433)
(13,085)
As at 31 December 2020
1,360
137
139
776
As at 1 January 2020
877
Transfers upon completion
2,798
2,448
(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
(12,270)
Including: inter-segment expenses
(2,292)
(148)
54,476
14,220
572
11,611
28,073
8,336
8,336
Net profit
Income tax
Segment results
and joint ventures
(84,361)
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
(3,103)
(2,284)
(15,921)
805,049
(2,448)
17,468
16,539
120,393
653,097
Segment revenues
(2,448)
2,448
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
Benefits, claims and expenses
Insurance benefits and claims expenses
Life insurance death and other benefits
(108,862)
(60,841)
Underwriting and policy acquisition costs
(28,279)
(150)
(28,129)
participation in profits
Policyholder dividends resulting from
(9,846)
(352)
(9,494)
Investment contract benefits
(5,315)
(414,797)
(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)
(220)
51,373
Attributable to
- Equity holders of the Company
3,233,223
Segment liabilities
114,339
23,288
370
6,013
84,668
Others
122,249
5,665
358
7,070
109,156
repurchase
Securities sold under agreements to
288,212
16,455
271,757
Investment contracts
2,973,225
10,096
195,487
2,767,642
225,025
10,824
28,953
3,498,025
11,333
1,352
8,091
50,428
As at 1 January 2021
RMB million
Total
construction improvements
vehicles
fixtures
Buildings
Insurance contracts
Leasehold
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
Motor Assets under
Liabilities
Total
Others
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
Unallocated
1,118
Depreciation and amortisation
25,699
402
78
1,534
23,685
attributable to equity holders of
the Company
1,116
50,257
Other comprehensive income
- Non-controlling interests
3,086
74,002
Property, plant and equipment
Health
4,252,466
46,626
52,747
4,153,093
356,860
11,639
237,498
3,547,096
265,274
239,584
675
Life
14,939
3,887,819
117,276
10,964
222,559
3,537,020
RMB million
Total
Elimination
Others
Accident
As at 31 December 2020
10,076
530
188 Annual Report 2021 | Financial Report
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.
5,598
Finance costs
acquisition costs
A decrease in regular premiums of new policies
-22.1%
84,361
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
accounts
benefits
An increase in the scale of universal insurance
7.9%
9,846
10,628
Investment contract
An increase in the change of insurance contract
liabilities
claims expenses
6.5%
3,747
580,801
49.4%
Administrative expenses
The
Dear Shareholders,
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.
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%
50,257
50,921
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
An increase in interest paid for securities sold
under agreements to repurchase
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.
618,754
An increase in the income of management
service fees by subsidiaries
Great efforts made by the Company in the
development of health insurance business
RMB million
Investment income
business
Accident insurance
5.0%
109,091
114,549
Health insurance business
0.1%
480,214
Life insurance business
1.1%
604,666
611,251
Net premiums earned
Main Reasons for Change
Change
2020
2021
of Comprehensive Income
Consolidated Statement
Major Items of the
For the year ended 31 December
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.
16,488
Insurance benefits and
15,975
178,387
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%
21,900
4,943
Net fair value gains through
profit or loss
financial assets
39.5%
14,583
20,344
Net realised gains on
An increase in interest income from debt-type
investments
15.5%
154,497
3.2%
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.
479,600
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.
98,410
115,421
First-year regular premiums with a payment duration of
ten years or longer
41,682
56,398
Renewal premiums
442,463
418,326
Gross investment income
214,057
198,596
Net profit attributable to equity holders of the Company
50,921
50,257
Value of one year's sales
Policy Persistency Rate (14 months)1 (%)
Policy Persistency Rate (26 months)¹ (%)
Surrender Rate² (%)
44,780
58,373
Including: Individual agent business sector
42,945
57,669
80.50
85.70
81.10
Including: First-year regular premiums
82.40
193,939
Premiums from new policies
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
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
and Analysis
REVIEW OF BUSINESS OPERATIONS
IN 2021
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.
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.
Annual Report 2021 | Management Discussion and Analysis 15
From left to right:
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
2020
Gross written premiums
618,327
612,265
175,864
1.20
Management
Discussion
As at
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
As at 31 December 2020
12.2%
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 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 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%.
12 Annual Report 2021 | Letter to Shareholders
1.09
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.
Renewal premiums
442,463
2021
1,072,140 ▼
premiums 2,101
75,353
premiums
98,410
As at
31 December
2021
Embedded value
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.
2020
Annual Report 2021 | Management Discussion and Analysis
premiums
Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of long-term insurance
contracts)
insurance
Short-term Single
First-year
regular
(RMB million)
31 December
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.
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%.
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.
17
Gross written premiums breakdown
147,709
164,690
34,292
3,048
26,551
45,745
175,771
after adjustments
the associates and joint ventures
Total equity attributable to equity holders of
(1,552)
(4,540)
16,981
427
(6,528)
Total adjustments (i)
10,854
10,221
33,865
8,669
3,048
2,612
79,974
Proportion of the Group's ownership
11,285
79,974
26,551
Net carrying value of the investments
(3,217)
Impairment
4,736
5,779
22,433
20,676
6,314
1,612
14,502
Gross carrying value of the investments
75.00%
66.67%
10.29%
43.86%
35.00%
40.00%
29.59%
43.686%
10,620
52,273
263,528
the associates and joint ventures
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
MCL
Joy City
China
Unicom
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 2020 and for the year ended 31 December 2020:
9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
For the year ended 31 December 2021
10,620
Notes to the Consolidated Financial Statements (continued)
Total assets
3,027,972
106,930
20,567
Total equity attributable to equity holders of
10,854
10,221
331,474
33,865
3,055
26,551
69,722
218,150
Total equity
173,159
13,342
251,001
1,068
17,512
80,379
193,806
2,809,822
Total liabilities
24,196
10,306
582,475
85
1,612
Total
22,433
1,533,753
104,668
63,305
201,988
209,627
617,515
911,451
265,198
349,370
RMB million
RMB million
2020
2021
31 December
31 December
As at
As at
(i) Unlisted debt securities include those traded on the Chinese interbank market.
Unlisted (i)
Listed overseas
Listed in Hong Kong, PRC
1,189,369
Listed in Mainland, PRC
246,134
87
Annual Report 2021 | Financial Report 191
68,300
Subordinated bonds
Corporate bonds
Government agency bonds
Government bonds
RMB million
Total
As at 31 December 2020
Level 1
Level 2
RMB million RMB million
RMB million
RMB million RMB million
Total
As at 31 December 2021
Level 1
Level 2
Debt securities - fair value hierarchy
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).
1,189,369
973,480
1,287,488
1,533,753
70
44
148
215,671
Debt securities
Total
Subordinated bonds
Other comprehensive income
185
339
12,525
2,823
208
1,730
4,675
13,812
Net profit/(loss)
853
360
306,490
5,259
2,193
77,990
61,271
80,525
Total revenues
4,736
5,779
(1,944)
630
1,991
(1,706)
Corporate bonds
Government agency bonds
Government bonds
Debt securities
10.1 Held-to-maturity securities
10 FINANCIAL ASSETS
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
192 Annual Report 2021 | Financial Report
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.
20,676
(i) Including adjustments for the difference of accounting policies, fair value and others.
314
10,819
2,823
203
3,721
5,305
11,868
Total comprehensive income
650
(25)
835
475
25,153
445
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:
75.00%
66.67%
The British Virgin Islands
The British Cayman Islands
10.29%
PRC
43.86%
PRC
35.00%
PRC
40.00%
PRC
29.59%
Hong Kong, PRC
43.686%
PRC
equity interest held
Percentage of
CLP&C
Place of incorporation
COFCO
Futures
China
Unicom
257,074
1,476
21,868
94,756
204,805
3,125,484
Total liabilities
24,195
RMB million RMB million RMB million
10,258
593,284
37,099
314,113
120,178
281,252
3,359,985
Total assets
RMB million
RMB million RMB million
RMB million RMB million
MCL
Joy City
Pipeline
Company
MCL
Joy City
Joint ventures
PRC
Percentage of
equity interest held
Place of incorporation
190 Annual Report 2021 | Financial Report
MCL
Joint ventures
Joy City
China Unicom
Pipeline Company
COFCO Futures
CLP&C
Sino-Ocean
CGB
Associates
Name
As at 31 December 2021, the major associates and joint ventures of the Group are as follows:
(v) There is no significant restriction for the Group to dispose of its 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.
43.686%
Hong Kong, PRC
29.59%
PRC
China Unicom
Pipeline Company
COFCO Futures
CLP&C
Sino-Ocean
CGB
Associates
Name
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:
For the year ended 31 December 2021
232
Notes to the Consolidated Financial Statements (continued)
The British Virgin Islands
66.67%
The British Cayman Islands
10.29%
PRC
43.86%
PRC
35.00%
PRC
40.00%
75.00%
447
13,035
234,501
352
331,665
5,583
6,846
82,549
68,645
74,905
Total revenues
4,237
5,546
22,644
21,438
1,692
10,151
11,899
86,179
Net carrying value of the investments
(3,217)
Impairment
4,237
5,546
897
22,644
Net profit/(loss)
5,091
348
14,389
3,081
273
(145)
5,056
19,892
Total comprehensive income
15
(27)
(8)
(766)
(35)
2,416
Other comprehensive income
28
333
14,416
3,081
281
621
17,476
21,438
1,692
10,151
405
(7,257)
464
Total adjustments (i)
11,160
10,026
149,217
35,623
3,277
25,422
55,074
189,510
the associates and joint ventures
Total equity attributable to equity holders of
11,160
10,026
336,210
35,623
3,285
25,422
76,447
16,509
(1,707)
(5,511)
Total equity attributable to equity holders of
15,116
86,179
Gross carrying value of the investments
75.00%
66.67%
10.29%
43.86%
35.00%
40.00%
29.59%
Total equity
43.686%
5,649
8,319
165,726
36,028
3,277
25,422
47,817
189,974
after adjustments
the associates and joint ventures
Proportion of the Group's ownership
382,413
As at
238,636
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
10 FINANCIAL ASSETS (continued)
After ten years
10.6 Securities at fair value through profit or loss
As at
90,425
4,422
7,989
1,638
1,393
Subtotal
Others
Common stocks
Funds
Equity securities
Subtotal
Others
Corporate bonds
Government agency bonds
Government bonds
Debt securities
RMB million
RMB million
2020
31 December
31 December
2021
As at
After five years but within ten years
After one year but within five years
Within one year
31 December
As at
As at
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
31 December
2021
2020
RMB million
Maturing:
Debt securities - Contractual maturity schedule
Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
price quotations, wealth management products and private equity funds.
1,215,603
1,429,287
634,793
635,743
325,768
321,866
278
86,803
28
75,694
200,254
238,155
580,810
793,544
538,656
707,399
42,154
86,145
RMB million
108,493
20,606
43,250
143,057
RMB million
RMB million
2020
31 December
31 December
2021
As at
As at
198 Annual Report 2021 | Financial Report
Total
Non-current
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)
11,896
For the year ended 31 December 2021
7,947
12,915
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
31 December
As at
As at
31 December
2021
7,947
1,019
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 197
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.
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
16,835
17,794
95,615
262
Unlisted
112,827
62,948
161,570
206,771
Total
65,955
63,714
10,033
12,312
4,213
4,849
Subtotal
2,752
Unlisted
80
736
51,629
45,817
Listed in Hong Kong, PRC
Listed in Mainland, PRC
Equity securities
95,615
143,057
Subtotal
Listed overseas
20,279
1,429,287
614,187
615,464
As at
Total
After five years but within ten years
After one year but within five years
Within one year
Maturing:
10.3 Term deposits
(i) As at 31 December 2021, maturities of policy loans were within 6 months (as at 31 December 2020: same).
Net value
Impairment
Total
After one year but within five years
After five years but within ten years
After ten years
Within one year
Maturing:
Net value
Impairment
Total
Other loans
Policy loans (i)
10.2 Loans
10 FINANCIAL ASSETS (continued)
As at
For the year ended 31 December 2021
31 December
2021
RMB million
RMB million
2020
2021
31 December
31 December
As at
As at
658,535
666,087
(2,443)
(3,819)
660,978
669,906
460,248
433,697
200,730
236,209
RMB million
RMB million
2020
31 December
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 193
1,189,369
1,487,819
150,452
Total
108,694
96,362
12,332
66,481
66,481
209,873
205,440
4,433
219,793
211,882
7,911
631,203
559,488
71,715
969,584
895,343
74,241
275,770
1,638,271
125,614
1,099,926
1,225,540
1,533,753
811,252
1,167,118
206,134
163,479
146,463
147,786
25,520
55,370
RMB million
348,940
2020
31 December
2021
RMB million
As at
As at
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
31 December
231,291
182,493
287,196
31 December
As at
As at
Total
Others (i)
Equity securities
Available-for-sale securities, at cost
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
2021
31 December
2020
RMB million
RMB million
148,671
206,996
13,013
5,005
53,778
52,127
301,249
256,441
97,476
94,895
Available-for-sale securities, at fair value
580,810
144,721
161,054
81,795
111,029
136,025
203,147
169,013
259,753
49,256
58,561
793,544
37,134
10.5 Available-for-sale securities
6,333
394,187
63,090
135,301
RMB million
RMB million
2020
2021
31 December
31 December
(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.
As at
658,535
666,087
(2,443)
(3,819)
660,978
669,906
27,606
32,154
114,885
106,319
480,848
1,740
529,488
545,678
6,333
6,333
4,613
1,720
RMB million
RMB million
2020
2021
31 December
31 December
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.
As at
Total
After one year but within five years
Within one year
Contractual maturity schedule:
10.4 Statutory deposits - restricted
10 FINANCIAL ASSETS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
194 Annual Report 2021 | Financial Report
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.
As at
9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
34,933
Notes to the Consolidated Financial Statements (continued)
1,048
(662)
26
(271)
589
11,285
11,245
Equity Method
86,179
("Sino-Ocean") (ii)
109
5,819
79,974
45,176
Equity Method
("CGB") (i)
China Guangfa Bank Co., Ltd.
Associates
Sino-Ocean Group Holding Limited
43.686%
296
11,899
98
1,612
1,339
Equity Method
("COFCO Futures")
COFCO Futures Company Limited
40.00%
10,151
(527)
(214)
272
10,620
6,000
Equity Method
("CLP&C")
Insurance Company Limited
China Life Property and Casualty
(3,217)
29.59%
RMB Million
RMB Million
impairment
interest
228
(707)
239,584
Movement
As at
Share of
Accounting
method
31 December
Change of
profit
Declared
Cost
2020
the cost
or loss
dividends
Other
equity Provision 31 December
movements of impairment 2021
As at
For the year ended 31 December 2021
1,121
90
(5,253)
8,336
amount of
of equity
Percentage Accumulated
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
RMB million
11,400
222,983
13,997
10,328
(4,480)
1T
257,953
(3)
Equity Method
Others (iv)
75.00%
4,237
505
(1,004)
4,736
7,656
48,576 40,914
Equity Method
66.67%
5,546
10
(354)
111
5,779
6,281
Equity Method
Mapleleaf Century Limited ("MCL")
5,790
(516)
(945)
(15)
Annual Report 2021 | Financial Report 189
(3,217)
257,953
1,121
(4,480)
10,328
11,400
239,584
Total
54,935
424
(1,299)
(1,409)
5,790
62,513 51,429
Subtotal
45,152
(91)
Fund L.P. ("Joy City")
Joy City Commercial Property
216,075
(3,217)
Equity Method
("China Unicom") (iii)
Communications Limited
China United Network
43.86%
21,438
35
(608)
109
35
1,335
20,676
20,000
("Pipeline Company")
Pipeline Co., Ltd.
Sinopec Sichuan to East China Gas
Joint ventures
35.00%
1,692
21,801
22,433
Equity Method
(369)
697
602
203,018
11,737
5,610
(3,181)
153,562
Subtotal
49,015
(130)
188,155
3,022
5,610
41,555
48,001
Equity Method
Others (iv)
(22)
(1,042)
22,644 10.29%
Group Life
(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.
(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%
25.00
0.90%
% of Premium
0.85% 0.90%
0.85% 0.90%
45.00
45.00
RMB Per Policy
Individual Life
% of Premium
RMB Per Policy
25.00
202 Annual Report 2021 | Financial Report
- Unearned premiums
For the year ended 31 December 2021
Long-term insurance contracts
Net
As at 31 December 2020
Total, ceded
- Unearned premiums (Note 13)
- Claims and claim adjustment expenses (Note 13)
Short-term insurance contracts
Notes to the Consolidated Financial Statements (continued)
Long-term insurance contracts (Note 13)
Total, gross
- Claims and claim adjustment expenses
Short-term insurance contracts
Long-term insurance contracts
Gross
(b) Net liabilities of insurance contracts
15 INSURANCE CONTRACTS (continued)
Recoverable from reinsurers
As at 31 December 2021
(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 (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
200 Annual Report 2021 | Financial Report
(i) The Group's right-of-use assets include the above land use rights and right-of-use assets disclosed in Note 7.
29,040
39,559
15 INSURANCE CONTRACTS
9,323
19,717
30,713
29,040
39,559
Short-term insurance contracts
6,865
8,846
(a) Process used to decide on assumptions
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:
As at 31 December 2021
As at 31 December 2020
15 INSURANCE CONTRACTS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 201
Risk margin is considered in the Group's mortality and morbidity assumptions.
The Group bases its morbidity assumptions for critical illness products on analysis of historical experience and
expectations of future developments. There are two main sources of uncertainty. Firstly, wide-ranging lifestyle changes
could result in future deterioration in morbidity experience. Secondly, future development of medical technologies and
improved coverage of medical facilities available to policyholders may bring forward the timing of diagnosing critical
illness, which demands earlier payment of the critical illness benefits. Both could ultimately result in an inadequate
reserving of liability if current morbidity assumptions do not properly reflect such trends.
The Group bases its mortality assumptions on China Life Insurance Mortality Table (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.
(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 the consideration of risk margin.
2.88% 4.80%
3.09% 4.80%
Discount rate assumptions
As at 31 December 2021
As at 31 December 2020
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:
4.85%
4.85%
Discount rate assumptions
(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:
- Claims and claim adjustment expenses
RMB million
Total, net
(17,783)
(32,804)
(34,301)
18,404
21,991
15,623
(16,682)
17,672
4,319
RMB million
2020
2021
- Claims arising in current year
Claims incurred
2,781
56,938
52,589
- Claims arising in prior years
8,884
21,991
26,234
Total as at 31 December - Gross
17,672
22,037
Incurred but not reported
4,319
4,197
Notified claims
21,991
26,234
Total as at 31 December - Gross
484
(611)
· Cash paid for prior year claims
- Unearned premiums
- Cash paid for current year claims
Total as at 1 January – Gross
14,701
14,062
21,991
26,234
2,936,533
3,379,603
3,419,899
RMB million
2021
31 December
As at
As at
The table below presents movements in claims and claim adjustment expense reserve:
(c) Movements in liabilities of short-term insurance contracts
31 December
2020
RMB million
2,973,225
(4,910)
(4,228)
Incurred but not reported
Notified claims
2,968,265
3,413,754
14,178
21,782
25,822
13,239
2,932,305
3,374,693
(4,960)
(6,145)
(523)
(823)
(209)
(412)
Cash paid for claims settled
187
(3,732)
728
7,947
56,655
(276,521)
60,440
(299,727)
56,655
(288,212)
(313,594)
Investment contracts (iii)
60,440
Financial liabilities at fair value through
Cash and cash equivalents
7,947
12,915
to resell
Securities purchased under agreements
6,333
1,194,997
161,570
6,333
1,409,008
206,771
12,915
profit or loss
(3,416)
(3,732)
(18,686)
Interest-bearing loans and borrowings
(35,602)
(35,898)
(34,992)
(34,994)
Bonds payable
(122,249)
(239,446)
(122,249)
(239,446)
to repurchase
Securities sold under agreements
Annual Report 2021 | Financial Report 203
(3,416)
6,333
1,194,997
161,570
(19,556)
206,771
6,333
As at
31 December
2021
RMB million
RMB million
RMB million
31 December
2020
2021
31 December
As at
As at
Estimated fair value (i)
Carrying value
The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
investment contracts:
11 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
As at
31 December
2020
RMB million
545,667
529,488
545,667
529,488
667,545
686,005
1,225,540
1,638,271
1,189,369
658,535
666,087
1,533,753
Securities at fair value through profit or loss
Statutory deposits - restricted
Term deposits
Held-to-maturity securities (ii)
Loans (iii)
1,409,008
101
(18,686)
(i)
6,630
4,228
4,910
1,867
1,720
6,095
6,095
6,630
412
523
823
1,135
485
4,228
209
As at
As at
31 December
2021
717
2,257
3,353
3,522
3,673
5,866
5,327
8,056
8,011
1,559
9,493
RMB million
RMB million
2020
31 December
RMB million
(19,556)
RMB million
4,910
31 December
2021
Claims recoverable from reinsurers (Note 15)
Ceded unearned premiums (Note 15)
Due from reinsurance companies
Long-term insurance contracts ceded (Note 15)
13 REINSURANCE ASSETS
For the year ended 31 December 2021
Total
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 Financial Report
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).
12 PREMIUMS RECEIVABLE
(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.
(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.
The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
199
Current
Non-current
Total
As at
As at
Total
Non-current
Current
Total
Others
Prepayments to constructors
Due from related parties
Tax prepaid
Automated policy loans
Disbursements
Land use rights (i)
Investments receivable and prepaid
14 OTHER ASSETS
31 December
2020
Notes to the Consolidated Financial Statements (continued)
Available-for-sale securities, at fair value
15 INSURANCE CONTRACTS (continued)
Others
Stock appreciation rights (Note 32)
Tax payable
Interest payable of debt instruments
Agency deposits
Payable to constructors
Brokerage and commission payable
Salary and welfare payable
Interest payable to policyholders
Payable to the third-party holders of consolidated structured entities
20 OTHER LIABILITIES
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
206 Annual Report 2021 | Financial Report
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.
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.
122,249
Total
239,446
Current
Total
2,594
2,497
7,057
5,352
11,318
12,874
16,139
17,866
42,654
67,862
RMB million
RMB million
2020
2021
31 December
As at
As at
31 December
Non-current
1,467
122,101
140
8
122,249
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%.
35,000
35,000
35,000
RMB million
As at
31 December
2020
2021
RMB million
35,000
4.28%
22 March 2029
22 March 2019
Total
Interest rate p.a.
Maturity date
Issue date
31 December
As at
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:
18 BONDS PAYABLE
Bonds payable are measured at amortised cost as described in Note 2.15.
237,371
2,075
19 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
Stock exchange market
239,446
24,275
58,325
97,974
181,121
RMB million
2020
2021
RMB million
31 December
As at
As at
31 December
Total
After 90 days
More than 30 days within 90 days
Within 30 days
Maturing:
Total
Interbank market
For the year ended 31 December 2021
1,811
1,320
Subtotal
Realised gains (i)
Impairment (ii)
Debt securities
RMB million
RMB million
2020
2021
For the year ended 31 December
23 NET REALISED GAINS ON FINANCIAL ASSETS
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.
154,497
178,387
772
25,860
31,948
32,970
350
25,949
798
Equity securities
912
Realised gains (i)
Impairment (ii)
Total
For the year ended 31 December 2021
208 Annual Report 2021 | Financial Report
(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.
14,583
20,344
13,008
21,505
(11,917)
(21,362)
24,925
42,867
1,575
(1,161)
1,287
288
(1,359)
198
(i) Realised gains were generated mainly from available-for-sale securities.
Subtotal
1,528
24,185
3,482
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 207
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.
21 STATUTORY INSURANCE FUND
104,476
133,676
104,476
133,676
104,476
133,676
20,201
23,222
493
291
889
717
22 INVESTMENT INCOME
27,806
Debt securities
- available-for-sale securities
4,079
29,491
44,757
56,830
RMB million
RMB million
2020
2021
For the year ended 31 December
Total
Securities purchased under agreements to resell
Loans
Bank deposits
at fair value through profit or loss
- available-for-sale securities
Equity securities
- at fair value through profit or loss
-held-to-maturity securities
Notes to the Consolidated Financial Statements (continued)
22,695
(ii) 1.00% when USD LIBOR is negative.
(288,959)
536,150
542,974
(287,705)
2,521,331
2,936,533
RMB million
RMB million
2020
2021
As at 31 December
Other movements
- Change in other assumptions (ii)
- Change in discount rates
Change in assumptions
Accretion of interest
Release of liabilities (i)
Premiums
148,504
As at 1 January
129,679
35,071
At fair value through profit or loss
-
- At amortised cost
Investment contracts without DPF
Investment contracts with DPF at amortised cost
16 INVESTMENT CONTRACTS
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
204 Annual Report 2021 | Financial Report
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.
(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.
(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.
2,936,533
(211)
1,022
3,379,603
3,472
7,574
30,701
Total
The table below presents movements in the liabilities of long-term insurance contracts:
14,178
14,701
Net
Ceded
Gross
Net
Ceded
Gross
RMB million
RMB million
2020
2021
As at 31 December
Release
Increase
As at 1 January
Annual Report 2021 | Financial Report 205
(c) Movements in liabilities of short-term insurance contracts (continued)
The table below presents movements in unearned premium reserves:
(523)
(d) Movements in liabilities of long-term insurance contracts
14,178
(369)
(523)
14,701
13,239
(823)
14,062
(12,632)
369
(13,001)
(14,178)
523
(14,701)
14,178
(523)
14,701
13,239
14,062
12,632
13,001
The table below presents movements of investment contracts with DPF:
(823)
Deposits received
1.50%
563
1.80%
25 June 2024
16 September 2024
8 September 2023
9 March 2022
13 January 2022
5 January 2022
Credit loans
Credit loans
Guaranteed loans
Guaranteed loans
Guaranteed loans
Total
Credit loans
Credit loans
RMB million
RMB million
2020
2021
913
626
1,015
EURLIBOR+3.00% (i)
794
3.00% when EURIBOR is negative.
(i)
As at 1 January
19,556
18,686
6,329
6,184
USD LIBOR+1.00% (ii)
Interest rate
27 September 2024
5,483
3.30%
2,444
2,366
2,648
2,383
3.10%
883
5,611
Maturity date
3.08%
As at
9
223,252
245,041
64,950
RMB million
RMB million
68,544
2020
2021
31 December
As at
As at
17 INTEREST-BEARING LOANS AND BORROWINGS
As at 31 December
Deposits withdrawn, payments on death and other benefits
31 December
Policy fees deducted from account balances
Interest credited
10
313,594
31 December
2021
As at
31 December
64,950
288,212
1,340
1,436
(39)
(41)
(3,008)
(2,711)
68,544
4,910
RMB million
5,000
RMB million
64,950
2020
61,657
Net deferred tax assets
Net deferred tax liabilities
31 December
As at
31 December
2020
RMB million
Deferred tax assets
Deferred tax liabilities
2021
RMB million
22,354
(29,714)
121
(7,481)
17,174
(32,373)
87
(15,286)
Annual Report 2021 Financial Report 211
As at
As at 31 December 2020
- Others
For the year ended 31 December 2021
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)
As at 1 January 2020
(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
-
(c) As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows:
Notes to the Consolidated Financial Statements (continued)
(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
(1,917)
Profit before income tax
Tax computed at the statutory tax rate
As at 1 January 2021
(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:
Adjustment on current income tax of previous period
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
3,103
RMB million
54,476
12,624
13,619
(412)
(464)
(14,425)
(10,787)
276
202
27
498
(7)
35
50,495
(Charged)/Credited to net profit
(Charged)/Credited to other
345
- Available-for-sale securities
2,853
(15,199)
2,862
3,534
6,741
448
7,644
677
(27)
(18,202)
3,198
677
448
(27)
(7,360)
(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 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:
- deferred tax assets to be recovered after 12 months
(22,386)
4,334
(15,199)
2,853
· 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)
comprehensive income
(iii)
1,787
(14,673)
1,759
2,914
(61)
(10,202)
3,485
990
(9,446)
(9,446)
990
(26)
(26)
4,334
(22,386)
1,557
For the year ended 31 December 2021
625,378
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
(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
585,388
Life insurance death and other benefits
For the year ended 31 December 2021
RMB million
Net
Notes to the Consolidated Financial Statements (continued)
- deferred tax assets to be recovered within 12 months
Subtotal
For the year ended 31 December 2021
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
(4,587)
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
580,801
26 INVESTMENT CONTRACT BENEFITS
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:
22,414
- deferred tax liabilities to be settled within 12 months
Subtotal
(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
(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.
(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.
4,970
2,439,186
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
China Life Insurance (Overseas) Company Limited ("CL Overseas")
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
RMB Million
3,873
China Life Investment Management Company Limited (Formerly known
Relationship with the Company
CL Wealth
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
RMB1,288
CL AMP
("Suzhou Pension Company")
- deferred tax liabilities to be settled after 12 months
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
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")
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
4,846
Retirement Investment Company Limited
13
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.
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
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
Notes to the Consolidated Financial Statements (continued)
24
Net deferred tax liabilities
As at
As at
31 December
31 December
2021
2020
RMB million
RMB million
14,695
10,882
7,659
206,771
6,292
17,174
(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
22,354
2020
RMB million
161,570
(26,850)
1,978,361
BBB+
BBB-
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
427
25
4,331
3,654
13
45
75
2,559,014
958,340
3,724,125
112
A-
A
170
3,000
1,933,543
Overseas
3,069,528
929,597
A+
Fair value changes
for the year ended 31 December
2021
RMB million
RMB million
4,541
92,219
(11,064)
14,959
55,151
111,719
2020
(i)
66,501
Subtotal
AA+
AAA
AA-
Domestic
Rating not required (iv)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 215
Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale securities and held-to-maturity securities.
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:
AA
(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange.
Annual Report 2021 | Financial Report 227
28,265
28,264,705,000
7,441
Notes to the Consolidated Financial Statements (continued)
7,441,175,000
1,500
19,323,530,000
8,941
8,941,175,000
19,324
RMB million
No. of shares
As at 31 December 2021
28,265
For the year ended 31 December 2021
28,265 28,264,705,000
All shares owned by CLIC are domestic listed shares.
1,500,000,000
37 RESERVES
on translating
Other
foreign
(i)
General
Statutory Discretionary
loss under the
for-sale
securities
reserves
Other
Share
premium
Unrealised
to profit or
comprehensive
income non-
reclassifiable
Other
Exchange
differences
reclassifiable
from
available-
income
(losses)
gains/ comprehensive
to profit or
overseas listed (ii)
Salaries and other benefits
Including: domestic listed
2021
For the year ended 31 December
(i) Key management personnel compensation
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.
Note:
114
604
Amount due from Rui Chong Company
(43)
(114)
Amount due to Pension Company
39
46
Amount due from Pension Company
(8)
Amount due to AMC HK
(1,293)
(717)
loss under the
2020
RMB million
RMB million
15
Owned by other equity holders
Owned by CLIC (i)
As at 31 December 2021, the Company's share capital was as follows:
28,264,705,000
Registered, authorised, issued and fully paid
Ordinary shares of RMB1 each
RMB million
No. of shares
RMB million
As at 31 December 2020
Total
As at 31 December 2021
No. of shares
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.
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
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
226 Annual Report 2021 | Financial Report
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.
28
36 SHARE CAPITAL
equity method
for the year
reserve fund
5,009
5,096
Appropriation to reserves
(4,608)
(104)
(388)
1,233
(5,349)
Other comprehensive income
237,935
182
(989)
43,047
40,502
45,525
1,402
54,268
93
53,905
5,273
15,378
Other comprehensive income
to retained earnings
Others
Amount due to AMC
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)
As at 1 January 2021
48,320
50,621
2,635
48,919
305
305
398
53,905
As at 31 December 2021
45
45
45,511
237,935
182
(989)
(162)
(24)
37,888
34,645
40,516
756
28,594
1,148
53,905
197,266
As at 1 January 2020
(b)
(a)
RMB million RMB million
RMB million RMB million RMB million RMB million RMB million
RMB million RMB million RMB million
Total
equity method
operations
reserve
(c)
reserve fund
Other comprehensive income
25,674
43,047
40,502
45,525
1,402
54,268
93
53,905
As at 31 December 2020
(1,055)
for the year
(1,055)
16,025
5,159
5,857
5,009
Appropriation to reserves
25,699
344
(965)
646
Others
The resulting balances due from and to subsidiaries of the Company
100.00%
(15)
99.98%
RMB571
directly
directly
99.98%
RMB571
RMB571
99.98%
Shanghai Yuan Shu Yuan Jiu Investment
Management Partnership (Limited
Partnership) ("Yuan Shu Yuan Jiu")
Shanghai Yuan Shu Yuan Pin Investment
indirectly
indirectly
100.00%
-- USD452
100.00%
RMB571
99.98%
Management Partnership (Limited
directly
-- RMB1,680
99.98%
RMB1,680
Ningbo Meishan Bonded Port Area Bai
Wansheng")
directly
directly
(Limited Partnership) ("Shanghai
99.98%
12 - RMB4,024
99.98%
RMB4,012
Shanghai Wansheng Industry Partnership
Partnership) ("Yuan Shu Yuan Pin")
directly
USD452
99.98%
Wisdom Forever Limited Partnership
indirectly
Percentage
of holding
Amount
As at 31 December 2021
As at 31 December 2020
Subsidiaries
(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
Guo Yang Guo Sheng
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 219
indirectly
indirectly
100.00%
USD2
For the year ended 31 December 2021
million
RMB2,835
Increase
million
Decrease
100.00%
100.00%
New Fortune Wisdom Limited
indirectly
indirectly
100.00%
100.00%
New Capital Wisdom Limited
directly
directly
89.997%
Percentage
of holding
Amount
million
RMB2,835
89.997%
million
indirectly
100.00%
Ning Investment Partnership (Limited
directly
RMB616
321
99.95%
RMB295
China Life Guangde(Tianjin) Equity
directly
99.95%
directly
99.99%
RMB4,111
451
indirectly
100.00%
RMB1,093
LLC ("CG Investments")
Investment Fund Partnership (Limited
directly
directly
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
220 Annual Report 2021 | Financial Report
("CL Pension Industry")
directly
directly
Investment Fund (Limited Partnership)
99.90%
RMB504
495
99.90%
RMB9
Beijing China Life Pension Industry
Partnership) ("CL Guang De")
30
directly
35
RMB3,660
99.98%
- RMB548
15
99.98%
RMB533
Wuhu Yuanxiang Tianfu Investment
Management Partnership (Limited
indirectly
100.00%
RMB484
100.00%
RMB484
Hope Building
Partnership) ("Bai Ning")
indirectly
directly
directly
Partnership) ("Yuanxiang Tianfu")
CBRE Global Investors U.S. Investments I,
indirectly
100.00%
RMB1,063
Shengyi Jingsheng
Partnership) ("Yuanxiang Tianyi")
directly
directly
Management Partnership (Limited
99.98%
- RMB548
15
99.98%
RMB533
Wuhu Yuanxiang Tianyi Investment
99.99%
USD2
Franklin Shenzhen Company
directly
50.00%
HKD130
50.00%
HKD130
China Life Franklin Asset Management
indirectly
Company Limited ("AMC HK")
indirectly
directly and
74.27%
RMB2,746
74.27%
RMB2,746
directly
directly and
indirectly
indirectly
Suzhou Pension Company
RMB200
CL Wealth
indirectly
indirectly
85.03%
RMB1,095
85.03%
RMB1,095
CL AMP
directly
100.00%
RMB2,181
190
100.00%
RMB1,991
directly
100.00%
60.00%
60.00%
Decrease
Increase
Percentage
Percentage
of holding
Amount
million
As at 31 December 2021
million
CLIC
Shareholder
(f) Percentages of holding of related parties with control relationship and changes during the year
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
(17)
As at 31 December 2020
million
RMB19,324
68.37%
RMB1,680
Pension Company
AMC
As at 31 December 2021
Percentage
of holding
Amount
Decrease
million
million
million
Increase
Amount of holding
As at 31 December 2020
Percentage
Subsidiaries
68.37%
of holding
Amount
million
RMB19,324
million
RMB1,680
RMB200
100.00%
indirectly
Fortune Bamboo Limited
directly
directly
100.00%
RMB1,876
100.00%
RMB2,435
RMB1,876
directly
directly
100.00%
RMB1,993
100.00%
RMB1,993
Sunny Bamboo Limited
100.00%
RMB2,435
100.00%
directly
100.00%
RMB1,530
100.00%
RMB1,530
CL Health
indirectly
indirectly
100.00%
USD1,125
100.00%
USD1,125
China Century Core Fund Limited
directly
directly
Golden Bamboo Limited
directly
directly
100.00%
- 700 RMB6,100
100.00%
RMB6,800
Rui Chong Company
indirectly
indirectly
100.00%
100.00%
King Phoenix Tree Limited
directly
directly
100.00%
100.00%
Golden Phoenix Tree Limited
indirectly
100.00%
(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
directly
New Aldgate Limited
RMB285
190
100.00%
RMB95
CL Hotel Investor, L.P.
directly
directly
100.00%
100.00%
Glorious Fortune Forever Limited
directly
directly
100.00%
RMB1,167
RMB1,167
directly
Subsidiaries
directly
China Life Insurance Sales Company Limited
Distribution of profits from the consolidated structured entities
to the Company
Transactions between the consolidated structured entities
and the Company
Capital reduction from Rui Chong
Capital reduction of subsidiaries
12
12
700
Capital contribution to Shanghai Wansheng
Capital contribution to Yuanxiang Tianyi
15
Capital contribution to Yuanxiang Tianfu
205
190
Capital contribution to Suzhou Pension Company
15
15,947
14,429
Annual Report 2021 | Financial Report 223
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
224 Annual Report 2021 | Financial Report
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.
(ii.c)
(ii.b) In 2018, CL Overseas renewed an investment management agreement with AMC HK, effective from 1 January 2018 to 31 December 2022. In
accordance with the agreement, CL Overseas entrusted AMC HK to manage and make investments for its insurance funds and paid AMC HK a
basic investment management fee and an investment performance fee. The basic investment management fee was accrued by multiplying the
weighted average total funds by the basic fee rate. The investment performance fee was calculated based on the difference between the total actual
annual yields and predetermined net realised yield. The basic investment management fee was calculated and payable on a semi-annual basis. The
investment performance fee was payable according to the total actual annual yield at the end of each year.
(ii.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.
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.
(i)
Notes:
(g) Transactions with significant related parties (continued)
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
95
(g) Transactions with significant related parties (continued)
190
285
432
2,089
18
15
2,742
Capital increase in subsidiaries
Rental received from Pension Company
220
Rental received
Agency fee received from Pension Company for entrusted sales of
Agency fee received
Dividends from the other subsidiaries
Dividends from Pension Company
Dividends from AMC
Dividends from subsidiaries
annuity funds and other businesses
127
738
301
321
451
495
6,064
Capital contribution to CL Guang De
Capital contribution to CG Investments
Capital contribution to CL Pension Industry
Capital contribution to China Life Qihang Fund I
68
70
40
57
10
70
(v)
Capital contribution to CL Hotel Investors, L.P.
(ii.e) (vii)
(ii.f)
Notes (continued):
(iii)
Wealth management products and other financial instruments of CGB
71,419
69,148
Amount deposited with CGB
(38)
(40)
8,384
Amount due to CLHI
2
Amount due from CLRE
(447)
(445)
32
(22)
2
603
Amount due from CGB Note
9,138
Amount due to CL Ecommerce
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)
12
3
Amount due from CL Ecommerce
7
7
Amount due from Sino-Ocean
361
356
Corporate bonds of Sino-Ocean
(51)
(80)
Amount due to CGB
1,240
(17)
(ii.f)
Amount due to CLI
Amount due to CLP&C
Notes to the Consolidated Financial Statements (continued)
Annual Report 2021 | Financial Report 225
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.
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%.
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 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.
For the year ended 31 December 2021
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 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.
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.
(vii)
(vi)
(v)
(iv)
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.
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.
251
258
43
59
348
342
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
RMB million
RMB million
As at
31 December
2020
2021
31 December
As at
Amount due from CLI
Payment of an asset management fee to AMC HK
51
Payment of an asset management fee
2020
2021
For the year ended 31 December
Rental and a service fee received from CLP&C
Asset management fee received from CLP&C
Dividends from CLP&C (Note 9)
Agency fee received from CLP&C
Notes
CLP&C
CLIC
Transactions with CLIC and its subsidiaries
(g) Transactions with significant related parties
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
Distribution of dividends from the Company and AMC to CLIC
Policy management fee received from CLIC
Asset management fee received from CLIC
RMB million
RMB million
(i) (vii)
(ii.c)
54
78
271
214
2,289
1,634
(iii) (vii)
125
156
564
554
14,253
12,663
(ii.a)
Annual Report 2021 | Financial Report 221
(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.
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.
(i)
RMB1
million
million
Decrease
Increase
Percentage
of holding
Amount
million
As at 31 December 2020
("CL Jiayuan")(i)
Management Company Limited
China Life Jiayuan (Xiamen) Health
Limited ("CL Hangzhou Hotel")(i)
Payment of an asset management fee to AMC
("CL Sales")(ii)
China Life (Hangzhou) Hotel Company
99.99%
52
6,064
directly
indirectly
99.99%
RMB300
300
indirectly
99.99%
- RMB65
65
directly
90.81%
indirectly
99.98%
RMB3,865
3,865
99.99%
directly
Amount
million
RMB6,065
41
As at 31 December 2021
Percentage
of holding
Payment of asset management fee to CLI
Dividends from other associates and joint ventures (Note 9)
and the Group
Transaction between other associates and joint ventures
26
17
178
271
3
88
124
145
189
190
(iv)
550
3,333
662
4,254
Notes to the Consolidated Financial Statements (continued)
RMB million
Notes
RMB million
CLI
2020
2021
For the year ended 31 December
2020
RMB million
1,140
2021
RMB million
1,357
Notes
For the year ended 31 December
Transactions between other subsidiaries and the Company
Transaction between EAP and the Group
35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
(g) Transactions with significant related parties (continued)
For the year ended 31 December 2021
222 Annual Report 2021 | Financial Report
2,938
Contribution to EAP
Interest of corporate bonds received from Sino-Ocean
Asset management fee received from CL Overseas
CL Overseas
106
112
(vi)
Payment of a operation management service fee to CLHI
(ii.b)
71
135
103
(ii.d) (vii)
3,268
651
588
52
79
CLHI
Dividends from CGB (Note 9)
Insurance premium received from CGB
73
Rental fee received from CGB
Commission expenses charged by CGB
Interest on deposits received from CGB
CGB
2020
RMB million
Payment of real estate purchase to CLI
Property leasing expenses charged by CLI
Dividends from Sino-Ocean (Note 9)
RMB million
Notes
2021
Transactions with associates and joint ventures
Sino-Ocean
For the year ended 31 December
6,796
Buildings
RMB million
As at 31 December 2021
As at 31 December 2021
As at 31 December 2021
Fair value
As at 1 January 2021
218
Net book value
As at 1 January 2021
Cost
6,191
(634)
(189)
(823)
6,162
7,878
8,190
Annual Report 2021 | Financial Report 235
Notes to the Consolidated Financial Statements (continued)
Additions
For the year ended 31 December 2021
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(c) Investment properties (continued)
As at 1 January 2020
Additions
7,014
As at 1 January 2021
(2,238)
As at 31 December 2021
1,103
4,448
1,103
As at 31 December 2020
1
(490)
(490)
5,060
1
5,061
(1,176)
(1,453)
(1,176)
Accumulated depreciation
(1,453)
391
(2,238)
3,271
2,822
1
3,272
1
2,823
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).
(c) Investment properties
Cost
As at 1 January 2021
Additions
391
Accumulated depreciation
For the year ended 31 December 2021
Additions
Notes to the Consolidated Financial Statements (continued)
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(d) Investments in subsidiaries (continued)
(i) The table below presents the basic information of the Company's subsidiaries as at 31 December 2021:
Name
AMC (i)
Pension Company (i)
AMC HK
Suzhou Pension Company (i)
CL AMP (i)
CL Wealth (i)
Golden Phoenix Tree Limited
King Phoenix Tree Limited
Rui Chong Company (i)
New Aldgate Limited
88,951
Place of incorporation
and operation
PRC
60.00% directly
PRC
74.27% directly
Registered capital
RMB4,000 million
RMB3,400 million
Principal activities
Asset management
Pension and annuity
and indirectly
Hong Kong, PRC
4,447
50.00% indirectly
100.00% directly
PRC
Percentage of
equity interest held
As at 1 January 2020
170,387
31 December
2020
As at 31 December 2020
Net book value
As at 1 January 2020
As at 31 December 2020
Fair value
As at 1 January 2020
As at 31 December 2020
Buildings
RMB million
4,387
2,409
6,796
(473)
RMB million
(161)
3,914
6,162
5,462
7,878
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.
(d) Investments in subsidiaries
Unlisted investments at cost
236 Annual Report 2021 | Financial Report
As at
As at
31 December
2021
RMB million
(634)
RMB million
968
Others
(24)
(1)
(25)
Net book value
As at 1 January 2020
31,264
2,763
518
13,657
1,028
49,230
As at 31 December 2020
35,643
2,525
456
10,567
50,159
Annual Report 2021 | Financial Report 233
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)
(b) Right-of-use assets
Buildings
Others
Total
RMB million
As at 31 December 2020
Disposals
Charge for the year
(25)
(823)
(1,543)
Not applicable
RMB2,181 million
(19,106)
Charge for the year
(1,511)
(690)
(189)
(372)
(2,762)
Disposals
308
Cost
771
138
137
1,354
As at 31 December 2020
(12,614)
(5,248)
(874)
(1,778)
(20,514)
Impairment
As at 1 January 2020
(24)
Notes to the Consolidated Financial Statements (continued)
As at 1 January 2021
Additions
Deductions
2,823
As at 31 December 2021
2,238
1
2,239
234 Annual Report 2021 | Financial Report
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)
(b) Right-of-use assets (continued)
Cost
As at 1 January 2020
Additions
1
Deductions
Accumulated depreciation
As at 1 January 2020
Charge for the year
Deductions
As at 31 December 2020
Impairment
As at 1 January 2020
As at 31 December 2020
Net book value
As at 1 January 2020
As at 31 December 2020
Buildings
As at 31 December 2020
Total
2,822
1
As at 31 December 2021
Accumulated depreciation
As at 1 January 2021
Charge for the year
Deductions
As at 31 December 2021
Impairment
As at 1 January 2021
As at 31 December 2021
Net book value
As at 1 January 2021
5,060
836
(1,019)
(2,638)
4,877
5,061
836
(1,020)
4,877
(2,238)
(2,238)
(1,309)
(1,309)
908
1
909
(2,639)
1
PRC
Notes to the Consolidated Financial Statements (continued)
85.03% indirectly
100.00% indirectly
-
Percentage
of shares held
Trust/
investments
received
Principal
activities
58.69% directly RMB75,716 million Investment management
CL Investment China Eastern Airlines Group Equity 100.00% directly
China Life
-
China Hua Neng Debt-to-Equity Swap
Shan Guo Tou Jing Tou Corporate Trust Loan
Collective Funds Trust Scheme
Jiao Yin Guo Xin China Aluminium Co., Ltd.
Supply-side Reform Collective Fund
Trust Scheme
Jian Xin Trust - CL Guo Xin Collective Fund
Trust Scheme
Guang Da Hui Ying No. 8 Collective Fund
Bai Rui Heng Yi No.817 Collective Fund Trust
Scheme (Zhong Guo Guo Xin)
Jiao Yin Guo Xin CL Shanxi Coal Mining
Debt-to-Equity Collective Funds Trust Scheme
Chongqing Trust Fund Guo Rong No.4
Collective Fund
•
Jiao Yin Guo Xin Jing Tou Corporate
RMB11,000 million
Investment management
100.00% directly
100.00% directly
RMB10,000 million
RMB10,000 million
Investment management
Investment management
CL Asset - Yuanliu No.1 Insurance Asset
Management Product
Name
(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
December 2021:
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(d) Investments in subsidiaries (continued)
China Life Qihang Fund I (ii)
PRC
99.99% directly
Not applicable
Investment
CL Xing Wan (ii)
PRC
99.98% indirectly
Not applicable
Investment
CL Sales (i)
PRC
99.99% directly RMB10,000 million Investment management
CL Hangzhou Hotel (i)
CL Jiayuan (i)
PRC
90.81%directly
99.99% directly
99.99% indirectly
RMB544 million
RMB65 million
RMB1,500 million
Insurance Agent
Hotel Management
Health Consultation
(i) The above subsidiaries are registered as limited companies in accordance of the Company Law of the People's Republic of China.
(ii) The above subsidiaries are registered as limited liability partnerships in accordance of the Law of the People's Republic of China on Partnerships.
Non-controlling interests in subsidiaries are not significant to the Company.
Annual Report 2021 | Financial Report 237
For the year ended 31 December 2021
PRC
99.99% directly RMB10,000 million Investment management
89.00% directly
90.00% directly
and indirectly
RMB10,000 million
RMB10,000 million
CL - Dian Tou Clean Energy Equity Investment
Scheme (series I)
89.47% directly
RMB7,600 million
Investment management
Zhong Xin Jin Cheng •Tianjin Port Group
99.98% directly
RMB6,000 million
Investment management
Loans Collective Fund Trust Scheme
CL An Bao An Ji Half-year Debt Collective
Fund Scheme
89.15% directly
RMB6,166 million Investment management
CL Investment-COSCO Marine Debt
Investment management
Investment management
and indirectly
71.67% directly
Investment management
Investment Scheme
Guang Da Hui Ying No. 11 Collective Fund
72.41% directly
RMB5,800 million
Investment management
Trust Scheme
China Life
Tianjin Metro Infrastructure Debt
Investment Scheme
93.91% directly
(5,329)
RMB5,750 million
RMB6,000 million
Investment
RMB8,000 million
RMB7,900 million
CL Hua Neng International Development of
Infrastructure Debt Investment Scheme
Investment management
Investment management
75.00% directly RMB10,000 million Investment management
and indirectly
85.00% directly
RMB9,996 million Investment management
91.95% directly
RMB9,982 million Investment management
-
China Life Yanzhou Coal Mining Debt Investment
Zhong Hang Trust Fund Tian Qi [2020] No.372
100.00% directly
99.99% directly
RMB9,000 million
RMB9,000 million
84.00% directly
88.61% directly
Investment management
Investment management
China Eastern Airlines Equity Instrument
Investment Collective Fund Trust Scheme
Shang Xin Ningbo Wu Lu Si Qiao PPP
-
Collective Fund Trust Scheme
88.02% directly
RMB8,758 million Investment management
Kun Lun Trust China Metallurgical No.1
86.25% directly
RMB8,000 million
Investment management
Collective Fund
Jiang Su Trust •Xin Bao Sheng No.144 (Jing Tou)
Collective Funds
PRC
Not applicable
PRC
100.00% directly
Not applicable
Investment
The British Virgin Islands
The British Virgin Islands
The British Cayman Islands
100.00% directly
Not applicable
Investment
100.00% directly
Not applicable
Investment
PRC
PRC
100.00% indirectly
100.00% directly
100.00% indirectly
Not applicable
RMB1,530 million
Investment
Health management
USD2 million
Investment
PRC
89.997% directly
Not applicable
Investment
The British Virgin Islands
100.00% indirectly
Not applicable
The British Virgin Islands
Investment
Not applicable
100.00% directly
Hong Kong, PRC
The British Jersey Island
100.00% directly
PRC
100.00% indirectly
100.00% directly
RMB1,288 million
RMB200 million
Not applicable
Not applicable
RMB6,100 million
Asset management
Investment in
retirement properties
Fund management
Financial service
Investment
Investment
Investment
Hong Kong, PRC
100.00% directly
Investment
Not applicable
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
China Century Core Fund Limited
CL Health (i)
Franklin Shenzhen Company (i)
Guo Yang Guo Sheng (ii)
New Capital Wisdom Limited
New Fortune Wisdom Limited
USA
Investment
Wisdom Forever Limited Partnership
The British Virgin Islands
The British Cayman Islands
100.00% indirectly
Not applicable
Investment
PRC
99.98% directly
Not applicable
Investment
PRC
99.98% directly
Not applicable
Investment
Shengyi Jingsheng (i)
PRC
99.98% directly
100.00% indirectly
Investment
CG Investments
USA
99.99% directly
Not applicable
Investment
CL Guang De (ii)
PRC
99.95% directly
Not applicable
Investment
CL Pension Industry (ii)
RMB1,131 million
99.90% directly
PRC
RMB484 million
Not applicable
Investment
100.00% indirectly
Not applicable
Investment
Bai Ning (ii)
Yuan Shu Yuan Pin (ii)
Yuan Shu Yuan Jiu (ii)
Hope Building (i)
Shanghai Wansheng (ii)
Yuanxiang Tianfu (ii)
Yuanxiang Tianyi (ii)
Investment
PRC
Not applicable
Investment
PRC
99.98% directly
Not applicable
Investment
PRC
99.98% directly
Not applicable
Investment
PRC
100.00% indirectly
99.98% directly
(11,411)
For the year ended 31 December 2021
Accumulated depreciation
94,770
78,954
1,528
3,063
96,298
82,017
(b) 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
230 Annual Report 2021 | Financial Report
As at
As at
31 December
31 December
2021
2020
RMB million
RMB million
781
1,296
768
1,526
142
RMB million
RMB million
2020
2021
For the year ended 31 December 2021
39 PROVISIONS AND CONTINGENCIES
The following is a summary of the significant contingent liabilities:
As at
As at
31 December
31 December
2021
2020
RMB million
RMB million
506
193
403
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.
40 COMMITMENTS
(a) Capital commitments
The Group had the following capital commitments relating to property development projects and investments:
Contracted, but not provided for
Investments
Property, plant and equipment
Total
As at
As at
31 December
31 December
Pending lawsuits
Notes to the Consolidated Financial Statements (continued)
2,219
Notes to the Consolidated Financial Statements (continued)
162,984
157,401
Held-to-maturity securities
41(f)
1,531,640
1,188,509
Loans
41(g)
646,998
638,849
Term deposits
41(h)
491,332
521,886
Statutory deposits - restricted
41(i)
5,653
5,653
Available-for-sale securities
41(j)
1,370,035
Securities at fair value through profit or loss
41(k)
120,191
1,187,153
127,404
41(e)
Investments in associates and joint ventures
88,951
170,387
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
Statement of financial position
As at 31 December 2021
As at
31 December
As at
31 December
2021
2020
Notes
RMB million
RMB million
ASSETS
2,487
Property, plant and equipment
51,116
50,159
Right-of-use assets
41(b)
2,239
2,823
Investment properties
41(c)
6,191
6,162
Investments in subsidiaries
41(d)
41(a)
Annual Report 2021 | Financial Report 229
363,529
359
19,556
At 31 December 2020
(78)
(78)
Others
3,747
3,632
113
2
Interest expense
1,156
1,156
New leases
(751)
(751)
structured entities
control of consolidated
Changes arising from losing
(806)
(806)
Foreign exchange movement
21,226
(3,639)
21,254
4,912
34,992
2,664
122,249
42,654
Investment management
(368)
(368)
structured entities
control of consolidated
Changes arising from losing
(870)
(870)
Foreign exchange movement
134,441
(6,461)
25,208
(1,618)
117,211
cash flows
Changes from financing
223,435
1,320
42,654
122,249
2,664
34,992
19,556
At 1 January 2021
223,435
1,320
(1,517)
317
cash flows
Changes from financing
the third-party
liability-
payable to
Other
Other liability-
Changes in liabilities arising from financing activities
38 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
New leases
1,086
1,086
Interest expense
interest
2
5,500
5,598
Others
(147)
354
207
At 31 December 2021
18,686
34,994
2,182
239,446
67,862
96
Securities purchased under agreements to resell
Interest-
bearing
loans and
borrowings
198,941
1,327
21,400
118,088
3,091
34,990
20,045
At 1 January 2020
RMB million
RMB million
RMB million
RMB million
Securities
RMB million
RMB million
Total
activities
entities
financing
structured
related to
payable
holders of
consolidated
sold under
agreements to
repurchase
Lease
liabilities
Bonds
payable
RMB million
41(1)
3,463
5,888
420
43
530
1,257
As at 31 December 2021
(14,055)
(5,568)
(979)
(1,620)
(22,222)
Impairment
As at 1 January 2021
(24)
(1)
(25)
Charge for the year
Disposals
As at 31 December 2021
(24)
(1)
(25)
Net book value
As at 1 January 2021
35,643
2,525
264
Disposals
(2,965)
(372)
(209)
(209)
Disposals
(300)
(440)
(45)
(548)
(1,333)
As at 31 December 2021
55,345
8,008
1,287
456
6,351
73,363
Accumulated depreciation
As at 1 January 2021
(12,614)
(5,248)
(874)
(1,778)
(20,514)
Charge for the year
(1,705)
(740)
(148)
2,372
10,567
968
50,159
2
(6,451)
318
(121)
Additions
147
580
131
5,459
6,317
Transfers into investment properties
(2,098)
6,010
(2,098)
(575)
(901)
(142)
(143)
(1,761)
As at 31 December 2020
48,281
7,773
1,330
10,568
2,746
70,698
Disposals
Transfers into investment properties
Transfers upon completion
2,571
As at 31 December 2021
41,266
2,440
308
6,350
752
51,116
232 Annual Report 2021 | Financial Report
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)
(a) Property, plant and equipment (continued)
Cost
68,361
Buildings
Assets
Motor
vehicles
under
construction
Leasehold
improvements
Total
RMB million
As at 1 January 2020
42,699
8,092
1,341
13,658
Office
equipment
furniture and
fixtures
As at 1 January 2020
4,424
2
2,973,225
Policyholder dividends payable
313,594
124,949
288,212
122,510
Lease liabilities
1,889
2,416
Bonds payable
18
34,994
34,992
Securities sold under agreements to repurchase
41(p)
232,496
116,584
Annuity and other insurance balances payable
56,818
55,031
Premiums received in advance
48,699
53,021
Other liabilities
41(q)
61,487
3,419,899
56
16
15
Accrued investment income
41(m)
49,717
44,582
Premiums receivable
12
20,361
20,730
Reinsurance assets
13
6,630
6,095
59,219
Other assets
33,821
24,479
Cash and cash equivalents
53,593
50,692
Total assets
4,726,351
4,127,416
LIABILITIES AND EQUITY
Liabilities
Insurance contracts
Investment contracts
41(n)
Deferred tax liabilities
41(0)
6,581
Cost
Office
equipment
furniture and
Assets
Buildings
fixtures
Motor
vehicles
under
Leasehold
construction improvements
Total
RMB million
As at 1 January 2021
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(a) Property, plant and equipment
48,281
1,330
10,568
2,746
70,698
Transfers upon completion
6,757
(7,148)
174
(217)
Additions
607
675
7,773
3,140
For the year ended 31 December 2021
Annual Report 2021 | Financial Report 231
15,909
Statutory insurance fund
21
339
384
Total liabilities
Equity
Share capital
Reserves
4,301,745
3,721,503
36
Notes to the Consolidated Financial Statements (continued)
28,265
41(r)
243,076
234,071
Retained earnings
Total equity
Total liabilities and equity
153,265
143,577
424,606
405,913
4,726,351
4,127,416
28,265
238 Annual Report 2021 | Financial Report
56
31 December
237,305
199,859
75,694
108,493
28
278
277,607
313,421
590,634
622,051
1,370,035
1,187,153
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.
242 Annual Report 2021 | Financial Report
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 (continued)
Debt securities - Contractual maturity schedule
Maturing:
565,102
779,401
523,636
693,870
553
833
953
142
162
1,523
1,668
Listed overseas
Unlisted
Within one year
Subtotal
As at
31 December
31 December
2021
2020
RMB million
RMB million
85,531
41,466
Total
548
After one year but within five years
After ten years
Subtotal
Total
As at
31 December
As at
31 December
2021
2020
RMB million
RMB million
35,510
36,802
174,433
124,578
313,145
266,057
256,313
137,665
779,401
565,102
Unlisted
Listed overseas
Listed in Hong Kong, PRC
Listed in Mainland, PRC
Total
(k) Securities at fair value through profit or loss
Debt securities
Government bonds
Government agency bonds
Corporate bonds
Others
Subtotal
Equity securities
After five years but within ten years
Funds
Others
Subtotal
Total
Debt securities
Listed in Mainland, PRC
Listed overseas
Unlisted
Subtotal
Equity securities
Common stocks
RMB million
RMB million
2020
53,188
45,477
40,502
42,313
234,071
Other comprehensive income
for the year
(5,584)
(5,584)
Appropriation to reserves
5,096
5,009
5,096
15,201
Others
As at 31 December 2021
(500)
53,360
(112)
(612)
(1,269)
53,860
As at 1 January 2021
234,071
37,304
194,168
Other comprehensive income
for the year
25,297
Appropriation to reserves
5,009
5,857
5,009
(1,381)
15,875
(1,269)
(1,269)
As at 31 December 2020
53,860
(1,269)
53,188
45,477
40,502
42,313
Others
47,604
50,573
45,511
As at
31 December
2021
RMB million
2020
RMB million
112,194
1,485
94,586
3,051
113,679
97,637
31 December
(ii) Operating lease commitments
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 lessor, the future minimum rentals receivable under non-cancellable operating leases are as follows:
As at
31 December
2021
RMB million
As at
Property, plant and equipment
47,409
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
Total
2020
RMB million
403
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
506
34,645
As at
2020
3,574
33,821
24,479
26,222
16,907
7,599
7,572
33,821
24,479
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)
(o) Deferred tax
(i) The movements in deferred tax assets and liabilities during the year are as follows:
Deferred tax assets/(liabilities)
As at 1 January 2020
(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
4,940
714
590
2,257
980
49,717
44,582
As at
As at
31 December
31 December
2021
2020
policyholders
RMB million
9,129
1,554
7,479
7,509
5,324
5,349
3,673
3,522
2,686
RMB million
2,043
As at 31 December 2020
(Charged)/Credited to net profit
(22,789)
2,546
(15,909)
2,862
4,261
344
7,467
1,413
1,413
- Portion of fair value changes on available-for-
sale securities attributable to participating
policyholders
As at 31 December 2021
448
7,644
(17,115)
2,890
(ii) The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
448
(6,581)
As at
As at
4,334
(15,909)
2,546
(22,789)
(Charged)/Credited to other comprehensive income
- Available-for-sale securities
Insurance
Investments
RMB million
RMB million
Others
RMB million
Total
RMB million
1,557
As at 1 January 2021
1,787
2,630
(10,890)
(84)
3,413
(9,422)
(9,422)
990
990
4,334
(15,077)
1,710
43,602
47,674
44,582
52,676
47,889
76,159
74,238
28,118
39,540
64
4,849
4,213
11,009
9,349
44,032
53,166
120,191
127,404
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.
Annual Report 2021 | Financial Report 243
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2021
26,132
217
231
23,252
127,404
RMB million
1,156
1,469
5,851
2,715
62,009
68,569
7,143
1,485
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(I) Securities purchased under agreements to sell
76,159
12,229
9,771
31,537
43,133
266
262
44,032
53,166
120,191
74,238
Maturing:
Within 30 days
Total
2021
2020
RMB million
RMB million
3,463
5,888
3,463
5,888
As at
31 December
2021
RMB million
As at
31 December
As at
2020
RMB million
12,124
12,298
30,761
26,093
6,832
6,191
49,717
31 December
31 December
31 December
244 Annual Report 2021 | Financial Report
(m) Accrued investment income
Bank deposits
Debt securities
Others
Total
Current
Non-current
Total
(n) Other assets
As at
Investments receivable and prepaid
Disbursements
Automated policy loans
Tax prepaid
Due from related parties
Others
Total
Current
Non-current
Total
Land use rights
40,468
As at
53,860
Impairment
Net value
240 Annual Report 2021 | Financial Report
As at
31 December
2021
As at
31 December
2020
RMB million
RMB million
55,016
25,267
147,684
146,287
163,348
205,928
1,165,592
811,027
1,531,640
1,188,509
As at
As at
Total
After one year but within five years
After five years but within ten years
After ten years
Within one year
Maturing:
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
31 December
2021
Maturing:
After one year but within five years
After five years but within ten years
After ten years
Total
(g) Loans
Policy loans
Other loans
Total
Impairment
Net value
Within one year
31 December
2020
RMB million
27,256
650,817
641,292
(3,819)
(2,443)
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
31,699
Maturing:
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
Within one year
215,457
103,666
279,286
RMB million
236,209
200,730
414,608
440,562
650,817
641,292
(3,819)
(2,443)
646,998
101,456
638,849
31 December
2021
RMB million
As at
31 December
2020
RMB million
348,708
231,084
168,954
As at
245,879
1,285,761
1,188,509
1,531,640
For the year ended 31 December 2021
41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
(p) Securities sold under agreements to repurchase
Interbank market
Stock exchange market
Total
Maturing:
Within 30 days
After 30 days within 90 days
After 90 days
Total
Notes to the Consolidated Financial Statements (continued)
As at
As at
31 December
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)
•
Percentage
of shares held
96.36% directly
Trust/
investments
31 December
received
Annual Report 2021 | Financial Report 245
(6,581)
RMB million
31 December
2020
RMB million
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:
13,832
10,051
7,358
6,006
(15,909)
21,190
- deferred tax liabilities to be settled after 12 months
(25,141)
(27,921)
- deferred tax liabilities to be settled within 12 months
(2,630)
(4,045)
Subtotal
(27,771)
(31,966)
Net deferred tax liabilities
16,057
60,324
Principal
activities
Kun Lun Trust Tianjin Urban Communications
2021
2020
27,891
RMB million
157,401
5,583
162,984
154,501
2,900
157,401
As at
As at
31 December
Unlisted debt securities include those traded on the Chinese interbank market.
31 December
2020
RMB million
349,116
264,983
910,151
617,515
209,068
201,343
63,305
104,668
2021
RMB million
RMB5,486 million Investment management
Total
Listed in Mainland, PRC
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
Investment Scheme (series II)
Wu Kuang Trust - Xing Fu No.137
Collective Fund Trust Scheme
90.00% directly
Unlisted
RMB5,000 million Investment management
As at 1 January
Investments in associates and joint ventures
As at 31 December
(f) Held-to-maturity securities
Debt securities
Government bonds
Government agency bonds
Corporate bonds
Subordinated bonds
Total
Debt securities
(e) Investments in associates and joint ventures
363,931
RMB million
1,740
232,496
116,584
230,421
2,075
116,436
140
8
232,496
116,584
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.
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.
(q) Other liabilities
20,683
As at
31 December
2021
RMB million
2020
RMB million
Interest payable to policyholders
Salary and welfare payable
17,866
16,139
11,500
10,060
Brokerage and commission payable
As at
31 December
5,351
55,572
176,924
53,778
5,005
13,013
163,620
137,287
570,355
601,492
20,279
1,370,035
20,559
1,187,153
(i)
95,901
Other available-for-sale securities mainly include unlisted equity investments, private equity funds and perpetual bonds.
Listed in Mainland, PRC
Unlisted
Subtotal
Equity securities
Listed in Mainland, PRC
Listed in Hong Kong, PRC
2021
2020
RMB million
RMB million
Debt securities
7,051
Payable to constructors
2,324
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)
(r) Reserves
Share
premium
Unrealised gains/
(losses) from
Other available-for-sale
reserves
securities
Statutory
reserve fund
Discretionary
59,219
General
reserve
RMB million
RMB million
RMB million
RMB million
RMB million
RMB million
Total
RMB million
459,822
As at 1 January 2020
reserve fund
61,487
246 Annual Report 2021 | Financial Report
Total
2,410
Agency deposits
1,467
1,811
Interest payable of debt instruments
1,271
1,249
Tax payable
434
634
Stock appreciation rights (Note 32)
291
493
Others
20,983
19,372
Total
61,487
59,219
Current
Non-current
61,487
59,219
52,127
301,106
2021
Common stocks
Subtotal
Equity securities
Funds
(i) Statutory deposits - restricted
Preferred stocks
Wealth management products
Others (i)
Subtotal
Available-for-sale securities, at cost
Others (i)
Equity securities
Total
As at
31 December
As at
31 December
2021
2020
RMB million
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.
RMB million
Others (i)
Subordinated bonds
Corporate bonds
Government agency bonds
After one year but within five years
Total
As at
31 December
2021
As at
31 December
2020
RMB million
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
Available-for-sale securities, at fair value
Debt securities
Government bonds
58,446
49,148
258,864
168,912
521,886
Within one year
491,332
256,291
96,308
93,312
565,102
Contractual maturity schedule:
779,401
130,734
149,151
81,795
111,029
134,513
201,911
859.2
2,230.3
Han Bing
505.5
976.2
129.7
207.3
3,089.5
1,818.7
1,818.7
Cao Qingyang
593.6
959.3
1,481.7
86.1
2,864.0
859.2
Name
salaries
bonuses
income
income
in kind contributions
139.4
Total
Actual paid
included
in total
Jia Yuzeng
1,432.0
1,432.0
Pension
scheme
Deferred
payment
included
in total
RMB thousand
For the year ended 31 December 2021
Benefits
113.4
601.4
944.4
139.6
114.8
690.0
358.1
58.5
49.0
250.6
1,490.5
98.0
139.5
1,253.0
RMB thousand
127.5
1,552.9
842.3
19.7
in salary
of salary
included
Subtotal
Performance
related
Basic
payment
Deferred
The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2020 are as
follows:
(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
(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.
Han Bing resigned as shareholder representative supervisor in October 2021.
(i)
153.8
21.2
112.9
207.9
(c) Five highest paid individuals
1,888.4
The emoluments of the five highest paid individuals are the total emoluments paid to them during the year.
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).
132 I
2020
5
2021
There was no arrangement under which a director, chief executive or supervisor waived or agreed to waive any
remuneration during the year.
For the year ended 31 December
14,370.6
RMB thousand
13,940.1
430.5
6,985.3
490.2
7,475.5
2020
2021
RMB1,000,001 - RMB2,000,000
RMB2,000,001 - RMB3,000,000
RMB3,000,001 - RMB4,000,000
RMB4,000,001 - RMB4,500,000
Number of individuals
RMBO RMB1,000,000
252 Annual Report 2021 | Financial Report
TM
responsible sources
Paper from
MIX
www.fsc.org
FSC
ir@e-chinalife.com
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.
: www.e-chinalife.com
E-mail
Website
Telephone
Office Address: 16 Financial Street, Xicheng District, Beijing, P. R. China
China Life Insurance Company Limited
中国人寿保险股份有限公司
: 86-10-63633333
127.6
The emoluments fell within the following bands:
Basic salaries, housing allowances, other allowances and benefits in kind
Pension scheme contributions
116.8
74.7
42.1
Song Ping (ii)
Luo Zhaohui (i)
1,781.0
29.9
1,781.0
206.9
1,458.5
940.1
518.4
Wang Xiaoqing
1,888.4
115.6
Total
20.2
145.5
Details of the remuneration of the five highest paid individuals are as follows:
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).
Total
42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
MANAGEMENT'S REMUNERATION (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
8.5
Annual Report 2021 | Financial Report 251
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.
(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
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.
(i)
115.6
29.9
The supervisors received the compensation amounts disclosed above during their term of office in 2021 and 2020.
Benefits Pension scheme
in kind contributions
300.0
Remuneration
(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.
(v) Lam Chi Kuen, Zhai Haitao were appointed as independent director in June 2021 and October 2021.
(iv) Yin Zhaojun, Liu Huimin resigned as non-executive director in January 2021 and February 2021.
(iii) Huang Xiumei was appointed as executive director in July 2021.
(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
300.0
(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.
160.0
370.0
70.0
210.0
300.0
160.0
360.0
360.0
370.0
Annual Report 2021 | Financial Report 249
For the year ended 31 December 2021
Benefits
in salary
of salary
related
Basic
Pension
Notes to the Consolidated Financial Statements (continued)
included
Performance
Deferred
Name
The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
December 2020 are as follows:
(a) Directors' and chief executive's emoluments (continued)
42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
MANAGEMENT'S REMUNERATION (continued)
Subtotal
70.0
FSC™ C019970
210.0
Li Mingguang
Su Hengxuan (i)
RMB thousand
Total
Pension scheme
contributions
in kind
1,253.0
paid
Remuneration
Name
The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
December 2021 are as follows:
(a) Directors' and chief executive's emoluments
The total compensation package for the directors, supervisors, chief executive and senior management for the year ended
31 December 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.
42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
MANAGEMENT'S REMUNERATION
Benefits
160.0
Huang Xiumei (iii)
626.5
Su Hengxuan did not receive remuneration from the Company.
(i)
Robinson Drake Pike (vi)
Chang Tso Tung Stephen (vi)
Leung Oi-Sie Elsie
Tang Xin
Zhai Haitao (v)
Lam Chi Kuen (v)
Wang Junhui (ii)
Liu Huimin (iv)
Yin Zhaojun (iv)
Yuan Changqing (ii)
1,511.0
746.7
98.0
49.7
70.5
scheme
paid
salaries
income
(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.
(iii) Zhao Peng was appointed as executive director from February to April 2020. He did not receive remuneration from the Company.
(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
(i) Su Hengxuan did not receive remuneration from the Company.
300.0
300.0
(v) Wang Bin did not receive remuneration from the Company and resigned as chairman and executive director in February 2022.
320.0
320.0
320.0
320.0
320.0
Notes to the Consolidated Financial Statements (continued)
50.0
320.0
250.0
(vi) The above remuneration was calculated based on the relevant employment period during the reporting period.
The directors and chief executive received the compensation amounts disclosed above during their term of office in 2021
and 2020.
Niu Kailong (ii)
Lai Jun (ii)
Wang Xiaoqing
Cao Qingyang
Han Bing (i)
Jia Yuzeng
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.
Name
(b) Supervisors' emoluments
42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
MANAGEMENT'S REMUNERATION (continued)
For the year ended 31 December 2021
Notes to the Consolidated Financial Statements (continued)
250 Annual Report 2021 | Financial Report
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.
The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2021 are as
follows:
Leung Oi-Sie Elsie
320.0
70.0
139.9
751.8
2,506.0
1,253.0
1,253.0
Li Mingguang
86.1
Su Hengxuan (i)
included
in total
Actual paid
Deferred
payment
included
in total
Total
in kind contributions
income
RMB thousand
2,732.0
751.8
1,980.2
250.0
Tang Xin
320.0
70.0
250.0
Robinson Drake Pike
320.0
70.0
250.0
Chang Tso Tung Stephen (iv)
Wang Junhui (ii)
Yin Zhaojun (ii)
Liu Huimin (ii)
Yuan Changqing (ii)
Zhao Peng (iii)
bonuses
payment
RMB thousand
16,000
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
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.
Gross written premiums of
group insurance channel (RMB million)
2021
2020
Short-term insurance premiums
Direct sales representatives
45,000
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.
Integrated Financial Sector
22 Annual Report 2021 | Management Discussion and Analysis
Including premiums from online insurance business acquired by different sales channels of the Company.
1
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.
2021
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.
2.9%
25,694 ▼ 29,162 ▼
% end of 2020
from the
↑13.0%
High-performance
personnel increased by
24,970 ▼ 28,872 ▼
16,110 ▼
511,044 ▼
509,489 ▼
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.
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
Analysis of insurance business
Insurance Business
2. Premiums of other channels mainly included premiums of government-sponsored health insurance business and online sales, etc.
1. Premiums of individual agent business sector included premiums acquired by the general sales team and the upsales team.
Individual Agent Business Sector
Notes:
618,327
Total
30,246
Short-term insurance business
83
76
30,838
612,265
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.
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.
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.
820,000
Agents of individual agent
business sector
First-year regular premiums
▼ 99,555
2020
2021
20 Annual Report 2021 | Management Discussion and Analysis
▼ 82,254
Gross written premiums of
individual agent business sector
Gross written premiums of
bancassurance channel (RMB million)
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.
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.
Diversified Business Sector
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.
(RMB million)
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.
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
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.
23,114
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
Insurance (Type A)
(國壽鑫福贏家年金保險)2
34,094
Top three insurance products in terms of net increase in investment contracts
RMB million
(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
Mainly through the channel of exclusive individual
agents
For the year ended 31 December
12,580
contracts
(exclusive version)
China Life Xin Account Endowment Insurance (universal insurance)
Insurance product
in investment
Net increase
Major sales channel
180
China Life Xin Xiang Jin Sheng Annuity
Annuity Insurance
Standard
premiums
from new
40,851
premiums
Gross written
RMB million
(國壽鑫享至尊年金保險(慶典版))
policies¹
Insurance (Celebration Version)
Insurance product
For the year ended 31 December
Top five insurance products in terms of gross written premiums
23
Annual Report 2021 | Management Discussion and Analysis
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.
China Life Xin Xiang Zhi Zun Annuity
(國壽鑫耀東方年金保險)
Major sales channel
payment
China Life Xin Yao Dong Fang
Through other channels
25,112
25,112
exclusive individual agents
586
Surrender
Mainly through the channel of
Mainly through the channel of
exclusive individual agents
11,908
39,573
834
Mainly through the channel of
exclusive individual agents
75
293
Mainly through the channel of exclusive individual
agents
26
2
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
-4.6%
571
612,265
-0.9%
15,851
545
618,327
-8.3%
12
-6.4%
11
16,012
15,862
-1.1%
16,583
16,407
4.7%
-0.9%
2,204
2,062
-20.0%
Renewal business
Single
First-year regular
First-year business
Health Insurance Business
Renewal business
Accident Insurance Business
Single
First-year business
Life Insurance Business
For the year ended 31 December
Gross written premiums categorized by business
Figures of Gross Written Premiums
BUSINESS ANALYSIS
First-year regular
1.0%
First-year business
Single
106,001
84,820
-19.7%
108,205
86,882
0.1%
First-year regular
480,593
Change
RMB million
2020
2021
Total
Renewal business
481,311
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%.
110
44
First-year regular
28,872
2,040
1,846
First-year business of long-term insurance
Single
29,162
374
411
Short-term insurance business
25,109
32,792
Renewal business
Group Insurance Channel
9
1,802
Renewal business
188
28
First-year business of long-term insurance
31,109
30,350
Renewal business
1,930
Single
Other Channels²
24,970
25,694
Short-term insurance business
1,862
1,622
First-year regular
8
13
15,748
82,254
First-year regular
99,838
82,514
First-year business of long-term insurance
511,044
99,555
509,489
2020
2021
RMB million
For the year ended 31 December
Gross written premiums categorized by channel
Annual Report 2021 | Management Discussion and Analysis 19
Individual Agent Business Sector¹
Single
Single
283
16,110
First-year regular
15,757
16,123
First-year business of long-term insurance
41,240
260
49,326
19,934
19,002
Short-term insurance business
391,272
407,973
Renewal business
Bancassurance Channel
419
(國壽鑫享金生年金保險(A款))2
China Life Xin Zun Bao Whole Life Insurance (universal insurance)
236,330
5.76%
Investment properties
13,374
0.28%
14,217
0.35%
Cash and others5
73,355
1.56%
64,602
1.58%
Investments in associates and joint ventures
257,953
5.47%
239,584
5.85%
Total
4,716,401
100.00%
4,095,491
100.00%
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.
6.03%
284,678
Other equity investments4
2.79%
1,718,639
41.97%
Debt-type financial products¹
443,784
9.41%
453,641
11.08%
Other fixed-maturity investments²
425,565
9.02%
358,382
8.75%
(國壽鑫賬戶兩全保險(萬能型)(鑽石版))
Equity financial assets
14.83%
700,748
17.10%
Common stocks
302,090
6.41%
350,107
8.55%
Funds³
112,689
2.39%
114,311
699,457
3.
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.
4.
10,328
8,336
20,344
14,583
Net fair value gains through profit or loss
4,943
21,900
Disposal gains and impairment losses of associates and joint ventures
(670)
Net investment yield¹
4.38%
4.34%
1,841
Gross investment yield²
5.30%
Notes:
1.
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)
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)
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.
Credit risk management
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.
2
Comprehensive investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase + Current net fair value
changes of available-for-sale securities recognised in other comprehensive income)/((Investment assets at the end of the previous year - Securities sold
under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of the previous year + Investment assets
at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative financial liabilities at the end of the
period)/2)
28 Annual Report 2021 | Management Discussion and Analysis
4.98%
48.20%
1,216
55
5.
Other equity investments include private equity funds, unlisted equities, preference shares, equity investment plans and bank wealth management
products, etc.
Cash and others include cash, cash at banks, short-term deposits, and securities purchased under agreements to resell, etc.
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%
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.
Annual Report 2021 | Management Discussion and Analysis
27
Investment income
For the year ended 31 December
RMB million
2021
2020
(50)
Gross investment income
Net income from fixed-maturity investments
Net income from equity investments
Net income from investment properties
Investment income from cash and others
Share of profit of associates and joint ventures
Net realised gains on financial assets
214,057
198,596
188,770
162,783
148,453
127,673
28,718
24,983
Net investment income
2,273,425
Other fixed-maturity investments include policy loans, statutory deposits-restricted, and interbank certificates of deposits, etc.
13.32%
15.0%
835,400
837,293
-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.
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
Analysis of claims and policyholder benefits
For the year ended 31 December
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.
RMB million
Change
Insurance benefits and claims expenses
Life insurance business
Health insurance business
Accident insurance business
Investment contract benefits
Policyholder dividends resulting from participation in profits
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
2021
618,754
2020
580,801
6.5%
527,863
490,994
7.5%
83,688
82,146
2,973,225
-0.3%
10,096
17.1%
Bonds
(celebration version)
Mainly through the channel of exclusive individual
agents
20
20
(國壽鑫尊寶終身壽險(萬能型)(慶典版))
24 Annual Report 2021 | Management Discussion and Analysis
Insurance contracts
Life insurance
Health insurance
Accident insurance
Total of insurance contracts
1.9%
Including: Residual margin Note
31 December
As at
31 December
RMB million
2021
2020
Change
3,180,931
2,767,642
14.9%
228,899
10,069
3,419,899
195,487
As at
7,203
3,718
-6.0%
12,270
1,253
1,229
26.1%
2.0%
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.
Investment Business
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
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.
26 Annual Report 2021 | Management Discussion and Analysis
Investment portfolios
As at the end of the Reporting Period, the Company's investment assets categorized by investment object are set out as
below:
RMB million
15,467
Investment category
Amount
As at 31 December 2021
Percentage
As at 31 December 2020
Amount
Percentage
3,672,262
77.86%
3,076,340
75.12%
529,488
545,678
7,661
Fixed-maturity financial assets
Term deposits
8.2%
11.23%
40,808
37,706
9,846
7.9%
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
25
Analysis of underwriting and policy acquisition costs and other expenses
Underwriting and policy acquisition costs
Finance costs
Administrative expenses
Other expenses
For the year ended 31 December
RMB million
2021
49.4%
2020
Change
65,744
84,361
-22.1%
5,598
3,747
Statutory insurance fund contribution
10,628
26,511
(6,392)
Notes: 1. Numbers may not be additive due to rounding.
1,203,008
(2,471)
(2,711)
(173)
38,575
(7,614)
2.
(18,089)
Items B through J are explained below:
H Reflects the gains or losses due to changes in exchange rate.
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
Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
|
G Change in the market value adjustment from the beginning of year 2021 to 31 December 2021 and other adjustments.
44,780
J
Reflects dividends distributed to shareholders during 2021.
B Reflects expected impact of covered business, and the expected return on investments supporting the 2021 opening net worth.
84,962
C Value of New Business in the Period
RMB million
By Annual Premium Equivalent
31 December
Other miscellaneous items.
31 December
2021
2020
41.6%
42.2%
47.9%
48.1%
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.
36 Annual Report 2021 | Embedded Value
MOVEMENT ANALYSIS
1,072,140
The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
ITEM
A Embedded Value at the Start of Year
B Expected Return on Embedded Value
D Operating Experience Variance
E Investment Experience Variance
F Methodology, Model and Assumption Changes
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)
Analysis of Embedded Value Movement in 2021
Annual Report 2021 | Embedded Value
9.
SENSITIVITY RESULTS
47,995
535,107
10% decrease in expenses
6.
41,566
522,276
10% increase in expenses
5.
36,362
427,018
53,202
630,761
7.
47,042
42,688
504,849
44,780
528,691
4. Investment return -50bps
Investment return +50bps
Risk discount rate -50bps
1. Risk discount rate +50bps
Base case scenario
3.
402,341
By First Year Premium
554,272
37
10% increase in mortality rate for non-annuity products
and 10% decrease in mortality rate for annuity products
43,970
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.
38 Annual Report 2021 | Embedded Value
574,225
14. Allowing for diversification in calculation of VIF
44,273
527,279
13. Using 2020 EV appraisal assumptions
525,259
46,853
12. 10% decrease in morbidity rates
42,717
520,500
11. 10% increase in morbidity rates
45,661
528,752
10. 10% decrease in lapse rates
43,925
528,559
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
537,058
New Business Margin of One Year's Sales of Individual Agent Business Sector
1,066,939
57,669
Profit before income tax
Life insurance business
Health insurance business
Accident insurance business
Other businesses
2021
2020
50,495
54,476
-7.3%
22,771
28,073
-18.9%
8,599
RMB million
Change
11,611
1,682
17,443
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.
-25.9%
Liquidity uses
During the Reporting Period, there was no material equity
investment or non-equity investment of the Company that
is subject to disclosure requirements.
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.
16,658
60%
4,000
Net Profit
Net Assets
Total Assets
Shareholding
Registered
Capital
RMB million
Major Business Scope
Company Name
Major investments
Major Subsidiaries and Associates of the Company
Sale of Material Assets and Equity
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.
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.
268.92%
262.41%
260.10%
253.70%
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
During the Reporting Period, there was no sale of material
assets and equity of the Company.
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
(144)
-50.7%
cash and cash equivalents
Net increase in cash and
cash quivalents
3,785
3,316
14.1%
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 the Company's
solvency ratios as at the end of the Reporting Period:
(71)
Core capital
Actual capital
Core solvency ratio
Comprehensive solvency ratio
As at
RMB million
As at
31 December
2021
31 December
2020
1,020,756
1,031,947
1,055,768
396,749
Minimum capital
Foreign exchange gains/(losses) on
The needs for liquidity
management
financing activities
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
RMB million
2021
2020
Change
Main Reasons for Change
Net cash inflow/(outflow) from
operating activities
286,448
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:
304,019
-5.8%
The change of allocation in
Net cash inflow/(outflow) from
(393,731)
(292,799)
34.5%
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
14,324
2,760
30 Annual Report 2021 | Management Discussion and Analysis
70.74%
is held by
A Adjusted Net Worth
ITEM
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
Other operating assumptions such as mortality, morbidity,
lapses and expenses are based on the Company's recent
operating experience and expected future outlook.
Economic assumptions: The calculations are based upon
assumed corporate tax rate of 25% for all years. The
investment return is assumed to be 5% 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.
ASSUMPTIONS
The embedded value and the value of one year's sales
were prepared by China Life Insurance Company Limited
in accordance with the "CAA Standards of Actuarial
Practice: Appraisal of Embedded Value" issued by the
China Association of Actuaries ("CAA") in November
2016. 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.
PREPARATION AND REVIEW
B Value of In-Force Business before Cost of Required Capital
C Cost of Required Capital
3,400
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.
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.
Net assets, defined as assets less corresponding policy
liabilities and other liabilities valued; and
"Adjusted net worth" is equal to the sum of:
The embedded value of a life insurer is defined as the
sum of the adjusted net worth and the value of in-force
business allowing for the cost of required capital.
DEFINITIONS OF EMBEDDED VALUE
AND VALUE OF ONE YEAR'S SALES
34 Annual Report 2021 | Embedded Value
The values shown below do not consider the future
financial impact of transactions between the Company and
CLIC, CLI, AMC, Pension Company, CLP&C, and etc.
Also, the calculation of embedded value and value of one
year's sales involves substantial technical complexity
and estimates can vary materially as key assumptions
are changed. Therefore, special care is advised when
interpreting embedded value results.
It is important to note that actuarial standards with respect
to the calculation of embedded value are still evolving.
There is still no universal standard which defines the
form, calculation methodology or presentation format of
the embedded value of an insurance company. Hence,
differences in definition, methodology, assumptions,
accounting basis and disclosures may cause inconsistency
when comparing the results of different companies.
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.
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.
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
42,945
58,373
44,780
(5,981)
(5,693)
64,354
50,474
1,072,140
1,203,008
503,553
528,691
(62,244)
(64,446)
565,797
593,137
568,587
674,317
2020
2021
31 December
31 December
RMB million
Note: Numbers may not be additive due to rounding.
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
G Cost of Required Capital
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
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.
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.
EMBEDDED VALUE
234,501
3,359,985
43.686%
19,687
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
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
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
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
China Guangfa Bank
Co., Ltd.
China Life Property
and Casualty
Insurance Company
Limited
China Life Pension
Company Limited
17,476
BACKGROUND
25,422
120,178
40%
18,800
AMC
is held by
and 3.53%
the Company,
1,158
5,889
8,305
China Life Asset
Note: For details, please refer to Note 9 and Note 41(d) in the Notes to the Consolidated Financial Statements in this annual report.
Management
Company Limited
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.
Structured Entities Controlled by the Company
Annual Report 2021 | Management Discussion and Analysis 33
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.
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.
Potential Risks
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.
Development Strategies and Business Plans of
the Company
FUTURE PROSPECT
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".
32 Annual Report 2021 | Management Discussion and Analysis
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%.
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.
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.
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.
Operations and Services
Annual Report 2021 | Management Discussion and Analysis
621
10
TECHNOLOGY EMPOWERMENT AND
OPERATIONS AND SERVICES
Technology Empowerment
31
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.
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.
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.
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.
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.
Insurance Sales Framework Agreement
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.
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.
Cooperation Framework Agreement for Investment
Management with Insurance Funds between the
Company and China Life Capital
43
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
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.
2,000
2,000
65,000
65,000
Fees for the Investment and
Management Services and
the Entrusted Operation Fee
(RMB million or its
equivalent in foreign currency)
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.
Annual Report 2021 | Significant Events
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.
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
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;
the annual cap of the redemption fee for the fund products
is RMB100 million; the annual cap of the management fee
(including the performance-based fee) payable by CLP&C
for the asset management for specific clients is RMB100
million; and the annual cap of the fees for other daily
transactions is RMB100 million.
For the year ended 31 December 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.
Framework Agreement between CLI and AMP
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.
45
65,000
Framework Agreements with AMP
Contractual Amount of
Assets Newly Entrusted for
Investment and Management
during the Period
(RMB million or its
equivalent in foreign currency)
2,000
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:
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.
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.
Basis of Opinion, Reliance and Limitation
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.
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 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");
•
•
•
Our scope of work covered:
Scope of work
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.
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").
INDEPENDENT ACTUARIES REVIEW
OPINION REPORT ON EMBEDDED
VALUE OF CHINA LIFE INSURANCE
COMPANY LIMITED
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 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.
Asset Management Agreements
Confirmation by Auditor
The Board has received a comfort letter from the
auditor of the Company with respect to the above
continuing connected transactions which were subject
to the reporting, announcement and/or independent
shareholders' approval requirements, and the letter stated
that during the Reporting Period:
1. nothing has come to the auditors' attention that
causes them to believe that the disclosed continuing
connected transactions have not been approved by the
Company's Board of Directors;
2. for transactions involving the provision of goods or
services by the Company, nothing has come to the
auditors' attention that causes them to believe that
the transactions were not, in all material respects, in
accordance with the pricing policies of the Company;
3. nothing has come to the auditors' attention that causes
them to believe that the transactions were not entered
into, in all material respects, in accordance 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;
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.
2. the transactions were conducted on normal
commercial terms;
Opinion
•
For the year ending 31 December 2022
For the year ending 31 December 2023
For the year ending 31 December 2024
For the year ended 31 December 2021, the service fee
paid by CLIC to the Company amounted to RMB553.66
million.
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.
Policy Management Agreement
The Company has complied with the disclosure requirements
under Chapter 14A of the Listing Rules in respect of the
above continuing connected transactions. When conducting
the above continuing connected transactions during the
Reporting Period, the Company has followed the pricing
policies and guidelines formulated at the time when such
transactions were entered into.
During the Reporting Period, the Company also carried
out certain continuing connected transactions, including
the policy management agreement between the Company
and CLIC, and the asset management agreement
between CLIC and AMC, which were exempt from the
reporting, announcement, annual review and independent
shareholders' approval requirements under Chapter 14A of
the Listing Rules.
Annual Report 2021 | Significant Events
40
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.
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 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
Based on the scope of work above, we have concluded
that:
MAJOR CONNECTED TRANSACTIONS
Continuing Connected Transactions
MATERIAL LITIGATIONS OR
ARBITRATIONS
SIGNIFICANT
EVENTS
39
Annual Report 2021 | Embedded Value
24 March 2022
Deloitte Consulting (Shanghai) Co., Ltd.
Eric Lu
Yu Jiang
For and on behalf of
• The embedded value results are consistent with its
methodology and assumptions used. The overall result
is reasonable.
The operating assumptions used by China Life have
taken into account the past experience and the
expectation of future experience; and
The economic assumptions used by China Life have
taken into account the current investment market
conditions and the investment strategy of China Life;
The embedded value methodology used by China Life
is in line with the "CAA Standards of Actuarial Practice:
Appraisal of Embedded Value" issued by CAA. This
method is commonly used by life and health insurance
companies in China;
During the Reporting Period, the Company was not
involved in any material litigation or arbitration.
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
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.
Other Major Connected Transaction
Formation of China Life Chengda (Wuxi) Equity
Investment Center (Limited Partnership)
41
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.
4. the amounts of the above transactions have not
exceeded the relevant annual caps.
For the year ended
31 December 2019
For the year ended
31 December 2020
For the year ended
Annual Report 2021 | Significant Events
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
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
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
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.
(including the amount for the subscription
of the related financial products: 100,000)
200,000
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
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:
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.
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.
46
Annual Report 2021 | Significant Events
For the year ended 31 December 2021, the Company paid
AMC a service fee of RMB2,741.56 million.
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).
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.
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 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.
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.
The Company has complied with the disclosure
requirement under Chapter 14A of the Listing Rules in
respect of the above one-off connected transactions.
Statement on Claims, Debt Transactions and
Guarantees etc. of a Non-operating Nature with
Related Parties
During the Reporting Period, the Company was not
involved in claims, debt transactions or guarantees of a
non-operating nature with related parties.
Investment in Partnerships through Equity
Investment Plans
47
Annual Report 2021 | Significant Events
Asset Management Agreement between the Company
and AMC
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.
48
Except as otherwise disclosed in this report, the Company
had no other material contracts during the Reporting
Period.
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.
The Company neither gave external guarantees nor
provided guarantees to its holding subsidiaries during the
Reporting Period.
During the Reporting Period, the Company neither acted
as trustee, contractor or lessee of other companies'
assets, nor entrusted, contracted or leased its assets to
other companies, the profit or loss from which accounted
for 10% or more of the Company's profits for the
Reporting Period, nor were there any such matters that
occurred in previous periods but subsisted during the
Reporting Period.
MATERIAL CONTRACTS AND THEIR
PERFORMANCE
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
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.
(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
CORPORATE
GOVERNANCE
GOVERNANCE
RESTRICTION ON MAJOR ASSETS
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.
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.
PRACTICING THE
BEST CORPORATE
Yuan Changqing
Wang Junhui
Liu Huimin
NON-EXECUTIVE
DIRECTORS
(resigned on 7 February 2021 due to the adjustment of
work arrangements)
SHARE CAPITAL
Details of the movement in property, plant and equipment
of the Company are set out in Note 6 in the Notes to the
Consolidated Financial Statements in this annual report.
PROPERTY, PLANT AND EQUIPMENT
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.
Yin Zhaojun
The changes in accounting estimates of the Company
during the Reporting Period are set out in Note 3 in the
Notes to the Consolidated Financial Statements in this
annual report.
CHANGES IN ACCOUNTING ESTIMATES
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.
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.
56 Annual Report 2021 | Corporate Governance
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;
Details of the movement in share capital of the Company
are set out in Note 36 in the Notes to the Consolidated
Financial Statements in this annual report.
INFORMATION OF TAX DEDUCTION FOR
HOLDERS OF LISTED SECURITIES
Shareholders are taxed and/or enjoy tax relief for the
dividend income received from the Company in accordance
with the "Individual Income Tax Law of the People's
Republic of China", the "Enterprise Income Tax Law of the
People's Republic of China", and relevant administrative
rules, governmental regulations and guiding documents.
Please refer to the announcement published by the
Company on the website of the SSE on 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.
58 Annual Report 2021 | Corporate Governance
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.
PENSION PLAN
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.
PERMITTED INDEMNITY PROVISION
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.
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.
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.
In accordance with Article 218 of the Articles of
Association, the Company's profit distribution
policy is as follows:
OR CONTRACTS
INTERESTS OF DIRECTORS AND SUPERVISORS
(AND THEIR CONNECTED ENTITIES) IN
57
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
MATERIAL TRANSACTIONS, ARRANGEMENTS
3. The Company shall give priority to cash dividends as its
profit distribution manner.
RESERVES
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;
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
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.
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.
Environmental policies and performance of the
Company
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.
(appointed on 14 October 2021)
(appointed on 29 June 2021)
Chang Tso Tung Stephen
Robinson Drake Pike
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;
Lam Chi Kuen
Leung Oi-Sie Elsie
Notes:
Tang Xin
INDEPENDENT
DIRECTORS
(resigned on 15 January 2021 due to the adjustment of
work arrangements)
(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)
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.
Zhai Haitao
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.
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).
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.
Annual Report 2021 | Corporate Governance 55
Relationship between the Company and its
customers
Being customer-centric all along, the Company was
committed to offering high-quality services to customers,
and provided insurance services and value-added services
for more than 500 million customers.
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
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 "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.
3
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.
54 Annual Report 2021 | Corporate Governance
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",
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.
Remuneration paid by the Company to the auditors is
subject to the approval at the shareholders' general
meeting, pursuant to which the Board is authorized to
determine the amount and make payment. Audit fees
paid by the Company to the auditors will not affect the
independence of the auditors.
Remuneration paid by the Company to PricewaterhouseCoopers
Zhong Tian LLP and PricewaterhouseCoopers in 2021 was
as follows:
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.
Fees
Service/Nature
RMB million
Audit, review and agreed-upon
procedures fee
46.51
Including: Internal control audit fee
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.
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.
COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE
Independent Directors of the Company have rendered
their independent opinions on the Company's external
guarantees, and are of the view that:
SUFFICIENCY OF PUBLIC FLOAT
8.50
PRE-EMPTIVE RIGHTS AND ARRANGEMENTS
FOR SHARE OPTIONS
According to the Articles of Association and relevant
PRC laws, there is no provision for any pre-emptive
rights of the shareholders of the Company. At present,
the Company does not have any arrangement for share
options.
MANAGEMENT CONTRACTS
No management or administration contracts for the whole
or substantial part of any business of the Company were
entered into during the Reporting Period.
MATERIAL GUARANTEES
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.
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.
Non-audit services fee (tax services
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.
Total
151.10
25.80
125.30
since 16 August 2019,
Vice President since November 2014,
Chief Actuary since March 2012,
Board Secretary since June 2017
Board Secretary
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
Male
Executive Director
President
Su Hengxuan
No
Appointed as an Executive Director
Executive Director
since 1 July 2021,
Male
Independent Director
Tang Xin
Yes
Since 16 August 2019
July 1971
Male
Non-executive Director
Wang Junhui
Appointed as an Executive Director
Charge of Finance since May 2020
Vice President and Person in
No
149.26
23.96
125.30
June 1967
Female
Vice President
Huang Xiumei
Person in Charge of Finance
September 1971
Yes
Male
67
Annual Report 2021 | Corporate Governance
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.
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%
92.80%
19,323,530,000 (L)
A Shares
Beneficial owner
China Life Insurance (Group)
Company
the total number
of shares in issue
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Name
Position
Gender Date of Birth
Non-executive Director
Yuan Changqing
ten thousands
(before tax)
in RMB
the Company
ten thousands
the Company
Period in RMB
September 1961 Since 11 February 2018
fund paid by
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
parties of
Since 7 March 2016
37.00
0
Male
Employee Representative
Supervisor
Lai Jun
No
20
84.23
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
May 1964
Since 14 October 2021
11.29
4.09
68 Annual Report 2021 | Corporate Governance
No
149.05
23.75
125.30
Since July 2019
April 1968
Male
Vice President
Male
No
23.75
125.30
Since April 2018
July 1966
Male
Vice President
Ruan Qi
Zhan Zhong
No
15.38
149.05
Cao Qingyang
Employee Representative
69
Zhai Haitao
No
21.00
0
21.00
Since 29 June 2021
April 1953
Male
Independent Director
Independent Director
Lam Chi Kuen
36.00
0
36.00
Since 20 July 2016
Female April 1939
Independent Director
Leung Oi-Sie Elsie
No
37.00
No
Percentage of
Male
Since 14 October 2021
Representative Supervisor
Yes
September 1974 Since 14 October 2021
Male
Niu Kailong
Non-employee
Supervisors
No
149.05
January 1969
23.75
Since 11 July 2018
June 1962
Male
Jia Yuzeng
Chairman of the Board of
Yes
7.00
0
7.00
125.30
Percentage of
the respective
class of shares
Number of
shares held
Class of
shares
63
Annual Report 2021 | Corporate Governance
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.
6
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.
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.
Annual Report 2021 | Corporate Governance
62
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.
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.
0/2
0/6
ន ន
2/2
6/6
Wang Xiaoqing
Lai Jun
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.
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.
Unit: Shares
No. of H Share shareholders:
25,326
No. of A Share shareholders:
147,078
Total number of ordinary
share shareholders as
at the end of the month
prior to the disclosure of
the annual report
Particulars of top ten shareholders of the Company
No. of H Share shareholders:
25,415
No. of A Share shareholders:
151,802
Total number of ordinary
share shareholders as at
the end of the Reporting
Period
INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
Total number of shareholders and their shareholdings
0/6
As at the end of the Reporting Period, the Company had not issued any securities in the last three years. During the
Reporting Period, there was no change in the total number of shares and the share structure of the Company due to bonus
issues or placings, nor were there any internal employees' shares.
During the Reporting Period, there was no change in the total number of shares and the share capital of the Company.
CHANGES IN ORDINARY SHARES AND SHAREHOLDERS INFORMATION
CHANGES IN SHARE CAPITAL
64 Annual Report 2021 | Corporate Governance
24 March 2022
Chairman of the Board of Supervisors
By Order of the Board of Supervisors
Jia Yuzeng
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.
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.
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.
ISSUE AND LISTING OF SECURITIES
6/6
Cao Qingyang
0/2
Number of
Attendance records of the resigned Supervisor at the
meetings of the Board of Supervisors are as follows:
During the Reporting Period, six meetings were held by
the Board of Supervisors of the Company. Attendance
records of individual Supervisors are as follows:
MEETINGS AND ATTENDANCE
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 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.
61
Annual Report 2021 | Corporate Governance
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.
Number of
manner.
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.
Mr. Lai Jun, Mr. Cao Qingyang, Mr. Jia Yuzeng, Mr. Niu Kailong, Ms. Wang Xiaoqing
From left to right:
REPORT OF THE BOARD OF SUPERVISORS
24 March 2022
By Order of the Board
Yuan Changqing
Non-executive Director
60 Annual Report 2021 | Corporate Governance
47.64
1.13
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
Name of shareholder
meetings attended meetings attended
in person/number by proxies/number
Han Bing
2/2
0/6
6/6
Niu Kailong
Jia Yuzeng
of meetings
required to attend
required to attend
Name of Supervisor
of meetings
Name of Supervisor
in person/number by proxies/number
meetings attended
Number of
5
4
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.
Note: The number of meetings attended in person includes meetings
attended by the Supervisors on-site and by way of telephone or
video conference.
0/4
of meetings
required to attend
of meetings
required to attend
4/4
Number of
meetings attended
and consultation services)
Nature of shareholder
Number of shares
held as at the
end of the
Reporting Period
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.
2.
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
Notes:
65
Annual Report 2021 | Corporate Governance
+9,530,033
9,530,133
0.03%
Domestic natural person
Li Zhuo
10,000,000
0.04%
State-owned legal person
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
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:
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
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
66 Annual Report 2021 | Corporate Governance
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.
10%
China Life Insurance
Company Limited
China International Television Corporation
68.37%
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
+1,780,228
14,177,504
0.05%
-15,697,388
708,240,246
2.51%
State-owned legal person
China Securities Finance Corporation Limited
+596,257
7,327,931,503
25.93%
Overseas legal person
Central Huijin Asset Management Limited
HKSCC Nominees Limited
68.37%
State-owned legal person
China Life Insurance (Group) Company
restrictions
pledged or frozen
subject to selling
Number of shares
Number of shares
Increase/decrease
during the
Reporting Period
19,323,530,000
Percentage of
shareholding
State-owned legal person
117,165,585
Other
Industrial and Commercial Bank of China Limited
- SSE 50 Exchange Traded Index Securities
Investment Fund
- Tianfu Bull No. 53 Asset Management Plan
of China Limited China Universal
15,015,845
0.05%
Other
- Industrial and Commercial Bank
+18,520,041
0.41%
22,334,683
Other
- Founder Fubon CSI Insurance Theme
Index Security Investment Fund
Guosen Securities Co., Ltd.
+8,685,066
57,106,771
0.20%
Overseas legal person
Hong Kong Securities Clearing Company Limited
-2,554,315
0.08%
China Universal Asset Management Co., Ltd
32.50
Name
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
Non-employee
12 July 2019
Han Bing
Representative
Male
November 1971
25.06
10.75
35.81
Retired due to the
-18 October 2021
Yang Chuanyong
Person in Charge of
Audit
December 2020
Male
March 1963
14.43
6.07
20.50
Resigned due to the
No adjustment of work
- October 2021
arrangements
Total
1
I
Supervisor
85.49
Resigned due to the
Yes adjustment of work
arrangements
Yes adjustment of work
Non-executive Director Male
July 1965
- 15 January 2021
in RMB
ten thousands
(before tax)
Chang Tso Tung
Stephen
20 October 2014
Independent Director
Male
November 1948
16.00
0
16.00
arrangements
- 28 June 2021
11 July 2015
Independent Director
Male
October 1951
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
Robinson Drake
16.82
102.31
| |
SUPERVISORS
Mr. Jia Yuzeng, born in 1962, 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. Niu Kailong, born in 1974, 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.
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
Annual Report 2021 | Corporate Governance
SENIOR MANAGEMENT
Mr. Ruan Qi, born in 1966, Chinese
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 Zhong, born in 1968, Chinese
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
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.
74
Mr. Zhai became an Independent Director of the Company in October 2021. He is
the President and Founding Partner of Primavera Capital Group, and an Independent
Non-executive Director of each of China Everbright Environment Group Limited and
China Everbright Water Limited. From 2000 to 2009, Mr. Zhai worked at and held
various positions in Goldman Sachs Group, including the Managing Director, the Chief
Representative of its Beijing Office, the Director of the Strategic Cooperation Office
between Goldman Sachs Group and Industrial and Commercial Bank of China, and the
Credit Rating Consultant of the Ministry of Finance of the PRC and China Development
Bank. From 1995 to 1998, he was the Deputy Representative of the People's Bank of
China Representative Office for the Americas based in New York. From 1990 to 1995,
Mr. Zhai worked at the International Department of the People's Bank of China. Mr. Zhai
holds a master's degree in international affairs from Columbia University, a master's
degree in business administration from New York University and a bachelor's degree in
economics from Peking University.
Mr. Zhai Haitao, born in 1969, Chinese
Notes:
1.
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.
3.
4.
The emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and senior management during the
Reporting Period.
According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the resigned and retired
Directors, Supervisors and senior management is currently subject to review and approval. The result of the review will be disclosed when the final
amount is confirmed.
70 Annual Report 2021 | Corporate Governance
PERSONAL PROFILE OF CURRENT DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND
COMPANY SECRETARY
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.
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. Lam Chi Kuen, born in 1953, 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.
Ms. Leung Oi-Sie Elsie, born in 1939, Chinese
73
Annual Report 2021 | Corporate Governance
Yin Zhaojun
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.
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. Wang Junhui, born in 1971, Chinese
Annual Report 2021 | Corporate Governance
72
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.
Ms. Huang Xiumei, born in 1967, Chinese
Mr. Tang Xin, born in 1971, Chinese
31 July 2017
None of the resigned or retired Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting
Period.
June 1965
Assistant to the President
Male
November 1967
Since October 2019
65.00
23.80
88.80
Liu Yuejin
Assistant to the President
Male
April 1967
Since June 2021
11.52
44.02
Zhao Guodong
2 2 2
No
No
Appointed as an Assistant to the
Zhang Di
Assistant to the President
Chief Investment Officer
President since December 2021,
Female January 1968
No
Chief Investment Officer
since January 2022
Xu Chongmiao
Liu Fengji
Compliance Officer
Person in Charge of Audit
Male
Male
No
149.09
125.30
Since July 2019
-7 February 2021
Position
Gender Date of Birth
Term
Salary/
Remuneration
paid in RMB
ten thousands
Other benefits,
social insurance,
Total
housing
provident
emoluments
received from
the Company
Whether
during
fund and
enterprise
annuity
the Reporting
received
emolument
February 1967
Female
Vice President
Yang Hong
ten thousands
(before tax)
October 1969
October 1969
in RMB
ten thousands
the Company
Period in RMB
fund paid by
parties of
from connected
the Company
Since July 2018
23.79
24.67
Remuneration
Name
housing
provident fund
and enterprise
Total
emolument
received from
Whether
the Company
received
emolument
Previous Position
Gender Date of Birth
Term
paid in RMB
ten thousands
annuity fund
the Reporting
Period in RMB
the Company
ten thousands
during
Non-executive Director Male
68.34
Liu Huimin
31 July 2017
- 23 February 2022
November 1958
Salary
Male
Chairman of the Board
Executive Director
Wang Bin
Reason for changes
the Company
parties of
from connected
3 December 2018
Other benefits,
social insurance,
paid by
RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
93.01
No
Since December 2021
No
Total
1,159.07
258.41
1,417.48
Notes:
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.
3.
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.
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.
5.
6.
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.
8.
On 30 June 2021, the 2020 Annual General Meeting was convened by the Company for the election of the seventh session of the Board.
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 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.
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.
Annual Report 2021 | Corporate Governance 69
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.
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.
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.
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 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 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.
7.
Attendance records of the resigned Directors at the
shareholders' general meetings convened during the
Reporting Period:
2
Number of
shareholders'
1
general
Number of
meetings
attended
in
person
1
Lam Chi Kuen
Zhai Haitao
2
2
Independent Director
2
Name of Director
Independent Director
Type of Director
Non-executive Director
required
Independent Director
0
0
0
Liu Huimin
0
0
Non-executive Director
Yin Zhaojun
1
2
Executive Director
Wang Bin
for the year
to attend
meetings
Leung Oi-Sie Elsie
shareholders'
2
2
Non-executive Director
Yuan Changqing
for the year
to attend
required
0
meetings
Name of Director
general
Number of
meetings
attended
in person
Number of
0
Attendance records of the current Directors at the
shareholders' general meetings convened during the
Reporting Period:
Type of Director
Su Hengxuan
Executive Director
2
Independent Director
Tang Xin
1
2
Non-executive Director
Wang Junhui
0
1
Executive Director
Huang Xiumei
2
2
Executive Director
Li Mingguang
2
2
Independent Director
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.
Chang Tso Tung Stephen Independent Director
Robinson Drake Pike
the seventh session of the Board
22 July 2021
Second meeting of
the seventh session of the Board
30 June 2021
First meeting of
Third meeting of
the sixth session of the Board
36th meeting of
the sixth session of the Board
28 April 2021
35th meeting of
the sixth session of the Board
25 March 2021
26 May 2021
25 August 2021
the seventh session of the Board
Fourth meeting of
84 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.
15 proposals, including the "Proposal in relation to
the Third Quarter Report of the Company for 2021",
were considered and approved.
12 proposals, including the "Proposal in relation to
the Financial Report of the Company for the First Half of
2021", were 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
34th meeting of
1
the sixth session of the Board
33rd meeting of
4 persons
2 persons
3 persons
Executive
Director
Non-executive Independent
Director
Director
Directors by type:
Directors by location:
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:
85
Annual Report 2021 | Corporate Governance
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.
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.
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
BOARD
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.
Directors by gender:
Male
7 persons
22 January 2021
Date of the meeting Resolutions adopted at the meeting
the sixth session of the Board
32nd meeting of
Session of the meeting
Board meetings convened during the Reporting Period are as follows:
86 Annual Report 2021 | Corporate Governance
3 persons
6 persons
Hong Kong, China
Mainland China
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.
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.
2 persons
Female
25 February 2021
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.
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.
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
Unit: Persons
Management and administration
Sales and sales management
Finance and auditing
Class of Expertise
Structure of Expertise
As at the end of the Reporting Period, the composition of
the employees of the Company and its major subsidiaries
is as follows:
EMPLOYEES AND BRANCHES
Employees
Number of
Employees
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.
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.
REMUNERATION OF DIRECTORS, SUPERVISORS
AND SENIOR MANAGEMENT
80 Annual Report 2021 | Corporate Governance
Since March 2021
Since August 2016
Since December 2017
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.
19,275
46,555
4,696
College Diploma
68,671
5,889
Number of
Employees
Unit: Persons
Master and above
Bachelor
Education Level
Education Level
Total
103,262
3,773
5,134
Other expertise and technicians
Others
23,829
Insurance verification, claim processing
and customer services
(in preparation) and President of
China Life Institute of Finance
24,715
Planning Department/Office of
the Board of Directors
Niu Kailong
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
87
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.
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
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.
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.
8
9
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.
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.
88
Annual Report 2021 | 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
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.
Mr. Liu Fengji, born in 1969, Chinese
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.
Annual Report 2021 | Corporate Governance
Wang Junhui
China Life Insurance (Group) Company Vice President
Su Hengxuan
Yuan Changqing
Since May 2017
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
China Life Insurance (Group) Company Chief Investment Officer
China Life Insurance (Group) Company General Manager of the Strategic
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.
Secondary School
Unit: Persons
The Company has made information disclosure in a
timely, open and transparent manner pursuant to the
requirements of the listing rules of its listed jurisdictions.
The Company has continuously improved its management
of investor relations and enriched its communication with
investors in both form and substance, thus ensuring that
all shareholders enjoy equal rights and have access to
information about the Company in an open, fair, true and
accurate manner.
The Company has 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.
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.
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 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".
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.
Board Secretary
Company Secretary
Board of Directors' Office/
Investor Relations
Department
Annual Report 2021 | Corporate Governance
82
Including branches at the provincial or prefecture level, sub-branches, sales offices and sales & services offices.
(Corporate Governance Structure Chart)
Control Committee
With the establishment of a corporate governance system
with reasonably designed structure, well-developed
mechanism, strict rules and regulations, as well as high
efficiency in operation as its core objectives, the Company
constantly promotes the development of its corporate
governance, strictly performs its obligation of information
disclosure, enhances its transparency and actively serves
the interest of public investors so as to enhance its image
and position in the capital market.
Annual Report 2021 | Corporate Governance 83
-
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.
16 December 2021
30 June 2021
Date of publication of
resolutions
www.sse.com.cn
www.hkexnews.hk
www.e-chinalife.com
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
30 June 2021
2020 Annual General Meeting
Date of the meeting
Session 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
Connected
Transactions
1,455
Strategy and Assets and
Liabilities Management
Committee
Nomination and
Remuneration
Committee
25
the Company and its major
Resigned and retired employees of
103,262
Employees in total
the Company's major subsidiaries
subsidiaries for which
1,803
103,262
Total
101,459
Number of employees of the Company
2,532
Others
Number of employees of
extra costs have to be incurred
Annual Report 2021 | Corporate Governance
81
Board of
Supervisors
Board of
Directors
Shareholders'
General
Meeting
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.
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,
REPORT OF CORPORATE GOVERNANCE
OVERVIEW OF CORPORATE GOVERNANCE
As at 31 December 2021, the Company had approximately
19,000 branches.
Branches
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.
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
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
Risk Management
and Consumer Rights
Protection Committee
Annual Report 2021 | Corporate Governance