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Restructure to raise $2.32b for Picc

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The People's Insurance Co of China (Picc) plans to raise 2.5 billion yuan (about HK$2.32 billion) for three subsidiaries to be set up in a restructuring this month.

A Picc official said the subsidiaries would be created by spinning off the life insurance, property insurance and reinsurance divisions. They would be inaugurated by the end of the month. Picc is being restructured into a holding group, the People's Insurance Group Corp of China (or Zhongbao Group), with a registered capital of three billion yuan.

The restructuring is to comply with the new insurance law which requires all insurance companies to separate life and property insurance operations. Other insurers are expected to follow suit.

Picc is expected to sell stakes in the new subsidiaries to other enterprises.

The property insurance arm is expected to have a registered capital of two billion yuan, of which 1.1 billion yuan will come from the parent. The life insurance arm will have capital of 1.5 billion yuan, with 800 million yuan from the parent.

The group will inject 1.1 billion yuan into the reinsurance unit, which will have a registered capital of two billion yuan.

Stake sales will cover the rest of the capital.

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