CHINA'S insurance policy will be altered next year with the establishment of specialised insurance companies, according to an official of the People's Bank of China (PBOC). Speaking at a seminar on the introduction of overseas funds to China's securities market yesterday in Beijing, Wu Xiaolin, director of the policy research office of PBOC, said the setting up of state agricultural insurance company and re-insurance company would be included in the development of the insurance market. With the establishment of specialised insurance companies, life insurance and property insurance should become separate business which insurance companies could run. While giving a review on financial reform, Ms Wu said that a basic financial framework was achieved and the unification of two exchange rates of the yuan had proved to be a success. With the success of the inter-bank foreign exchange market as a testing ground, PBOC was more prepared to further implement the operation of open market system next year, said Ms Wu. The PBOC should use the money supply and absorption and the floating interest rates as tools to exercise its macroeconomic management in the open market system. She said though the credit line for the banks still remained, the transformation of the four specialised banks - the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China and the People's Construction Bank of China - into state commercial banks had taken a revolutionary step by introduction of the ratio management of credit and asset. 'The banks should be given more autonomy in their credit policy but governed by the risk management of the central bank. 'That's the approach of the commercialisation of the specialised banks.' She said banking system reform should go hand in hand with the changes of enterprises operation mechanism - a focus for next year's economic reform - and a number of state enterprises might declare bankruptcy.