The mainland's biggest state-owned reinsurance company wants to become a shareholding firm to offset the loss of its state-sanctioned privileges when China joins the World Trade Organisation. China Reinsurance plans to introduce a dozen leading domestic insurers into its ownership and has applied to the State Council for approval. The move will allow China Reinsurance to expand its capital base in preparation for an expected increase in competition. As part of its bid to secure WTO admission, Beijing has promised to further open the insurance sector to overseas companies. Vice-president Yao Hezhen said the state would gradually phase out Insurance Law requirements, which state that domestic insurers have 20 per cent of their business reinsured by China Reinsurance. The move means China Reinsurance can no longer rely on state policy for a guaranteed revenue stream. The business generated by the requirement accounted for more than 90 per cent of China Reinsurance's 14 billion yuan (about HK$13.12 billion) of premiums last year. The remaining portion is made up of premiums gained through the company's own initiative. To offset the impact of the policy change, China Reinsurance will actively develop the so-called commercial reinsurance business, according to Ms Yao. As part of the new efforts, the company has opened a liaison office in Hong Kong to help pave the way for overseas expansion of its business. The re-insurer has already opened offices in New York, London and Dubai. Chief executive Dai Fengju said the SAR liaison office would afford the company better access to international market information and strengthen ties with SAR-based insurers. He said Hong Kong was a main source of the company's overseas reinsurance business. Red chip China Insurance International Holdings chief executive Dong Ming said his company would assist China Reinsurance in developing overseas markets.