China Life defers investment plans on risk concerns

Beijing-based China Life Insurance Co. Ltd.<601628><2628>, the leading life insurance company in China's life insurance market, will defer the implementation of global investment plans due to unreleased risk concerns.

While it is clear that the sub-prime crisis will revalue global asset prices, the risks of credit assets have not been fully released due to accounting policies. It is believed that the effect would be obvious within this year.

The accounting policy also causes a restraint on corporate bonds which will eventually become an integral aspect in the insurance company's investment portfolio and thus should be removed as soon as possible.

On the same note, China Life has also recently decided to use Merrill Lynch "BookMark" bond index as the standard to assess its bond investment performance. It will comprehensively reflect the investment strategies of long-term investors like insurers and other market information. This will improve domestic insurance companies' bond management capacity.