AIG and PICC plan insurance JV

AMERICAN International Group plans to form a joint venture with Chinese insurer PICC Life Insurance Co to sell life insurance in China's major cities.

AIG's non-binding agreement with Chinese state-owned insurer PICC Group, parent of PICC Life, covers sale of life insurance and other insurance products as well as engaging in reinsurance, the US firm said yesterday.

AIG said it will subscribe to US$500 million worth of H-shares of PICC Group's initial public offering in Hong Kong. It agreed not to sell over 25 percent of the stake for five years after the IPO. But it may sell the entire stake if the joint venture documents are not signed by the end of May 2013, according to a statement on AIG's website yesterday.

PICC Group, which plans to raise US$3.6 billion through the IPO, has received commitments for US$1.85 billion worth of shares from 17 cornerstone investors, including AIG, State Grid Corporation of China and China Life Insurance Group and China Export and Credit Insurance Co, Nanfang Metropolis Daily said yesterday.

AIG now owns around 9.9 percent of PICC Property and Casualty Co, a unit of PICC Group listed in Hong Kong, the US insurer said in the statement.

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