China Pacific Insurance Co., the mainland's second-biggest insurance firm, said Thursday it plans to split into a life insurer and property insurer to create the property sector's first listed company.

The property unit, the more profitable of the two, will issue shares on the domestic stockmarket, a spokesman said by telephone in Shanghai, adding that listing permission was being sought from both the insurance and securities regulators in Beijing.

The life insurer, meanwhile, would be reborn as a Sino-foreign joint venture, he said, confirming a report in the official Shanghai News.

General manager Wang Guoliang was quoted as saying the foreign partner had yet to be determined but that he hoped to close a deal by June 30 with the leading suitor, US giant Aetna International Inc.

Under current regulations, foreign investment in life insurance is experimental and restricted to small geographic areas only -- Pacific and Aetna already have a joint venture operating in Shanghai.

But the new firm would be national in scale, as negotiations are assuming a relaxation of rules on China's expected entry into the World Trade Organisation.

Under the bilateral entry deal struck with Washington in November, Beijing agreed to drop all geographical and numerical restrictions on foreign entrants, allowing overseas partners to own up to 50 percent shares in insurance companies.

Wang said, however, that Pacific must be the largest shareholder in this case.

The firm in its present form is China's second-biggest insurer in terms of premium income, which totalled 12.2 billion yuan (1.5 billion dollars) last year, the spokesman said.

The biggest is the People's Insurance Company of China -- the property insurance fragment of the now split-up former state monopoly of the same name.

Citing the China Insurance Regulatory Commission (CIRC), the newspaper report said Pacific is only one of three insurance groups that will break apart their property and life operations. The other two are Ping'an Insurance Co. of China Ltd. and Xinjiang Corps Insurance Co.

Insurance regulators have been pushing firms to put the two types of insurance under different roofs, as many firms have been tempted to prop up losses in the life business with capital borrowings from the property side, increasing risk.

In the first statement of its kind, CIRC chairman Ma Yongwei last week indicated insurance companies would be encouraged to go public.

Although authorities had issued no explicit ban in the past on public listings, the idea was seen as off-limits to firms in the fledgling and highly regulated insurance sector.

China's insurance industry has been growing at an average of 37.6 percent annually since 1980.

In the first nine months of 1999, national premium income in the industry reached 100 billion yuan (12 billion dollars), a 4.0 percent increase over the same period the previous year.

(Agencies)