CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE ASSET MANAGEMENT AGREEMENT
1
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take
no responsibility for the contents of this announcement, make no representation as to its accuracy or
completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in
reliance upon the whole or any part of the contents of this announcement.
CHINA LIFE INSURANCE COMPANY LIMITED
(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(the “Company”)
(Stock code: 2628)
ANNOUNCEMENT
CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE ASSET
MANAGEMENT AGREEMENT
The Company entered into the Asset Management Agreement with AMC on 30 December 2010. The
Asset Management Agreement shall be for a term of one year effective from 1 January 2011 and
expiring on 31 December 2011, and subject to the Listing Rules, will be renewed for another year,
unless terminated by either party giving to the other party no less than 90 days’ prior written notice to
terminate the agreement at the expiration of the then current term. The Company’s annual caps of the
service fees for asset management for each of the two years ending 31 December 2011 and 2012 will
be RMB900 million.
AMC is a connected person of the Company under Rule 14A.11(5) of the Listing Rules. In
accordance with Rule 14A.34 of the Listing Rules, the Continuing Connected Transactions under
the Asset Management Agreement are only subject to reporting, announcement and annual review
requirements under the Listing Rules and are exempt from independent shareholders’ approval
requirements under the Listing Rules.
ASSET MANAGEMENT AGREEMENT
Reference is made to the announcement of the Company dated 22 December 2009 in relation to the
renewal of the asset management agreement dated 30 December 2008 between the Company and AMC
and the continuing connected transactions contemplated thereunder. The abovementioned agreement will
expire on 31 December 2010.
The Company entered into the Asset Management Agreement with AMC on 30 December 2010.2
Scope of Services
Under the Asset Management Agreement, AMC will invest and manage assets entrusted to it by the
Company, on a discretionary basis, within the scope granted by the Company and in accordance with
the requirements of the applicable laws and regulations and the investment guidelines of the Company.
The Company retains the title of the entrusted assets and AMC is authorized to operate the accounts
associated with the entrusted assets for and on behalf of the Company.
Service fees
The Company agreed to pay AMC in cash a fixed service fee and a variable service fee. The fixed service
fee is payable monthly and is calculated with reference to the net asset value of the assets managed by
AMC and the management fee rate pre-determined by the parties on an arm’s length basis. The variable
service fee is payable annually and is calculated with reference to the fixed service fee per annum and the
results of the annual appraisal of AMC conducted by the Company.
Term and termination
The Asset Management Agreement is for a term of one year effective from 1 January 2011 and expiring
on 31 December 2011, and subject to the Listing Rules, will be renewed for another year, unless
terminated by either party giving to the other party no less than 90 days’ prior written notice to terminate
the agreement at the expiration of the then current term.
CAP AMOUNT
Historical figures
The service fees for asset management paid by the Company to AMC for the years ended 31 December
2008 and 2009 and the six-month period ended 30 June 2010 were as follows:
Period Amount of Service Fees paid by the Company
(RMB in million)
Year ended 31 December 2008 362
Year ended 31 December 2009 540
Six months ended 30 June 2010 296
Cap Amount
The Company’s 2010 annual cap of the service fees for asset management was RMB800 million and the
annual caps for each of the two years ending 31 December 2011 and 2012 will be RMB900 million.
The above annual caps were determined by reference to the historical figures, the size and composition
of the assets managed and to be managed by AMC, and the inherent volatility of the capital market.3
REASONS AND BENEFITS FOR THE CONTINUING CONNECTED TRANSACTIONS
Taking into account the past performance of the asset management agreement whereby the terms of the
agreement generally satisfy the asset management needs of the Company, and the historical relationship
between the parties, the parties consider it appropriate to enter into the Asset Management Agreement.
Mr. Yang Chao, Mr. Wan Feng, Mr. Miao Jianmin, Mr. Shi Guoqing and Ms. Zhuang Zuojin hold
positions with CLIC and/or AMC and have abstained from voting on the board resolution passed to
approve the Continuing Connected Transactions. Save as disclosed above, no other Director is regarded
as having a material interest in the Continuing Connected Transactions, and hence no other Director has
abstained from voting on the board resolution to approve the Continuing Connected Transactions.
The Directors, including the independent non-executive Directors, are of the opinion that the Continuing
Connected Transactions have been conducted on normal commercial terms, were entered into in the
ordinary and usual course of business of the Company, are fair and reasonable and in the interests of
the Company and the Shareholders as a whole, and that the annual caps of the Continuing Connected
Transactions are fair and reasonable.
LISTING RULES IMPLICATIONS
CLIC is a connected person of the Company by virtue of its being a controlling shareholder of the
Company. AMC, a 60% owned subsidiary of the Company, is owned as to 40% by CLIC and is thus a
connected person of the Company under Rule 14A.11(5) of the Listing Rules. Given that the annual caps
for the Continuing Connected Transactions under the Asset Management Agreement represent more than
0.1% but less than 5% of the applicable percentage ratios, as defined in the Listing Rules, the Continuing
Connected Transactions fall within Rule 14A.34 of the Listing Rules and are only subject to reporting,
announcement and annual review requirements under the Listing Rules and are exempt from independent
Shareholders’ approval requirements under the Listing Rules.
Information on the Company and AMC
The Company is one of the leading life insurance companies in the PRC. It offers individual and group
life insurance policies, annuity contracts, long-term health insurance policies and short-term health
insurance policies.
The principal business activities of AMC are to manage insurance funds and to provide consultation
services relating to insurance fund management.4
DEFINITIONS
“AMC” (China Life Insurance Asset
Management Company Limited), a 60% owned subsidiary of the
Company
“Asset Management
Agreement”
the asset management agreement entered into between the Company
and AMC on 30 December 2010
“Board” the board of Directors of the Company
“CLIC” (China Life Insurance (Group) Company),
a state-owned enterprise established under the laws of the PRC
“Company” China Life Insurance Company Limited, a joint stock limited liability
company incorporated in the PRC
“connected person” has the meaning given to it under the Listing Rules
“Continuing Connected
Transactions”
the transactions contemplated under the Asset Management
Agreement
“controlling shareholder” has the meaning given to it under the Listing Rules
“Directors” the directors of the Company
“Hong Kong” Hong Kong Special Administrative Region of the PRC
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
“PRC” the People’s Republic of China, but for the purposes of this
announcement excludes Hong Kong, Macau Special Administrative
Region and Taiwan Region
“RMB” Renminbi, the lawful currency of the PRC
“Shareholders” the shareholders of the Company
By Order of the Board of
China Life Insurance Company Limited
Heng Kwoo Seng
Company Secretary5
As at the date of this announcement, the Board comprises:
Executive Directors: Yang Chao, Wan Feng, Lin Dairen, Liu Yingqi
Non-executive Directors: Miao Jianmin, Shi Guoqing, Zhuang Zuojin
Independent non-executive Directors: Ma Yongwei, Sun Changji, Bruce Douglas Moore,
Anthony Francis Neoh
Hong Kong, 30 December 2010
