China to allow banks to start insurance units

China will allow its four major state-run banks to set up insurance units on a trial basis, state media reported Monday, marking the latest step toward establishing national financial conglomerates. Banking regulators and insurance regulators have agreed on the pilot project, the China Securities Journal reported, citing Lai Xiufu, a senior China Banking Regulatory Commission official.
China had already relaxed restrictions on cross-sector operations by allowing banks to set up fund management units to encourage financial innovation and diversify their revenue sources. The "Big Four" are Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agricultural Bank of China. The newspaper reported last week that two other banks, Bank of Communications and Bank of Beijing, had received regulatory approval to buy into domestic insurers.