China's insurance regulator will allow eligible insurers to invest income from some long-term policies in blue-chip shares as it seeks to expand the investment scope for insurers.

These insurers can open a separate account on a trial basis to invest premiums collected from high-yield life policies sold before 1999 on blue-chip shares, the China Insurance Regulatory Commission said in a statement on its website yesterday.

They can decide for themselves how much premium they wish to invest in the blue chips.

"The policies will help explore new channels to allocate long-term insurance capital, and may improve the stability of the capital market," the CIRC said.

It didn't, however, say when the policy will take effect.

Market participants said the move could see the insurers invest more in stocks and benefit from the high cash dividends given by large companies.

"The dividends given by blue-chip companies are certainly attractive," said an unidentified investment manager with a listed life insurer. "But it usually takes a long time for a policy to be implemented, and it's not sure whether we will really invest in the blue chips seeing their poor performance so far."

The CIRC's move came a day after the regulator allowed insurers to buy shares trading on Shenzhen's ChiNext — a Nasdaq-style board for startups.

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