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@@ -0,0 +1,19346 @@
+4
+4.
+3.
+2.
+1.
+Notes:
+point
+percentage
+Annual Report 2021 | Prelude
+6
+of 0.32
+5.
+5.16
+5.24
+point
+decrease
+5.30
+4.98
+Gross investment yield 5 (%)
+of 0.80
+percentage
+88.77
+90.07
+89.02
+point
+increase
+3.29
+The financial data of previous years for this report have been restated due to a business combination under common control this year. For details, please
+refer to Note 35 in the Notes to the Consolidated Financial Statements in this annual report.
+Investment assets = Cash and cash equivalents + Securities at fair value through profit or loss + Available-for-sale securities + Held-to-maturity
+securities + Term deposits + Derivative financial assets + Securities purchased under agreements to resell + Loans + Statutory deposits-restricted +
+Investment properties + Investments in associates and joint ventures
+In calculating the percentage change of the "Earnings per share (basic and diluted)", "Equity holders' equity per share", "Ordinary share holders' equity
+per share" and "Net cash inflow/(outflow) from operating activities per share", the tail differences of the basic figures have been taken into account.
+Gearing ratio = Total liabilities/Total assets
+Available-for-sale securities
+An increase in the allocation of
+government bonds
+-3.0%
+29.0%
+545,678
+1,189,369
+1,533,753
+Held-to-maturity securities
+529,488
+Term deposits
+Main Reasons for Change
+Change
+31 December
+2020
+2021
+of Financial Position
+31 December
+Consolidated Statement
+As at
+As at
+Major Items of the
+RMB million
+MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
+REASONS FOR CHANGE
+7
+Annual Report 2021 | Prelude
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the
+end of the previous year - Securities sold under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of
+the previous year + Investment assets at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative
+financial liabilities at the end of the period)/2)
+89.25
+1,429,287
+90.05
+of 0.86
+percentage
+6.3%
+15.92
+16.93
+Equity holders' equity per share³
+0.39
+2.05
+1.7%
+1.77
+1.80
+Earnings per share (basic and diluted)³
+14.29
+Per share (RMB)
+15.0% 3,726,791
+15.2% 3,573,199
+16.0% 3,317,432
+6.3% 403,779
+4,891,085 4,252,466
+4,716,401 4,095,491
+4,404,427 3,795,529
+478,585 450,056
+Total equity holders' equity
+Total liabilities
+Investment assets²
+Total assets
+As at 31 December
+200,990
+147,551
+286,028
+3,254,460 2,897,656
+3,104,065 2,753,176
+2,931,146 2,572,308
+318,393 320,967
+11.26
+11.36
+Ordinary share holders' equity
+10.49
+3.54
+16.47
+decrease
+11.83
+10.97
+Weighted average ROE (%)
+Major financial ratios
+operating activities per share³
+7.11
+5.22
+10.12
+-5.8%
+10.76
+10.13
+Net cash inflow/(outflow) from
+per share³
+11.08
+10.99
+14.01
+6.3%
+15.92
+16.93
+Gearing ratio (%)
+-5.8%
+1,215,603
+An increase in the allocation of bonds in
+available-for-sale securities
+"Ark Prize for Golden Insurance Service in 2021"
+"Ark Prize for Technological Progress of China's
+Insurance Industry in 2021"
+Securities Times
+"Assessment and Selection
+of the Ark Prizes for China's Insurance Industry in 2021"
+"Annual Insurance Protection Brand Top Award"
+Shanghai Securities News
+"Assessment and Selection of the 12th 'Golden Wealth Management""
+"Investment Golden Bull Award for Insurance Company"
+China Securities Journal
+"Assessment and Selection of Investment Golden Bull Awards for
+China's Insurance Industry in 2021"
+"Influential Insurance Company of the Year"
+"Sustainable and Green Development Award"
+Hexun.com
+High-quality Development in 2021"
+The "19th Financial Annual Champion Awards"
+Caijing
+"Assessment and Selection of the 2021 Evergreen Awards"
+"Bronze Prize for Global Innovator"
+Annual Report 2021 | Prelude
+Interest-bearing loans and other borrowings include a three-year bank loan of EUR330 million with a maturity date on 8 September 2023, a five-year
+bank loan of GBP275 million with a maturity date on 25 June 2024, a five-year bank loan of USD860 million with a maturity date on 16 September
+2024, and a six-month bank loan of EUR127 million with a maturity date on 13 January 2022, which is automatically renewed upon maturity pursuant
+to the terms of the agreement, and a six-month bank loan of EUR78 million with a maturity date on 5 January 2022, which is automatically renewed
+upon maturity pursuant to the terms of the agreement. All the above are fixed rate bank loans. Interest-bearing loans and other borrowings also
+include a five-year bank loan of USD970 million with a maturity date on 27 September 2024, and an eighteen-month bank loan of EUR110 million
+with a maturity date on 9 March 2022, both of which are floating rate loans.
+Due to the combined impact of total
+comprehensive income and profit
+distribution during the Reporting Period
+8
+Note:
+6.3%
+450,056
+"Social Responsibility Award of the Year"
+"Ark Prize for Insurance Company with
+3
+Annual Report 2021 | Prelude
+Annual Report 2021 | Prelude
+During the long course of its development, the Company has accumulated a wealth of experience
+in operation and management and has a stable and professional management team that is
+well versed in the art of management in China's life insurance market. The Company's core
+management team and key personnel comprise those who have in-depth knowledge and
+understanding of the life insurance market in China, including the Company's senior management,
+experienced underwriting personnel, insurance actuaries, investment managers and risk
+management teams. During the Reporting Period, there was no change of the above personnel
+which might have a material impact on the Company. The Company has been pushing forward the
+reform of the market-oriented remuneration system, continuously stimulating its internal vitality,
+and building a talent team that matches its high-quality development.
+2
+Annual Report 2021 | Prelude
+Honors and Awards
+"2021 Forbes Global 2000", ranking 49th
+"2021 Fortune China 500 List”, ranking 8th
+Forbes
+Fortune China
+"Most Respected Enterprise in Asia (Insurance Industry)"
+"2021 Best Life Insurance Company in Asia"
+Institutional Investor
+21st Century Business Herald
+"Best Listed Company"
+"Listed Company with the Best Investment Value
+for the 14th Five-Year Plan Period"
+Hong Kong Tai Kung Wen Wei Media Group,
+the Listed Companies Association of Beijing,
+Hong Kong Chinese Enterprises Association,
+the Chinese Financial Association of Hong Kong,
+the Chinese Securities Association of Hong Kong,
+the Hong Kong Chartered Governance Institute and
+Hong Kong Securities Professionals Association
+"Assessment and Selection of the 11th China Securities 2021 'Golden Bauhinia' Awards"
+"Golden Dragon Award – 2021 Best Listed Insurance Company"
+Financial Times
+"Gold Medal List of Chinese Financial Institution"
+"New Fortune Best Listed Company"
+New Fortune
+"Assessment and Selection of the 3rd New Fortune Best Listed Company"
+478,585
+17.6%
+Equity holders' equity
+-51.1%
+New investments in associates and joint
+ventures and an increase in the equity of
+associates and joint ventures
+15.0%
+2,973,225
+3,419,899
+Insurance contracts
+The needs for liquidity management
+6.7%
+7.7%
+56,655
+239,584
+257,953
+60,440
+The accumulation of insurance liabilities
+from new policies and renewals
+Cash and cash equivalents
+Investments in associates
+and joint ventures
+62.5%
+7,947
+12,915
+Securities purchased under
+agreements to resell
+An increase in the allocation of debt-type
+assets in securities at fair value through
+profit or loss
+through profit or loss
+28.0%
+161,570
+206,771
+Securities at fair value
+The needs for liquidity management
+Investment contracts
+313,594
+288,212
+15,286
+7,481
+Deferred tax liabilities
+other borrowings Note
+The fluctuation of exchange rate
+-4.4%
+19,556
+18,686
+Interest-bearing loans and
+balances payable
+An increase in maturities payable
+3.2%
+55,031
+56,818
+Annuity and other insurance
+agreements to repurchase
+The needs for liquidity management
+95.9%
+122,249
+239,446
+Securities sold under
+An increase in the scale of universal
+insurance accounts
+8.8%
+The change in fair value of financial
+assets
+304,019
+1.13
+31,869
+Consolidated Statement of
+and Rectification
+131
+Consolidated Statement of
+Financial Position
+Regulations, Penalties Imposed
+49
+Alleged Violation of Laws and
+124
+Independent Auditor's Report
+48
+133
+Undertakings
+124
+FINANCIAL REPORT
+48
+Material Contracts and Their
+08
+40
+Major Connected Transactions
+40
+Material Litigations or Arbitrations
+40
+Performance
+Restriction on Major Assets
+49
+Comprehensive Income
+68
+Directors, Supervisors, Senior
+65
+Changes in Ordinary Shares and
+Shareholders Information
+61
+Report of the Board of Supervisors
+52
+52
+42
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+Financial Statements
+138
+Notes to the Consolidated
+06
+Cash Flows
+136
+Consolidated Statement of
+286,448
+135
+Consolidated Statement of
+49
+Performance of Environmental
+and Social Responsibilities
+40
+123
+Definitions and Material Risk Alert
+Announcements
+03
+12
+LETTER TO SHAREHOLDERS
+02
+3560
+2
+2
+Financial Summary
+Business Highlights
+Honors and Awards
+Core Competitiveness
+PRELUDE
+01
+CONTENTS
+Our products and services include individual life
+insurance, group life insurance, and accident and
+health insurance. The Company is a leading provider
+of individual and group life insurance, annuity
+products and accident and health insurance in
+China. As at 31 December 2021, the Company had
+approximately 323 million long-term individual and
+group life insurance policies, annuity contracts, and
+long-term health insurance policies in force. We
+also provide both individual and group accident and
+short-term health insurance policies and services.
+The Company is a leading life insurance company
+in China and possesses an extensive distribution
+network comprising exclusive agents, direct
+sales representatives, and dedicated and non-
+dedicated agencies. The Company is one of
+the largest institutional investors in China, and
+becomes one of the largest insurance asset
+management companies in China through its
+controlling shareholding in China Life Asset
+Management Company Limited. The Company also
+has controlling shareholding in China Life Pension
+Company Limited.
+The Company is a life insurance company
+established in Beijing, China on 30 June 2003
+according to the Company Law and the Insurance
+Law of the People's Republic of China. The
+Company was successfully listed on the New
+York Stock Exchange, the Hong Kong Stock
+Exchange and the Shanghai Stock Exchange on
+17 and 18 December 2003, and 9 January 2007,
+respectively. The Company's registered capital is
+RMB28,264,705,000.
+2021
+Annual Report
+點諧中國
+Stock Code: 2628
+China Life Insurance Company Limited
+中国人寿保险股份有限公司
+MANAGEMENT
+Management and Employees
+DISCUSSION AND ANALYSIS
+Review of Business Operations
+in 2021
+119
+Index of Information Disclosure
+116
+Basic Information of the Company
+116
+OTHER INFORMATION
+34
+32
+07
+SIGNIFICANT EVENTS
+05
+EMBEDDED VALUE
+04
+33
+33
+222
+32
+Technology Empowerment and
+Operations and Services
+Future Prospect
+29
+Analysis of Specific Items
+19
+Business Analysis
+15
+15
+Report of Corporate Governance
+Changes in Equity
+82
+Insurance benefits and claims
+608,855
+621,310
+88
+3.5%
+758,239
+784,763
+Benefits, claims and expenses
+506,910
+532,023
+618,754
+560,278
+604,666
+611,251
+Net premiums earned
+643,379
+627,472
+729,499
+2.5%
+805,049
+824,930
+Total revenues
+1.1%
+580,801
+6.5%
+509,467
+10,998
+57,887
+1.7%
+50,056
+50,921
+holders of the Company
+Net profit attributable to ordinary
+share holders of the Company
+Net cash inflow/(outflow) from
+operating activities
+32,249
+11,382
+58,281
+1.3%
+50,257
+50,921
+Net profit attributable to equity
+41,667
+13,907
+59,788
+-7.3%
+54,476
+50,495
+Profit before income tax
+expenses
+466,043
+479,219
+2017
+2018
+677,722
+Change
+1,203,008
+Embedded value
+million
+4,891,085
+million
+618,327
+Total assets
+Gross written premiums
+Business Highlights
+European Financial Management and
+Marketing Association (EFMA) and Accenture
+"Efma-Accenture Innovation in Insurance Awards"
+million
+The Company implements the "Technology-driven China Life" development strategy in great
+depth by adhering to the leading concept of technological innovation. The Company has
+established digital platforms closely integrating online and offline resources with teams and
+outlets as the support and industry-leading hybrid clouds as the base, creating an open, win-win
+and diversified digital insurance ecosystem, facilitating the Company's digital transformation in all
+aspects, and accelerating the replacement of old growth drivers with new ones, through which the
+Company's business operation is empowered in all aspects, and the Company is able to provide
+smart, convenient, efficient and well-targeted comprehensive financial and insurance services to
+the public.
+and innovation
+empowerment
+Leading
+technologies
+The Company adheres to the service concept of "honest and trustworthy, professional and
+efficient, customer-oriented, and first-class experience", develops the operation model
+of "multiple accesses at the front-end, intelligent centralization at the headquarters, and
+comprehensive sharing for operations", and has established a customer-oriented digital operation
+and service system. The Company keeps considering and catering to demands of its customers,
+devoting itself to improve customer experience, and providing customers with "convenient, quality
+and caring" services. The Company also adheres to the concept of "people-oriented, caring for
+life, creating value and serving the community", with the aim to consistently contribute to the
+protection of people's good life.
+Convenient
+services
+and superb
+customer
+experience
+The Company sticks to the original role of insurance and further explores the huge potentials of
+the life insurance market. The Company has a sound institutional and services network, with its
+business outlets and services counters covering both urban and rural areas across China, which
+forms a powerful distribution and services network and through which the Company maintains its
+leading position in China's life insurance market and becomes the life insurance service provider
+within the reach of customers. Through the long-term development and accumulation, China Life
+has solid financial strength comparable to world-class enterprises in the world, with its total assets
+ranking No. 1 in the life insurance industry in China. As one of the largest institutional investors in
+China, the Company becomes one of the largest insurance asset management companies in China
+through its controlling shareholding in China Life Asset Management Company Limited.
+2019
+Prominent
+principal
+The predecessor of the Company, one of the first batch of enterprises to underwrite insurance
+business in China, was approved by the Chinese Government for establishment in October 1949.
+After the restructuring and reorganization, the Company was successively listed at home and
+abroad, becoming the first financial insurance enterprise in China triple-listed on the Shanghai
+Stock Exchange, the Hong Kong Stock Exchange and the New York Stock Exchange. The Company
+has been playing the role of an explorer and pioneer in China's life insurance industry, and through
+long-term and continuous brand building, China Life has become one of the famous and strong
+brands in the world with growing brand value and influence.
+Long history
+and excellent
+brand
+Core Competitiveness
+Professional
+and stable
+core team
+Gross
+business and
+sound financial
+strength
+214,057
+investment income
+2020
+For the year ended
+2021
+Under International Financial Reporting Standards (IFRS)
+RMB million
+MAJOR FINANCIAL DATA AND INDICATORS FOR THE PAST FIVE YEARS¹
+Financial Summary
+5
+LO
+Annual Report 2021 | Prelude
+262.41%
+Major Financial Data
+4.38%
+Comprehensive
+solvency ratio
+million
+50,921
+million
+equity holders of
+the Company
+44,780
+million
+Net investment yield
+Value of one year's sales
+Net profit attributable to
+97
+Annual Report 2021 | Corporate Governance
+All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+2.
+1. The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+Notes:
+Liu Huimin
+Yin Zhaojun
+attended by proxies/
+Number of meetings
+Name of member
+attended in person/
+Number of meetings
+Number of meetings
+Attendance records of the resigned Directors at meetings are as follows:
+The meetings convened are as follows:
+0/3
+required to attend
+Meetings convened
+15 December 2021
+Eighth meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the sixth session of
+the Board
+3/3
+98 Annual Report 2021 | Corporate Governance
+Reviewing the risk analysis on major matters concerning
+the business operation and management of the Company.
+In 2021, the Risk Management and Consumer Rights
+Protection Committee reviewed the risk analysis on
+major matters concerning the business operation and
+management of the Company, reviewed and approved the
+proposals in relation to the risk compliance analysis on the
+strategic asset allocation plan for the years from 2022 to
+2024, the risk compliance analysis on the asset allocation
+plan for the year 2022 and the overseas investment plan
+and investment authorization for the year 2022, and
+gave guiding opinions on risk control for major matters
+concerning the business operation and management
+of the Company in accordance with the regulatory
+requirements of the CBIRC on the China Risk Oriented
+Solvency System (C-ROSS).
+In 2021, the Risk Management and Consumer Rights
+Protection Committee performed its duties and functions
+in strict compliance with the "Procedural Rules for the
+Risk Management and Consumer Rights Protection
+Committee Meetings". All members performed their
+obligations in a responsible manner and reviewed the
+proposals in relation to the internal control system of
+the Company, its risk management and construction
+in compliance with law. During meetings of the
+Risk Management and Consumer Rights Protection
+Committee, all members actively participated in
+discussions and gave guiding opinions on the proposals
+considered and discussed at the meetings.
+Performance of duties by the Risk Management
+and Consumer Rights Protection Committee
+Five proposals, including the "Proposal in relation to the Risk Compliance
+Analysis on the Strategic Asset Allocation Plan of the Company for the
+Years from 2022 to 2024" and the "Proposal in relation to the Work Report
+on the Fraudulent Risk Management of the Company for the Year 2021",
+were considered and approved, and the "Audit Report on the Solvency Risk
+Management System of the Company for the Year 2021" was debriefed.
+The "Proposal in relation to the 'Report on the Enterprise-wide Risk
+Management of the Company for the Third Quarter of 2021'" was
+considered and approved.
+Four proposals, including the "Proposal in relation to the Amendments to
+the 'Statement of the Company on Risk Preference for the Year 2021'"
+and the "Proposal in relation to the 'Report on the Enterprise-wide Risk
+Management of the Company for the Second Quarter of 2021'", were
+considered and approved.
+was debriefed.
+Third meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the seventh session of
+the Board
+Second meeting of the Risk
+Management and Consumer Rights
+Protection Committee of the seventh
+session of the Board
+27 October 2021
+First meeting of the Risk Management
+and Consumer Rights Protection
+Committee of the seventh session of
+the Board
+24 August 2021
+the Board
+Ninth meeting of the Risk Management The "Report on the Case Prevention of the Company for the Year 2020"
+and Consumer Rights Protection
+Committee of the sixth session of
+Seven proposals, including the "Proposal in relation to the New Business
+Plan of the Company for the Years from 2021 to 2023" and the "Proposal in
+relation to the 'Statement of the Company on Risk Preference for the Year
+2021, were considered and approved.
+Description
+27 April 2021
+24 March 2021
+1/5
+Number of meetings
+required to attend
+2/5
+required to attend
+required to attend
+2/2
+0/2
+3/3
+0/3
+Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+Annual Report 2021 | Corporate Governance
+91
+The meetings convened are as follows:
+Number of meetings
+Meetings convened
+18th meeting of the Audit Committee
+of the sixth session of the Board
+27 April 2021
+19th meeting of the Audit Committee
+of the sixth session of the Board
+24 August 2021
+First meeting of the Audit Committee
+of the seventh session of the Board
+27 October 2021
+Second meeting of the Audit Committee
+of the seventh session of the Board
+15 December 2021
+Third meeting of the Audit Committee
+of the seventh session of the Board
+Description
+24 March 2021
+Eleven proposals, including the "Proposal in relation to the Financial
+Report of the Company for the Year 2020" and the "Proposal in relation to
+the Remuneration of Auditors of the Company for the Year 2020", were
+considered and approved, and the report of Ernst & Young Hua Ming LLP
+on the audit for the year 2020 was debriefed.
+Number of meetings
+attended in person/
+Tang Xin
+Lam Chi Kuen
+Independent Director, Chairman of the Audit
+Committee of the seventh session of the Board
+Independent Director, member of the Audit
+Committee of the seventh session of the Board
+Independent Director, member of the Audit
+Committee of the seventh session of the Board
+meetings
+required
+to attend
+2/2
+5/5
+3/3
+Attendance records of the resigned Directors at meetings are as follows:
+attended by proxies/
+Name of member
+Robinson Drake Pike
+meetings
+required
+to attend
+0/2
+12
+0/5
+99
+03
+0/3
+Number of meetings
+Number of meetings
+Chang Tso Tung Stephen
+Five proposals, including the "Proposal in relation to the Financial Report
+of the Company for the First Quarter of 2021" and the "Proposal in relation
+to the Appointment of Auditors of the Company for the Year 2021", were
+considered and approved, and the report of Ernst & Young Hua Ming LLP
+on the results of agreed-upon procedures for the first quarter of 2021
+and the report of PriceWaterhouseCoopers Zhong Tian LLP on matters
+associated with independence were debriefed.
+Three proposals, including the "Proposal in relation to the Financial Report
+of the Company for the First Half of 2021", were considered and approved,
+and the report of PricewaterhouseCoopers Zhong Tian LLP on the interim
+review for 2021 was debriefed.
+Three proposals, including the "Proposal in relation to the Financial Report
+of the Company for the Third Quarter of 2021, were considered and
+approved, and the report of PricewaterhouseCoopers Zhong Tian LLP on
+the agreed-upon procedures for the Third Quarter of 2021 was debriefed.
+required
+required
+to attend
+to attend
+Tang Xin
+Independent Director, Chairman of the
+Nomination and Remuneration Committee of
+the seventh session of the Board
+3/3
+93
+0/3
+Non-executive Director, member of the
+meetings
+Yuan Changqing
+0/3
+3/3
+Independent Director, member of the
+Zhai Haitao
+Nomination and Remuneration Committee of
+the seventh session of the Board
+1/1
+0/1
+Attendance records of the resigned Director at meetings are as follows:
+Number of meetings
+Number of meetings
+Nomination and Remuneration Committee of
+the seventh session of the Board
+meetings
+proxies/
+Number of
+meetings
+attended by
+The "Prior Approval for the Scope of Additional Services of
+PricewaterhouseCoopers" was considered and approved.
+Performance of duties by the Audit Committee
+In 2021, the Audit Committee performed its relevant
+duties and functions in strict compliance with the
+"Procedural Rules for the Audit Committee Meetings".
+All members of the Audit Committee performed their
+obligations in a responsible manner and reviewed
+the proposals in relation to the audit of the Company,
+its financial reports, connected transactions, internal
+control and legal compliance. During meetings of the
+Audit Committee, all members actively participated in
+discussions and gave guiding opinions on any proposals
+considered and discussed at the meetings.
+Reviewing and approving financial reports. The Audit
+Committee, according to its duties, reviewed and
+approved annual, interim and quarterly financial reports of
+the Company. The Audit Committee was of the view that
+the financial reports of the Company reflected the overall
+situation of the Company in a true, accurate and complete
+manner, and gave its written opinion in this regard. By
+reviewing and monitoring the completeness of financial
+statements, annual report and accounts, interim report
+and quarterly reports of the Company, and examining
+significant matters such as financial statements and
+reports, the Audit Committee guaranteed the accuracy
+and completeness of the financial information disclosed
+by the Company and the consistency of its financial
+reports. Prior to the audit conducted by the accounting
+firm and the review of the annual report, the Audit
+Committee communicated the relevant situations with the
+auditors and listened to the report in connection with the
+arrangement of the audit. Before issuing opinion on audit
+by the accounting firm, the Audit Committee commenced
+in-depth communications with it so as to understand
+whether there were any issues arisen during the audit.
+92 Annual Report 2021 | Corporate Governance
+Assessing the work of and strengthening communications
+with external auditors. Besides regular meetings, the
+Audit Committee convened communication meetings
+in advance with external auditors so as to discuss the
+annual audit plan of the Company, determine the service
+scope of the annual audit, listen to the report given by the
+auditors with respect to the results of the audit on and
+review of periodic financial reports of the Company, and
+gave opinions and advice on the agreed-upon procedures
+proposed annually and quarterly by the external auditors
+of the Company and the pre-approval of the scope of
+additional services. Through communications, the Audit
+Committee enhanced the effectiveness of the internal
+control of the Company and further supervised the
+performance of duties by the external auditors in a diligent
+and responsible way.
+Assessing the effectiveness of internal control and
+monitoring the operation of the Company to be in
+compliance with law. The Audit Committee provided
+guidance to the Company on the management of internal
+control, devised the working plan for internal control
+assessment, reviewed the work report on assessment
+of internal control, and inspected the rectification of
+problems identified in the internal control pursuant to the
+"Standard Regulations on Corporate Internal Control"
+and relevant requirements, as well as Section 404 of the
+U.S. Sarbanes-Oxley Act. The Audit Committee earnestly
+performed its duties and responsibilities and monitored
+the Company to carry out its work in compliance with laws
+and regulations pursuant to the relevant requirements
+of the CBIRC, the SSE and the HKSE. As required by its
+duties and responsibilities, the Audit Committee reviewed
+the annual and half-year compliance reports of the
+Company to ensure that its work was conducted strictly
+according to the relevant regulatory requirements in a
+reasonable and efficient manner.
+Examining the internal audit functions of the Company. In
+2021, the Audit Committee reviewed proposals including
+the proposal on the 2020 internal audit work and the
+proposal on the internal audit work report for the first half
+of 2021, and discussed any matters of concerns through
+communication in a timely and effective manner, with a
+view to further understanding the duties of the Company's
+audit departments and supervising the effectiveness
+of the internal audit function. The Audit Committee
+I was of the view that the internal audit function of the
+Company was effective during the Reporting Period. In the
+selection and appointment of external auditors, the Audit
+Committee performed its duty of review in compliance
+with laws and issued its review opinions.
+NOMINATION AND REMUNERATION COMMITTEE
+The Company established the Management Training
+and Remuneration Committee on 30 June 2003. On 16
+March 2006, the Board resolved to change the name of
+the Management Training and Remuneration Committee
+to the Nomination and Remuneration Committee, with
+a majority of Independent Directors on the committee.
+Currently, the Nomination and Remuneration Committee
+of the seventh session of the Board comprises Mr. Tang
+Xin, an Independent Director, Mr. Yuan Changqing, a
+Non-executive Director, and Mr. Lam Chi Kuen 13, an
+Independent Director, with Mr. Tang Xin acting as the
+Chairman. Due to consecutively serving as an Independent
+Director for six years, Mr. Robinson Drake Pike resigned
+from his position as a member of the Nomination and
+Remuneration Committee.
+The Nomination and Remuneration Committee is mainly
+responsible for reviewing the structure of the Board,
+its number of members and composition and drawing
+up plans for the appointment, succession and appraisal
+criteria of Directors and senior management. The
+committee is also responsible for formulating training
+and remuneration policies for the senior management
+of the Company. The Nomination and Remuneration
+Committee, as an advisor to the Board on the nomination
+of Directors, shall first discuss and agree on the list
+of candidates to be nominated as new Directors,
+following which such candidates are recommended to
+the Board. The Board shall then determine whether
+such candidates' appointments should be proposed for
+approval at the shareholders' general meeting. The major
+criteria considered by the Nomination and Remuneration
+Committee and the Board are educational background,
+management and research experience in the insurance
+industry, and the candidates' commitment to the
+Company. As to the nomination of Independent Directors,
+the Nomination and Remuneration Committee will give
+special consideration to the independence of the relevant
+candidates.
+The Nomination and Remuneration Committee
+determines, with delegated responsibility, the
+remuneration packages of all Executive Directors and
+senior management officers. The fixed salary of the
+Executive Directors and other members of senior
+management are determined in accordance with market
+levels and their respective positions, and the amount
+of their performance-related bonuses is determined
+according to the results of performance appraisals.
+Directors' fees and the volume of share appreciation rights
+to be granted are determined with reference to market
+levels and the actual circumstances of the Company.
+13
+Mr. Lam Chi Kuen became a member of the Nomination and Remuneration Committee in February 2022.
+4/5
+Meetings and attendance
+During the Reporting Period, three meetings were held by the Nomination and Remuneration Committee of the Board of
+the Company. Attendance records of individual members are as follows:
+Name of member
+Position
+Number of
+meetings
+attended in
+person/
+Number of
+Number of
+Zhai Haitao
+attended in person/
+proxies/
+Number of
+Number of
+Wang Junhui
+Non-executive Director
+9/10
+1/10
+Tang Xin
+Independent Director
+10/10
+0/10
+Leung Oi-Sie Elsie
+Independent Director
+2/4
+10/10
+Lam Chi Kuen
+Independent Director
+5/5
+Zhai Haitao
+Independent Director
+2/2
+0/5
+0/2
+Attendance records of the resigned Directors of the
+Company at the Board meetings convened during the
+Reporting Period are as follows:
+Name of Director
+Type of Director
+0/10
+Number of Number of
+meetings meetings
+attended in attended by
+person/ proxies/
+Number of Number of
+meetings meetings
+required to required to
+attend
+2/4
+Huang Xiumei
+Meetings and attendance
+During the Reporting Period, five regular Board meetings
+and five ad-hoc Board meetings were held by the Board of
+the Company, of which seven meetings were convened
+by a combination of physical meeting and participation
+through communication tools, and the remaining meetings
+were convened by written resolutions with voting through
+communication tools. Attendance records of the current
+individual Directors are as follows:
+Number of
+meetings
+Number of
+meetings
+attended in attended by
+proxies/
+Number of
+meetings
+required to
+Name of Director
+Type of Director
+person/
+Number of
+meetings
+required to
+attend
+attend
+Executive Director
+Yuan Changqing
+9/10
+1/10
+Su Hengxuan
+Executive Director
+9/10
+1/10
+Li Mingguang
+Executive Director
+7/10
+3/10
+Non-executive Director
+-
+attend
+Wang Bin
+The Chairman of the Board is the legal representative
+of the Company, primarily responsible for convening
+and presiding over Board meetings, ensuring the
+implementation of Board resolutions, attending annual
+general meetings and arranging attendance by Chairmen/
+Chairpersons of Board committees to answer questions
+raised by shareholders, signing securities issued by the
+Company and other important documents, providing
+leadership for the Board to ensure that the Board works
+effectively and performs its responsibilities, encouraging
+all Directors to make a full and active contribution to the
+Board's affairs, and promoting a culture of openness and
+debate. The Chairman of the Board is accountable to
+and reports to the Board 10. During the Reporting Period
+and up to the date of this report, Mr. Su Hengxuan has
+served as the President of the Company. The President is
+responsible for the day-to-day operations of the Company,
+mainly including implementing strategies, policies,
+operation plans and investment schemes approved by the
+Board, formulating the Company's internal management
+structure and fundamental management policies, drawing
+up basic rules and regulations of the Company, submitting
+to the Board any requests for appointment or removal of
+senior management officers and exercising other rights
+granted to him under the Articles of Association and by the
+Board. The President is fully accountable to the Board for
+the operations of the Company.
+BOARD OF SUPERVISORS
+The composition of the Board of Supervisors and the
+profile of each Supervisor are set forth in the section
+headed "Directors, Supervisors, Senior Management and
+Employees" of this report, and the details of the duty
+performance of the Board of Supervisors are set forth in
+the section headed "Report of the Board of Supervisors".
+AUDIT COMMITTEE
+The Company established its Audit Committee on 30
+June 2003. In 2021, the Audit Committee comprised only
+Independent Directors. Currently, the Audit Committee
+of the seventh session of the Board comprises Mr.
+Lam Chi Kuen¹¹, Mr. Tang Xin and Mr. Zhai Haitao 12, all
+being Independent Directors, with Mr. Lam Chi Kuen
+acting as the Chairman. Due to consecutively serving
+as Independent Directors for six years, Mr. Chang Tso
+Tung Stephen and Mr. Robinson Drake Pike successively
+resigned from their respective positions as a member and
+the Chairman of the Audit Committee.
+All members of the Audit Committee have extensive
+experience in financial matters. The principal duties of
+the Audit Committee are to review and supervise the
+preparation of the Company's financial reports, assess the
+effectiveness of the Company's internal control system,
+supervise the Company's internal audit system and its
+implementation, and recommend the engagement or
+replacement of external auditors. The Audit Committee is
+also responsible for communications between the internal
+and external auditors and the establishment of the internal
+whistleblowing mechanism of the Company.
+10
+11
+12
+CHAIRMAN AND PRESIDENT
+Given that Mr. Wang Bin, a former Executive Director of the Company, was not able to perform his role and duties as a Director, Mr. Yuan Changqing,
+Mr. Lam Chi Kuen became a member of the Audit Committee in June 2021 and the Chairman of the Audit Committee in February 2022.
+Mr. Zhai Haitao became the Chairman of the Audit Committee in October 2021 and a member of the Audit Committee in February 2022.
+90
+Annual Report 2021 | Corporate Governance
+Meetings and attendance
+During the Reporting Period, five meetings were held by the Audit Committee of the Board of the Company. Attendance
+records of individual members are as follows:
+Name of member
+Position
+Number of
+meetings
+attended in
+person/
+Number of
+a Non-Executive Director of the Company, was elected at the sixth meeting of the seventh session of the Board of the Company on 13 January 2022 to
+assume the role and duties of the Chairman of the Board.
+During the Reporting Period, no Independent Director had
+raised any objection against the proposals and matters
+considered by the Board of the Company.
+In 2021, Mr. Tang Xin, Ms. Leung Oi-Sie Elsie, Mr. Lam
+Chi Kuen and Mr. Zhai Haitao, all being the Independent
+Directors of the Company, carried out investigation and
+research on the investment sector of the Company,
+listened to the reports concerning the investment
+management structure and investment system of the
+Company, and discussed and communicated in respect
+of the relevant issues. Through the investigation and
+research, the Board further understood the development
+and status of the Company's investment business in
+great depth and examined the effectiveness of the
+implementation of decisions of the Board.
+89
+Executive Director
+8/10
+2/10
+Yin Zhaojun
+Non-executive Director
+Liu Huimin
+Non-executive Director
+1/1
+0/1
+5/5
+0/5
+Robinson Drake Pike
+Independent Director
+8/8
+0/8
+Chang Tso Tung Stephen Independent Director
+110000
+Notes:
+1. The number of meetings attended in person includes meetings
+attended by the Directors on-site and by way of telephone or video
+conference.
+2. All Directors who were unable to attend any meeting of the Board have
+authorized other Directors to attend and vote at the meeting on their
+behalf.
+Performance of duties by Independent Directors
+In 2021, all Independent Directors of the Board of the
+Company possessed extensive experience in various
+fields, such as macro economy, finance and insurance,
+legal compliance, accounting and auditing. They
+satisfied the criteria for Independent Directors under the
+regulatory rules of the Company's listed jurisdictions.
+The Independent Directors of the Company performed
+their duties pursuant to the Articles of Association and
+the provisions and requirements of the listing rules of the
+Company's listed jurisdictions.
+All Independent Directors diligently fulfilled their
+responsibilities and faithfully performed their duties by
+attending meetings of the Board and the specialized
+Board committees in 2021, examining and approving
+the Company's business development, its financial
+management and connected transactions, participating
+in the establishment of specialized Board committees,
+providing professional and constructive advice in respect
+of major decisions of the Company, seriously listening
+to the reports from relevant personnel, understanding
+the daily operations and any possible operational risks of
+the Company in a timely manner, and expressing their
+opinions and exercising their functions and powers at
+Board meetings, thus actively performing their duties
+as Independent Directors in an effective manner. At
+the annual special meeting between the Chairman and
+the Independent Directors, all Independent Directors
+put forward their own views and opinions on various
+aspects such as the macro-environment, industry
+development, policies of the insurance industry, and
+corporate governance, etc., and gave advices and
+recommendations on matters including the development
+strategy of the Company, development of business, and
+risk management. The Board attached great importance
+to opinions and advice from Independent Directors,
+actively strengthened its communication with them
+and adopted their advice after careful deliberation and
+discussion. In 2021, the Company provided various
+materials to Independent Directors, which facilitated them
+to comprehend information associated with the insurance
+industry. All Independent Directors obtained information
+relating to the operation and management of the Company
+through various channels, which therefore formed the
+basis of their scientific and prudent decisions.
+Annual Report 2021 | Corporate Governance
+meetings
+attended by
+attended by proxies/
+Annual Report 2021 | Corporate Governance 93
+Number of meetings
+Number of
+Number of
+meetings
+attended in
+During the Reporting Period, five meetings were held by the Risk Management and Consumer Rights Protection
+Committee of the Board of the Company. Attendance records of individual members are as follows:
+Meetings and attendance
+Annual Report 2021 | Corporate Governance
+96
+Mr. Tang Xin became a member of the Risk Management and Consumer Rights Protection Committee in July 2021.
+15
+Mr. Wang Junhui became a member of the Risk Management and Consumer Rights Protection Committee in February 2021.
+14
+The Risk Management and Consumer Rights Protection
+Committee is mainly responsible for formulating
+the Company's system of risk control benchmarks,
+establishing well-developed risk management and internal
+control systems and the system for the management of
+consumer rights protection, examining and reviewing the
+Company's risk preference, risk tolerance and the work
+reports from the senior management and the Consumer
+Rights Protection Department, formulating the Company's
+risk management policy and major policy on consumer
+rights protection, reviewing the assessment reports in
+relation to the Company's risk management and internal
+control, studying major investigation findings on risk
+management and internal control matters as delegated by
+the Board or on its own initiative and the management's
+response to these findings, dealing with major risk
+emergency events or crisis events or major disagreement
+in risk management, and supervising and directing the
+senior management and the relevant departments to
+resolve any issues identified during the rectification
+process in a timely manner.
+Director, Mr. Li Mingguang, an Executive Director, Mr.
+Wang Junhui 14, a Non-executive Director, and Mr. Tang
+Xin 15, an Independent Director, with Ms. Leung Oi-Sie
+Elsie acting as the Chairperson. Due to the adjustment of
+work arrangements, Mr. Yin Zhaojun and Mr. Liu Huimin
+successively resigned from their positions as members
+of the Risk Management and Consumer Rights Protection
+Committee.
+The Company established its Risk Management
+Committee on 30 June 2003. In December 2019, the
+Board renamed the Risk Management Committee as
+the Risk Management and Consumer Rights Protection
+Committee, the additional function of management of
+consumer rights protection was included in the functions
+of the original Risk Management Committee, and
+corresponding changes and amendments were made in
+such areas as the functions and responsibilities of the
+committee and the procedural rules of the committee.
+Currently, the Risk Management and Consumer Rights
+Protection Committee of the seventh session of the
+Board comprises Ms. Leung Oi-Sie Elsie, an Independent
+RISK MANAGEMENT AND CONSUMER RIGHTS
+PROTECTION COMMITTEE
+Carrying out the evaluation of the performance of duties
+by Directors, Supervisors and senior management officers
+of the Company and their performance appraisal. The
+Nomination and Remuneration Committee reviewed
+proposals on the results of evaluating the performance
+of duties by Directors for the year 2020, the results of
+performance appraisal of senior management officers
+for the year 2020 and the performance target contract of
+senior management for the year 2021, the remuneration
+of Directors and Supervisors of the Company, and the
+remuneration of senior management officers of the
+Company, and made recommendations to the Board
+in respect of matters such as the determination of
+performance target, performance appraisal procedures
+and results.
+meetings
+attended by
+Name of member
+Position
+person/
+Number of
+Description
+3/5
+0/5
+5/5
+Independent Director, Chairperson of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Non-executive Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Independent Director, member of the Risk
+Management and Consumer Rights Protection
+Committee of the seventh session of the Board
+Tang Xin
+Wang Junhui
+Proposing remuneration policy of Directors, Supervisors
+and senior management officers of the Company. The
+Nomination and Remuneration Committee took into
+account various factors such as business development
+management, strategic investment decisions, and
+corporate governance management and control,
+carefully examined and determined the specific
+remuneration packages of all Executive Directors and
+senior management officers, approved the terms of
+service contracts between the Company and each of
+the Executive Directors, Non-executive Directors and
+Independent Directors and pushed forward the signing of
+service contracts between the Company and all Directors,
+defined the rights, obligations and remunerations of
+Directors, and seriously appraised the performance of
+Directors in the discharge of their duties.
+Li Mingguang
+to attend
+to attend
+required
+required
+meetings
+meetings
+proxies/
+Number of
+Leung Oi-Sie Elsie
+members and composition (including taking into
+account diversity factors, such as gender, age, cultural
+and educational background, skills, knowledge and
+experience), fully reviewed the professional qualifications
+and industrial background of the candidates for Directors
+and members of the Board committees and the
+independence of Independent Directors, and submitted
+the opinions in relation thereto to the Board. It also
+conducted a careful assessment on the qualifications,
+skills, knowledge and experience of candidates for senior
+management officers to ensure that the candidates met
+the requirements set by the Company, and submitted a
+review opinion to the Board and agreed to submit such
+proposals to the Board for consideration.
+Annual Report 2021 | Corporate Governance 95
+In 2021, the Nomination and Remuneration Committee
+performed its relevant duties and functions in strict
+compliance with the "Procedural Rules for the Nomination
+and Remuneration Committee Meetings". All members
+of the Nomination and Remuneration Committee
+performed their obligations in a responsible manner and
+reviewed the proposals on the candidates for Directors,
+nomination of senior management officers, business
+objectives and appraisal results, the remuneration of
+Directors, Supervisors and senior management, and the
+report on the duty performance of the Audit Committee
+and the Nomination and Remuneration Committee.
+During meetings of the Nomination and Remuneration
+Committee, all members actively participated in
+discussions and gave guiding opinions on the proposals
+considered and discussed at the meetings.
+Nomination and proposed appointment of Directors and
+senior management officers of the Company and the
+Board diversity policy. The Company firmly believes
+that the Board diversity may enhance the decision-
+making capability of the Board, and considers the Board
+diversity as a key factor for maintaining a sound corporate
+governance standard and achieving the sustainable
+development of the Company. In accordance with the
+"Procedural Rules for the Nomination and Remuneration
+Committee Meetings" and the Board diversity policy,
+the Nomination and Remuneration Committee seriously
+reviewed the structure of the Board, its number of
+24 March 2021
+Meetings convened
+The meetings convened are as follows:
+94 Annual Report 2021 | Corporate Governance
+3. Mr. Zhai Haitao served as a member of the Nomination and Remuneration Committee from October 2021 to February 2022.
+2. All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+27 April 2021
+The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+Notes:
+0/2
+2/2
+Robinson Drake Pike
+required to attend
+required to attend
+Number of meetings
+1.
+15th meeting of the Nomination and
+Remuneration Committee of
+the sixth session of the Board
+14th meeting of the Nomination and
+Remuneration Committee of
+the sixth session of the Board
+First meeting of the Nomination and
+Remuneration Committee of
+the seventh session of the Board
+Performance of duties by the Nomination and
+Remuneration Committee
+Three proposals, including the "Proposal in relation to the Nomination
+of Mr. Liu Yuejin as an Assistant to the President of the Company" and
+the "Proposal in relation to the Nomination of Ms. Zhang Di as the Chief
+Investment Officer of the Company", were considered and approved.
+Five proposals, including the "Proposal in relation to the Nomination of
+Ms. Zhang Di as an Assistant to the President of the Company" and the
+"Proposal in relation to the Nomination of Mr. Liu Fengji as the Person in
+Charge of Audit of the Company", were considered and approved.
+Name of member
+17 proposals, including the "Proposal in relation to the Remuneration of
+Directors and Supervisors of the Company", the "Proposal in relation to the
+Remuneration of Senior Management of the Company" and the nomination
+of the candidates for Directors of the seventh session of the Board, were
+considered and approved.
+27 October 2021
+0/3
+0/2
+2/2
+3/3
+required to attend
+required to attend
+Note: The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+Number of meetings
+attended by proxies/
+Number of meetings
+Number of meetings
+Number of meetings
+Robinson Drake Pike
+Chang Tso Tung Stephen
+Name of member
+Attendance records of the resigned Directors at meetings are as follows:
+102 Annual Report 2021 | Corporate Governance
+Mr. Zhai Haitao became a member of the Connected Transactions Control Committee in October 2021.
+19
+Mr. Lam Chi Kuen became a member of the Connected Transactions Control Committee in June 2021.
+attended in person/
+The meetings convened are as follows:
+Third meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+24 March 2021
+If the number of Directors is less than the number
+stipulated in the Company Law or two-thirds of the
+number specified by the Articles of Association, or the
+uncovered losses incurred amount to one-third of the
+Company's total share capital or if the Board or the Board
+of Supervisors deems necessary, or more than half of the
+Directors (including at least two Independent Directors)
+request, or shareholders holding 10% or more shares of
+the Company make a requisition, the Board shall convene
+an extraordinary shareholders' general meeting within two
+months. Where shareholders holding 10% or more shares
+request an extraordinary shareholders' general meeting,
+such shareholders shall make a request in writing to
+the Board with a clear agenda. The Board shall, upon
+receipt of such a written request, convene a meeting as
+soon as possible. If the Board fails to convene a meeting
+within 30 days of the receipt of such a written request,
+shareholders making such a request may convene a
+meeting by themselves at the cost of the Company within
+four months of the receipt by the Board of such a written
+request.
+In accordance with the Articles of Association, when the
+Company convenes the shareholders' general meeting,
+shareholders individually or in aggregate holding 3% or
+more of the shares of the Company shall have the right
+to submit proposals to the Company. The Company
+should include such matters that fall into the scope of
+the functions and powers of the shareholders' general
+meeting in the agenda of the meeting. Shareholders
+individually or in aggregate holding 3% or more of the
+shares of the Company may submit provisional proposals
+in writing to the convenor sixteen days prior to the
+shareholders' general meeting. The provisional proposals
+shall fall into the scope of the functions and powers of the
+shareholders' general meeting and specify explicit topics
+and specific resolution matters.
+Shareholders may put forward enquiries to the Board
+through the Board Secretary or the Company Secretary, or
+put forward proposals at shareholders' general meetings
+through their proxies. The Company has made available its
+contact details in its correspondence with shareholders to
+enable such enquiries or proposals to be properly directed.
+INFORMATION DISCLOSURE AND INVESTOR
+RELATIONS
+The Company has established a well-developed, effective
+and practical information disclosure management
+system in strict compliance with the regulatory laws and
+regulations of its listed jurisdictions and the insurance
+industry, internal rules and regulations as well as self-
+regulatory requirements and continued to improve the
+quality of its information disclosure, so as to ensure that
+domestic and overseas investors obtain true, accurate and
+complete information in a compliant and effective manner.
+The Company has attached great importance to its
+contact and communication with domestic and overseas
+investors, and proactively developed investor relations by
+offering various channels to facilitate such investors to
+keep abreast of any major business development of the
+Company in a timely manner.
+The Company has created the "Investor Relations"
+section on its official website at www.e-chinalife.com
+to facilitate investors to access announcements,
+operating results materials and other information for
+public disclosure as published by the Company in the
+three listing venues. In addition, investors may call the
+investor relations hotline of the Company at 86-10-
+63631329 or email to the investor relations email box
+at ir@e-chinalife.com if they have any further inquiries.
+The Company will respond to such enquiries in a timely
+manner.
+Annual Report 2021 | Corporate Governance 105
+In 2021, the Company further proceeded with the
+construction of its information disclosure regulation
+system, and continued to make amendments to improve
+the regulations in connection with the information
+disclosure affairs management and the registration
+and management of persons who have knowledge of
+inside information as required by the revised rules of
+the CSRC and the SSE, which led to the successful and
+efficient implementation of the basic regulation system
+of information disclosure. For the disclosure by way of
+provisional announcements, the Company fulfilled its
+obligation of information disclosure in a timely manner
+by publishing timely announcements with respect to the
+progress of such matters as significant matters, major
+investments and connected transactions in its listed
+jurisdictions or on the media satisfying the conditions
+prescribed by the CSRC, the official website of the
+Company and the website of Insurance Association of
+China. For the disclosure by way of periodic reports, the
+Company constantly enhanced the quality of information
+disclosure with its focus primarily on investor concerns,
+and delivered corporate value to the market and investors
+in an approachable, simple and clear, and graphically
+illustrated manner. The Company also regularly organized
+training courses and promotion activities relating to the
+relevant rules of information disclosure and corporate
+governance. It properly arranged information disclosure
+on the basis that the differences between the laws
+and regulations of its listed jurisdictions in the PRC and
+overseas, and the differences between the regulatory
+requirements of its listed jurisdictions and the insurance
+industry, are well defined. The Company strictly managed
+its inside information and carried out the registration and
+filing procedures on persons who have knowledge of
+inside information in compliance with law, strengthened
+the confidentiality of inside information, and safeguarded
+the legitimate rights and interests of investors, with a
+view to maintaining the fairness, impartiality and openness
+of information disclosure of the Company. In 2021, the
+Company was awarded Grade A in the assessment by the
+SSE of information disclosure of listed companies for the
+year of 2020-2021.
+The Company took active actions to respond to any
+uncertainties brought by the social, economic and financial
+environments both internationally and domestically, and
+developed investor relations in a proactive way with
+its stringent attitude and innovative thinking. It kept
+abreast with the development pace of technology era and
+consistently made innovation in its communications with
+and services to investors, which constantly enhanced
+the efficiency of communication between the Company
+and capital market, and mitigated the negative impacts
+brought by the pandemic. The works conducted by the
+Company for investor relations mainly included holding
+general meetings and results briefings, embarking on
+global non-deal roadshows, holding online and offline
+conferences with investors and analysts, attending
+investors' meetings, frequently updating information
+on its investor relations website, and timely responding
+to enquiries from investors and analysts. In 2021, the
+Company communicated with more than 5,200 investors
+and analysts, including more than 2,600 investors
+who attended results briefings online and offline. The
+Company held over 170 online and offline meetings with
+approximately 1,500 investors and analysts for the year,
+and communicated with more than 1,100 institutional
+investors by attending a total of 46 investors' meetings
+held locally or internationally. It also communicated
+with more than 90 investors in non-deal roadshows for
+annual and interim results. In addition, the Company
+focused on the protection of medium and small investors,
+actively responded to any enquiries from them, kept in
+close contact with investors by various means such as
+email, phone and internet, and recorded a click-through
+rate of 35,000 person-times for the live video streaming
+of results briefings. The Company reviews its policy
+for communication with shareholders once a year and
+considers that such policy remains effective based on the
+feedbacks received from investors and the capital market
+on investor relations.
+In 2021, the Company won various awards, including
+the "Precedent for the Best Practices of the Office of
+the Board of Directors of Listed Company for 2021" by
+the China Association for Public Companies, the "Best
+Investor Activity" by the Investor Relations Magazine, the
+"Most Progress in Investor Relations Award" by Hong
+Kong Investor Relations Association, the "Interaction
+of Medium and Small Investor Relations Award" and
+the "Institutional Friendly Communication Award" by
+www.p5W.net, and the "Best Communication with the
+Capital Market Award" and the "Best Digital Investor
+Relations Award" in the 5th Excellent IR in China. With
+the outstanding achievements of its practice in investor
+relations management, the Company was among the first
+batch of companies to have been selected for inclusion
+of its investor relations precedents into the case study
+collection of the SSE for investor relations management.
+106 Annual Report 2021 | Corporate Governance
+CHANGES OF THE ARTICLES OF ASSOCIATION
+In accordance with the relevant requirements of the
+Company Law, the "Reply of the State Council on the
+Adjustment of the Notice Period for General Meeting
+and Other Matters Applicable to the Overseas Listed
+Companies" (Guo Han [2019] No. 97), and the "Measures
+for the Administration of Connected Transactions of
+Insurance Companies" (Yin Bao Jian Fa [2019] No. 35) 20
+and the "Guiding Opinions on Banking and Insurance
+Institutions Strengthening the Building of Working
+Systems and Mechanisms for Protection of Consumer
+Rights and Interests" (Yin Bao Jian Fa [2019] No. 38)
+issued by the CBIRC, the amendments to the Articles
+of Association were put to vote and adopted by way
+of special resolution at the First Extraordinary General
+Meeting 2021 held on 16 December 2021. The major
+amendments to the Articles of Association mainly
+include: 1. revising the notice period for general meeting,
+removing the requirements for shareholders who intend
+to attend a general meeting to give written reply to the
+Company and for minimum percentage of voting rights
+and relevant procedures for convening general meetings,
+and optimizing the provisions with respect to the change
+of registration by the holders of H shares prior to the
+date of a general meeting in accordance with Article 102
+of the Company Law and the relevant requirements of
+the "Reply of the State Council on the Adjustment of the
+Notice Period for General Meeting and Other Matters
+Applicable to the Overseas Listed Companies" (Guo
+Han [2019] No. 97); and 2. revising the provisions of the
+Articles of Association with respect to the specialized
+committees of the Board, establishing a new Connected
+Transactions Control Committee under the Board of
+Directors of the Company, and adding the new provisions
+with respect to the composition of the Connected
+Transactions Control Committee; as well as changing
+the name of the Risk Management Committee under
+the Board of the Company to the Risk Management and
+Consumer Rights Protection Committee, in accordance
+with the relevant requirements of the "Measures for the
+Administration of Connected Transactions of Insurance
+Companies" (Yin Bao Jian Fa [2019] No. 35) and the
+"Guiding Opinions on Banking and Insurance Institutions
+Strengthening the Building of Working Systems and
+Mechanisms for Protection of Consumer Rights and
+Interests" (Yin Bao Jian Fa [2019] No. 38).
+The amendments to the Articles of Association as
+described above shall come into effect after the approval
+from the CBIRC.
+INTERNAL CONTROL AND RISK MANAGEMENT
+The Company has consistently proceeded with tasks in
+compliance with the regulatory requirements of relevant
+regulatory authorities, such as the SSE, the HKSE, the U.S.
+Securities and Exchange Commission (the "SEC") and
+the New York Stock Exchange, with respect to corporate
+internal control.
+Internal Control
+The Company has been devoting significant effort towards
+the promotion of internal control and the establishment of
+internal control related systems. In accordance with the
+requirements of Section 404 of the "U.S. Sarbanes-Oxley
+Act", the "Standard Regulations on Corporate Internal
+Control", the "Implementation Guidelines for Corporate
+Internal Control", the "Guidance on Internal Control for
+Companies Listed on the Shanghai Stock Exchange",
+the "Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited", and the "Basic
+Standards of Internal Control for Insurance Companies"
+issued by the CBIRC, the Company has carried out a lot
+of work on its internal control system establishment,
+rules implementation and risk management by strictly
+following its corporate governance structure. The
+Company has also formulated and issued the "Internal
+Control Implementation Manual of China Life Insurance
+Company Limited (2021 Edition)" to strengthen the
+implementation of internal control standards and internal
+control assessments, and actively promoted the culture
+and philosophy of internal control, thereby continuously
+enhancing the internal control of the Company.
+20
+The "Measures for the Administration of Connected Transactions of Insurance Companies" (Yin Bao Jian Fa [2019] No. 35) was abolished on 1 March
+2022, and the "Measures for the Administration of Connected Transactions of Banking and Insurance Institutions" (Order of the China Banking
+and Insurance Regulatory Commission [2022] No. 1) was implemented. The relevant amendments to the Articles of Assocation are in line with the
+requirements of the two aforesaid regulatory provisions.
+Annual Report 2021 | Corporate Governance 107
+Pursuant to the requirements of the "Notice on the Proper
+Preparation for Disclosure of 2021 Annual Reports of
+Companies Listed on the Main Board" and the "Business
+Guide for the Periodic Reports of Listed Companies"
+promulgated by the SSE, the Company shall release an
+Internal Control Self-assessment Report simultaneously
+with the publication of its 2021 annual report. Meanwhile,
+the Company, as an overseas private issuer, was required
+to provide a specific assessment report on its internal
+control system relating to financial reporting for the year
+ended 31 December 2021 in its Form 20-F (U.S. Annual
+Report) to be submitted to the SEC in accordance with
+Section 404 of the U.S. Sarbanes-Oxley Act. In accordance
+with the requirements of laws and regulations relating to
+internal control of the jurisdictions where the Company is
+listed, the Company has completed internal control self-
+assessments in relation to the requirements of Section
+404 of the U.S. Sarbanes-Oxley Act and the SSE for
+the year ended 31 December 2021. Such assessments
+are conducted on an annual basis and in two stages,
+namely, interim assessment and supplementary test. The
+Company has confirmed after the assessments that its
+internal controls were effective. The Company has also
+received from its independent auditors an unqualified
+opinion on the effectiveness of its internal control in
+relation to financial reporting as at 31 December 2021.
+The Company's assessment report and the report of its
+independent auditors will be included as an attachment to
+its annual report submitted to the SSE and its Form 20-F to
+be submitted to the SEC.
+It is the responsibility of the Board of the Company to
+establish and effectively implement well-established
+internal control systems, assess their effectiveness and
+disclose the report on the internal control assessment.
+The Board and the Audit Committee are responsible for
+leading the implementation of internal control measures
+of the Company, and the Board of Supervisors supervises
+the internal control assessments performed by the Board.
+The Company has established the Risk Management
+Department in its headquarters and branches. The
+Company also conducts tests on the management
+level, assesses the effectiveness of the established and
+implemented internal control systems in accordance with
+the regulatory requirements of the jurisdictions where
+the Company is listed, and reports to the Board, the Audit
+Committee and the management.
+In compliance with regulatory requirements and having
+considered the characteristics of its business and
+management requirements, the Company has established
+and implemented a series of internal control measures and
+procedures with respect to currency and funds, insurance
+operations, external investments, physical assets,
+information technology, financial reporting and information
+disclosure to ensure the safety and integrity of its
+assets. By strictly complying with relevant PRC laws and
+regulations as well as the internal rules and regulations of
+the Company, the quality of accounting information has
+been improved.
+A relatively well-developed internal control system
+has been established in terms of team-building, sales
+and operations, and system management for the sales
+channels, such as individual insurance, bancassurance,
+group insurance and health insurance. This internal
+control system regulates the relevant authorizations
+and operational workflows, and effectively adopts
+the measures to prevent and manage risks relating to
+the operation of exclusive agents. The Company has
+promulgated clear regulations for the workflows and
+authorizations relating to the verification of insurance
+policies, insurance claims and insurance preservation.
+The Company has also formulated business operation
+standards and service quality standards, developed
+systems of business, document and file management, and
+further regulated the management of business approval
+authority to strengthen its control over business risk and
+improve the quality of its services.
+In accordance with relevant laws and regulations such
+as the "Accounting Law of the People's Republic of
+China" and the "Enterprise Accounting Standards" and
+taking into account the needs of the Company for its
+business development, operation and management, the
+Company has formulated and issued the "Accounting
+System of China Life Insurance Company Limited"
+and the "Accounting Practices of China Life Insurance
+Company Limited". The accounting units of the Company
+at all levels have implemented them in strict compliance
+with the requirements of the accounting system and
+various basic systems to regulate works relating to
+financial accounting and preparation of financial reports.
+The accounting units of the Company at all levels have
+assigned positions in a reasonable manner, clearly
+defined duties and responsibilities of such positions and
+their scope of authority on management, and strictly
+prohibited employees from serving incompatible positions
+concurrently, thus exercising the control over financial
+risks in an efficient manner.
+108 Annual Report 2021 | Corporate Governance
+To safeguard shareholders' interests, in addition to the
+right to participate in the Company's affairs by attending
+shareholders' general meetings, shareholders have the
+right to convene extraordinary shareholders' general
+meetings under certain circumstances.
+Meetings convened
+SHAREHOLDERS' INTERESTS
+The Company implements a term-of-service and target-
+related responsibility system for senior management.
+Performance target contracts are entered into between
+the Chairman of the Board and the President, and
+between the President and other senior management of
+the Company. The performance target contract system is
+an important tool in disassembling the strategic goals of
+the Company in a scientific manner, which is conducive
+towards the breakdown of targets and transmission of
+responsibility, enhancing the implementation capability
+of the Company and ensuring the successful completion
+of its annual business targets. The performance appraisal
+criteria listed in the individual performance target
+contracts of senior management are partially linked to the
+business targets of the Company and partially formulated
+with reference to the duties and functions of their
+respective positions.
+Eighth meeting of the Connected
+Transactions Control Committee of
+the sixth session of the Board
+26 May 2021
+Ninth meeting of the Connected
+Transactions Control Committee of
+the sixth session of the Board
+24 August 2021
+First meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+27 October 2021
+Second meeting of the Connected
+Transactions Control Committee of
+the seventh session of the Board
+15 December 2021
+18
+Description
+Four proposals, including the "Proposal in relation to the Execution
+of a Supplemental Agreement to the 'Agreement for the Entrusted
+Management of Retained Assets' between the Company and China Life
+Investment Management Company Limited" and the "Proposal in relation
+to the 'Report on the Overall Status of Connected Transactions of the
+Company for the Year 2020'", were considered and approved.
+Two proposals, including the "Proposal in relation to the Participation
+by the Company in the Capital Increase of CGB", were considered and
+approved.
+Two proposals, including the "Proposal in relation to an Increase in
+Revolving Investment for Project Qihang", were considered and approved.
+The "Proposal in relation to the Execution of the 'Agreement for Entrusted
+Investment and Management and Operating Services with respect to
+Alternative Investments with Insurance Funds' between the Company and
+China Life Investment Management Company Limited" was considered
+and approved.
+Nine proposals, including the "Proposal in relation to the Renewal of the
+'Policy Management Agreement' between the Company and China Life
+Insurance (Group) Company" and the "Proposal in relation to the Renewal
+of the Asset Management Agreement between the Company and China
+Life Franklin Asset Management Company Limited", were considered and
+approved.
+Annual Report 2021 | Corporate Governance 103
+Performance of duties by the Connected
+Transactions Control Committee
+In 2021, the Connected Transactions Control Committee
+performed its duties and functions in strict compliance
+with the "Procedural Rules for the Connected
+Transactions Control Committee Meetings". All members
+performed their obligations in a responsible manner
+and reviewed the proposals in relation to the connected
+transactions of the Company. During meetings of the
+Connected Transactions Control Committee, all members
+actively participated in discussions and gave guiding
+opinions on the proposals considered and discussed at the
+meetings.
+Determining connected parties of the Company. In 2021,
+the Connected Transactions Control Committee reviewed
+the "Report on Determining a List of Connected Parties
+of the Company as of 31 December 2020" and the
+"Report on Determining a List of Connected Parties of the
+Company as of 30 June 2021", and reported to the Board
+in respect thereof.
+Approving connected transactions. In 2021, the
+Connected Transactions Control Committee reviewed
+connected transaction projects, such as the participation
+by the Company in the capital increase of CGB, its
+investment in Project Eyas, investment in China
+Life Smart Healthcare Fund Project, renewal of the
+"Policy Management Agreement" with CLIC, renewal
+of the "Framework Agreement for Daily Connected
+Transactions" with Pension Company, renewal of the
+framework agreement for the connected transaction
+regarding bonds distribution with AMC, renewal of the
+framework agreement for connected transactions with
+Sino-Ocean Group and other framework agreements for
+daily connected transactions, and the execution of the
+"Agreement for Entrusted Investment and Management
+and Operating Services with respect to Alternative
+Investments with Insurance Funds" with CLI, fully
+discussed the necessity, feasibility and risks of the
+projects and made recommendations to the Board in
+respect thereof.
+Reviewing the implementation of the system for
+connected transactions management. In 2021, the
+Connected Transactions Control Committee reviewed the
+implementation of the Company's system for connected
+transactions management and the report on connected
+transactions, considered and approved the "Proposal in
+relation to the 'Report on the Overall Status of Connected
+Transactions of the Company for the Year 2020'", and
+submitted the review opinions to the Board.
+INDEPENDENCE OF THE COMPANY FROM ITS
+CONTROLLING SHAREHOLDER
+Employees: The Company is independent in the aspects
+of employment, human resources and remuneration
+management.
+Assets: The Company owns all assets relating to
+the operation of its principal business. At present,
+the Company does not provide any guarantee for its
+shareholders. The Company's assets are independent,
+complete, and independent of the shareholders of the
+Company and other related parties.
+Finance: The Company has established a separate financial
+department, and an independent financial accounting
+system and financial management system; further, the
+Company makes financial decisions on its own; it employs
+separate financial personnel, opens separate accounts
+with banks and does not share bank accounts with
+CLIC; the Company, as a separate taxpayer, pays taxes
+individually according to law.
+Organization: The Company has established a well-
+developed organizational system, under which internal
+bodies such as the Board of Directors and the Board of
+Supervisors operate separately. There is no subordinate
+relationship between such internal bodies and the
+functional departments of the Company's controlling
+shareholder.
+Business operations: The Company independently
+develops personal insurance businesses, including life
+insurance, health insurance and accident insurance
+businesses; reinsurance relating to the above insurance
+businesses; use of funds permitted by applicable PRC
+laws and regulations or the State Council; as well as all
+types of personal insurance services, consulting business
+and agency business; sale of securities investment
+funds; and other businesses permitted by the insurance
+administrative and regulatory authorities of the PRC. The
+Company currently possesses the "Insurance Permit"
+(Number: 000005) issued by the CBIRC. The Company is
+independently engaged in the businesses as prescribed
+in its business scope according to law, has separate sales
+and agency channels and is licensed to use licensed
+trademarks without consideration. The completeness and
+independence of the Company's business operations will
+not be adversely affected by its relationship with related
+parties.
+104 Annual Report 2021 | Corporate Governance
+PERFORMANCE APPRAISAL AND INCENTIVES
+FOR SENIOR MANAGEMENT
+The remuneration for senior management mainly comprises
+position compensation, performance rewards, welfare
+benefits and medium and long term incentives.
+0/2
+96
+Connected Transactions Control Committee of
+the seventh session of the Board
+6/6
+0/6
+Wang Junhui
+Non-executive Director, member of
+the Strategy and Assets and Liabilities
+Management Committee of the seventh
+session of the Board
+2/6
+4/6
+Huang Xiumei
+Executive Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+Attendance records of the resigned Director at meetings are as follows:
+Name of member
+Chang Tso Tung Stephen
+1/3
+2/3
+Independent Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+Number of meetings
+attended in person/
+attended by proxies/
+Number of meetings
+Number of meetings
+required to attend
+required to attend
+3/3
+0/3
+Notes:
+1.
+The number of meetings attended in person includes attending meetings by the Directors on-site and by telephone or video conference.
+2.
+All Directors who were unable to attend any meeting of specialized Board committees have authorized other Directors to attend and vote at the meeting
+on their behalf.
+Number of meetings
+Leung Oi-Sie Elsie
+3/6
+3/6
+Providing its opinions for the review of the proposals
+on risk management to the Board. In 2021, the Risk
+Management and Consumer Rights Protection Committee
+closely monitored and controlled and effectively prevented
+internal and external risks of the Company, assisted the
+Board in reviewing the assessment reports on business
+risk and internal control of the Company according to
+the national and international regulatory requirements.
+The Risk Management and Consumer Rights Protection
+Committee provided its opinions for the review of the
+reports on risk management such as the annual and
+quarterly reports on the enterprise-wide risk management
+of the Company, work summary on anti-money laundering
+for the year 2020 and the work plan for the year 2021, the
+report on case prevention for the year 2020, the statement
+of the Company on risk preference for the year 2021, the
+audit report on the solvency risk management system
+of the Company for the year 2021, the reputational risk
+management report and the work report on fraudulent risk
+management, which offered professional support to the
+Board's decision-making in a scientific manner.
+Reviewing the system of the Company in relation
+to consumer rights protection. In 2021, the Risk
+Management and Consumer Rights Protection Committee
+reviewed the report on the customer rights protection
+of the Company for the year 2020 and the proposal for
+customer rights protection of the Company for 2021, and
+submitted the review opinions to the Board.
+STRATEGY AND ASSETS AND LIABILITIES
+MANAGEMENT COMMITTEE
+The Company established the Strategy Committee on 30
+June 2003. In October 2010, the proposal to establish the
+Strategy and Investment Decision Committee on the basis
+of the Strategy Committee was reviewed and approved
+at the ninth meeting of the third session of the Board.
+In June 2018, the proposal to establish the Strategy and
+Assets and Liabilities Management Committee on the
+basis of the Strategy and Investment Decision Committee
+was reviewed and approved at the twenty-fourth meeting
+of the fifth session of the Board. Currently, the Strategy
+and Assets and Liabilities Management Committee of the
+seventh session of the Board comprises Mr. Zhai Haitao 16
+and Ms. Leung Oi-Sie Elsie, all being the Independent
+Directors, Mr. Su Hengxuan and Ms. Huang Xiumei¹7, all
+being the Executive Directors, and Mr. Wang Junhui, a
+Non-executive Director, with Mr. Zhai Haitao acting as the
+Chairman. Due to consecutively serving as an Independent
+Director for six year, Mr. Chang Tso Tung Stephen
+resigned from his position as the Chairman of the Strategy
+and Assets and Liabilities Management Committee.
+The Strategy and Assets and Liabilities Management
+Committee is mainly responsible for the drawing-up
+of long-term development strategies of the Company,
+conducting studies on important matters concerning
+assets and liabilities management and the relevant
+policies and systems, the system for the application and
+management of insurance funds, and major strategic
+investment decisions of the Company, and making
+recommendations in respect thereof.
+16
+Mr. Zhai Haitao became the Chairman of the Strategy and Assets and Liabilities Management Committee in February 2022.
+17
+Ms. Huang Xiumei became a member of the Strategy and Assets and Liabilities Management Committee in July 2021.
+Annual Report 2021 | Corporate Governance
+99
+Meetings and attendance
+During the Reporting Period, six meetings were held by the Strategy and Assets and Liabilities Management Committee
+of the Board of the Company. Attendance records of individual members are as follows:
+Name of member
+Position
+Number of
+meetings
+attended in
+person/
+Number of
+Number of
+meetings
+attended by
+proxies/
+Number of
+meetings
+meetings
+required
+to attend
+required
+to attend
+Lam Chi Kuen
+Su Hengxuan
+Independent Director, Chairman of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+Executive Director, member of the Strategy
+and Assets and Liabilities Management
+Committee of the seventh session of the Board
+3/3
+0/3
+3. Mr. Lam Chi Kuen served as the Chairman of the Strategy and Assets and Liabilities Management Committee from July 2021 to February 2022.
+2/2
+100 Annual Report 2021 | Corporate Governance
+Meetings convened
+person/
+Number of
+Number of
+meetings
+attended by
+proxies/
+Number of
+meetings
+meetings
+required
+required
+to attend
+to attend
+Tang Xin
+Independent Director, Chairman of the
+Connected Transactions Control Committee of
+the seventh session of the Board
+Number of
+meetings
+attended in
+5/5
+Independent Director, member of the
+Leung Oi-Sie Elsie
+Connected Transactions Control Committee of
+the seventh session of the Board
+5/5
+0/5
+Independent Director, member of the
+Lam Chi Kuen
+Connected Transactions Control Committee of
+3/3
+0/3
+the seventh session of the Board
+Independent Director, member of the
+Zhai Haitao
+0/5
+Position
+Name of member
+During the Reporting Period, five meetings were held by the Connected Transactions Control Committee of the Board of
+the Company. Attendance records of individual members are as follows:
+24 March 2021
+15th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+16th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+26 May 2021
+17th meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the sixth session of the Board
+24 August 2021
+First meeting of the Strategy and Assets
+and Liabilities Management Committee
+of the seventh session of the Board
+27 October 2021
+Second meeting of the Strategy and
+Assets and Liabilities Management
+Committee of the seventh session
+of the Board
+15 December 2021
+Third meeting of the Strategy and
+Assets and Liabilities Management
+Committee of the seventh session
+of the Board
+Description
+Four proposals, including the "Proposal in relation to the New Business
+Plan of the Company for the Years from 2021 to 2023" and the "Proposal
+in relation to the Final Assessment Report for the Outline of the '13th Five-
+Year Development Plan' of the Company", were considered and approved.
+Two proposals, including the "Proposal in relation to the General Mandate
+for the Issue of H Shares of the Company", were considered and approved,
+and the "Report on the Situation Relevant to the Assets and Liabilities
+Management of the Company for 2020" was debriefed.
+Two proposals, including the "Proposal in relation to the Participation
+by the Company in the Capital Increase of CGB", were considered and
+approved.
+Two proposals, including the "Proposal in relation to the 'Statement of the
+Company on Risk Preference for the Year 2021'", were considered and
+approved.
+The "Proposal in relation to the Implementation of Tasks and the
+Performance Appraisal of the Company for 2020" was considered and
+approved.
+Ten proposals, including the "Proposal in relation to the Strategic Asset
+Allocation Plan of the Company for the Years from 2022 to 2024" and the
+"Proposal in relation to the Asset Allocation Plan of the Company for the
+Year 2022", were considered and approved.
+Performance of duties by the Strategy and Assets
+and Liabilities Management Committee
+In 2021, all members of the Strategy and Assets and
+Liabilities Management Committee attended meetings in a
+timely manner, reviewed the proposals on the application
+of the Company's insurance funds, annual investments,
+major strategic projects, assets and liabilities management
+and annual related reports. Members of the Strategy and
+Assets and Liabilities Management Committee diligently
+performed their duties. During meetings of the Strategy
+and Assets and Liabilities Management Committee, all
+members actively participated in discussions and gave
+professional advices on any proposals considered and
+discussed at the meetings.
+Reviewing annual asset allocation plan and entrusted
+investments of the Company. In 2021, the Strategy and
+Assets and Liabilities Management Committee reviewed
+the proposals on investment plans such as the annual
+asset allocation plan of the Company and the annual
+investment plan of the Company for self-use real estate,
+the proposals on authorization of investments such as
+the annual authorization by the Company of investment
+in non self-use real estate, the annual authorization of
+investment entrusted by the Company in connection with
+Renminbi liberalization and the annual authorization by
+the Company of investment in equity investment funds,
+and the proposals on investment guidelines such as the
+management guidelines on the investment made by CLI
+under the entrustment of the Company, and submitted its
+opinions to the Board in this regard.
+Reviewing the systems of the Company concerning assets
+and liabilities management. In 2021, the Strategy and
+Assets and Liabilities Management Committee reviewed
+and approved the proposals on the amendments to the
+statement of the Company on risk preference for the year
+2021 and the amendments to the rules on enterprise-
+wide risk management of the Company, and submitted its
+review opinions to the Board.
+Annual Report 2021 | Corporate Governance 101
+Discussing the Company's development plans and major
+strategic projects. In 2021, the Strategy and Assets
+and Liabilities Management Committee reviewed the
+proposals on the final assessment report for the outline of
+the "13th five-year development plan" of the Company,
+its strategic asset allocation plan for the years from 2022
+to 2024, asset allocation plan for the year 2022, the
+Company's participation in the capital increase of CGB
+and its investment in Project Eyas, and made significant
+recommendations to the Board.
+CONNECTED TRANSACTIONS CONTROL
+COMMITTEE
+The Company established its Connected Transactions
+Control Committee on 29 October 2019. In October 2019,
+the "Proposal in relation to the Establishment of the
+Connected Transactions Control Committee of the Board
+of Directors" was reviewed and approved at the twentieth
+meeting of the sixth session of the Board, pursuant to
+which a new Connected Transactions Control Committee
+was established under the Board of the Company.
+Currently, the Connected Transactions Control Committee
+of the seventh session of the Board comprises Mr. Tang
+Xin, Ms. Leung Oi-Sie Elsie, Mr. Lam Chi Kuen 18 and Mr.
+Zhai Haitao 19, all being the Independent Directors, with
+Mr. Tang Xin acting as the Chairman. Due to consecutively
+serving as Independent Directors for six years, Mr.
+Chang Tso Tung Stephen and Mr. Robinson Drake Pike
+successively resigned from their positions as members of
+the Connected Transactions Control Committee.
+The principal duties of the Connected Transactions
+Control Committee are to confirm connected parties of
+the Company, manage, examine and approve connected
+transactions to control risks relating to connected
+transactions, and focus on the compliance and necessity
+of connected transactions and the fairness of their pricing,
+which provide an important basis for the Board's decision-
+making in connected transaction management.
+Meetings and attendance
+The meetings convened are as follows:
+27 April 2021
+The Company has formulated the "Measures for
+the Administration of the Accountability System for
+Major Errors in Periodic Report Disclosures of China
+Life Insurance Company Limited", which set forth
+provisions governing the basic responsibilities of periodic
+report disclosures, the major errors in periodic report
+disclosures and the responsibility attribution. As at
+31 December 2021, there has been no major error in
+periodic report disclosures of the Company. In order to
+cope with the latest regulatory requirements, enhance
+the confidentiality of its inside information, and register
+and submit information concerning persons who have
+knowledge of inside information, the Company, after
+taking into account the regulatory requirements, has
+revised during the Reporting Period the "Measures for
+the Administration of Registration of Persons Who Have
+Knowledge of Inside Information of China Life Insurance
+Company Limited". For the purpose of strengthening
+the its emergency management for the information
+disclosure of emergencies, the Company has, after
+taking into account the regulatory requirements, revised
+the "Measures for the Emergency Management for the
+Information Disclosure of Emergencies of China Life
+Insurance Company Limited" during the Reporting Period
+and, after taking into account the regulatory requirements,
+revised the "Rules for the Administration of Information
+Disclosure of China Life Insurance Company Limited" and
+the "System of Internal Reporting of Material Information
+of China Life Insurance Company Limited" in 2018. In
+particular, the internal report on material information has
+been included in the indicator system under the internal
+control report of the Company. Persons responsible
+for reporting material information obtain and identify
+potential material information at the level of operation
+and management by making use of various information
+technologies, and submit and report such information to
+the President and the Board of the Company as earlier
+as possible. The Board then makes the final decision on
+whether to release the material information, and discloses
+the same to such extent as it considers reasonable and
+practicable.
+118 Annual Report 2021 | Other Information
+It should be stated that the risk management and
+internal control of the Company are designed with the
+objectives to reasonably ensure the legal compliance of
+business operation and management, safety of assets,
+truthfulness and completeness of financial reports
+and relevant information, improvement of operating
+efficiency and effectiveness, and accomplishment of
+development strategy. Given the inherent limitations on
+risk management and internal control, the Company can
+only provide reasonable assurance with respect to the
+accomplishment of the above objectives.
+For analysis on the insurance risk, market risk, credit risk
+and liquidity risk of the Company, please refer to the "Risk
+Management" section in the Notes to the Consolidated
+Financial Statements of this annual report.
+manner.
+The Company assesses ESG material issues once a
+year in view of the external economic, social and macro
+environment as well as its own development strategy,
+discusses and determines the risks and opportunities
+faced by it in relation to ESG, and regards the
+management and escalation of key issues as its priority
+of work in ESG for the year. The Board of the Company
+reviews and confirms the assessment results, taking into
+consideration the key issues as part of its formulation of
+an overall strategy, and exercising its supervisory function
+with respect to the management of such issues and
+their performance. In 2021, the Company established an
+ESG risk management system, through which five ESG
+risks were identified as follows: information safety risk,
+climate change risk, corruption risk, human resources
+and customer relationship management risk, and talent
+attraction and retention risk. The Company has devised
+the management strategy against the above risks in order
+to keep track with the risk development trend in a timely
+ESG Risk
+The Company has established a well-developed system
+relating to investment decisions in accordance with the
+relevant laws and regulations and based on the actual
+situation of investment management. The system defines
+the approval and decision-making authority, authorization
+mechanism and specific decision-making procedures for
+investment management. All major investment decisions
+shall be approved and implemented in strict compliance
+with the internal decision-making process of the Company
+and the requirements of its investment management
+system. The Investment Decisions Committee is a
+permanent body of the Company for investment decisions,
+which is responsible for reviewing major investments and
+providing support to any investment decisions made by
+the management.
+114 Annual Report 2021 | Corporate Governance
+Annual Report 2021 | Corporate Governance 115
+The Company attached great importance to information
+safety risk management. Firstly, the Company set up
+organizations to offer protection for information safety. It
+established the information safety functional departments
+at the headquarters and provincial levels for performing
+the duty of information safety management at each level.
+Secondly, the Company developed various systems
+and strictly implemented such systems to ensure the
+standardization of information management. Thirdly, the
+Company optimized the safety management requirements
+for the full life cycle of its IT system. By conducting
+safety tests and quality checks on the IT system before
+and after it was put online, the Company consistently
+enhanced the safety of such system. The Company also
+formulated contingency plans for regular exercises to
+enhance its emergency response capability to address
+cyber attacks or safety accidents. Through the application
+of new cutting-edge technologies such as cloud
+computing and big data in all aspects, the Company built
+a security situational awareness platform and developed
+an automatic joint control mechanism focusing on joint
+prevention and coordination of risks for the entire network
+with the help from the enterprise general control center,
+thus achieving the centralized analysis and coordinated
+disposal of various safety risks. In addition, the Company
+constantly stepped up efforts on education for the safety
+awareness of employees to foster a corporate culture of
+'everyone places emphasis on safety", and conducted
+several assessments on internal and external risks,
+which further enhanced the capability of the Company in
+information safety risk management. In 2021, there was
+no circumstance where the Company's operation was
+affected due to the breakdown of computers or security
+breach.
+Information Safety Risk
+The Company established a system for liquidity risk
+management to define the organizational structure and
+responsibilities of liquidity risk management. Further,
+the Company developed the processes covering the
+identification, evaluation, monitoring, response and
+disposal, reporting, and rectification of liquidity risk, and
+organized regular emergency exercises on liquidity risks.
+Overall, the liquidity risk of the Company was insignificant.
+The Company will constantly step up its effort on liquidity
+risk management pursuant to the regulatory requirements
+and its own regulations to ensure the performance of its
+obligation to give insurance benefits as scheduled.
+Liquidity risk refers to the risk that the Company does not
+have access to sufficient funds in time or at reasonable
+costs to meet its liabilities or other payment obligations as
+they become due.
+Liquidity Risk
+In 2021, the Company constantly made improvements
+to its system for reputational risk management to
+optimize relevant working mechanism and further
+enhance the standard of reputational risk management.
+For the improvement of system establishment, a sound
+mechanism for the evaluation and responsibility attribution
+of reputional risk was established to consolidate the main
+management responsibilities, strengthen the governance
+of reputational risk sources, and mitigate hidden
+reputational risk in an active and effective manner. The
+Company constantly proceeded with all tasks throughout
+the process, such as the identification, evaluation and
+disposal of reputational risk, so as to properly address any
+reputational risk incdients and effectively protect brand
+reputation. The Company also continued to offer training
+courses and exercises on reputational risk management to
+raise the risk awareness of all employees, which helped
+cultivate a culture of reputational risk management.
+Reputational risk refers to the risk of negative comments
+on the Company from stakeholders, the public and the
+media as a result of the behaviours of the Company's
+divisions at all levels, practitioners or external events,
+thereby causing losses, damaging brand value, being
+detrimental to the normal operation of the Company, and
+even affecting market and social stability. Reputational risk
+may exist in any aspect of the Company's operation and
+management. The Company highly values its reputation
+and has incorporated reputational risk management
+into the corporate governance and comprehensive risk
+management systems to prevent reputational risk.
+Reputational Risk
+Information safety risk refers to the operational, legal
+and reputational risks caused by natural factors, human
+factors, technological loopholes or management defects
+in the process of applying information technology in the
+Company.
+Annual Report 2021 | Corporate Governance 113
+OTHER
+BASIC INFORMATION OF THE COMPANY
+and the legal representative of the Company)
+Yuan Changqing (assuming the roles and duties of the Chairman of the Board
+China Life Insurance Company Limited ("China Life")
+中國人壽保險股份有限公司(簡稱「中國人壽」)
+Telephone
+Hong Kong Office Address
+Email
+INFORMATION
+Website
+Customer Service Hotline
+Investor Relations Hotline
+Telephone
+Registered Office Address/
+Current Office Address
+Postal Code
+Legal Representative
+Registered Name in English
+Registered Name in Chinese
+Fax
+The Company set up a relatively well-developed system
+for strategic risk management, and established an
+organizational system for strategic risk management
+with the ultimate responsibility assumed by the Board,
+under the direct leadership of the management and
+with the division of labour and collaboration among
+the relevant functional departments. By taking into full
+account various factors such as market conditions, risk
+preference and capital position, the Company made
+planning for its medium- and long-term development
+and put the same into practice in annual business plans
+and work plans, so as to strengthen the formulation,
+approval, implementation and evaluation of whole
+process management of strategic and development
+planning. The Company also created an indicator system
+for the daily monitoring of strategic risks to monitor and
+analyze strategic risks on a regular basis, which ensured
+an effective execution of the Company's strategic risk
+management. In 2021, the soundness of the Company's
+strategic risk management system and the effectiveness
+of its implementation were maintained.
+Strategic risk refers to the risk of mismatch between
+strategies, market conditions and capabilities of the
+Company arising from ineffective formulation or
+implementation of strategies or changes in operational
+environment.
+Strategic Risk
+Insurance Risk
+The major risks of the Company in the course of operation
+and management include insurance risk, market risk,
+credit risk, operational risk, strategic risk, reputational risk,
+liquidity risk, information safety risk and ESG risk.
+Risk Identification and Control
+monitoring of sale risk pre-warning, and risk management
+data mart. The informatization and intellectualization of
+risk management improved significantly, and the risk
+management capability of the Company reached a new
+level, which provided a strong support to the high-quality
+development of the Company.
+In 2021, the Company vigorously promoted the
+informatization of risk management, actively applied.
+the latest advanced technologies such as big data and
+artificial intelligence, and further optimized and upgraded
+the intelligent application of anti-money laundering in
+greath depth, thus making significant breakthroughs in
+the intelligent identification of illegal fund-raising risks,
+The Company followed the requirements under anti-
+money laundering laws and regulations, kept on improving
+the system for money-laundering risk management and
+performed the anti-money laundering obligations under
+the law, with a view to enhancing both the quality and
+efficiency of its anti-money laundering work. Meanwhile,
+pursuant to external regulatory requirements, the
+Company conducted special governance on illegal fund-
+raising activities and carried out the self-inspection and
+rectification in key risk areas, which effectively improved
+the Company's precaution capability in key risk areas.
+Pursuant to the requirements of the CBIRC on the China
+Risk Oriented Solvency System (C-ROSS), the Company
+pushed forward the establishment of a solvency risk
+management system, and built a "1+7+N" comprehensive
+risk management system with the "Comprehensive Risk
+Management Rules" as the general principles, seven
+types of risks (including insurance risk, market risk,
+credit risk, operational risk, strategic risk, reputational
+risk and liquidity risk) as the key focuses, and having
+reliance on a series of implementing rules for business
+such as the "Measures for the Administration of Risk
+Preference System". The Company actively implemented
+key risk monitoring and risk pre-warning classification
+management, and consistently reinforced the mechanism
+for formation, transmission and application of the risk
+preference system, which created a system for the normal
+management of risk preference with the statement on
+risk preference as the carrier, and the risk tolerance and
+limit indicators as the focus. Through the combination
+of risk preference with various lines of operation and
+management, the Company maintained a good interaction
+between risk management and business development.
+The Company conducts a self-assessment on solvency
+risk management capability every year so as to assess all
+work in relation to risk management in two dimensions:
+the soundness of the system and the effectiveness of its
+implementation. The Company took specific rectification
+measures against its own shortcomings and weaknesses,
+which helped enhanced its risk management standard in
+all aspects.
+Insurance risk refers to the risk that exposes insurance
+companies to unexpected losses due to the adverse
+deviation of the actual situation from the projections of
+assumptions such as loss ratio, expense rate and lapse
+Work in relation to Risk Management
+The Company has established an organizational system
+for comprehensive risk management with the ultimate
+responsibility assumed by the Board, under the direct
+leadership of the management, having reliance on
+the risk management departments and with the close
+cooperation among the relevant functional departments,
+and developed a 5-tier organizational structure for risk
+management covering the corporate governance level,
+the headquarters level, the provincial branches level, the
+local or city branches level, and the county sub-branches
+level. With the reliance on the 5-tier risk management
+and control structure, the Company has put in place
+three lines of defense that focus on risk management:
+the first line of defense consists of branches and sub-
+branches at all levels and various functional departments
+that identify, assess, address, monitor and report risks
+at the front end of business; the second line of defense
+is composed of the Risk Management and Consumer
+Rights Protection Committee of the Board, as well as the
+Risk Management Committee and the Risk Management
+Department of the Company that take lead in formulating
+the system, standard and limit for a variety of risks and
+make recommendations to address such risks; the third
+line of defense comprises the Audit Committee of the
+Board, as well as the internal audit department, the
+Office of the Discipline Inspection Committee and other
+departments of the Company that supervise the risk
+management workflows established by the Company
+and the procedures and actions for control of various
+risks. The three lines of defense have been coordinated
+with each other in a proactive manner to organize and
+commence any work in relation to risk management.
+By establishing the organizational structure of risk
+control, the Company has gradually established a criss-
+cross network of risk control system, with the risk
+management departments at all levels as leading bodies,
+the relevant functional departments as main bodies, the
+vertical decision-making control system and horizontal
+interactive collaboration mechanism as supporting
+systems and the comprehensive risk management as
+focus, thus laying a strong foundation for the Company to
+achieve a comprehensive risk management system with
+full coverage, all-employee participation and effective
+workflows.
+Risk Management System
+Risk Management
+Company has also fostered the concept of compliance
+creating value, and promoted a good interaction between
+the compliance management functional department of
+the Company and external regulators, for the purpose of
+enhancing the overall compliance management standard
+of the Company and ensuring the achievement of its goal
+of high-quality development.
+The Risk Management Department, the Audit Department
+and the Legal and Compliance Department of the
+Company are responsible for the supervision and
+inspection of its internal control measures. The Company
+identifies issues in the areas of system design, control
+implementation and risk management in a timely manner
+through the adoption of various measures such as
+walk-through test, control test and risk analysis. It also
+eliminates loopholes, guards against risks and reduces
+losses by adopting various measures to improve systems,
+enhance legal compliance and pursue responsible
+persons. In 2021, the Company actively adapted to the
+stringent regulatory environment in the PRC and overseas
+financial industry and strictly complied with the regulatory
+requirements to constantly improve the organizational
+structure of internal audit and further strengthen the
+mechanism for internal audit management, which
+effectively performed the supervisory role of audit. The
+Company carried out the economic responsibility audit on
+managers at all levels, performed a series of special audits
+closely related to the Company's reform for development,
+and conducted a variety of regular audits on anti-money
+laundering, connected transactions, assets and liabilities
+management, solvency system construction, internal
+control over the application of insurance funds, protection
+of customers' rights and interests, compliance of
+intermediary business, and insurance fraud management
+pursuant to regulatory requirements. Meanwhile, the
+Company has put more efforts on the application of audit
+results, and played a proactive role to supervise and
+direct the implementation of rectification measures for
+any issues identified in audit, facilitating the standardized
+management and compliance operation of the Company.
+The Company has formulated regulations with respect to
+the reporting, investigation, handling of and responsibility
+attribution for cases involving any violations of laws and
+regulations by employees, each being implemented
+by the Legal and Compliance Department, which
+ensures that cases involving any violations of laws and
+regulations by employees are handled in a timely manner,
+and the persons involved will be attributed to proper
+responsibility. The Legal and Compliance Department
+reports the criminal cases involving practitioners and
+manages the responsibility attribution of such cases in
+accordance with regulations such as the "Measures for
+the Administration of Criminal Cases Involving Banking
+and Insurance Institutions (for Trial Implementation)"
+issued by the CBIRC and internal policies such as the
+"Measures for the Administration of Criminal Cases (for
+Trial Implementation)" and the "Implementing Rules for
+Responsibility Attribution of Cases". The Company has
+constantly optimized three lines of defense for compliance
+management to establish an efficient compliance
+management system, with a view to identifying, guarding
+against and mitigating material compliance risks. The
+Annual Report 2021 | Corporate Governance 109
+The Company has established a comprehensive
+information technology system to cover all aspects of
+IT work and formed a closed-loop control mechanism
+focusing on centralized review and publication, periodic
+inspection and continuous improvement. By conducting
+measures such as the inspection and evaluation of system
+implementation on a regular basis, the Company has
+facilitated the effective implementation of the system
+and enhanced the standardization and normalization of
+various IT work. Further, the Company has constantly
+promoted the construction of the systems of information
+safety and risk control, and formulated and implemented a
+series of effective information safety control measures at
+various stages of the life cycle of the IT system, thereby
+effectively ensuring the safe and steady operation of
+the Company. In 2021, the Company conducted several
+internal and external risk assessments to promote
+construction by inspection, with a view to consistently
+enhancing its capability of managing information safety
+risks.
+110 Annual Report 2021 | Corporate Governance
+rate.
+The Company assessed and monitored insurance risks
+through sensitivity analysis and other actuarial appraisal
+techniques, with a focus on the impact of mortality
+rate, morbidity rate, lapse rate and other relevant
+assumptions on the Company's operating results.
+The Company managed insurance risks through the
+following mechanisms and processes: (1) establishing
+an organizational structure and a system for insurance
+risk management, so that insurance risk management
+can be performed within a scientific, comprehensive and
+effective management system; (2) devising a system for
+risk limit indicators and carrying out normal monitoring
+analysis, so as to contain risks within a controllable range;
+(3) implementing an effective product development and
+management system to strictly control product pricing
+risks, and strengthening empirical analysis to offer support
+to pricing assumptions and assessing assumptions, in
+order to prevent and control insurance risks from the
+front end of products; (4) effectively guarding against
+adverse selection risks and insurance frauds through the
+establishment and implementation of a well-developed
+system for verification of insurance policies and claims,
+as well as the practical operation regulations; and (5)
+transferring and mitigating insurance risk through a
+scientific and reasonable reinsurance arrangement.
+In 2021, the Company managed insurance risks in
+a regulated and orderly manner, with sufficient and
+reasonable provisions of minimum capital for insurance
+risks. The Company will continuously keep a watch on the
+development trend of insurance risks and further enhance
+its capability of managing insurance risks.
+Annual Report 2021 | Corporate Governance
+reporting mechanisms; (2) establishing a loss data room
+for operational risks to carry out the loss data collection
+and analysis of operational risks on a regular basis; (3)
+establishing a key indicator room for operational risks
+to organize regular monitoring of any risks that may
+cause losses and to take relevant control measures
+against them; (4) conducting self-assessments on the
+operational risk management and effect on a regular
+basis and identifying any issues in the management and
+control of operational risks, with a view to constantly
+increasing the capability of the Company in operational risk
+management; and (5) promoting a culture of operational
+risk management by organizing and conducting training
+courses on operational risk management. In 2021, the
+operational risk management was satisfactory, and
+losses from operational risks were controllable. With the
+continual improvement of the operational risk control
+system, the management foundation of the Company was
+strengthened consistently and the quality and efficiency of
+risk management were further enhanced.
+The Company consistently implemented regulatory
+requirements and its operational risk management
+strategies, optimized the operational risk management
+system, and regulated the operational risk management
+processes, so as to enhance the effectiveness of
+operational risk management policies, systems and
+process management on an ongoing basis. The Company
+established an operational risk management system
+that combines three management tools, namely self-
+assessment of operational risk and its control, loss
+data room for operational risks and key risk indicators
+monitoring, and further reinforced the operational risk
+management at all levels of branches, so as to facilitate
+the vertical expansion of operational risk management
+network and achieve the integration of operational risk
+management and control with its business development.
+In the meanwhile, the Company reported operational risk
+governance to the senior management on a quarterly
+basis. The operational risk control measures adopted by
+the Company mainly included the following: (1) carrying
+out the classification management for operational
+risk and developing an operational risk management
+process compatible with the nature, scale and risk
+characteristics of the Company's business, including
+the identification, assessment, control, monitoring and
+Operational risk refers to the risk of direct or indirect
+losses arising from incomplete internal operational
+processes, personnel, systems or external events.
+Operational Risk
+Reinsurance credit risk refers to the credit risk that may
+possibly be faced by the Company in connection with
+the obligations to be undertaken by reinsurers due to
+their failure to perform reinsurance contracts. To address
+the reinsurance credit risks, the Company adopted the
+following measures: (1) properly setting self-retained
+risk limits through an effective reinsurance management
+system, and using reinsurance as an effective tool to
+transfer risks to reinsurers with a high level of solvency;
+(2) reviewing the relevant information of a reinsurer in
+the reinsurance registration system in strict compliance
+with the regulatory requirements prior to the execution
+of a reinsurance contract to ensure that the reinsurer
+in cooperation with the Company satisfies with the
+regulatory requirements; and (3) conducting credit
+assessment on reinsurers through internal rating to select
+reinsurers that have higher credit standing to mitigate
+credit risks.
+Reinsurance Credit Risk
+112 Annual Report 2021 | Corporate Governance
+To address the credit risks of investment business,
+the Company developed and continuously improved
+the organizational structure of credit risk management,
+and constantly optimized the process for credit risk
+management. Meanwhile, the Company established
+and made amendments to the management system
+and strengthened the implementation of such system
+pursuant to the regulatory requirements and management
+practices; strengthened the research on risks and kept
+on improving risk analysis, assessment, monitoring, pre-
+warning and emergency response standard. By relying
+on information technology, the Company consistently
+enhanced the standard of quantitative analysis on
+credit risks and diversified the methods used for risk
+management and control. The Company primarily adopted
+the following measures in 2021: (1) further improving the
+centralized credit rating process and system functions
+to enhance the credit risk management standard; (2)
+optimizing the credit risk limit management system
+in multiple dimensions to improve the mechanism
+for prevention of credit risks prior to investment; (3)
+strengthening the monitoring of credit risk indicators for
+the purposes of indicating risk exposure and any change
+of risk distribution in an effective manner and closely
+tracking down negative information; and (4) deepening
+efforts on the research of key industries and the credit risk
+outlook to enhance the capability of the Company in risk.
+management and control during and after investment.
+Credit Risk of Investment Business
+The credit risks that the Company is exposed to mainly
+relate to investment deposits, bond investments, non-
+standard financial product investments and reinsurance
+arrangements, etc.
+Credit risk refers to the risk that exposes the Company to
+unexpected losses due to non-performance or delay in the
+performance of contractual obligations by counterparties,
+or adverse changes in their credit standings.
+Credit Risk
+emergency response.
+In order to address the market risks, the Company
+continued to pay attention to the risk exposures of interest
+rate, equity prices, real estate prices and exchange rate,
+monitored value at risk/mark to market (VaR/MTM), yield
+volatility, duration and other key market risk indicators
+on a regular basis, set up a 2-tier risk limit indicator and
+corresponding threshold values, carried out sensitivity
+analysis and stress test to measure the risk losses to
+the Company under stress scenarios, gave pre-warning
+of market risks and formulated contingency plans for
+emergencies. Currently, the proportion of each investment
+asset is in line with the requirements of the CBIRC and
+the internal management provisions of the Company.
+According to the results of the risk indicator monitoring
+and stress test, the market risk of the Company was
+within a normal controllable range. The Company primarily
+adopted the following risk control measures in 2021:
+(1) stepping up efforts on the study of macro economy,
+currency and financial policies to assess domestic and
+international economic and market trends in a timely
+manner; (2) reviewing the risks of major assets and the
+characteristics of their returns on a regular basis, so as
+to constantly optimize the model of assets allocation; (3)
+carrying out the effective management of open market
+equity exposure and making reasonable allocations; (4)
+increasing investment in interest rate bonds with long
+duration when appropriate opportunities arose, with a
+view to extending the duration of assets and narrowing
+the gap arising from the duration mismatch of assets and
+liabilities; and (5) facilitating the establishment of systems
+to improve risk monitoring and pre-warning functions
+and simultaneously increasing the frequency and scope
+of emergency exercises to acquire more experience in
+Market risk refers to the risk that exposes the Company to
+unexpected losses due to adverse movement in (amongst
+others) interest rate, equity prices, real estate prices and
+exchange rate.
+Market Risk
+111
+16 Financial Street, Xicheng District, Beijing, P.R. China
+100033
+In 2021, the Company paid great attention and actively
+implemented the Data Security Law of the PRC for the
+purpose of protecting the legitimate rights and interests
+of customers. It optimized its data governance structure,
+refined the responsibilities of divisions at all levels for data
+management, and improved the related data management
+regulations. The Company assessed the sophistication
+of data management capability against the national
+benchmarks, defined the targets to be protected for
+data security and the key areas for protection, achieved
+the classified security protection for the full life cycle
+such as the collection, transmission and storage of data,
+established a 3-dimensional data security protection
+system based on classified protection, and consistently
+strengthened the management and control of data
+security, in order to ensure that the data was manageable
+and controllable.
+86-10-63631329
+International Legal Advisers
+Domestic Legal Adviser
+Depositary of ADR
+H Share Registrar and
+Transfer Office
+OTHER RELEVANT INFORMATION
+Annual Report 2021 | Other Information 117
+LFC
+Auditors of the Company
+New York Stock Exchange
+China Life
+601628
+China Life
+Stock Code
+Stock Short Name
+Exchanges on which the
+Stocks are Listed
+Shanghai Stock Exchange
+The Stock Exchange of
+Hong Kong Limited
+ADR
+2628
+H Share
+Computershare Hong Kong
+Investors Services Limited
+King & Wood Mallesons
+Latham & Watkins LLP
+Yip Siu Foon, Linda
+Name of the Certified Auditor:
+Central, Hong Kong
+Address: 22/F, Prince's Building,
+PricewaterhouseCoopers
+International Auditor
+Debevoise & Plimpton LLP
+Deutsche Bank
+Address: 60 Wall Street, New York, NY 10005
+Name of the Signing Auditors:
+Zhou Xing, Tu Yi
+Huangpu District,
+Shanghai, PRC
+86-10-63633333
+PricewaterhouseCoopers
+Address: 11/F,
+PricewaterhouseCoopers
+Zhong Tian LLP
+Domestic Auditor
+Address: Shops 1712-1716, 17th Floor,
+Hopewell Centre, 183 Queen's Road East,
+Wanchai, Hong Kong
+A Share
+Center, 2 Link Suqare,
+202 Hubin Road,
+Stock Type
+86-10-63631329
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+Li Mingguang
+Board Secretary
+Email
+Fax
+Telephone
+Securities Representative
+Office Address
+CONTACT INFORMATION
+116 Annual Report 2021 | Other Information
+16/F, Tower A, China Life Centre, One Harbour Gate, 18 Hung Luen Road,
+Hung Hom, Kowloon, Hong Kong
+ir@e-chinalife.com
+www.e-chinalife.com
+86-10-66575722
+95519
+Name
+Li Yinghui
+852-29192628
+86-10-63631191
+16 Financial Street, Xicheng District,
+Beijing, P.R. China
+STOCK INFORMATION
+12/F, Tower A, China Life Plaza, 16 Financial Street, Xicheng District, Beijing,
+P.R. China
+The Company's website at www.e-chinalife.com
+www.sse.com.cn
+China Securities Journal (www.cs.com.cn)
+Securities Times (www.stcn.com)
+Securities Daily (www.zqrb.cn)
+The Company's Annual Report
+may be obtained at
+The Company's H Share
+Disclosure Websites
+HKExnews website of Hong Kong Exchanges and
+Clearing Limited at www.hkexnews.hk
+Media and Websites for the
+Company's A Share Disclosure
+INFORMATION DISCLOSURE AND PLACE FOR OBTAINING THE REPORT
+* Ms. Li Yinghui, Securities Representative of
+the Company, is also the main contact person
+of the external Company Secretary engaged
+by the Company
+liyh@e-chinalife.com
+ir@e-chinalife.com
+86-10-66575112
+CSRC's Designated Website for
+the Company's Annual Report
+Disclosure
+86-10-66575112
+23
+13
+12
+2021/3/12
+Announcement of Premium Income
+Notice of Board Meeting
+2021/3/11
+10
+Voluntary Announcement - Convening of 2020 Annual Results Briefing
+Announcement of Results for the Year Ended 31 December 2020
+2021/2/25
+11
+2021/3/17
+Summary of Solvency Quarterly Report of Insurance Company (Fourth Quarter of 2020)
+Announcement - Nomination of Directors
+14
+China Life Insurance Company Limited 2020 Environmental, Social and Governance
+& Social Responsibility Report
+2021/3/25
+17
+567
+15
+16
+2021/3/25
+2021/3/25
+Announcement - Nomination of Non-employee Representative Supervisor
+2021/3/25
+Announcement - Re-election of Employee Representative Supervisors
+2021/3/25
+2021/2/22
+Announcement - Resignation of Non-executive Director
+9
+INDEX OF INFORMATION DISCLOSURE ANNOUNCEMENTS
+1
+2
+3
+Serial No.
+Items
+Announcement on the Progress of Connected Transaction in relation to the
+Formation of the Partnership
+Announcement of Premium Income
+18
+Date of disclosure
+2021/1/5
+2021/1/13
+4
+5
+Election of Language and Means of Receipt of Corporate Communication
+Reply Form
+2021/1/18
+2021/1/18
+6
+Announcement - Forfeiture of Unclaimed Dividends
+2021/2/5
+7
+Announcement - Resignation of Non-executive Director
+2021/2/7
+00
+8
+Announcement of Premium Income
+Overseas Regulatory Announcement - China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+2021/1/18
+19
+2021/10/19
+62
+67
+2021 Third Quarter Report
+2021/10/28
+-
+68
+Announcement - Approval of Qualification of Supervisors by the CBIRC and
+Resignation of Supervisor
+Announcement – Supplementary Information regarding Compensation of Directors,
+Supervisors and Senior Management Members in 2020
+69
+69
+Announcement - Continuing Connected Transactions under the Agreement for
+Entrusted Investment and Management and Operating Services with respect to
+Alternative Investments with Insurance Funds
+2021/10/28
+70
+Summary of Solvency Quarterly Report of Insurance Company (Third Quarter of 2021)
+2021/10/28
+2021/10/28
+71
+66
+2021/10/18
+22 22
+Reply Slip of Holders of H Shares
+2021/9/28
+Notification Letter and Change Request Form to Registered Shareholders
+2021/9/28
+62
+Notification Letter and Request Form to Non-Registered Shareholders
+99
+2021/9/28
+Announcement of Premium Income
+2021/10/15
+64
+Announcement - Approval of Qualification of Independent Director by the CBIRC
+and Retirement of Independent Director
+2021/10/18
+65
+Notice of Board Meeting
+63
+61
+Overseas Regulatory Announcement China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+72
+79
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement of Premium Income
+2021/11/29
+2021/11/29
+2021/12/13
+Announcement
+Resolutions Passed at the First Extraordinary General Meeting
+78
+80
+2021
+81
+Announcement - Connected Transaction – Formation of Partnership
+2021/12/16
+82
+Announcement - Renewal of Continuing Connected Transactions under the Policy
+Management Agreement
+2021/12/16
+2021/12/16
+2021/10/28
+77
+Items
+Announcement of Premium Income
+2021/11/12
+73
+Announcement on the Progress of Connected Transaction in relation to a Partnership
+2021/11/19
+74
+Renewal of Continuing Connected Transactions and Supplemental Notice of the
+First Extraordinary General Meeting 2021
+Date of disclosure
+2021/11/29
+Supplemental Notice of the First Extraordinary General Meeting 2021
+2021/11/29
+76
+Supplemental Form of Proxy of Holders of H Shares for use at the First
+Extraordinary General Meeting 2021 of the Company to be held on Thursday,
+16 December 2021
+2021/11/29
+Annual Report 2021 | Other Information 121
+Serial No.
+75
+60
+2021/9/28
+Form of Proxy of Holders of H Shares for use at the First Extraordinary General
+Meeting 2021 of the Company to be held on Thursday, 16 December 2021
+43
+44
+45
+46
+47
+48
+Announcement of Premium Income
+42
+Announcement - Election of Employee Representative Supervisor
+Notice of Board Meeting
+Voluntary Announcement - Convening of 2021 Interim Results Briefing
+Announcement of Unaudited Interim Results for the Six Months Ended
+30 June 2021
+2021/7/14
+2021/8/2
+2021/8/12
+2021/8/13
+Announcement of Premium Income
+2021/8/16
+2021/7/6
+2021/6/30
+Supplemental Form of Proxy of Holders of H Shares for use at the Annual General
+Meeting of the Company to be held on Wednesday, 30 June 2021
+2021/5/25
+37
+38
+39
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement of Premium Income
+2021/5/25
+Announcement on Qualification of Executive Director
+2021/5/25
+40
+40
+Announcement - Approval of Qualification of Independent Director by the CBIRC
+and Resignation of Independent Director
+2021/6/30
+41
+41
+Announcement - Resolutions Passed at the Annual General Meeting, Election
+of Members of the Seventh Session of the Board of Directors and the Board of
+Supervisors, Change of Auditors and Distribution of Final Dividend
+2021/6/15
+2021/8/25
+49
+Announcement - Proposed Amendments to the Articles of Association
+Serial No.
+Items
+55
+56
+57
+40
+Notification Letter and Change Request Form to Registered Shareholders
+120 Annual Report 2021 | Other Information
+Notification Letter and Request Form to Non-Registered Shareholders
+Date of disclosure
+2021/9/15
+2021/9/15
+2021/9/28
+58
+2021/9/28
+59
+Proposed Amendments to the Articles of Association, the Procedural Rules for
+the Shareholders' General Meetings and the Procedural Rules for the Board of
+Directors' Meetings and Notice of the First Extraordinary General Meeting 2021
+Notice of the First Extraordinary General Meeting 2021
+2021/9/15
+2021 Interim Report
+54
+2021/8/25
+50
+Announcement on the Progress of Connected Transaction in relation to a Partnership
+2021/8/25
+51
+Summary of Solvency Quarterly Report of Insurance Company (Second Quarter of 2021)
+2021/8/25
+62
+Overseas Regulatory Announcement
+-
+China Life Insurance Company Limited -
+52
+2021/8/25
+Announcement on Changes in Accounting Estimates
+53
+Announcement of Premium Income
+2021/9/13
+Announcement
+-
+83
+Connected Transactions
+Equity Investment Plans
+We have identified the Group's long-term insurance
+contract liabilities as a key audit matter due to:
+.
+The complexity of the actuarial models to develop the
+reserve of long-term insurance contracts;
+Significant judgements involved in the actuarial
+assumptions related to mortality rates, morbidity rates,
+lapse rates, discount rates and expenses assumptions.
+Changes in these assumptions could have significant
+effects on long-term insurance contract liabilities.
+How our audit addressed the Key Audit Matter
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls
+over the Group's long-term insurance contract liabilities
+estimation processes, including controls over management's
+review of the actuarial models, the actuarial assumptions,
+the actuarial methodologies and the data inputs used.
+With the assistance of our actuarial experts, we performed
+the following audit procedures:
+The Group uses the discounted cash flow method to
+estimate the reserve of long-term insurance contracts
+which includes a reasonable estimate of liability, a risk
+margin and a residual margin.
+•
+•
+•
+Comparing the methodologies, actuarial models and
+actuarial assumptions used by the Group to recognised
+actuarial practices;
+Testing the completeness and accuracy of the underlying
+insurance policy data used in the valuation on a sample
+basis;
+Assessing the reasonableness of the actuarial
+assumptions by considering the Group's rationale for the
+actuarial judgements applied along with comparison to
+industry data and historical experience;
+Performing an independent actuarial modelling and
+recalculation of the long-term insurance contract
+liabilities on a sample basis and comparing our result to
+the result from the Group's actuarial models;
+Performing analytical procedures over the movement of
+long-term insurance contract liabilities considering the
+appropriateness of changes in the actuarial assumptions
+in the reporting period.
+•
+Based on the above procedures, we found that the actuarial
+models applied and key assumptions adopted to estimate
+the reserve for long-term insurance contracts were
+supportable by the evidence we gathered.
+At 31 December 2021, the Group had long-term insurance
+contract liabilities with the amount of RMB3,379.60 billion,
+accounting for 76.73% of the Group's total liabilities.
+Long-term insurance contract liabilities
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+section of our report.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
+Independence
+We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants
+(including International Independence Standards) issued by the International Ethics Standards Board for Accountants
+("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
+KEY AUDIT MATTERS
+Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of
+the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
+opinion on these matters.
+Key audit matters identified in our audit are summarised as follows:
+Refer to Notes 2.12 and 15 to the consolidated financial
+statements.
+. Long-term insurance contract liabilities
+Impairment tests for investments in associates and joint ventures
+•
+Fair value of level 3 financial assets
+Annual Report 2021 | Financial Report 125
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+Key Audit Matter
+•
+126 Annual Report 2021 | Financial Report
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+2021/3/25
+We have identified the fair value of the Group's level
+3 financial assets as a key audit matter due to the
+significant estimates and judgements involved in the
+determination of valuation techniques, significant
+assumptions and significant unobservable inputs.
+How our audit addressed the Key Audit Matter
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls over
+the Group's fair value measurement of level 3 financial
+assets, including controls over management's review of
+the valuation techniques, the significant assumptions and
+the significant unobservable inputs used in the fair value
+measurements.
+With the assistance of our valuation experts, we performed
+the following audit procedures:
+•
+Evaluating the appropriateness of the Group's valuation
+techniques, significant assumptions by referring to
+industry practices and valuation guidelines;
+At 31 December 2021, the Group held level 3 financial
+assets measured at fair value, with a carrying value of
+RMB349.13 billion, accounting for 7.14% of the Group's
+total assets.
+Testing the significant unobservable inputs used by the
+Group in determining the fair values and assessing the
+reasonableness of these inputs by comparing them to
+information available from third-party sources or market
+data;
+Based on the above procedures, we found that the
+significant estimates and judgements involved in
+determining the fair value of level 3 financial instruments
+were supportable by the evidence we gathered.
+OTHER INFORMATION
+The directors of the Company are responsible for the other information. The other information comprises all of the
+information included in the annual report other than the consolidated financial statements and our auditor's report
+thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any
+form of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
+and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
+statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+128 Annual Report 2021 | Financial Report
+Independently developing fair value estimates and
+comparing them to the Group's valuation results on a
+sample basis.
+Refer to Note 4.4 to the consolidated financial
+statements.
+Fair value of level 3 financial assets
+Key Audit Matter
+Key Audit Matter
+Impairment tests for investments in associates and joint
+ventures
+How our audit addressed the Key Audit Matter
+Refer to Notes 3.3 and 9 to the consolidated financial
+statements.
+At 31 December 2021, the Group held investments in
+associates and joint ventures, with a carrying value of
+RMB257.95 billion, accounting for 5.27% of the Group's
+total assets.
+According to the impairment testing results performed
+by the Group, no impairment loss was recognised
+for the year ended 31 December 2021. The Group
+had accumulatively recognised impairment provision
+of RMB3.22 billion by the end of 2021 on these
+investments.
+We have identified the impairment tests for investments
+in associates and joint ventures as a key audit matter due
+to the significant estimates and judgements involved in
+management's assessment including discount rates and
+expected future cash flows.
+We obtained an understanding, evaluated the design and
+tested the operating effectiveness of internal controls over
+the Group's impairment tests for these investments, including
+controls over management's review of the impairment test
+methodology and the significant assumptions used in the
+valuation.
+With the assistance of our valuation experts, we performed
+the following audit procedures:
+• Evaluating the appropriateness of the Group's
+impairment methodology by referring to valuation
+guidelines and industry practices;
+Comparing the discount rates used by the Group in the
+impairment tests with the discount rates developed by
+using the weighted average cost of capital model;
+Testing the completeness and accuracy of the underlying
+key data used by the Group in the cash flows projections;
+Comparing the significant assumptions used by the
+Group in the impairment tests to the historical business
+results of these investments and industry data to assess
+the reasonableness of the assumptions used.
+Based on the above procedures, we found that the
+significant estimates and judgements involved in impairment
+tests for investments in associates and joint ventures were
+supportable by the evidence we gathered.
+Annual Report 2021 | Financial Report 127
+Independent Auditor's Report (continued)
+KEY AUDIT MATTERS (continued)
+BASIS FOR OPINION
+36
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the
+Group as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year
+then ended in accordance with International Financial Reporting Standards ("IFRSS") and have been properly prepared in
+compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+the notes to the consolidated financial statements, which include significant accounting policies and other explanatory
+information.
+AMP
+CLWM
+CGB
+CLP&C
+CLI
+China Life Capital
+Ministry of Finance
+Pension Company
+CBIRC
+HKSE
+SSE
+Company Law
+Insurance Law
+Securities Law
+Articles of Association
+China or PRC
+CSRC
+ESG
+AMC
+China Life, the Company21
+_
+Investment in Partnerships through
+2021/12/16
+Announcement
+-
+Connected Transactions - Acquisition of Creditor's Rights on the
+84
+CLIC
+2021/12/16
+85
+Supplemental Announcement
+Formation of Partnerships
+Connected Transactions in relation to the
+2021/12/29
+122 Annual Report 2021 | Other Information
+DEFINITIONS AND MATERIAL RISK ALERT
+In this report, unless the context otherwise requires, the following expressions have the following meanings:
+Trust Loan through Asset-backed Plan
+RMB
+China Life Insurance Company Limited and its subsidiaries
+China Life Insurance (Group) Company, the controlling shareholder of the
+Company
+pwc
+To the Shareholders of China Life Insurance Company Limited
+(incorporated in the People's Republic of China with limited liability)
+OPINION
+What we have audited
+The consolidated financial statements of China Life Insurance Company Limited (the "Company") and its subsidiaries (the
+"Group") which are set out on pages 131 to 252, which comprise:
+*
+the consolidated statement of financial position as at 31 December 2021;
+Independent Auditor's Report
+the consolidated statement of comprehensive income for the year then ended;
+the consolidated statement of changes in equity for the year then ended;
+124 Annual Report 2021 | Financial Report
+Independent Auditor's Report (continued)
+OPINION (continued)
+What we have audited (continued)
+•
+the consolidated statement of cash flows for the year then ended; and
+*
+FINANCIAL
+REPORT
+Annual Report 2021 | Other Information 123
+21 Except for "the Company" referred to in the Consolidated Financial Statements.
+China Life Asset Management Company Limited, a non-wholly owned
+subsidiary of the Company
+China Life Pension Company Limited, a non-wholly owned subsidiary of the
+Company
+China Life AMP Asset Management Company Limited, an indirect non-wholly
+owned subsidiary of the Company
+China Life Wealth Management Company Limited, an indirect non-wholly
+owned subsidiary of the Company
+China Guangfa Bank Co., Ltd., an associate of the Company
+China Life Property and Casualty Insurance Company Limited, a non-wholly
+owned subsidiary of CLIC
+China Life Investment Management Company Limited, the former China Life
+Investment Holding Company Limited, a wholly-owned subsidiary of CLIC
+China Life Capital Investment Company, an indirect wholly-owned subsidiary
+of CLIC
+Ministry of Finance of the People's Republic of China
+China Banking and Insurance Regulatory Commission
+China Securities Regulatory Commission
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+Company Law of the People's Republic of China
+Insurance Law of the People's Republic of China
+Securities Law of the People's Republic of China
+Articles of Association of China Life Insurance Company Limited
+For the purpose of this report, "China" or "PRC" refers to the People's
+Republic of China, excluding the Hong Kong Special Administrative Region,
+Macau Special Administrative Region and Taiwan region
+Environment, Social and Governance
+Renminbi Yuan
+Material Risk Alert:
+The risks faced by the Company primarily include risks relating to macro trends, insurance risk, market risk, credit risk,
+operational risk, strategic risk, reputational risk, liquidity risk, information safety risk and ESG risk, etc. The Company
+has adopted various measures to manage and control different risks effectively. For details, please refer to the
+"Future Prospect" in the section headed "Management Discussion and Analysis" and the "Internal Control and Risk
+Management" in the section headed "Corporate Governance" of this report.
+Our opinion
+2021/5/25
+These level 3 financial assets primarily include unlisted
+equity securities and unlisted debt securities, which are
+accounted for as available-for-sale securities at fair value
+or securities at fair value through profit or loss. The fair
+values of these financial assets are measured using
+valuation techniques based on significant unobservable
+inputs.
+Serial No.
+27
+26
+2021/4/15
+Reply Slip of H Share Shareholders
+25
+2021/4/15
+Form of Proxy of Holders of H Shares for use at the Annual General Meeting of the
+Company to be held on Wednesday, 30 June 2021
+24
+2 22
+2021/4/15
+Notice of Annual General Meeting
+23
+23
+2021/4/15
+Reports of the Board of Directors & the Board of Supervisors for 2020, Financial
+Report and Profit Distribution Plan for 2020, Remuneration of Directors &
+Supervisors, Election of Directors, Election of Non-employee Representative
+Supervisors, Renewal of Liability Insurance for Directors, Supervisors & Senior
+Management, Continued Donations to China Life Foundation, Duty Report of
+the Independent Directors for 2020, Report on the Overall Status of Connected
+Transactions for 2020 & Notice of AGM
+22
+22
+2021/4/15
+Annual Report 2020
+21
+2021/4/14
+Notice of Board Meeting
+20
+2021/4/13
+Announcement of Premium Income
+28
+2021/4/15
+Notification Letter and Change Request Form to Registered Shareholders
+Notification Letter and Request Form to Non-Registered Shareholders
+Announcement - Estimated Profit Increase for the First Quarter of 2021
+2021/4/28
+2021/5/25
+Appointment of Auditors for the Year 2021, General Mandate to Issue H Shares and
+Supplemental Notice of Annual General Meeting
+34
+2021/5/13
+Announcement of Premium Income
+33
+2021/4/28
+Overseas Regulatory Announcement - China Life Insurance Company Limited -
+Announcement on Changes in Accounting Estimates
+32
+2021/4/15
+35
+Announcement - Proposed Change of Auditors
+2021/4/28
+Summary of Solvency Quarterly Report of Insurance Company (First Quarter of 2021)
+30
+2021/4/28
+2021 First Quarter Report
+29
+Date of disclosure
+Items
+Annual Report 2021 | Other Information 119
+2021/4/21
+31
+Supplemental Notice of Annual General Meeting
+40,598
+47,129
+Receivables and payables
+Income tax paid
+(5,862)
+3,004
+(1,478)
+Financial liabilities at fair value through profit or loss
+2021
+For the year ended 31 December 2021
+Consolidated Statement of Cash Flows
+Annual Report 2021 | Financial Report 135
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+486,658
+8,073
+201,265
+249,055
+28,265
+(18,097)
+(313)
+(33,512)
+15,728
+351
+46
+305
+(45)
+45
+(359)
+(359)
+(18,089)
+(18,089)
+(15,378)
+15,378
+47,818
+1,505
+RMB million
+(3,263)
+2020
+(Restated
+Note 35(f) (ii)
+(21,954)
+(44,527)
+Increase in securities at fair value through profit or loss, net
+Changes in operating assets and liabilities:
+(7,666)
+(10,328)
+Net gains on investments of associates and joint ventures
+(119)
+(645)
+Foreign exchange losses/(gains)
+5,162
+5,287
+419,866
+445,472
+(36,483)
+(25,287)
+(154,497)
+(178,387)
+54,476
+50,495
+Depreciation and amortisation
+Insurance contracts
+Net realised and unrealised gains on financial assets
+Investment income
+Adjustments for:
+Profit before income tax
+CASH FLOWS FROM OPERATING ACTIVITIES
+RMB million
+-
+138 Annual Report 2021 | Financial Report
+3,753
+The directors of the Company are responsible for the preparation of the consolidated financial statements that give a
+true and fair view in accordance with IFRSS and the disclosure requirements of the Hong Kong Companies Ordinance,
+and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial
+statements that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to
+continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
+basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
+alternative but to do so.
+Those charged with governance are responsible for overseeing the Group's financial reporting process.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
+We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or
+accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but
+is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it
+exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
+could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
+financial statements.
+As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
+throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations, or the override of internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the directors.
+Annual Report 2021 | Financial Report 129
+Independent Auditor's Report (continued)
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (continued)
+•
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the group audit. We remain solely responsible for our audit opinion.
+As at
+As at
+As at 31 December 2021
+Consolidated Statement of Financial Position
+ASSETS
+130 Annual Report 2021 | Financial Report
+GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+24 March 2022
+Certified Public Accountants
+PricewaterhouseCoopers
+The engagement partner on the audit resulting in this independent auditor's report is Yip Siu Foon, Linda.
+From the matters communicated with those charged with governance, we determine those matters that were of most
+significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
+matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the
+matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
+because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
+such communication.
+We also provide those charged with governance with a statement that we have complied with relevant ethical
+requirements regarding independence, and to communicate with them all relationships and other matters that may
+reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
+safeguards applied.
+We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
+the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
+audit.
+Hong Kong,
+RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH
+Investments in associates and joint ventures
+(7,469)
+Disposals of equity investments
+Maturities of debt investments
+36,774
+37,708
+Disposals of debt investments
+Disposals and maturities:
+Disposals of property, plant and equipment
+CASH FLOWS FROM INVESTING ACTIVITIES
+286,448
+Net cash inflow/(outflow) from operating activities
+775
+50,921
+826
+4,120
+304,019
+Interest received – securities at fair value through profit or loss
+Dividends received – securities at fair value through profit or loss
+Disposals of subsidiaries
+Debt investments
+(5,475)
+Property, plant and equipment
+(338,306)
+(409,676)
+(593,917)
+(745,973)
+Purchases:
+57
+2,175
+341
+308,406
+385,308
+198,640
+196,596
+Equity investments and subsidiaries
+559
+(4,608)
+(4,594)
+(9,846)
+As at 1 January 2021
+Net profit
+Other comprehensive income
+Total comprehensive income
+Transactions with owners
+Appropriation to reserves (Note 37)
+Dividends paid (Note 33)
+Dividends to non-controlling interests
+Reserves to retained earnings (Note 37)
+Others
+Total transactions with owners
+As at 31 December 2020
+As at 31 December 2021
+Non-
+controlling
+Total
+interests
+Other
+equity
+Share
+capital instruments
+Retained
+Reserves
+earnings
+Attributable to equity holders of the Company
+RMB million RMB million
+Total transactions with owners
+Dividends to non-controlling interests
+(59)
+344
+(4,549)
+25,750
+47,863
+77,123
+46,358
+75,956
+1,505
+Others
+1,167
+134 Annual Report 2021 | Financial Report
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2021
+As at 1 January 2020 (Restated Note 35(f) (ii)
+Net profit
+Other comprehensive income
+Total comprehensive income
+Transactions with owners
+Appropriation to reserves (Note 37)
+Dividends paid
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+RMB million
+RMB million RMB million RMB million
+(Note 36)
+308
+(8,538)
+(7,791)
+14,970
+(36,859)
+134
+(29,546)
+28,265
+237,935
+(1,055)
+183,856
+456,937
+28,265
+237,935
+183,856
+6,881
+456,937
+50,921
+1,491
+52,412
+6,881
+(7,791)
+(174)
+(174)
+(Note 37)
+28,265
+7,791
+197,266
+170,458
+5,580
+409,360
+50,257
+1,116
+51,373
+25,699
+51
+25,750
+_____ _- 25,699
+50,257
+1,167
+77,123
+- 16,025
+(16,025)
+(20,834)
+(20,834)
+25,406
+(4,490)
+- Non-controlling interests
+· Equity holders of the Company
+10,328
+7,666
+Including: share of profit of associates and joint ventures
+10,328
+8,336
+Profit before income tax
+28
+Income tax
+29
+9
+22
+54,476
+1,917
+(3,103)
+Net profit
+52,412
+51,373
+Attributable to:
+- Equity holders of the Company
+50,921
+50,495
+Net gains on investments of associates and joint ventures
+(758,239)
+(784,763)
+Policyholder dividends resulting from participation in profits
+(26,511)
+(28,279)
+Underwriting and policy acquisition costs
+(65,744)
+(84,361)
+Finance costs
+27
+(5,598)
+(3,747)
+Administrative expenses
+(40,808)
+(37,706)
+Statutory insurance fund contribution
+21
+(1,253)
+(1,229)
+Other expenses
+(15,467)
+(12,270)
+Total benefits, claims and expenses
+50,257
+31 December
+- Non-controlling interests
+1,116
+(1,793)
+(3,959)
+Share of other comprehensive income of associates and
+joint ventures under the equity method
+1,260
+672
+Exchange differences on translating foreign operations
+(398)
+(986)
+attributable to policyholders equity
+Income tax relating to components of other comprehensive income
+1,098
+(8,482)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods
+Other comprehensive income that will not be reclassified to
+profit or loss in subsequent periods:
+Share of other comprehensive income of associates and
+joint ventures under the equity method
+Other comprehensive income for the year, net of tax
+Total comprehensive income for the year, net of tax
+Attributable to:
+29
+Portion of fair value changes on available-for-sale securities
+(14,386)
+(21,722)
+Basic and diluted earnings per share
+31
+RMB1.80
+RMB1.77
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+Annual Report 2021 | Financial Report 133
+Consolidated Statement of Comprehensive Income (continued)
+For the year ended 31 December 2021
+Other comprehensive income
+2021
+2020
+Note
+RMB million
+RMB million
+(Restated
+Note 35(f) (ii)
+Other comprehensive income that may be reclassified to
+profit or loss in subsequent periods:
+Fair value gains on available-for-sale securities
+17,065
+52,547
+Amount transferred to net profit from other comprehensive income
+1,491
+31 December
+10.2
+Notes
+(10,628)
+26
+Investment contract benefits
+(414,797)
+(442,370)
+25
+Increase in insurance contract liabilities
+(52,395)
+(55,030)
+25
+Accident and health claims and claim adjustment expenses
+(113,609)
+(121,354)
+25
+BENEFITS, CLAIMS AND EXPENSES
+Insurance benefits and claims expenses
+Life insurance death and other benefits
+805,049
+824,930
+(7,072)
+Total revenues
+(14,942)
+17,748
+Independent Auditor's Report (continued)
+(292,799)
+(393,731)
+Net cash inflow/(outflow) from investing activities
+(25,858)
+(35,479)
+Increase in policy loans, net
+29,590
+32,177
+Dividends received
+126,848
+142,311
+Interest received
+(3,850)
+(2,804)
+Increase in securities purchased under agreements to resell, net
+(10,947)
+Decrease/(Increase) in term deposits, net
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+9,403
+Other income
+Net written premiums
+612,265
+618,327
+550
+Less: premiums ceded to reinsurers
+Gross written premiums
+REVENUES
+(Restated
+Note 35(f) (ii)
+RMB million
+RMB million
+Notes
+2020
+2021
+For the year ended 31 December 2021
+Consolidated Statement of Comprehensive Income
+132 Annual Report 2021 | Financial Report
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+(8,015)
+610,312
+10,005
+(6,053)
+Net change in unearned premium reserves
+21,900
+4,943
+24
+Net fair value gains through profit or loss
+14,583
+20,344
+23
+Net realised gains on financial assets
+154,497
+178,387
+22
+Investment income
+604,666
+611,251
+Net premiums earned
+(1,546)
+939
+606,212
+Su Hengxuan
+Director
+136 Annual Report 2021 | Financial Report
+For the year ended 31 December 2021
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+119
+184
+56,536
+60,256
+Short-term bank deposits
+Cash at banks and in hand
+Analysis of balances of cash and cash equivalents
+56,655
+60,440
+53,339
+56,655
+End of the year
+Beginning of the year
+Cash and cash equivalents
+3,316
+3,785
+Annual Report 2021 | Financial Report 137
+Net increase in cash and cash equivalents
+Notes to the Consolidated Financial Statements
+1 ORGANISATION AND PRINCIPAL ACTIVITIES
+1 January 2021
+beginning on or after
+Effective for
+annual periods
+Covid-19-Related Rent Concessions beyond
+30 June 2021
+Interest Rate Benchmark Reform - Phase 2
+Content
+and IFRS 16 Amendments
+Amendments to IFRS 16
+IFRS 9, IAS 39, IFRS 7, IFRS 4
+Standards/Amendments
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2021
+The Group has prepared these consolidated financial statements in accordance with International Financial Reporting
+Standards ("IFRSS"), amendments to IFRSS and interpretations issued by the International Accounting Standards Board
+("IASB"). These consolidated financial statements also comply with the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the applicable
+disclosure requirements of the Hong Kong Companies Ordinance. The Group has prepared the consolidated financial
+statements under the historical cost convention, except for financial assets and liabilities at fair value through profit or
+loss, available for sale securities, insurance contract liabilities and certain property, plant and equipment at deemed cost
+as part of the Restructuring process. The preparation of financial statements in compliance with IFRSS requires the use of
+certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
+Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
+and estimates are significant to the consolidated financial statements are disclosed in Note 3.
+2.1 Basis of preparation
+The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
+These policies have been consistently applied to all the years presented, unless otherwise stated.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+These consolidated financial statements are presented in millions of Renminbi ("RMB million") unless otherwise stated.
+These consolidated financial statements have been approved and authorised for issue by the Board of Directors on 24
+March 2022.
+The Company is a joint stock company incorporated in the PRC with limited liability. The address of its registered office is
+16 Financial Street, Xicheng District, Beijing, the PRC. The Company is listed on the New York Stock Exchange, the Stock
+Exchange of Hong Kong Limited, and the Shanghai Stock Exchange.
+China Life Insurance Company Limited (the "Company") was established in the People's Republic of China ("China" or
+the "PRC") on 30 June 2003 as a joint stock company with limited liability as part of a group restructuring of China Life
+Insurance (Group) Company ("CLIC", formerly China Life Insurance Company) and its subsidiaries (the "Restructuring").
+The Company and its subsidiaries are hereinafter collectively referred to as the "Group". The Group's principal activities
+are the writing of life, health, accident and other types of personal insurance business; reinsurance business for personal
+insurance business; fund management business permitted by national laws and regulations or approved by the State
+Council of the People's Republic of China, etc.
+For the year ended 31 December 2021
+Consolidated Statement of Cash Flows (continued)
+(144)
+Foreign exchange gains/(losses) on cash and cash equivalents
+(20,834)
+(18,089)
+Dividends paid to equity holders of the Company
+(6,505)
+Repayment of borrowings
+(3,779)
+(8,194)
+Interest paid
+4,912
+117,211
+Increase in securities sold under agreements to repurchase, net
+CASH FLOWS FROM FINANCING ACTIVITIES
+(Restated
+Note 35(f)(ii))
+RMB million
+RMB million
+2020
+2021
+Dividends paid to non-controlling interests
+(71)
+Cash received from borrowings
+(372)
+(7,760)
+111,139
+Net cash inflow/(outflow) from financing activities
+(1,592)
+(750)
+Cash paid related to other financing activities
+1,069
+Cash received related to other financing activities
+22,846
+22,850
+Capital injected into subsidiaries by non-controlling interests
+(9,060)
+Cash paid for redemption of other equity instruments
+(1,478)
+(1,517)
+6,822
+(161)
+Payment of lease liabilities
+2021
+Yuan Changqing
+Director
+Total liabilities and equity
+Other assets
+6,095
+6,630
+13
+Reinsurance assets
+20,730
+20,361
+12
+Premiums receivable
+45,200
+51,097
+10.8
+Accrued investment income
+7,947
+12,915
+10.7
+Securities purchased under agreements to resell
+Deferred tax assets
+6,333
+1,215,603
+161,570
+Cash and cash equivalents
+14
+As at
+31 December
+As at
+31 December
+2021
+(continued)
+As at 31 December 2021
+Consolidated Statement of Financial Position
+Annual Report 2021 | Financial Report 131
+The notes on pages 138 to 252 form an integral part of these consolidated financial statements.
+4,252,466
+87
+56,655
+60,440
+4,891,085
+121
+29
+1 April 2021
+29,040
+39,559
+Total assets
+2020
+206,771
+Securities at fair value through profit or loss
+Investments in associates and joint ventures
+14,217
+13,374
+8
+Investment properties
+3,076
+2,518
+7
+52,747
+54,398
+6 9
+Right-of-use assets
+Property, plant and equipment
+Note 35(f)(ii))
+(Restated
+2020
+RMB million
+RMB million
+9
+10.6
+257,953
+Held-to-maturity securities
+1,429,287
+10.5
+Available-for-sale securities
+6,333
+10.4
+Statutory deposits - restricted
+545,678
+529,488
+10.3
+Term deposits
+658,535
+666,087
+(4,608)
+Loans
+1,189,369
+1,533,753
+10.1
+239,584
+Approved and authorised for issue by the Board of Directors on 24 March 2022.
+Notes
+RMB million
+Share capital
+3,795,529
+4,404,427
+384
+339
+21
+191
+248
+15,286
+7,481
+104,476
+133,676
+22
+29
+20
+Equity
+Total liabilities
+Reserves
+Statutory insurance fund
+Retained earnings
+38
+Total equity
+Non-controlling interests
+Attributable to equity holders of the Company
+4,252,466
+456,937
+486,658
+4,891,085
+6,881
+8,073
+450,056
+478,585
+183,856
+201,265
+237,935
+249,055
+28,265
+28,265
+36
+37
+RMB million
+Current income tax liabilities
+Other liabilities
+18,686
+17
+Interest-bearing loans and borrowings
+122,510
+124,949
+Policyholder dividends payable
+288,212
+313,594
+16
+2,973,225
+3,419,899
+15
+Investment contracts
+Insurance contracts
+Liabilities
+LIABILITIES AND EQUITY
+(Restated
+Note 35(f) (ii))
+19,556
+Deferred tax liabilities
+Lease liabilities
+2,664
+53,021
+48,699
+Premiums received in advance
+55,031
+56,818
+Annuity and other insurance balances payable
+122,249
+239,446
+19
+Securities sold under agreements to repurchase
+3,732
+3,416
+Financial liabilities at fair value through profit or loss
+34,992
+34,994
+18
+Bonds payable
+2,182
+14
+For the year ended 31 December 2021
+For the year ended 31 December 2021
+At the commencement date of the lease, the Group recognises right-of-use assets representing the right to use the
+leased assets, including buildings and land use rights, etc. The Group measures the lease liability at the present value
+of the lease payments that are not paid at that date, except for short-term leases and leases of low-value assets. In
+calculating the present value of the lease payments, the lease payments are discounted using the interest rate implicit in
+the lease. If that rate cannot be readily determined, the Group uses its own incremental borrowing rate.
+Initial measurement
+As a lessee
+At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,
+a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
+consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of a
+time, the Group assesses whether, throughout the period of use, the lessee has the right to obtain substantially all of the
+economic benefits from use of the identified asset and the right to direct the use of the identified asset.
+2.7 Leases
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+146 Annual Report 2021 | Financial Report
+The gain or loss on disposal of an item of property, plant and equipment is the difference between the net sales proceeds
+and the carrying amount of the relevant asset, and is recognised in net profit.
+The lease term is the non-cancellable period of a lease when the Group has the right to use lease assets. When the Group
+has an option to extend a lease and is reasonably certain to exercise that option to extend a lease, the lease term also
+comprises the periods covered by the option to extend the lease. When the Group has an option to terminate the lease
+and is reasonably certain not to exercise that option, the lease term also comprises the periods covered by the option to
+terminate the lease. The Group reassesses whether it is reasonably certain to exercise an extension option, to exercise a
+purchase option or not to exercise a termination option, upon the occurrence of either a significant event or a significant
+change in circumstances that are within the control of the Group and affects whether the Group is reasonably certain to
+exercise the commensurate options.
+Property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate
+that the carrying amount may not be recoverable. An impairment loss is recognised in net profit for the amount by which
+the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset's net selling price and
+value in use.
+Assets under construction mainly represent buildings under construction, which are stated at cost less any impairment
+losses and are not depreciated, except for those acquired prior to 30 June 2003, which are stated at deemed cost less
+any accumulated impairment losses. Cost comprises the direct costs of construction and capitalised borrowing costs on
+related borrowed funds during the period of construction. Assets under construction are reclassified to the appropriate
+category of property, plant and equipment, investment properties or other assets when completed and ready for use.
+The residual values, depreciation method and useful lives are reviewed periodically to ensure that the method and
+period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and
+equipment.
+Over the shorter of the remaining term
+of the lease and the useful lives
+Estimated useful lives
+15 to 35 years
+3 to 11 years
+4 to 8 years
+Leasehold improvements
+Motor vehicles
+Office equipment, furniture and fixtures
+Buildings
+Depreciation is computed on a straight-line basis to write down the cost of each asset to its residual value over its
+estimated useful lives as follows:
+Depreciation
+Impairment and gains or losses on disposals
+Subsequent measurement
+The Group applies the straight-line method in depreciating the right-of-use assets. If it is reasonably certain that
+ownership of a leased asset transfers to the Group at the end of the lease term, the leased asset is depreciated under
+the remaining useful life of the asset. If it cannot be reasonably determined that ownership of a leased asset transfers to
+the Group at the end of the lease term, the Group depreciates the right-of-use asset from the commencement date to the
+earlier of the end of the lease term or the end of the useful life of the right-of-use asset.
+The Group uses a constant periodic rate of interest to calculate interest on the lease liability in each period during the
+lease term and recognises the interest in profit or loss.
+The Group classifies its financial assets into the following categories: securities at fair value through profit or loss, held-
+to-maturity securities, loans and receivables and available-for-sale securities. Management determines the classification
+of its financial assets at initial recognition which depends on the purpose for which the assets are acquired. The Group's
+investments in securities fall into the following four categories:
+2.9.a Classification
+2.9 Financial assets
+An investment property is derecognised when either it has been disposed of or when the investment property is
+permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the
+retirement or disposal of an investment property are recognised in the statement of comprehensive income in the year of
+retirement or disposal. A transfer to, or from, an investment property is made when, and only when, there is evidence of
+a change in use.
+The useful lives and depreciation method are reviewed periodically to ensure that the method and period of depreciation
+are consistent with the expected pattern of economic benefits from the individual investment properties.
+Overseas investment properties, that are held by the Group in the form of property ownership, equity investment, or other
+forms, have expected useful lives not longer than 50 years, determined based on the usage in their locations.
+Depreciation is computed on the straight-line basis over the estimated useful lives. The estimated useful lives of
+investment properties are 15 to 35 years.
+Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
+investment properties are stated at cost less accumulated depreciation and any impairment loss.
+Investment properties are interests in land use rights and buildings that are held to earn rental income and/or for capital
+appreciation, rather than for the supply of services or for administrative purposes.
+2.8 Investment properties
+At the commencement date of the lease, leases in which the Group does not transfer substantially all the risks and
+rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on
+a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss.
+As a lessor
+The Group partly adopts the simplified method for rental concessions arising as a direct consequence of COVID-19
+reached by the Group and the lessor on the existing lease contracts of buildings. The Group treats the reduced or
+exempted rent concessions as variable lease payments. When a concession agreement is reached to relieve the original
+rent payment obligation, the undiscounted cash amount will be used to offset the cost of the related asset or expense,
+and adjust the related liablity.
+COVID-19-Related Rent Concessions
+As a lessee (continued)
+2.7 Leases (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 147
+The Group assesses whether there is any indication that a right-of-use asset may be impaired at the end of reporting
+period. If any such indication exists, the Group performs the impairment test. An impairment loss is recognised in net
+profit for the amount by which the carrying amount of the right-of-use asset exceeds its recoverable amount, which is the
+higher of the right-of-use asset's net selling price and value in use.
+After the commencement date of a lease, when there is a change in in-substance fixed payments, a change in the
+amounts expected to be payable under a residual value guarantee, a change in future lease payments resulting from a
+change in an index or a rate used to determine those payments, a change in the assessment or actual exercise situation
+of a purchase option, an extension option or a termination option, the Group uses the changed present value of lease
+payments to remeasure the lease liability and adjust the carrying amount of right-of-use asset accordingly. If the carrying
+amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease
+liability, the Group recognises any remaining amount of the remeasurement in profit or loss.
+Variable lease payments not included in the measurement of the lease liability are recognised in profit or loss in the period
+in which the event or condition that triggers the payment occurs.
+The historical costs of property, plant and equipment comprise its purchase price, including import duties and non-
+refundable purchase taxes, and any directly attributable costs of bringing the asset to its working condition and location
+for its intended use. Expenditure incurred after terms of property, plant and equipment have been put into operation, such
+as repairs and maintenance, is normally charged to the statement of comprehensive income in the period in which it is
+incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in
+the carrying amount of the assets as a replacement. Where significant parts of property, plant and equipment are required
+to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates
+them accordingly.
+(i) Securities at fair value through profit or loss
+Property, plant and equipment, are stated at historical costs less accumulated depreciation and any accumulated
+impairment losses, except for those acquired prior to 30 June 2003, which are stated at deemed cost less accumulated
+depreciation and any accumulated impairment losses.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.2 Consolidation (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 143
+The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group, other than
+common control combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the
+assets transferred, the liabilities incurred and the equity interest issued by the Group. The consideration transferred
+includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related
+costs are expensed as incurred. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business
+combination are measured initially at their fair value at the acquisition date. On an acquisition-by-acquisition basis, the
+Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's
+proportionate share of the acquiree's net assets.
+The comparative financial data have been restated to reflect the business combinations under common control occurred
+during this year. Transaction costs, including professional fees, registration fees, costs of furnishing information to
+shareholders, costs or losses incurred in combining operations of the previously separate businesses and other costs
+incurred in relation to the common control combination that is to be accounted for by using the merger accounting method
+are recognised as expenses in the period in which they are incurred.
+The consolidated financial statements incorporate the financial statements of the combining entities or businesses in
+business combination under common control as if they had been combined from the date when the combining entities
+or businesses first came under the control of the ultimate holding company. The net assets of the combining entities
+or businesses are consolidated using the carrying amount from the ultimate holding company's perspective. No amount
+is recognised for goodwill or excess of the Group's interest in the book value of the net assets over cost at the time
+of the common control combination, to the extent of the continuation of the ultimate holding company's interest. The
+consolidated statement of comprehensive income includes the results of each of the combining entities or businesses
+from the earliest date presented or since the date when the combining entities or businesses first came under common
+control, where this is a shorter period, regardless of the date of the common control combination.
+reclassifies the Group's share of components previously recognised in OCI to profit or loss or retained earnings, as
+appropriate, as the Group had directly disposed of the related assets or liabilities.
+recognises any surplus or deficit in profit or loss; and
+The excess of the aggregate of the consideration transferred, the fair value of any non-controlling interest in the acquiree,
+and the fair value of any previous equity interest in the acquiree at the acquisition date over the fair value of the net
+identifiable assets acquired and liabilities assumed is recorded as goodwill. If this is less than the fair value of the net
+assets of the subsidiary acquired in the case of a bargain purchase, the Group re-assesses whether it has correctly
+identified all of the assets acquired and all of the liabilities assumed, and reviews the procedures used to measure the
+amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net
+assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. Goodwill is
+tested annually for impairment and carried at cost less accumulated impairment losses. If there is any indication that
+goodwill is impaired, recoverable amount is estimated and the difference between carrying amount and recoverable
+amount is recognised as an impairment charge. Impairment losses on goodwill are not reversed in subsequent periods.
+Gains or losses on the disposal of an entity take into consideration the carrying amount of goodwill relating to the entity
+sold.
+•
+recognises the fair value of the consideration received;
+•
+• derecognises the cumulative translation differences recorded in equity;
+derecognises the carrying amount of any non-controlling interests;
+•
+derecognises the assets (including goodwill) and liabilities of the subsidiary;
+•
+A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
+the Group loses control over a subsidiary, it:
+Profit or loss and each component of OCI are attributed to the equity holders of the Company and to the non-controlling
+interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are
+made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting
+policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
+members of the Group are eliminated in full upon consolidation.
+2.2 Consolidation (continued)
+recognises the fair value of any investment retained;
+The investments in subsidiaries are accounted for only in the Company's statement of financial position at cost less
+impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost
+also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the
+basis of dividends received and receivable.
+Transactions with non-controlling interests
+The Group treats transactions with non-controlling interests that do not result in loss of controls as equity transactions.
+For shares purchased from non-controlling interests, the difference between any consideration paid and the relevant
+share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposal of
+shares to non-controlling interests are also recorded in equity.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 145
+The Company's functional currency is RMB. Each entity in the Group determines its own functional currency and items
+included in the financial statements of each entity are measured using that functional currency. The reporting currency
+of the consolidated financial statements of the Group is RMB. Transactions in foreign currencies are translated at the
+exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are
+translated at the exchange rates ruling at the end of the reporting period. Exchange differences arising in these cases are
+recognised in net profit.
+2.5 Foreign currency translation
+The Group's operating segments are presented in a manner consistent with the internal management reporting provided
+to the operating decision maker - president office for deciding how to allocate resources and for assessing performance.
+Operating segment refers to the segment within the Group that satisfies the following conditions: i) the segment
+generates income and incurs costs from daily operating activities; ii) management evaluates the operating results of the
+segment to make resource allocation decision and to evaluate the business performance; and iii) the Group can obtain
+relevant financial information of the segment, including financial condition, operating results, cash flows and other
+financial performance indicators.
+2.4 Segment reporting
+The investments in associates and joint ventures are stated at cost less impairment in the Company's statement of
+financial position. The results of associates and joint ventures are accounted for by the Company on the basis of dividends
+received and receivable.
+The Group determines at each reporting date whether there is any objective evidence that the investments in associates
+and joint ventures are impaired. If this is the case, an impairment loss is recognised for the amount by which the
+investment's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the investment's
+fair value less costs of disposal and value in use. The impairment of investments in the associates and joint ventures is
+reviewed for possible reversal at each reporting date.
+Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable
+assets of acquired associates or joint ventures at the date of acquisition. Goodwill on acquisitions of associates and
+joint ventures is included in investments in associates and joint ventures and is tested for impairment as part of the
+overall balance. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity take into
+consideration the carrying amount of goodwill relating to the entity sold.
+Unrealised gains on transactions between the Group and its associates or joint ventures are eliminated to the extent of
+the Group's interests in the associates or joint ventures. Unrealised losses are also eliminated unless the transaction
+provides evidence of an impairment of the asset transferred. Associates and joint ventures' accounting policies have been
+changed where necessary to ensure consistency with the policies adopted by the Group.
+The Group's share of post-acquisition profit or loss of its associates and joint ventures is recognised in net profit, and its
+share of post-acquisition movements in OCI is recognised in the consolidated statement of comprehensive income. The
+cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's
+share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture, including
+any other unsecured receivables, the Group does not recognise further losses unless it has obligations to make payments
+on behalf of the associate or joint venture.
+2.3 Associates and joint ventures (continued)
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+144 Annual Report 2021 | Financial Report
+Investments in associates and joint ventures are accounted for using the equity method of accounting and are initially
+recognised at cost.
+Joint ventures are the type of joint arrangements whereby the parties that have joint control of the arrangement have
+rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement,
+which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing
+control.
+Associates are entities over which the Group has significant influence, generally accompanying a shareholding of between
+20% and 50% of the voting rights of the investee. Significant influence is the power to participate in the financial and
+operating policy decisions of the investee, but is not control or joint control over those policies.
+2.3 Associates and joint ventures
+If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the
+amounts previously recognised in OCI is reclassified to profit or loss as appropriate.
+When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair
+value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
+purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition,
+any amounts previously recognised in OCI in respect of that entity are accounted for as if the Group had directly disposed
+of the related assets or liabilities. This may mean that amounts previously recognised in OCI are reclassified to profit or
+loss.
+2.6 Property, plant and equipment
+This category has two sub-categories: securities held for trading and those designated as at fair value through profit or
+loss at inception. Securities are classified as held for trading at inception if acquired principally for the purpose of selling
+in the short-term or if they form part of a portfolio of financial assets in which there is evidence of taking short-term profit.
+The Group may classify other financial assets as at fair value through profit or loss if they meet the criteria in IAS 39 and
+designated as such at inception.
+148 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+In July 2014, the IASB issued the final version of IFRS 9, bringing together all phases of the financial instruments project
+to replace IAS 39 and all previous versions of IFRS 9. The standard introduces new requirements for classification and
+measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January
+2018, with early adoption permitted. Based on the current assessment, the Group expects that the adoption of IFRS 9
+will have a significant impact on the consolidated financial statements. The Group has adopted the temporary exemption
+permitted in the Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts ("IFRS 4
+Amendment") to apply IAS 39 rather than IFRS 9, until the effective date of IFRS 17. Refer to Note 34 for more details.
+Classification and measurement
+IFRS 9 requires that the Group classifies debt instruments based on the combined effect of application of business
+models (hold to collect contractual cash flows, hold to collect contractual cash flows and sell financial assets or other
+business models) and contractual cash flow characteristics (solely payments of principal and interest on the principal
+amount outstanding or not). Debt instruments not giving rise to cash flows that are solely payments of principal
+and interest on the principal amount outstanding would be measured at fair value through profit or loss. Other debt
+instruments giving rise to cash flows that are solely payments of principal and interest on the principal amount
+outstanding would be measured at amortised cost, fair value through other comprehensive income ("FVOCI") or fair
+value through profit or loss, based on their respective business models. The Group analysed the contractual cash flow
+characteristics of financial assets as at 31 December 2021 and made relevant disclosures in Note 34.
+Equity instruments would generally be measured at fair value through profit or loss unless the Group elects to measure
+at FVOCI for certain equity investments not held for trading. This will result in unrealised gains and losses on equity
+instruments currently classified as available-for-sale securities being recorded in income going forward. Currently, these
+unrealised gains and losses are recognised in other comprehensive income ("OCI"). If the Group elects to record equity
+investments at FVOCI, gains and losses would be recognised in retained earnings when the instruments be disposed,
+except for the received dividends which do not represent a recovery of part of the investment cost.
+Impairment
+IFRS 9 replaces the "incurred loss" model with the "expected credit loss" model which is designed to include forward-
+looking information. The Group is in the process of developing and testing the key models required under IFRS 9 and
+analysing the impact on the expected loss provision; the Group believes that the provision for debt instruments of the
+Group under the "expected credit loss" model would be larger than that under the previous "incurred loss" model.
+Hedge accounting
+The Group does not apply the hedge accounting currently, so the Group expects that the new hedge accounting model
+under IFRS 9 will have no impact on the Group's consolidated financial statements.
+140 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+IFRS 9 Financial Instruments
+For the year ended 31 December 2021
+2.1 Basis of preparation (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2021
+Standards/Amendments
+Amendments to IFRS 3
+Amendments to IAS 16
+Amendments to IAS 37
+Annual improvements
+Amendments to IAS 1
+IFRS 17
+Amendment to IAS 12
+IFRS 10 and IAS 28
+Amendments
+Content
+Update Reference to the Conceptual Framework
+Property, Plant and Equipment:
+Proceeds before intended use
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+1 January 2018
+Effective for
+annual periods
+beginning on or after
+Financial Instruments
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.1 New accounting standards and amendments adopted by the Group for the first time for the
+financial year beginning on 1 January 2021 (continued)
+IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark Reform
+Phase 2
+In August 2020, the IASB issued IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark
+Reform - Phase 2. The amendments address issues not dealt with in the previous amendments which affect financial
+reporting when an existing interest rate benchmark is replaced with an alternative benchmark rate. The key reliefs
+provided by the Phase 2 amendments are as follows:
+Changes to contractual cash flows. When changing the basis for determining contractual cash flows for financial
+assets and liabilities (including lease liabilities), the reliefs have the effect that the changes that are required by an
+interest rate benchmark reform (that is, are necessary as a direct consequence of IBOR reform and are economically
+equivalent) will not result in an immediate gain or loss in the income statement.
+Hedge accounting. The hedge accounting reliefs will allow most IAS 39 or IFRS 9 hedge relationships that are directly
+affected by IBOR reform to continue. However, additional ineffectiveness might need to be recorded.
+The amendments are effective for annual periods beginning on or after 1 January 2021 and shall be applied
+retrospectively, but entities are not required to restate the comparative information.
+The Group had certain interest-bearing bank borrowings denominated in US dollars and Euros based on the London
+Interbank Offered Rate ("LIBOR") and the Europe Interbank Offered Rate ("EURIBOR") as at 31 December 2021. If the
+interest rates of these borrowings are replaced by alternative benchmark rates in a future period, the Group will apply this
+practical expedient upon the modification of these borrowings when the "economically equivalent" criterion is met and
+expects that no significant modification gain or loss will arise as a result of applying the amendments to these changes.
+IFRS 16 Amendment - Covid-19-Related Rent Concessions beyond 30 June 2021
+In May 2020, the IASB issued the amendment to IFRS 16 Leases to provide an optional relief to lessees from applying
+IFRS 16's guidance on lease modification accounting for rent concessions arising as a direct consequence of COVID-19.
+The amendment does not apply to lessors.
+In March 2021, the IASB has extended by one year the application period of the practical expedient in IFRS 16 Leases to
+help lessees accounting for covid-19-related rent concessions.
+The Group has adopted the amendment on 1 April 2021. Because the Group was not provided with a significant amount
+of rent concessions arising as a direct consequence of COVID-19, the amendment did not have any significant impact on
+the Group's consolidated financial statements.
+Annual Report 2021 | Financial Report 139
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.2 New accounting standards and amendments that are effective for the financial year ended 31
+December 2021 but temporary exemption is applied by the Group
+Standards/Amendments
+IFRS 9
+Content
+Onerous Contracts - Cost of Fulfilling a Contract
+Annual Improvements to IFRS Standards 2018-2020
+Cycle
+Classification of Liabilities as Current or Non-current
+Insurance Contracts
+Deferred Tax related to Assets and Liabilities arising from
+a Single Transaction
+Sale or Contribution of Assets between an Investor and
+its Associate or Joint Venture
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.1 Basis of preparation (continued)
+2.1.3 New accounting standards and amendments that are not yet effective and have not been early
+adopted by the Group for the financial year beginning on 1 January 2021 (continued)
+IFRS 17 Insurance Contracts (continued)
+Amounts that the policyholder will always receive, regardless of whether an insured event happens (non-distinct
+investment components) are not presented in the statement of comprehensive income, but are recognised directly in
+the statement of financial position;
+Insurance services results are presented separately from the insurance finance income or expense;
+Extensive disclosures to provide information on the recognised amounts from insurance contracts and the nature and
+extent of risks arising from these contracts.
+In June 2020, the IASB issued the amendments to IFRS 17 which include a deferral of the effective date of IFRS 17 to
+annual reporting periods beginning on or after 1 January 2023. Insurers qualifying for the deferral of IFRS 9 can apply both
+IFRS 17 and IFRS 9 for the first time to annual reporting periods beginning on or after 1 January 2023. In December 2021,
+the IASB issued the amendment to IFRS 17, which permit entities that first apply IFRS 17 and IFRS 9 at the same time to
+present comparative information about a financial asset as if the classification and measurement requirements of IFRS 9
+had been applied to that financial asset before. The Group is currently assessing the impact of the implementation of the
+standard.
+Except for IFRS 17, there are no other new accounting standards, amendments or IFRIC interpretations that are not yet
+effective but would be expected to have a significant impact on the financial position and performance of the Group.
+2.2 Consolidation
+The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year
+ended 31 December 2021. Subsidiaries are those entities which are controlled by the Group (including the structured
+entities controlled by the Group). Control is achieved when the Group is exposed, or has rights, to variable returns from its
+involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically,
+the Group controls an investee if and only if the Group has:
+power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
+investee);
+exposure, or rights, to variable returns from its involvement with the investee; and
+.
+the ability to use its power over the investee to affect its returns.
+When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
+facts and circumstances in assessing whether it has power over an investee, including:
+the contractual arrangement with the other vote holders of the investee;
+•
+rights arising from other contractual arrangements; and
+the Group's voting rights and potential voting rights.
+The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
+to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
+the subsidiary and ceases when the Group loses control of the subsidiary.
+142 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 141
+The effect of changes in discount rates will be reported in either profit or loss or OCI, determined by an accounting
+policy choice;
+Effective for
+annual periods
+beginning on or after
+1 January 2022
+1 January 2022
+1 January 2022
+1 January 2022
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+1 January 2023
+1 January 2023
+No mandatory effective
+date yet determined but
+available for adoption
+The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
+IFRS 17 - Insurance Contracts
+In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance
+contracts covering recognition and measurement, presentation and disclosure, which replaces IFRS 4 Insurance
+Contracts.
+In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies
+for measurement purposes, IFRS 17 provides a comprehensive model (the general model) for insurance contracts,
+supplemented by the variable fee approach for contracts with direct participation features and the premium allocation
+approach mainly for short-duration which typically applies to certain non-life insurance contracts.
+The main features of the new accounting model for insurance contracts are as follows:
+•
+•
+•
+•
+•
+The fulfilment cash flows including the expected present value of future cash flows and explicit risk adjustment,
+remeasured every reporting period;
+A contractual service margin represents the unearned profitability of the insurance contracts and is recognised in profit
+or loss over the coverage period;
+Certain changes in the expected present value of future cash flows are adjusted against the contractual service margin
+and thereby recognised in profit or loss over the remaining coverage period;
+The recognition of insurance revenue and insurance service expenses in the statement of comprehensive income
+based on the concept of services provided during the period;
+1 January 2023
+Notes to the Consolidated Financial Statements (continued)
+The Group is subject to income tax in numerous jurisdictions. During the normal course of business, certain transactions
+and activities for which the ultimate tax determination is uncertain, the Group needs to exercise significant judgement
+when determining the income tax. If the final settlement results of the tax matters are different from the amounts
+recorded, these differences will impact the final income tax expense and deferred tax for the period.
+Housing benefits
+All full-time employees of the Group are entitled to participate in various government-sponsored housing funds. The Group
+contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees. The Group's
+liability in respect of these funds is limited to the contributions payable in each year.
+Stock appreciation rights
+Compensation under the stock appreciation rights is measured based on the fair value of the liabilities incurred and is
+expensed over the vesting period. Valuation techniques including option pricing models are used to estimate fair value
+of relevant liabilities. The liability is re-measured at the end of each reporting period to its fair value until settlement. Fair
+value changes in the vesting period are included in administrative expenses and changes after the vesting period are
+included in net fair value gains through profit or loss in net profit. The related liability is included in other liabilities.
+154 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.18 Share capital
+Full-time employees of the Group are covered by various government-sponsored pension plans, under which the
+employees are entitled to a monthly pension based on certain formulae. These government agencies are responsible for
+the pension liability to these employees upon retirement. The Group contributes on a monthly basis to these pension
+plans. All contributions made under the government-sponsored pension plans described above are fully attributable to
+employees at the time of the payment and the Group is unable to forfeit any amounts contributed by it to such plans. In
+addition to the government-sponsored pension plans, the Group established an employee annuity fund plan pursuant to
+the relevant laws and regulations in the PRC, whereby the Group is required to contribute to the plan at fixed rates of
+the employees' salary costs. Contributions made by the Group under the annuity fund plan that is forfeited in respect of
+those employees who resign from their positions prior to the full vesting of the contributions will be recorded in the public
+account of the annuity fund and shall not be used to offset any contributions to be made by the Group in the future. All
+funds in the public account will be attributed to the employees whose accounts are in normal status after the approval
+procedures are completed as required. Under these plans, the Group has no legal or constructive obligation for retirement
+benefit beyond the contributions made.
+Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of equity instruments are
+shown in equity as a deduction, net of tax, from the proceeds.
+Other equity instruments are Core Tier 2 Capital Securities issued by the Group. These securities contain no contractual
+obligation to deliver cash or another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group; or to be settled in the Group's own equity
+instruments. Therefore, the Group classifies these securities as other equity instruments. Fees, commissions and
+other transaction costs of these securities' issuance are deducted from equity. The distributions of the securities are
+recognised as profit distribution at the time of declaration.
+2.20 Revenue recognition
+Turnover of the Group represents the total revenues which include the following:
+Premiums
+Premiums from long-term insurance contracts are recognised as revenue when due from the policyholders.
+Premiums from the sale of short duration accident and health insurance products are recorded when written and are
+accreted to earnings on a pro-rata basis over the term of the related policy coverage.
+Policy fee income
+The policy fee income for investment contracts mainly consists of acquisition costs and various fees (handling fees and
+management fees, etc.) over the period of which the service is provided. Policy fee income net of certain acquisition costs
+is amortised over the expected life of the contracts and recognised as other income.
+Investment income
+2.19 Other equity instruments
+2.21 Finance costs
+Pension benefits
+Embedded derivatives that are not closely related to their host contracts and meet the definition of a derivative are
+separated and fair valued through profit or loss. The Group does not separately measure embedded derivatives that
+meet the definition of an insurance contract or embedded derivatives that are closely related to host insurance contracts
+including embedded options to surrender insurance contracts for a fixed amount (or an amount based on a fixed amount
+and an interest rate).
+The benefits to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets.
+Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the
+reinsured insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance liabilities are
+primarily premiums payable for reinsurance contracts and are recognised as expenses when due.
+The Group assesses its reinsurance assets for impairment as at the end of reporting period. If there is objective evidence
+that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable
+amount and recognises that impairment loss in net profit.
+2.12.3 Investment contracts
+For investment contracts with or without DPF, the Company's policy fee income mainly consists of acquisition cost
+and various fees (handling fees and management fees, etc.) over the period of which the service is provided. Policy fee
+income net of certain acquisition cost is amortised over the expected life of the contracts by period and recognised in
+revenue.
+Except for unit-linked contracts, of which the liabilities are carried at fair value, the liabilities of investment contracts are
+carried at amortised cost.
+2.12.4 DPF in long-term insurance contracts and investment contracts
+DPF is contained in certain long-term insurance contracts and investment contracts. These contracts are collectively
+called participating contracts. The Group is obligated to pay to the policyholders of participating contracts as a group at the
+higher of 70% of accumulated surplus available and the rate specified in the contracts. The accumulated surplus available
+mainly arises from net investment income and gains and losses arising from the assets supporting these contracts. To the
+extent unrealised gains or losses from available-for-sale securities are attributable to policyholders, shadow adjustments
+are recognised in OCI. The surplus owed to policyholders is recognised as policyholder dividends payable whether it is
+declared or not. The amount and timing of distribution to individual policyholders of participating contracts are subject to
+future declarations by the Group.
+2.13 Financial liabilities at fair value through profit or loss
+2.17 Employee benefits
+Financial liabilities at fair value through profit or loss are the portions owned by the external investors in the consolidated
+structured entities (open-ended funds). Such financial liabilities are designated at fair value upon initial recognition, and all
+realised or unrealised gains or losses are recognised in net profit.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.14 Securities sold under agreements to repurchase
+The Group retains substantially all the risk and rewards of ownership of securities sold under agreements to repurchase
+which generally mature within 180 days from the transaction date. Therefore, securities sold under agreements to
+repurchase are classified as secured borrowings. The Group may be required to provide additional collateral based on the
+fair value of the underlying securities. Securities sold under agreements to repurchase are recorded at amortised cost,
+i.e., their cost plus accrued interest at the end of the reporting period. It is the Group's policy to maintain effective control
+over securities sold under agreements to repurchase which includes maintaining physical possession of the securities.
+Accordingly, such securities continue to be carried on the consolidated statement of financial position.
+2.15 Bonds payable
+Bonds payable are initially recognised at fair value and subsequently measured at amortised cost using the effective
+interest rate method. Amortised cost is calculated by taking into account any discount or premium at acquisition and
+transaction costs.
+2.16 Derivative instruments
+Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
+subsequently re-measured at their fair value. The resulting gain or loss of derivative financial instruments is recognised in
+net profit. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
+Annual Report 2021 | Financial Report 153
+Contracts with reinsurers under which the Group is compensated for losses on one or more contracts issued by the
+Group and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held.
+Contracts with reinsurers that do not meet these classification requirements are classified as financial assets. Insurance
+contracts entered into by the Group under which the contract holder is another insurer (inwards reinsurance) are included
+with insurance contracts.
+Interest expenses for bonds payable, securities sold under agreements to repurchase, interest-bearing loans, borrowings
+and lease liabilities are recognised within finance costs in net profit using the effective interest rate method.
+Income tax expense for the period comprises current and deferred tax. Income tax is recognised in net profit, except to
+the extent that it relates to items recognised directly in OCI where the income tax is recognised in OCI.
+The judgements exercised in the valuation of insurance contract liabilities (including contracts with DPF) affect the
+amounts recognised in the consolidated financial statements as insurance contract benefits and insurance contract
+liabilities.
+The impact of the various assumptions and their changes are described in Note 15.
+Annual Report 2021 | Financial Report 157
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+3.2 Financial instruments
+The Group's principal investments are debt securities, equity securities, term deposits and loans. The critical estimates
+and judgements are those associated with the recognition of impairment and the measurement of fair value.
+The Group considers a wide range of factors in the impairment assessment as described in Note 2.9.c.
+The residual margin relating to the long-term insurance contracts is amortised over the expected life of the contracts,
+based on the assumptions (mortality rates, morbidity rates, lapse rates, discount rates, expenses assumption and policy
+dividend assumptions) that are determined at inception of the contracts and remain unchanged for the duration of the
+contracts.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date. When the fair values of financial assets and liabilities recorded in the
+consolidated statement of financial position cannot be measured based on quoted prices in active markets, their fair value
+is measured using valuation techniques which require a degree of judgements. The methods and assumptions used by
+the Group in measuring the fair value of financial instruments are as follows:
+debt securities: fair values are generally based upon current bid prices. Where current bid prices are not readily
+available, fair values are estimated using either prices observed in recent transactions, values obtained from current
+bid prices of comparable investments or valuation techniques when the market is not active.
+equity securities: fair values are generally based upon current bid prices. Where current bid prices are not readily
+available, fair values are estimated using either prices observed in recent transactions or commonly used market
+pricing models. Equity securities, for which fair values cannot be measured reliably, are recognised at cost less
+impairment.
+securities purchased under agreements to resell, policy loans, term deposits, interest-bearing loans and borrowings,
+and securities sold under agreements to repurchase: the carrying amounts of these assets in the consolidated
+statement of financial position approximate fair value.
+fair values of other loans are obtained from valuation techniques.
+For the description of valuation techniques, please refer to Note 4.4. Using different valuation techniques and parameter
+assumptions may lead to some differences of fair value estimations.
+3.3 Impairment of investments in associates and joint ventures
+The Group assesses whether there are any indicators of impairment for investments in associates and joint ventures
+at the end of each reporting period. Investments in associates and joint ventures are tested for impairment when there
+are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of
+investments in associates and joint ventures exceeds its recoverable amount, which is the higher of its fair value less
+costs of disposal and its value in use. The calculation of the fair value less costs of disposal is based on available data from
+binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental
+costs for disposing of investments in associates and joint ventures. When value in use calculations are undertaken, the
+Group must estimate the expected future cash flows from investments in associates and joint ventures and choose a
+suitable discount rate in order to calculate the present value of those cash flows.
+3.4 Income tax
+158 Annual Report 2021 | Financial Report
+•
+2.22 Current and deferred income taxation
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and liabilities,
+are set out below. It is possible that actual results may be different from the estimates and judgements referred to below.
+3.1 Estimates of future benefit payments and premiums arising from long-term insurance contracts
+The determination of the liabilities under long-term insurance contracts is based on estimates of future benefit payments,
+premiums and relevant expenses made by the Group and the margins. Assumptions about mortality rates, morbidity
+rates, lapse rates, discount rates, expense assumptions and policy dividend assumptions are made based on the most
+recent historical analysis and current and future economic conditions. The liability uncertainty arising from uncertain future
+benefit payments, premiums and relevant expenses is reflected in the risk margin.
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+Current income tax assets and liabilities for the current period are calculated on the basis of the tax laws enacted or
+substantively enacted at the end of each reporting period in the jurisdictions where the Company and its subsidiaries
+operate and generate taxable income. Management periodically evaluates positions taken with respect to situations in
+which applicable tax regulations are subject to interpretation.
+Annual Report 2021 | Financial Report 155
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.22 Current and deferred income taxation (continued)
+Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of
+assets and liabilities and their carrying amounts in the consolidated financial statements. Substantively enacted tax rates
+are used in the determination of deferred income tax.
+Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint
+ventures except where the timing of the reversal of the temporary difference can be controlled and it is probable that the
+temporary difference will not be reversed in the foreseeable future.
+The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
+be utilised. Conversely, previously unrecognised deferred tax assets are reassessed by the end of each reporting period
+and are recognised to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the
+deferred tax asset to be utilised.
+The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and
+judgements are continually evaluated and based on historical experience and other factors, including expectations of
+future events that are believed to be reasonable under the circumstances. The Group exercises significant judgement in
+making appropriate assumptions.
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
+is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
+the end of the reporting period.
+2.23 Provisions and contingencies
+Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is
+probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
+Provisions are not recognised for future operating losses.
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of
+economic resources will be required, or the amount of obligation cannot be measured reliably.
+A contingent liability is not recognised in the consolidated statement of financial position but is disclosed in the notes
+to the consolidated financial statements. When a change in the probability of an outflow occurs so that such outflow is
+probable and can be reliably measured, it will then be recognised as a provision.
+2.24 Dividend distribution
+Dividend distribution to the Company's equity holders is recognised as a liability in the Group's consolidated financial
+statements in the year in which the dividends are approved by the Company's equity holders.
+156 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off
+current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income tax
+levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
+to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously,
+in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or
+recovered.
+2.12.2.c Reinsurance contracts held
+Investment income comprises interest income from term deposits, cash and cash equivalents, debt securities, securities
+purchased under agreements to resell, loans and dividend income from equity securities. Interest income is recorded
+on an accrual basis using the effective interest rate method. Dividend income is recognised when the right to receive
+dividend payment is established.
+2.12.2.b Liability adequacy test
+a breach of contract, such as a default or delinquency in payments;
+it becomes probable that the issuer or debtor will enter into bankruptcy or other financial reorganisation; and
+•
+the disappearance of an active market for that financial asset because of financial difficulties.
+In evaluating whether a decline in value is impairment for equity securities, the Group also considers the extent or the
+duration of the decline. The quantitative factors include the following:
+the market price of the equity securities was more than 50% below their cost at the reporting date;
+the market price of the equity securities was more than 20% below their cost for a period of at least six months at the
+reporting date; and
+the market price of the equity securities was below their cost for a period of more than one year (including one year)
+at the reporting date.
+When the decline in value is considered impairment, held-to-maturity debt securities are written down to their present
+value of estimated future cash flows discounted at the securities' effective interest rates, available-for-sale debt
+securities and equity securities are written down to their fair value, and the change is recorded in net realised gains
+on financial assets in the period the impairment is recognised. The impairment loss is reversed through net profit if in
+a subsequent period the fair value of a debt security increases and the increase can be objectively related to an event
+occurring after the impairment loss was recognised through net profit. The impairment losses recognised in net profit on
+equity instruments are not reversed through net profit.
+significant financial difficulty of the issuer or debtor;
+2.10 Fair value measurement
+•
+in the principal market for the asset or liability, or
+in the absence of a principal market, in the most advantageous market for the asset or liability.
+The principal or the most advantageous market must be accessible by the Group at the measurement date.
+The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
+the asset or liability, assuming that market participants act in their economic best interest.
+A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
+benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
+asset in its highest and best use.
+150 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+The Group measures financial instruments, such as securities at fair value through profit or loss and available-for-sale
+securities, at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid
+to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
+measurement of assets and liabilities is based on the presumption that the transaction to sell the asset or transfer the
+liability takes place either:
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+•
+2.9 Financial assets (continued)
+For the year ended 31 December 2021
+The Group assesses the adequacy of insurance contract reserves using the current estimate of future cash flows with
+available information at the end of each reporting period. If that assessment shows that the carrying amount of its
+insurance liabilities (less related intangible assets, if applicable) is inadequate in light of the estimated future cash flows,
+the insurance contract reserves will be adjusted accordingly, and any changes of the insurance contract liabilities will be
+recognised in net profit.
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.9 Financial assets (continued)
+2.9.a Classification (continued)
+(ii) Held-to-maturity securities
+Held-to-maturity securities are non-derivative financial assets with fixed or determinable payments and fixed maturities
+that the Group has the positive intention and ability to hold to maturity and do not meet the definition of loans and
+receivables nor designated as available-for-sale securities or securities at fair value through profit or loss.
+(iii) Loans and receivables
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
+active market other than those that the Group intends to sell in the short-term or held as available-for-sale. Loans and
+receivables mainly comprise term deposits, loans, securities purchased under agreements to resell, accrued investment
+income and premium receivables as presented separately in the statement of financial position.
+(iv) Available-for-sale securities
+2.9.c Impairment of financial assets other than securities at fair value through profit or loss
+Financial assets other than those accounted for as at fair value through profit or loss are adjusted for impairment, where
+there are declines in value that are considered to be impaired. In evaluating whether a decline in value is an impairment
+for these financial assets, the Group considers several factors including, but not limited to, the following:
+Available-for-sale securities are non-derivative financial assets that are either designated in this category or not classified
+in any of the other categories.
+Purchase and sale of investments are recognised on the trade date, when the Group commits to purchase or sell assets.
+Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through
+profit or loss, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the
+rights to receive cash flows from the investments have expired or when they have been transferred and the Group has
+also transferred substantially all risks and rewards of ownership.
+Securities at fair value through profit or loss and available-for-sale securities are carried at fair value. Equity investments
+that do not have a quoted price in an active market and whose fair value cannot be reliably measured are carried at cost,
+net of allowance for impairments. Held-to-maturity securities are carried at amortised cost using the effective interest
+method. Investment gains and losses on sales of securities are determined principally by specific identification. Realised
+and unrealised gains and losses arising from changes in the fair value of the securities at fair value through profit or
+loss category, and the change of fair value of available-for-sale debt securities due to foreign exchange impact on the
+amortised cost are included in net profit in the period in which they arise. The remaining unrealised gains and losses
+arising from changes in the fair value of available-for-sale securities are recognised in OCI. When securities classified
+as available-for-sale securities are sold or impaired, the accumulated fair value adjustments are included in net profit as
+realised gains on financial assets.
+Term deposits primarily represent traditional bank deposits which have fixed maturity dates and are stated at amortised
+cost.
+Loans are carried at amortised cost, net of allowance for impairment.
+The Group purchases securities under agreements to resell substantially identical securities. These agreements are
+classified as secured loans and are recorded at amortised cost, i.e., their costs plus accrued interests at the end of the
+reporting period, which approximates fair value. The amounts advanced under these agreements are reflected as assets
+in the consolidated statement of financial position. The Group does not take physical possession of securities purchased
+under agreements to resell. Sale or transfer of the securities is not permitted by the respective clearing house on which
+they are registered while the lent capital is outstanding. In the event of default by the counterparty, the Group has the
+right to the underlying securities held by the clearing house.
+Annual Report 2021 | Financial Report 149
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+2.9.b Recognition and measurement
+2.10 Fair value measurement (continued)
+•
+All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
+categorised within the fair value hierarchy, described in Notes 4.4, 8, 11 and 41(c) based on the lowest level input that is
+significant to the fair value measurement as a whole.
+(a) The reasonable estimate of liability for long-term insurance contracts is the present value of reasonable estimates of
+future cash outflows less future cash inflows. The expected future cash inflows include cash inflows of future premiums
+arising from the undertaking of insurance obligations, with consideration of decrement mostly from death and surrenders.
+The expected future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of the following:
+•
+guaranteed benefits based on contractual terms, including payments for deaths, disabilities, diseases, survivals,
+maturities and surrenders;
+additional non-guaranteed benefits, such as policyholder dividends; and
+reasonable expenses incurred to manage insurance contracts or to process claims, including maintenance expenses
+and claim settlement expenses. Future administration expenses are included in the maintenance expenses.
+Expenses are determined based on expense analysis with consideration of future inflation and the Group's expense
+management control.
+On each reporting date, the Group reviews the assumptions for reasonable estimates of liability and risk margins, with
+consideration of all available information, taking into account the Group's historical experience and expectation of future
+events. Changes in assumptions are recognised in net profit. Assumptions for the amortisation of residual margin are
+locked in at policy issuance and are not adjusted at each reporting date.
+(b) Margin has been taken into consideration while computing the reserve of insurance contracts, measured separately
+and recognised in net profit in each period over the life of the contracts. At the inception of the contracts, the Group does
+not recognise Day 1 gain, whereas on the other hand, Day 1 loss is recognised in net profit immediately.
+Margin comprises risk margin and residual margin. Risk margin is the reserve accrued to compensate for the uncertain
+amount and timing of future cash flows. At the inception of the contract, the residual margin is calculated net of certain
+acquisition costs, mainly consist of underwriting and policy acquisition costs, by the Group representing Day gain and
+will be amortised over the life of the contracts. For insurance contracts of which future returns are affected by investment
+yields of corresponding investment portfolios, their related residual margins are amortised based on estimated future
+participating dividends payable to policyholders. For insurance contracts of which future returns are not affected by
+investment yields of corresponding investment portfolios, their related residual margins are amortised based on sum
+assured of outstanding policies. The subsequent measurement of the residual margin is independent from the reasonable
+estimate of future discounted cash flows and risk margin. The assumption changes have no effect on the subsequent
+measurement of the residual margin.
+(c) The Group has considered the impact of time value on the reserve calculation for insurance contracts.
+(iii) Universal life contracts and unit-linked contracts
+Universal life contracts and unit-linked contracts are unbundled into the following components:
+insurance components
+•
+non-insurance components
+The insurance components are accounted for as insurance contracts; and the non-insurance components are accounted
+for as investment contracts (Note 2.12.3), which are stated in the investment contract liabilities.
+152 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
+to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
+2.12.2 Insurance contracts (continued)
+(ii) Long-term insurance contracts (continued)
+2.12.2.a Recognition and measurement (continued)
+2.12 Insurance contracts and investment contracts (continued)
+2.12 Insurance contracts and investment contracts (continued)
+2.12.2 Insurance contracts (continued)
+2.11 Cash and cash equivalents
+Cash amounts represent cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
+with original maturities of 90 days or less, whose carrying value approximates fair value.
+2.12 Insurance contracts and investment contracts
+2.12.1 Classification
+The Group issues contracts that transfer insurance risk or financial risk or both. The contracts issued by the Group
+are classified as insurance contracts and investment contracts. Insurance contracts are those contracts that transfer
+significant insurance risk. They may also transfer financial risk. Investment contracts are those contracts that transfer
+financial risk without significant insurance risk. A number of insurance and investment contracts contain a discretionary
+participating feature ("DPF"). This feature entitles the policyholders to receive additional benefits or bonuses that are, at
+least in part, at the discretion of the Group.
+2.12.2 Insurance contracts
+2.12.2.a Recognition and measurement
+(i) Short-term insurance contracts
+Premiums from the sale of short duration accident and health insurance products are recorded when written and are
+accreted to earnings on a pro-rata basis over the term of the related policy coverage. Reserves for short duration
+insurance products consist of unearned premium reserve and expected claims and claim adjustment expenses reserve.
+Actual claims and claim adjustment expenses are charged to net profit as incurred.
+For assets and liabilities that are measured at fair value on a recurring basis, the Group determines whether transfers
+have occurred between each level in the hierarchy by re-assessing categorisation (based on the lowest level input that is
+significant to the fair value measurement as a whole) at the end of each reporting period.
+Reserves for claims and claim adjustment expenses consist of the reserves for reported and unreported claims and
+reserves for claims expenses with respect to insured events. In developing these reserves, the Group considers the
+nature and distribution of the risks, claims cost development, and experiences in deriving the reasonable estimated
+amount and the applicable margins. The methods used for reported and unreported claims include the case-by-case
+estimation method, average cost per claim method, chain ladder method, etc. The Group calculates the reserves for
+claims expenses based on the reasonable estimates of the future payments for claims expenses.
+(ii) Long-term insurance contracts
+Long-term insurance contracts include whole life insurance, term life insurance, endowment insurance and annuity
+policies with significant life contingency risk. Premiums are recognised as revenue when due from policyholders.
+The Group uses the discounted cash flow method to estimate the reserve of long-term insurance contracts. The reserve
+of long-term insurance contracts consists of a reasonable estimate of liability, a risk margin and a residual margin. The
+long-term insurance contract liabilities are calculated using various assumptions, including assumptions on mortality rates,
+morbidity rates, lapse rates, discount rates, and expense assumptions, and based on the following principles:
+Annual Report 2021 | Financial Report 151
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
+The unearned premium reserve represents the portion of the premiums written net of certain acquisition costs relating to
+the unexpired terms of coverage.
+Collateral and other credit enhancements
+Securities purchased under agreements to resell are pledged by counterparties' debt securities or term deposits of which
+the Group could take the ownership if the owner of the collateral defaults. Policy loans and most of premium receivables
+are collateralised by their policies' cash value according to the terms and conditions of policy loan contracts and policy
+contracts, respectively.
+Credit quality
+Annual Report 2021 | Financial Report 167
+As at 31 December 2021, 99.5% (as at 31 December 2020: 99.7%) of the Group's bank deposits are with the four
+largest state-owned commercial banks, other national commercial banks and China Securities Depository and Clearing
+Corporation Limited ("CSDCC") in the PRC. The Group believes these commercial banks, and CSDCC have a high credit
+quality. The Group's most other loans excluding policyholder loans, are guaranteed by third parties or with pledge, or have
+the fiscal annual budget income as the source of repayment, or have higher credit rating borrowers. As a result, the Group
+concludes that the credit risk associated with term deposits and accrued investment income thereof, statutory deposits
+- restricted, other loans, and cash and cash equivalents has not caused a material impact on the Group's consolidated
+financial statements as at 31 December 2021 and 2020.
+The credit risk associated with securities purchased under agreements to resell, policy loans and most of premium
+receivables has not caused a material impact on the Group's consolidated financial statements taking into consideration
+their sufficient collateral held and maturity terms of no more than one year as at 31 December 2021 and 2020.
+19,556
+The Group's debt securities investment mainly includes government bonds, government agency bonds, corporate bonds
+and subordinated bonds, and most of the debt securities are guaranteed by either the Chinese government or Chinese
+government controlled financial institutions. As at 31 December 2021, 100.0% (as at 31 December 2020: 99.9%) of the
+corporate bonds held by the Group or the issuers of these corporate bonds had credit ratings of AA/A-2 or above. As at
+31 December 2021, 100.0% (as at 31 December 2020: 100.0%) of the subordinated bonds held by the Group either had
+credit ratings of AA/A-2 or above, or were issued by national commercial banks. The bonds issuers' credit ratings are
+assigned by a qualified appraisal institution in the PRC and updated at each reporting date.
+The carrying amount of financial assets included on the consolidated statement of financial position represents the
+maximum credit risk exposure at the reporting date without taking account of any collateral held or other credit
+enhancements attached. The Group has no credit risk exposure relating to off-balance sheet items as at 31 December
+2021 and 2020.
+4.2 Financial risk (continued)
+Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Group manages
+credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction
+structures. Where appropriate, the Group obtains collateral in the form of rights to cash, securities, property and
+equipment to lower the credit risk.
+Credit risk is the risk that one party of a financial transaction or the issuer of a financial instrument will fail to discharge
+its obligation and cause another party to incur a financial loss. Because the Group's investment portfolio is restricted
+to the types of investments as permitted by the China Banking and Insurance Regulatory Commission ("CBIRC") and a
+significant portion of the portfolio is in government bonds, government agency bonds, corporate bonds with higher credit
+rating and term deposits with the state-owned commercial banks, the Group's overall exposure to credit risk is relatively
+low.
+4.2.2 Credit risk
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+166 Annual Report 2021 | Financial Report
+As at 31 December 2021, if RMB had strengthened or weakened by 10% against US dollar, HK dollar, GB pound, EUR and
+other foreign currencies, with all other variables held constant, pre-tax profit for the year would have been RMB640 million
+(as at 31 December 2020: RMB339 million) lower or higher, respectively, mainly as a result of foreign exchange losses or
+gains on translation of US dollar, HK dollar, GB pound, EUR and other foreign currencies denominated financial assets and
+financial liabilities other than the available-for-sale equity securities included in the table above. Pre-tax available-for-sale
+reserve in equity would have been RMB8,440 million (as at 31 December 2020: RMB11,593 million) lower or higher,
+respectively, as a result of foreign exchange of the available-for-sale equity securities at fair value. The actual exchange
+gains in 2021 were RMB645 million (2020: exchange gains in RMB119 million).
+Notes to the Consolidated Financial Statements (continued)
+Credit risk exposure
+For the year ended 31 December 2021
+maturity
+4.2 Financial risk (continued)
+19,556
+3 years
+than
+than
+Later
+not later
+than
+1 year but 3 years but
+not later
+Later than Later than
+4 RISK MANAGEMENT (continued)
+(undiscounted)
+than
+1 year
+Without
+Carrying
+value
+As at 31 December 2021
+Not later
+The following tables set forth the contractual and expected undiscounted cash flows for financial assets and liabilities and
+insurance liabilities:
+In the normal course of business, the Group attempts to match the maturity of financial assets to the maturity of
+insurance and financial liabilities to reduce liquidity risk.
+Liquidity risk is the risk that the Group is unable to obtain funds at a reasonable funding cost when required to meet a
+repayment obligation and fund its asset portfolio within a certain time.
+4.2.3 Liquidity risk
+Contractual and expected cash flows
+5,172
+350
+5,172
+339
+10
+11
+21
+297
+profit or loss
+3,615
+3,615
+- Securities at fair value through
+Term deposits
+- Available-for-sale securities
+1,445
+220
+220
+- Held-to-maturity securities
+- Loans
+Debt securities
+6,953
+847
+1,219
+5 years
+1,445
+2,444
+7,990
+Cash and cash equivalents
+2,444
+11,940
+Total
+11,940
+other borrowings
+Interest-bearing loans and
+Financial liabilities
+141,166
+864
+7,990
+1,370
+109,975
+28,228
+Total
+2,400
+7
+140
+358
+1,297
+598
+729
+5 years
+4.1.2 Concentration of insurance risks (continued)
+Financial assets
+(56,818)
+56,818
+balances payable
+Annuity and other insurance
+(3,416)
+3,416
+through profit or loss
+Financial liabilities at fair value
+(239,679)
+Interest-bearing loans and
+-
+to repurchase
+Securities sold under agreements
+Contractual cash outflows
+(957,814)
+(202,368) (5,990,882)
+94,302
+86,132
+16,479
+111,912
+(31,671)
+313,594
+3,419,899
+239,446
+Investment contracts
+other borrowings
+Bonds payable
+185
+(d) Kang Ning Whole Life is a whole life insurance contract with the options for single premium or regular premium of
+10 years or 20 years and the payment methods of insurance are divided into single payment, annual payment, and semi-
+annual payment. This product is applicable to healthy policyholders under 70-year-old. The critical illness benefit is paid at
+200% of the basic sum insured. If the critical illness benefits are paid within the payment period, the insurance premium
+of each subsequent period shall be exempted, and the contract shall continue to be valid from the date of the payment of
+the critical illness benefits. Both death and disability benefits are paid at 300% of the basic sum insured less any critical
+illness benefits paid.
+168 Annual Report 2021 | Financial Report
+564,943 (3,781,475)
+676,936 1,025,643
+(108,269) (6,948,725)
+(29)
+(203)
+(1,067)
+46,426
+18,686
+(37,996)
+(2,552)
+(332)
+(1,093)
+(220,233)
+(3,416)
+696,041
+427,497
+Net cash inflow/(outflow)
+4,089,035
+Subtotal
+2,182
+Lease liabilities
+34,994
+(17,122)
+RMB Million
+Insurance contracts
+Financial and insurance liabilities
+6,333
+Statutory deposits - restricted
+372,571
+144,271
+529,488
+Term deposits
+137,705
+110,345
+508,864 3,029,545
+1,936
+461,413
+138,241
+666,087
+Loans
+231,604
+2,470,354
+Debt securities
+699,457
+699,457
+Equity securities
+Contractual cash inflows
+376,766
+Expected cash outflows
+4,682
+Securities purchased under
+673,212 3,167,250
+979,217
+897,169
+699,457
+4,516,532
+Subtotal
+60,440
+60,440
+Cash and cash equivalents
+53,822
+181
+20,361
+Premiums receivable
+1,964
+49,133
+51,097
+Accrued investment income
+346
+12,658
+12,915
+agreements to resell
+20,361
+4,352
+34,045
+118,204
+5,075
+6.05%
+Hong Ying Participating Endowment (e)
+10,315
+12.22%
+11,393
+13.59%
+Others (f)
+66,412
+78.67%
+65,484
+78.09%
+Total
+84,418
+100.00%
+83,854
+100.00%
+As at 31 December 2021
+RMB million
+%
+6.70%
+5,653
+Kang Ning Whole Life (d)
+2.17%
+100.00%
+536,150
+100.00%
+Insurance benefits of long-term
+insurance contracts
+Xin Xiang Zhi Zun Annuity
+(Celebration Version) (a)
+67
+0.08%
+As at 31 December 2020
+RMB million
+21
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+145
+0.17%
+58
+0.07%
+Xin Fu Ying Jia Annuity (c)
+1,826
+2.16%
+1,823
+0.03%
+%
+Liabilities of long-term insurance contracts
+Xin Xiang Zhi Zun Annuity
+0.83%
+Others (f)
+2,684,791
+79.43%
+2,364,798
+80.53%
+Total
+3,379,603
+100.00%
+24,398
+2,936,533
+160 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks (continued)
+(a) Xin Xiang Zhi Zun Annuity (Celebration Version) is an annuity insurance contract with the options for regular premium
+of 3 years and 5 years paid annually or monthly. Its insured period is 10 years. This product is applicable to healthy
+policyholders between 28-day-old and 68-year-old. From the first effective date after the fifth policy years to the expiration
+period, if the policyholders live to the annual corresponding effective date, the annuity payment shall be paid at 60% of
+annual premium according to the basic sum insured if the payment period is 3 years; and the annuity payment shall be paid
+at 100% of annual premium according to the basic sum insured if the payment period is 5 years. If the policyholders live
+to the annual corresponding effective date of the expiration period, the contract terminates and maturity benefit is paid
+at the basic sum insured. If death incurred over insured period, the contract terminates and death benefit is paid at the
+premium received (without interest).
+(b) Xin Xiang Jin Sheng Annuity (A Version) is an annuity insurance contract with the options for regular premium
+of 3 years and 5 years paid annually or monthly. Its insured period is 15 years. This product is applicable to healthy
+policyholders between 28-day-old and 65-year-old. From the effective date to the contractual date starting to claim of Xin
+Xiang Jin Sheng Annuity (A Version) after the fifth policy years or sixth policy years, if the policyholders live to the annual
+corresponding effective date, the annuity payment shall be paid at 50% of annual premium according to the basic sum
+insured if the payment period is 3 years; and the annuity payment shall be paid at 100% of annual premium according
+to the basic sum insured if the payment period is 5 years. From the first effective date after the seventh policy years
+to the expiration period, if the policyholders live to the annual corresponding effective date, the annuity payment shall
+be paid at 24% of annual premium according to the basic sum insured if the payment period is 3 years; and the annuity
+payment shall be paid at 32% of annual premium according to the basic sum insured if the payment period is 5 years.
+If the policyholders live to the annual corresponding effective date of the expiration period, the contract terminates and
+maturity benefit is paid at the basic sum insured. If death incurred over insured period, the contract terminates and death
+benefit is paid at the premium received (without interest).
+(c) Xin Fu Ying Jia Annuity is an annuity insurance contract with the options for regular premium of 3 years, 5 years or
+10 years. Its insured period extends from the effective date of Xin Fu Ying Jia Annuity to the corresponding date when
+policyholders reach the age of 88. This product is applicable to healthy policyholders between 28-day-old and 70-year-
+old. There are 12 age ranges for policyholders to choose to receive care money, which are: thirty, thirty-five, forty, forty-
+five, fifty, fifty-five, sixty, sixty-five, seventy, seventy-five, eighty, and eighty-five years old. From the effective date to
+the contractual date starting to claim of Xin Fu Ying Jia Annuity, the annuity payment of first policy year is paid at 20%
+of the first premium of the product, and the following annuity payments are paid at 20% of the basic sum insured by
+Xin Fu Ying Jia Annuity. From the first corresponding date after the contractual date starting to claim of annuity, to the
+corresponding date when the policyholders reach the age of 88-year-old, annuity is paid at 3% of the basic sum insured
+during the insured period if policyholders live to the annual corresponding effective date; annuity is paid at the premium
+received (without interest) during the insured period if policyholders live to the contractual date starting to claim of
+annuity; the contract terminates and death benefit is paid at the premium received (without interest) or the cash value of
+the contract, whichever greater when death incurred before the contractual date starting to claim of annuity; the contract
+terminates and death benefit is paid at the cash value of the contract when death incurred after contractual date starting
+to claim of annuity; the contract terminates and accidental death benefit is paid at the premium received (without interest)
+less any death benefit paid when accidents occurred and due to which death incurred within 180 days. Death benefit and
+accidental death benefit are paid only once.
+100.00%
+542,974
+0.43%
+Hong Ying Participating Endowment (e)
+(Celebration Version) (a)
+73,283
+2.17%
+30,885
+1.05%
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+101,608
+3.01%
+64,055
+14,479
+2.18%
+140,196
+4.15%
+114,111
+3.89%
+Kang Ning Whole Life (d)
+365,246
+10.81%
+338,286
+11.52%
+Xin Fu Ying Jia Annuity (c)
+Annual Report 2021 | Financial Report 161
+Total
+416,859
+Holding all other variables constant, if the discount rates were 50 basis points higher or lower than the current best
+estimate, pre-tax profit for the year would have been RMB130,439 million or RMB152,136 million (as at 31 December
+2020: RMB114,536 million or RMB131,732 million) higher or lower, respectively.
+Holding all other variables constant, if lapse rates were to increase or decrease from the current best estimate by 10%,
+pre-tax profit for the year would have been RMB399 million or RMB472 million higher or lower, respectively (as at 31
+December 2020: RMB707 million or RMB646 million lower or higher).
+Holding all other variables constant, if mortality rates and morbidity rates were to increase or decrease from the current
+best estimate by 10%, pre-tax profit for the year would have been RMB39,459 million or RMB40,963 million (as at 31
+December 2020: RMB34,590 million or RMB35,955 million) lower or higher, respectively.
+Liabilities for long-term insurance contracts and liabilities unbundled from universal life insurance contracts and unit-linked
+insurance contracts with insurance risk are calculated based on the assumptions on mortality rates, morbidity rates, lapse
+rates and discount rates. Changes in insurance contract reserve assumptions reflect the Company's actual operating
+results and changes in its expectation of future events. The Company considers the potential impact of future risk factors
+on its operating results and incorporates such potential impact in the determination of assumptions.
+Sensitivity analysis of long-term insurance contracts
+4.1.3 Sensitivity analysis
+(f) Others consist of various long-term insurance contracts with no significant concentration.
+(e) Hong Ying Participating Endowment is a participating endowment insurance contract with the options for single
+premium or regular premium of 3 years, 5 years or 10 years. Its insured period can be 6 years, 10 years or 15 years. This
+product is applicable to healthy policyholders between 30-day-old and 70-year-old. Maturity benefit of a single premium
+policy is paid at the basic sum insured, while that of a regular premium policy is paid at the basic sum insured multiplied
+by the number of years of the premium payments. Disease death benefit incurred within the first policy year is paid at
+the premium received (without interest). Disease death benefit incurred after the first policy year is paid at the basic sum
+insured for a single premium policy or the basic sum insured multiplied by the number of years of premium payments for
+a regular premium policy. When accidents occurred during taking a train, a ship or a flight period, death benefit is paid at
+the basic sum multiplied by 3 insured for a single premium policy or the basic sum multiplied by 3 and times the number
+of years of premium payments insured for a regular premium policy. When accidents occurred out of the period of taking
+a train, a ship or a flight, death benefit is paid at the basic sum multiplied by 2 insured for a single premium policy or the
+basic sum multiplied by 2 and times the number of years of premium payments insured for a regular premium policy.
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
+3.5 Determination of control over investee
+The Group applies its judgement to determine whether the control indicators set out in Note 2.2 indicate that the Group
+controls structured entities such as funds and asset management products.
+The Group issues certain structured entities (e.g. funds and asset management products), and acts as a manager for such
+entities according to the contracts. In addition, the Group may be exposed to variability of returns as a result of holding
+shares of the structured entities. Determining whether the Group controls such structured entities usually focuses on the
+assessment of the aggregate economic interests of the Group in the entities (including any carried interests and expected
+management fees) and the decision-making rights on the entity. As at 31 December 2021, the Group has consolidated
+some funds issued and managed by the Company's subsidiary, China Life AMP Asset Management Company ("CL
+AMP"), some debt investment schemes and asset management products issued and managed by the Company's
+subsidiary, China Life Asset Management Company Limited ("AMC") and some trust schemes and debt investment
+schemes issued and managed by third parties in the consolidated financial statements. Please refer to Note 41(d) for the
+details.
+4 RISK MANAGEMENT
+Risk management is carried out by the Company's Risk Management Committee under policies approved by the
+Company's Board of Directors.
+The Group issues contracts that transfer insurance risk or financial risk or both. This section summarises these risks and
+the way the Group manages them.
+4.1 Insurance risk
+4.1.1 Types of insurance risks
+162 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+33,926
+- Securities at fair value through
+profit or loss
+2 years later
+1 year later
+Year end
+RMB Million
+Total
+2021
+2020
+The risk under any one insurance contract is the possibility that an insured event occurs and the uncertainty about the
+amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.
+For a portfolio of insurance contracts where the theory of probability is applied to the pricing and provisioning, the principal
+risk that the Group faces under its insurance contracts is that the actual claims and benefit payments are less favourable
+than the underlying assumptions used in establishing the insurance liabilities. This occurs when the frequency or severity
+of claims and benefits exceeds the estimates. Insurance events are random, and the actual number of claims and the
+amount of benefits paid will vary each year from estimates established using statistical techniques.
+2019
+2017
+Estimated claims expenses
+Short-term insurance contracts (accident year)
+The following table indicates the claim development for short-term insurance contracts without taking into account the
+impacts of ceded business:
+Holding all other variables constant, if claim ratios are 100 basis points higher or lower than the current assumption, pre-
+tax profit is expected to be RMB740 million (as at 31 December 2020: RMB733 million) lower or higher, respectively.
+The assumptions of reserves for claims and claim adjustment expenses may be affected by other variables such as claims
+payment of short-term insurance contracts, which may result in the synchronous changes to reserves for claims and claim
+adjustment expenses.
+Sensitivity analysis of short-term insurance contracts
+4.1.3 Sensitivity analysis (continued)
+4.1 Insurance risk (continued)
+2018
+Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability of the
+expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a
+change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the types
+of insurance risks accepted and within each of these categories to achieve a sufficiently large population to reduce the
+variability of the expected outcome. The Group manages insurance risk through underwriting strategies, reinsurance
+arrangements and claims handling.
+Annual Report 2021 | Financial Report 159
+Notes to the Consolidated Financial Statements (continued)
+34,828
+6.50%
+Xin Fu Ying Jia Annuity (c)
+23,114
+4.26%
+24,116
+4.50%
+Kang Ning Whole Life (d)
+15,430
+6.28%
+2.84%
+3.27%
+Hong Ying Participating Endowment (e)
+66
+0.01%
+137
+0.03%
+Others (f)
+429,419
+79.09%
+17,553
+77.74%
+34,094
+7.96%
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.1 Insurance risk (continued)
+4.1.2 Concentration of insurance risks
+Insurance operations of the Group are mainly located in the PRC. There are no significant differences among the regions
+where the Group underwrites insurance contracts.
+The table below presents the Group's major products of long-term insurance contracts:
+For the year ended 31 December
+2021
+2020
+Xin Xiang Jin Sheng Annuity (A Version) (b)
+Product name
+%
+RMB million
+%
+Premiums of long-term insurance contracts
+Xin Xiang Zhi Zun Annuity
+(Celebration Version) (a)
+40,851
+7.52%
+42,657
+RMB million
+Notes to the Consolidated Financial Statements (continued)
+The Group manages insurance risks through two types of reinsurance agreements, ceding on a quota share basis or
+a surplus basis, to cover insurance liability risk. Reinsurance contracts cover almost all products, which contain risk
+liabilities. The products reinsured include: life insurance, accident and health insurance or death, disability, accident,
+illness and assistance in terms of product category or function, respectively. These reinsurance agreements spread
+insured risk to a certain extent and reduce the effect of potential losses to the Group. However, the Group's direct
+insurance liabilities to the policyholder are not eliminated because of the credit risk associated with the failure of
+reinsurance companies to fulfil their responsibilities.
+4 RISK MANAGEMENT (continued)
+8,424
+Debt securities
+- Held-to-maturity securities
+131
+131
+- Loans
+1,292
+1,292
+- Available-for-sale securities
+4,696
+4,696
+- Securities at fair value through
+profit or loss
+206
+Term deposits
+7,785
+-
+Cash and cash equivalents
+1,920
+927
+1,433
+391
+897
+Price risk arises mainly from the volatility of prices of equity securities held by the Group. Prices of equity securities are
+determined by market forces. The Group is subject to increased price risk mainly because China's capital markets are
+relatively volatile.
+The Group manages price risk by holding an appropriately diversified investment portfolio as permitted by laws and
+regulations designed to reduce the risk of concentration in any one specific industry or issuer.
+As at 31 December 2021, if the prices of all the Group's equity securities had increased or decreased by 10% with all
+other variables held constant, pre-tax profit for the year would have been RMB6,371 million (as at 31 December 2020:
+RMB6,596 million) higher or lower, respectively, mainly as a result of an increase or decrease in fair value of equity
+securities excluding available-for-sale securities. Pre-tax available-for-sale reserve in equity would have been RMB49,804
+million (as at 31 December 2020: RMB45,939 million) higher or lower, respectively, as a result of an increase or decrease
+in fair value of available-for-sale equity securities. If prices decreased to the extent that the impairment criteria were met,
+a portion of such decrease of the available-for-sale equity securities would reduce pre-tax profit through impairment.
+(iii) Currency risk
+Currency risk is the volatility of fair value or future cash flows of financial instruments resulted from changes in foreign
+currency exchange rates. The Group's currency risk exposure mainly arises from cash and cash equivalents, term
+deposits, debt investments, equity investments, interest-bearing loans and borrowings denominated in currencies other
+than the functional currency, such as US dollar, HK dollar, GB pound and EUR, etc.
+The following table summarises primary financial assets and financial liabilities denominated in currencies other than RMB
+as at 31 December 2021 and 2020, expressed in RMB equivalent:
+As at 31 December 2021
+Financial assets
+Equity securities
+198
+- Available-for-sale securities
+GB pound
+EUR
+Others
+Total
+10,989
+75,694
+86,683
+- Securities at fair value through
+profit or loss
+4,776
+US dollar HK dollar
+289
+Total
+31,795
+Annual Report 2021 | Financial Report 165
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk (continued)
+4.2.1 Market risk (continued)
+(iii) Currency risk (continued)
+As at 31 December 2020
+US dollar
+18,686
+HK dollar
+EUR
+Others
+Total
+Financial assets
+Equity securities
+- Available-for-sale securities
+9,711
+For the year ended 31 December 2021
+108,493
+GB pound
+(ii) Price risk
+18,686
+2,366
+76,789
+698
+1,500
+56
+991
+18
+11
+61
+296
+4,652
+7,785
+2,466
+111,773
+Financial liabilities
+Interest-bearing loans and
+other borrowings
+11,668
+Total
+11,668
+2,366
+3
+4.2.1 Market risk (continued)
+4,652
+4 RISK MANAGEMENT (continued)
+Unpaid claims expenses
+(50,275)
+697
+52,057
+(49,157)
+2,900
+56,938
+(34,301)
+22,637
+236,240
+(210,006)
+26,234
+41,945
+The following table indicates the claim development for short-term insurance contracts taking into account the impacts of
+ceded business:
+Estimated claims expenses
+(41,945)
+2017
+1 year later
+2 years later
+Short-term insurance contracts (accident year)
+2018
+2019
+2020
+2021
+Total
+RMB Million
+Year end
+33,700
+(34,328)
+50,972
+4.1 Insurance risk (continued)
+40,601
+4.2 Financial risk (continued)
+49,727
+52,589
+56,938
+34,845
+42,785
+51,051
+Accumulated claims expenses paid
+52,057
+41,945
+50,972
+34,328
+3 years later
+4 years later
+Estimated accumulated
+claims expenses
+34,328
+41,945
+34,328
+40,157
+34,328
+4.2.1 Market risk
+232,924
+(207,102)
+25,822
+Annual Report 2021 | Financial Report 163
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+4.2 Financial risk
+The Group's activities are exposed to a variety of financial risks. The key financial risk is that proceeds from the sale of
+financial assets will not be sufficient to fund the obligations arising from the Group's insurance and investment contracts.
+The most important components of financial risk are market risk, credit risk and liquidity risk.
+The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
+potential adverse effects on the financial performance of the Group. Risk management is carried out by a designated
+department under policies approved by management. The responsible department identifies, evaluates and manages
+financial risks in close cooperation with the Group's operating units. The Group provides written principles for overall risk
+management, as well as written policies covering specific areas, such as managing market risk, credit risk, and liquidity
+55,862
+(33,580)
+22,282
+risk.
+The sensitivity analyses below are based on a change in an assumption while holding all other assumptions constant. In
+practice this is unlikely to occur, and changes in some of the assumptions may be correlated, such as change in interest
+rate and change in market price.
+(i) Interest rate risk
+Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate due to changes
+in market interest rates. The Group's financial assets are principally composed of term deposits, debt securities and
+loans which are exposed to interest rate risk. Changes in the level of interest rates could have a significant impact on
+the Group's overall investment return. Many of the Group's insurance policies offer guaranteed returns to policyholders.
+These guarantees expose the Group to interest rate risk.
+The Group manages interest rate risk through adjustments to portfolio structure and duration, and, to the extent possible,
+by monitoring the mean duration of its assets and liabilities.
+The sensitivity analysis for interest rate risk illustrates how changes in interest income and the fair value of future cash
+flows of a financial instrument will fluctuate because of changes in market interest rates at the end of the reporting
+period.
+164 Annual Report 2021 | Financial Report
+For the year ended 31 December 2021
+As at 31 December 2021, if market interest rates were 50 basis points higher or lower with all other variables held
+constant, pre-tax profit for the year would have been RMB830 million (as at 31 December 2020: RMB627 million) higher or
+lower, respectively, mainly as a result of higher or lower interest income on floating rate cash and cash equivalents, term
+deposits, statutory deposits - restricted, debt securities and loans and the fair value losses or gains on debt securities
+assets at fair value through profit or loss. Pre-tax available-for-sale reserve in equity would have been RMB18,831 million
+(as at 31 December 2020: RMB13,906 million) lower or higher, as a result of a decrease or increase in the fair value of
+available-for-sale securities.
+49,175
+The Group manages financial risk by holding an appropriately diversified investment portfolio as permitted by laws and
+regulations designed to reduce the risk of concentration in any one specific industry or issuer. The structure of the
+investment portfolio held by the Group is disclosed in Note 10.
+51,260
+(48,406)
+2,854
+Notes to the Consolidated Financial Statements (continued)
+34,045
+34,560
+42,280
+55,862
+50,414
+51,260
+50,315
+(49,629)
+686
+41,442
+50,315
+34,045
+3 years later
+41,442
+51,994
+Estimated accumulated
+claims expenses
+34,045
+41,442
+Accumulated claims expenses paid
+(34,045)
+(41,442)
+Unpaid claims expenses
+4 years later
+99,649
+Trust schemes managed by affiliated entities
+and service fee
+Investment income
+99,649
+Note 1
+RMB million
+Investment income
+Interest held by
+the Group
+Maximum
+exposure
+RMB million
+8,232
+8,232
+158,182
+Funds managed by affiliated entities
+Funds managed by third parties
+2,096
+97,988
+1,298
+Note 1
+Debt investment schemes managed by
+RMB million
+affiliated entities
+Investment income
+9,172
+9,172
+18,275
+Debt investment schemes managed by
+Investment income
+63,229
+63,229
+Note 1
+Trust schemes managed by third parties
+Investment income
+1,298
+As at 31 December 2020
+Investment income
+Size
+15,770
+39,817
+Debt investment schemes managed by
+Investment income
+62,702
+62,702
+15,770
+Note 1
+Investment income
+and service fee
+Investment income
+1,296 Investment income
+1,296
+1,994
+Trust schemes managed by affiliated entities
+27,747
+97,988
+Trust schemes managed by third parties
+affiliated entities
+Debt investment schemes managed by
+third parties
+Note 1
+amount
+Carrying
+Unconsolidated structured entities
+Investment income
+and service fee
+Investment income
+107,372
+107,372
+Note 1
+Others managed by third parties Note 2
+14,150
+14,150
+28,368
+Others managed by affiliated entities Note 2
+and service fee
+Investment income
+51,172
+51,172
+of assets
+27,747
+RMB million
+third parties
+256,441
+23,094
+233,347
+Common stocks
+94,895
+94,895
+Preferred stocks
+RMB million
+RMB million
+inputs
+Level 3
+inputs
+Level 2
+Level 1
+Total
+Significant
+unobservable
+RMB million
+Significant
+observable
+52,127
+Wealth management products
+Government agency bonds
+Note 1
+58,561
+49,353
+9,208
+Government bonds
+52,127
+Debt securities
+136,456
+49,530
+21,010
+Others
+5,005
+5,005
+206,996
+in active
+markets
+Quoted prices
+Fair value measurement using
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+172 Annual Report 2021 | Financial Report
+Note 2: Others included wealth management products, special asset management schemes, and asset-backed plans, etc.
+Note 1: Funds, trust schemes, debt investment schemes and others managed by third parties were sponsored by third party financial institutions and the
+information related to size of these structured entities were not publicly available.
+Investment income
+and service fee
+Investment income
+4 RISK MANAGEMENT (continued)
+75,551
+Note 1
+Others managed by third parties Note 2
+12,681
+12,681
+290,937
+Others managed by affiliated entities Note 2
+75,551
+4.3 Disclosures about interest in unconsolidated structured entities (continued)
+(ii) The unconsolidated structured entities that the Group has sponsored but does not have interest in
+As at 31 December 2021, the size of the unconsolidated structured entities that the Group sponsored but had no
+interest was RMB633,503 million (as at 31 December 2020: RMB686,989 million), which were mainly funds, special
+asset management schemes, pension security products and pension products, etc., sponsored by the Group to generate
+management service fee income. In 2021, the management service fee from these structured entities was RMB1,995
+million (2020: RMB2,092 million), which was recorded as other income. The Group did not transfer assets to these
+structured entities.
+4.4 Fair value hierarchy
+Available-for-sale securities
+- Equity securities
+Funds
+Assets measured at fair value
+The following table presents the Group's quantitative disclosures of the fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2021:
+For the accounting policies regarding the determination of fair values of financial assets and liabilities, see Note 3.2.
+At 31 December 2021, assets classified as Level 3 accounted for approximately 21.61% of assets measured at fair
+value on a recurring basis. They primarily include unlisted equity securities and unlisted debt securities. Fair values are
+determined using valuation techniques, including discounted cash flow valuations, the comparable companies approach,
+etc. The determination of Level 3 is primarily based on the significance of certain unobservable inputs.
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 173
+As at 31 December 2021, assets classified as Level 2 accounted for approximately 48.57% of assets measured at
+fair value on a recurring basis. They primarily include certain debt securities and equity securities. Valuations are
+generally obtained from third party pricing services for identical or comparable assets, or through the use of valuation
+methodologies using observable market inputs, or recent quoted market prices. Valuation service providers typically
+gather, analyse and interpret information related to market transactions and other key valuation model inputs from
+multiple sources, and through the use of widely accepted internal valuation models, provide a theoretical quote on various
+securities. Debt securities are classified as Level 2 when they are valued at recent quoted prices from the Chinese
+interbank market or from valuation service providers.
+As at 31 December 2021, assets classified as Level 1 accounted for approximately 29.82% of assets measured at
+fair value on a recurring basis. Fair value measurements classified as Level 1 include certain debt securities, equity
+securities that are traded in an active exchange market or interbank market and open-ended funds with public market
+price quotations. The Group considers a combination of certain factors to determine whether a market for a financial
+instrument is active, including the occurrence of trades within the specific period, the respective trading volume, and the
+degree which the implied yields for a debt security for observed transactions differs from the Group's understanding of
+the current relevant market rates and information. Trading prices from the Chinese interbank market are determined by
+both trading counterparties and can be observed publicly. The Group adopted this price of the debt securities traded on
+the Chinese interbank market at the reporting date as their fair market value and classified the investments as Level 1:
+Open-ended funds also have active markets. Fund management companies publish the net asset value of these funds on
+their websites on each trade date. Investors subscribe for and redeem units of these funds in accordance with the funds'
+net asset value published by the fund management companies on each trade date. The Company adopted the unadjusted
+net asset value of the funds at the reporting date as their fair market value and classified the investments as Level 1.
+Under certain conditions, the Group may not receive a price quote from independent third-party pricing services. In this
+instance, the Group's valuation team may choose to apply an internally developed valuation method to the assets or
+liabilities being measured, determine the main inputs for valuation, and analyse the change of the valuation and report it
+to management. Key inputs involved in internal valuation services are not based on observable market data. They reflect
+assumptions made by management based on judgements and experiences. The assets or liabilities valued by this method
+are generally classified as Level 3.
+Other than Level 1 quoted prices, Level 2 fair value is based on valuation techniques using significant inputs, that are
+observable for the asset being measured, either directly or indirectly, for substantially the full term of the asset through
+corroboration with observable market data. Observable inputs generally used to measure the fair value of securities
+classified as Level 2 include quoted market prices for similar assets in active markets; quoted market prices in markets
+that are not active for identical or similar assets and other market observable inputs. This level includes the debt securities
+for which quotations are available from pricing services providers. Fair values provided by pricing services providers are
+subject to a number of validation procedures by management. These procedures include a review of the valuation models
+utilised and the results of these models, as well as the recalculation of prices obtained from pricing services at the end of
+each reporting period.
+Level 1 fair value is based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
+can obtain at the measurement date.
+and service fee
+Investment income
+Funds managed by third parties
+balances payable
+Maximum
+exposure
+RMB million
+9,860
+Annuity and other insurance
+(3,732)
+3,732
+through profit or loss
+Financial liabilities at fair value
+(122,249)
+55,031
+122,249
+Securities sold under agreements
+Contractual cash outflows
+(93,971) (5,618,867)
+68,882 (798,317)
+190,123 151,280
+(29,149) (13,861)
+288,212
+2,973,225
+to repurchase
+Investment contracts
+(55,031)
+other borrowings
+(2,996)
+(14,680)
+(4,384)
+(2,044)
+(328)
+(1,273)
+(19,951)
+558,025
+(3,732)
+697,016
+407,959
+Interest-bearing loans and
+Net cash inflow/(outflow)
+Subtotal
+2,664
+Lease liabilities
+34,992
+Bonds payable
+19,556
+3,499,661
+Insurance contracts
+Expected cash outflows
+Financial and insurance liabilities
+agreements to resell
+Securities purchased under
+720
+6,098
+297
+6,333
+7,947
+Statutory deposits - restricted
+197,867
+329,191
+75,364
+545,678
+Term deposits
+31,464
+2,260,215
+173,729
+1,753
+7,947
+Accrued investment income
+45,200
+616,777 2,435,697
+905,028
+577,976
+700,748
+3,907,620
+Subtotal
+56,655
+56,655
+Cash and cash equivalents
+20,730
+20,730
+Premiums receivable
+438
+565
+44,197
+(36,498)
+Interest held by
+the Group
+(1,250)
+(331)
+(76,598)
+These structured entities that the Group has interest in are guaranteed by third parties with higher credit ratings, or by
+pledging, or by having the fiscal budget income as the source of repayment, or by borrowers with higher credit ratings.
+The Group's interest in unconsolidated structured entities are recorded as securities at fair value through profit or
+loss, available-for-sale securities and loans. These structured entities typically raise funds by issuing securities or other
+beneficiary certificates. The purpose of these structured entities is primarily to generate management service fees,
+or provide finance to public and private infrastructure construction. Refer to Note 3.5 for the Group's consolidation
+judgements related to structured entities.
+4.3 Disclosures about interest in unconsolidated structured entities
+According to the Supervision Information System of the China Risk Oriented Solvency System, the latest Integrated Risk
+Rating result of the Company was Category A.
+(iv) Category D: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or
+several risks in operation, strategy, reputation and liquidity are severe.
+(iii) Category C: solvency ratios do not meet the requirements or solvency ratios meet the requirements but one or
+several risks in operation, strategy, reputation and liquidity are high;
+The Group did not guarantee or provide any financing support for the structured entities that the Group had interest in or
+sponsored.
+(ii) Category B: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are low;
+According to the solvency ratios results mentioned above, and the unquantifiable evaluation results of operational
+risk, strategic risk, reputational risk and liquidity risk of insurance companies, the CBIRC evaluates the comprehensive
+solvency of insurance companies and supervises insurance companies by classifying them into four categories:
+269%
+262%
+260%
+254%
+396,749
+(i) Category A: solvency ratios meet the requirements, and the operational risk, strategic risk, reputational risk and
+liquidity risk are very low;
+402,341
+Annual Report 2021 | Financial Report 171
+For the year ended 31 December 2021
+9,860
+168,466
+Funds managed by affiliated entities
+RMB million
+RMB million
+As at 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+of assets
+Carrying
+amount
+Unconsolidated structured entities
+The Group believes that the maximum exposure approximates the carrying amount of interest in these unconsolidated
+structured entities. The size of unconsolidated structured entities as well as the Group's carrying amount of the assets
+recognised in the financial statements relating to its interest in unconsolidated structured entities and the Group's
+maximum exposure are shown below:
+(i) The unconsolidated structured entities that the Group has interest in
+4.3 Disclosures about interest in unconsolidated structured entities (continued)
+4 RISK MANAGEMENT (continued)
+Size
+1,031,947
+1,066,939
+1,055,768
+As at
+31 December
+2020
+RMB million
+The Group's objectives for managing capital are to comply with the insurance capital requirements based on the minimum
+capital and actual capital required by the CBIRC, prevent risk in operation and safeguard the Group's ability to continue
+as a going concern so that it can continue to provide returns for equity holders and benefits for other stakeholders. The
+Group replenishes capital to improve the solvency ratio by issuing Core Tier 2 Capital Securities and bonds for capital
+replenishment according to the relevant laws and the approval of the relevant authorities.
+4.2.4 Capital management
+Although all investment contracts with DPF and investment contracts without DPF contain contractual options to
+surrender that can be exercised immediately by all policyholders at any time, the Group's expected cash flows
+(undiscounted) as shown in the above tables are based on past experience and future expectations. Should these
+contracts be surrendered immediately, it would cause a cash outflow of RMB68,289 million and RMB242,540 million,
+respectively for the year ended 31 December 2021 (2020: RMB64,445 million and RMB220,973 million, respectively),
+payable within one year.
+The liquidity analysis above does not include policyholder dividends payable of RMB124,949 million as at 31 December
+2021 (as at 31 December 2020: RMB122,510 million). As at 31 December 2021, declared dividends of RMB86,506
+million (as at 31 December 2020: RMB82,154 million) included in policyholder dividends payable have a maturity not later
+than one year. For the remaining policyholder dividends payable, the amount and timing of the undiscounted cash flows
+are indeterminate due to the uncertainty of future experiences including investment returns and are subject to future
+declarations by the Group.
+4.2.3 Liquidity risk (continued)
+4.2 Financial risk (continued)
+The Group is also subject to other local capital requirements, such as statutory deposits-restricted requirement, statutory
+insurance fund requirement, statutory reserve fund requirement and general reserve requirement discussed in detail in
+Note 10.4, Note 21 and Note 37, respectively.
+4 RISK MANAGEMENT (continued)
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 169
+The amounts set forth in the tables above for insurance and investment contracts in each column are the undiscounted
+cash flows representing expected future benefit payments taking into consideration of future premiums payments or
+deposits from policyholders. The excess cash inflows from matured financial assets will be reinvested to cover any future
+liquidity exposures. The estimate is subject to assumptions related to mortality, morbidity, the lapse rate, the loss ratio of
+short-term insurance contracts, expense and other assumptions. Actual experience may differ from estimates.
+540,179 (3,981,528)
+(6,417,225)
+(41)
+For the year ended 31 December 2021
+The Group manages capital to ensure its continuous and full compliance with the regulations mainly through monitoring
+its quarterly solvency ratios, as well as the solvency ratio based on annual stress testing.
+170 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+1,020,756
+RMB million
+2021
+31 December
+As at
+Comprehensive solvency ratio
+Core solvency ratio
+Minimum capital
+Actual capital
+Core capital
+The table below summarises the core and comprehensive solvency ratio, core capital, actual capital and minimum capital
+of the Company under Insurance Institution Solvency Regulations (No.1 - No. 17):
+4.2.4 Capital management (continued)
+4.2 Financial risk (continued)
+For the year ended 31 December 2021
+4 RISK MANAGEMENT (continued)
+128,789
+1,033,817
+228,289
+2,752
+Corporate bonds
+profit or loss
+Investment contracts at fair value through
+(3,732)
+profit or loss
+Financial liabilities at fair value through
+Liabilities measured at fair value
+(10)
+1,356,567
+566,716
+495,927
+Total
+2,752
+129,813
+Others
+293,924
+86,803
+Total
+(3,732)
+Equity
+securities
+Total
+Derivative
+financial
+assets
+Securities
+at fair value
+through
+profit or loss
+Debt
+securities
+Available-for-sale securities
+(3,742)
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2020:
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+176 Annual Report 2021 | Financial Report
+(3,742)
+(10)
+4.4 Fair value hierarchy (continued)
+9
+83,837
+2,957
+Others
+Common stocks
+Funds
+- Equity securities
+Securities at fair value through profit or loss
+144,721
+- Debt securities
+143,905
+Others
+81,795
+75,551
+6,244
+Subordinated bonds
+136,025
+816
+| | |
+16,731
+104
+Corporate bonds
+4,422
+3,450
+972
+Government agency bonds
+1,638
+1,302
+336
+Government bonds
+262
+221
+41
+16,835
+48,858
+524
+48,334
+Debt
+securities
+133,617
+RMB million
+RMB million
+Relationships
+Discounts for lack 31 December 2021: 11%-30%
+31 December 2020: 12%-35%
+of marketability
+companies
+Comparable
+31 December 2021:28,245
+31 December 2020: 28,162
+between fair value and
+unobservable inputs
+Equity
+securities
+inputs
+techniques
+Fair value
+Significant
+unobservable
+Valuation
+The table below presents information about the significant unobservable inputs used for primary financial instruments at
+fair value classified as Level 3 as at 31 December 2021 and 31 December 2020:
+Range
+4.4 Fair value hierarchy (continued)
+The fair value is inversely related to the
+discounts for lack of marketability
+approach
+Net asset value
+method
+Discounted cash
+flow method
+178 Annual Report 2021 | Financial Report
+The fair value is inversely related to
+discount rate
+The fair value is inversely related to
+discount rate
+31 December 2021: 3.21%-9.78%
+31 December 2020: 3.88% -9.82%
+31 December 2021: 2.69% -9.93%
+31 December 2020: 3.80%-6.07%
+Discount rate
+31 December 2021: 36,556
+31 December 2020: 36,697
+31 December 2021: 116,245
+31 December 2020: 84,212
+Discounted cash
+flow method
+securities
+Debt
+Discount rate
+N/A
+N/A
+N/A
+31 December 2021: 160,499
+31 December 2020: 143,905
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Total gains/(losses) recorded in
+(128)
+(121)
+(7)
+Total gains/(losses) recorded in
+profit or loss
+58,439
+other comprehensive income
+234,993
+16
+128,899
+19,953
+105,650
+38,486
+Opening balance
+Purchases
+RMB million
+RMB million
+428
+653
+Disposals or exercises
+7,127
+(5,969)
+Annual Report 2021 | Financial Report 177
+As at 31 December 2021 and 2020, significant unobservable inputs such as discount rate and discounts for lack of
+marketability were used in the valuation of primary assets and liabilities at fair value classified as Level 3. The fair value
+was not significantly sensitive to reasonable changes in these significant unobservable inputs.
+For the years ended 31 December 2021 and 2020, there were no significant changes in the business or economic
+circumstances that affected the fair value of the Group's financial assets and liabilities. There were also no
+reclassifications of financial assets.
+For the assets and liabilities measured at fair value on a recurring basis, during the year ended 31 December 2021,
+RMB16,499 million (2020: RMB12,084 million) debt securities were transferred from Level 1 to Level 2 within the fair
+value hierarchy, whereas RMB31,764 million (2020: RMB9,825 million) debt securities were transferred from Level 2 to
+Level 1. RMB4,196 million equity securities were transferred from Level 1 to Level 2 (2020: no equity securities were
+transferred from Level 1 to Level 2), whereas RMB5,520 million equity securities were transferred from Level 2 to Level
+1 (2020: no material equity securities were transferred from Level 2 to Level 1).
+The assets and liabilities whose fair value measurements are classified under Level 3 above do not have material impact
+on the profit or loss of the Group.
+293,924
+150,010
+143,905
+Closing balance
+(884)
+(884)
+Maturity
+(6,276)
+(307)
+7,780
+RMB million
+2,408
+Corporate bonds
+169,013
+Total
+(9)
+profit or loss
+Investment contracts at fair value through
+(3,416)
+profit or loss
+(3,425)
+Financial liabilities at fair value through
+43,250
+1,615,779
+349,127
+90,425
+45
+7,989
+5,643
+83,734
+43,150
+784,845
+Liabilities measured at fair value
+481,807
+(3,416)
+(3,425)
+Closing balance
+Maturity
+Disposals or exercises
+comprehensive income
+Total gains/(losses) recorded in other
+Transfer into Level 3
+(9)
+Purchases
+The following table presents the changes in Level 3 financial instruments for the year ended 31 December 2021:
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+174 Annual Report 2021 | Financial Report
+Opening balance
+Total
+100
+Others
+Funds
+Equity securities
+Securities at fair value through profit or loss
+161,054
+160,499
+555
+Common stocks
+Others
+94,149
+16,880
+Subordinated bonds
+203,147
+198,442
+4,705
+111,029
+Others
+17,572
+222
+6,646
+2,346
+Government agency bonds
+Corporate bonds
+1,393
+1,240
+153
+Government bonds
+- Debt securities
+271
+45,649
+17,794
+266
+5
+2,173
+43,476
+Available-for-sale securities
+Debt
+securities
+RMB million
+Securities
+at fair value
+through
+profit or loss
+Total
+22,994
+278,255
+Common stocks
+97,476
+97,476
+Funds
+301,249
+- Equity securities
+Assets measured at fair value
+RMB million
+RMB million
+RMB million
+RMB million
+inputs
+Level 3
+Available-for-sale securities
+Preferred stocks
+53,778
+53,778
+143,716
+25,297
+Government agency bonds
+49,256
+43,418
+5,838
+Government bonds
+Debt securities
+148,671
+96,232
+41,401
+11,038
+13,013
+13,013
+Wealth management products
+Others
+inputs
+Level 2
+259,753
+Level 1
+Significant
+unobservable
+4,073
+36
+36
+71,076
+293,924
+9
+(2,212)
+(2,876)
+150,010
+43,661
+143,905
+RMB million
+RMB million
+RMB million
+Debt
+securities
+Equity
+securities
+27,415
+1,861
+(2,876)
+(14,894)
+Significant
+observable
+in active
+markets
+Quoted prices
+Fair value measurement using
+The following table presents the Group's quantitative disclosures of the fair value measurement hierarchy for assets and
+liabilities measured at fair value as at 31 December 2020:
+4.4 Fair value hierarchy (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 175
+349,127
+45
+188,583
+160,499
+(14,894)
+Total
+219,840
+than
+658,535
+1 year but 3 years but
+not later not later
+Later than
+Later than
+than
+Not later
+Contractual and expected cash flows
+(undiscounted)
+Later
+Without
+maturity
+As at 31 December 2020
+4.2 Financial risk (continued)
+4 RISK MANAGEMENT (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+235,901
+Carrying
+value
+than
+4.2.3 Liquidity risk (continued)
+1 year
+Loans
+than
+287,939
+349,334
+1,865,794
+Debt securities
+700,748
+136,885
+Equity securities
+Contractual cash inflows
+3 years
+Financial assets
+RMB Million
+5 years
+700,748
+5 years
+Deductions
+(1,518)
+(1)
+(1,517)
+(1,168)
+(1)
+(1,167)
+329
+As at 1 January 2020
+Charge for the year
+1
+As at 31 December 2020
+As at 31 December 2020
+(2,355)
+(1)
+(2,356)
+Impairment
+As at 1 January 2020
+Net book value
+As at 1 January 2020
+As at 31 December 2020
+3,519
+3,075
+Accumulated depreciation
+330
+5,432
+Total
+5,430
+3,075
+1
+3,076
+2,517
+1
+2,518
+Cost
+Buildings
+Others
+1
+RMB million
+2
+As at 1 January 2020
+2
+4,688
+Additions
+1,157
+1
+1,158
+Deductions
+(413)
+(1)
+(414)
+As at 31 December 2020
+4,686
+1
+31 December
+The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
+year ended 31 December 2021 (2020: same).
+Cost
+As at 1 January 2021
+Additions
+As at 31 December 2021
+Accumulated depreciation
+As at 1 January 2021
+Additions
+As at 31 December 2021
+Net book value
+As at 1 January 2021
+As at 31 December 2021
+Fair value
+As at 1 January 2021
+As at 31 December 2021
+15,385
+(414)
+14,971
+(1,168)
+(429)
+(1,597)
+14,217
+13,374
+17,285
+16,626
+Annual Report 2021 | Financial Report 187
+Notes to the Consolidated Financial Statements (continued)
+RMB million
+Buildings
+1,893
+1,840
+The Group's right-of-use assets include the above assets and land use rights disclosed in Note 14.
+186 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+7 LEASES (continued)
+(b) The amounts recognised in profit or loss in relation to leases are as follows:
+Interest on lease liabilities
+Depreciation charge of right-of-use assets
+Expense relating to short-term leases
+Expense relating to leases of low-value assets
+(except for short-term lease liabilities)
+Total
+8 INVESTMENT PROPERTIES
+3,520
+3,076
+As at
+31 December
+2021
+(2,854)
+2020
+RMB million
+RMB million
+96
+1,411
+113
+332
+1,518
+260
+1
+2
+As at
+(1)
+RMB million
+(1,411)
+Others
+Accident
+Health
+Life
+For the year ended 31 December 2020
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 181
+4,404,427
+316,360
+Total
+Others
+Unallocated
+4,088,067
+29,052
+11,120
+266,201
+3,781,694
+Segment liabilities
+115,128
+22,102
+379
+Elimination
+Total
+RMB million
+Revenues
+154,497
+3,870
+462
+9,202
+140,963
+Investment income
+604,666
+15,975
+109,091
+479,600
+Net premiums earned
+5,276
+294,897
+73,747
+- Annuity
+- Endowment
+- Whole life
+2,674
+- Term life
+612,265
+16,583
+115,089
+480,593
+Gross written premiums
+109,275
+913
+87,371
+239,446
+257,953
+569
+4,496,312
+223,824
+11,668
+259,618
+16,044
+9,893
+4,001,202
+For the year ended 31 December 2021
+Total
+Elimination
+Others
+Accident
+As at 31 December 2021
+For the year ended 31 December 2021
+Health
+Life
+Unallocated
+Segment assets
+Others
+Financial assets
+(2,356)
+(1)
+284,459
+4,011,095
+275,662
+12,237
+6,950
+672
+14,536
+217,288
+repurchase
+Securities sold under agreements to
+313,594
+17,490
+296,104
+Investment contracts
+3,419,899
+Others
+10,069
+3,180,931
+Insurance contracts
+Liabilities
+4,891,085
+55,916
+54,398
+Total
+Others
+Property, plant and equipment
+4,780,771
+481,777
+228,899
+8 INVESTMENT PROPERTIES (continued)
+2,487
+As at 1 January 2020
+17,051
+126,908
+663,209
+Segment revenues
+(3,134)
+3,134
+Including: inter-segment revenue
+10,005
+(3,134)
+11,826
+85
+1,228
+Other income
+4,943
+1,952
+9
+187
+2,795
+Net fair value gains through profit or loss
+20,344
+262
+58
+1,256
+20,896
+(3,134)
+824,930
+Benefits, claims and expenses
+(144)
+(26,367)
+participation in profits
+Policyholder dividends resulting from
+(10,628)
+(405)
+(10,223)
+Investment contract benefits
+(442,370)
+(208)
+(28,956)
+18,768
+(413,206)
+(55,030)
+(6,954)
+(48,076)
+claim adjustment expenses
+Accident and health claims and
+(121,354)
+(41)
+(6,656)
+(114,657)
+Life insurance death and other benefits
+Insurance benefits and claims expenses
+Increase in insurance contract liabilities
+Net realised gains on financial assets
+178,387
+611,251
+Health
+Life
+For the year ended 31 December 2021
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 179
+Financial assets, securities sold under agreements to repurchase and derivative financial liabilities are allocated among
+segments in proportion to the respective segments' average liabilities of insurance contracts and investment contracts
+at the beginning and end of the year. Insurance and investment contract liabilities are presented under the respective
+segments. The remaining assets and liabilities are not allocated.
+5.3 Allocation basis of assets and liabilities
+Investment income, net realised gains on financial assets, net fair value gains through profit or loss and foreign exchange
+gains/(losses) within other expenses are allocated among segments in proportion to the respective segments' average
+liabilities of insurance contracts and investment contracts at the beginning and end of the year. Administrative expenses
+are allocated among segments in proportion to the unit cost of respective products in the different segments. Unallocated
+other income and other expenses are presented in the "Others" segment directly. Income tax is not allocated.
+5.2 Allocation basis of income and expenses
+Accident
+Other businesses relate primarily to income and cost of the agency business in respect of transactions with CLIC, etc.,
+as described in Note 35, net share of profit of associates and joint ventures, income and expenses of subsidiaries, and
+unallocated income and expenditure of the Group.
+Accident insurance business relates primarily to the sale of accident insurance policies.
+(iii) Accident insurance business (Accident)
+Health insurance business relates primarily to the sale of health insurance policies, including those health insurance
+policies without significant insurance risk transferred.
+(ii) Health insurance business (Health)
+Life insurance business relates primarily to the sale of life insurance policies, including those life insurance policies
+without significant insurance risk transferred.
+(i) Life insurance business (Life)
+The Group operates in four operating segments:
+5.1 Operating segments
+5 SEGMENT INFORMATION
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+(iv) Other businesses (Others)
+(26,511)
+Others
+Elimination
+6,856
+496
+10,831
+160,204
+Investment income
+16,488
+114,549
+480,214
+Net premiums earned
+311,096
+- Annuity
+RMB million
+97,791
+69,923
+- Whole life
+2,501
+- Term life
+618,327
+16,407
+120,609
+481,311
+Gross written premiums
+Revenues
+Total
+- Endowment
+Cost
+Underwriting and policy acquisition costs
+(21,021)
+Assets
+5 SEGMENT INFORMATION (continued)
+Notes to the Consolidated Financial Statements (continued)
+180 Annual Report 2021 | Financial Report
+5,287
+641
+368
+1,359
+2,919
+Depreciation and amortisation
+(4,563)
+1,097
+(16)
+(354)
+(5,290)
+attributable to equity holders of
+the Company
+1,491
+50,921
+Other comprehensive income
+- Non-controlling interests
+- Equity holders of the Company
+Attributable to
+52,412
+The Group uses the weighted average of market comparison approach and income approach as its valuation method to
+estimate the fair value of its investment properties. Under the market comparison approach, the estimated fair value of
+a property is based on the average sale price of comparable properties recently sold; the income approach is to convert
+projected future incomes of investment properties into value by rate of return, rate of capitalization or income multiplier.
+According to the calculation results of the above two valuation approaches, with consideration of the comprehensive
+adjustment coefficient, which is composed of a number of adjusting factors, including the time and the conditions of sale,
+the geographical location, age, decoration, floor area, lot size of the property and other factors.
+The fair value of investment properties of the Group as at 31 December 2021 amounted to RMB16,626 million (as at
+31 December 2020: RMB17,285 million), which was estimated by the Group having regards to valuations performed by
+independent appraisers. The investment properties were classified as Level 3 in the fair value hierarchy.
+As at 31 December 2021, the net book value of investment properties which were in process to obtain title certificates
+was RMB981 million (as at 31 December 2020: RMB1,044 million).
+The Group has no restrictions on the use of its investment properties and no contractual obligations to each investment
+property purchased, constructed or developed or for repairs, maintenance and enhancements.
+Additions
+As at 31 December 2020
+Accumulated depreciation
+As at 1 January 2020
+Additions
+As at 31 December 2020
+Net book value
+As at 1 January 2020
+As at 31 December 2020
+Fair value
+As at 1 January 2020
+Net profit
+As at 31 December 2020
+12,898
+Net realised gains on financial assets
+15,385
+(757)
+(411)
+(1,168)
+12,141
+14,217
+14,870
+17,285
+The Company leases part of its investment properties to its subsidiaries and charges rentals based on the areas occupied
+by the respective entities. These properties are categorised as property, plant and equipment of the Group in the
+consolidated statement of financial position.
+Buildings
+RMB million
+1,917
+Income tax
+50,495
+(270)
+(1,307)
+(8,961)
+Other expenses
+(1,253)
+(99)
+(367)
+(787)
+Statutory insurance fund contribution
+(40,808)
+(3,452)
+(8,063)
+(2,948)
+(23,339)
+Administrative expenses
+(5,598)
+(668)
+(14)
+(308)
+(4,608)
+Finance costs
+(65,744)
+(1,598)
+(4,835)
+(11,069)
+(38,290)
+3,134
+Including: inter-segment expenses
+17,443
+1,682
+8,599
+22,771
+Segment results
+10,328
+10,328
+and joint ventures
+Including: share of profit of associates
+10,328
+10,328
+(15,467)
+associates and joint ventures
+(784,763)
+3,134
+(13,781)
+(15,369)
+(118,309)
+(640,438)
+Segment benefits, claims and expenses
+3,134
+(9)
+(196)
+(2,929)
+Net gains on investments of
+13,523
+Including: inter-segment revenue
+44
+6 PROPERTY, PLANT AND EQUIPMENT (continued)
+Notes to the Consolidated Financial Statements (continued)
+184 Annual Report 2021 | Financial Report
+54,398
+762
+6,789
+315
+2,574
+43,958
+As at 31 December 2021
+52,747
+977
+11,332
+461
+2,658
+37,319
+As at 1 January 2021
+Net book value
+(25)
+(1)
+(24)
+As at 31 December 2021
+Disposals
+For the year ended 31 December 2021
+Cost
+Office
+equipment,
+furniture and
+Buildings
+5,509
+131
+626
+222
+Additions
+(121)
+322
+(6,456)
+3
+6,010
+Transfers upon completion
+Charge for the year
+71,500
+14,378
+1,364
+8,368
+44,771
+As at 1 January 2020
+RMB million
+Total
+construction improvements
+Leasehold
+Motor Assets under
+vehicles
+fixtures
+2,619
+6,488
+(25)
+(24)
+6,790
+1,311
+8,351
+58,595
+As at 31 December 2021
+(1,506)
+(548)
+(46)
+(456)
+(456)
+Disposals
+(209)
+(209)
+Transfers into investment properties
+5,403
+3,267
+5
+716
+1,415
+Additions
+(211)
+182
+(7,601)
+2,432
+77,479
+Accumulated depreciation
+As at 1 January 2021
+As at 1 January 2021
+Impairment
+(23,056)
+(1,670)
+(996)
+(5,777)
+(14,613)
+As at 31 December 2021
+1,279
+44
+434
+(1)
+271
+(3,105)
+(379)
+(149)
+(778)
+(1,799)
+Charge for the year
+(21,230)
+(1,821)
+(891)
+(5,433)
+(13,085)
+Disposals
+Transfers into investment properties
+(2,098)
+(2,098)
+5,432
+2
+5,430
+As at 1 January 2021
+RMB million
+Total
+Others
+Buildings
+Cost
+(a) Right-of-use assets
+7 LEASES
+Under the market comparison approach and income approach, an increase (decrease) in the comprehensive adjustment
+coefficient will result in an increase (decrease) in the fair value of investment properties.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 185
+As at 31 December 2021, the net book value of buildings above which were in process to obtain title certificates was
+RMB9,605 million (as at 31 December 2020: RMB6, 159 million).
+52,747
+977
+11,332
+461
+2,658
+37,319
+51,758
+Additions
+972
+1
+973
+(1)
+33-3
+(2,853)
+912
+(1,410)
+As at 31 December 2021
+As at 1 January 2021
+Net book value
+As at 31 December 2021
+As at 1 January 2021
+Impairment
+1,038
+As at 31 December 2021
+(2,355)
+As at 1 January 2021
+Accumulated depreciation
+5,372
+2
+5,370
+As at 31 December 2021
+(1,033)
+(1)
+(1,032)
+Deductions
+Charge for the year
+Deductions
+14,377
+523
+2,884
+(189)
+(725)
+(1,582)
+Charge for the year
+(19,717)
+(1,581)
+(841)
+(5,484)
+(11,811)
+As at 1 January 2020
+Accumulated depreciation
+(377)
+74,002
+11,333
+1,352
+8,091
+50,428
+As at 31 December 2020
+(1,767)
+(143)
+(143)
+(906)
+(575)
+Disposals
+2,798
+7,208
+(2,873)
+308
+32,936
+(25)
+(24)
+EE
+As at 31 December 2020
+As at 1 January 2020
+Net book value
+As at 31 December 2020
+Disposals
+Charge for the year
+(25)
+Disposals
+(24)
+Impairment
+(21,230)
+(1,821)
+(891)
+(5,433)
+(13,085)
+As at 31 December 2020
+1,360
+137
+139
+776
+As at 1 January 2020
+877
+Transfers upon completion
+2,798
+2,448
+(4,851)
+(241)
+(1,051)
+(8,575)
+Other expenses
+(1,229)
+(94)
+(302)
+(833)
+Statutory insurance fund contribution
+(37,706)
+(3,020)
+(2,649)
+(8,677)
+(23,360)
+Administrative expenses
+(3,747)
+(759)
+(7)
+(183)
+(2,798)
+Finance costs
+(12,270)
+Including: inter-segment expenses
+(2,292)
+(148)
+54,476
+14,220
+572
+11,611
+28,073
+8,336
+8,336
+Net profit
+Income tax
+Segment results
+and joint ventures
+(84,361)
+7,666
+(758,239)
+2,448
+(10,914)
+(15,967)
+(108,782)
+(625,024)
+Including: share of profit of associates
+Net gains on investments of associates and
+joint ventures
+Segment benefits, claims and expenses
+2,448
+(8)
+7,666
+(3,103)
+(2,284)
+(15,921)
+805,049
+(2,448)
+17,468
+16,539
+120,393
+653,097
+Segment revenues
+(2,448)
+2,448
+9,403
+(2,448)
+10,492
+75
+1,284
+Other income
+21,900
+2,967
+58
+1,148
+17,727
+Net fair value gains through profit or loss
+14,583
+139
+Benefits, claims and expenses
+Insurance benefits and claims expenses
+Life insurance death and other benefits
+(108,862)
+(60,841)
+Underwriting and policy acquisition costs
+(28,279)
+(150)
+(28,129)
+participation in profits
+Policyholder dividends resulting from
+(9,846)
+(352)
+(9,494)
+Investment contract benefits
+(5,315)
+(414,797)
+(32,445)
+(382,132)
+Increase in insurance contract liabilities
+(52,395)
+(7,408)
+(44,987)
+claim adjustment expenses
+Accident and health claims and
+(113,609)
+(33)
+(4,714)
+(220)
+51,373
+Attributable to
+- Equity holders of the Company
+3,233,223
+Segment liabilities
+114,339
+23,288
+370
+6,013
+84,668
+Others
+122,249
+5,665
+358
+7,070
+109,156
+repurchase
+Securities sold under agreements to
+288,212
+16,455
+271,757
+Investment contracts
+2,973,225
+10,096
+195,487
+2,767,642
+225,025
+10,824
+28,953
+3,498,025
+11,333
+1,352
+8,091
+50,428
+As at 1 January 2021
+RMB million
+Total
+construction improvements
+vehicles
+fixtures
+Buildings
+Insurance contracts
+Leasehold
+Office
+equipment,
+furniture and
+Cost
+6 PROPERTY, PLANT AND EQUIPMENT
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 183
+3,795,529
+Total
+297,504
+Others
+Unallocated
+Motor Assets under
+Liabilities
+Total
+Others
+Segment assets
+Others
+Financial assets
+Assets
+5 SEGMENT INFORMATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+182 Annual Report 2021 | Financial Report
+- 5,162
+607
+351
+Unallocated
+1,118
+Depreciation and amortisation
+25,699
+402
+78
+1,534
+23,685
+attributable to equity holders of
+the Company
+1,116
+50,257
+Other comprehensive income
+- Non-controlling interests
+3,086
+74,002
+Property, plant and equipment
+Health
+4,252,466
+46,626
+52,747
+4,153,093
+356,860
+11,639
+237,498
+3,547,096
+265,274
+239,584
+675
+Life
+14,939
+3,887,819
+117,276
+10,964
+222,559
+3,537,020
+RMB million
+Total
+Elimination
+Others
+Accident
+As at 31 December 2020
+10,076
+530
+188 Annual Report 2021 | Financial Report
+As a company listed in three listing venues, China
+Life committed to the best practices of corporate
+governance, and a sound and effective corporate
+governance structure has played an important role
+in promoting the steady operation and development
+of the Company. During the Reporting Period, we
+successfully completed the election of and formed
+the seventh session of the Board of Directors and
+the Board of Supervisors, further improving the
+governance structure and effectiveness. China Life
+will continue to push forward the construction of
+a corporate governance system well aligned with
+the characteristics of Chinese state-owned financial
+enterprises and put into more efforts to promote the
+high-quality development of the Company.
+5,598
+Finance costs
+acquisition costs
+A decrease in regular premiums of new policies
+-22.1%
+84,361
+65,744
+Underwriting and policy
+participation in profits
+A decrease in investment income from the
+participating accounts
+resulting from
+-6.3%
+28,279
+26,511
+Policyholder dividends
+accounts
+benefits
+An increase in the scale of universal insurance
+7.9%
+9,846
+10,628
+Investment contract
+An increase in the change of insurance contract
+liabilities
+claims expenses
+6.5%
+3,747
+580,801
+49.4%
+Administrative expenses
+The
+Dear Shareholders,
+Letter to Shareholders
+Being committed to the new development concept
+at a new development stage, the Company fully
+implemented the national strategy and deployment,
+and made its contributions to the new development
+landscape. With stability as the top priority, we
+worked hard and overcame many difficulties to
+push forward the high-quality development of the
+Company, achieving steady progress and setting
+up a good start for the 14th Five-Year Plan period.
+HIGH-QUALITY
+DEVELOPMENT
+PURSUING THE
+$
+9
+Annual Report 2021 | Prelude
+Due to the stable and sound business
+operations of the Company, satisfactory
+results in investment, and updated discount
+rate assumptions for reserves of traditional
+insurance contracts based on market
+information as at the date of the statement of
+financial position
+Due to the combined impact of income tax
+payable and deferred income tax
+Company
+equity holders of the
+1.3%
+50,257
+50,921
+Net profit attributable to
+N/A
+3,103
+(1,917)
+Income tax
+Due to the expiration of policies on temporary
+expenses deduction
+8.2%
+37,706
+40,808
+An increase in interest paid for securities sold
+under agreements to repurchase
+year 2021 marked a starting point for China to build
+a new development landscape. Being committed to
+the new development concept at a new development
+stage, the Company fully implemented the national
+strategy and deployment, and made its contributions
+to the new development landscape. With stability
+as the top priority, we worked hard and overcame
+many difficulties to push forward the high-quality
+development of the Company, achieving steady
+progress and setting up a good start for the 14th Five-
+Year Plan period.
+618,754
+An increase in the income of management
+service fees by subsidiaries
+Great efforts made by the Company in the
+development of health insurance business
+RMB million
+Investment income
+business
+Accident insurance
+5.0%
+109,091
+114,549
+Health insurance business
+0.1%
+480,214
+Life insurance business
+1.1%
+604,666
+611,251
+Net premiums earned
+Main Reasons for Change
+Change
+2020
+2021
+of Comprehensive Income
+Consolidated Statement
+Major Items of the
+For the year ended 31 December
+We coordinated development and security and
+consistently strengthened our risk management
+and control. We upheld a systematic concept to
+strengthen asset-liability management, adhered to
+robust and prudent operations and firmly held on to the
+bottom line of no systematic financial risks. By strictly
+implementing the regulatory requirements, optimizing
+the enterprise-wide risk management system and
+improving the risk management mechanism, we
+consistently strengthened our risk control measures
+and risk management capability. In the integrated risk
+rating for insurance industry conducted by CBIRC, the
+Company has received the rating of Class A for 15
+consecutive quarters.
+16,488
+Insurance benefits and
+15,975
+178,387
+6.4%
+9,403
+10,005
+An increase in the profits of certain associates
+Due to the market value fluctuation of
+securities at fair value through profit or loss and
+investment operations
+An increase in spread income of stocks in
+available-for-sale securities
+Other income
+ventures
+of associates and joint
+34.7%
+7,666
+10,328
+Net gains on investments
+-77.4%
+21,900
+4,943
+Net fair value gains through
+profit or loss
+financial assets
+39.5%
+14,583
+20,344
+Net realised gains on
+An increase in interest income from debt-type
+investments
+15.5%
+154,497
+3.2%
+During the Reporting Period, the Company's gross
+written premiums amounted to RMB618,327 million,
+and the embedded value reached RMB1,203,008
+million, maintaining the leading position in the industry
+in both business scale and value. Our total assets were
+RMB4,891,085 million, increasing by 15.0% from the
+end of 2020. Net profit attributable to equity holders
+of the Company was RMB50,921 million, an increase
+of 1.3% year on year. As at the end of the Reporting
+Period, the core solvency ratio and the comprehensive
+solvency ratio were 253.70% and 262.41%,
+respectively, which remained at a high level. The Board
+has proposed to distribute an annual cash dividend of
+RMB0.65 per share (inclusive of tax), and such proposal
+will be submitted to the 2021 Annual General Meeting
+for review and discussion.
+479,600
+Company was awarded Grade A for six consecutive
+years. In 2021, the Company ranked 49th and 8th in
+the Forbes Global 2000 and the Fortune China 500,
+respectively, and received many honors, such as "Best
+Listed Company and Listed Company with the Best
+Investment Value for the 14th Five-Year Plan Period"
+from the 11th China Securities 2021 "Golden Bauhinia”
+Awards and "Most Respected Enterprise in Asia
+(insurance industry)" from the Institutional Investor.
+98,410
+115,421
+First-year regular premiums with a payment duration of
+ten years or longer
+41,682
+56,398
+Renewal premiums
+442,463
+418,326
+Gross investment income
+214,057
+198,596
+Net profit attributable to equity holders of the Company
+50,921
+50,257
+Value of one year's sales
+Policy Persistency Rate (14 months)1 (%)
+Policy Persistency Rate (26 months)¹ (%)
+Surrender Rate² (%)
+44,780
+58,373
+Including: Individual agent business sector
+42,945
+57,669
+80.50
+85.70
+81.10
+Including: First-year regular premiums
+82.40
+193,939
+Premiums from new policies
+Looking back at 2021, the domestic economy was
+facing several challenges, such as a complicated
+and severe international environment and sporadic
+outbreaks of the pandemic, and development of the
+insurance industry saw great pressure with the release
+of demands for insurance consumption slowing down,
+and the industry still in the throes of transformation
+and upgrade. China Life, being people-centered,
+actively responded to major challenges by focusing
+on its principal businesses, made arduous efforts in
+coordinating pandemic prevention and control as well
+as operation management, and achieved prominent
+progress in a variety of fields, such as serving the
+overall national development, business performance,
+transformation and innovation and risk control, etc.,
+which further enhanced the Company's comprehensive
+strengths. In the evaluation of operations of insurance
+companies by the Insurance Association of China, the
+Annual Report 2021 | Letter to Shareholders 13
+2022 is an important year for fully building a
+modern socialist country and marching towards
+the second Centenary Goal. At present, China's
+economic development faces triple pressures of
+shrinking demands, supply disruption, and weakened
+expectations of growth, which are also seen in the
+life insurance industry to some extent. Despite
+complicated situations, we firmly believe that the long-
+term positive fundamentals of China's life insurance
+industry remain unchanged. From the perspective of
+macro environment, China's economy will maintain
+the sound development momentum in the long-term,
+and the overall social situation will remain stable. As
+the financial reform and opening up is accelerated
+in all aspects, high-quality development has become
+the key for the life insurance industry to achieve new
+progresses. With the in-depth development of the
+insurance supply, China will remain as one of the largest
+incremental markets of life insurance around the world.
+From the perspective of public demands, as awareness
+of insurance increases and consumption demands are
+upgraded, the demands for risk management, wealth
+management and health management will continue
+to expand, and the life insurance industry will open
+up a broader development space. The life insurance
+industry is still at an important stage full of strategic
+opportunities, and the long-term development situation
+remains promising.
+"To see a thousand miles afar, we should ascend
+a higher mountain". China Life and its predecessor
+are the participants, who witnessed and promoted
+the commencement, development and progress of
+China's insurance industry, and grow together with
+the industry. Standing at a new starting point, we will
+strengthen our judgement on the current situation
+and future trend, and properly analyze challenges and
+opportunities. With the focus on serving the national
+development and the goal of "Protecting People's Good
+Life", we will seize strategic development opportunities
+and carry out various tasks in a down-to-earth manner.
+By sticking to the original role of insurance, we will
+consistently deepen the supply-side reforms and
+improve our capacity of insurance service supply with
+steady progress. Besides, we will lead the high-quality
+development of the industry with our own high-quality
+development, aiming to building a world-class life
+insurance company and rewarding the shareholders and
+people from all walks of life with satisfactory operating
+performances.
+Board of Directors of
+China Life Insurance Company Limited
+24 March 2022
+14 Annual Report 2021 | Letter to Shareholders
+and Analysis
+REVIEW OF BUSINESS OPERATIONS
+IN 2021
+In 2021, the worldwide COVID-19 pandemic continued
+to evolve, and the domestic economy was facing triple
+pressures of shrinking demands, supply disruption, and
+weakened expectations of growth amid a complicated
+and challenging international environment. Under the
+unprecedented pressures, such as the decelerated
+release of insurance demands and decline of sales force,
+the growth of life insurance industry further slowed
+down in terms of premiums. In addition, the insurance
+industry regulator continued to promote the return to its
+original role by the insurance sector, further improved
+system building, and bolstered regulations in the areas
+of insurance product management, sales channel
+development, market behaviors, operations and services
+as well as corporate governance, with an aim at the high-
+quality development of the industry.
+During the Reporting Period, the Company adhered to
+the strategic core of "Three Major Transformations, Dual
+Centers and Dual Focuses, Asset-liability Interaction,"
+and upheld the operational guideline of "prioritizing
+business value, strengthening sales force, achieving
+stable growth, upgrading technology, optimizing customer
+services and guarding against risks." By concentrating
+efforts and overcoming difficulties with strong resilience,
+the Company steadfastly promoted its high-quality
+development while proceeding with routine pandemic
+prevention and control, and achieved stable and sound
+business operations as whole, with its market leading
+position further solidified. The quality and efficiency of
+its operations and services were significantly improved,
+digital transformation was sped up, and its comprehensive
+strengths were greatly enhanced.
+Annual Report 2021 | Management Discussion and Analysis 15
+From left to right:
+Ms. Zhang Di, Mr. Zhao Guodong, Mr. Zhan Zhong, Ms. Huang Xiumei, Mr. Su Hengxuan, Mr. Li Mingguang, Mr. Ruan Qi, Ms. Yang Hong, Mr. Liu Yuejin
+The Company pushed forward the "Dingxin Project"
+in greater depth and made breakthroughs in several
+aspects. The optimization of business modes achieved
+remarkable results. As the customer-centric sales
+deployment of "Yi Ti Duo Yuan" was further deepened,
+the individual agent business sector consistently
+prioritized business value and made great efforts in
+improving the quality of its sales force. The diversified
+business sector further optimized its business modes,
+which saw improved capability of business value creation.
+The achievements of market-oriented reforms were
+continuously consolidated. The market-oriented
+investment management system was further advanced,
+the classification management system of branches
+was continuously improved, and intensified efforts
+were made in promoting the assessment, incentive and
+restraint mechanisms for managers in key cities with
+optimized human resource management. The efficiency
+of technology empowerment continued to improve.
+The management system based on tech products
+was comprehensively implemented to facilitate the
+integration of technology and business operations, and
+digital transformation was pushed forward continuously.
+China Life "Internet of Things" fully covered all business
+units and sales outlets across China, and technology
+empowerment demonstrated significant effectiveness.
+The upgrading of operation model achieved
+remarkable results. Key breakthroughs were made for
+the operation model of "multiple accesses at the front-
+end, intelligent centralization at the headquarters and
+comprehensive sharing for operations", and the service
+efficiency and experience, operation control foundation
+and operational risk control capability were significantly
+enhanced.
+16 Annual Report 2021 | Management Discussion and Analysis
+Key Performance Indicators of 2021
+RMB million
+2021
+2020
+Gross written premiums
+618,327
+612,265
+175,864
+1.20
+Management
+Discussion
+As at
+Short-term Single
+insurance premiums
+2,402
+premiums
+76,116
+First-year
+regular
+premiums
+115,421
+2020
+Renewal premiums
+418,326
+Value of one year's sales (RMB million)
+2021
+2020
+44,780 ▼
+58,373 ▼
+Embedded value (RMB million)
+As at 31 December 2021
+1,203,008 ▼
+18 Annual Report 2021 | Management Discussion and Analysis
+As at 31 December 2020
+12.2%
+We enhanced technology-driven development and
+the digital transformation was further advanced.
+In the digital era, we constantly strengthened the
+driving and supporting role of technology innovation,
+accelerated the digital transformation under the
+principle of "Collective Wisdom, Agility, and Iteration",
+enhanced the technology-empowered value creation
+and proceeded with creating a digital insurance
+ecosystem to facilitate the construction of Digital China
+Life. We comprehensively upgraded the technological
+architecture, reinforced the integration of technology
+and business operations, and pushed forward the
+whole process of operation and management to be
+more digitalized and intelligent. Our technological
+adaptability was greatly improved with technology
+empowerment becoming increasingly prominent. Our
+capacity of data governance and security management
+was also firmly enhanced.
+We focused on enhancing the growth drivers
+through continuously deepening reforms and
+innovation. We maintained strategic consistency and
+implemented the "Dingxin Project" in greater depth,
+laying a solid foundation for the steady development of
+the Company at a new stage. As the sales deployment
+of "Yi Ti Duo Yuan" was further deepened, we
+actively explored on the sales system reform and
+firmly promoted the transformation of the largest sales
+force in the industry to become more professional
+and specialized. The number of our high-performance
+agents was stable, and the foundation of our sales.
+force remained solid. The market-oriented incentive,
+assessment and restraint mechanism was further
+promoted, and the Company's investment center
+witnessed prominent results in its market-oriented
+reforms. Being customer-centric, we proceeded with
+the reform in insurance product supply to improve
+the multi-dimensional and multi-level product system.
+We strengthened service innovation and centralized
+operations, and continuously improved our customer
+experience with "convenient, quality and caring"
+services, with the proportion of highly satisfied
+customers remained at a high level. The Company
+constantly implemented the strategy of "Inclusive
+Healthcare" and "Integrated Aged-care" to expand new
+development space for long-term deployment.
+We demonstrated strong resilience and consistently
+maintained industry leadership in both business
+scale and value. In 2021, the insurance industry
+developed under multiple challenges. Prioritizing
+business value creation, the Company's gross written
+premiums reached a new high after exceeding RMB600
+billion in 2020, and the embedded value increased by
+12.2% after exceeding RMB1 trillion, both maintaining
+its leading position in the industry. Due to the overall
+transformation of the industry, the value of one year's
+sales of the Company decreased from the high base
+to RMB44,780 million, and the decline was within a
+reasonable range, which was a hard-won result. The
+Company consistently optimized the investment fund
+allocation towards major assets categories and the
+assets and liabilities were well coordinated. During
+the Reporting Period, the Company achieved a gross
+investment income of RMB214,057 million, an increase
+of 7.8% year on year, and realised a gross investment
+yield of 4.98%.
+12 Annual Report 2021 | Letter to Shareholders
+1.09
+We proactively leveraged advantages of our
+principal businesses to serve the overall national
+development. We firmly took the responsibility of
+serving the overall interests of national development,
+and acted as a main force in implementing the national
+strategies of Healthy China program and proactively
+responding to population aging. We actively participated
+in the construction of a multi-level social security
+system. The supplementary major medical expenses
+insurance programs covered over 350 million people,
+the long-term care insurance programs covered 23
+million people, the city-customized commercial medical
+insurance programs covered over 10 million people,
+and the pilot programs for the exclusive commercial
+pension insurance were carried out in an orderly
+manner. By sticking to the role of the financial industry
+in serving the real economy, the Company focused on
+major national strategies and continuously improved the
+quality and efficiency of its services. Our investments
+in the real economy in aggregate have exceeded
+RMB2.7 trillion, with new investments during the
+Reporting Period amounting to nearly RMB770 billion.
+Investments in serving the national strategy for regional
+developments have exceeded RMB1.4 trillion in total.
+Our green investments have accumulatively exceeded
+RMB300 billion, aiming at facilitating the green
+development strategy of "peak carbon emissions and
+carbon neutrality". With the establishment of a green
+investment standard system, AMC, the Company's
+non-wholly owned subsidiary, has launched the first
+ESG bond index and ESG equity index in the domestic
+insurance asset management industry. We fully
+advanced rural revitalization strategy, optimizing the
+rural revitalization-related insurance product supply and
+consistently supporting the development of key regions
+in need of assistance in China.
+Renewal premiums
+442,463
+2021
+1,072,140 ▼
+premiums 2,101
+75,353
+premiums
+98,410
+As at
+31 December
+2021
+Embedded value
+Number of long-term in-force policies (hundred million)
+1,203,008
+3.23
+1,072,140
+3.17
+Notes:
+1.
+2.
+The Persistency Rate for long-term individual life insurance policy is an important operating performance indicator for life insurance companies. It
+measures the ratio of in-force policies in a pool of policies after a certain period of time. It refers to the proportion of policies that are still effective during
+the designated month in the pool of policies whose issue date was 14 or 26 months ago.
+2020
+Annual Report 2021 | Management Discussion and Analysis
+premiums
+Surrender Rate = Surrender payment/(Liability of long-term insurance contracts at the beginning of the period + Premiums of long-term insurance
+contracts)
+insurance
+Short-term Single
+First-year
+regular
+(RMB million)
+31 December
+In 2021, the Company maintained stable and sound
+business operations and achieved satisfactory results in
+investment. It updated the discount rate assumptions
+for reserves of traditional insurance contracts based on
+market information as at the date of the statement of
+financial position. Taking the above factors into account,
+net profit attributable to equity holders of the Company
+was RMB50,921 million, an increase of 1.3% year on year.
+During the Reporting Period, in the face of a complex
+and changing market situation, the Company always
+maintained its strategic consistency, reinforced asset-
+liability management, firmly implemented its medium-
+to long-term strategic plan of asset allocation, and
+continuously optimized its allocation management
+by centering on the investment value creation chain.
+In 2021, the Company flexibly made tactical allocations
+in response to the market change, taking into account
+short-term income stability, prevention of key risks, and
+long-term opportunities. The gross investment income
+amounted to RMB214,057 million, an increase of 7.8%
+year on year, and the gross investment yield was 4.98%.
+During the Reporting Period, while the life insurance
+industry was under pressure and the growth of
+premiums continued to slow down, the Company
+prioritized business value and pushed forward
+transformation and upgrade, and maintained the
+industry leadership position in both business scale and
+value. In 2021, the Company's gross written premiums
+amounted to RMB618,327 million, an increase of 1.0%
+year on year, and renewal premiums reached RMB442,463
+million, an increase of 5.8% year on year. As at the end
+of the Reporting Period, the embedded value of the
+Company reached RMB1,203,008 million, an increase of
+12.2% from the end of 2020. Due to the impact of the
+pandemic and the slowdown in the release of demands
+for insurance consumption, premiums from new policies
+were RMB175,864 million, a decrease of 9.3% year on
+year. The first-year regular premiums were RMB98,410
+million, a decrease of 14.7% year on year; in particular,
+first-year regular premiums with a payment duration of
+ten years or longer were RMB41,682 million, a decrease
+of 26.1% year on year. In 2021, the value of one year's
+sales of the Company was RMB44,780 million, a decrease
+of 23.3% year on year. The number of long-term in-force
+policies was 323 million, an increase of 1.9% from the end
+of 2020. The surrender rate was 1.20%, an increase of
+0.11 percentage point year on year.
+17
+Gross written premiums breakdown
+147,709
+164,690
+34,292
+3,048
+26,551
+45,745
+175,771
+after adjustments
+the associates and joint ventures
+Total equity attributable to equity holders of
+(1,552)
+(4,540)
+16,981
+427
+(6,528)
+Total adjustments (i)
+10,854
+10,221
+33,865
+8,669
+3,048
+2,612
+79,974
+Proportion of the Group's ownership
+11,285
+79,974
+26,551
+Net carrying value of the investments
+(3,217)
+Impairment
+4,736
+5,779
+22,433
+20,676
+6,314
+1,612
+14,502
+Gross carrying value of the investments
+75.00%
+66.67%
+10.29%
+43.86%
+35.00%
+40.00%
+29.59%
+43.686%
+10,620
+52,273
+263,528
+the associates and joint ventures
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+MCL
+Joy City
+China
+Unicom
+Pipeline
+Company
+COFCO
+Futures
+CLP&C
+Sino-Ocean
+CGB
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2020 and for the year ended 31 December 2020:
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+For the year ended 31 December 2021
+10,620
+Notes to the Consolidated Financial Statements (continued)
+Total assets
+3,027,972
+106,930
+20,567
+Total equity attributable to equity holders of
+10,854
+10,221
+331,474
+33,865
+3,055
+26,551
+69,722
+218,150
+Total equity
+173,159
+13,342
+251,001
+1,068
+17,512
+80,379
+193,806
+2,809,822
+Total liabilities
+24,196
+10,306
+582,475
+85
+1,612
+Total
+22,433
+1,533,753
+104,668
+63,305
+201,988
+209,627
+617,515
+911,451
+265,198
+349,370
+RMB million
+RMB million
+2020
+2021
+31 December
+31 December
+As at
+As at
+(i) Unlisted debt securities include those traded on the Chinese interbank market.
+Unlisted (i)
+Listed overseas
+Listed in Hong Kong, PRC
+1,189,369
+Listed in Mainland, PRC
+246,134
+87
+Annual Report 2021 | Financial Report 191
+68,300
+Subordinated bonds
+Corporate bonds
+Government agency bonds
+Government bonds
+RMB million
+Total
+As at 31 December 2020
+Level 1
+Level 2
+RMB million RMB million
+RMB million
+RMB million RMB million
+Total
+As at 31 December 2021
+Level 1
+Level 2
+Debt securities - fair value hierarchy
+As at 31 December 2021, no accumulated impairment loss for the investment of held-to-maturity securities has been
+recognised by the Group (2020: RMB20 million).
+1,189,369
+973,480
+1,287,488
+1,533,753
+70
+44
+148
+215,671
+Debt securities
+Total
+Subordinated bonds
+Other comprehensive income
+185
+339
+12,525
+2,823
+208
+1,730
+4,675
+13,812
+Net profit/(loss)
+853
+360
+306,490
+5,259
+2,193
+77,990
+61,271
+80,525
+Total revenues
+4,736
+5,779
+(1,944)
+630
+1,991
+(1,706)
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+10.1 Held-to-maturity securities
+10 FINANCIAL ASSETS
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+192 Annual Report 2021 | Financial Report
+The Group had no contingent liabilities with the associates and joint ventures as at 31 December 2021 and 31 December
+2020. The Group had a capital contribution commitment of RMB20,730 million with associates and joint ventures as at 31
+December 2021 (as at 31 December 2020: RMB25,364 million). The capital contribution commitment amount has been
+included in the capital commitments in Note 40.
+20,676
+(i) Including adjustments for the difference of accounting policies, fair value and others.
+314
+10,819
+2,823
+203
+3,721
+5,305
+11,868
+Total comprehensive income
+650
+(25)
+835
+475
+25,153
+445
+Sino-Ocean
+CGB
+The following table illustrates the financial information of the Group's major associates and joint ventures as at 31
+December 2021 and for the year ended 31 December 2021:
+75.00%
+66.67%
+The British Virgin Islands
+The British Cayman Islands
+10.29%
+PRC
+43.86%
+PRC
+35.00%
+PRC
+40.00%
+PRC
+29.59%
+Hong Kong, PRC
+43.686%
+PRC
+equity interest held
+Percentage of
+CLP&C
+Place of incorporation
+COFCO
+Futures
+China
+Unicom
+257,074
+1,476
+21,868
+94,756
+204,805
+3,125,484
+Total liabilities
+24,195
+RMB million RMB million RMB million
+10,258
+593,284
+37,099
+314,113
+120,178
+281,252
+3,359,985
+Total assets
+RMB million
+RMB million RMB million
+RMB million RMB million
+MCL
+Joy City
+Pipeline
+Company
+MCL
+Joy City
+Joint ventures
+PRC
+Percentage of
+equity interest held
+Place of incorporation
+190 Annual Report 2021 | Financial Report
+MCL
+Joint ventures
+Joy City
+China Unicom
+Pipeline Company
+COFCO Futures
+CLP&C
+Sino-Ocean
+CGB
+Associates
+Name
+As at 31 December 2021, the major associates and joint ventures of the Group are as follows:
+(v) There is no significant restriction for the Group to dispose of its other associates and joint ventures.
+(iv) The Group invested in real estate, industrial logistics assets and other industries through these enterprises.
+On 31 December 2021, the stock price of China Unicom was RMB3.93 per share.
+(iii) The 2020 final dividend of RMB0.0669 in cash per ordinary share was approved and declared in the Annual General
+Meeting of China Unicom on 11 May 2021. The Company received a cash dividend of RMB213 million. The 2021 interim
+dividend of RMB0.0488 in cash per ordinary share was approved and declared in the Annual General Meeting of China
+Unicom on 23 September 2021. The Company received a cash dividend equivalent to RMB156 million.
+Sino-Ocean, the Group's associate is listed in Hong Kong. On 31 December 2021, the stock price of Sino-Ocean was
+HKD1.82 per share. As at 31 December 2020, the cumulative impairment loss of RMB3,217 million for the investment
+in Sino-Ocean had been recognised by the Group. The Group performed an impairment test to this investment valued
+using the discounted future cash flow method on 31 December 2021 and no further impairment loss should be made. The
+impairment test involved significant assumptions including selling prices of properties under development, rental prices
+of investment properties and discount rates, and the Group used 10% as the discount rate of cash flow for properties
+under development and investment properties (As at 31 December 2020: 10% for properties under development and
+investment properties).
+(ii) The 2020 final dividend of HKD0.09 in cash per ordinary share was approved and declared in the Annual General
+Meeting of Sino-Ocean on 21 May 2021. The Company received a cash dividend equivalent to RMB168 million. The 2021
+interim dividend of HKD0.055 in cash per ordinary share was approved and declared by the Board of Directors of Sino-
+Ocean on 19 August 2021. The Company received a cash dividend equivalent to RMB103 million.
+43.686%
+Hong Kong, PRC
+29.59%
+PRC
+China Unicom
+Pipeline Company
+COFCO Futures
+CLP&C
+Sino-Ocean
+CGB
+Associates
+Name
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+As at 31 December 2020, the major associates and joint ventures of the Group are as follows:
+For the year ended 31 December 2021
+232
+Notes to the Consolidated Financial Statements (continued)
+The British Virgin Islands
+66.67%
+The British Cayman Islands
+10.29%
+PRC
+43.86%
+PRC
+35.00%
+PRC
+40.00%
+75.00%
+447
+13,035
+234,501
+352
+331,665
+5,583
+6,846
+82,549
+68,645
+74,905
+Total revenues
+4,237
+5,546
+22,644
+21,438
+1,692
+10,151
+11,899
+86,179
+Net carrying value of the investments
+(3,217)
+Impairment
+4,237
+5,546
+897
+22,644
+Net profit/(loss)
+5,091
+348
+14,389
+3,081
+273
+(145)
+5,056
+19,892
+Total comprehensive income
+15
+(27)
+(8)
+(766)
+(35)
+2,416
+Other comprehensive income
+28
+333
+14,416
+3,081
+281
+621
+17,476
+21,438
+1,692
+10,151
+405
+(7,257)
+464
+Total adjustments (i)
+11,160
+10,026
+149,217
+35,623
+3,277
+25,422
+55,074
+189,510
+the associates and joint ventures
+Total equity attributable to equity holders of
+11,160
+10,026
+336,210
+35,623
+3,285
+25,422
+76,447
+16,509
+(1,707)
+(5,511)
+Total equity attributable to equity holders of
+15,116
+86,179
+Gross carrying value of the investments
+75.00%
+66.67%
+10.29%
+43.86%
+35.00%
+40.00%
+29.59%
+Total equity
+43.686%
+5,649
+8,319
+165,726
+36,028
+3,277
+25,422
+47,817
+189,974
+after adjustments
+the associates and joint ventures
+Proportion of the Group's ownership
+382,413
+As at
+238,636
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+580,810
+793,544
+147,344
+258,479
+271,394
+318,992
+125,202
+179,476
+36,870
+36,597
+RMB million
+RMB million
+31 December
+2020
+2021
+31 December
+As at
+As at
+196 Annual Report 2021 | Financial Report
+Total
+10 FINANCIAL ASSETS (continued)
+After ten years
+10.6 Securities at fair value through profit or loss
+As at
+90,425
+4,422
+7,989
+1,638
+1,393
+Subtotal
+Others
+Common stocks
+Funds
+Equity securities
+Subtotal
+Others
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+RMB million
+RMB million
+2020
+31 December
+31 December
+2021
+As at
+After five years but within ten years
+After one year but within five years
+Within one year
+31 December
+As at
+As at
+Total
+Subtotal
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+Subtotal
+Unlisted
+Listed in Mainland, PRC
+Debt securities
+10.5 Available-for-sale securities (continued)
+10 FINANCIAL ASSETS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 195
+(i) Other available-for-sale securities mainly include unlisted equity investments, private equity funds, trust schemes and perpetual bonds.
+1,215,603
+31 December
+2021
+2020
+RMB million
+Maturing:
+Debt securities - Contractual maturity schedule
+Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
+equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
+price quotations, wealth management products and private equity funds.
+1,215,603
+1,429,287
+634,793
+635,743
+325,768
+321,866
+278
+86,803
+28
+75,694
+200,254
+238,155
+580,810
+793,544
+538,656
+707,399
+42,154
+86,145
+RMB million
+108,493
+20,606
+43,250
+143,057
+RMB million
+RMB million
+2020
+31 December
+31 December
+2021
+As at
+As at
+198 Annual Report 2021 | Financial Report
+Total
+Non-current
+Current
+Total
+Others
+Bank deposits
+Debt securities
+10.8 Accrued investment income
+Total
+Above 30 days
+Within 30 days
+Maturing:
+10.7 Securities purchased under agreements to resell
+10 FINANCIAL ASSETS (continued)
+11,896
+For the year ended 31 December 2021
+7,947
+12,915
+45,200
+51,097
+1,003
+2,066
+44,197
+49,031
+45,200
+51,097
+6,176
+6,462
+26,454
+31,900
+12,570
+12,735
+RMB million
+RMB million
+2020
+31 December
+As at
+As at
+31 December
+2021
+7,947
+1,019
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 197
+Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
+equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
+price quotations.
+273
+Listed overseas
+72
+23
+Listed in Hong Kong, PRC
+32,333
+29,934
+Listed in Mainland, PRC
+Debt securities
+161,570
+206,771
+Total
+65,955
+63,714
+262
+271
+48,858
+45,649
+16,835
+17,794
+95,615
+262
+Unlisted
+112,827
+62,948
+161,570
+206,771
+Total
+65,955
+63,714
+10,033
+12,312
+4,213
+4,849
+Subtotal
+2,752
+Unlisted
+80
+736
+51,629
+45,817
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Equity securities
+95,615
+143,057
+Subtotal
+Listed overseas
+20,279
+1,429,287
+614,187
+615,464
+As at
+Total
+After five years but within ten years
+After one year but within five years
+Within one year
+Maturing:
+10.3 Term deposits
+(i) As at 31 December 2021, maturities of policy loans were within 6 months (as at 31 December 2020: same).
+Net value
+Impairment
+Total
+After one year but within five years
+After five years but within ten years
+After ten years
+Within one year
+Maturing:
+Net value
+Impairment
+Total
+Other loans
+Policy loans (i)
+10.2 Loans
+10 FINANCIAL ASSETS (continued)
+As at
+For the year ended 31 December 2021
+31 December
+2021
+RMB million
+RMB million
+2020
+2021
+31 December
+31 December
+As at
+As at
+658,535
+666,087
+(2,443)
+(3,819)
+660,978
+669,906
+460,248
+433,697
+200,730
+236,209
+RMB million
+RMB million
+2020
+31 December
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 193
+1,189,369
+1,487,819
+150,452
+Total
+108,694
+96,362
+12,332
+66,481
+66,481
+209,873
+205,440
+4,433
+219,793
+211,882
+7,911
+631,203
+559,488
+71,715
+969,584
+895,343
+74,241
+275,770
+1,638,271
+125,614
+1,099,926
+1,225,540
+1,533,753
+811,252
+1,167,118
+206,134
+163,479
+146,463
+147,786
+25,520
+55,370
+RMB million
+348,940
+2020
+31 December
+2021
+RMB million
+As at
+As at
+Total
+After ten years
+After five years but within ten years
+After one year but within five years
+Within one year
+Maturing:
+Debt securities - Contractual maturity schedule
+31 December
+231,291
+182,493
+287,196
+31 December
+As at
+As at
+Total
+Others (i)
+Equity securities
+Available-for-sale securities, at cost
+Subtotal
+Others (i)
+Wealth management products
+Preferred stocks
+Common stocks
+Funds
+Equity securities
+Subtotal
+Others (i)
+Subordinated bonds
+Corporate bonds
+Government agency bonds
+Government bonds
+Debt securities
+2021
+31 December
+2020
+RMB million
+RMB million
+148,671
+206,996
+13,013
+5,005
+53,778
+52,127
+301,249
+256,441
+97,476
+94,895
+Available-for-sale securities, at fair value
+580,810
+144,721
+161,054
+81,795
+111,029
+136,025
+203,147
+169,013
+259,753
+49,256
+58,561
+793,544
+37,134
+10.5 Available-for-sale securities
+6,333
+394,187
+63,090
+135,301
+RMB million
+RMB million
+2020
+2021
+31 December
+31 December
+(i) The 2020 final dividend of RMB0.077 in cash per ordinary share was approved and declared in the Annual General
+Meeting of CGB on 30 June 2021. The Company received a cash dividend of RMB662 million.
+As at
+658,535
+666,087
+(2,443)
+(3,819)
+660,978
+669,906
+27,606
+32,154
+114,885
+106,319
+480,848
+1,740
+529,488
+545,678
+6,333
+6,333
+4,613
+1,720
+RMB million
+RMB million
+2020
+2021
+31 December
+31 December
+Insurance companies in China are required to deposit an amount that equals 20% of their registered capital with banks in
+compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
+during liquidation proceedings.
+As at
+Total
+After one year but within five years
+Within one year
+Contractual maturity schedule:
+10.4 Statutory deposits - restricted
+10 FINANCIAL ASSETS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+194 Annual Report 2021 | Financial Report
+As at 31 December 2021, the Group's term deposits of RMB2,641 million (as at 31 December 2020: RMB750 million)
+were deposited in banks for risk reserves of enterprise annuity fund investments, risk reserves of personal endowment
+security management business and backing overseas borrowings, which are restricted to use.
+As at
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued)
+34,933
+Notes to the Consolidated Financial Statements (continued)
+1,048
+(662)
+26
+(271)
+589
+11,285
+11,245
+Equity Method
+86,179
+("Sino-Ocean") (ii)
+109
+5,819
+79,974
+45,176
+Equity Method
+("CGB") (i)
+China Guangfa Bank Co., Ltd.
+Associates
+Sino-Ocean Group Holding Limited
+43.686%
+296
+11,899
+98
+1,612
+1,339
+Equity Method
+("COFCO Futures")
+COFCO Futures Company Limited
+40.00%
+10,151
+(527)
+(214)
+272
+10,620
+6,000
+Equity Method
+("CLP&C")
+Insurance Company Limited
+China Life Property and Casualty
+(3,217)
+29.59%
+RMB Million
+RMB Million
+impairment
+interest
+228
+(707)
+239,584
+Movement
+As at
+Share of
+Accounting
+method
+31 December
+Change of
+profit
+Declared
+Cost
+2020
+the cost
+or loss
+dividends
+Other
+equity Provision 31 December
+movements of impairment 2021
+As at
+For the year ended 31 December 2021
+1,121
+90
+(5,253)
+8,336
+amount of
+of equity
+Percentage Accumulated
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+9 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+As at 1 January
+Change of the cost
+Share of profit or loss
+Declared dividends
+Other equity movements
+Impairment
+As at 31 December
+2021
+2020
+RMB million
+239,584
+RMB million
+11,400
+222,983
+13,997
+10,328
+(4,480)
+1T
+257,953
+(3)
+Equity Method
+Others (iv)
+75.00%
+4,237
+505
+(1,004)
+4,736
+7,656
+48,576 40,914
+Equity Method
+66.67%
+5,546
+10
+(354)
+111
+5,779
+6,281
+Equity Method
+Mapleleaf Century Limited ("MCL")
+5,790
+(516)
+(945)
+(15)
+Annual Report 2021 | Financial Report 189
+(3,217)
+257,953
+1,121
+(4,480)
+10,328
+11,400
+239,584
+Total
+54,935
+424
+(1,299)
+(1,409)
+5,790
+62,513 51,429
+Subtotal
+45,152
+(91)
+Fund L.P. ("Joy City")
+Joy City Commercial Property
+216,075
+(3,217)
+Equity Method
+("China Unicom") (iii)
+Communications Limited
+China United Network
+43.86%
+21,438
+35
+(608)
+109
+35
+1,335
+20,676
+20,000
+("Pipeline Company")
+Pipeline Co., Ltd.
+Sinopec Sichuan to East China Gas
+Joint ventures
+35.00%
+1,692
+21,801
+22,433
+Equity Method
+(369)
+697
+602
+203,018
+11,737
+5,610
+(3,181)
+153,562
+Subtotal
+49,015
+(130)
+188,155
+3,022
+5,610
+41,555
+48,001
+Equity Method
+Others (iv)
+(22)
+(1,042)
+22,644 10.29%
+Group Life
+(v) The Group applies a consistent method to determine risk margin. The Group considers risk margin for the discount
+rate, mortality and morbidity and expense assumptions to compensate for the uncertain amount and timing of future cash
+flows. When determining risk margin, the Group considers historical experience, future expectations and other factors.
+The Group determines the risk margin level by itself as the regulations have not imposed any specific requirement on it.
+The Group adopts a consistent process to decide on assumptions for the insurance contracts disclosed in this note.
+On each reporting date, the Group reviews the assumptions for reasonable estimates of liability and risk margin, with
+consideration of all available information, and taking into account the Group's historical experience and expectation of
+future events.
+(iv) The lapse rates and other assumptions are affected by certain factors, such as future macro-economy, availability of
+financial substitutions, and market competition, which bring uncertainty to these assumptions. The lapse rates and other
+assumptions are determined with reference to creditable past experience, current conditions, future expectations and
+other information.
+0.90%
+25.00
+0.90%
+% of Premium
+0.85% 0.90%
+0.85% 0.90%
+45.00
+45.00
+RMB Per Policy
+Individual Life
+% of Premium
+RMB Per Policy
+25.00
+202 Annual Report 2021 | Financial Report
+- Unearned premiums
+For the year ended 31 December 2021
+Long-term insurance contracts
+Net
+As at 31 December 2020
+Total, ceded
+- Unearned premiums (Note 13)
+- Claims and claim adjustment expenses (Note 13)
+Short-term insurance contracts
+Notes to the Consolidated Financial Statements (continued)
+Long-term insurance contracts (Note 13)
+Total, gross
+- Claims and claim adjustment expenses
+Short-term insurance contracts
+Long-term insurance contracts
+Gross
+(b) Net liabilities of insurance contracts
+15 INSURANCE CONTRACTS (continued)
+Recoverable from reinsurers
+As at 31 December 2021
+(i) For the insurance contracts of which future insurance benefits are affected by investment yields of the corresponding
+investment portfolios, the discount rate assumption is based on expected investment returns of the asset portfolio
+backing these liabilities, considering the impacts of time value on reserves.
+(a) Process used to decide on assumptions (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+200 Annual Report 2021 | Financial Report
+(i) The Group's right-of-use assets include the above land use rights and right-of-use assets disclosed in Note 7.
+29,040
+39,559
+15 INSURANCE CONTRACTS
+9,323
+19,717
+30,713
+29,040
+39,559
+Short-term insurance contracts
+6,865
+8,846
+(a) Process used to decide on assumptions
+In developing the discount rate assumptions, the Group considers investment experience, the current investment
+portfolio and the trend of the relevant yield curves. The assumed discount rates reflect the future economic outlook as
+well as the Group's investment strategy. The assumed discount rates with risk margin are as follows:
+As at 31 December 2021
+As at 31 December 2020
+15 INSURANCE CONTRACTS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 201
+Risk margin is considered in the Group's mortality and morbidity assumptions.
+The Group bases its morbidity assumptions for critical illness products on analysis of historical experience and
+expectations of future developments. There are two main sources of uncertainty. Firstly, wide-ranging lifestyle changes
+could result in future deterioration in morbidity experience. Secondly, future development of medical technologies and
+improved coverage of medical facilities available to policyholders may bring forward the timing of diagnosing critical
+illness, which demands earlier payment of the critical illness benefits. Both could ultimately result in an inadequate
+reserving of liability if current morbidity assumptions do not properly reflect such trends.
+The Group bases its mortality assumptions on China Life Insurance Mortality Table (2010-2013), adjusted where
+appropriate to reflect the Group's recent historical mortality experience. The main source of uncertainty with life insurance
+contracts is that epidemics and wide-ranging lifestyle changes could result in deterioration in future mortality experience,
+thus leading to an inadequate reserving of liability. Similarly, improvements in longevity due to continuing advancements
+in medical care and social conditions may expose the Group to longevity risk.
+(ii) The mortality and morbidity assumptions are based on the Group's historical mortality and morbidity experience. The
+assumed mortality rates and morbidity rates vary with the age of the insured and contract type.
+There is uncertainty on the discount rate assumption, which is affected by factors such as future macro-economy,
+monetary and foreign exchange policies, capital market and availability of investment channels of insurance funds. The
+Group determines the discount rate assumption based on the information obtained at the end of each reporting period,
+including the consideration of risk margin.
+2.88% 4.80%
+3.09% 4.80%
+Discount rate assumptions
+As at 31 December 2021
+As at 31 December 2020
+For the insurance contracts of which future insurance benefits are not affected by investment yields of the corresponding
+investment portfolios, the discount rate assumption is based on the "Yield curve of reserve computation benchmark for
+insurance contracts", published on the "China Bond" website with consideration of liquidity spreads, taxation and other
+relevant factors. The assumed spot discount rates with risk margin are as follows:
+4.85%
+4.85%
+Discount rate assumptions
+(iii) Expense assumptions are based on expected unit costs with the consideration of previous expense studies and future
+trends. Expense assumptions are affected by certain factors such as future inflation and market competition which bring
+uncertainty to these assumptions. The Group determines expense assumptions based on information obtained at the end
+of each reporting period and risk margin. Components of expense assumptions include the cost per policy and percentage
+of premium as follows:
+- Claims and claim adjustment expenses
+RMB million
+Total, net
+(17,783)
+(32,804)
+(34,301)
+18,404
+21,991
+15,623
+(16,682)
+17,672
+4,319
+RMB million
+2020
+2021
+- Claims arising in current year
+Claims incurred
+2,781
+56,938
+52,589
+- Claims arising in prior years
+8,884
+21,991
+26,234
+Total as at 31 December - Gross
+17,672
+22,037
+Incurred but not reported
+4,319
+4,197
+Notified claims
+21,991
+26,234
+Total as at 31 December - Gross
+484
+(611)
+· Cash paid for prior year claims
+- Unearned premiums
+- Cash paid for current year claims
+Total as at 1 January – Gross
+14,701
+14,062
+21,991
+26,234
+2,936,533
+3,379,603
+3,419,899
+RMB million
+2021
+31 December
+As at
+As at
+The table below presents movements in claims and claim adjustment expense reserve:
+(c) Movements in liabilities of short-term insurance contracts
+31 December
+2020
+RMB million
+2,973,225
+(4,910)
+(4,228)
+Incurred but not reported
+Notified claims
+2,968,265
+3,413,754
+14,178
+21,782
+25,822
+13,239
+2,932,305
+3,374,693
+(4,960)
+(6,145)
+(523)
+(823)
+(209)
+(412)
+Cash paid for claims settled
+187
+(3,732)
+728
+7,947
+56,655
+(276,521)
+60,440
+(299,727)
+56,655
+(288,212)
+(313,594)
+Investment contracts (iii)
+60,440
+Financial liabilities at fair value through
+Cash and cash equivalents
+7,947
+12,915
+to resell
+Securities purchased under agreements
+6,333
+1,194,997
+161,570
+6,333
+1,409,008
+206,771
+12,915
+profit or loss
+(3,416)
+(3,732)
+(18,686)
+Interest-bearing loans and borrowings
+(35,602)
+(35,898)
+(34,992)
+(34,994)
+Bonds payable
+(122,249)
+(239,446)
+(122,249)
+(239,446)
+to repurchase
+Securities sold under agreements
+Annual Report 2021 | Financial Report 203
+(3,416)
+6,333
+1,194,997
+161,570
+(19,556)
+206,771
+6,333
+As at
+31 December
+2021
+RMB million
+RMB million
+RMB million
+31 December
+2020
+2021
+31 December
+As at
+As at
+Estimated fair value (i)
+Carrying value
+The table below presents the carrying value and estimated fair value of major financial assets and liabilities, and
+investment contracts:
+11 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+As at
+31 December
+2020
+RMB million
+545,667
+529,488
+545,667
+529,488
+667,545
+686,005
+1,225,540
+1,638,271
+1,189,369
+658,535
+666,087
+1,533,753
+Securities at fair value through profit or loss
+Statutory deposits - restricted
+Term deposits
+Held-to-maturity securities (ii)
+Loans (iii)
+1,409,008
+101
+(18,686)
+(i)
+6,630
+4,228
+4,910
+1,867
+1,720
+6,095
+6,095
+6,630
+412
+523
+823
+1,135
+485
+4,228
+209
+As at
+As at
+31 December
+2021
+717
+2,257
+3,353
+3,522
+3,673
+5,866
+5,327
+8,056
+8,011
+1,559
+9,493
+RMB million
+RMB million
+2020
+31 December
+RMB million
+(19,556)
+RMB million
+4,910
+31 December
+2021
+Claims recoverable from reinsurers (Note 15)
+Ceded unearned premiums (Note 15)
+Due from reinsurance companies
+Long-term insurance contracts ceded (Note 15)
+13 REINSURANCE ASSETS
+For the year ended 31 December 2021
+Total
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 Financial Report
+As at 31 December 2021, the carrying value of premiums receivable within one year was RMB19,935 million (as at 31
+December 2020: RMB20,458 million).
+12 PREMIUMS RECEIVABLE
+(iii) Investment contracts at fair value through profit or loss have quoted prices in active markets, and therefore, their fair value was classified as Level 1.
+The fair value of policy loans approximated its carrying value. The fair values of other loans and investment contracts at amortised cost were determined
+using valuation techniques, with consideration of the present value of expected cash flows arising from contracts using a risk-adjusted discount rate,
+allowing for the risk-free rate available on the valuation date, credit risk and risk margin associated with the future cash flows. The fair values of other
+loans and investment contracts at amortised cost were classified as Level 3.
+(ii) The fair value of held-to-maturity securities is determined by reference with other debt securities which are measured by fair value. Please refer to
+Note 4.4.
+The estimates and judgements to determine the fair value of financial assets are described in Note 3.2.
+199
+Current
+Non-current
+Total
+As at
+As at
+Total
+Non-current
+Current
+Total
+Others
+Prepayments to constructors
+Due from related parties
+Tax prepaid
+Automated policy loans
+Disbursements
+Land use rights (i)
+Investments receivable and prepaid
+14 OTHER ASSETS
+31 December
+2020
+Notes to the Consolidated Financial Statements (continued)
+Available-for-sale securities, at fair value
+15 INSURANCE CONTRACTS (continued)
+Others
+Stock appreciation rights (Note 32)
+Tax payable
+Interest payable of debt instruments
+Agency deposits
+Payable to constructors
+Brokerage and commission payable
+Salary and welfare payable
+Interest payable to policyholders
+Payable to the third-party holders of consolidated structured entities
+20 OTHER LIABILITIES
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+206 Annual Report 2021 | Financial Report
+For debt repurchase transactions through the stock exchange, the Group is required to deposit certain exchange-traded
+bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchange's regulation which
+should be no less than the balance of the related repurchase transaction. As at 31 December 2021, the carrying value of
+securities deposited in the collateral pool was RMB298,043 million (as at 31 December 2020: RMB256,062 million). The
+collateral is restricted from trading during the period of the repurchase transaction.
+As at 31 December 2021, bonds with a carrying value of RMB199,211 million (as at 31 December 2020: RMB113,454
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulting from repurchase
+transactions entered into by the Group in the interbank market.
+122,249
+Total
+239,446
+Current
+Total
+2,594
+2,497
+7,057
+5,352
+11,318
+12,874
+16,139
+17,866
+42,654
+67,862
+RMB million
+RMB million
+2020
+2021
+31 December
+As at
+As at
+31 December
+Non-current
+1,467
+122,101
+140
+8
+122,249
+The fair value of bonds payable is based on the valuation results of China Central Depository & Clearing Co., Ltd.
+On 20 March 2019, the Company issued a bond in the national inter-bank bond market at a principal amount of RMB35
+billion, and completed the issuance on 22 March 2019. The bond has a 10-year maturity and a fixed coupon rate of 4.28%
+per annum. The Company has a conditional right to redeem the bonds at the end of the fifth year. If the Company does
+not redeem the bonds at the end of the fifth year, the coupon rate per annum for the remaining 5 years will be raised to
+5.28%.
+35,000
+35,000
+35,000
+RMB million
+As at
+31 December
+2020
+2021
+RMB million
+35,000
+4.28%
+22 March 2029
+22 March 2019
+Total
+Interest rate p.a.
+Maturity date
+Issue date
+31 December
+As at
+As at 31 December 2021, all bonds payable were the bonds for capital replenishment (the "Bond") with a total carrying
+value of RMB34,994 million (as at 31 December 2020: RMB34,992 million), and the fair value of RMB35,898 million (as
+at 31 December 2020: RMB35,602 million). The fair value of the Bond was classified as level 2 in the fair value hierarchy.
+The following table presents the par value of the bonds payable:
+18 BONDS PAYABLE
+Bonds payable are measured at amortised cost as described in Note 2.15.
+237,371
+2,075
+19 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
+Stock exchange market
+239,446
+24,275
+58,325
+97,974
+181,121
+RMB million
+2020
+2021
+RMB million
+31 December
+As at
+As at
+31 December
+Total
+After 90 days
+More than 30 days within 90 days
+Within 30 days
+Maturing:
+Total
+Interbank market
+For the year ended 31 December 2021
+1,811
+1,320
+Subtotal
+Realised gains (i)
+Impairment (ii)
+Debt securities
+RMB million
+RMB million
+2020
+2021
+For the year ended 31 December
+23 NET REALISED GAINS ON FINANCIAL ASSETS
+For the year ended 31 December 2021, the interest income included in investment income was RMB149,669 million
+(2020: RMB129,514 million). Interest income was mainly accrued using the effective interest method.
+154,497
+178,387
+772
+25,860
+31,948
+32,970
+350
+25,949
+798
+Equity securities
+912
+Realised gains (i)
+Impairment (ii)
+Total
+For the year ended 31 December 2021
+208 Annual Report 2021 | Financial Report
+(ii) During the year ended 31 December 2021, the Group recognised an impairment charge of RMB8 million on available-for-sale funds (2020: RMB111
+million); an impairment charge of RMB21,354 million on available-for-sale stock securities (2020: RMB11,732 million); no impairment charge on
+available-for-sale other equity securities (2020: RMB74 million); an impairment reversal of RMB17 million on available-for-sale debt securities (2020:
+RMB16 million); an impairment charge of RMB1,376 million on loans (2020: an impairment reversal of RMB275 million) and no impairment charge of
+held-to-maturity securities (2020: RMB3 million), for which the Group determined that objective evidence of impairment existed.
+14,583
+20,344
+13,008
+21,505
+(11,917)
+(21,362)
+24,925
+42,867
+1,575
+(1,161)
+1,287
+288
+(1,359)
+198
+(i) Realised gains were generated mainly from available-for-sale securities.
+Subtotal
+1,528
+24,185
+3,482
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 207
+As required by the CIRC Order [2008] No. 2, "Measures for Administration of Statutory Insurance Fund", all insurance
+companies have to pay the statutory insurance fund contribution from 1 January 2009. The Group is subject to the
+statutory insurance fund contribution, (i) at 0.15% and 0.05% of premiums and accumulated policyholder deposits from
+life policies with guaranteed benefits and life policies without guaranteed benefits, respectively; (ii) at 0.8% and 0.15%
+of premiums from short-term health policies and long-term health policies, respectively; (iii) at 0.8% of premiums from
+accident insurance contracts, at 0.08% and 0.05% of accumulated policyholder deposits from accident investment
+contracts with guaranteed benefits and without guaranteed benefits, respectively. When the accumulated statutory
+insurance fund contributions reach 1% of total assets, no additional contribution to the statutory insurance fund is
+required.
+21 STATUTORY INSURANCE FUND
+104,476
+133,676
+104,476
+133,676
+104,476
+133,676
+20,201
+23,222
+493
+291
+889
+717
+22 INVESTMENT INCOME
+27,806
+Debt securities
+- available-for-sale securities
+4,079
+29,491
+44,757
+56,830
+RMB million
+RMB million
+2020
+2021
+For the year ended 31 December
+Total
+Securities purchased under agreements to resell
+Loans
+Bank deposits
+at fair value through profit or loss
+- available-for-sale securities
+Equity securities
+- at fair value through profit or loss
+-held-to-maturity securities
+Notes to the Consolidated Financial Statements (continued)
+22,695
+(ii) 1.00% when USD LIBOR is negative.
+(288,959)
+536,150
+542,974
+(287,705)
+2,521,331
+2,936,533
+RMB million
+RMB million
+2020
+2021
+As at 31 December
+Other movements
+- Change in other assumptions (ii)
+- Change in discount rates
+Change in assumptions
+Accretion of interest
+Release of liabilities (i)
+Premiums
+148,504
+As at 1 January
+129,679
+35,071
+At fair value through profit or loss
+-
+- At amortised cost
+Investment contracts without DPF
+Investment contracts with DPF at amortised cost
+16 INVESTMENT CONTRACTS
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+204 Annual Report 2021 | Financial Report
+For the year ended 31 December 2020, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
+products, which increased insurance contract liabilities by RMB2,081 million. This change reflected the Group's most recent experience and future
+expectations about the morbidity rates as at the reporting date. Changes in assumptions other than morbidity rates increased insurance contract
+liabilities by RMB1,391 million.
+(ii) For the year ended 31 December 2021, the change in other assumptions was mainly caused by the change in morbidity rate assumptions of certain
+products, which increased insurance contract liabilities by RMB5,897 million. This change reflected the Group's most recent experience and future
+expectations about the morbidity rates as at the reporting date. Changes in assumptions other than morbidity rates increased insurance contract
+liabilities by RMB1,677 million.
+(i) The release of liabilities mainly consists of release due to death or other benefits and related expenses, release of residual margin and change of
+reserves for claims and claim adjustment expenses.
+2,936,533
+(211)
+1,022
+3,379,603
+3,472
+7,574
+30,701
+Total
+The table below presents movements in the liabilities of long-term insurance contracts:
+14,178
+14,701
+Net
+Ceded
+Gross
+Net
+Ceded
+Gross
+RMB million
+RMB million
+2020
+2021
+As at 31 December
+Release
+Increase
+As at 1 January
+Annual Report 2021 | Financial Report 205
+(c) Movements in liabilities of short-term insurance contracts (continued)
+The table below presents movements in unearned premium reserves:
+(523)
+(d) Movements in liabilities of long-term insurance contracts
+14,178
+(369)
+(523)
+14,701
+13,239
+(823)
+14,062
+(12,632)
+369
+(13,001)
+(14,178)
+523
+(14,701)
+14,178
+(523)
+14,701
+13,239
+14,062
+12,632
+13,001
+The table below presents movements of investment contracts with DPF:
+(823)
+Deposits received
+1.50%
+563
+1.80%
+25 June 2024
+16 September 2024
+8 September 2023
+9 March 2022
+13 January 2022
+5 January 2022
+Credit loans
+Credit loans
+Guaranteed loans
+Guaranteed loans
+Guaranteed loans
+Total
+Credit loans
+Credit loans
+RMB million
+RMB million
+2020
+2021
+913
+626
+1,015
+EURLIBOR+3.00% (i)
+794
+3.00% when EURIBOR is negative.
+(i)
+As at 1 January
+19,556
+18,686
+6,329
+6,184
+USD LIBOR+1.00% (ii)
+Interest rate
+27 September 2024
+5,483
+3.30%
+2,444
+2,366
+2,648
+2,383
+3.10%
+883
+5,611
+Maturity date
+3.08%
+As at
+9
+223,252
+245,041
+64,950
+RMB million
+RMB million
+68,544
+2020
+2021
+31 December
+As at
+As at
+17 INTEREST-BEARING LOANS AND BORROWINGS
+As at 31 December
+Deposits withdrawn, payments on death and other benefits
+31 December
+Policy fees deducted from account balances
+Interest credited
+10
+313,594
+31 December
+2021
+As at
+31 December
+64,950
+288,212
+1,340
+1,436
+(39)
+(41)
+(3,008)
+(2,711)
+68,544
+4,910
+RMB million
+5,000
+RMB million
+64,950
+2020
+61,657
+Net deferred tax assets
+Net deferred tax liabilities
+31 December
+As at
+31 December
+2020
+RMB million
+Deferred tax assets
+Deferred tax liabilities
+2021
+RMB million
+22,354
+(29,714)
+121
+(7,481)
+17,174
+(32,373)
+87
+(15,286)
+Annual Report 2021 Financial Report 211
+As at
+As at 31 December 2020
+- Others
+For the year ended 31 December 2021
+29 TAXATION (continued)
+(c) As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows:
+(continued)
+As at 31 December 2021 and 31 December 2020, deferred income tax was calculated in full on temporary differences
+under the liability method using the principal tax rate of 25%. The movements in net deferred income tax assets and
+liabilities during the period were as follows:
+Net deferred tax assets/(liabilities)
+As at 1 January 2020
+(Charged)/Credited to net profit
+(Charged)/Credited to other
+comprehensive income
+- Available-for-sale securities
+- Portion of fair value changes on
+available-for-sale securities attributable
+to participating policyholders
+-
+(c) As at 31 December 2021 and 31 December 2020, the amounts of deferred tax assets and liabilities are as follows:
+Notes to the Consolidated Financial Statements (continued)
+(i) Non-taxable income mainly includes interest income from government bonds, dividend income from applicable equity securities, etc. Expenses not
+deductible for tax purposes mainly include donations and other expenses that do not meet the criteria for deduction according to the relevant tax
+regulations.
+RMB million
+(1,917)
+Profit before income tax
+Tax computed at the statutory tax rate
+As at 1 January 2021
+(b) The reconciliation between the Group's effective tax rate and the statutory tax rate of 25% in the PRC (2020: same)
+is as follows:
+Adjustment on current income tax of previous period
+Non-taxable income (i)
+Expenses not deductible for tax purposes (i)
+Unused tax losses
+Others
+Income tax at the effective tax rate
+For the year ended 31 December
+2021
+2020
+3,103
+RMB million
+54,476
+12,624
+13,619
+(412)
+(464)
+(14,425)
+(10,787)
+276
+202
+27
+498
+(7)
+35
+50,495
+(Charged)/Credited to net profit
+(Charged)/Credited to other
+345
+- Available-for-sale securities
+2,853
+(15,199)
+2,862
+3,534
+6,741
+448
+7,644
+677
+(27)
+(18,202)
+3,198
+677
+448
+(27)
+(7,360)
+(i)
+The deferred tax liabilities arising from the insurance category are mainly related to the change of long-term insurance contract liabilities at 31 December
+2008 as a result of the first time adoption of IFRSS in 2009 and the temporary differences of short-term insurance contract liabilities and policyholder
+dividends payable.
+(ii) The deferred tax arising from the investments category is mainly related to the temporary differences of unrealised gains/(losses) on available-for-sale
+securities, securities at fair value through profit or loss, and others.
+(iii) The deferred tax arising from the others category is mainly related to the temporary differences of employee salaries and welfare costs payable.
+Unrecognised deductible tax losses of the Group amounted to RMB3, 173 million as at 31 December 2021 (as at 31
+December 2020: RMB3,300 million). Unrecognised deductible temporary differences of the Group amounted to RMB1
+million as at 31 December 2021 (as at 31 December 2020: RMB1 million).
+212 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+29 TAXATION (continued)
+(d) The analysis of net deferred tax assets and deferred tax liabilities is as follows:
+29 TAXATION (continued)
+Deferred tax assets:
+- deferred tax assets to be recovered after 12 months
+(22,386)
+4,334
+(15,199)
+2,853
+· Portion of fair value changes on
+available-for-sale securities attributable
+to participating policyholders
+- Others
+As at 31 December 2021
+Insurance
+Investments
+RMB million
+RMB million
+Others
+RMB million
+Total
+RMB million
+(i)
+(ii)
+comprehensive income
+(iii)
+1,787
+(14,673)
+1,759
+2,914
+(61)
+(10,202)
+3,485
+990
+(9,446)
+(9,446)
+990
+(26)
+(26)
+4,334
+(22,386)
+1,557
+For the year ended 31 December 2021
+625,378
+3,103
+125,998
+(4,644)
+121,354
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+56,327
+(1,297)
+55,030
+443,053
+(683)
+442,370
+Total
+(6,624)
+618,754
+For the year ended 31 December 2020
+Life insurance death and other benefits
+117,129
+(3,520)
+113,609
+Accident and health claims and claim adjustment expenses
+Increase in insurance contract liabilities
+53,073
+(678)
+52,395
+415,186
+(389)
+414,797
+Total
+585,388
+Life insurance death and other benefits
+For the year ended 31 December 2021
+RMB million
+Net
+Notes to the Consolidated Financial Statements (continued)
+- deferred tax assets to be recovered within 12 months
+Subtotal
+For the year ended 31 December 2021
+24 NET FAIR VALUE GAINS THROUGH PROFIT OR LOSS
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+Debt securities
+Equity securities
+Stock appreciation rights
+Financial liabilities at fair value through profit or loss
+Derivative financial instruments
+(4,587)
+Total
+3,470
+(583)
+22,997
+202
+255
+202
+(648)
+(121)
+4,943
+21,900
+25 INSURANCE BENEFITS AND CLAIMS EXPENSES
+Gross
+RMB million
+Ceded
+RMB million
+1,069
+580,801
+26 INVESTMENT CONTRACT BENEFITS
+Benefits of investment contracts are mainly the interest credited to investment contracts.
+2020
+RMB million
+20,928
+19,534
+1,412
+1,318
+3,273
+2,455
+5,287
+5,162
+(645)
+(119)
+53
+63
+RMB million
+29 TAXATION
+(a) The amount of taxation charged to net profit represents:
+Current taxation - Enterprise income tax
+Deferred taxation
+Total tax charges
+210 Annual Report 2021 | Financial Report
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+4,824
+(6,741)
+6,588
+(3,485)
+(1,917)
+Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
+against current tax liabilities and when the deferred income tax relates to the same tax authority.
+Notes to the Consolidated Financial Statements (continued)
+2021
+Foreign exchange gains
+Annual Report 2021 | Financial Report 209
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+27 FINANCE COSTS
+Interest expenses for securities sold under agreements to repurchase
+Interest expenses for bonds payable
+Interest expenses for interest-bearing loans and borrowings
+Interest on lease liabilities
+Total
+For the year ended 31 December
+2021
+2020
+RMB million
+RMB million
+3,523
+Remuneration in respect of audit services provided by auditors
+1,565
+1,503
+479
+566
+96
+5,598
+113
+3,747
+28 PROFIT BEFORE INCOME TAX
+Profit before income tax is stated after charging/(crediting) the following:
+For the year ended 31 December
+Employee salaries and welfare costs
+Housing benefits
+Contribution to the defined contribution pension plan
+Depreciation and amortisation
+1,500
+Deferred tax liabilities:
+22,414
+- deferred tax liabilities to be settled within 12 months
+Subtotal
+(a) Related parties with control relationship
+Information of the parent company is as follows:
+Name
+CLIC
+Location of
+registration
+Beijing, China
+Principal business
+Insurance services including receipt
+of premiums and payment of benefits
+in respect of the in-force life, health,
+accident and other types of personal
+insurance business, and the reinsurance
+business; holding or investing in domestic
+and overseas insurance companies or
+other financial insurance institutions;
+fund management business permitted by
+national laws and regulations or approved
+by the State Council of the People's
+Republic of China; and other businesses
+approved by insurance regulatory agencies.
+Relationship
+with the Company
+Immediate and
+ultimate holding
+company
+Nature of
+ownership
+State-owned
+Legal
+representative
+Bai Tao
+(the change of
+registration with
+the department in
+charge of industrial
+and commercial
+administration is in
+progress)
+Annual Report 2021 | Financial Report 217
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(b) Subsidiaries
+Refer to Note 41(d) for the basic and related information of subsidiaries.
+(c) Associates and joint ventures
+Refer to Note 9 for the basic and related information of associates and joint ventures.
+(d) Other related parties
+Significant related parties
+China Life Real Estate Co., Limited ("CLRE")
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS
+(iii) For financial assets measured at amortised cost, the carrying amount before adjusting impairment allowance is disclosed here.
+(iv) Mainly including government bonds and policy financial bonds.
+(ii) Credit risk ratings for domestic assets are provided by domestic qualified external rating agencies and credit risk ratings for overseas assets are provided
+by overseas qualified external rating agencies.
+4,970
+2,439,186
+1,937,416
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)
+(c) The table below presents financial assets without low credit risk for aforementioned financial assets with contractual
+terms that give rise to SPPI:
+Domestic
+Overseas
+Total
+Domestic
+Overseas
+Total
+As at 31 December 2021
+Carrying
+amount (iii)
+Fair value
+China Life Insurance (Overseas) Company Limited ("CL Overseas")
+RMB Million
+9,631
+7,274
+9,631
+7,274
+As at 31 December 2020
+Carrying
+amount (iii)
+Fair value
+RMB Million
+RMB Million
+7,367
+24
+4,966
+4
+7,391
+RMB Million
+3,873
+China Life Investment Management Company Limited (Formerly known
+Relationship with the Company
+CL Wealth
+RMB200
+Shanghai Rui Chong Investment Co., Limited
+RMB6,800
+("Rui Chong Company")
+China Life (Beijing) Health Management
+RMB1,530
+Co., Limited ("CL Health")
+China Life Franklin (Shenzhen) Equity
+USD2
+RMB1,288
+700
+RMB200
+RMB6,100
+RMB1,530
+USD2
+Investment Fund Management Co., Limited
+("Franklin Shenzhen Company")
+Xi'an Shengyi Jingsheng Real Estate Co., Ltd.
+RMB1,131
+("Shengyi Jingsheng")
+Dalian Hope Building Company Ltd.
+RMB484
+RMB1,131
+RMB484
+("Hope Building")
+The table above does not include the partnerships and the subsidiaries which were not set up or invested in Mainland
+China that having control relationship with the Group. These partnerships and subsidiaries do not have related information
+about registered capital.
+218 Annual Report 2021 | Financial Report
+RMB1,288
+CL AMP
+("Suzhou Pension Company")
+- deferred tax liabilities to be settled after 12 months
+Under common control of CLIC
+Under common control of CLIC
+Under common control of CLIC
+Under common control of CLIC
+Under common control of CLIC
+A pension fund jointly set up by the
+Company and others
+(e) Registered capital of related parties with control relationship and changes during the year
+As at
+31 December
+As at
+31 December
+Name of related party
+2020
+Increase
+Decrease
+million
+million
+as "China Life Investment Holding Company Limited")("CLI")
+China Life Ecommerce Company Limited ("CL Ecommerce")
+China Life Healthcare Investment company limited ("CLHI")
+China Life Enterprise Annuity Fund ("EAP")
+million
+RMB4,600
+2021
+million
+RMB4,600
+AMC
+RMB4,000
+RMB4,000
+China Life Pension Company Limited
+RMB3,400
+RMB3,400
+("Pension Company")
+China Life (Suzhou) Pension and
+RMB1,991
+190
+RMB2,181
+CLIC
+4,846
+Retirement Investment Company Limited
+13
+Stock appreciation rights have been awarded in units, with each unit representing the value of one H share. No shares
+of common stock will be issued under the stock appreciation rights plan. According to the Company's plan, all stock
+appreciation rights will have an exercise period of five years from the date of award and will not be exercisable before the
+fourth anniversary of the date of award unless specific market or other conditions have been met. On 26 February 2010,
+the Board of Directors of the Company extended the exercise period of all stock appreciation rights, which is also subject
+to government policy.
+As at 31 December 2021, there were 55.01 million units outstanding and exercisable (as at 31 December 2020: same). As
+at 31 December 2021, the amount of intrinsic value for the vested stock appreciation rights was RMB278 million (as at 31
+December 2020: RMB480 million).
+The fair value of the stock appreciation rights is estimated on the date of valuation at each reporting date using lattice-
+based option valuation models based on expected volatility from 14% to 30%, an expected dividend yield of no higher
+than 6.05% and a risk-free interest rate ranging from -0.01% to 0.25%.
+The Company recognised a gain of RMB202 million in the net fair value through profit or loss in the consolidated
+comprehensive income representing the fair value change of the rights during the year ended 31 December 2021 (2020:
+fair value gain of RMB255 million). RMB278 million and RMB13 million were included in salary and staff welfare payable
+included under other liabilities for the units not exercised and exercised but not paid as at 31 December 2021 (as at 31
+December 2020: RMB480 million and RMB13 million), respectively. There was no unrecognised compensation cost for
+the stock appreciation rights as at 31 December 2021 (as at 31 December 2020: nil).
+33 DIVIDENDS
+Pursuant to the shareholders' approval at the Annual General Meeting on 30 June 2021, a final dividend of RMB0.64
+(inclusive of tax) per ordinary share totalling RMB18,089 million in respect of the year ended 31 December 2020 was
+declared and paid in 2021. The dividend has been recorded in the consolidated financial statements for the year ended 31
+December 2021.
+Pursuant to a resolution passed at the meeting of the Board of Directors on 24 March 2022, a final dividend of RMB0.65
+(inclusive of tax) per ordinary share totalling approximately RMB18,372 million for the year ended 31 December 2021 was
+proposed for shareholders' approval at the forthcoming Annual General Meeting. The dividend has not been recorded in
+the consolidated financial statements for the year ended 31 December 2021.
+214 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9
+According to IFRS 4 Amendments, the Company made the assessment based on the Group's financial position of 31
+December 2015, concluding that the carrying amount of the Group's liabilities arising from contracts within the scope
+of IFRS 4, which includes any deposit components or embedded derivatives unbundled from insurance contracts, was
+significant compared to the total carrying amount of all its liabilities. The percentage of the total carrying amount of its
+liabilities connected with insurance relative to the total carrying amount of all its liabilities is greater than 90 percent.
+There had been no significant change in the activities of the Group since then that requires reassessment. Therefore, the
+Group's activities are predominantly connected with insurance, meeting the criteria to apply temporary exemption from
+IFRS 9.
+Sino-Ocean, China Unicom, CGB and certain associates of the Group, have adopted IFRS 9. According to IFRS 4
+Amendments, the Group elected not to apply uniform accounting policies when using the equity method for these
+associates.
+(a) The tables below present the fair value of the following groups and fair value changes for the years of major financial
+assets (i) under IFRS 9:
+For the year ended 31 December
+Held for trading financial assets
+Financial assets that are managed and whose performance are evaluated on
+a fair value basis
+Other financial assets
+- Financial assets with contractual terms that give rise on specified dates
+to cash flows that are solely payments of principal and interest on the
+principal amount outstanding ("SPPI")
+- Financial assets with contractual terms that do not give rise to SPPI
+Total
+Held for trading financial assets
+Financial assets that are managed and whose performance are evaluated on
+a fair value basis
+Other financial assets
+- Financial assets with contractual terms that give rise to SPPI
+-
+– Financial assets with contractual terms that do not give rise to SPPI
+Total
+2021
+RMB million
+The Board of Directors of the Company approved, on 5 January 2006, an award of stock appreciation rights of 4.05 million
+units and on 21 August 2006, another award of stock appreciation rights of 53.22 million units to eligible employees. The
+exercise prices of the two awards were HKD5.33 and HKD6.83, respectively, the average closing price of shares in the
+five trading days prior to 1 July 2005 and 1 January 2006, the dates for vesting and exercise price setting purposes of this
+award. Upon the exercise of stock appreciation rights, exercising recipients will receive payments in RMB, subject to any
+withholding tax, equal to the number of stock appreciation rights exercised times the difference between the exercise
+price and market price of the H shares at the time of exercise.
+32 STOCK APPRECIATION RIGHTS
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+24
+Net deferred tax liabilities
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+14,695
+10,882
+7,659
+206,771
+6,292
+17,174
+(28,107)
+(2,864)
+(4,266)
+(29,714)
+(32,373)
+(7,360)
+(15,199)
+30 NET PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
+Net profit attributable to equity holders of the Company is recognised in the financial statements of the Company to the
+extent of RMB42,865 million (2020: RMB44,594 million).
+31 EARNINGS PER SHARE
+There is no difference between the basic and diluted earnings per share. The basic and diluted earnings per share for the
+year ended 31 December 2021 are calculated based on the net profit for the year attributable to ordinary equity holders of
+the Company and the weighted average of 28,264,705,000 ordinary shares (2020: same).
+Annual Report 2021 | Financial Report 213
+22,354
+2020
+RMB million
+161,570
+(26,850)
+1,978,361
+BBB+
+BBB-
+Not rated
+Subtotal
+Total
+216 Annual Report 2021 | Financial Report
+Carrying amount (iii)
+As at
+As at
+31 December
+2021
+RMB Million
+31 December
+2020
+RMB Million
+832,127
+1,592,582
+6,551
+80
+3,000
+2,434,340
+719,142
+1,207,034
+4,197
+427
+25
+4,331
+3,654
+13
+45
+75
+2,559,014
+958,340
+3,724,125
+112
+A-
+A
+170
+3,000
+1,933,543
+Overseas
+3,069,528
+929,597
+A+
+Fair value changes
+for the year ended 31 December
+2021
+RMB million
+RMB million
+4,541
+92,219
+(11,064)
+14,959
+55,151
+111,719
+2020
+(i)
+66,501
+Subtotal
+AA+
+AAA
+AA-
+Domestic
+Rating not required (iv)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 215
+Only including securities at fair value through profit or loss, loans (excluding policy loans), available-for-sale securities and held-to-maturity securities.
+34 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)
+(b) The table below presents the credit risk exposure (ii) for aforementioned financial assets with contractual terms that
+give rise to SPPI:
+AA
+(ii) Overseas listed shares are traded on the Stock Exchange of Hong Kong Limited and the New York Stock Exchange.
+Annual Report 2021 | Financial Report 227
+28,265
+28,264,705,000
+7,441
+Notes to the Consolidated Financial Statements (continued)
+7,441,175,000
+1,500
+19,323,530,000
+8,941
+8,941,175,000
+19,324
+RMB million
+No. of shares
+As at 31 December 2021
+28,265
+For the year ended 31 December 2021
+28,265 28,264,705,000
+All shares owned by CLIC are domestic listed shares.
+1,500,000,000
+37 RESERVES
+on translating
+Other
+foreign
+(i)
+General
+Statutory Discretionary
+loss under the
+for-sale
+securities
+reserves
+Other
+Share
+premium
+Unrealised
+to profit or
+comprehensive
+income non-
+reclassifiable
+Other
+Exchange
+differences
+reclassifiable
+from
+available-
+income
+(losses)
+gains/ comprehensive
+to profit or
+overseas listed (ii)
+Salaries and other benefits
+Including: domestic listed
+2021
+For the year ended 31 December
+(i) Key management personnel compensation
+Board of directors of the Company approved and announced on 26 May 2021 to subscribe 918,578,836 shares of Guangfa Bank's additional stock issue at
+RMB8.7364 per share, amounted to RMB8,025 million. As at 31 December 2021, the Company has finished the capital injection to Guangfa Bank and was
+awaiting the final regulatory approval. Therefore the capital contribution was recorded as other account receivable.
+Note:
+114
+604
+Amount due from Rui Chong Company
+(43)
+(114)
+Amount due to Pension Company
+39
+46
+Amount due from Pension Company
+(8)
+Amount due to AMC HK
+(1,293)
+(717)
+loss under the
+2020
+RMB million
+RMB million
+15
+Owned by other equity holders
+Owned by CLIC (i)
+As at 31 December 2021, the Company's share capital was as follows:
+28,264,705,000
+Registered, authorised, issued and fully paid
+Ordinary shares of RMB1 each
+RMB million
+No. of shares
+RMB million
+As at 31 December 2020
+Total
+As at 31 December 2021
+No. of shares
+As at 31 December 2021, most of the bank deposits of the Group were with state-owned banks; the issuers of
+corporate bonds and subordinated bonds held by the Group were mainly state-owned enterprises. For the year ended
+31 December 2021, a large portion of group insurance business of the Group was with state-owned enterprises; the
+majority of bancassurance commission charges were paid to state-owned banks and postal offices; and the majority of the
+reinsurance agreements of the Group were entered into with a state-owned reinsurance company.
+Under IAS 24 Related Party Disclosures ("IAS 24"), business transactions between state-owned enterprises controlled
+by the PRC government are within the scope of related party transactions. CLIC, the ultimate holding company of the
+Group, is a state-owned enterprise. The Group's key business is insurance and investment related and therefore the
+business transactions with other state-owned enterprises are primarily related to insurance and investment activities. The
+related party transactions with other state-owned enterprises were conducted in the ordinary course of business. Due to
+the complex ownership structure, the PRC government may hold indirect interests in many companies. Some of these
+interests may, in themselves or when combined with other indirect interests, be controlling interests which may not be
+known to the Group. Nevertheless, the Group believes that the following captures the material related parties and has
+applied IAS 24 exemption and disclosed only qualitative information.
+(j) Transactions with state-owned enterprises
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+226 Annual Report 2021 | Financial Report
+The total compensation package for the Company's key management personnel has not yet been finalised in accordance
+with regulations of the relevant PRC authorities. The compensation listed above is the tentative payment.
+28
+36 SHARE CAPITAL
+equity method
+for the year
+reserve fund
+5,009
+5,096
+Appropriation to reserves
+(4,608)
+(104)
+(388)
+1,233
+(5,349)
+Other comprehensive income
+237,935
+182
+(989)
+43,047
+40,502
+45,525
+1,402
+54,268
+93
+53,905
+5,273
+15,378
+Other comprehensive income
+to retained earnings
+Others
+Amount due to AMC
+228 Annual Report 2021 | Financial Report
+Under related PRC law, dividends may be paid only out of distributable profits. Any distributable profits that are not
+distributed in a given year are retained and available for distribution in the subsequent years.
+(c) Pursuant to "Financial Standards of Financial Enterprises - Implementation Guide" issued by the Ministry of Finance of the PRC on 30 March 2007, for
+the year ended 31 December 2021, the Company appropriated 10% of net profit under CAS which amounted to RMB5,096 million to the general reserve
+for future uncertain catastrophes, which cannot be used for dividend distribution or conversion to share capital increment (2020: RMB5,009 million).
+In addition, pursuant to the CAS, the Group appropriated RMB177 million to the general reserve of its subsidiaries attributable to the Company in the
+consolidated financial statements (2020: RMB150 million).
+(b) Approved at the Annual General Meeting in 30 June 2021, the Company appropriated RMB5,009 million to the discretionary reserve fund for the year
+ended 31 December 2020 based on net profit under CAS (2020: RMB5,857 million).
+(a) Pursuant to the relevant PRC laws, the Company appropriated 10% of its net profit under Chinese Accounting Standards ("CAS") to statutory reserve
+which amounted to RMB5,096 million for the year ended 31 December 2021 (2020: RMB5,009 million).
+249,055
+123
+(1,377)
+As at 1 January 2021
+48,320
+50,621
+2,635
+48,919
+305
+305
+398
+53,905
+As at 31 December 2021
+45
+45
+45,511
+237,935
+182
+(989)
+(162)
+(24)
+37,888
+34,645
+40,516
+756
+28,594
+1,148
+53,905
+197,266
+As at 1 January 2020
+(b)
+(a)
+RMB million RMB million
+RMB million RMB million RMB million RMB million RMB million
+RMB million RMB million RMB million
+Total
+equity method
+operations
+reserve
+(c)
+reserve fund
+Other comprehensive income
+25,674
+43,047
+40,502
+45,525
+1,402
+54,268
+93
+53,905
+As at 31 December 2020
+(1,055)
+for the year
+(1,055)
+16,025
+5,159
+5,857
+5,009
+Appropriation to reserves
+25,699
+344
+(965)
+646
+Others
+The resulting balances due from and to subsidiaries of the Company
+100.00%
+(15)
+99.98%
+RMB571
+directly
+directly
+99.98%
+RMB571
+RMB571
+99.98%
+Shanghai Yuan Shu Yuan Jiu Investment
+Management Partnership (Limited
+Partnership) ("Yuan Shu Yuan Jiu")
+Shanghai Yuan Shu Yuan Pin Investment
+indirectly
+indirectly
+100.00%
+-- USD452
+100.00%
+RMB571
+99.98%
+Management Partnership (Limited
+directly
+-- RMB1,680
+99.98%
+RMB1,680
+Ningbo Meishan Bonded Port Area Bai
+Wansheng")
+directly
+directly
+(Limited Partnership) ("Shanghai
+99.98%
+12 - RMB4,024
+99.98%
+RMB4,012
+Shanghai Wansheng Industry Partnership
+Partnership) ("Yuan Shu Yuan Pin")
+directly
+USD452
+99.98%
+Wisdom Forever Limited Partnership
+indirectly
+Percentage
+of holding
+Amount
+As at 31 December 2021
+As at 31 December 2020
+Subsidiaries
+(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
+Guo Yang Guo Sheng
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 219
+indirectly
+indirectly
+100.00%
+USD2
+For the year ended 31 December 2021
+million
+RMB2,835
+Increase
+million
+Decrease
+100.00%
+100.00%
+New Fortune Wisdom Limited
+indirectly
+indirectly
+100.00%
+100.00%
+New Capital Wisdom Limited
+directly
+directly
+89.997%
+Percentage
+of holding
+Amount
+million
+RMB2,835
+89.997%
+million
+indirectly
+100.00%
+Ning Investment Partnership (Limited
+directly
+RMB616
+321
+99.95%
+RMB295
+China Life Guangde(Tianjin) Equity
+directly
+99.95%
+directly
+99.99%
+RMB4,111
+451
+indirectly
+100.00%
+RMB1,093
+LLC ("CG Investments")
+Investment Fund Partnership (Limited
+directly
+directly
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+220 Annual Report 2021 | Financial Report
+("CL Pension Industry")
+directly
+directly
+Investment Fund (Limited Partnership)
+99.90%
+RMB504
+495
+99.90%
+RMB9
+Beijing China Life Pension Industry
+Partnership) ("CL Guang De")
+30
+directly
+35
+RMB3,660
+99.98%
+- RMB548
+15
+99.98%
+RMB533
+Wuhu Yuanxiang Tianfu Investment
+Management Partnership (Limited
+indirectly
+100.00%
+RMB484
+100.00%
+RMB484
+Hope Building
+Partnership) ("Bai Ning")
+indirectly
+directly
+directly
+Partnership) ("Yuanxiang Tianfu")
+CBRE Global Investors U.S. Investments I,
+indirectly
+100.00%
+RMB1,063
+Shengyi Jingsheng
+Partnership) ("Yuanxiang Tianyi")
+directly
+directly
+Management Partnership (Limited
+99.98%
+- RMB548
+15
+99.98%
+RMB533
+Wuhu Yuanxiang Tianyi Investment
+99.99%
+USD2
+Franklin Shenzhen Company
+directly
+50.00%
+HKD130
+50.00%
+HKD130
+China Life Franklin Asset Management
+indirectly
+Company Limited ("AMC HK")
+indirectly
+directly and
+74.27%
+RMB2,746
+74.27%
+RMB2,746
+directly
+directly and
+indirectly
+indirectly
+Suzhou Pension Company
+RMB200
+CL Wealth
+indirectly
+indirectly
+85.03%
+RMB1,095
+85.03%
+RMB1,095
+CL AMP
+directly
+100.00%
+RMB2,181
+190
+100.00%
+RMB1,991
+directly
+100.00%
+60.00%
+60.00%
+Decrease
+Increase
+Percentage
+Percentage
+of holding
+Amount
+million
+As at 31 December 2021
+million
+CLIC
+Shareholder
+(f) Percentages of holding of related parties with control relationship and changes during the year
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+(17)
+As at 31 December 2020
+million
+RMB19,324
+68.37%
+RMB1,680
+Pension Company
+AMC
+As at 31 December 2021
+Percentage
+of holding
+Amount
+Decrease
+million
+million
+million
+Increase
+Amount of holding
+As at 31 December 2020
+Percentage
+Subsidiaries
+68.37%
+of holding
+Amount
+million
+RMB19,324
+million
+RMB1,680
+RMB200
+100.00%
+indirectly
+Fortune Bamboo Limited
+directly
+directly
+100.00%
+RMB1,876
+100.00%
+RMB2,435
+RMB1,876
+directly
+directly
+100.00%
+RMB1,993
+100.00%
+RMB1,993
+Sunny Bamboo Limited
+100.00%
+RMB2,435
+100.00%
+directly
+100.00%
+RMB1,530
+100.00%
+RMB1,530
+CL Health
+indirectly
+indirectly
+100.00%
+USD1,125
+100.00%
+USD1,125
+China Century Core Fund Limited
+directly
+directly
+Golden Bamboo Limited
+directly
+directly
+100.00%
+- 700 RMB6,100
+100.00%
+RMB6,800
+Rui Chong Company
+indirectly
+indirectly
+100.00%
+100.00%
+King Phoenix Tree Limited
+directly
+directly
+100.00%
+100.00%
+Golden Phoenix Tree Limited
+indirectly
+100.00%
+(f) Percentages of holding of related parties with control relationship and changes during the year (continued)
+directly
+New Aldgate Limited
+RMB285
+190
+100.00%
+RMB95
+CL Hotel Investor, L.P.
+directly
+directly
+100.00%
+100.00%
+Glorious Fortune Forever Limited
+directly
+directly
+100.00%
+RMB1,167
+RMB1,167
+directly
+Subsidiaries
+directly
+China Life Insurance Sales Company Limited
+Distribution of profits from the consolidated structured entities
+to the Company
+Transactions between the consolidated structured entities
+and the Company
+Capital reduction from Rui Chong
+Capital reduction of subsidiaries
+12
+12
+700
+Capital contribution to Shanghai Wansheng
+Capital contribution to Yuanxiang Tianyi
+15
+Capital contribution to Yuanxiang Tianfu
+205
+190
+Capital contribution to Suzhou Pension Company
+15
+15,947
+14,429
+Annual Report 2021 | Financial Report 223
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+224 Annual Report 2021 | Financial Report
+On 10 February 2021, CLP&C renewed an agreement for the management of insurance funds with AMC, entrusting AMC to manage and make
+investments for its insurance funds, effective from 1 January 2021 to 31 December 2023. In accordance with the agreement, CLP&C paid AMC a
+fixed service fee and a variable service fee. The fixed service fee was calculated on a monthly basis and payable on an annual basis, by multiplying
+the average net asset value of assets of each category under management at the beginning and the end of any given month by the responding annual
+investment management fee rate, divided by 12. The variable service fee was payable on an annual basis, and linked to investment performance.
+(ii.d) On 31 December 2018, the Company and CLI renewed a management agreement of alternative investment of insurance funds, effective from 1
+January 2019 to 31 December 2020. The agreement shall be automatically renewed for one year unless either party gives written notice to the other
+party not to renew it 90 business days prior to the expiration of this agreement. On 1 January 2021, the agreement was automatically renewed
+for one year. In accordance with the agreement, the Company entrusted CLI to engage in investment, operation and management of equities, real
+estate and related financial products, and securitised financial products under the instructions of the annual guidelines. The Company paid CLI an
+asset management fee and a performance related bonus based on the agreement. For fixed-income projects, the management fee rate was between
+0.05% and 0.6% according to different ranges of returns; for non-fixed-income projects, the management fee rate for invested projects was 0.3%,
+the management fee rates for newly signed projects were between 0.05% and 0.3% according to CLI's involvement in project management and
+the performance-related bonus is based on the internal return rate upon expiry of the project. In addition, the Company adjusts the investment
+management fees for fixed-income projects and non-fixed-income projects based on the annual evaluation results on CLI's performance. The
+adjustment (variable management fee) ranges from negative 10% to positive 15% of the investment management fee in the current period.
+(ii.e) On 28 December 2018, the Company and AMC renewed the agreement for the management of insurance funds, effective from 1 January 2019 to 31
+December 2021. In accordance with the agreement, the Company entrusted AMC to manage and make investments for its insurance funds and paid
+AMC a fixed investment management service fee and a variable investment management service fee. The fixed annual service fee was calculated
+and payable on a seasonal basis, by multiplying the average net value of the assets under management by the rate of 0.05%; the variable investment
+management service fee was payable annually, based on the results of performance evaluation, at 20% of the fixed service fee per annum. On 1 July
+2020, the Company and AMC revised the agreement for the management of insurance funds, effective from 1 July 2020 to 31 December 2022. The
+calculation method of the fixed annual service fee has been changed from five ten thousandths of the net value of the total investment assets to daily
+accrued fixed service fee by multiplying the net value of the total investment assets on the day by the variety-based annual investment management
+fee rate divided by 360. The other terms above remain unchanged. Asset management fees charged to the Company by AMC are eliminated in the
+consolidated statement of comprehensive income.
+(ii.c)
+(ii.b) In 2018, CL Overseas renewed an investment management agreement with AMC HK, effective from 1 January 2018 to 31 December 2022. In
+accordance with the agreement, CL Overseas entrusted AMC HK to manage and make investments for its insurance funds and paid AMC HK a
+basic investment management fee and an investment performance fee. The basic investment management fee was accrued by multiplying the
+weighted average total funds by the basic fee rate. The investment performance fee was calculated based on the difference between the total actual
+annual yields and predetermined net realised yield. The basic investment management fee was calculated and payable on a semi-annual basis. The
+investment performance fee was payable according to the total actual annual yield at the end of each year.
+(ii.a) In December 2018, CLIC renewed an asset management agreement with AMC, entrusting AMC to manage and make investments for its insurance
+funds. The agreement is effective from 1 January 2019 to 31 December 2021. In accordance with the agreement, CLIC paid AMC a basic service
+fee at the rate of 0.05% per annum for the management of insurance funds. The service fee was calculated on a monthly basis and payable on a
+seasonal basis, by multiplying the average book value of the assets under management (after deducting the funds and interests of positive repurchase
+transactions and deducting the principal and interests of debt and equity investment schemes, project asset-backed schemes and customised
+non-standard products) at the beginning and the end of any given month by the rate of 0.05%, divided by 12. According to specific projects, debt
+investment schemes, equity investment plans, project asset-backed plans, and customised non-standard products are based on the contractual
+agreed rate, without paying for an extra management fee. At the end of each year, CLIC assessed the investment performance of the assets managed
+by AMC, compared the actual results against benchmark returns and made adjustment to the basic service fee. In July 2020, CLIC revised the asset
+management agreement with AMC, effective from 1 July 2020 to 31 December 2022. The annual rate of the basic service fee has been changed from
+0.05% to 0.08%, and the other terms mentioned above remain unchanged.
+On 26 December 2017, the Company and CLIC renewed a renewable insurance agency agreement, effective from 1 January 2018 to 31 December
+2020. The Company performs its duties of insurance agents in accordance with the agreement, but does not acquire any rights and profits or assume
+any obligations, losses and risks as an insurer of the non-transferable policies. The policy management fee was payable semi-annually, and is equal to
+the sum of (1) the number of policies in force as at the last day of the period, multiplied by RMB8.0 per policy and (2) 2.5% of the actual premiums and
+deposits received during the period, in respect of such policies. The policy management fee income is included in other income in the consolidated
+statement of comprehensive income. On 31 December 2020, the Company and the CLIC renewed the insurance agency agreement. This agreement
+is effective from 1 January 2021 to 31 December 2021.
+(i)
+Notes:
+(g) Transactions with significant related parties (continued)
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+95
+(g) Transactions with significant related parties (continued)
+190
+285
+432
+2,089
+18
+15
+2,742
+Capital increase in subsidiaries
+Rental received from Pension Company
+220
+Rental received
+Agency fee received from Pension Company for entrusted sales of
+Agency fee received
+Dividends from the other subsidiaries
+Dividends from Pension Company
+Dividends from AMC
+Dividends from subsidiaries
+annuity funds and other businesses
+127
+738
+301
+321
+451
+495
+6,064
+Capital contribution to CL Guang De
+Capital contribution to CG Investments
+Capital contribution to CL Pension Industry
+Capital contribution to China Life Qihang Fund I
+68
+70
+40
+57
+10
+70
+(v)
+Capital contribution to CL Hotel Investors, L.P.
+(ii.e) (vii)
+(ii.f)
+Notes (continued):
+(iii)
+Wealth management products and other financial instruments of CGB
+71,419
+69,148
+Amount deposited with CGB
+(38)
+(40)
+8,384
+Amount due to CLHI
+2
+Amount due from CLRE
+(447)
+(445)
+32
+(22)
+2
+603
+Amount due from CGB Note
+9,138
+Amount due to CL Ecommerce
+China Life Qihang Phase I (Tianjin) Equity
+Investment Fund Partnership (Limited
+Partnership) ("CL Qihang Fund I")
+China Life Xing Wan (Tianjin) Enterprise
+Management Partnership (Limited
+Partnership) ("CL Xing Wan")(i)
+12
+3
+Amount due from CL Ecommerce
+7
+7
+Amount due from Sino-Ocean
+361
+356
+Corporate bonds of Sino-Ocean
+(51)
+(80)
+Amount due to CGB
+1,240
+(17)
+(ii.f)
+Amount due to CLI
+Amount due to CLP&C
+Notes to the Consolidated Financial Statements (continued)
+Annual Report 2021 | Financial Report 225
+These transactions constitute continuing connected transactions which are subject to reporting and announcement requirements but are exempt
+from independent shareholders' approval requirements under Chapter 14A of the Listing Rules. The Company has complied with the disclosure
+requirements in accordance with Chapter 14A of the Listing Rules.
+On 25 November 2020, the Company and CLHI signed a new aged-care projects management service agreement, effective from 1 January 2020 to
+31 December 2021. In accordance with the agreement, the Company entrusted CLHI to operate and manage existed aged-care projects and paid
+CLHI a management service fee. The management service fee was calculated and payable on a seasonal basis, by multiplying the total amount of the
+investments under management (based on the daily weighted average investment amount) by the annual rate of 2.7%.
+On 1 January 2019, the Company and Pension Company renewed an entrusted agency agreement for pension business acted by life business.
+The agreement is effective from 1 January 2019 to 31 December 2021. The business means that Pension Company entrusted the Company to sell
+enterprise annuity funds, pension security business, occupational pension business and the third-party asset management business. The commissions
+agreed upon in the agreement include the daily business commissions and the annual promotional plans commissions. According to the agreement,
+the commissions for the entrusting service of enterprise annuity fund management, which is the core business of Pension Company, are calculated
+at 30% to 80% of the annual entrusting management fee revenues, depending on the duration of the agreement. The commissions for account
+management service are calculated at 60% of the first year's account management fee and were only charged for the first year, regardless of the
+duration of the agreement. The commissions for investment management services, in accordance with the duration of the agreement, are calculated
+at 60% to 3% of the annual investment management fee (excluding risk reserves for investment), decreasing annually. The commissions of the group
+pension plan are, in accordance with the duration of the contracts, calculated at 50% to 3% of the annual investment management fee, decreasing
+annually; the commissions of the personal pension plan are calculated at 30% to 50% of the annual investment management fee according to the
+various rates of the daily management fee applied to the various individual pension management products in all of the management years; the
+commissions of occupation annuity and third-party asset management business are in accordance with the provision of annual promotional plans,
+which should be determined by both parties on a separate occasion. The commissions charged to Pension Company by the Company are eliminated
+in the consolidated statement of comprehensive income of the Group.
+On 28 December 2018, the Company and CGB signed another insurance agency agreement to distribute corporate group insurance products. The
+corporate group insurance products suitable for distribution through bancassurance channels are included in the agreement. The Company paid the
+agency commission by multiplying the net amount of total premiums received from the sale of each category group insurance product after deducting
+the surrender premiums, by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed by
+reference to comparable market prices of independent third-parties. The commissions are paid on a monthly basis. The agreement is effective for two
+years from 1 January 2019, with an automatic one-year renewal if no objections were raised by either party upon expiry.
+For the year ended 31 December 2021
+On 19 October 2018, the Company and CGB renewed an insurance agency agreement to distribute insurance products. All individual insurance
+products suitable for distribution through bancassurance channels are included in the agreement. CGB provides agency services, including the sale
+of insurance products, collecting premiums and paying benefits. The Company paid the agency commission by multiplying the net amount of total
+premiums received from the sale of each category individual insurance products after deducting the surrender premiums in the hesitation period,
+by the responding fixed commission rate. The commission rates for various insurance products sold by CGB are agreed based on arm's length
+transactions. The commissions are payable on a monthly basis. On 22 August 2020, the Company and CGB renewed an insurance agency agreement
+to distribute insurance products, effective from the signing date to 22 August 2022.
+On 31 January 2018, the Company and CLP&C signed an insurance agency framework agreement, whereby CLP&C entrusted the Company to act as
+an agent to sell designated P&C insurance products in certain authorised jurisdictions. The agency fee was determined based on cost (tax included)
+plus a margin. The agreement is effective for three years, from 8 March 2018 to 7 March 2021. On 20 February 2021, CLP&C and the Company
+renewed the agreement, effective for two years, from 8 March 2021 to 7 March 2023.
+On 31 December 2018, the Company and AMC HK renewed the management agreement of insurance funds investment, which is effective from
+1 January 2019 to 31 December 2021. In accordance with the agreement, the Company entrusted AMC HK to manage and make investments for
+its insurance funds and paid AMC HK an asset management fee on a seasonal basis and the maximum investment management fee paid annually
+is RMB30 million. The management fee rate for financial products, such as investment plans, project asset-backed plans, customised products and
+insurance asset management products, set up by AMC HK in the industry permitted by regulatory policies, is set according to contractual terms.
+The management fee rate for the directive investment operation of term deposits, common stocks, funds, financial products and other investment
+products, universal account B-2 and entrusted assets account alike was 0.02%; the management fee rate for unlisted equity investment was 0.3%;
+the management fee rate for customised investment portfolio was agreed upon the management fee of market-oriented entrusted investment. Asset
+management fees charged to the Company by AMC HK are eliminated in the consolidated statement of comprehensive income.
+(vii)
+(vi)
+(v)
+(iv)
+CLP&C and CL Sales signed the Strategic Cooperation Agreement on 22 July 2019. According to the agreement, CL Sales, as an agent of insurance
+products, provides intermediary services for CLP&C. The two parties determine the specific commissions and the standard of sales management fee
+through fair negotiation, based on the local market price and the paid- in premium which exclude value-added tax and deducte the premium from batch
+reduction. This agreement is valid for three years, from 22 July 2019 to 21 July 2022.
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(h) Amounts due from/to significant related parties
+The following table summarises the balances due from and to significant related parties. The balances of the Group are
+all unsecured. The balances of the Group are non-interest-bearing and have no fixed repayment dates except for deposits
+with CGB, wealth management products and other securities of CGB, and corporate bonds issued by Sino-Ocean.
+251
+258
+43
+59
+348
+342
+Amount due from CLP&C
+Amount due from CL Overseas
+The resulting balances due from and to significant related parties of the Group
+Amount due from CLIC
+RMB million
+RMB million
+As at
+31 December
+2020
+2021
+31 December
+As at
+Amount due from CLI
+Payment of an asset management fee to AMC HK
+51
+Payment of an asset management fee
+2020
+2021
+For the year ended 31 December
+Rental and a service fee received from CLP&C
+Asset management fee received from CLP&C
+Dividends from CLP&C (Note 9)
+Agency fee received from CLP&C
+Notes
+CLP&C
+CLIC
+Transactions with CLIC and its subsidiaries
+(g) Transactions with significant related parties
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+Distribution of dividends from the Company and AMC to CLIC
+Policy management fee received from CLIC
+Asset management fee received from CLIC
+RMB million
+RMB million
+(i) (vii)
+(ii.c)
+54
+78
+271
+214
+2,289
+1,634
+(iii) (vii)
+125
+156
+564
+554
+14,253
+12,663
+(ii.a)
+Annual Report 2021 | Financial Report 221
+(ii) For the year ended 31 December 2021, the Company injected capital of RMB500 million to CL Sales, a wholly owned subsidiary of CLIC, and acquired
+90.81% of the shareholders' equity. Both parties are under common control by CLIC which is not transitory before and after the combination. Therefore,
+this is a business combination under common control. The financial statements of the Group were restated based on the financial statements as at 31
+December 2021 obtained from the merged party on the date of combination.
+CL Xing Wan, CL Hangzhou Hotel, CL Jiayuan were newly included in the consolidated financial statements of the Group for the year ended
+31 December 2021.
+(i)
+RMB1
+million
+million
+Decrease
+Increase
+Percentage
+of holding
+Amount
+million
+As at 31 December 2020
+("CL Jiayuan")(i)
+Management Company Limited
+China Life Jiayuan (Xiamen) Health
+Limited ("CL Hangzhou Hotel")(i)
+Payment of an asset management fee to AMC
+("CL Sales")(ii)
+China Life (Hangzhou) Hotel Company
+99.99%
+52
+6,064
+directly
+indirectly
+99.99%
+RMB300
+300
+indirectly
+99.99%
+- RMB65
+65
+directly
+90.81%
+indirectly
+99.98%
+RMB3,865
+3,865
+99.99%
+directly
+Amount
+million
+RMB6,065
+41
+As at 31 December 2021
+Percentage
+of holding
+Payment of asset management fee to CLI
+Dividends from other associates and joint ventures (Note 9)
+and the Group
+Transaction between other associates and joint ventures
+26
+17
+178
+271
+3
+88
+124
+145
+189
+190
+(iv)
+550
+3,333
+662
+4,254
+Notes to the Consolidated Financial Statements (continued)
+RMB million
+Notes
+RMB million
+CLI
+2020
+2021
+For the year ended 31 December
+2020
+RMB million
+1,140
+2021
+RMB million
+1,357
+Notes
+For the year ended 31 December
+Transactions between other subsidiaries and the Company
+Transaction between EAP and the Group
+35 SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)
+(g) Transactions with significant related parties (continued)
+For the year ended 31 December 2021
+222 Annual Report 2021 | Financial Report
+2,938
+Contribution to EAP
+Interest of corporate bonds received from Sino-Ocean
+Asset management fee received from CL Overseas
+CL Overseas
+106
+112
+(vi)
+Payment of a operation management service fee to CLHI
+(ii.b)
+71
+135
+103
+(ii.d) (vii)
+3,268
+651
+588
+52
+79
+CLHI
+Dividends from CGB (Note 9)
+Insurance premium received from CGB
+73
+Rental fee received from CGB
+Commission expenses charged by CGB
+Interest on deposits received from CGB
+CGB
+2020
+RMB million
+Payment of real estate purchase to CLI
+Property leasing expenses charged by CLI
+Dividends from Sino-Ocean (Note 9)
+RMB million
+Notes
+2021
+Transactions with associates and joint ventures
+Sino-Ocean
+For the year ended 31 December
+6,796
+Buildings
+RMB million
+As at 31 December 2021
+As at 31 December 2021
+As at 31 December 2021
+Fair value
+As at 1 January 2021
+218
+Net book value
+As at 1 January 2021
+Cost
+6,191
+(634)
+(189)
+(823)
+6,162
+7,878
+8,190
+Annual Report 2021 | Financial Report 235
+Notes to the Consolidated Financial Statements (continued)
+Additions
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(c) Investment properties (continued)
+As at 1 January 2020
+Additions
+7,014
+As at 1 January 2021
+(2,238)
+As at 31 December 2021
+1,103
+4,448
+1,103
+As at 31 December 2020
+1
+(490)
+(490)
+5,060
+1
+5,061
+(1,176)
+(1,453)
+(1,176)
+Accumulated depreciation
+(1,453)
+391
+(2,238)
+3,271
+2,822
+1
+3,272
+1
+2,823
+The Group had no significant profit or loss from subleasing right-of-use assets or sale and leaseback transactions for the
+year ended 31 December 2021 (2020: same).
+(c) Investment properties
+Cost
+As at 1 January 2021
+Additions
+391
+Accumulated depreciation
+For the year ended 31 December 2021
+Additions
+Notes to the Consolidated Financial Statements (continued)
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+(i) The table below presents the basic information of the Company's subsidiaries as at 31 December 2021:
+Name
+AMC (i)
+Pension Company (i)
+AMC HK
+Suzhou Pension Company (i)
+CL AMP (i)
+CL Wealth (i)
+Golden Phoenix Tree Limited
+King Phoenix Tree Limited
+Rui Chong Company (i)
+New Aldgate Limited
+88,951
+Place of incorporation
+and operation
+PRC
+60.00% directly
+PRC
+74.27% directly
+Registered capital
+RMB4,000 million
+RMB3,400 million
+Principal activities
+Asset management
+Pension and annuity
+and indirectly
+Hong Kong, PRC
+4,447
+50.00% indirectly
+100.00% directly
+PRC
+Percentage of
+equity interest held
+As at 1 January 2020
+170,387
+31 December
+2020
+As at 31 December 2020
+Net book value
+As at 1 January 2020
+As at 31 December 2020
+Fair value
+As at 1 January 2020
+As at 31 December 2020
+Buildings
+RMB million
+4,387
+2,409
+6,796
+(473)
+RMB million
+(161)
+3,914
+6,162
+5,462
+7,878
+The fair value of investment properties of the Company as at 31 December 2021 amounted to RMB8,190 million (as at 31
+December 2020: RMB7,878 million), which was estimated by the Company having regards to valuations performed by an
+independent appraiser. The investment properties were classified as Level 3 in the fair value hierarchy.
+(d) Investments in subsidiaries
+Unlisted investments at cost
+236 Annual Report 2021 | Financial Report
+As at
+As at
+31 December
+2021
+RMB million
+(634)
+RMB million
+968
+Others
+(24)
+(1)
+(25)
+Net book value
+As at 1 January 2020
+31,264
+2,763
+518
+13,657
+1,028
+49,230
+As at 31 December 2020
+35,643
+2,525
+456
+10,567
+50,159
+Annual Report 2021 | Financial Report 233
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Right-of-use assets
+Buildings
+Others
+Total
+RMB million
+As at 31 December 2020
+Disposals
+Charge for the year
+(25)
+(823)
+(1,543)
+Not applicable
+RMB2,181 million
+(19,106)
+Charge for the year
+(1,511)
+(690)
+(189)
+(372)
+(2,762)
+Disposals
+308
+Cost
+771
+138
+137
+1,354
+As at 31 December 2020
+(12,614)
+(5,248)
+(874)
+(1,778)
+(20,514)
+Impairment
+As at 1 January 2020
+(24)
+Notes to the Consolidated Financial Statements (continued)
+As at 1 January 2021
+Additions
+Deductions
+2,823
+As at 31 December 2021
+2,238
+1
+2,239
+234 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(b) Right-of-use assets (continued)
+Cost
+As at 1 January 2020
+Additions
+1
+Deductions
+Accumulated depreciation
+As at 1 January 2020
+Charge for the year
+Deductions
+As at 31 December 2020
+Impairment
+As at 1 January 2020
+As at 31 December 2020
+Net book value
+As at 1 January 2020
+As at 31 December 2020
+Buildings
+As at 31 December 2020
+Total
+2,822
+1
+As at 31 December 2021
+Accumulated depreciation
+As at 1 January 2021
+Charge for the year
+Deductions
+As at 31 December 2021
+Impairment
+As at 1 January 2021
+As at 31 December 2021
+Net book value
+As at 1 January 2021
+5,060
+836
+(1,019)
+(2,638)
+4,877
+5,061
+836
+(1,020)
+4,877
+(2,238)
+(2,238)
+(1,309)
+(1,309)
+908
+1
+909
+(2,639)
+1
+PRC
+Notes to the Consolidated Financial Statements (continued)
+85.03% indirectly
+100.00% indirectly
+-
+Percentage
+of shares held
+Trust/
+investments
+received
+Principal
+activities
+58.69% directly RMB75,716 million Investment management
+CL Investment China Eastern Airlines Group Equity 100.00% directly
+China Life
+-
+China Hua Neng Debt-to-Equity Swap
+Shan Guo Tou Jing Tou Corporate Trust Loan
+Collective Funds Trust Scheme
+Jiao Yin Guo Xin China Aluminium Co., Ltd.
+Supply-side Reform Collective Fund
+Trust Scheme
+Jian Xin Trust - CL Guo Xin Collective Fund
+Trust Scheme
+Guang Da Hui Ying No. 8 Collective Fund
+Bai Rui Heng Yi No.817 Collective Fund Trust
+Scheme (Zhong Guo Guo Xin)
+Jiao Yin Guo Xin CL Shanxi Coal Mining
+Debt-to-Equity Collective Funds Trust Scheme
+Chongqing Trust Fund Guo Rong No.4
+Collective Fund
+•
+Jiao Yin Guo Xin Jing Tou Corporate
+RMB11,000 million
+Investment management
+100.00% directly
+100.00% directly
+RMB10,000 million
+RMB10,000 million
+Investment management
+Investment management
+CL Asset - Yuanliu No.1 Insurance Asset
+Management Product
+Name
+(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
+December 2021:
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+China Life Qihang Fund I (ii)
+PRC
+99.99% directly
+Not applicable
+Investment
+CL Xing Wan (ii)
+PRC
+99.98% indirectly
+Not applicable
+Investment
+CL Sales (i)
+PRC
+99.99% directly RMB10,000 million Investment management
+CL Hangzhou Hotel (i)
+CL Jiayuan (i)
+PRC
+90.81%directly
+99.99% directly
+99.99% indirectly
+RMB544 million
+RMB65 million
+RMB1,500 million
+Insurance Agent
+Hotel Management
+Health Consultation
+(i) The above subsidiaries are registered as limited companies in accordance of the Company Law of the People's Republic of China.
+(ii) The above subsidiaries are registered as limited liability partnerships in accordance of the Law of the People's Republic of China on Partnerships.
+Non-controlling interests in subsidiaries are not significant to the Company.
+Annual Report 2021 | Financial Report 237
+For the year ended 31 December 2021
+PRC
+99.99% directly RMB10,000 million Investment management
+89.00% directly
+90.00% directly
+and indirectly
+RMB10,000 million
+RMB10,000 million
+CL - Dian Tou Clean Energy Equity Investment
+Scheme (series I)
+89.47% directly
+RMB7,600 million
+Investment management
+Zhong Xin Jin Cheng •Tianjin Port Group
+99.98% directly
+RMB6,000 million
+Investment management
+Loans Collective Fund Trust Scheme
+CL An Bao An Ji Half-year Debt Collective
+Fund Scheme
+89.15% directly
+RMB6,166 million Investment management
+CL Investment-COSCO Marine Debt
+Investment management
+Investment management
+and indirectly
+71.67% directly
+Investment management
+Investment Scheme
+Guang Da Hui Ying No. 11 Collective Fund
+72.41% directly
+RMB5,800 million
+Investment management
+Trust Scheme
+China Life
+Tianjin Metro Infrastructure Debt
+Investment Scheme
+93.91% directly
+(5,329)
+RMB5,750 million
+RMB6,000 million
+Investment
+RMB8,000 million
+RMB7,900 million
+CL Hua Neng International Development of
+Infrastructure Debt Investment Scheme
+Investment management
+Investment management
+75.00% directly RMB10,000 million Investment management
+and indirectly
+85.00% directly
+RMB9,996 million Investment management
+91.95% directly
+RMB9,982 million Investment management
+-
+China Life Yanzhou Coal Mining Debt Investment
+Zhong Hang Trust Fund Tian Qi [2020] No.372
+100.00% directly
+99.99% directly
+RMB9,000 million
+RMB9,000 million
+84.00% directly
+88.61% directly
+Investment management
+Investment management
+China Eastern Airlines Equity Instrument
+Investment Collective Fund Trust Scheme
+Shang Xin Ningbo Wu Lu Si Qiao PPP
+-
+Collective Fund Trust Scheme
+88.02% directly
+RMB8,758 million Investment management
+Kun Lun Trust China Metallurgical No.1
+86.25% directly
+RMB8,000 million
+Investment management
+Collective Fund
+Jiang Su Trust •Xin Bao Sheng No.144 (Jing Tou)
+Collective Funds
+PRC
+Not applicable
+PRC
+100.00% directly
+Not applicable
+Investment
+The British Virgin Islands
+The British Virgin Islands
+The British Cayman Islands
+100.00% directly
+Not applicable
+Investment
+100.00% directly
+Not applicable
+Investment
+PRC
+PRC
+100.00% indirectly
+100.00% directly
+100.00% indirectly
+Not applicable
+RMB1,530 million
+Investment
+Health management
+USD2 million
+Investment
+PRC
+89.997% directly
+Not applicable
+Investment
+The British Virgin Islands
+100.00% indirectly
+Not applicable
+The British Virgin Islands
+Investment
+Not applicable
+100.00% directly
+Hong Kong, PRC
+The British Jersey Island
+100.00% directly
+PRC
+100.00% indirectly
+100.00% directly
+RMB1,288 million
+RMB200 million
+Not applicable
+Not applicable
+RMB6,100 million
+Asset management
+Investment in
+retirement properties
+Fund management
+Financial service
+Investment
+Investment
+Investment
+Hong Kong, PRC
+100.00% directly
+Investment
+Not applicable
+Glorious Fortune Forever Limited
+Hong Kong, PRC
+100.00% directly
+Not applicable
+Investment
+CL Hotel Investor, L.P.
+Golden Bamboo Limited
+Sunny Bamboo Limited
+Fortune Bamboo Limited
+China Century Core Fund Limited
+CL Health (i)
+Franklin Shenzhen Company (i)
+Guo Yang Guo Sheng (ii)
+New Capital Wisdom Limited
+New Fortune Wisdom Limited
+USA
+Investment
+Wisdom Forever Limited Partnership
+The British Virgin Islands
+The British Cayman Islands
+100.00% indirectly
+Not applicable
+Investment
+PRC
+99.98% directly
+Not applicable
+Investment
+PRC
+99.98% directly
+Not applicable
+Investment
+Shengyi Jingsheng (i)
+PRC
+99.98% directly
+100.00% indirectly
+Investment
+CG Investments
+USA
+99.99% directly
+Not applicable
+Investment
+CL Guang De (ii)
+PRC
+99.95% directly
+Not applicable
+Investment
+CL Pension Industry (ii)
+RMB1,131 million
+99.90% directly
+PRC
+RMB484 million
+Not applicable
+Investment
+100.00% indirectly
+Not applicable
+Investment
+Bai Ning (ii)
+Yuan Shu Yuan Pin (ii)
+Yuan Shu Yuan Jiu (ii)
+Hope Building (i)
+Shanghai Wansheng (ii)
+Yuanxiang Tianfu (ii)
+Yuanxiang Tianyi (ii)
+Investment
+PRC
+Not applicable
+Investment
+PRC
+99.98% directly
+Not applicable
+Investment
+PRC
+99.98% directly
+Not applicable
+Investment
+PRC
+100.00% indirectly
+99.98% directly
+(11,411)
+For the year ended 31 December 2021
+Accumulated depreciation
+94,770
+78,954
+1,528
+3,063
+96,298
+82,017
+(b) Operating lease commitments
+As lessor, the future minimum rentals receivable under non-cancellable operating leases are as follows:
+Not later than one year
+Later than one year but not later than five years
+Later than five years
+Total
+230 Annual Report 2021 | Financial Report
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+781
+1,296
+768
+1,526
+142
+RMB million
+RMB million
+2020
+2021
+For the year ended 31 December 2021
+39 PROVISIONS AND CONTINGENCIES
+The following is a summary of the significant contingent liabilities:
+As at
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+506
+193
+403
+The Group involves in certain lawsuits arising from the ordinary course of business. In order to accurately disclose the
+contingent liabilities for pending lawsuits, the Group analysed all pending lawsuits case by case at the end of each interim
+and annual reporting period. A provision will only be recognised if management determines, based on third-party legal
+advice, that the Group has present obligations and the settlement of which is expected to result in an outflow of the
+Group's resources embodying economic benefits, and the amount of such obligations could be reasonably estimated.
+Otherwise, the Group will disclose the pending lawsuits as contingent liabilities. As at 31 December 2021 and 2020, the
+Group had other contingent liabilities but disclosure of such was not practical because the amounts of liabilities could not
+be reliably estimated and were not material in aggregate.
+40 COMMITMENTS
+(a) Capital commitments
+The Group had the following capital commitments relating to property development projects and investments:
+Contracted, but not provided for
+Investments
+Property, plant and equipment
+Total
+As at
+As at
+31 December
+31 December
+Pending lawsuits
+Notes to the Consolidated Financial Statements (continued)
+2,219
+Notes to the Consolidated Financial Statements (continued)
+162,984
+157,401
+Held-to-maturity securities
+41(f)
+1,531,640
+1,188,509
+Loans
+41(g)
+646,998
+638,849
+Term deposits
+41(h)
+491,332
+521,886
+Statutory deposits - restricted
+41(i)
+5,653
+5,653
+Available-for-sale securities
+41(j)
+1,370,035
+Securities at fair value through profit or loss
+41(k)
+120,191
+1,187,153
+127,404
+41(e)
+Investments in associates and joint ventures
+88,951
+170,387
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS
+Statement of financial position
+As at 31 December 2021
+As at
+31 December
+As at
+31 December
+2021
+2020
+Notes
+RMB million
+RMB million
+ASSETS
+2,487
+Property, plant and equipment
+51,116
+50,159
+Right-of-use assets
+41(b)
+2,239
+2,823
+Investment properties
+41(c)
+6,191
+6,162
+Investments in subsidiaries
+41(d)
+41(a)
+Annual Report 2021 | Financial Report 229
+363,529
+359
+19,556
+At 31 December 2020
+(78)
+(78)
+Others
+3,747
+3,632
+113
+2
+Interest expense
+1,156
+1,156
+New leases
+(751)
+(751)
+structured entities
+control of consolidated
+Changes arising from losing
+(806)
+(806)
+Foreign exchange movement
+21,226
+(3,639)
+21,254
+4,912
+34,992
+2,664
+122,249
+42,654
+Investment management
+(368)
+(368)
+structured entities
+control of consolidated
+Changes arising from losing
+(870)
+(870)
+Foreign exchange movement
+134,441
+(6,461)
+25,208
+(1,618)
+117,211
+cash flows
+Changes from financing
+223,435
+1,320
+42,654
+122,249
+2,664
+34,992
+19,556
+At 1 January 2021
+223,435
+1,320
+(1,517)
+317
+cash flows
+Changes from financing
+the third-party
+liability-
+payable to
+Other
+Other liability-
+Changes in liabilities arising from financing activities
+38 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2021
+New leases
+1,086
+1,086
+Interest expense
+interest
+2
+5,500
+5,598
+Others
+(147)
+354
+207
+At 31 December 2021
+18,686
+34,994
+2,182
+239,446
+67,862
+96
+Securities purchased under agreements to resell
+Interest-
+bearing
+loans and
+borrowings
+198,941
+1,327
+21,400
+118,088
+3,091
+34,990
+20,045
+At 1 January 2020
+RMB million
+RMB million
+RMB million
+RMB million
+Securities
+RMB million
+RMB million
+Total
+activities
+entities
+financing
+structured
+related to
+payable
+holders of
+consolidated
+sold under
+agreements to
+repurchase
+Lease
+liabilities
+Bonds
+payable
+RMB million
+41(1)
+3,463
+5,888
+420
+43
+530
+1,257
+As at 31 December 2021
+(14,055)
+(5,568)
+(979)
+(1,620)
+(22,222)
+Impairment
+As at 1 January 2021
+(24)
+(1)
+(25)
+Charge for the year
+Disposals
+As at 31 December 2021
+(24)
+(1)
+(25)
+Net book value
+As at 1 January 2021
+35,643
+2,525
+264
+Disposals
+(2,965)
+(372)
+(209)
+(209)
+Disposals
+(300)
+(440)
+(45)
+(548)
+(1,333)
+As at 31 December 2021
+55,345
+8,008
+1,287
+456
+6,351
+73,363
+Accumulated depreciation
+As at 1 January 2021
+(12,614)
+(5,248)
+(874)
+(1,778)
+(20,514)
+Charge for the year
+(1,705)
+(740)
+(148)
+2,372
+10,567
+968
+50,159
+2
+(6,451)
+318
+(121)
+Additions
+147
+580
+131
+5,459
+6,317
+Transfers into investment properties
+(2,098)
+6,010
+(2,098)
+(575)
+(901)
+(142)
+(143)
+(1,761)
+As at 31 December 2020
+48,281
+7,773
+1,330
+10,568
+2,746
+70,698
+Disposals
+Transfers into investment properties
+Transfers upon completion
+2,571
+As at 31 December 2021
+41,266
+2,440
+308
+6,350
+752
+51,116
+232 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment (continued)
+Cost
+68,361
+Buildings
+Assets
+Motor
+vehicles
+under
+construction
+Leasehold
+improvements
+Total
+RMB million
+As at 1 January 2020
+42,699
+8,092
+1,341
+13,658
+Office
+equipment
+furniture and
+fixtures
+As at 1 January 2020
+4,424
+2
+2,973,225
+Policyholder dividends payable
+313,594
+124,949
+288,212
+122,510
+Lease liabilities
+1,889
+2,416
+Bonds payable
+18
+34,994
+34,992
+Securities sold under agreements to repurchase
+41(p)
+232,496
+116,584
+Annuity and other insurance balances payable
+56,818
+55,031
+Premiums received in advance
+48,699
+53,021
+Other liabilities
+41(q)
+61,487
+3,419,899
+56
+16
+15
+Accrued investment income
+41(m)
+49,717
+44,582
+Premiums receivable
+12
+20,361
+20,730
+Reinsurance assets
+13
+6,630
+6,095
+59,219
+Other assets
+33,821
+24,479
+Cash and cash equivalents
+53,593
+50,692
+Total assets
+4,726,351
+4,127,416
+LIABILITIES AND EQUITY
+Liabilities
+Insurance contracts
+Investment contracts
+41(n)
+Deferred tax liabilities
+41(0)
+6,581
+Cost
+Office
+equipment
+furniture and
+Assets
+Buildings
+fixtures
+Motor
+vehicles
+under
+Leasehold
+construction improvements
+Total
+RMB million
+As at 1 January 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(a) Property, plant and equipment
+48,281
+1,330
+10,568
+2,746
+70,698
+Transfers upon completion
+6,757
+(7,148)
+174
+(217)
+Additions
+607
+675
+7,773
+3,140
+For the year ended 31 December 2021
+Annual Report 2021 | Financial Report 231
+15,909
+Statutory insurance fund
+21
+339
+384
+Total liabilities
+Equity
+Share capital
+Reserves
+4,301,745
+3,721,503
+36
+Notes to the Consolidated Financial Statements (continued)
+28,265
+41(r)
+243,076
+234,071
+Retained earnings
+Total equity
+Total liabilities and equity
+153,265
+143,577
+424,606
+405,913
+4,726,351
+4,127,416
+28,265
+238 Annual Report 2021 | Financial Report
+56
+31 December
+237,305
+199,859
+75,694
+108,493
+28
+278
+277,607
+313,421
+590,634
+622,051
+1,370,035
+1,187,153
+Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
+equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
+price quotations, wealth management products and private equity funds.
+242 Annual Report 2021 | Financial Report
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j) Available-for-sale securities (continued)
+Debt securities - Contractual maturity schedule
+Maturing:
+565,102
+779,401
+523,636
+693,870
+553
+833
+953
+142
+162
+1,523
+1,668
+Listed overseas
+Unlisted
+Within one year
+Subtotal
+As at
+31 December
+31 December
+2021
+2020
+RMB million
+RMB million
+85,531
+41,466
+Total
+548
+After one year but within five years
+After ten years
+Subtotal
+Total
+As at
+31 December
+As at
+31 December
+2021
+2020
+RMB million
+RMB million
+35,510
+36,802
+174,433
+124,578
+313,145
+266,057
+256,313
+137,665
+779,401
+565,102
+Unlisted
+Listed overseas
+Listed in Hong Kong, PRC
+Listed in Mainland, PRC
+Total
+(k) Securities at fair value through profit or loss
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Others
+Subtotal
+Equity securities
+After five years but within ten years
+Funds
+Others
+Subtotal
+Total
+Debt securities
+Listed in Mainland, PRC
+Listed overseas
+Unlisted
+Subtotal
+Equity securities
+Common stocks
+RMB million
+RMB million
+2020
+53,188
+45,477
+40,502
+42,313
+234,071
+Other comprehensive income
+for the year
+(5,584)
+(5,584)
+Appropriation to reserves
+5,096
+5,009
+5,096
+15,201
+Others
+As at 31 December 2021
+(500)
+53,360
+(112)
+(612)
+(1,269)
+53,860
+As at 1 January 2021
+234,071
+37,304
+194,168
+Other comprehensive income
+for the year
+25,297
+Appropriation to reserves
+5,009
+5,857
+5,009
+(1,381)
+15,875
+(1,269)
+(1,269)
+As at 31 December 2020
+53,860
+(1,269)
+53,188
+45,477
+40,502
+42,313
+Others
+47,604
+50,573
+45,511
+As at
+31 December
+2021
+RMB million
+2020
+RMB million
+112,194
+1,485
+94,586
+3,051
+113,679
+97,637
+31 December
+(ii) Operating lease commitments
+Not later than one year
+Later than one year but not later than five years
+Later than five years
+Total
+248 Annual Report 2021 | Financial Report
+As at
+As at
+31 December
+2021
+31 December
+As lessor, the future minimum rentals receivable under non-cancellable operating leases are as follows:
+As at
+31 December
+2021
+RMB million
+As at
+Property, plant and equipment
+47,409
+243,076
+(s) Provisions and contingencies
+The following is a summary of the significant contingent liabilities:
+Pending lawsuits
+As at
+31 December
+2021
+As at
+31 December
+RMB million
+Total
+2020
+RMB million
+403
+Annual Report 2021 | Financial Report 247
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(t) Commitments
+(i) Capital commitments
+Capital commitments of the Company relating to property development projects and investments:
+Contracted, but not provided for
+Investments
+506
+34,645
+As at
+2020
+3,574
+33,821
+24,479
+26,222
+16,907
+7,599
+7,572
+33,821
+24,479
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(o) Deferred tax
+(i) The movements in deferred tax assets and liabilities during the year are as follows:
+Deferred tax assets/(liabilities)
+As at 1 January 2020
+(Charged)/Credited to net profit
+(Charged)/Credited to other comprehensive income
+- Available-for-sale securities
+- Portion of fair value changes on available-for-
+sale securities attributable to participating
+4,940
+714
+590
+2,257
+980
+49,717
+44,582
+As at
+As at
+31 December
+31 December
+2021
+2020
+policyholders
+RMB million
+9,129
+1,554
+7,479
+7,509
+5,324
+5,349
+3,673
+3,522
+2,686
+RMB million
+2,043
+As at 31 December 2020
+(Charged)/Credited to net profit
+(22,789)
+2,546
+(15,909)
+2,862
+4,261
+344
+7,467
+1,413
+1,413
+- Portion of fair value changes on available-for-
+sale securities attributable to participating
+policyholders
+As at 31 December 2021
+448
+7,644
+(17,115)
+2,890
+(ii) The analysis of deferred tax assets and deferred tax liabilities during the year is as follows:
+448
+(6,581)
+As at
+As at
+4,334
+(15,909)
+2,546
+(22,789)
+(Charged)/Credited to other comprehensive income
+- Available-for-sale securities
+Insurance
+Investments
+RMB million
+RMB million
+Others
+RMB million
+Total
+RMB million
+1,557
+As at 1 January 2021
+1,787
+2,630
+(10,890)
+(84)
+3,413
+(9,422)
+(9,422)
+990
+990
+4,334
+(15,077)
+1,710
+43,602
+47,674
+44,582
+52,676
+47,889
+76,159
+74,238
+28,118
+39,540
+64
+4,849
+4,213
+11,009
+9,349
+44,032
+53,166
+120,191
+127,404
+Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded. Unlisted
+equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market
+price quotations.
+Annual Report 2021 | Financial Report 243
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+26,132
+217
+231
+23,252
+127,404
+RMB million
+1,156
+1,469
+5,851
+2,715
+62,009
+68,569
+7,143
+1,485
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(I) Securities purchased under agreements to sell
+76,159
+12,229
+9,771
+31,537
+43,133
+266
+262
+44,032
+53,166
+120,191
+74,238
+Maturing:
+Within 30 days
+Total
+2021
+2020
+RMB million
+RMB million
+3,463
+5,888
+3,463
+5,888
+As at
+31 December
+2021
+RMB million
+As at
+31 December
+As at
+2020
+RMB million
+12,124
+12,298
+30,761
+26,093
+6,832
+6,191
+49,717
+31 December
+31 December
+31 December
+244 Annual Report 2021 | Financial Report
+(m) Accrued investment income
+Bank deposits
+Debt securities
+Others
+Total
+Current
+Non-current
+Total
+(n) Other assets
+As at
+Investments receivable and prepaid
+Disbursements
+Automated policy loans
+Tax prepaid
+Due from related parties
+Others
+Total
+Current
+Non-current
+Total
+Land use rights
+40,468
+As at
+53,860
+Impairment
+Net value
+240 Annual Report 2021 | Financial Report
+As at
+31 December
+2021
+As at
+31 December
+2020
+RMB million
+RMB million
+55,016
+25,267
+147,684
+146,287
+163,348
+205,928
+1,165,592
+811,027
+1,531,640
+1,188,509
+As at
+As at
+Total
+After one year but within five years
+After five years but within ten years
+After ten years
+Within one year
+Maturing:
+973,052
+1,531,640
+1,188,509
+The estimated fair value of all held-to-maturity securities was RMB1,636,030 million as at 31 December 2021 (as at 31
+December 2020: RMB1,224,617 million).
+Annual Report 2021 | Financial Report 239
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(f) Held-to-maturity securities (continued)
+As at 31 December 2021, no accumulated impairment loss for the investment of held-to-maturity securities has been
+recognised by the Company (as at 31 December 2020: same).
+Debt securities - Contractual maturity schedule
+31 December
+2021
+Maturing:
+After one year but within five years
+After five years but within ten years
+After ten years
+Total
+(g) Loans
+Policy loans
+Other loans
+Total
+Impairment
+Net value
+Within one year
+31 December
+2020
+RMB million
+27,256
+650,817
+641,292
+(3,819)
+(2,443)
+646,998
+638,849
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(h) Term deposits
+31,699
+Maturing:
+After one year but within five years
+After five years but within ten years
+Total
+As at
+31 December
+As at
+31 December
+2021
+RMB million
+2020
+RMB million
+127,401
+Within one year
+215,457
+103,666
+279,286
+RMB million
+236,209
+200,730
+414,608
+440,562
+650,817
+641,292
+(3,819)
+(2,443)
+646,998
+101,456
+638,849
+31 December
+2021
+RMB million
+As at
+31 December
+2020
+RMB million
+348,708
+231,084
+168,954
+As at
+245,879
+1,285,761
+1,188,509
+1,531,640
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(p) Securities sold under agreements to repurchase
+Interbank market
+Stock exchange market
+Total
+Maturing:
+Within 30 days
+After 30 days within 90 days
+After 90 days
+Total
+Notes to the Consolidated Financial Statements (continued)
+As at
+As at
+31 December
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(d) Investments in subsidiaries (continued)
+(ii) The table below presents the basic information of the Company's major consolidated structured entities as at 31
+December 2021: (continued)
+Name
+Bai Rui Fu Cheng No.424 Collective Fund
+Trust Scheme (Wu Han Metro)
+•
+Percentage
+of shares held
+96.36% directly
+Trust/
+investments
+31 December
+received
+Annual Report 2021 | Financial Report 245
+(6,581)
+RMB million
+31 December
+2020
+RMB million
+Deferred tax assets:
+- deferred tax assets to be recovered after 12 months
+- deferred tax assets to be recovered within 12 months
+Subtotal
+Deferred tax liabilities:
+13,832
+10,051
+7,358
+6,006
+(15,909)
+21,190
+- deferred tax liabilities to be settled after 12 months
+(25,141)
+(27,921)
+- deferred tax liabilities to be settled within 12 months
+(2,630)
+(4,045)
+Subtotal
+(27,771)
+(31,966)
+Net deferred tax liabilities
+16,057
+60,324
+Principal
+activities
+Kun Lun Trust Tianjin Urban Communications
+2021
+2020
+27,891
+RMB million
+157,401
+5,583
+162,984
+154,501
+2,900
+157,401
+As at
+As at
+31 December
+Unlisted debt securities include those traded on the Chinese interbank market.
+31 December
+2020
+RMB million
+349,116
+264,983
+910,151
+617,515
+209,068
+201,343
+63,305
+104,668
+2021
+RMB million
+RMB5,486 million Investment management
+Total
+Listed in Mainland, PRC
+99.99% directly
+RMB5,001 million Investment management
+Construction No. 1 Collective Fund Trust Scheme
+CL Investment - COSCO Marine Debt
+100.00% directly
+RMB5,000 million Investment management
+Investment Scheme (series II)
+Wu Kuang Trust - Xing Fu No.137
+Collective Fund Trust Scheme
+90.00% directly
+Unlisted
+RMB5,000 million Investment management
+As at 1 January
+Investments in associates and joint ventures
+As at 31 December
+(f) Held-to-maturity securities
+Debt securities
+Government bonds
+Government agency bonds
+Corporate bonds
+Subordinated bonds
+Total
+Debt securities
+(e) Investments in associates and joint ventures
+363,931
+RMB million
+1,740
+232,496
+116,584
+230,421
+2,075
+116,436
+140
+8
+232,496
+116,584
+As at 31 December 2021, bonds with a carrying value of RMB194,593 million (as at 31 December 2020: RMB111,233
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from repurchase
+transactions entered into by the Company in the interbank market.
+For debt repurchase transactions through the stock exchange, the Company is required to deposit certain exchange-
+traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchange's regulation
+which should be no less than the balance of the related repurchase transaction. As at 31 December 2021, the carrying
+value of securities deposited in the collateral pool was RMB292,323 million (as at 31 December 2020: RMB250,407
+million). The collateral is restricted from trading during the period of the repurchase transaction.
+(q) Other liabilities
+20,683
+As at
+31 December
+2021
+RMB million
+2020
+RMB million
+Interest payable to policyholders
+Salary and welfare payable
+17,866
+16,139
+11,500
+10,060
+Brokerage and commission payable
+As at
+31 December
+5,351
+55,572
+176,924
+53,778
+5,005
+13,013
+163,620
+137,287
+570,355
+601,492
+20,279
+1,370,035
+20,559
+1,187,153
+(i)
+95,901
+Other available-for-sale securities mainly include unlisted equity investments, private equity funds and perpetual bonds.
+Listed in Mainland, PRC
+Unlisted
+Subtotal
+Equity securities
+Listed in Mainland, PRC
+Listed in Hong Kong, PRC
+2021
+2020
+RMB million
+RMB million
+Debt securities
+7,051
+Payable to constructors
+2,324
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(r) Reserves
+Share
+premium
+Unrealised gains/
+(losses) from
+Other available-for-sale
+reserves
+securities
+Statutory
+reserve fund
+Discretionary
+59,219
+General
+reserve
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+Total
+RMB million
+459,822
+As at 1 January 2020
+reserve fund
+61,487
+246 Annual Report 2021 | Financial Report
+Total
+2,410
+Agency deposits
+1,467
+1,811
+Interest payable of debt instruments
+1,271
+1,249
+Tax payable
+434
+634
+Stock appreciation rights (Note 32)
+291
+493
+Others
+20,983
+19,372
+Total
+61,487
+59,219
+Current
+Non-current
+61,487
+59,219
+52,127
+301,106
+2021
+Common stocks
+Subtotal
+Equity securities
+Funds
+(i) Statutory deposits - restricted
+Preferred stocks
+Wealth management products
+Others (i)
+Subtotal
+Available-for-sale securities, at cost
+Others (i)
+Equity securities
+Total
+As at
+31 December
+As at
+31 December
+2021
+2020
+RMB million
+As at 31 December 2021, the Company's term deposits of RMB750 million (as at 31 December 2020: RMB750 million)
+were deposited in banks to back overseas borrowings and are restricted to use. Please refer to Note 10.3 for the details.
+RMB million
+Others (i)
+Subordinated bonds
+Corporate bonds
+Government agency bonds
+After one year but within five years
+Total
+As at
+31 December
+2021
+As at
+31 December
+2020
+RMB million
+RMB million
+1,600
+4,053
+5,653
+5,653
+5,653
+Insurance companies in China are required to deposit an amount that equals to 20% of their registered capital with banks
+in compliance with regulations of the CBIRC. These funds may not be used for any purpose other than for paying off debts
+during liquidation proceedings.
+Annual Report 2021 | Financial Report 241
+Notes to the Consolidated Financial Statements (continued)
+For the year ended 31 December 2021
+41 STATEMENT OF FINANCIAL POSITION AND NOTES TO KEY ITEMS (continued)
+(j) Available-for-sale securities
+Available-for-sale securities, at fair value
+Debt securities
+Government bonds
+58,446
+49,148
+258,864
+168,912
+521,886
+Within one year
+491,332
+256,291
+96,308
+93,312
+565,102
+Contractual maturity schedule:
+779,401
+130,734
+149,151
+81,795
+111,029
+134,513
+201,911
+859.2
+2,230.3
+Han Bing
+505.5
+976.2
+129.7
+207.3
+3,089.5
+1,818.7
+1,818.7
+Cao Qingyang
+593.6
+959.3
+1,481.7
+86.1
+2,864.0
+859.2
+Name
+salaries
+bonuses
+income
+income
+in kind contributions
+139.4
+Total
+Actual paid
+included
+in total
+Jia Yuzeng
+1,432.0
+1,432.0
+Pension
+scheme
+Deferred
+payment
+included
+in total
+RMB thousand
+For the year ended 31 December 2021
+Benefits
+113.4
+601.4
+944.4
+139.6
+114.8
+690.0
+358.1
+58.5
+49.0
+250.6
+1,490.5
+98.0
+139.5
+1,253.0
+RMB thousand
+127.5
+1,552.9
+842.3
+19.7
+in salary
+of salary
+included
+Subtotal
+Performance
+related
+Basic
+payment
+Deferred
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2020 are as
+follows:
+(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+(ii) Lai Jun and Niu Kailong were appointed as employee representative supervisor and shareholder representative supervisor in October 2021. Niu Kailong
+did not receive remuneration from the Company.
+Han Bing resigned as shareholder representative supervisor in October 2021.
+(i)
+153.8
+21.2
+112.9
+207.9
+(c) Five highest paid individuals
+1,888.4
+The emoluments of the five highest paid individuals are the total emoluments paid to them during the year.
+For the year ended 31 December 2021, no emoluments were paid by the Company to the directors, chief executive,
+supervisors or any of the five highest paid individuals as an inducement to join or upon joining the Company or
+compensation for loss of office as a director of any member of the Group or of any other office in connection with the
+management (2020: nil).
+132 I
+2020
+5
+2021
+There was no arrangement under which a director, chief executive or supervisor waived or agreed to waive any
+remuneration during the year.
+For the year ended 31 December
+14,370.6
+RMB thousand
+13,940.1
+430.5
+6,985.3
+490.2
+7,475.5
+2020
+2021
+RMB1,000,001 - RMB2,000,000
+RMB2,000,001 - RMB3,000,000
+RMB3,000,001 - RMB4,000,000
+RMB4,000,001 - RMB4,500,000
+Number of individuals
+RMBO RMB1,000,000
+252 Annual Report 2021 | Financial Report
+TM
+responsible sources
+Paper from
+MIX
+www.fsc.org
+FSC
+ir@e-chinalife.com
+In case of any discrepancy between the Chinese version and the English version of this report,
+the Chinese version shall prevail; in case of any discrepancy between the printed version and
+the website version of this report, the website version shall prevail.
+: www.e-chinalife.com
+E-mail
+Website
+Telephone
+Office Address: 16 Financial Street, Xicheng District, Beijing, P. R. China
+China Life Insurance Company Limited
+中国人寿保险股份有限公司
+: 86-10-63633333
+127.6
+The emoluments fell within the following bands:
+Basic salaries, housing allowances, other allowances and benefits in kind
+Pension scheme contributions
+116.8
+74.7
+42.1
+Song Ping (ii)
+Luo Zhaohui (i)
+1,781.0
+29.9
+1,781.0
+206.9
+1,458.5
+940.1
+518.4
+Wang Xiaoqing
+1,888.4
+115.6
+Total
+20.2
+145.5
+Details of the remuneration of the five highest paid individuals are as follows:
+For the year ended 31 December 2021, the five individuals whose emoluments were the highest in the Company include
+one director and one supervisor (2020: one director and one supervisor).
+Total
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+8.5
+Annual Report 2021 | Financial Report 251
+The compensation amounts disclosed above for these supervisors for the year ended 31 December 2020 were restated
+based on the finalised amounts determined during 2021.
+(iii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+Luo Zhaohui resigned as shareholder representative supervisor in July 2020 and did not receive remuneration from the Company.
+(ii) Song Ping resigned as employee representative supervisor in January 2020.
+(i)
+115.6
+29.9
+The supervisors received the compensation amounts disclosed above during their term of office in 2021 and 2020.
+Benefits Pension scheme
+in kind contributions
+300.0
+Remuneration
+(vi) Chang Tso Tung Stephen resigned as independent director in October 2020 and continued to perform as independent director until June 2021; Robinson
+Drake Pike resigned as independent director in June 2021 and continued to perform as independent director until October 2021.
+(v) Lam Chi Kuen, Zhai Haitao were appointed as independent director in June 2021 and October 2021.
+(iv) Yin Zhaojun, Liu Huimin resigned as non-executive director in January 2021 and February 2021.
+(iii) Huang Xiumei was appointed as executive director in July 2021.
+(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
+300.0
+(vii) Wang Bin did not receive remuneration from the Company and resigned as chairman and executive director in February 2022.
+(viii) The above remuneration was calculated based on the relevant employment period during the reporting period.
+160.0
+370.0
+70.0
+210.0
+300.0
+160.0
+360.0
+360.0
+370.0
+Annual Report 2021 | Financial Report 249
+For the year ended 31 December 2021
+Benefits
+in salary
+of salary
+related
+Basic
+Pension
+Notes to the Consolidated Financial Statements (continued)
+included
+Performance
+Deferred
+Name
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
+December 2020 are as follows:
+(a) Directors' and chief executive's emoluments (continued)
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+Subtotal
+70.0
+FSC™ C019970
+210.0
+Li Mingguang
+Su Hengxuan (i)
+RMB thousand
+Total
+Pension scheme
+contributions
+in kind
+1,253.0
+paid
+Remuneration
+Name
+The aggregate amounts of emoluments paid to directors and chief executive of the Company for the year ended 31
+December 2021 are as follows:
+(a) Directors' and chief executive's emoluments
+The total compensation package for the directors, supervisors, chief executive and senior management for the year ended
+31 December 2021 in accordance with the related measures for compensation management of the Company has not
+yet been finalised. The amount of the compensation not provided for is not expected to have a significant impact on the
+Group's 2021 consolidated financial statements. The final compensation will be disclosed in a separate announcement
+when determined.
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION
+Benefits
+160.0
+Huang Xiumei (iii)
+626.5
+Su Hengxuan did not receive remuneration from the Company.
+(i)
+Robinson Drake Pike (vi)
+Chang Tso Tung Stephen (vi)
+Leung Oi-Sie Elsie
+Tang Xin
+Zhai Haitao (v)
+Lam Chi Kuen (v)
+Wang Junhui (ii)
+Liu Huimin (iv)
+Yin Zhaojun (iv)
+Yuan Changqing (ii)
+1,511.0
+746.7
+98.0
+49.7
+70.5
+scheme
+paid
+salaries
+income
+(iv) Chang Tso Tung Stephen resigned as independent director on 19 October 2020. He continued to perform as independent director until 28 June 2021,
+when the qualification of new independent director was approved by CBIRC.
+(iii) Zhao Peng was appointed as executive director from February to April 2020. He did not receive remuneration from the Company.
+(ii) Yuan Changqing, Wang Donghui and other non-executive directors did not receive remuneration from the Company.
+(i) Su Hengxuan did not receive remuneration from the Company.
+300.0
+300.0
+(v) Wang Bin did not receive remuneration from the Company and resigned as chairman and executive director in February 2022.
+320.0
+320.0
+320.0
+320.0
+320.0
+Notes to the Consolidated Financial Statements (continued)
+50.0
+320.0
+250.0
+(vi) The above remuneration was calculated based on the relevant employment period during the reporting period.
+The directors and chief executive received the compensation amounts disclosed above during their term of office in 2021
+and 2020.
+Niu Kailong (ii)
+Lai Jun (ii)
+Wang Xiaoqing
+Cao Qingyang
+Han Bing (i)
+Jia Yuzeng
+The compensation amounts disclosed above for these directors and the chief executive for the year ended 31 December
+2020 were restated based on the finalised amounts determined during 2021.
+Name
+(b) Supervisors' emoluments
+42 DIRECTORS', SUPERVISORS', CHIEF EXECUTIVE'S AND SENIOR
+MANAGEMENT'S REMUNERATION (continued)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements (continued)
+250 Annual Report 2021 | Financial Report
+In addition to the directors' emoluments disclosed above, certain directors of the Company received emoluments from
+CLIC, the amounts of which were not apportioned between their services to the Company and their services to CLIC.
+The aggregate amounts of emoluments paid to supervisors of the Company for the year ended 31 December 2021 are as
+follows:
+Leung Oi-Sie Elsie
+320.0
+70.0
+139.9
+751.8
+2,506.0
+1,253.0
+1,253.0
+Li Mingguang
+86.1
+Su Hengxuan (i)
+included
+in total
+Actual paid
+Deferred
+payment
+included
+in total
+Total
+in kind contributions
+income
+RMB thousand
+2,732.0
+751.8
+1,980.2
+250.0
+Tang Xin
+320.0
+70.0
+250.0
+Robinson Drake Pike
+320.0
+70.0
+250.0
+Chang Tso Tung Stephen (iv)
+Wang Junhui (ii)
+Yin Zhaojun (ii)
+Liu Huimin (ii)
+Yuan Changqing (ii)
+Zhao Peng (iii)
+bonuses
+payment
+RMB thousand
+16,000
+49,326 ▼
+19.6%
+15,748 ▼
+41,240 ▼
+2020
+First-year regular premiums
+Account managers of
+bancassurance channel
+25,000
+Annual Report 2021 | Management Discussion and Analysis
+21
+Group Insurance Channel The group insurance
+channel insisted on the coordination of business scale
+and profitability and achieved stable development in
+all business lines. During the Reporting Period, gross
+written premiums from the channel were RMB29,162
+million, an increase of 1.0% year on year. Short-term
+insurance premiums from the channel were RMB25,694
+million, an increase of 2.9% year on year. As at the
+end of the Reporting Period, the number of direct sales
+representatives was 45,000, among which the high-
+performance personnel increased by 13.0% from the end
+of 2020.
+Gross written premiums of
+group insurance channel (RMB million)
+2021
+2020
+Short-term insurance premiums
+Direct sales representatives
+45,000
+Being customer-centric, the Company fully leveraged
+the resource advantages of the fellow members of
+CLIC and actively engaged in the construction of a "Life
+Insurance plus" integrated financial ecosystem, turning
+the integrated financial advantages into a driving force for
+the high-quality development of the Company. In 2021,
+due to the impact of the comprehensive reform on auto
+insurance and the slower growth of this sector, premiums
+from CLP&C cross-sold by the Company were RMB21,107
+million, with the number of insurance policies increased
+by 18.0% year on year. Additional first-year receipts of
+enterprise annuity funds and pension security products of
+AMP cross-sold by the Company were RMB28,197 million.
+The Company entrusted CGB to sell its bancassurance
+products, with the first-year regular premiums recording
+a relatively stable growth. The number of new debit cards
+and credit cards jointly issued by the Company and CGB
+reached 1,224,000. Meanwhile, in order to satisfy the
+diverse needs of its customers, the Company worked with
+CGB and CLP&C to carry out various operation activities
+to provide customers with a series of quality financial and
+insurance service solutions.
+Integrated Financial Sector
+22 Annual Report 2021 | Management Discussion and Analysis
+Including premiums from online insurance business acquired by different sales channels of the Company.
+1
+In addition, the Company greatly developed the online
+insurance business and provided customers with high-
+quality service experience through online-to-offline
+sales and online direct sales. In full compliance with the
+regulatory requirements of the CBIRC with respect to
+the online insurance business, the Company optimized
+its online organization and business system, featuring
+centralized operation and unified management, and
+offered a variety of products for different scenarios and
+customers. During the Reporting Period, the Company's
+online insurance business grew rapidly, which was mostly
+achieved through online-to-offline integration with sales
+channels of individual agents, bancassurance and group
+insurance. Total premiums¹ under the CBIRC caliber were
+RMB34,969 million, reaching a record high once again. In
+the future, the Company will further strengthen the online-
+to-offline integration of its online insurance business,
+actively explore on the dedicated online life insurance
+business, and provide customers with more convenient
+online insurance services.
+2021
+Other Channels In 2021, gross written premiums from
+other channels were RMB30,350 million, a decrease of
+2.4% year on year. The Company proactively participated
+in a variety of government-sponsored health insurance
+businesses. As at the end of the Reporting Period, the
+Company carried out over 200 supplementary major
+medical expenses insurance programs, covering more
+than 350 million people. It also undertook over 400 health
+care entrusted programs, providing services to more than
+100 million people; 61 long-term care insurance programs
+in 17 provinces and cities, covering 23 million people;
+and 170 supplementary medical insurance programs
+in 22 provinces and cities, covering 91 million people.
+The Company also participated in the construction of a
+multi-level social security system and implemented 54
+city-customized commercial medical insurance projects
+in 15 provinces and cities, covering more than 10 million
+people.
+2.9%
+25,694 ▼ 29,162 ▼
+% end of 2020
+from the
+↑13.0%
+High-performance
+personnel increased by
+24,970 ▼ 28,872 ▼
+16,110 ▼
+511,044 ▼
+509,489 ▼
+the individual agent business sector by concentrating
+on specialized operations, quality and efficiency
+enhancement, and transformation and innovation. As at
+the end of the Reporting Period, the number of total sales
+force of the Company was approximately 890,000.
+In 2021, facing persistent impacts of the COVID-19
+pandemic and a challenging market environment, the
+industry faced unprecedented pressure for transformation.
+The Company continued to deepen the customer-centric
+sales deployment of "Yi Ti Duo Yuan", focusing on
+business restructuring and making breakthroughs, and
+stressing precise allocation of resources on the basis of
+standardized management. The individual agent business
+sector consistently prioritized business value and further
+promoted operation differentiation between sales teams.
+The diversified business sector achieved progress while
+maintaining stability and coordinated effectively with
+Analysis of insurance business
+Insurance Business
+2. Premiums of other channels mainly included premiums of government-sponsored health insurance business and online sales, etc.
+1. Premiums of individual agent business sector included premiums acquired by the general sales team and the upsales team.
+Individual Agent Business Sector
+Notes:
+618,327
+Total
+30,246
+Short-term insurance business
+83
+76
+30,838
+612,265
+By integrating online and offline as well as internal and
+external healthcare resources, the Company improved
+its health management and service capabilities and
+actively participated in the Healthy China program. China
+Life Inclusive Healthcare Service Platform continued
+to diversify its services while upgrading its system
+functions. As at the end of the Reporting Period, more
+than a hundred types of services were available on the
+platform, and the size of the accumulated registered users
+of the platform led the industry with an increase of over
+35% from the end of 2020. The Company continued to
+formulate the China Life aged care system and deployed
+towards high-quality resources in the aged care industry
+such as rehabilitation, medical care, hospital, health care
+big data, and health industrial parks through the China
+Life Integrated Aged Care Fund. In 2021, the China Life
+Integrated Aged Care Fund reserved a batch of pension
+and retirement projects that could meet the diversified
+and multi-level demands of customers in strategic regions
+such as Beijing-Tianjin-Hebei, the Yangtze River Economic
+Belt, and the Guangdong-Hong Kong-Macao Greater Bay
+Area.
+The individual agent business sector pursued high-
+quality development, consistently deepened business
+restructuring, and achieved steady business development.
+During the Reporting Period, gross written premiums
+from the sector were RMB509,489 million, a decrease
+of 0.3% year on year. Renewal premiums amounted to
+RMB407,973 million, an increase of 4.3% year on year.
+First-year regular premiums were RMB82,254 million,
+a decrease of 17.4% year on year, of which first-year
+regular premiums with a payment duration of ten years
+or longer were RMB41,580 million, a decrease of 26.0%
+year on year. In 2021, the value of one year's sales of the
+sector was RMB42,945 million, a decrease of 25.5% year
+on year, and new business margin of one year's sales by
+annual premium equivalent was 42.2%, a decrease of 5.9
+percentage points year on year.
+820,000
+Agents of individual agent
+business sector
+First-year regular premiums
+▼ 99,555
+2020
+2021
+20 Annual Report 2021 | Management Discussion and Analysis
+▼ 82,254
+Gross written premiums of
+individual agent business sector
+Gross written premiums of
+bancassurance channel (RMB million)
+Bancassurance Channel With equal emphasis on
+business scale and value, the bancassurance channel
+consistently pushed forward sound and healthy
+development. During the Reporting Period, gross written
+premiums from the channel amounted to RMB49,326
+million, an increase of 19.6% year on year. First-year
+regular premiums were RMB16,110 million, an increase
+of 2.3% year on year; in particular, first-year regular
+premiums with a payment duration of five years or longer
+were RMB6,743 million, an increase of 35.3% year
+on year. Renewal premiums amounted to RMB32,792
+million (a year-on-year increase of 30.6%), accounting
+for 66.48% of gross written premiums from the channel
+(a year-on-year increase of 5.59 percentage points).
+The bancassurance channel constantly enhanced the
+professional service support capability of the sales team,
+and the quality of which was steadily improved. As at the
+end of the Reporting Period, the number of the channel's
+account managers was 25,000, the quarterly average
+active managers remained stable, and the productivity per
+manager increased continuously.
+Pushing forward "Dingxin Project" deployment in great
+depth, the diversified business sector concentrated on
+specialized operation as well as quality and efficiency
+enhancement, and actively developed the bancassurance,
+group insurance, and health insurance businesses.
+Diversified Business Sector
+Affected by sporadic outbreaks of the pandemic and the
+challenging market environment, the whole industry had
+difficulties in agent recruitment and retention, and the size
+of sales force consequently declined to a certain extent.
+The Company adhered to the sales force development
+strategy of improving quality with stabilised quantity,
+and made great efforts in enhancing its quality. As at the
+end of the Reporting Period, the number of agents of the
+sector was 820,000, including 519,000 agents from the
+general sales team and 301,000 agents from the upsales
+team. The monthly average productive agents decreased
+compared with the previous year, however, the number of
+high-performance agents was stable, and the foundation
+of sales force remained solid. Although the sector's
+development was under pressure, the Company adhered
+to the strategy of "productive agents-driven business"
+and made solid stride in business restructuring. The 4.0
+version of the regular agent management system was
+fully promoted and implemented, and transformation of
+sales team was pushed forward aiming at becoming more
+specialized and professional.
+(RMB million)
+Analysis of insurance products
+Adhering to the customer-centric product development
+concept and the original role of insurance, the Company
+fully implemented major national strategies including
+Healthy China program, proactively responding to
+population aging and rural revitalization, accelerated
+insurance product innovation and advanced the supply-
+side reform of insurance products to create a diversified
+product system.
+By closely integrating the Healthy China program with its
+own business development, the Company consistently
+optimized and upgraded its health insurance products and
+strengthened the innovative research and development
+of illness insurance products and medical insurance
+products, etc., in terms of the insured customer group,
+scope of cover, and protection functions, so as to offer
+diversified health protections. The Company actively
+served the national strategy of responding to population
+aging and deepened its research in insurance coverage
+and benefits. By leveraging the advantages of the long-
+term risk protection of insurance products and the long-
+term application of insurance fund, the Company launched
+the exclusive commercial pension insurance and special
+annuity insurance products for the elderly customers. It
+also developed exclusive insurance products to facilitate
+rural revitalization strategy, proactively playing its role in
+protecting people's well-being.
+Standard premiums were calculated in accordance with the calculation methods set forth in the "Notice on Establishing the Industry Standard of Standard
+Premiums in the Life Insurance Industry" (Bao Jian Fa [2004] No. 102) and the "Supplementary Notice of the 'Notice on Establishing the Industry Standard
+of Standard Premiums in the Life Insurance Industry'" (Bao Jian Fa [2005] No. 25) of the former China Insurance Regulatory Commission.
+2.
+1.
+Notes:
+1,231
+Mainly through the channel of
+exclusive individual agents
+China Life Xin Xiang Jin Sheng Annuity Insurance (Type A) and China Life Xin Fu Ying Jia Annuity Insurance have been replaced by their upgraded
+products and are no longer on sale, and premiums from insurance business were recorded as renewal premiums.
+23,114
+China Life Xin Fu Ying Jia Annuity Insurance
+(國壽城鄉居民大病團體醫療保險(A型))
+Urban Citizens (Type A)
+Health Insurance for Rural and
+China Life Critical Illness Group
+Insurance (Type A)
+(國壽鑫福贏家年金保險)2
+34,094
+Top three insurance products in terms of net increase in investment contracts
+RMB million
+(diamond version)
+7,858
+China Life Xin Account Endowment Insurance (universal insurance)
+(國壽鑫賬戶兩全保險(萬能型)(尊享版))
+Surrender
+payment
+156
+Mainly through the channel of exclusive individual
+agents
+For the year ended 31 December
+12,580
+contracts
+(exclusive version)
+China Life Xin Account Endowment Insurance (universal insurance)
+Insurance product
+in investment
+Net increase
+Major sales channel
+180
+China Life Xin Xiang Jin Sheng Annuity
+Annuity Insurance
+Standard
+premiums
+from new
+40,851
+premiums
+Gross written
+RMB million
+(國壽鑫享至尊年金保險(慶典版))
+policies¹
+Insurance (Celebration Version)
+Insurance product
+For the year ended 31 December
+Top five insurance products in terms of gross written premiums
+23
+Annual Report 2021 | Management Discussion and Analysis
+In 2021, the Company newly developed and upgraded a
+total of 160 products, including 12 life insurance products,
+138 health insurance products, two accident insurance
+products, and eight annuity insurance products. Out of
+these products, 144 were protection-oriented insurance
+products, and 16 were long-term savings insurance
+products.
+China Life Xin Xiang Zhi Zun Annuity
+(國壽鑫耀東方年金保險)
+Major sales channel
+payment
+China Life Xin Yao Dong Fang
+Through other channels
+25,112
+25,112
+exclusive individual agents
+586
+Surrender
+Mainly through the channel of
+Mainly through the channel of
+exclusive individual agents
+11,908
+39,573
+834
+Mainly through the channel of
+exclusive individual agents
+75
+293
+Mainly through the channel of exclusive individual
+agents
+26
+2
+394,429
+372,388
+5.9%
+120,609
+115,089
+4.8%
+73,120
+69,722
+4.9%
+13,579
+9,408
+44.3%
+59,541
+60,314
+-1.3%
+47,489
+45,367
+-4.6%
+571
+612,265
+-0.9%
+15,851
+545
+618,327
+-8.3%
+12
+-6.4%
+11
+16,012
+15,862
+-1.1%
+16,583
+16,407
+4.7%
+-0.9%
+2,204
+2,062
+-20.0%
+Renewal business
+Single
+First-year regular
+First-year business
+Health Insurance Business
+Renewal business
+Accident Insurance Business
+Single
+First-year business
+Life Insurance Business
+For the year ended 31 December
+Gross written premiums categorized by business
+Figures of Gross Written Premiums
+BUSINESS ANALYSIS
+First-year regular
+1.0%
+First-year business
+Single
+106,001
+84,820
+-19.7%
+108,205
+86,882
+0.1%
+First-year regular
+480,593
+Change
+RMB million
+2020
+2021
+Total
+Renewal business
+481,311
+Note: Single premiums in the above table include premiums from short-term insurance business.
+During the Reporting Period, gross written premiums from
+the life insurance business of the Company amounted to
+RMB481,311 million, rising by 0.1% year on year. Gross
+written premiums from the health insurance business
+reached RMB120,609 million, rising by 4.8% year on year.
+Gross written premiums from accident insurance business
+were RMB16,407 million, a year-on-year decrease
+of 1.1%.
+110
+44
+First-year regular
+28,872
+2,040
+1,846
+First-year business of long-term insurance
+Single
+29,162
+374
+411
+Short-term insurance business
+25,109
+32,792
+Renewal business
+Group Insurance Channel
+9
+1,802
+Renewal business
+188
+28
+First-year business of long-term insurance
+31,109
+30,350
+Renewal business
+1,930
+Single
+Other Channels²
+24,970
+25,694
+Short-term insurance business
+1,862
+1,622
+First-year regular
+8
+13
+15,748
+82,254
+First-year regular
+99,838
+82,514
+First-year business of long-term insurance
+511,044
+99,555
+509,489
+2020
+2021
+RMB million
+For the year ended 31 December
+Gross written premiums categorized by channel
+Annual Report 2021 | Management Discussion and Analysis 19
+Individual Agent Business Sector¹
+Single
+Single
+283
+16,110
+First-year regular
+15,757
+16,123
+First-year business of long-term insurance
+41,240
+260
+49,326
+19,934
+19,002
+Short-term insurance business
+391,272
+407,973
+Renewal business
+Bancassurance Channel
+419
+(國壽鑫享金生年金保險(A款))2
+China Life Xin Zun Bao Whole Life Insurance (universal insurance)
+236,330
+5.76%
+Investment properties
+13,374
+0.28%
+14,217
+0.35%
+Cash and others5
+73,355
+1.56%
+64,602
+1.58%
+Investments in associates and joint ventures
+257,953
+5.47%
+239,584
+5.85%
+Total
+4,716,401
+100.00%
+4,095,491
+100.00%
+Notes:
+1. Debt-type financial products include debt investment schemes, trust schemes, project asset-backed plans, credit asset-backed securities, specialized
+asset management plans, and asset management products, etc.
+2.
+6.03%
+284,678
+Other equity investments4
+2.79%
+1,718,639
+41.97%
+Debt-type financial products¹
+443,784
+9.41%
+453,641
+11.08%
+Other fixed-maturity investments²
+425,565
+9.02%
+358,382
+8.75%
+(國壽鑫賬戶兩全保險(萬能型)(鑽石版))
+Equity financial assets
+14.83%
+700,748
+17.10%
+Common stocks
+302,090
+6.41%
+350,107
+8.55%
+Funds³
+112,689
+2.39%
+114,311
+699,457
+3.
+Funds include equity funds, bond funds and money market funds, etc. In particular, the balances of money market funds as at 31 December 2021 and
+31 December 2020 were RMB1,961 million and RMB1,206 million, respectively.
+4.
+10,328
+8,336
+20,344
+14,583
+Net fair value gains through profit or loss
+4,943
+21,900
+Disposal gains and impairment losses of associates and joint ventures
+(670)
+Net investment yield¹
+4.38%
+4.34%
+1,841
+Gross investment yield²
+5.30%
+Notes:
+1.
+2.
+Net investment yield = (Net investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the end of the
+previous year - Securities sold under agreements to repurchase at the end of the previous year + Investment assets at the end of the period - Securities
+sold under agreements to repurchase at the end of the period)/2)
+Gross investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase)/((Investment assets at the
+end of the previous year - Securities sold under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of
+the previous year + Investment assets at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative
+financial liabilities at the end of the period)/2)
+In 2021, the Company's net investment income was
+RMB188,770 million, rising by 16.0% year on year, an
+increase of RMB25,987 million from 2020. Since the
+Company consistently increased its allocation to bonds
+with long durations in recent years, and the income
+from investments in associates and joint ventures also
+increased, the net investment yield was 4.38% for 2021,
+up by 4 basis points from 2020. The gross investment
+income of the Company reached RMB214,057 million,
+rising by 7.8% year on year, an increase of RMB15,461
+million from 2020. Gross investment yield was 4.98%,
+down by 32 basis points from 2020. Affected by the
+fluctuation in the equity market, the comprehensive
+investment yield² taking into account the current net fair
+value changes of available-for-sale securities recognized
+in other comprehensive income was 4.87%, down by 146
+basis points from 2020.
+Credit risk management
+The Company's credit asset investments mainly included
+credit bonds and debt-type financial products, which
+concentrated on sectors such as banking, transportation,
+non-banking finance, public utilities, and energy, and the
+financing entities were primarily large central-owned
+enterprises and state-owned enterprises. As at the end of
+the Reporting Period, over 97% of the credit bonds and
+over 99% of the debt-type financial products held by the
+Company were rated AAA by external rating institutions.
+In general, the asset quality of the Company's credit
+investment products was in good condition, and the credit
+risks were well controlled.
+2
+Comprehensive investment yield = (Gross investment income - Interest paid for securities sold under agreements to repurchase + Current net fair value
+changes of available-for-sale securities recognised in other comprehensive income)/((Investment assets at the end of the previous year - Securities sold
+under agreements to repurchase at the end of the previous year - Derivative financial liabilities at the end of the previous year + Investment assets
+at the end of the period - Securities sold under agreements to repurchase at the end of the period - Derivative financial liabilities at the end of the
+period)/2)
+28 Annual Report 2021 | Management Discussion and Analysis
+4.98%
+48.20%
+1,216
+55
+5.
+Other equity investments include private equity funds, unlisted equities, preference shares, equity investment plans and bank wealth management
+products, etc.
+Cash and others include cash, cash at banks, short-term deposits, and securities purchased under agreements to resell, etc.
+As at the end of the Reporting Period, the Company's
+investment assets reached RMB4,716,401 million, an
+increase of 15.2% from the end of 2020. Among the
+major types of investments, the percentage of investment
+in bonds rose to 48.20% from 41.97% as at the end of
+2020, the percentage of term deposits changed to 11.23%
+from 13.32% as at the end of 2020, the percentage
+of investment in debt-type financial products changed
+to 9.41% from 11.08% as at the end of 2020, and the
+percentage of investment in stocks and funds (excluding
+money market funds) changed to 8.75% from 11.31% as
+at the end of 2020.
+Annual Report 2021 | Management Discussion and Analysis
+27
+Investment income
+For the year ended 31 December
+RMB million
+2021
+2020
+(50)
+Gross investment income
+Net income from fixed-maturity investments
+Net income from equity investments
+Net income from investment properties
+Investment income from cash and others
+Share of profit of associates and joint ventures
+Net realised gains on financial assets
+214,057
+198,596
+188,770
+162,783
+148,453
+127,673
+28,718
+24,983
+Net investment income
+2,273,425
+Other fixed-maturity investments include policy loans, statutory deposits-restricted, and interbank certificates of deposits, etc.
+13.32%
+15.0%
+835,400
+837,293
+-0.2%
+Note: The residual margin is a component of insurance contract reserve, which results in no Day 1 gain at the initial recognition of an insurance contract.
+The residual margin is set to zero if it is negative.
+As at the end of the Reporting Period, the reserves of
+insurance contracts of the Company were RMB3,419,899
+million, 15.0% up from RMB2,973,225 million as at
+the end of 2020, primarily due to the accumulation of
+Analysis of claims and policyholder benefits
+For the year ended 31 December
+insurance liabilities from new policies and renewals. As
+at the date of the statement of financial position, the
+reserves of various insurance contracts of the Company
+passed the liability adequacy test.
+RMB million
+Change
+Insurance benefits and claims expenses
+Life insurance business
+Health insurance business
+Accident insurance business
+Investment contract benefits
+Policyholder dividends resulting from participation in profits
+During the Reporting Period, insurance benefits and
+claims expenses rose by 6.5% year on year due to an
+increase in the change of insurance contract liabilities. In
+particular, due to steady growth of life insurance business,
+insurance benefits and claims expenses of life insurance
+business rose by 7.5% year on year. Insurance benefits
+and claims expenses of health insurance business rose
+by 1.9% year on year, and insurance benefits and claims
+2021
+618,754
+2020
+580,801
+6.5%
+527,863
+490,994
+7.5%
+83,688
+82,146
+2,973,225
+-0.3%
+10,096
+17.1%
+Bonds
+(celebration version)
+Mainly through the channel of exclusive individual
+agents
+20
+20
+(國壽鑫尊寶終身壽險(萬能型)(慶典版))
+24 Annual Report 2021 | Management Discussion and Analysis
+Insurance contracts
+Life insurance
+Health insurance
+Accident insurance
+Total of insurance contracts
+1.9%
+Including: Residual margin Note
+31 December
+As at
+31 December
+RMB million
+2021
+2020
+Change
+3,180,931
+2,767,642
+14.9%
+228,899
+10,069
+3,419,899
+195,487
+As at
+7,203
+3,718
+-6.0%
+12,270
+1,253
+1,229
+26.1%
+2.0%
+During the Reporting Period, underwriting and policy
+acquisition costs declined by 22.1% year on year due to a
+decrease in regular premiums from new policies. Finance
+costs rose by 49.4% year on year due to an increase
+in interest paid for securities sold under agreements to
+repurchase. Administrative expenses rose by 8.2% year
+on year due to the expiration of policies on temporary
+expenses deduction.
+Investment Business
+In 2021, domestic bond yields fluctuated within a tight
+range, which rose at first and then fell down, and the
+interest rate pivot trended downwards on the whole.
+The A-share market was volatile, with significant sector
+divergence. The Company always adhered to its strategic
+consistency, prioritized asset-liability management in
+using insurance funds, firmly implementing its medium-
+to long-term strategic plan of asset allocation, and making
+flexible tactical allocations in response to the market
+change. Firstly, the Company seized the opportunity of
+a relatively high interest rate in the first half of 2021 and
+increased allocation to assets with long durations such
+as government bonds to further narrow the duration gap.
+Secondly, the Company prudently controlled equity risk
+exposures in open market to reduce portfolio volatility.
+and secure the investment gains. Thirdly, the Company
+strengthened the innovation in alternative investment
+models, and positioned for sectors with prime prospects
+to establish a diversified investment portfolio.
+26 Annual Report 2021 | Management Discussion and Analysis
+Investment portfolios
+As at the end of the Reporting Period, the Company's investment assets categorized by investment object are set out as
+below:
+RMB million
+15,467
+Investment category
+Amount
+As at 31 December 2021
+Percentage
+As at 31 December 2020
+Amount
+Percentage
+3,672,262
+77.86%
+3,076,340
+75.12%
+529,488
+545,678
+7,661
+Fixed-maturity financial assets
+Term deposits
+8.2%
+11.23%
+40,808
+37,706
+9,846
+7.9%
+28,279
+-6.3%
+expenses of accident insurance business declined by
+6.0% year on year. Investment contract benefits rose
+by 7.9% year on year due to an increase in the scale of
+the universal insurance accounts. Policyholder dividends
+resulting from participation in profits declined by 6.3%
+year on year due to a decrease in investment income from
+the participating accounts.
+Annual Report 2021 | Management Discussion and Analysis
+25
+Analysis of underwriting and policy acquisition costs and other expenses
+Underwriting and policy acquisition costs
+Finance costs
+Administrative expenses
+Other expenses
+For the year ended 31 December
+RMB million
+2021
+49.4%
+2020
+Change
+65,744
+84,361
+-22.1%
+5,598
+3,747
+Statutory insurance fund contribution
+10,628
+26,511
+(6,392)
+Notes: 1. Numbers may not be additive due to rounding.
+1,203,008
+(2,471)
+(2,711)
+(173)
+38,575
+(7,614)
+2.
+(18,089)
+Items B through J are explained below:
+H Reflects the gains or losses due to changes in exchange rate.
+C
+Value of one year's sales for the 12 months ended 31 December 2021.
+D
+Reflects the difference between actual operating experience in 2021 (including mortality, morbidity, lapse, and expenses etc.) and the
+assumptions.
+E
+Compares actual with expected investment returns during 2021.
+F
+Reflects the effects of appraisal methodology and model enhancement, and assumption changes.
+|
+G Change in the market value adjustment from the beginning of year 2021 to 31 December 2021 and other adjustments.
+44,780
+J
+Reflects dividends distributed to shareholders during 2021.
+B Reflects expected impact of covered business, and the expected return on investments supporting the 2021 opening net worth.
+84,962
+C Value of New Business in the Period
+RMB million
+By Annual Premium Equivalent
+31 December
+Other miscellaneous items.
+31 December
+2021
+2020
+41.6%
+42.2%
+47.9%
+48.1%
+Note: First Year Premium is the written premium used for calculation of the value of one year's sales and Annual Premium Equivalent is calculated as the
+sum of 100 percent of first year regular premiums and 10 percent of single premiums.
+36 Annual Report 2021 | Embedded Value
+MOVEMENT ANALYSIS
+1,072,140
+The following analysis tracks the movement of the embedded value from the start to the end of the Reporting Period:
+ITEM
+A Embedded Value at the Start of Year
+B Expected Return on Embedded Value
+D Operating Experience Variance
+E Investment Experience Variance
+F Methodology, Model and Assumption Changes
+G Market Value and Other Adjustments
+H Exchange Gains or Losses
+Shareholder Dividend Distribution and Capital Changes
+|
+J
+Others
+K Embedded Value as at 31 December 2021 (sum A through J)
+Analysis of Embedded Value Movement in 2021
+Annual Report 2021 | Embedded Value
+9.
+SENSITIVITY RESULTS
+47,995
+535,107
+10% decrease in expenses
+6.
+41,566
+522,276
+10% increase in expenses
+5.
+36,362
+427,018
+53,202
+630,761
+7.
+47,042
+42,688
+504,849
+44,780
+528,691
+4. Investment return -50bps
+Investment return +50bps
+Risk discount rate -50bps
+1. Risk discount rate +50bps
+Base case scenario
+3.
+402,341
+By First Year Premium
+554,272
+37
+10% increase in mortality rate for non-annuity products
+and 10% decrease in mortality rate for annuity products
+43,970
+Sensitivity tests were performed using a range of alternative assumptions. In each of the sensitivity tests, only the
+assumption referred to was changed, with all other assumptions remaining unchanged. The results are summarized
+below:
+Sensitivity Results
+Value of In-Force
+Business after Cost
+of Required Capital
+RMB million
+Value of One year's
+Sales after Cost
+of Required Capital
+2.
+38 Annual Report 2021 | Embedded Value
+574,225
+14. Allowing for diversification in calculation of VIF
+44,273
+527,279
+13. Using 2020 EV appraisal assumptions
+525,259
+46,853
+12. 10% decrease in morbidity rates
+42,717
+520,500
+11. 10% increase in morbidity rates
+45,661
+528,752
+10. 10% decrease in lapse rates
+43,925
+528,559
+45,594
+532,101
+8. 10% decrease in mortality rate for non-annuity products
+and 10% increase in mortality rate for annuity products
+10% increase in lapse rates
+537,058
+New Business Margin of One Year's Sales of Individual Agent Business Sector
+1,066,939
+57,669
+Profit before income tax
+Life insurance business
+Health insurance business
+Accident insurance business
+Other businesses
+2021
+2020
+50,495
+54,476
+-7.3%
+22,771
+28,073
+-18.9%
+8,599
+RMB million
+Change
+11,611
+1,682
+17,443
+572
+194.1%
+14,220
+22.7%
+During the Reporting Period, profit before income tax
+from the life insurance business decreased by 18.9%
+year on year. The change in investment yield, and the
+change in accrued cost of reserve as a result of business
+accumulation, etc., contributed to the above result
+comprehensively. Profit before income tax from the health
+insurance business decreased by 25.9% year on year due
+to an increase in claims expenses of certain insurance
+businesses. Profit before income tax from the accident
+insurance business increased by 194.1% due to business
+quality improvement. Profit before income tax from other
+businesses increased by 22.7%, primarily due to an
+increase in the profits of certain associates.
+Analysis of Cash Flows
+Liquidity sources
+The Company's cash inflows mainly come from insurance
+premiums, income from non-insurance contracts, interest
+income, dividends and bonus, and proceeds from sale
+and maturity of investment assets. The primary liquidity
+risks with respect to these cash inflows are the risk of
+surrender by contract holders and policyholders, as well as
+the risks of default by debtors, interest rate fluctuations
+and other market volatilities. The Company closely
+monitors and manages these risks.
+The Company's cash and bank deposits can provide it
+with a source of liquidity to meet normal cash outflows.
+As at the end of the Reporting Period, the balance of cash
+and cash equivalents was RMB60,440 million. In addition,
+the vast majority of its term deposits in banks allow it to
+withdraw funds on deposits, subject to a penalty interest
+charge. As at the end of the Reporting Period, the amount
+of term deposits was RMB529,488 million.
+The Company's investment portfolio also provides it with
+a source of liquidity to meet unexpected cash outflows.
+It is also subject to market liquidity risk due to the large
+size of its investments in some of the markets in which
+it invests. In some circumstances, some of its holdings
+of investment securities may be large enough to have
+an influence on the market value. These factors may
+adversely affect its ability to sell these investments or sell
+them at a fair price.
+-25.9%
+Liquidity uses
+During the Reporting Period, there was no material equity
+investment or non-equity investment of the Company that
+is subject to disclosure requirements.
+identification, early warning, and early disposal. Under a
+market environment where credit default events occurred
+frequently, no credit default event occurred for the
+Company in 2021.
+16,658
+60%
+4,000
+Net Profit
+Net Assets
+Total Assets
+Shareholding
+Registered
+Capital
+RMB million
+Major Business Scope
+Company Name
+Major investments
+Major Subsidiaries and Associates of the Company
+Sale of Material Assets and Equity
+As at the end of the Reporting Period, the Company's
+comprehensive solvency ratio decreased by 6.51
+percentage points from the end of 2020, primarily due
+to the continuous growth of insurance business and
+investment assets, dividends payment, and a decline of
+discount rate in solvency reserve.
+Note: The China Risk Oriented Solvency System was formally implemented on 1 January 2016. This table is compiled according to the rules of the system.
+268.92%
+262.41%
+260.10%
+253.70%
+The Company insisted on a prudent investment philosophy
+and carried out comprehensive risk management to
+prevent various investment risks. Based on a disciplined
+and scientific internal rating system and a multi-
+dimensional management mechanism of risk limits, the
+Company scrutinized credit profiles of targets and risk
+exposure concentration before investment in a prudent
+manner and carried out ongoing tracking after investment,
+effectively managing the credit risks through early
+ANALYSIS OF SPECIFIC ITEMS
+Profit before Income Tax
+For the year ended 31 December
+During the Reporting Period, there was no sale of material
+assets and equity of the Company.
+The Company's principal cash outflows primarily relate to
+the payables for the liabilities associated with its various
+life insurance, annuity, accident insurance and health
+insurance products, operating expenses, income taxes
+and dividends that may be declared and paid to its equity
+holders. Cash outflows arising from its insurance activities
+primarily relate to benefit payments under these insurance
+products, as well as payments for policy surrenders,
+withdrawals and policy loans.
+The Company believes that its sources of liquidity are
+sufficient to meet its current cash requirements.
+Annual Report 2021 | Management Discussion and Analysis 29
+(144)
+-50.7%
+cash and cash equivalents
+Net increase in cash and
+cash quivalents
+3,785
+3,316
+14.1%
+Solvency Ratio
+An insurance company shall have the capital commensurate
+with its risks and business scale. According to the nature.
+and capacity of loss absorption by capital, the capital of an
+insurance company is classified into the core capital and
+the supplementary capital. The core solvency ratio is the
+ratio of core capital to minimum capital, which reflects the
+adequacy of the core capital of an insurance company. The
+comprehensive solvency ratio is the ratio of the sum of
+core capital and supplementary capital to minimum capital,
+which reflects the overall capital adequacy of an insurance
+company. The following table shows the Company's
+solvency ratios as at the end of the Reporting Period:
+(71)
+Core capital
+Actual capital
+Core solvency ratio
+Comprehensive solvency ratio
+As at
+RMB million
+As at
+31 December
+2021
+31 December
+2020
+1,020,756
+1,031,947
+1,055,768
+396,749
+Minimum capital
+Foreign exchange gains/(losses) on
+The needs for liquidity
+management
+financing activities
+Consolidated cash flows
+The Company established a cash flow testing system, and conducted regular tests to monitor the cash inflows and
+outflows under various scenarios and adjusted the asset portfolio accordingly to ensure sufficient sources of liquidity.
+For the year ended 31 December
+RMB million
+2021
+2020
+Change
+Main Reasons for Change
+Net cash inflow/(outflow) from
+operating activities
+286,448
+The new business margin of one year's sales of individual agent business sector for the 12 months ended 31 December
+2021 is shown below:
+304,019
+-5.8%
+The change of allocation in
+Net cash inflow/(outflow) from
+(393,731)
+(292,799)
+34.5%
+investing activities
+securities at fair value through profit
+or loss
+The needs for investment
+management
+Net cash inflow/(outflow) from
+111,139
+(7,760)
+N/A
+14,324
+2,760
+30 Annual Report 2021 | Management Discussion and Analysis
+70.74%
+is held by
+A Adjusted Net Worth
+ITEM
+The embedded value as at 31 December 2021, the value of one year's sales for the 12 months ended 31 December 2021,
+and the corresponding results as at 31 December 2020 are shown below:
+Components of Embedded Value and Value of One Year's Sales
+SUMMARY OF RESULTS
+35
+Annual Report 2021 | Embedded Value
+Other operating assumptions such as mortality, morbidity,
+lapses and expenses are based on the Company's recent
+operating experience and expected future outlook.
+Economic assumptions: The calculations are based upon
+assumed corporate tax rate of 25% for all years. The
+investment return is assumed to be 5% per annum.
+17% grading to 21% (remaining level thereafter) of the
+investment return is assumed to be exempt from income
+tax. The investment return and tax exempt assumptions
+are based on the Company's strategic asset mix and
+expected future returns. The risk-adjusted discount rate
+used is 10% per annum.
+ASSUMPTIONS
+The embedded value and the value of one year's sales
+were prepared by China Life Insurance Company Limited
+in accordance with the "CAA Standards of Actuarial
+Practice: Appraisal of Embedded Value" issued by the
+China Association of Actuaries ("CAA") in November
+2016. Deloitte Consulting performed a review of China
+Life's embedded value. The review statement from
+Deloitte Consulting is contained in the "Independent
+Actuaries Review Opinion Report on Embedded Value of
+China Life Insurance Company Limited" section.
+PREPARATION AND REVIEW
+B Value of In-Force Business before Cost of Required Capital
+C Cost of Required Capital
+3,400
+The market value of assets can fluctuate significantly
+over time due to the impact of the prevailing market
+environment. Hence the adjusted net worth can fluctuate
+significantly between valuation dates.
+Net-of-tax adjustments for relevant differences
+between the market value and the book value of
+assets, together with relevant net-of-tax adjustments
+to certain liabilities.
+Net assets, defined as assets less corresponding policy
+liabilities and other liabilities valued; and
+"Adjusted net worth" is equal to the sum of:
+The embedded value of a life insurer is defined as the
+sum of the adjusted net worth and the value of in-force
+business allowing for the cost of required capital.
+DEFINITIONS OF EMBEDDED VALUE
+AND VALUE OF ONE YEAR'S SALES
+34 Annual Report 2021 | Embedded Value
+The values shown below do not consider the future
+financial impact of transactions between the Company and
+CLIC, CLI, AMC, Pension Company, CLP&C, and etc.
+Also, the calculation of embedded value and value of one
+year's sales involves substantial technical complexity
+and estimates can vary materially as key assumptions
+are changed. Therefore, special care is advised when
+interpreting embedded value results.
+It is important to note that actuarial standards with respect
+to the calculation of embedded value are still evolving.
+There is still no universal standard which defines the
+form, calculation methodology or presentation format of
+the embedded value of an insurance company. Hence,
+differences in definition, methodology, assumptions,
+accounting basis and disclosures may cause inconsistency
+when comparing the results of different companies.
+the assumptions used and hence the potential of the
+business. However, the information on embedded value
+and value of one year's sales should not be viewed as
+a substitute of financial measures under the relevant
+accounting basis. Investors should not make investment
+decisions based solely on embedded value information
+and the value of one year's sales.
+The "value of in-force business" and the "value of one
+year's sales" are defined here as the discounted value of
+the projected stream of future shareholders' interest in
+distributable earnings for existing in-force business at the
+valuation date and for one year's sales in the 12 months
+immediately preceding the valuation date.
+D Value of In-Force Business after Cost of Required Capital (B + C)
+E Embedded Value (A + D)
+F Value of One Year's Sales before Cost of Required Capital
+42,945
+58,373
+44,780
+(5,981)
+(5,693)
+64,354
+50,474
+1,072,140
+1,203,008
+503,553
+528,691
+(62,244)
+(64,446)
+565,797
+593,137
+568,587
+674,317
+2020
+2021
+31 December
+31 December
+RMB million
+Note: Numbers may not be additive due to rounding.
+H Value of One Year's Sales after Cost of Required Capital (F + G)
+Including: Value of One Year's Sales of Individual Agent Business Sector
+G Cost of Required Capital
+China Life Insurance Company Limited believes that
+reporting the Company's embedded value and value of
+one year's sales provides useful information to investors
+in two respects. First, the value of the Company's in-force
+business represents the total amount of shareholders'
+interest in distributable earnings, in present value
+terms, which can be expected to emerge over time, in
+accordance with the assumptions used. Second, the value
+of one year's sales provides an indication of the value
+created for investors by new business activity based on
+China Life Insurance Company Limited prepares financial
+statements to public investors in accordance with the
+relevant accounting standards. An alternative measure
+of the value and profitability of a life insurance company
+can be provided by the embedded value method.
+Embedded value is an actuarially determined estimate
+of the economic value of the life insurance business
+of an insurance company based on a particular set of
+assumptions about future experience, excluding the
+economic value of future new business. In addition,
+the value of one year's sales represents an actuarially
+determined estimate of the economic value arising from
+new life insurance business issued in one year based on a
+particular set of assumptions about future experience.
+The value of in-force business and the value of one
+year's sales have been determined using a traditional
+deterministic discounted cash flow methodology. This
+methodology makes implicit allowance for the cost of
+investment guarantees and policyholder options, asset/
+liability mismatch risk, credit risk, the risk of operating
+experience's fluctuation and the economic cost of capital
+through the use of a risk-adjusted discount rate.
+EMBEDDED VALUE
+234,501
+3,359,985
+43.686%
+19,687
+Taking public deposits; granting short-term, mid-term and long-
+term loans; handling settlements in and out of China; honoring bills
+and offering discounting services; issuing financial bonds; issuing,
+paying for and underwriting government bonds as an agent; sales
+and purchases of negotiable securities such as government bonds
+and financial bonds; engaging in inter-bank borrowings; providing
+letters of credit service and guarantee; engaging in bank card
+business; acting as payment and receipt agent and insurance agent;
+providing safe deposit box services; taking deposits and granting
+loans in foreign currency; foreign currency remittance; foreign
+currency exchange; international settlements; foreign exchange
+settlements and sales; inter-bank foreign currency borrowings;
+honoring bills of exchange and offering discounting services in
+foreign currency; granting foreign currency loans; granting foreign
+currency guarantees; sales and purchases of negotiable securities
+other than shares in a foreign currency for itself and as an agent;
+issuing negotiable securities other than shares in a foreign currency
+for itself and as an agent; sales and purchases of foreign exchange
+on its own account and on behalf of its customers; issuing and
+making payments for foreign credit card as an agent; offshore
+financial operations; assets and credit verification, consultation and
+notarization businesses; other businesses approved by the CBIRC
+and other relevant authorities
+Property loss insurance; liability insurance; credit insurance
+and bond insurance; short-term health insurance and accident
+insurance; reinsurance of the above insurance businesses;
+business for the use of insurance funds that are permitted by
+applicable PRC laws and regulations; other businesses permitted by
+the CBIRC
+Group pension insurance and annuity; individual pension insurance
+and annuity; short-term health insurance; accident insurance;
+reinsurance of the above insurance businesses; business for the
+use of insurance funds that are permitted by applicable PRC laws
+and regulations; pension insurance asset management product
+business; management of funds in RMB or foreign currency as
+entrusted by entrusting parties for the retirement benefit purpose;
+other businesses permitted by the CBIRC
+Management and utilization of proprietary funds; acting as agent
+or trustee for asset management business; consulting business
+relevant to the above businesses; other asset management
+business permitted by applicable PRC laws and regulations
+China Guangfa Bank
+Co., Ltd.
+China Life Property
+and Casualty
+Insurance Company
+Limited
+China Life Pension
+Company Limited
+17,476
+BACKGROUND
+25,422
+120,178
+40%
+18,800
+AMC
+is held by
+and 3.53%
+the Company,
+1,158
+5,889
+8,305
+China Life Asset
+Note: For details, please refer to Note 9 and Note 41(d) in the Notes to the Consolidated Financial Statements in this annual report.
+Management
+Company Limited
+Details of structured entities controlled by the Company is set out in the Note 41(d) to the Consolidated Financial
+Statements in this annual report.
+Structured Entities Controlled by the Company
+Annual Report 2021 | Management Discussion and Analysis 33
+The Company believes that it will have sufficient capital
+to meet its insurance business expenditures and new
+general investment needs in 2022. At the same time, the
+Company will make corresponding financing arrangements
+based on capital market conditions if it plans to implement
+any business development strategies in the future.
+The internal and external environment has become more
+complex, challenging and uncertain since unprecedented
+global changes and the impact of the global pandemic
+continue to evolve. China's economy is facing triple
+pressures of shrinking demands, supply disruption, and
+weakened expectations of growth, which also bring
+challenges to the steady development of the insurance
+industry. As the impact of the COVID-19 pandemic still
+exists, various regions and cities have taken more stringent
+prevention and control measures, which have restricted
+the on-site marketing and training activities and will thus
+greatly affect business development and agent recruitment
+and management. Since the traditional sales force-driven
+business development mode has encountered difficulties,
+market players are actively seeking transformation by
+making unremitting efforts in adjusting business structure
+and improving the quality of the sales force, and the
+industry will be still under pressure in the short term.
+The Company will take a variety of measures to actively
+respond to such risks and challenges. It will adhere to the
+principle of making progress while maintaining stability,
+continue to push forward reform and transformation, and
+strive to improve the quality of its business operation
+and management. As to the capital market, with market
+interest rate trending downwards and the volatility in
+the equity market increasing, credit default events occur
+frequently and the investment income of insurance funds
+will be likely subject to higher fluctuation in the short
+term. The Company will continue to prioritize asset-
+liability management, deepen its research on specialized
+investment, further optimize its asset allocation mix
+and flexibly adjust its investment strategies to respond
+to market changes. Furthermore, the Company will
+continuously focus on and enhance the analysis of the
+related complex risk factors and make great stride in
+pursuing its high-quality development.
+Potential Risks
+In 2022, the Company will uphold the guideline of making
+progress while maintaining stability and adhere to the
+original function of insurance, constantly deepen the
+supply-side reforms, give full play to the protection role
+of insurance, and continue to pursue the high-quality
+development of the Company by enhancing its capability of
+value creation, digital operations, innovation of insurance
+products and services as well as risk prevention and control.
+Development Strategies and Business Plans of
+the Company
+FUTURE PROSPECT
+Customer experience was further improved. Claims
+settlement services provided by the Company were
+efficient and warm. In 2021, "Direct Claims Payment"
+provided claims payments to over six million customers.
+"Claims Settlement for Critical Illness within One Day"
+benefited 170,000 customer-times, with payment amount
+up by 32.3% year on year. Door-to-door services were
+provided to more than 117,000 customers difficult to
+reaching the counters. Scenario-based services benefited
+various groups of customers. The Company also led the
+industry to launch the senior-friendly version of China
+Life App, and introduced several senior-oriented services,
+such as the "sit and wait" service over the counters. The
+Company carried out a variety of value-added services
+continuously, such as "Immunity Enhancement Program",
+"Little Painters of China Life" and "Customer Festival",
+etc., all themed on "health, parent-child education and
+enjoying life".
+32 Annual Report 2021 | Management Discussion and Analysis
+Intelligent service capacity was significantly
+enhanced. The Company upgraded and promoted its
+intelligent business models so that the service efficiency
+for new policies of long-term individual insurance was
+improved by 37.2% year on year, and the intelligent
+approval rates of underwriting, policy administration and
+claims settlement reached 93.4%, 99.1% and 73.1%,
+respectively. Application scenarios of Internet-based
+intelligent customer services were expanded, and services
+provided by intelligent robots reached over 75 million
+times. As the digital services were fully implemented,
+percentage of non-manual customer services in the
+contact center reached 88.9%.
+Online services were growing rapidly. The Company
+upgraded various online service points of contact, with the
+registered users of China Life Insurance APP reaching 112
+million, a year-on-year increase of 21%, and the monthly
+average active users increasing by 18.1% year on year.
+The online processing rate of policy administration and
+claims settlement for individual insurance rose to 88.3%
+and 98.7%, respectively. More than 780 million electronic
+notification messages were sent, services provided by
+Online Customer Service Agent increased by nine folds
+year on year, and the average waiting time for customers
+over the counter was shortened significantly year on year.
+In 2021, being customer-centric, the Company adhered
+to the operational objectives of "efficiency first,
+technology-driven, value increase and first-class customer
+experience", accelerated the transformation of operations
+and services to be more Internet-based and intelligent,
+and continued to provide customers with high-quality and
+"convenient, quality and caring" services. As a result,
+its customer experience continued to be improved and
+customer appraisal remained at a high level.
+Industry Landscape and Development Trends
+Overall, the life insurance industry in China is still at
+an important stage full of strategic opportunities with
+the high-quality development as its key development
+theme. At present and in the near future, China's
+economy remains resilient, and the long-term positive
+economic fundamentals featuring ample development
+potential and room to maneuver will remain unchanged.
+With the promotion of common prosperity, the size of
+China's middle class will continue to grow, meaning
+more effective demands for the life insurance market.
+The consistent promotion of the Healthy China program
+and the national strategy of proactively responding
+to population aging will also provide broader space
+for the development of the industry. With market
+players speeding up their reform and transformation,
+the foundation for the high-quality development of the
+industry will be further consolidated. Meanwhile, the
+industry has witnessed continuous breakthroughs in
+technological innovations with the accelerated digital
+transformation of the industry. Technologies such as
+cloud computing, big data, artificial intelligence, and the
+"Internet of Things" has greatly empowered various
+aspects of the value chain, such as sales service,
+operation management, and risk prevention and control,
+etc. With domestic insurance industry consistently
+promoting its opening up, it will see more diversified
+industry players, and the market sophistication will be
+improved further.
+Operations and Services
+Annual Report 2021 | Management Discussion and Analysis
+621
+10
+TECHNOLOGY EMPOWERMENT AND
+OPERATIONS AND SERVICES
+Technology Empowerment
+31
+Technological innovation, leading to the upgrade of
+technology architecture as a whole. With the support
+of the strong computing power of China Life Hybrid Cloud
+and the openness and compatibility of the digital platform,
+the Company fulfilled the upgrade to a distributed
+architecture for all core systems, from computing,
+storage, database and middleware to application software.
+Its technology-supporting capacity realised a leap-forward
+development with the data processing capacity improved
+by 10 times and the elastic capacity scaling time of
+computing resources reduced to minute level.
+Agile delivery, significantly enhancing the response
+to changes by technology. The Company widely
+implemented the tech products-based management
+system, and facilitated the comprehensive circulation
+of technology-based operations with a digital operation
+mechanism featuring full data and full chain tracing. More
+updated functions and services were launched at a high
+frequency, and technology products were iterated and
+optimized more than 40 times on a daily basis to quickly
+respond to market changes, offering more accurate and
+efficient services to customers.
+Intelligence upgrading, further enhancing technology
+empowerment. China Life "Internet of Things" covered
+all business units and scales outlets of the Company
+across China and technology services were accessible
+to the frontline. It fulfilled centralized management and
+control of 240,000 electronic appliances in 12 categories
+throughout the Company with the establishment of
+an online Digital Twin, and its service efficiency was
+improved by 70% compared with 2020. The "China
+Life 'Internet of Things' Edge Computing, Intelligent
+Perception and Digital Presentation" won the 2021
+FinTech and Digital Transformation Innovation award. The
+Company also comprehensively developed its intelligent
+services, with its intelligent robots serving in various
+business fields, such as sales, services, operations,
+finance, risk control, and among others. Its big data-
+empowered scenarios were increased by 84% compared
+with 2020 and the daily average intelligent services.
+reached more than 5 million person-times.
+Interactive traffic, constantly amplifying the digital
+ecological effects. The online socialized collaboration
+system, which seamlessly connected with mobile phones,
+desktops, large screens and various digital applications,
+comprehensively improved the communication and
+interaction experience of the customers, salespersons,
+and employees of the Company. The Company enriched
+its digital insurance ecosystem continuously, releasing
+3,256 standardized services in total on its digital platform,
+a year-on-year increase of 92%, launched nearly 1,000
+ecological applications, and carried out nearly 400,000
+services and activities with different cooperative
+institutions.
+In 2021, the Company accelerated technological
+innovation, strengthened digital-driven operations,
+deepened technology-empowered value creation,
+continued to build a digital insurance ecosystem, and
+promoted the integration of technologies with business
+operations. The leading and supporting role of its
+technological innovation was continuously enhanced.
+The Company and CLP&C entered into the 2021 insurance
+sales framework agreement on 20 February 2021, with a
+term of two years from 8 March 2021 to 7 March 2023.
+Unless a party serves the other party a written notice
+for non-renewal within 30 days before the expiration
+of the 2021 insurance sales framework agreement, the
+agreement will be automatically extended for one year
+from the expiration thereof to 7 March 2024. Pursuant to
+the agreement, CLP&C will entrust the Company to act
+as an agent to sell selected insurance products within
+the authorized regions, and pay an agency service fee to
+the Company in consideration of the services provided.
+For details as to the method of calculation of the agency
+service fee, please refer to Note 35 in the Notes to the
+Consolidated Financial Statements. The annual caps for
+the three years ending 31 December 2023 are RMB3,500
+million, RMB3,830 million and RMB4,240 million,
+respectively.
+Insurance Sales Framework Agreement
+For the year ended 31 December 2021, the amount of
+subscription by the Company in the capacity of the limited
+partner of the fund products of which China Life Capital or
+any of its subsidiaries serves as the general partner was
+RMB4,000.00 million, and the management fee charged
+by China Life Capital as the general partner or the manager
+of the fund products was RMB136.31 million.
+The Company and China Life Capital entered into the
+2020-2022 framework agreement on 31 December 2019,
+with a term from 1 January 2020 to 31 December 2022.
+Pursuant to the agreement, the Company will continue
+to subscribe in the capacity of the limited partner for
+the fund products of which China Life Capital or any of
+its subsidiaries serves (individually and jointly with third
+parties) as the general partner, and/or the fund products of
+which China Life Capital serves as the manager (including
+the fund manager and co-manager). For the three years
+ending 31 December 2022, the annual cap for the
+subscription by the Company in the capacity of the limited
+partner of the fund products of which China Life Capital
+or any of its subsidiaries serves as the general partner is
+RMB5,000 million, and the annual cap for the management
+fee charged by China Life Capital as the general partner or
+the manager of the fund products is RMB200 million.
+Cooperation Framework Agreement for Investment
+Management with Insurance Funds between the
+Company and China Life Capital
+43
+For the year ended 31 December 2021, the investment
+management service fee, floating management fee,
+performance-based bonus and real estate operation
+management service fee paid by the Company to CLI
+amounted to RMB587.63 million, and the contractual
+amount of assets newly entrusted by the Company to
+CLI for investment and management was RMB23,326.50
+million. For the year ended 31 December 2021, the
+amount for the subscription of the related financial
+products established and issued by CLI or of which CLI
+had participated in the establishment and issuance was
+RMB23,326.50 million.
+2,000
+2,000
+65,000
+65,000
+Fees for the Investment and
+Management Services and
+the Entrusted Operation Fee
+(RMB million or its
+equivalent in foreign currency)
+Annual Report 2021 | Significant Events
+For the year ended 31 December 2021, CLP&C paid the
+Company an agency service fee of RMB1,541.99 million.
+Annual Report 2021 | Significant Events
+Framework Agreement between the Company and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, the Company and AMP entered into
+the 2020-2022 framework agreement on 31 December
+2019, with a term of three years from 1 January 2020
+to 31 December 2022. Pursuant to the agreement, the
+Company and AMP will continue to conduct certain daily
+transactions, including the subscription and redemption of
+fund products, sales agency services, asset management
+for specific clients and other daily transactions permitted
+by laws and regulations. Pricing of the transactions
+under the agreement shall be determined by the parties
+through arm's length negotiations with reference
+to industry practices. For the three years ending 31
+December 2022, the annual cap of the subscription price
+and corresponding subscription fee for the subscription
+of fund products is RMB72,600 million; the annual cap
+of the redemption price and corresponding redemption
+fee for the redemption of fund products is RMB72,600
+million; the annual caps of the sales commission fee and
+client maintenance fee payable by AMP are RMB700
+million, RMB800 million and RMB900 million, respectively;
+the annual caps of the management fee (including the
+performance-based fee) payable by the Company for
+the asset management for specific clients are RMB300
+million, RMB400 million and RMB500 million, respectively;
+and the annual cap of the fees for other daily transactions
+is RMB100 million.
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB8,909.41 million,
+the redemption price and corresponding redemption fee
+for the redemption of fund products were RMB4,067.58
+million, the sales commission fee and client maintenance
+fee paid by AMP were RMB1.39 million, the management
+fee (including the performance-based fee) paid by the
+Company for the asset management for specific clients
+was RMB65.84 million, and the fees for other daily
+transactions were RMB1.28 million.
+44 Annual Report 2021 | Significant Events
+Framework Agreement between CLIC and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLIC and AMP entered into the
+2020-2022 framework agreement on 6 September 2019,
+with a term of three years from 1 January 2020 to 31
+December 2022. Pursuant to the agreement, CLIC and
+AMP will continue to conduct certain daily transactions,
+including the subscription and redemption of fund
+products and private asset management. Pricing of the
+transactions under the agreement shall be determined
+by the parties through arm's length negotiations with
+reference to industry practices. For the three years
+ending 31 December 2022, the annual cap of the
+subscription price and corresponding subscription fee
+for the subscription of fund products is RMB10,000
+million; the annual cap of the redemption price and
+corresponding redemption fee for the redemption of fund
+products is RMB10,000 million; and the annual cap of
+the management fee (including the performance-based
+fee) payable by CLIC for the private asset management is
+RMB100 million.
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB0 million, the
+redemption price and corresponding redemption fee for
+the redemption of fund products were RMB101.40 million,
+and the management fee (including the performance-
+based fee) paid by CLIC for the private asset management
+was RMB26.37 million.
+Framework Agreement between CLP&C and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLP&C and AMP entered into the
+2020-2022 framework agreement on 3 December 2019,
+with a term of three years from 1 January 2020 to 31
+December 2022. Pursuant to the agreement, CLP&C and
+AMP will continue to conduct certain daily transactions,
+including the subscription and redemption of fund
+products, asset management for specific clients and other
+daily transactions permitted by laws and regulations.
+Pricing of the transactions under the agreement shall
+be determined by the parties through arm's length
+negotiations with reference to industry practices. For the
+three years ending 31 December 2022, the annual cap of
+the subscription price for the fund products is RMB10,000
+million; the annual cap of the redemption price for the
+fund products is RMB10,000 million; the annual cap of the
+subscription fee for the fund products is RMB100 million;
+the annual cap of the redemption fee for the fund products
+is RMB100 million; the annual cap of the management fee
+(including the performance-based fee) payable by CLP&C
+for the asset management for specific clients is RMB100
+million; and the annual cap of the fees for other daily
+transactions is RMB100 million.
+For the year ended 31 December 2021, the subscription
+price for the fund products was RMBO million, the
+redemption price for the fund products was RMBO
+million, the subscription fee for the fund products was
+RMBO million, the redemption fee for the fund products
+was RMBO million, the management fee (including the
+performance-based fee) paid by CLP&C for the asset
+management for specific clients was RMB15.75 million,
+and the fees for other daily transactions were RMB0.13
+million.
+Framework Agreement between CLI and AMP
+As approved by the First Extraordinary General Meeting
+2019 of the Company, CLI and AMP entered into the 2020-
+2022 framework agreement on 17 February 2020, with a
+term of three years from 1 January 2020 to 31 December
+2022. Pursuant to the agreement, CLI and AMP will
+continue to conduct certain daily transactions, including
+the subscription and redemption of fund products, asset
+management for specific clients, advisory services and
+other daily transactions permitted by laws and regulations.
+Pricing of the transactions under the agreement shall
+be determined by the parties through arm's length
+negotiations with reference to industry practices. For the
+three years ending 31 December 2022, the annual cap
+of the subscription price and corresponding subscription
+fee for the subscription of fund products is RMB10,000
+million; the annual cap of the redemption price and
+corresponding redemption fee for the redemption of
+fund products is RMB10,000 million; the annual cap of
+the management fee (including the performance-based
+fee) payable by CLI and its subsidiaries for the asset
+management for specific clients is RMB150 million;
+the annual cap of the management fee (including the
+performance-based fee) payable by the subsidiaries
+of AMP for the asset management for specific clients
+is RMB150 million; the annual cap of the advisory fee
+payable by CLI and its subsidiaries for the advisory
+services is RMB150 million; the annual cap of the advisory
+fee payable by AMP and its subsidiaries for the advisory
+services is RMB150 million; and the annual cap of the fees
+for other daily transactions is RMB150 million.
+45
+65,000
+Framework Agreements with AMP
+Contractual Amount of
+Assets Newly Entrusted for
+Investment and Management
+during the Period
+(RMB million or its
+equivalent in foreign currency)
+2,000
+For the three years ending 31 December 2024, the annual
+caps on the contractual amount of assets newly entrusted
+by the Company to CLI for investment and management,
+as well as the annual caps on the fees for the investment
+and management services payable by the Company
+to CLI (including the investment management service
+fee, product management fee, real estate operation
+management service fee and performance reward) and
+the entrusted operation fee in relation to the operating
+services are as follows:
+The determination of embedded value is based on a range
+of assumptions on future operations and investment
+performance. The future actual experiences are affected
+by internal and external factors, many of which are not
+entirely controlled by China Life. Hence the future actual
+experiences may deviate from these assumptions.
+We carried out our review work based on "CAA Standards
+of Actuarial Practice: Appraisal of Embedded Value",
+issued by CAA. In carrying out our review, we have
+relied on the completeness and accuracy of audited and
+unaudited data and information provided by China Life.
+Basis of Opinion, Reliance and Limitation
+a review of China Life's EV Results, including
+embedded value, value of one year's sales, analysis
+of embedded value movement from 31 December
+2020 to 31 December 2021, and the sensitivity results
+of value of in-force business and value of one year's
+sales.
+a review of the economic and operating assumptions
+used to develop embedded value and value of one
+year's sales as at 31 December 2021; and
+a review of the methodology used to develop the
+embedded value and value of one year's sales as at
+31 December 2021, in accordance with the "CAA
+Standards of Actuarial Practice: Appraisal of Embedded
+Value", issued by the China Association of Actuaries
+("CAA");
+•
+•
+•
+Our scope of work covered:
+Scope of work
+This report is addressed solely to China Life in accordance
+with the terms of our engagement letter. To the fullest
+extent permitted by applicable law, we do not accept
+or assume any responsibility, duty of care or liability to
+anyone other than China Life for or in connection with
+our review work, the opinions we have formed, or for any
+statements set forth in this report.
+China Life has retained Deloitte Consulting (Shanghai)
+Co., Ltd. to review its EV Results. The task is undertaken
+by Deloitte Actuarial and Insurance Solutions of Deloitte
+Consulting (Shanghai) Co., Ltd. ("Deloitte Consulting" or
+"we").
+INDEPENDENT ACTUARIES REVIEW
+OPINION REPORT ON EMBEDDED
+VALUE OF CHINA LIFE INSURANCE
+COMPANY LIMITED
+For the year ended 31 December 2021, the subscription
+price and corresponding subscription fee for the
+subscription of fund products were RMB2,832.27 million,
+the redemption price and corresponding redemption fee
+for the redemption of fund products were RMB3,466.89
+million, the management fee (including the performance-
+based fee) paid by CLI and its subsidiaries for the asset
+management for specific clients was RMB0 million, the
+management fee (including the performance-based fee)
+paid by the subsidiaries of AMP for the asset management
+for specific clients was RMB0 million; the advisory fee
+paid by CLI and its subsidiaries for the advisory services
+was RMBO million; the advisory fee paid by AMP and its
+subsidiaries for the advisory services was RMBO million,
+and the fees for other daily transactions were RMB3.50
+million.
+Framework Agreement between the Company
+and Chongqing Trust
+The Company and Chongqing Trust entered into the 2020-
+2022 framework agreement on 27 December 2019, with a
+term of three years from 1 January 2020 to 31 December
+2022. Pursuant to the agreement, the Company and
+Chongqing Trust will continue to conduct the subscription
+and redemption of trust products and other daily
+transactions permitted by laws and regulations. Pricing of
+the transactions under the agreement shall be determined
+by the parties through arm's length negotiations with
+reference to industry practices. For the three years ending
+31 December 2022, the annual cap of the total amount
+of subscription and redemption of the trust products
+is RMB30,000 million; the annual cap of the trustee's
+remuneration is RMB500 million; and the annual cap of the
+fees for other daily transactions is RMB100 million.
+Asset Management Agreements
+Confirmation by Auditor
+The Board has received a comfort letter from the
+auditor of the Company with respect to the above
+continuing connected transactions which were subject
+to the reporting, announcement and/or independent
+shareholders' approval requirements, and the letter stated
+that during the Reporting Period:
+1. nothing has come to the auditors' attention that
+causes them to believe that the disclosed continuing
+connected transactions have not been approved by the
+Company's Board of Directors;
+2. for transactions involving the provision of goods or
+services by the Company, nothing has come to the
+auditors' attention that causes them to believe that
+the transactions were not, in all material respects, in
+accordance with the pricing policies of the Company;
+3. nothing has come to the auditors' attention that causes
+them to believe that the transactions were not entered
+into, in all material respects, in accordance with the
+relevant agreements governing such transactions; and
+4. nothing has come to the auditors' attention that causes
+them to believe that the amounts of the continuing
+connected transactions have exceeded the total
+amount of the annual caps set by the Company.
+Confirmation by Independent Directors
+The Company's Independent Directors have reviewed
+the above continuing connected transactions which
+were subject to the reporting, announcement and/or
+independent shareholders' approval requirements, and
+confirmed that:
+1. the transactions were entered into in the ordinary and
+usual course of business of the Company;
+China Life Insurance Company Limited ("China Life").
+has prepared embedded value results as at 31 December
+2021 ("EV Results"). The disclosure of these EV Results,
+together with a description of the methodology and
+assumptions that have been used, are shown in the
+Embedded Value section.
+2. the transactions were conducted on normal
+commercial terms;
+Opinion
+•
+For the year ending 31 December 2022
+For the year ending 31 December 2023
+For the year ending 31 December 2024
+For the year ended 31 December 2021, the service fee
+paid by CLIC to the Company amounted to RMB553.66
+million.
+The Company and CLIC entered into the 2021 policy
+management agreement on 31 December 2020, with
+a term from 1 January 2021 to 31 December 2021.
+Pursuant to the agreement, the Company accepted CLIC's
+entrustment to provide policy administration services
+relating to the non-transferred policies. The Company
+acted as a service provider under the agreement and did
+not acquire any rights or assume any obligations as an
+insurer under the non-transferred policies. For details as
+to the method of calculation of the service fee, please
+refer to Note 35 in the Notes to the Consolidated Financial
+Statements. The annual cap in respect of the service.
+fee paid by CLIC to the Company for the year ended 31
+December 2021 was RMB599 million. The Company and
+CLIC entered into the 2022-2024 policy management
+agreement on 31 December 2021, with a term from 1
+January 2022 to 31 December 2024. Pursuant to the
+agreement, the Company will continue to accept CLIC's
+entrustment to provide policy administration services
+relating to the non-transferred policies. The annual cap
+in respect of the service fee to be paid by CLIC to the
+Company for each of the three years ending 31 December
+2024 is RMB491 million.
+Policy Management Agreement
+The Company has complied with the disclosure requirements
+under Chapter 14A of the Listing Rules in respect of the
+above continuing connected transactions. When conducting
+the above continuing connected transactions during the
+Reporting Period, the Company has followed the pricing
+policies and guidelines formulated at the time when such
+transactions were entered into.
+During the Reporting Period, the Company also carried
+out certain continuing connected transactions, including
+the policy management agreement between the Company
+and CLIC, and the asset management agreement
+between CLIC and AMC, which were exempt from the
+reporting, announcement, annual review and independent
+shareholders' approval requirements under Chapter 14A of
+the Listing Rules.
+Annual Report 2021 | Significant Events
+40
+During the Reporting Period, the continuing connected
+transactions carried out by the Company that were
+subject to the reporting, announcement, annual review
+and independent shareholders' approval requirements
+under Chapter 14A of the Listing Rules included the
+framework agreements entered into by AMP with the
+Company, CLIC, CLP&C and CLI, respectively, and the
+asset management agreement for alternative investments
+between the Company and CLI. Such agreements and
+the transactions thereunder have been approved by the
+independent shareholders of the Company. CLIC holds
+100% of the equity interest in CLI. Therefore, CLI is a
+connected person of the Company. AMP is a subsidiary
+of AMC, and is therefore a connected subsidiary of the
+Company.
+CLP&C and 100% of the equity interest in China Life
+Capital. Therefore, each of CLIC, CLP&C and China Life
+Capital constitutes a connected person of the Company.
+AMC is held as to 60% and 40% by the Company and
+CLIC, respectively, and is therefore a connected subsidiary
+of the Company. Chongqing Trust is an associate of CLIC
+and CLP&C by virtue of its acting as the trustee of a trust
+scheme of which CLP&C is a beneficiary, and is therefore
+also a connected person of the Company pursuant to Rule
+14A.13(2) of the Listing Rules.
+During the Reporting Period, the following continuing
+connected transactions were carried out by the Company
+pursuant to Rule 14A.76(2) of the Rules Governing the
+Listing of Securities on the HKSE (the "Listing Rules"),
+including the asset management agreement between
+the Company and AMC, the insurance sales framework
+agreement between the Company and CLP&C, the
+framework agreement between the Company and
+Chongqing International Trust Inc. ("Chongqing Trust"),
+and the framework agreement between the Company
+and China Life Capital. These continuing connected
+transactions were subject to the reporting, announcement
+and annual review requirements but were exempt from
+the independent shareholders' approval requirement
+under the Listing Rules. CLIC, the controlling shareholder
+of the Company, holds 60% of the equity interest in
+Based on the scope of work above, we have concluded
+that:
+MAJOR CONNECTED TRANSACTIONS
+Continuing Connected Transactions
+MATERIAL LITIGATIONS OR
+ARBITRATIONS
+SIGNIFICANT
+EVENTS
+39
+Annual Report 2021 | Embedded Value
+24 March 2022
+Deloitte Consulting (Shanghai) Co., Ltd.
+Eric Lu
+Yu Jiang
+For and on behalf of
+• The embedded value results are consistent with its
+methodology and assumptions used. The overall result
+is reasonable.
+The operating assumptions used by China Life have
+taken into account the past experience and the
+expectation of future experience; and
+The economic assumptions used by China Life have
+taken into account the current investment market
+conditions and the investment strategy of China Life;
+The embedded value methodology used by China Life
+is in line with the "CAA Standards of Actuarial Practice:
+Appraisal of Embedded Value" issued by CAA. This
+method is commonly used by life and health insurance
+companies in China;
+During the Reporting Period, the Company was not
+involved in any material litigation or arbitration.
+3. the transactions were entered into in accordance with
+the agreements governing those continuing connected
+transactions, and the terms are fair and reasonable and
+in the interests of shareholders of the Company as a
+whole; and
+For the year ended 31 December 2021, the total amount
+of subscription and redemption of the trust products was
+RMB2,266.63 million, the trustee's remuneration was
+RMB16.47 million, and the fees for other daily transactions
+were RMB0 million.
+Other Major Connected Transaction
+Formation of China Life Chengda (Wuxi) Equity
+Investment Center (Limited Partnership)
+41
+development and the revised structure of service fees.
+Pursuant to the 2020-2022 asset management agreement,
+AMC agreed to invest and manage assets entrusted
+to it by CLIC, on a discretionary basis, subject to the
+investment guidelines and instructions given by CLIC. In
+consideration of AMC's services in respect of investing
+and managing assets entrusted to it by CLIC under the
+agreement, CLIC agreed to pay AMC a service fee. For
+details as to the method of calculation of the service fee,
+please refer to Note 35 in the Notes to the Consolidated
+Financial Statements. The annual cap for the three years
+ending 31 December 2022 is RMB500 million.
+For the year ended 31 December 2021, CLIC paid AMC a
+service fee of RMB156.45 million.
+Asset Management Agreement for Alternative
+Investments between the Company and CLI
+As approved by the 2017 Annual General Meeting of the
+Company, the Company and CLI entered into the 2019
+asset management agreement for alternative investments
+on 31 December 2018. Such agreement took effect
+from 1 January 2019 and expired on 31 December 2021.
+Pursuant to the agreement, CLI agreed to invest and
+manage assets entrusted to it by the Company (including
+equity, real estate, related financial products and quasi-
+securitization financial products), on a discretionary basis,
+within the scope of utilization of insurance funds as
+specified by regulatory authorities and in accordance with
+the requirements of applicable laws and regulations and
+the investment guidelines given by the Company, and the
+Company agreed to pay CLI the investment management
+service fee, floating management fee, performance-based
+bonus and real estate operation management service fee
+in respect of the investment and management services
+provided by CLI to the Company. For details as to the
+method of calculation of the investment management
+service fee, floating management fee, performance-based
+bonus and real estate operation management service fee,
+please refer to Note 35 in the Notes to the Consolidated
+Financial Statements. In addition, the assets entrusted by
+the Company to CLI would also be partially used for the
+subscription of the related financial products established
+and issued by CLI or of which CLI had participated in the
+establishment and issuance, and such related financial
+products would be limited to infrastructure investment
+schemes and project asset-backed schemes.
+4. the amounts of the above transactions have not
+exceeded the relevant annual caps.
+For the year ended
+31 December 2019
+For the year ended
+31 December 2020
+For the year ended
+Annual Report 2021 | Significant Events
+Amount of Assets Newly
+Entrusted for Investment and
+Management during the Period
+(including the Amount
+for Subscription of the Related
+Financial Products)
+(RMB million or its
+equivalent in foreign currency)
+200,000
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+Amount of the Investment
+Management Service Fee,
+Floating Management Fee,
+Performance-based Bonus
+and Real Estate Operation
+Management Service Fee
+(RMB million or its
+equivalent in foreign currency)
+1,391
+1,982
+2,266
+31 December 2021
+(including the amount for the subscription
+of the related financial products: 100,000)
+42
+Annual Report 2021 | Significant Events
+Annual Report 2021 | Significant Events
+As approved by the Extraordinary General Meeting 2021
+of the Company, the Company and CLI entered into
+the 2022-2024 agreement for entrusted investment
+and management and operating services with respect
+to alternative investments with insurance funds on
+27 December 2021. Pursuant to the agreement, the
+Company will entrust CLI to perform services including the
+entrusted investment and management and the entrusted
+operation with respect to alternative investments. For
+the entrusted investment and management, it covers
+the equity/real estate direct investments, equity/real
+estate funds, non-standard financial products and quasi-
+securitization financial products already entrusted by the
+Company to CLI for investment and management under
+the existing projects, as well as the non-standard financial
+products and quasi-securitization financial products
+entrusted for investment under the new projects. CLI will
+continue to invest and manage assets entrusted to it by
+the Company, on a discretionary basis, within the scope of
+utilization of insurance funds as specified by the regulatory
+authorities and in accordance with the requirements
+of applicable laws and regulations and the investment
+guidelines of the Company, and the Company will pay
+CLI the investment management service fee, product
+management fee, real estate operation management
+service fee and performance award in respect of the
+investment and management services provided by CLI to
+the Company. For the entrusted operation, CLI will provide
+the operating services to the Company with respect to
+the equity/real estate funds invested by the Company at
+its own discretion and within the scope prescribed in the
+agreement, and the Company will pay CLI the entrusted
+operating fee in this regard. Such agreement took effect
+from 1 January 2022, with a term of two years ending on
+31 December 2023. Unless a party serves the other party
+a written notice for non-renewal prior to 90 working days
+before the expiry date of the agreement, the agreement
+will be automatically renewed for one year from the expiry
+date thereof.
+(including the amount for the subscription
+of the related financial products: 100,000)
+200,000
+Asset Management Agreement between CLIC and AMC
+CLIC and AMC entered into the 2019-2021 asset
+management agreement on 29 December 2018, with an
+entrustment term from 1 January 2019 to 31 December
+2021. In order to optimize the structure of service fees
+and further enhance the performance incentives for
+AMC, CLIC and AMC entered into the 2020-2022 asset
+management agreement on 1 July 2020 to replace
+the 2019-2021 asset management agreement, and to
+revise the annual caps in light of the needs for business
+For the three years ended 31 December 2021, the
+annual caps on the contractual amount of assets newly
+entrusted by the Company to CLI for investment and
+management, as well as the annual caps on the amount
+of the investment management service fee, floating
+management fee, performance-based bonus and real
+estate operation management service fee payable by the
+Company to CLI are as follows:
+The Company and AMC entered into the 2019-2021
+asset management agreement on 28 December 2018,
+with a term from 1 January 2019 to 31 December 2021.
+In order to optimize the structure of service fees and
+further enhance the performance incentives for AMC,
+the Company and AMC entered into the 2020-2022
+asset management agreement on 1 July 2020 to replace
+the 2019-2021 asset management agreement, and to
+revise the annual caps in light of the needs for business
+development and the revised structure of service fees.
+Pursuant to the 2020-2022 asset management agreement,
+AMC agreed to 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 applicable laws and regulations,
+regulatory requirements and the investment guidelines
+given by the Company. In consideration of AMC's services
+in respect of investing and managing various categories
+of assets entrusted to it by the Company under the
+agreement, the Company agreed to pay AMC a service
+fee. For details as to the method of calculation of the
+service fee, please refer to Note 35 in the Notes to the
+Consolidated Financial Statements. The annual caps for
+the three years ending 31 December 2022 are RMB3,000
+million, RMB4,000 million and RMB 5,000 million,
+respectively.
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company, CLP&C and
+Wuxi Fengrun Investment Co., Ltd. (each as a limited
+partner) entered into a partnership agreement with China
+Life Chengda (Shanghai) Healthcare Equity Investment
+Management Company Limited ("CLCD", as the general
+partner) and Chengda Fengzhi (Shanghai) Corporate
+Management Center (Limited Partnership) (as the special
+limited partner) on 31 December 2021 for the formation
+of China Life Chengda (Wuxi) Equity Investment Center
+(Limited Partnership)(the "Partnership"). The total capital
+contribution by all partners of the Partnership shall be
+RMB10,000,000,000, of which RMB7,500,000,000
+shall be contributed by the Company. China Life Equity
+Investment Company Limited ("CLEI") will serve as the
+manager of the Partnership. The Partnership will have
+a term of eight years, and will primarily make direct
+or indirect investment in private equity projects in the
+medical health and technological innovation sectors.
+46
+Annual Report 2021 | Significant Events
+For the year ended 31 December 2021, the Company paid
+AMC a service fee of RMB2,741.56 million.
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company and CLI entered
+into an entrustment contract on 11 January 2022,
+pursuant to which the Company will contribute no more
+than RMB1,500,000,000 to CLI - Xinyuan No. 1 Equity
+Investment Plan ("Xinyuan EIP") established by CLI. All
+funds under Xinyuan EIP will be used for the subscription
+of limited partnership interest in Beijing Xinyuan No. 1
+Equity Investment Fund Partnership (Limited Partnership)
+("Xinyuan Partnership"). CLI will, on behalf of Xinyuan
+EIP and as a limited partner, enter into a partnership
+agreement with Guangzhou Jinhong Asset Management
+Co., Ltd. ("Guangzhou Jinhong") and National Energy
+(Beijing) Private Equity Fund Management Co., Ltd.
+(each as a general partner), and Beijing Guoneng
+Green and Low-Carbon Development Investment Fund
+(Limited Partnership) and China Longyuan Power Group
+Corporation Limited (each as a limited partner). The total
+capital contribution by all partners of Xinyuan Partnership
+shall be RMB3,002,000,000. China Life Jinshi Asset
+Management Company Limited ("China Life Jinshi") will
+serve as the manager of Xinyuan Partnership. Xinyuan
+Partnership will primarily invest in green and low-carbon
+investment targets (such as wind power, photovoltaic
+power, energy storage and other clean energy projects).
+As approved at the fifth meeting of the seventh session
+of the Board of Directors, the Company and CLP&C
+intend to contribute no more than RMB2,400,000,000
+and RMB600,000,000, respectively, to CLI - Xindian No.
+1 Equity Investment Plan ("Xindian EIP") established by
+CLI and enter into an entrustment contract with CLI by 31
+December 2022 for such purpose. All funds under Xindian
+EIP will be used for the subscription of limited partnership
+interest in Beijing Xindian No. 1 Equity Investment Fund
+Partnership (Limited Partnership)("Xindian Partnership").
+CLI will, on behalf of Xindian EIP and as a limited partner,
+enter into a partnership agreement with Guangzhou
+Jinhong (as the general partner) and China Huadian
+Corporation Ltd. (as a limited partner). The total capital
+contribution by all partners of Xindian Partnership shall
+be RMB6,001,000,000. China Life Jinshi will serve as the
+manager of Xindian Partnership. Xindian Partnership will
+primarily invest in equity interests of unlisted enterprises
+in the clean energy sectors such as wind power,
+photovoltaic power and energy storage.
+Acquisition of Creditor's Rights on Trust Loan
+through Asset-backed Plan
+As approved at the fifth meeting of the seventh session of
+the Board of Directors, the Company signed a subscription
+letter on 27 December 2021 for the subscription of "China
+Life Chengxin No. 1 Asset-backed Plan" ("Asset-back
+Plan") with an amount of RMB1,999,845,375. The Asset-
+back Plan was established by AMC as the manager/trustee
+of the plan, and the proceeds from the Asset-backed Plan
+will be used for the acquisition from Chongqing Trust
+of the creditor's rights on the trust units in Phase II of
+"Chongqing Trust - XCMG Assembled Funds Trust Plan".
+The trust plan, with a total size of RMB2,000,000,000 and
+an interest rate of 4.75% per annum, was established
+on 13 May 2020 and will expire on 13 May 2025. As at
+27 December 2021, the sum of the outstanding principal
+under such trust plan and its accrued and undistributed
+interests amounted to RMB1,999,845,375.
+Each of CLP&C, CLCD, CLEI, CLI, Guangzhou Jinhong,
+China Life Jinshi and Chongqing Trust is an associate of
+CLIC, and therefore a connected person of the Company.
+The above transactions constituted one-off connected
+transactions of the Company that were subject to the
+reporting and announcement requirements but were
+exempt from the independent shareholders' approval
+requirement under Rule 14A.76(2) of the Listing Rules.
+The Company has complied with the disclosure
+requirement under Chapter 14A of the Listing Rules in
+respect of the above one-off connected transactions.
+Statement on Claims, Debt Transactions and
+Guarantees etc. of a Non-operating Nature with
+Related Parties
+During the Reporting Period, the Company was not
+involved in claims, debt transactions or guarantees of a
+non-operating nature with related parties.
+Investment in Partnerships through Equity
+Investment Plans
+47
+Annual Report 2021 | Significant Events
+Asset Management Agreement between the Company
+and AMC
+The Company's Shenzhen Branch and the other co-owners
+of the properties have issued a letter to the governing
+department of the original owner of the properties
+in respect of the confirmation of ownership of the
+properties, requesting it to report the ownership issue to
+the State-owned Assets Supervision and Administration
+Commission of the State Council ("SASAC"), and
+requesting the SASAC to confirm the respective shares
+of each co-owner in the properties and to issue written
+documents in this regard to the department of land and
+resources of Shenzhen, so as to assist the Company and
+the other co-owners to complete the formalities in relation
+to the division of ownership of the properties.
+CLIC strictly followed these commitments. As at the end
+of the Reporting Period, save for the two properties and
+related land of the Company's Shenzhen Branch, the
+ownership registration formalities of which had not been
+completed due to historical reasons, all other formalities in
+relation to the change of land and property ownership had
+been completed. The Shenzhen Branch of the Company
+continues to use such properties and land, and no other
+parties have questioned or hindered the use of such
+properties and land by the Company.
+Prior to the listing of the Company's A Shares (30)
+November 2006), land use rights were injected by CLIC
+into the Company during its reorganization. Out of
+these, four pieces of land (with a total area of 10,421.12
+square meters) had not had its formalities in relation to
+the change of ownership completed. Further, out of the
+properties injected into the Company, there were six
+properties (with a gross floor area of 8,639.76 square
+meters) in respect of which the formalities in relation to
+the change of ownership had not been completed. CLIC
+undertook to complete the above-mentioned formalities
+within one year of the date of listing of the Company's A
+Shares, and in the event that such formalities could not
+be completed within such period, CLIC would bear any
+potential losses to the Company due to the defective
+ownership.
+48
+Except as otherwise disclosed in this report, the Company
+had no other material contracts during the Reporting
+Period.
+Entrusted investment management during the Reporting
+Period or any investment management occurred in
+previous periods but subsisted during the Reporting
+Period: Investment is one of the principal businesses
+of the Company. The Company mainly adopts the
+mode of entrusted investment for management of its
+investment assets, and has established a diversified
+framework of entrusted investment management
+with China Life's internal managers playing the key
+role and the external managers offering effective
+supports. The internal managers include AMC and
+its subsidiaries, CLI and its subsidiaries and Pension
+Company. The external managers comprise both domestic
+and overseas managers, including fund companies,
+securities companies and other professional investment
+management institutions. The Company selected different
+investment managers based on the purpose of allocation
+of various types of investments, their risk features and the
+expertise of different managers, so as to establish a great
+variety of investment portfolios and improve the efficiency
+of insurance fund utilization. The Company entered into
+entrusted investment management agreements with all
+managers and supervised the managers' daily investment
+performance through the measures such as investment
+guidelines, asset entrustment and performance
+appraisals. The Company also adopted risk control
+measures in respect of specific investments based on
+the characteristics of different managers and investment
+products.
+The Company neither gave external guarantees nor
+provided guarantees to its holding subsidiaries during the
+Reporting Period.
+During the Reporting Period, the Company neither acted
+as trustee, contractor or lessee of other companies'
+assets, nor entrusted, contracted or leased its assets to
+other companies, the profit or loss from which accounted
+for 10% or more of the Company's profits for the
+Reporting Period, nor were there any such matters that
+occurred in previous periods but subsisted during the
+Reporting Period.
+MATERIAL CONTRACTS AND THEIR
+PERFORMANCE
+UNDERTAKINGS OF THE COMPANY,
+SHAREHOLDERS, EFFECTIVE
+CONTROLLERS, ACQUIRERS,
+DIRECTORS, SUPERVISORS,
+SENIOR MANAGEMENT OR
+OTHER RELATED PARTIES WHICH
+ARE EITHER GIVEN OR EFFECTIVE
+DURING THE REPORTING PERIOD
+With the establishment of a corporate governance
+system with reasonably designed structure, well-
+developed mechanism, strict rules and regulations,
+as well as high efficiency in operation as its core
+objectives, the Company constantly promotes the
+development of corporate governance and commits
+to the best practices of corporate governance, so
+as to further improve governance structure and
+effectiveness.
+(appointed on 1 July 2021)
+Su Hengxuan
+Li Mingguang
+Huang Xiumei
+EXECUTIVE
+DIRECTORS
+Directors of the Company during the Reporting Period and up to the date of this report were as follows:
+REPORT OF THE BOARD OF DIRECTORS
+CORPORATE
+GOVERNANCE
+GOVERNANCE
+RESTRICTION ON MAJOR ASSETS
+Annual Report 2021 | Significant Events 49
+For the performance by the Company of its social
+responsibility during the Reporting Period, please
+refer to the full text of the "2021 Environment, Social
+and Governance (ESG) Report" ("ESG Report 2021")
+separately disclosed by the Company on the website
+of the SSE (www.sse.com.cn) and the HKExnews
+website of the Hong Kong Exchanges and Clearing
+Limited (www.hkexnews.hk). The specific information
+on environment is set out in Part Two of the ESG Report
+2021, and the specific information on the consolidation of
+achievements in poverty alleviation and rural revitalization
+undertakings, etc. is set out in Part One of the ESG Report
+2021.
+PERFORMANCE OF ENVIRONMENTAL
+AND SOCIAL RESPONSIBILITIES
+The major assets of the Company are financial assets.
+During the Reporting Period, there was no major asset
+of the Company being seized, detained or frozen that is
+subject to the disclosure requirements.
+After the Reporting Period, as at the date of disclosure
+of this report, based on the information disclosed on 8
+January 2022 on the website of the Central Commission
+for Discipline Inspection and the National Supervisory
+Commission, Mr. Wang Bin, the former Secretary of the
+Party Committee and the former Chairman of the Board
+of Directors of CLIC, is currently under the disciplinary
+review and investigation by the Central Commission
+for Discipline Inspection and the National Supervisory
+Commission for suspected serious violation of disciplines
+and laws. Mr. Wang Bin is also the former Chairman of the
+Board and the former Executive Director of the Company.
+Given that Mr. Wang Bin was not able to perform his
+role and duties as the Chairman of the Board during the
+period of review and investigation, Mr. Yuan Changqing,
+a Non-Executive Director of the Company, was elected at
+the sixth meeting of the seventh session of the Board of
+Directors of the Company to assume the roles and duties
+of the Chairman of the Board and the legal representative
+of the Company during the period commencing from the
+date of passing of the Board resolution and ending on the
+effective date of the appointment of a new Chairman of
+the Board. The Board received a resignation letter from
+Mr. Wang Bin on 23 February 2022. As Mr. Wang Bin was
+not able to perform his role and duties as a Director, he
+had resigned from his positions as the Chairman of the
+Board and an Executive Director of the Company. The
+resignation took effect on the same day. Please refer to
+the announcements published by the Company on the
+website of the HKSE on 9 January 2022, 13 January 2022
+and 23 February 2022, respectively.
+During the Reporting Period, the Company was not
+investigated for suspected crimes according to law, and
+none of its controlling shareholders, effective controller,
+Directors, Supervisors and senior management were
+not subject to any compulsory measures for suspected
+crimes according to law. The Company or its controlling
+shareholders, effective controller, Directors, Supervisors
+and senior management were not subject to any criminal
+punishment, investigation by the CSRC for alleged
+violation of laws and regulations, administrative penalty
+by the CSRC, or material administrative penalty by other
+competent authorities, nor were they detained by the
+disciplinary inspection and supervison authorities for
+alleged serious violation of disciplines or laws or duty-
+related crimes which had an impact on their performance
+of duties. None of the Company's Directors, Supervisors
+and senior management were subject to any compulsory
+measures by other competent authorities for alleged
+violation of laws and regulations which had an impact on
+their performance of duties.
+ALLEGED VIOLATION OF LAWS
+AND REGULATIONS BY, PENALTIES
+IMPOSED ON AND RECTIFICATION
+OF THE COMPANY AND ITS
+CONTROLLING SHAREHOLDERS,
+EFFECTIVE CONTROLLER,
+DIRECTORS, SUPERVISORS OR
+SENIOR MANAGEMENT
+Given that the change of ownership of the above two
+properties and related land use rights were directed by the
+co-owners, and all formalities in relation to the change of
+ownership were proceeded slowly due to reasons such as
+issues rooted in history and government approvals, CLIC,
+the controlling shareholder of the Company, made further
+commitment as follows: CLIC will assist the Company
+in completing, and urge the co-owners to complete,
+the formalities in relation to the change of ownership in
+respect of the above two properties and related land use
+rights as soon as possible. If the formalities cannot be
+completed due to the reasons of the co-owners, CLIC will
+take any other legally practicable measures to resolve the
+issue and will bear any potential losses suffered by the
+Company as a result of the defective ownership.
+PRACTICING THE
+BEST CORPORATE
+Yuan Changqing
+Wang Junhui
+Liu Huimin
+NON-EXECUTIVE
+DIRECTORS
+(resigned on 7 February 2021 due to the adjustment of
+work arrangements)
+SHARE CAPITAL
+Details of the movement in property, plant and equipment
+of the Company are set out in Note 6 in the Notes to the
+Consolidated Financial Statements in this annual report.
+PROPERTY, PLANT AND EQUIPMENT
+The total amount of charitable donations made by the
+Company during the Reporting Period was approximately
+RMB218.88 million.
+CHARITABLE DONATIONS
+Details of the reserves of the Company are set out in Note
+37 in the Notes to the Consolidated Financial Statements
+in this annual report.
+Yin Zhaojun
+The changes in accounting estimates of the Company
+during the Reporting Period are set out in Note 3 in the
+Notes to the Consolidated Financial Statements in this
+annual report.
+CHANGES IN ACCOUNTING ESTIMATES
+The profit distribution policy of the Company complied
+with the Articles of Association and the examination and
+approval procedures of the Company, clearly defined
+the dividend distribution standards and percentage and
+the decision-making procedures and system. Small-
+and medium-sized shareholders of the Company have
+sufficient opportunities to express their opinions
+and appeals, and their legitimate rights have been
+well protected. The Independent Directors diligently
+considered the profit distribution policy and expressed
+their independent opinions in this regard.
+No public reserve capitalization is provided for in the profit
+distribution plan for the year.
+Board). The Company shall pay dividends to shareholders
+of foreign-listed shares in conformity with the PRC
+regulations on foreign exchange control. If no such
+regulations are in place, the applicable exchange rate is
+the average closing rate published by the People's Bank of
+China one week before the declaration of the distribution
+of dividends.
+56 Annual Report 2021 | Corporate Governance
+In accordance with the profit distribution plan for the
+year 2021 approved by the Board on 24 March 2022,
+with the appropriation to its discretionary surplus reserve
+fund of RMB5,096 million (10% of the net profit for
+2021), the Company, based on 28,264,705,000 shares in
+issue, proposed to distribute cash dividends amounting
+to approximately RMB18,372 million (representing
+36% of the net profit attributable to equity holders of
+the Company in the consolidated statements) to all
+shareholders of the Company at RMB0.65 per share
+(inclusive of tax). The foregoing profit distribution plan
+is subject to the approval by the 2021 Annual General
+Meeting. Dividends payable to domestic shareholders are
+declared, valued and paid in RMB. Dividends payable to
+shareholders of the Company's foreign-listed shares are
+declared and valued in RMB and paid in the currency of
+the jurisdiction in which the foreign-listed shares are listed
+(if the Company is listed in more than one jurisdiction,
+dividends shall be paid in the currency of the Company's
+principal jurisdiction of listing as determined by the
+Profit distribution plan and public reserves
+capitalization plan for the year 2021
+The Company's profit distribution proposal shall be
+reviewed by the Board of Directors. The Board of
+Directors shall have a sufficient discussion of the
+reasonableness of the profit distribution proposal. After a
+special resolution regarding the proposal is reached and
+independent opinions have been given by the Company's
+Independent Directors, the proposal shall be submitted to
+the Company's general meeting for approval. In reviewing
+the profit distribution proposal, the Company shall provide
+Internet-based voting mechanism to the shareholders.
+When deliberating on specific cash dividend proposal
+by the Company's general meeting, the Company shall
+make active communication with shareholders, especially
+small- and medium-sized shareholders, through various
+channels. The Company shall also fully solicit opinions and
+appeals from small- and medium-sized shareholders, and
+I give timely reply to concerns of small- and medium-sized
+shareholders.
+In accordance with Article 219 of the Articles of
+Association, the procedures of reviewing the
+Company's profit distribution proposal is as
+follows:
+In addition, the Company's profit distribution is required
+to comply with relevant regulatory requirements. If
+the Company's core solvency ratio or comprehensive
+solvency ratio does not meet the minimum requirements,
+the CBIRC may adopt regulatory measures against
+the Company due to its failure to meet the minimum
+requirements, which may restrict the Company's ability to
+distribute dividends to its shareholders.
+3. Conditions for distribution of share dividends: If
+the Company's operation is sound and the Board
+of Directors is of the opinion that share dividends
+distribution is in the interest of all the Company's
+shareholders since the Company's stock price does
+not match the Company's share capital, the Company
+may propose a share dividends distribution plan if the
+conditions for cash dividends listed above are satisfied.
+2. Conditions for and percentage of distribution of cash
+dividends: If the Company makes profits in a given year
+and the cumulative undistributed profit is positive, the
+Company shall distribute dividends in the form of cash
+and the cumulative profits distributed in cash over the
+past three years by the Company shall be no less than
+thirty percent (30%) of the average annual distributable
+profits in recent three years;
+1. Profit distribution modes: The Company may
+distribute dividends in the form of cash or shares
+or a combination of cash and shares. If practicable,
+the Company may distribute interim dividends. The
+Company's dividends shall not bear interest, save
+in the case where the Company fails to distribute
+the dividends to the shareholders on the day when
+dividends were due to have been distributed;
+Details of the movement in share capital of the Company
+are set out in Note 36 in the Notes to the Consolidated
+Financial Statements in this annual report.
+INFORMATION OF TAX DEDUCTION FOR
+HOLDERS OF LISTED SECURITIES
+Shareholders are taxed and/or enjoy tax relief for the
+dividend income received from the Company in accordance
+with the "Individual Income Tax Law of the People's
+Republic of China", the "Enterprise Income Tax Law of the
+People's Republic of China", and relevant administrative
+rules, governmental regulations and guiding documents.
+Please refer to the announcement published by the
+Company on the website of the SSE on 9 July 2021 for
+the information on income tax in respect of the dividend
+distributed to A Share shareholders during the Reporting
+Period, and the announcement published by the Company
+on the HKExnews website of Hong Kong Exchanges and
+Clearing Limited on 30 June 2021 for the information on
+income tax in respect of the dividend distributed to H Share
+shareholders during the Reporting Period.
+58 Annual Report 2021 | Corporate Governance
+Full-time employees of the Company are covered by
+various government-sponsored pension plans, under which
+the employees are entitled to a monthly pension based
+on certain formulae. These government agencies are
+responsible for the pension liability to these employees
+upon retirement. The Company contributes on a monthly
+basis to these pension plans. All contributions made under
+the government-sponsored pension plans described above
+are fully attributable to employees of the Company at the
+time of the payment and the Company is unable to forfeit
+any amounts contributed by it to such plans. In addition to
+the government-sponsored pension plans, the Company
+established an employee annuity fund plan pursuant to
+the relevant laws and regulations in the PRC, whereby the
+Company is required to contribute to the plan at fixed rates
+of the employees' salary costs. Contributions made by
+the Company under the annuity fund plan that is forfeited
+in respect of those employees who resign from their
+positions prior to the full vesting of the contributions will
+be recorded in the public account of the annuity fund and
+shall not be used to offset any contributions to be made by
+the Company in the future. All funds in the public account
+will be attributed to the employees whose accounts are in
+normal status after the approval procedures are completed
+as required. Under these plans, the Company has no legal
+or constructive obligation for retirement benefit beyond the
+contributions made.
+PENSION PLAN
+The Company made appropriate insurance arrangement
+with respect to legal actions that might be faced by its
+Directors in connection with corporate activities, and such
+insurance arrangement was in force during the Reporting
+Period and up to the date of this report.
+PERMITTED INDEMNITY PROVISION
+As at the end of the Reporting Period, none of the
+Directors, Supervisors and the chief executive of the
+Company had any interests or short positions in the
+shares, underlying shares or debentures of the Company
+or its associated corporations (within the meaning of
+Part XV of the Securities and Futures Ordinance (Chapter
+571 of the Laws of Hong Kong) (the "SFO")) that were
+required to be recorded in the register of the Company
+required to be kept pursuant to Section 352 of the SFO or
+which had to be notified to the Company and the HKSE
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers (the "Model Code") as set out
+in Appendix 10 to the Listing Rules. In addition, the Board
+has created a code of conduct in relation to the sale and
+purchase of the Company's securities by Directors and
+Supervisors, which is no less stringent than the Model
+Code. Upon specific inquiry by the Company, the Directors
+and Supervisors have confirmed observation of the Model
+Code and the Company's own code of conduct in the year
+of 2021.
+DISCLOSURE OF INTERESTS OF DIRECTORS,
+SUPERVISORS AND THE CHIEF EXECUTIVE IN
+THE SHARES OF THE COMPANY
+No arrangements to which the Company, any of its
+subsidiaries or holding companies, or any subsidiary
+of the Company's holding companies is a party, and
+whose objects are, or one of whose objects is, to enable
+Directors or Supervisors (including their spouses and
+children under the age of 18) to acquire benefits by
+means of the acquisition of shares in, or debentures of,
+the Company or any other body corporate, subsisted at
+any time during the Reporting Period or at the end of the
+Reporting Period.
+DIRECTORS' AND SUPERVISORS' RIGHTS TO
+ACQUIRE SHARES
+None of the Directors or Supervisors (and their connected
+entities) is or was materially interested, directly or
+indirectly, in any transaction, arrangement or contract of
+significance entered into by the Company or its controlling
+shareholders or any of their respective subsidiaries at any
+time during the Reporting Period or subsisted at the end of
+the Reporting Period.
+In accordance with Article 218 of the Articles of
+Association, the Company's profit distribution
+policy is as follows:
+OR CONTRACTS
+INTERESTS OF DIRECTORS AND SUPERVISORS
+(AND THEIR CONNECTED ENTITIES) IN
+57
+Annual Report 2021 | Corporate Governance
+None of the Directors or Supervisors has entered
+into any service contracts with the Company and its
+subsidiaries that are not terminable within one year or
+I can only be terminated by the Company with payment of
+compensation (other than statutory compensation).
+DIRECTORS' AND SUPERVISORS' SERVICE
+CONTRACTS
+DAY-TO-DAY OPERATIONS OF THE BOARD
+Details of the Board meetings and the Board's
+performance of its duties during the Reporting Period
+are set out in the section headed "Report of Corporate
+Governance" in this annual report.
+No H Share stock appreciation rights of the Company were
+granted or exercised in 2021. The Company will deal with
+such rights and related matters in accordance with the
+PRC national policies.
+H SHARE STOCK APPRECIATION RIGHTS
+During the Reporting Period, the Company and its
+subsidiaries did not purchase, sell or redeem any of the
+Company's listed securities.
+PURCHASE, SALE OR REDEMPTION OF THE
+COMPANY'S SECURITIES
+MATERIAL TRANSACTIONS, ARRANGEMENTS
+3. The Company shall give priority to cash dividends as its
+profit distribution manner.
+RESERVES
+1. The Company shall take the investment return for
+investors into full account and allocate the required
+percentage of the Company's realised distributable
+profits to shareholders as dividends each year;
+For details of the overall operation of the Company during
+the Reporting Period, the future development of its
+business and the principal risks faced by it, please refer
+to the sections headed "Management Discussion and
+Analysis" and "Internal Control and Risk Management"
+in this annual report. These discussions form part of the
+"Report of the Board of Directors".
+Overall operation of the Company during the
+Reporting Period
+BUSINESS REVIEW
+The Company is a leading life insurance company in
+China and possesses an extensive distribution network
+comprising exclusive agents, direct sales representatives,
+and dedicated and non-dedicated agencies, providing
+products and services such as individual and group life
+insurance, accident and health insurance. The Company
+is one of the largest institutional investors in China, and
+becomes one of the largest insurance asset management
+companies in China through its controlling shareholding in
+AMC. The Company also has controlling shareholding in
+Pension Company.
+PRINCIPAL BUSINESS
+Mr. Lam Chi Kuen, Mr. Tang Xin, Ms. Huang Xiumei, Mr. Li Mingguang, Mr. Yuan Changqing, Mr. Su Hengxuan, Mr. Wang Junhui, Ms. Leung Oi-Sie Elsie,
+Mr. Zhai Haitao
+From left to right:
+52 Annual Report 2021 | Corporate Governance
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+2.
+Environmental policies and performance of the
+Company
+1. The Board of the Company received a resignation letter from Mr. Wang Bin on 23 February 2022. As Mr. Wang Bin was not able to perform his role and
+duties as a Director, he had resigned from his positions as the Chairman of the Board and an Executive Director of the Company.
+(appointed on 14 October 2021)
+(appointed on 29 June 2021)
+Chang Tso Tung Stephen
+Robinson Drake Pike
+2. The Company shall maintain a sustainable and steady
+profit distribution policy and at the same time take
+into consideration the Company's long-term interest,
+general interest of all the shareholders and the
+sustainable development of the Company;
+Lam Chi Kuen
+Leung Oi-Sie Elsie
+Notes:
+Tang Xin
+INDEPENDENT
+DIRECTORS
+(resigned on 15 January 2021 due to the adjustment of
+work arrangements)
+(retired on 28 June 2021 due to the expiration of his term of office)
+(retired on 13 October 2021 due to the expiration of his term of office)
+With its commitment to "ensuring a healthy and friendly
+environment for the accomplishment of 'carbon neutrality'
+objective", the Company practiced the concepts of
+responsible investment and green operations on a
+voluntarily basis and took active actions in responding
+to climate change, thus firmly pursuing the high-quality
+development with green and low carbon approach.
+Zhai Haitao
+Annual Report 2021 | Corporate Governance
+The Company kicked off green investment to serve the
+development of green finance. In 2021, the Company
+incorporated ESG assessment into its decision-making
+process for investment in alternative investment projects
+and was proactively engaged in the implementation of
+high-quality projects with both ecological benefits and
+potential investment returns, thus recording an additional
+green investment of over RMB50 billion and a cumulative
+green investment of over RMB300 billion for the year.
+AMC, the major platform of the Company for investment,
+further deepened its cooperation and communication
+with UNPRI and other international organizations and
+formulated the "Basic Guiding Rules of China Life Asset
+Management Company Limited for ESG/Green Investment
+(for Trial Implementation)" for the purpose of further
+developing its ESG investment management system.
+In accordance with Article 217 of the Articles
+of Association, the basic principles of the
+Company's profit distribution are as follows:
+FORMULATION AND IMPLEMENTATION OF
+PROFIT DISTRIBUTION POLICY
+For information such as the environmental policies and
+performance of the Company during the Reporting Period,
+relationship between the Company and its customers, and
+the relationship between the Company and its employees,
+please also refer to the full text of the ESG Report 2021
+separately disclosed by the Company on the website of
+the SSE (www.sse.com.cn) and the HKExnews website
+of the Hong Kong Exchanges and Clearing Limited
+(www.hkexnews.hk).
+For details regarding the Company's employees (including
+the number of employees, composition of professionals,
+educational levels, remuneration policy and training
+program), please refer to the section headed "Directors,
+Supervisors, Senior Management and Employees" in this
+annual report.
+The Company actively promoted the construction of a
+corporate democratic management system with employee
+representative meetings as its basic form to protect the
+democratic rights of employees and to facilitate the joint
+development between employees and the Company. The
+Company and its provincial branches have fully established
+the system of employee representative meetings,
+safeguarded the right to know, right to propose, right to
+decide and right to vote at such meetings according to
+law, and inspected and monitored the implementation
+of any resolutions adopted by employee representative
+meetings, thus carrying out the function of supervising
+the implementation of proposals in a serious manner
+and constantly improving democratic management. In
+2021, the Company held four extraordinary employee
+representative meetings, during which the "Report on
+the Candidates for Employee Representative Supervisors
+of the Seventh Session of the Board of Supervisors", the
+"Provisional Measures of China Life Insurance Company
+Limited for the Responsibility Attribution of Directors,
+Supervisors and Senior Management", the "Enterprise
+Annuity Plan of China Life Insurance (Group) Company",
+the "Implementing Rules for the Enterprise Annuity Plan
+of China Life Insurance Company Limited", the "Report
+on the Candidates for Additional Employee Representative
+Supervisors of the Seventh Session of the Board of
+Supervisors", the "Measures for the Administration of
+Remuneration of Senior Management of Branches of
+China Life Insurance Company Limited", the "Measures
+for the Administration of Remuneration of Employees of
+Branches of China Life Insurance Company Limited" and
+the "Measures for the Administration of Fringe Benefits of
+Branches of China Life Insurance Company Limited" were
+considered and approved.
+development to apply education and training in the entire
+process of growth of cadre employees, and continued
+to focus on empowerment. The Company attached
+importance to humanistic concern by constantly improving
+the mechanism for communication with employees,
+safeguarding the legitimate rights and interests of
+employees in a practical manner and encouraging
+employees to arrange vacations and annual leave in a
+scientific way, with an aim to achieve work-life balance.
+The Company created a harmonious labour relationship
+according to law and entered into employment contracts
+with its employees in a timely manner. The Company
+strengthened the management of employees in all
+aspects by establishing the following mechanisms:
+an employee team management mechanism with the
+characteristics of focus on basic level, combination
+of training and working of employees, hierarchical
+responsibility and unified regulation; a performance
+management mechanism that was strategy-based and
+result-oriented, adopted hierarchical classification, and
+focused on application; and a remuneration distribution
+mechanism that was based on the principles of salary
+determined by position, remuneration paid based on
+performance, emphasis on incentives and preference
+to the local level, and was compatible with the high-
+quality development requirements of the Company. The
+Company also emphasized on the growth and cultivation
+of employees by stepping up its effort on the development
+of training system for employees, pursued innovation for
+Relationship between the Company and its
+employees
+Please also refer to the "Technology Empowerment
+and Operations and Services" in the section headed
+"Management Discussion and Analysis" in this annual
+report and Part Two of the ESG Report 2021 separately
+disclosed by the Company.
+The Company attached great importance to the protection
+of consumers' rights and interests, improved the top-level
+design for facilitating the establishment of systems and
+mechanism, and developed a multi-dimensional mechanism
+for protection of consumers' rights and interests covering
+product and service review, internal assessment,
+information disclosure, complaint management, promotion
+and education of financial knowledge and emergency
+response, etc., which integrated the protection of
+consumers' rights and interests into every aspect of
+corporate governance and business operation and
+management. In 2021, the Company carried out over
+40,000 educational and promotion activities in connection
+with the protection of consumers' rights and interests, with
+the cumulative number of participants reaching 150 million.
+Annual Report 2021 | Corporate Governance 55
+Relationship between the Company and its
+customers
+Being customer-centric all along, the Company was
+committed to offering high-quality services to customers,
+and provided insurance services and value-added services
+for more than 500 million customers.
+The Company consistently promoted the paperless
+application for new insurance policies and facilitated
+the utilization of electronic insurance policies, thereby
+reducing carbon emissions incurred during the process
+of application for new insurance policies. In 2021, the
+paperless insurance application rate of long-term individual
+insurance reached 99.9%, which saved approximately
+1,343 tons of paper during the process of the application
+of new policies. The intelligent online operation system
+was also established to save approximately 2,214 tons
+of paper in every aspect of its business operations.
+With the acceleration of technological innovation, the
+Company effectively supported the demands for remote
+working from a daily average number of over 90,000
+users, offering a brand new experience of "working on
+the same platform, communicating without boundary and
+being interactive in multi-screen" for its employees and
+sales agents. Besides, more than 280,000 meetings were
+convened via the webcast and over 320 million online
+messages were sent out on a real-time basis for the year.
+53
+Compliance by the Company with the relevant
+laws and regulations that have a significant
+impact
+In 2021, the Company developed a system for addressing
+climate change, paid attention to and studied the impacts
+of climate change on its sustainable development, fully
+identified opportunities and challenges arising therefrom
+in three aspects, namely products, operations and
+investments, and devised any plans to address such
+change, so as to enhance its own resilience in defending
+against climate risk.
+the "Provisions on the Administration of Insurance
+Companies", the "Provisions of the China Banking and
+Insurance Regulatory Commission on Administrative
+Licensing Procedures", the "Measures of the China
+Banking and Insurance Regulatory Commission on
+Administrative Punishment", the "Provisions on the
+Supervision and Administration of Insurance Agents",
+the "Standards for the Corporate Governance of Banking
+and Insurance Institutions", the "Provisions on the
+Administration of Solvency of Insurance Companies",
+the "Regulatory Rules for the Solvency of Insurance
+Companies", the "Provisions on the Administration
+of Reinsurance Business", the "Measures for the
+Administration of Licenses of Banking and Insurance
+Institutions", the "Measures for Oversight of Online
+Insurance Business", the "Notice of the General Office of
+the China Banking and Insurance Regulatory Commission
+on Further Regulating Matters Related to the Online
+Personal Insurance Business of Insurance Institutions",
+the “Notice of the General Office of the China Banking
+and Insurance Regulatory Commission on Regulating
+Issues Related to Short-term Health Insurance Business",
+the "Measures for the Supervision and Administration
+of Accident Insurance Business", the "Measures for the
+Regulatory Evaluation of Consumers' Rights and Interests
+Protection of Banking and Insurance Institutions" and
+the "Measures for the Administration of the Handling.
+of Banking and Insurance Consumer Complaints",
+consistently made improvement to its systems and
+mechanism, and implemented the spirit and requirements
+of major regulatory documents on product development
+and design, sales management, solvency management,
+reinsurance management, investment supervision and
+corporate governance, etc., as released by the CBIRC
+in a stringent manner for the purpose of further carrying
+out compliance management responsibilities at all levels
+and in various lines. The Company consistently improved.
+the compliance management framework of "three lines
+of defense" to ensure that the three lines of defense
+performed their own functions and collaborated with
+each other, which formed a joint force in compliance
+management. The Company also consolidated its
+foundation in all aspects for its steady and healthy
+development and firmly defended the bottom line of the
+systematic risk, which guaranteed the healthy and high-
+quality development of the Company on an ongoing basis.
+3
+On 30 December 2021, the CBIRC issued the "Regulatory Rules for the Solvency of Insurance Companies (II)", which were implemented on 1 January
+2022. The former "Regulatory Rules for the Solvency of Insurance Companies" were abolished simultaneously.
+54 Annual Report 2021 | Corporate Governance
+The Company adhered to the code of conduct of "being
+trustworthy, assuming risks, emphasizing on services.
+and being legal compliant" and promoted the compliance
+culture and concepts of "being compliant on a voluntary
+basis, and creating value from compliance", thereby
+creating the compliance environment of "starting
+from the top level and having responsibility for all to
+be compliant". The Company strictly observed and
+effectively implemented applicable laws and regulations
+and regulatory requirements, such as the Insurance Law,
+the Company Law, the Securities Law, the "Personal
+Information Protection Law", the "Regulations on
+Preventing and Dealing with Illegal Fund-raising",
+Annual Report 2021 | Corporate Governance
+59
+AUDITORS
+Following the consideration and approval by the
+shareholders at the 2020 Annual General Meeting of the
+Company, PricewaterhouseCoopers Zhong Tian LLP has
+been appointed as the PRC auditor and the auditor for
+the Form 20-F of the Company for the year 2021, and
+PricewaterhouseCoopers has been appointed as the Hong
+Kong auditor of the Company for the year 2021, who
+will hold office until the conclusion of the 2021 Annual
+General Meeting. In 2021, PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers served as
+the Company's auditors for the first year.
+Remuneration paid by the Company to the auditors is
+subject to the approval at the shareholders' general
+meeting, pursuant to which the Board is authorized to
+determine the amount and make payment. Audit fees
+paid by the Company to the auditors will not affect the
+independence of the auditors.
+Remuneration paid by the Company to PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers in 2021 was
+as follows:
+The Company had engaged Ernst & Young Hua Ming LLP
+and Ernst & Young for eight consecutive years, being the
+maximum consecutive tenure of service permitted under
+the "Administrative Measures for the Appointment of
+Accounting Firms by State-owned Financial Enterprises"
+(《國有金融企業選聘會計師事務所管理辦法》)(Caijin [2020]
+No. 6) issued by the Ministry of Finance, and the Company
+was therefore required to change the auditors. Ernst &
+Young Hua Ming LLP, the PRC auditor and the auditor
+for the Form 20-F of the Company for the year 2020, and
+Ernst & Young, the Hong Kong auditor of the Company for
+the year 2020, had retired as the auditors of the Company
+upon conclusion of the 2020 Annual General Meeting. The
+Company had communicated with the accounting firms
+originally engaged by it in connection with the change of
+accounting firms, and such accounting firms did not raise
+any objection against the change.
+Fees
+Service/Nature
+RMB million
+Audit, review and agreed-upon
+procedures fee
+46.51
+Including: Internal control audit fee
+The Company has applied the principles of the Corporate
+Governance Code (the "CG Code") as set out in Appendix
+14 to the Listing Rules, and has complied with all code
+provisions of the CG Code during the Reporting Period.
+The Company is taking active actions to proceed with
+the selection and appointment of its auditors for the
+year 2022, and investors are advised to pay attention to
+the announcements made by the Company in its listed
+jurisdictions for the further development in this regard.
+COMPLIANCE WITH THE CORPORATE
+GOVERNANCE CODE
+Independent Directors of the Company have rendered
+their independent opinions on the Company's external
+guarantees, and are of the view that:
+SUFFICIENCY OF PUBLIC FLOAT
+8.50
+PRE-EMPTIVE RIGHTS AND ARRANGEMENTS
+FOR SHARE OPTIONS
+According to the Articles of Association and relevant
+PRC laws, there is no provision for any pre-emptive
+rights of the shareholders of the Company. At present,
+the Company does not have any arrangement for share
+options.
+MANAGEMENT CONTRACTS
+No management or administration contracts for the whole
+or substantial part of any business of the Company were
+entered into during the Reporting Period.
+MATERIAL GUARANTEES
+1. during the Reporting Period, the Company did not
+provide any external guarantee;
+2. the Company's internal control system regarding external
+guarantees is in compliance with the requirements of
+relevant laws and regulations; and
+3. the Company has expressly provided in its Articles of
+Association the level of authority required for approving
+external guarantees and the approval procedures.
+RESPONSIBILITY STATEMENT OF DIRECTORS
+ON FINANCIAL REPORTS
+The Directors are responsible for overseeing the preparation
+of the financial report for each financial period which gives
+a true and fair view of the Company's financial position,
+performance results and cash flows for that period. To the
+best knowledge of the Directors, there was no material
+event or condition during the Reporting Period that might
+have a material adverse effect on the on-going operations of
+the Company.
+BOARD'S STATEMENT ON INTERNAL CONTROL
+In accordance with the requirements of the "Standard
+Regulations on Corporate Internal Control", the Board
+conducted an assessment on internal control relating
+to the Company's financial reporting functions, and
+confirmed that its internal control was effective as at 31
+December 2021.
+MAJOR CUSTOMERS
+In 2021, the gross written premiums received from the
+Company's five largest customers accounted for less than
+5% of the Company's gross written premiums for the
+year. There is no related party of the Company among the
+five largest customers.
+Based on the information publicly available to the
+Company and within the knowledge of the Directors as at
+the Latest Practicable Date (24 March 2022), not less than
+25% of the issued share capital of the Company (being
+the minimum public float applicable to the shares of the
+Company) was held in public hands.
+Non-audit services fee (tax services
+The authenticity of the financial report. The Company's
+annual financial report truly reflected the Company's financial
+position and operating results. PricewaterhouseCoopers
+Zhong Tian LLP and PricewaterhouseCoopers have
+performed audits and have issued standard and unqualified
+auditors' reports in respect of the financial statements
+for the year 2021 in accordance with the China Standards
+on Auditing of PRC Certified Public Accountants and the
+International Standards on Auditing, respectively.
+Total
+151.10
+25.80
+125.30
+since 16 August 2019,
+Vice President since November 2014,
+Chief Actuary since March 2012,
+Board Secretary since June 2017
+Board Secretary
+Chief Actuary
+July 1969
+Male
+Li Mingguang
+Vice President
+Executive Director
+Appointed as an Executive Director
+President since April 2019
+Yes
+since 20 December 2018,
+February 1963
+Male
+Executive Director
+President
+Su Hengxuan
+No
+Appointed as an Executive Director
+Executive Director
+since 1 July 2021,
+Male
+Independent Director
+Tang Xin
+Yes
+Since 16 August 2019
+July 1971
+Male
+Non-executive Director
+Wang Junhui
+Appointed as an Executive Director
+Charge of Finance since May 2020
+Vice President and Person in
+No
+149.26
+23.96
+125.30
+June 1967
+Female
+Vice President
+Huang Xiumei
+Person in Charge of Finance
+September 1971
+Yes
+Male
+67
+Annual Report 2021 | Corporate Governance
+Save as disclosed above, the Directors, Supervisors and the chief executive of the Company are not aware of any other
+party who, as at 31 December 2021, had an interest or short position in the shares and underlying shares of the Company
+which was recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.
+The letter "L" denotes a long position. The letter "S" denotes a short position.
+(Note): BlackRock, Inc. was interested in a total of 461,251,819 H shares of the Company in accordance with the provisions of Part XV of the SFO.
+Of these shares, BlackRock Investment Management, LLC, BlackRock Financial Management, Inc., BlackRock Institutional Trust Company,
+National Association, BlackRock Fund Advisors, BlackRock Advisors, LLC, BlackRock Japan Co., Ltd., BlackRock Asset Management Canada
+Limited, BlackRock Investment Management (Australia) Limited, BlackRock Asset Management North Asia Limited, BlackRock (Netherlands)
+B.V., BlackRock Advisors (UK) Limited, BlackRock Asset Management Ireland Limited, BLACKROCK (Luxembourg) S.A., BlackRock Investment
+Management (UK) Limited, BlackRock Asset Management Deutschland AG, BlackRock Fund Managers Limited, BlackRock Life Limited, BlackRock
+(Singapore) Limited, BlackRock Asset Management Schweiz AG and Aperio Group, LLC were interested in 4,749,000 H shares, 7,569,000 H shares,
+120,413,588 H shares, 157,902,000 H shares, 921,000 H shares, 26,902,045 H shares, 861,000 H shares, 4,736,000 H shares, 16,378,329 H
+shares, 16,450,130 H shares, 713,000 H shares, 61,780,448 H shares, 814,000 H shares, 14,928,733 H shares, 426,000 H shares, 14,187,720 H
+shares, 2,962,021 H shares, 2,710,000 H shares, 32,000 H shares and 5,815,805 H shares, respectively. All of these entities are either controlled
+or indirectly controlled subsidiaries of BlackRock, Inc. Of these 461,251,819 H shares, 159,000 H shares were cash settled unlisted derivatives.
+BlackRock, Inc. held by way of attribution a short position as defined under Part XV of the SFO in 652,000 H shares (0.01%). Of these 652,000 H
+shares, 551,000 H shares were cash settled unlisted derivatives.
+0.00%
+0.01%
+1.63%
+6.20%
+461,251,819 (L)
+652,000 (S)
+H Shares
+Interest in controlled
+corporation
+BlackRock, Inc. (Note)
+68.37%
+92.80%
+19,323,530,000 (L)
+A Shares
+Beneficial owner
+China Life Insurance (Group)
+Company
+the total number
+of shares in issue
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Name
+Position
+Gender Date of Birth
+Non-executive Director
+Yuan Changqing
+ten thousands
+(before tax)
+in RMB
+the Company
+ten thousands
+the Company
+Period in RMB
+September 1961 Since 11 February 2018
+fund paid by
+received
+emolument
+from connected
+the Reporting
+during
+Whether
+emoluments
+received from
+the Company
+Total
+Other benefits,
+social insurance,
+housing
+provident
+fund and
+enterprise
+annuity
+Salary/
+Remuneration
+paid in RMB
+ten thousands
+Term
+parties of
+Since 7 March 2016
+37.00
+0
+Male
+Employee Representative
+Supervisor
+Lai Jun
+No
+20
+84.23
+24.09
+60.14
+Since 27 December 2019
+Female October 1965
+Employee Representative
+Supervisor
+Wang Xiaoqing
+Supervisor
+No
+94.44
+25.44
+69.00
+Since 12 July 2019
+May 1963
+May 1964
+Since 14 October 2021
+11.29
+4.09
+68 Annual Report 2021 | Corporate Governance
+No
+149.05
+23.75
+125.30
+Since July 2019
+April 1968
+Male
+Vice President
+Male
+No
+23.75
+125.30
+Since April 2018
+July 1966
+Male
+Vice President
+Ruan Qi
+Zhan Zhong
+No
+15.38
+149.05
+Cao Qingyang
+Employee Representative
+69
+Zhai Haitao
+No
+21.00
+0
+21.00
+Since 29 June 2021
+April 1953
+Male
+Independent Director
+Independent Director
+Lam Chi Kuen
+36.00
+0
+36.00
+Since 20 July 2016
+Female April 1939
+Independent Director
+Leung Oi-Sie Elsie
+No
+37.00
+No
+Percentage of
+Male
+Since 14 October 2021
+Representative Supervisor
+Yes
+September 1974 Since 14 October 2021
+Male
+Niu Kailong
+Non-employee
+Supervisors
+No
+149.05
+January 1969
+23.75
+Since 11 July 2018
+June 1962
+Male
+Jia Yuzeng
+Chairman of the Board of
+Yes
+7.00
+0
+7.00
+125.30
+Percentage of
+the respective
+class of shares
+Number of
+shares held
+Class of
+shares
+63
+Annual Report 2021 | Corporate Governance
+As Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his duties as a Director nor participate in a Director self-
+assessment in the evaluation of the performance of duties by Directors for 2021, he was excluded from the scope of such evaluation.
+6
+Attending training courses and constantly enhancing
+performance of duties by the Supervisors. In 2021,
+all members of the Board of Supervisors attended the
+training programs on anti-money laundering and a training
+course on the "Standards for the Corporate Governance
+of Banking and Insurance Institutions" offered by The
+Insurance Association of China. Mr. Jia Yuzeng, the
+Chairman of the Board of Supervisors, attended a special
+training course for directors and supervisors of listed
+companies within Beijing as organized by the Listed
+Companies Association of Beijing (the "LCAB") and the
+"Special Training Course for the Supervisory Committee
+of Listed Companies" offered by the China Association
+for Public Companies. Mr. Niu Kailong, Mr. Cao Qingyang
+and Ms. Wang Xiaoqing, being the Supervisors, attended
+a special training course for directors and supervisors of
+listed companies within Beijing as organized by the LCAB,
+respectively.
+Actively conducting research and investigation
+activities, examining and understanding the business
+operations of the Company. In November 2021,
+the members of the Board of Supervisors conducted
+investigation and research activities on the investment
+sector of the Company, listened to reports concerning
+the investment management structure and investment
+system of the Company, and had discussion and
+communication among themselves with respect to the
+relevant issues. Through the investigation and research,
+the Board of Supervisors comprehended the risk
+prevention and control mechanism for the investment
+business of the Company in great depth, and further
+discussed matters in relation to the optimization of the risk
+prevention and control mechanism, the implementation
+of the "Dingxin Project" and the promotion of the high-
+quality development of the Company.
+Organizing the evaluations of the performance
+of duties by Directors and Supervisors. Firstly, an
+evaluation of the performance of duties by Directors
+was commenced in accordance with the "Measures
+for the Evaluation of the Performance of Duties by
+Directors and Supervisors of the Company". Secondly, an
+evaluation of the performance of duties by Supervisors
+was organized and commenced in accordance with the
+"Measures for the Evaluation of the Performance of
+Duties by Directors and Supervisors of the Company".
+After the final evaluation by the Board of Supervisors, all
+members of both the Board and the Board of Supervisors
+of the Company were evaluated as competent in their
+performance of duties in 2021.
+Supervising the performance of duties by the
+Board and senior management in reputational risk
+management. Members of the Board of Supervisors
+listened to an annual reputational risk management report
+prepared by the senior management through participation
+in the meetings of the Board and the Risk Management
+and Consumer Rights Protection Committee, so as to
+supervise the performance of duties by the Board in
+reputational risk management.
+Attending and participating in corporate governance
+meetings and actively exercising their supervisory
+role. In 2021, the Board of Supervisors attended the 2020
+Annual General Meeting of the Company and the First
+Extraordinary General Meeting 2021, and participated
+in the regular meetings of the Board. All members of
+the Board of Supervisors participated in the regular
+meetings of the Audit Committee, the Nomination and
+Remuneration Committee, the Risk Management and
+Consumer Rights Protection Committee, the Strategy and
+Assets and Liabilities Management Committee, and the
+Connected Transactions Control Committee, respectively,
+in accordance with the work allocation among Supervisors
+determined by the Board of Supervisors. By attending
+these meetings, all Supervisors diligently discharged
+their duties, oversaw the procedures for convening
+meetings, carefully listened to the matters considered
+at the meetings, and participated in discussions when
+necessary, thus proactively pushing forward the further
+enhancement of corporate governance.
+Annual Report 2021 | Corporate Governance
+62
+As elected by the sixth extraordinary meeting of the third session of the employee representative meeting of the Company and upon approval by the
+CBIRC, the appointment of Mr. Lai Jun as a Superviors became effective on 14 October 2021.
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, the appointment of Mr. Niu Kailong as a Supervisor
+became effective on 14 October 2021.
+0/2
+0/6
+ន ន
+2/2
+6/6
+Wang Xiaoqing
+Lai Jun
+INDEPENDENT OPINION OF THE BOARD OF
+SUPERVISORS ON CERTAIN MATTERS
+During the Reporting Period, the Board of Supervisors
+of the Company performed its supervisory duties in a
+diligent manner in accordance with the requirements
+of the Company Law, the Articles of Association and
+the "Procedural Rules for the Board of Supervisors
+Meetings". The Board of Supervisors had no objection in
+respect of the matters under its supervision during the
+Reporting Period.
+The Company's operations in compliance with law.
+During the Reporting Period, the Company's operations
+were in compliance with the law. The Company's
+operations and decision-making procedures were in
+compliance with the Company Law and the Articles of
+Association. All Directors and senior management of the
+Company maintained strict principles of diligence and
+integrity and performed their duties conscientiously. The
+Board of Supervisors is not aware of any of them having
+violated any law, regulation, or any provision in the Articles
+of Association or harmed the interests of the Company in
+the course of discharging their duties.
+Acquisition and sale of assets. During the Reporting
+Period, the prices for acquisition and sale of assets by
+the Company were fair and reasonable. The Board of
+Supervisors is not aware of any insider trading, any acts
+harming the interests of shareholders or incurring any loss
+to the Company's assets.
+Unit: Shares
+No. of H Share shareholders:
+25,326
+No. of A Share shareholders:
+147,078
+Total number of ordinary
+share shareholders as
+at the end of the month
+prior to the disclosure of
+the annual report
+Particulars of top ten shareholders of the Company
+No. of H Share shareholders:
+25,415
+No. of A Share shareholders:
+151,802
+Total number of ordinary
+share shareholders as at
+the end of the Reporting
+Period
+INFORMATION ON SHAREHOLDERS AND EFFECTIVE CONTROLLER
+Total number of shareholders and their shareholdings
+0/6
+As at the end of the Reporting Period, the Company had not issued any securities in the last three years. During the
+Reporting Period, there was no change in the total number of shares and the share structure of the Company due to bonus
+issues or placings, nor were there any internal employees' shares.
+During the Reporting Period, there was no change in the total number of shares and the share capital of the Company.
+CHANGES IN ORDINARY SHARES AND SHAREHOLDERS INFORMATION
+CHANGES IN SHARE CAPITAL
+64 Annual Report 2021 | Corporate Governance
+24 March 2022
+Chairman of the Board of Supervisors
+By Order of the Board of Supervisors
+Jia Yuzeng
+Information disclosure. The Company performed its
+obligation of information disclosure in strict compliance
+with the regulatory requirements, seriously implemented
+various information disclosure management systems,
+and disclosed information in a timely and fair manner.
+The Board of Supervisors is not aware of any false
+representations, misleading statements or material
+omissions during the Reporting Period.
+Internal control system and self-evaluation report
+on internal control. During the Reporting Period, the
+Company sought to improve its internal control system,
+and consistently enhanced the effectiveness of such
+system. The Board of Supervisors of the Company
+reviewed the self-evaluation report on the Company's
+internal control system and did not raise any objection
+against the self-evaluation report of the Board regarding
+the Company's internal control system.
+Connected transactions. During the Reporting Period,
+the connected transactions of the Company were on
+commercial terms. The Board of Supervisors is not aware
+of any acts harming the interests of the Company.
+ISSUE AND LISTING OF SECURITIES
+6/6
+Cao Qingyang
+0/2
+Number of
+Attendance records of the resigned Supervisor at the
+meetings of the Board of Supervisors are as follows:
+During the Reporting Period, six meetings were held by
+the Board of Supervisors of the Company. Attendance
+records of individual Supervisors are as follows:
+MEETINGS AND ATTENDANCE
+Currently, the seventh session of the Board of Supervisors
+of the Company comprises Mr. Jia Yuzeng, Mr. Niu
+Kailong, Mr. Cao Qingyang, Ms. Wang Xiaoqing and
+Mr. Lai Jun5, with Mr. Jia Yuzeng acting as the Chairman
+of the Board of Supervisors. Mr. Jia Yuzeng and Mr. Niu
+Kailong are Non-employee Representative Supervisors,
+whereas Mr. Cao Qingyang, Ms. Wang Xiaoqing and
+Mr. Lai Jun are Employee Representative Supervisors. In
+October 2021, Mr. Han Bing resigned from his position
+as a Supervisor of the Company due to the adjustment of
+work arrangements.
+Meetings of the Board of Supervisors are convened by
+the Chairman of the Board of Supervisors. According to
+the Articles of Association, the Company formulated the
+"Procedural Rules for the Board of Supervisors Meetings"
+and established protocols for the Board of Supervisors
+meetings. Board of Supervisors meetings are categorized
+as regular or ad-hoc meetings in accordance with the
+degree of pre-planning involved. There are at least three
+regular meetings each year, mainly to adopt and review
+financial reports and periodic reports, and examine the
+financial condition and internal control of the Company.
+Ad-hoc meetings are convened when necessary.
+61
+Annual Report 2021 | Corporate Governance
+The Board of Supervisors is accountable to the
+shareholders and reports its work to the shareholders'
+general meeting according to relevant laws. It is also
+responsible for appraising the Company's operations
+in compliance with law, financial reports, connected
+transactions and internal control, etc. during the Reporting
+Period.
+Number of
+manner.
+Pursuant to the Company Law and the Articles of
+Association, the Company has established a Board of
+Supervisors. The Board of Supervisors performs the
+following duties in accordance with the Company Law, the
+Articles of Association and the "Procedural Rules for the
+Board of Supervisors Meetings": to examine the finances
+of the Company; to monitor whether the Directors,
+President, Vice Presidents and other senior management
+officers of the Company have acted in contravention
+of laws, regulations, the Articles of Association and
+resolutions of the shareholders' general meetings when
+discharging their duties; to review the financial information
+of the Company such as financial reports, results reports
+and profit distribution plans to be approved by the Board;
+to propose the convening of extraordinary shareholders'
+general meetings, to propose resolutions at shareholders'
+general meetings and to perform any other duties
+under the laws, regulations and regulatory rules of the
+Company's listed jurisdictions.
+Mr. Lai Jun, Mr. Cao Qingyang, Mr. Jia Yuzeng, Mr. Niu Kailong, Ms. Wang Xiaoqing
+From left to right:
+REPORT OF THE BOARD OF SUPERVISORS
+24 March 2022
+By Order of the Board
+Yuan Changqing
+Non-executive Director
+60 Annual Report 2021 | Corporate Governance
+47.64
+1.13
+The Board of Supervisors consists of Non-employee
+Representative Supervisors, such as shareholder
+representatives, and Employee Representative
+Supervisors, of which the Employee Representative
+Supervisors shall not be less than one-third of the Board of
+Supervisors. Non-employee Representative Supervisors,
+such as shareholder representatives, shall be elected
+and removed by a shareholders' general meeting while
+Employee Representative Supervisors shall be elected and
+removed by employees of the Company in a democratic
+Name of shareholder
+meetings attended meetings attended
+in person/number by proxies/number
+Han Bing
+2/2
+0/6
+6/6
+Niu Kailong
+Jia Yuzeng
+of meetings
+required to attend
+required to attend
+Name of Supervisor
+of meetings
+Name of Supervisor
+in person/number by proxies/number
+meetings attended
+Number of
+5
+4
+ACTIVITIES OF THE BOARD OF SUPERVISORS
+Attending meetings of the Board of Supervisors
+and diligently discharging their duties. Pursuant to
+the regulatory requirements of the jurisdictions where
+the Company is listed, the Articles of Association and
+the "Procedural Rules for the Board of Supervisors'
+Meetings" of the Company, and in accordance with the
+work arrangement of the Board of Supervisors, the Board
+of Supervisors convened its regular meetings in a timely
+manner, at which it considered and approved proposals
+in relation to the Company's financial reports, periodic
+reports, internal control, and risk management, etc. In
+2021, the Board of Supervisors held six meetings in
+total, at which the Supervisors earnestly expressed their
+views, actively participated in discussions and diligently
+discharged their duties, thereby providing valuable advice
+for the business development of the Company.
+Note: The number of meetings attended in person includes meetings
+attended by the Supervisors on-site and by way of telephone or
+video conference.
+0/4
+of meetings
+required to attend
+of meetings
+required to attend
+4/4
+Number of
+meetings attended
+and consultation services)
+Nature of shareholder
+Number of shares
+held as at the
+end of the
+Reporting Period
+Legal representative
+Name of company
+The controlling shareholder of the Company is CLIC, and its relevant information is set out below:
+Information relating to the Controlling Shareholder and Effective Controller
+China Universal Asset Management Co., Ltd - Industrial and Commercial Bank of China Limited - China Universal - Tianfu Bull No. 53 Asset
+Management Plan has Industrial and Commercial Bank of China Limited as its asset trustee. Industrial and Commercial Bank of China Limited - SSE
+50 Exchange Traded Index Securities Investment Fund has Industrial and Commercial Bank of China Limited as its fund depositary. Save as above, the
+Company was not aware of any connected relationship and concerted parties as defined by the "Measures for the Administration of the Takeover of
+Listed Companies" among the top ten shareholders of the Company.
+system. The relevant regulations of the HKSE do not require such persons to declare whether their shareholdings are pledged or frozen. Hence, HKSCC
+Nominees Limited is unable to calculate or provide the number of shares that are pledged or frozen.
+2.
+1. HKSCC Nominees Limited is a company that holds shares on behalf of the clients of the Hong Kong stock brokers and other participants of the CCASS
+Notes:
+65
+Annual Report 2021 | Corporate Governance
++9,530,033
+9,530,133
+0.03%
+Domestic natural person
+Li Zhuo
+10,000,000
+0.04%
+State-owned legal person
+Date of incorporation
+Major businesses
+Shareholdings in other
+subsidiaries and affiliates
+listed in China or abroad
+during the Reporting Period
+China Life Insurance (Group) Company
+Capacity
+Name of substantial
+shareholder
+the Company under the provisions of Divisions 2 and 3 of
+Part XV of the SFO, or which were recorded in the register
+required to be kept by the Company pursuant to Section
+336 of the SFO, or as otherwise notified to the Company
+and the HKSE:
+So far as is known to the Directors, Supervisors and
+the chief executive of the Company, as at 31 December
+2021, the following persons (other than the Directors,
+Supervisors and the chief executive of the Company) had
+interests or short positions in the shares or underlying
+shares of the Company which would fall to be disclosed to
+INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY
+HELD BY SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS UNDER HONG KONG LAWS AND
+REGULATIONS
+66 Annual Report 2021 | Corporate Governance
+During the Reporting Period, there was no change to the controlling shareholder and the effective controller of the
+Company. As at the end of the Reporting Period, there was no other corporate shareholder holding more than 10% of the
+shares in the Company.
+10%
+China Life Insurance
+Company Limited
+China International Television Corporation
+68.37%
+National Council for Social
+Security Fund
+90%
+of the PRC
+Ministry of Finance
+The effective controller of the Company is the Ministry of Finance. The equity and controlling relationship between the
+Company and its effective controller is set out as below:
+As at 31 December 2021, CLIC held 1,785,098,644 H shares of Town Health
+International Medical Group Limited, representing 23.72% of its total shares.
+Insurance services including receipt of premiums and payment of benefits in respect
+of the in-force life, health, accident and other types of personal insurance business,
+and the reinsurance business; holding or investing in domestic and overseas insurance
+companies or other financial insurance institutions; funds application business
+permitted by national laws and regulations or approved by the State Council of PRC;
+other businesses approved by insurance regulatory agency.
+22 August 1996 (CLIC's predecessor was PICC (Life) Co., Ltd. incorporated in August
+1996. It was renamed as China Life Insurance Company, a company approved for
+formation by the State Council in January 1999. With the approval of the former
+China Insurance Regulatory Commission in 2003, China Life Insurance Company was
+restructured as CLIC.)
+Bai Tao (the change of registration with the department in charge of industrial and
+commercial administration is in progress)
+China Life Insurance
+(Group) Company
++1,780,228
+14,177,504
+0.05%
+-15,697,388
+708,240,246
+2.51%
+State-owned legal person
+China Securities Finance Corporation Limited
++596,257
+7,327,931,503
+25.93%
+Overseas legal person
+Central Huijin Asset Management Limited
+HKSCC Nominees Limited
+68.37%
+State-owned legal person
+China Life Insurance (Group) Company
+restrictions
+pledged or frozen
+subject to selling
+Number of shares
+Number of shares
+Increase/decrease
+during the
+Reporting Period
+19,323,530,000
+Percentage of
+shareholding
+State-owned legal person
+117,165,585
+Other
+Industrial and Commercial Bank of China Limited
+- SSE 50 Exchange Traded Index Securities
+Investment Fund
+- Tianfu Bull No. 53 Asset Management Plan
+of China Limited China Universal
+15,015,845
+0.05%
+Other
+- Industrial and Commercial Bank
++18,520,041
+0.41%
+22,334,683
+Other
+- Founder Fubon CSI Insurance Theme
+Index Security Investment Fund
+Guosen Securities Co., Ltd.
++8,685,066
+57,106,771
+0.20%
+Overseas legal person
+Hong Kong Securities Clearing Company Limited
+-2,554,315
+0.08%
+China Universal Asset Management Co., Ltd
+32.50
+Name
+No expiration of term of
+office
+Retired due to the
+No expiration of term of
+office
+Resigned due to the
+No adjustment of work
+arrangements
+Non-employee
+12 July 2019
+Han Bing
+Representative
+Male
+November 1971
+25.06
+10.75
+35.81
+Retired due to the
+-18 October 2021
+Yang Chuanyong
+Person in Charge of
+Audit
+December 2020
+Male
+March 1963
+14.43
+6.07
+20.50
+Resigned due to the
+No adjustment of work
+- October 2021
+arrangements
+Total
+1
+I
+Supervisor
+85.49
+Resigned due to the
+Yes adjustment of work
+arrangements
+Yes adjustment of work
+Non-executive Director Male
+July 1965
+- 15 January 2021
+in RMB
+ten thousands
+(before tax)
+Chang Tso Tung
+Stephen
+20 October 2014
+Independent Director
+Male
+November 1948
+16.00
+0
+16.00
+arrangements
+- 28 June 2021
+11 July 2015
+Independent Director
+Male
+October 1951
+30.00
+0
+30.00
+Pike
+- 13 October 2021
+Yes
+Resigned due to the
+failure to perform his
+role and duties as
+a Director
+Resigned due to the
+Robinson Drake
+16.82
+102.31
+| |
+SUPERVISORS
+Mr. Jia Yuzeng, born in 1962, Chinese
+Mr. Jia became the Chairman of the Board of Supervisors of the Company in July 2018.
+He has been an Executive Director of the Insurance Society of China since July 2020
+and a Director of China Insurance Security Fund Co., Ltd. since December 2020. During
+the period from 2006 to March 2018, he successively served as a Supervisor, the
+General Manager of the Human Resources Department, an Assistant to the President,
+the Vice President, the Board Secretary, an Executive Director and the Compliance
+Officer of China Life Pension Company Limited. During the period from 2004 to 2006,
+he served as the General Manager of the Work Department of the Trade Union, the
+Executive Deputy Director of the Trade Union and a Supervisor of the Company.
+During the period from 1988 to 2004, he successively served as the Division Head of
+the General Office and a secretary (at the deputy division level) of the PRC Ministry
+of Supervision, the Deputy Director (responsible for daily operations) of the Minister
+Office of the General Supervision Office under the Supervision Department of the
+Central Commission for Discipline Inspection, and an inspector (at the division level),
+supervisor, inspector (at the deputy bureau level) and special supervisor of the General
+Office of the Central Commission for Discipline Inspection. Mr. Jia graduated from
+the Open University of Hong Kong in 2003, majoring in business administration with a
+master's degree in business administration.
+Mr. Niu Kailong, born in 1974, Chinese
+Mr. Niu became a Supervisor of the Company in October 2021. He is the General
+Manager of the Strategic Planning Department/Office of the Board of Directors (in
+preparation) of China Life Insurance (Group) Company and the President of China
+Life Institute of Finance. Mr. Niu successively worked at PICC Property and Casualty
+Company Limited, the People's Insurance Company (Group) of China Limited and
+PICC Reinsurance Company Limited. He served as the Deputy General Manager of the
+Strategic Planning Department of the People's Insurance Company (Group) of China
+Limited from April 2017, a Supervisor, the Deputy General Manager (responsible for
+daily operations) of the Strategic Planning Department and the Deputy General Manager
+(responsible for daily operations) of the Strategic Planning Department/Office of the
+Board of Directors of PICC Reinsurance Company Limited from October 2017, the
+person in charge of the Strategy and Investment Management Department of China
+Life Healthcare Investment Company Limited from July 2020, and the Deputy General
+Manager (responsible for daily operations) of the Strategic Planning Department of
+China Life Insurance (Group) Company from August 2020. Mr. Niu graduated from
+Nankai University with a doctoral degree in finance. He is an associate researcher (social
+science) and senior economist.
+Annual Report 2021 | Corporate Governance 75
+Mr. Cao Qingyang, born in 1963, Chinese
+Mr. Cao became a Supervisor of the Company in July 2019. He has been the General
+Manager of the Product Development Department of the Company since February
+2011. From 2008 to 2011, he successively served as the Deputy General Manager
+of Tianjin Branch and the Group Leader of the Statistics Working Group of the
+Company. From 2004 to 2008, he successively served as the General Manager of the
+Investor Relations Department, the Deputy Secretary-General of the Board Secretariat
+and concurrently the General Manager of the Investor Relations Department, and
+the Deputy Secretary-General of the Board Secretariat of the Company. Mr. Cao
+graduated from Nankai University in 2004, majoring in finance with a doctoral degree in
+economics.
+Ms. Wang Xiaoqing, born in 1965, Chinese
+Ms. Wang became a Supervisor of the Company in December 2019. She has
+successively been the Deputy General Manager and the General Manager of the Risk
+Management Department of the Company since April 2018. From May 2016 to April
+2018, she served as the Secretary to the Discipline Inspection Committee of Tibet
+Autonomous Region Branch of the Company. From 2010 to 2016, she successively
+served as an Assistant to the General Manager and the Deputy General Manager of the
+County Insurance Management Department, and the Deputy General Manager of the
+Audit Department of the Company. From 2003 to 2010, she successively served as the
+Deputy Division Chief of the Training Division, the Deputy Division Chief of the Business
+Inspection Division, the Division Chief of the Agent Management Division, the Senior
+Manager of the Integrated Development Division of the Individual Insurance Sales
+Department of the Company, and the Deputy General Manager of No. 5 Sales Office
+in Beijing Branch of the Company. Ms. Wang graduated from Nanjing Communication
+Engineering College in 1988, majoring in radio communication engineering with a
+bachelor's degree in engineering.
+Mr. Lai Jun, born in 1964, Chinese
+Mr. Lai became a Supervisor of the Company in October 2021. He is the General
+Manager of the Human Resources Department of the Company. Mr. Lai joined the
+Company in 1984, and successively served as the Deputy General Manager and the
+Secretary to the Discipline Inspection Committee of Xinjiang Branch of the Company,
+the Person in Charge, the Deputy General Manager (responsible for daily operations)
+and the General Manager of Hainan Branch, as well as the General Manager of Xinjiang
+Branch of the Company from 2002 to 2021. Mr. Lai graduated from the Central Party
+School of the Chinese Communist Party, majoring in economics and management. He is
+a senior economist.
+76
+Annual Report 2021 | Corporate Governance
+Annual Report 2021 | Corporate Governance
+SENIOR MANAGEMENT
+Mr. Ruan Qi, born in 1966, Chinese
+Mr. Ruan became the Vice President of the Company in April 2018. He successively
+served as the General Manager (at the general manager level of the provincial branches)
+of the Information Technology Department and the Chief Information Technology
+Officer of the Company from 2016 to 2018. Mr. Ruan served as the General Manager
+of China Life Data Center and the General Manager (at the general manager level of
+the provincial branches) of the Information Technology Department of the Company
+from 2014 to 2016, and the Deputy General Manager and the General Manager of
+the Information Technology Department of the Company from 2004 to 2014. He
+successively served as the Deputy Division Chief of the Computer Division of Fujian
+Branch, and the Deputy Manager (responsible for daily operations) and the Manager of
+the Information Technology Department of the Company from 2000 to 2004. Mr. Ruan,
+a senior engineer, graduated from Beijing Institute of Posts and Telecommunications
+in August 1987, majoring in computer science and communications with a bachelor's
+degree in engineering, and from Xiamen University with a master's degree in business
+administration for senior management (EMBA) in December 2007.
+Mr. Zhan Zhong, born in 1968, Chinese
+Mr. Zhan became the Vice President of the Company in July 2019. He was an Employee
+Representative Supervisor of the Company from July 2015 to August 2017. Mr. Zhan
+successively served as the General Manager (at the general manager level of the
+provisional branches) of the Individual Insurance Sales Department and the Marketing
+Director of the Company from 2014 to 2019. He served as the Deputy General Manager
+(responsible for daily operations) and the General Manager of the Company's Qinghai
+Branch from 2013 to 2014. From 2009 to 2013, Mr. Zhan successively served as the
+Deputy General Manager (responsible for daily operations) and the General Manager
+of the Individual Insurance Sales Department of the Company. From 2005 to 2009,
+he successively served as the General Manager of the Individual Insurance Sales
+Department of the Company's Guangdong Branch and an Assistant to the General
+Manager of the Company's Guangdong Branch. From 1996 to 2005, he successively
+served as the Director of the Marketing Department of Chengdu High-tech Sub-branch
+of Zhongbao Life Insurance Company, an Assistant to the Manager and the Manager
+of the Marketing Department of Chengdu Branch, and the Deputy General Manager of
+Chengdu Branch of Taikang Life Insurance Company. Mr. Zhan graduated from Kunming
+Institute of Technology in July 1989, majoring in industrial electric automation with a
+bachelor's degree in engineering.
+Annual Report 2021 | Corporate Governance
+77
+Ms. Yang Hong, born in 1967, Chinese
+Ms. Yang became the Vice President of the Company in July 2019. She successively
+served as the General Manager of the Operation Service Center and the Operation
+Director of the Company from 2018 to 2019. Ms. Yang successively served as the
+Deputy General Manager (responsible for daily operations) and the General Manager of
+the Research and Development Center, the General Manager (at the general manager
+level of the provincial branches) of the Business Management Department and the
+General Manager (at the general manager level of the provincial branches) of the
+Process and Operation Department of the Company from 2011 to 2018. From 2002
+to 2011, she successively served as an Assistant to the General Manager and the
+Deputy General Manager of the Business Management Department, and the General
+Manager of the Customer Service Department of the Company. Ms. Yang graduated
+from the Computer Science Department of Jilin University in 1989, majoring in system
+structure with a bachelor's degree of science, and from the School of Economics
+and Management of Tsinghua University in 2013 with a master's degree in business
+administration for senior management.
+Mr. Zhao Guodong, born in 1967, Chinese
+Mr. Zhao became an Assistant to the President of the Company in October 2019. He
+has been the General Manager of the Company's Jiangsu Branch since July 2018. He
+successively served as the Deputy General Manager (responsible for daily operations)
+and the General Manager of Chongqing Branch, the General Manager of Hunan Branch
+of the Company from 2016 to 2018, the Deputy General Manager of each of Fujian
+Branch and Hunan Branch of the Company from 2007 to 2016, and the Deputy General
+Manager of Changde Branch and the General Manager of Yiyang Branch in Hunan
+province of the Company from 2001 to 2007. Mr. Zhao graduated from Hunan Computer
+School in 1988, majoring in computer software, and from China Central Radio and TV
+University in 2006, majoring in business administration.
+Mr. Liu Yuejin, born in 1967, Chinese
+Mr. Liu became an Assistant to the President of the Company in June 2021. He is the
+General Manager of Guangdong Branch of the Company. Mr. Liu joined the Company in
+1996, and successively served as an Assistant to the General Manager and the Deputy
+General Manager of the Company's Guizhou Branch and the Deputy General Manager
+of Shanxi Branch, the Person in Charge, the Deputy General Manager (responsible for
+daily operations) and the General Manager of Guizhou Branch, and the General Manager
+of Chongqing Branch from 2010 to 2020. Prior to joining the Company, he worked at the
+Department of Finance of Shanxi Province. Mr. Liu graduated from Shanxi Institute of
+Finance and Economics, majoring in planning and statistics with a bachelor's degree in
+economics.
+78
+Annual Report 2021 | Corporate Governance
+Mr. Su Hengxuan, please see the section "Directors" for his personal profile.
+Mr. Li Mingguang, please see the section "Directors" for his personal profile.
+Ms. Huang Xiumei, please see the section "Directors" for her personal profile.
+74
+Mr. Zhai became an Independent Director of the Company in October 2021. He is
+the President and Founding Partner of Primavera Capital Group, and an Independent
+Non-executive Director of each of China Everbright Environment Group Limited and
+China Everbright Water Limited. From 2000 to 2009, Mr. Zhai worked at and held
+various positions in Goldman Sachs Group, including the Managing Director, the Chief
+Representative of its Beijing Office, the Director of the Strategic Cooperation Office
+between Goldman Sachs Group and Industrial and Commercial Bank of China, and the
+Credit Rating Consultant of the Ministry of Finance of the PRC and China Development
+Bank. From 1995 to 1998, he was the Deputy Representative of the People's Bank of
+China Representative Office for the Americas based in New York. From 1990 to 1995,
+Mr. Zhai worked at the International Department of the People's Bank of China. Mr. Zhai
+holds a master's degree in international affairs from Columbia University, a master's
+degree in business administration from New York University and a bachelor's degree in
+economics from Peking University.
+Mr. Zhai Haitao, born in 1969, Chinese
+Notes:
+1.
+2. This table sets out the information of Directors, Supervisors and senior management who resigned or retired during the period from the beginning of the
+Reporting Period to the date of this report.
+3.
+4.
+The emoluments are calculated based on the terms of office of the resigned and retired Directors, Supervisors and senior management during the
+Reporting Period.
+According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the resigned and retired
+Directors, Supervisors and senior management is currently subject to review and approval. The result of the review will be disclosed when the final
+amount is confirmed.
+70 Annual Report 2021 | Corporate Governance
+PERSONAL PROFILE OF CURRENT DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND
+COMPANY SECRETARY
+DIRECTORS
+Mr. Yuan Changqing, born in 1961, Chinese
+Mr. Yuan became a Non-executive Director of the Company in February 2018. He
+has been performing duties as the acting Chairman of the Board of Directors of the
+Company since January 2022, and is the Deputy Secretary to the Party Committee,
+Vice Chairman and President of China Life Insurance (Group) Company (the controlling
+shareholder of the Company). Mr. Yuan served as the Deputy Secretary to the Party
+Committee and the Chairman of the Supervisory Committee of Agricultural Bank
+of China Limited from April 2015 to May 2017. He served as the Deputy General
+Manager and the Secretary to the Discipline Inspection Committee of China Everbright
+Group Corporation Limited from November 2014 to April 2015, the Secretary to the
+Discipline Inspection Committee of China Everbright Group Limited from December
+2008 to August 2012, and an Executive Director, the Deputy General Manager and
+the Secretary to the Discipline Inspection Committee of China Everbright Group
+Limited from August 2012 to November 2014, during which he concurrently served
+as the Chairman of Everbright Securities Company Limited. During the period from
+1995 to 2008, he successively served as the Vice President, President and Secretary
+to the Party Committee of Xinjiang Branch, the President and Secretary to the Party
+Committee of Henan Branch, and the Director of the Organization Department of the
+Party Committee and the General Manager of the Human Resources Department of the
+head office of Industrial and Commercial Bank of China Limited. During the period from
+1981 to 1995, he held various professional and management positions in branch offices
+of the People's Bank of China and Industrial and Commercial Bank of China. Mr. Yuan, a
+senior economist, graduated from the University of Hong Kong, majoring in international
+business administration with a master's degree in business administration.
+Mr. Su Hengxuan, born in 1963, Chinese
+Mr. Su became an Executive Director of the Company in December 2018. He has
+been the President of the Company since April 2019, the Vice President of China Life
+Insurance (Group) Company since December 2017 and a Director of China Guangfa
+Bank Co., Ltd. since September 2020. He was the President of China Life Pension
+Company Limited from March 2015 to February 2018. Mr. Su successively served
+various positions in the Company from 2000 to 2015, including the Deputy General
+Manager of Henan Branch, the General Manager of the Individual Insurance Department
+of the Company, the General Manager of the Individual Insurance Sales Department of
+the Company, an Assistant to the President and the Vice President of the Company.
+Mr. Su graduated from Wuhan University and the University of Science and Technology
+of China and obtained a doctoral degree in management science and engineering from
+the University of Science and Technology of China in 2011. Mr. Su, a senior economist,
+has over 35 years of experience in the operation and management of life insurance
+business.
+Annual Report 2021 | Corporate Governance 71
+Mr. Li Mingguang, born in 1969, Chinese
+Mr. Li became an Executive Director of the Company in August 2019. He has been
+the Vice President of the Company since November 2014, the Chief Actuary of the
+Company since March 2012, the Chief Actuary of China Life Pension Company Limited
+since May 2012 and the Board Secretary of the Company since June 2017. Mr. Li
+joined the Company in 1996 and subsequently served as the Deputy Division Chief,
+the Division Chief, an Assistant to the General Manager of the Product Development
+Department, the Responsible Actuary of the Company and the General Manager of
+the Actuarial Department. He graduated from Shanghai Jiaotong University with a
+bachelor's degree in computer science in 1991, Central University of Finance and
+Economics majoring in monetary banking (actuarial science) with a master's degree in
+1996 and Tsinghua University with an EMBA in 2010, and also studied in University of
+Pennsylvania in the United States in 2011. Mr. Li is a Fellow of the China Association
+of Actuaries (FCAA) and a Fellow of the Institute and Faculty of Actuaries (FIA). He was
+the Chairman of the first session of the China Actuarial Working Committee and the
+Secretary-general of both the first and the second sessions of the China Association
+of Actuaries. He is currently the Vice Chairman of the China Association of Actuaries.
+Mr. Li receives a special government allowance from the State Council.
+Mr. Lam became an Independent Director of the Company in June 2021. He is currently
+an Independent Non-executive Director of China Cinda Asset Management Co., Ltd.
+and an Independent Non-executive Director of Luks Group (Vietnam Holdings) Company
+Limited. He served as an Independent Non-executive Director of China Pacific Insurance
+(Group) Co., Ltd. from 2013 to 2019. Mr. Lam, a practicing certified public accountant
+in Hong Kong for approximately 35 years, was a partner and senior consultant of Ernst
+& Young from 1992 to 2013 and has extensive experience in accounting, auditing and
+financial management. Mr. Lam received a Higher Diploma in Accounting from the
+Hong Kong Polytechnic College (the current Hong Kong Polytechnic University). He
+is a member of the Hong Kong Institute of Certified Public Accountants and a senior
+member of the Association of Chartered Certified Accountants.
+Mr. Lam Chi Kuen, born in 1953, Chinese
+Ms. Leung became an Independent Director of the Company in July 2016. She was the
+first Secretary for Justice of Hong Kong, a member of the Executive Council of Hong
+Kong, the Deputy Director of the Hong Kong Basic Law Committee of the Standing
+Committee of the 2nd, 3rd and 4th National People's Congress and a consultant
+of lu, Lai & Li Solicitors & Notaries. Ms. Leung served as a member of the Social
+Welfare Advisory Committee and the Equal Opportunities Commission, an executive
+committee member and a council member of the Hong Kong Federation of Women, the
+Chairperson and President of the International Federation of Women Lawyers, and the
+Honorary President of the Nanhai Worldwide Friendship Federation. She is a Justice
+of the Peace, a Notary Public and a China-Appointed Attesting Officer. She has been
+awarded the "Grand Bauhinia Medal" and admitted as a solicitor by the Law Societies
+of Hong Kong and England. Ms. Leung graduated from the University of Hong Kong with
+a master's degree in law, and is a fellow of the International Academy of Matrimonial
+Lawyers. She served as an Independent Non-executive Director of United Company
+RUSAL Plc from December 2009 to June 2021. She has been an Independent Non-
+executive Director of China Resources Power Holdings Company Limited since April
+2010, and an Independent Non-executive Director of PetroChina Company Limited since
+June 2017.
+Ms. Leung Oi-Sie Elsie, born in 1939, Chinese
+73
+Annual Report 2021 | Corporate Governance
+Yin Zhaojun
+Mr. Tang became an Independent Director of the Company in March 2016. He is a
+professor of the School of Law of Tsinghua University, the Head of the Commercial Law
+Research Center of Tsinghua University, an associate editor of "Tsinghua Law Review",
+a member of the Listing Committee of the Shanghai Stock Exchange, a member of the
+Legal Professional Advisory Committee of the Shenzhen Stock Exchange, the Chairman
+of the Independent Director Committee of the China Association for Public Companies,
+a member of the Legislative Affair Committee of the Asset Management Association of
+China and an Independent Director of each of Harvest Fund Management Co., Ltd. and
+Bank of Guizhou Co., Ltd. Mr. Tang was elected as a member of the first and second
+sessions of the Merger, Acquisition and Reorganization Review Committee of the China
+Securities Regulatory Commission from 2008 to 2010. He served as an Independent
+Director of China Spacesat Co., Ltd. from 2008 to 2014, an Independent Director of
+each of SDIC Power Holdings Co., Ltd. and Changjiang Securities Company Limited
+from 2009 to 2013, and an Independent Director of Beijing Rural Commercial Bank
+Co., Ltd. from 2009 to 2015. Mr. Tang graduated from Renmin University of China with
+bachelor's, master's and doctoral degrees in law.
+Mr. Wang became a Non-executive Director of the Company in August 2019. He has
+been the Chief Investment Officer of China Life Insurance (Group) Company and the
+President of China Life Asset Management Company Limited since August 2016. He
+has been the Chairman of China Life AMP Asset Management Company Limited since
+December 2016 and a Director of China United Network Communications Group Co.,
+Ltd. since March 2021. From 2004 to 2016, he successively served as an Assistant
+to the President and the Vice President of China Life Asset Management Company
+Limited, and the President of China Life Investment Holding Company Limited. From
+2002 to 2004, he successively served as the Director of the Investment Department and
+an Assistant to the General Manager of Harvest Fund Management Co., Ltd. Mr. Wang
+graduated from the School of Computer Science of Beijing University of Technology
+with a bachelor's degree in software in 1995 and from Chinese Academy of Fiscal
+Sciences of the Ministry of Finance of the PRC with a doctoral degree in finance in 2008.
+He is a senior economist.
+Mr. Wang Junhui, born in 1971, Chinese
+Annual Report 2021 | Corporate Governance
+72
+Ms. Huang became an Executive Director of the Company in July 2021. She has been
+the Vice President and the Person in Charge of Finance of the Company since May
+2020. Ms. Huang has been a Director of China Life Asset Management Company
+Limited since June 2021, a Director of Sino-Ocean Group Holding Limited since March
+2021, and a Director of China Life Franklin Asset Management Company Limited since
+February 2021. From 2018 to 2021, she served as a Director of China Life Pension
+Company Limited. From 2016 to 2020, she served as the Vice President, the Board
+Secretary and the Person in Charge of Finance of China Life Pension Company Limited.
+From 2014 to 2016, she served as the Financial Controller and the General Manager of
+the Financial Management Department of the Company. From 2005 to 2014, Ms. Huang
+held various positions at the Company's Fujian Branch, including an Assistant to the
+General Manager, the Deputy General Manager, the Branch Head, the Deputy General
+Manager (responsible for daily operations) and the General Manager. From 1999 to
+2005, she served as the Deputy Division Chief of the Planning and Finance Division,
+the Manager of the Planning and Finance Department and the Manager of the Finance
+Department of the Company's Fujian Branch, and during the period from 2004 to 2005,
+she concurrently served as the Deputy General Manager of the Company's Fuzhou
+Branch. Ms. Huang graduated from Fuzhou University, majoring in accounting with a
+bachelor's degree. She is a senior accountant.
+Ms. Huang Xiumei, born in 1967, Chinese
+Mr. Tang Xin, born in 1971, Chinese
+31 July 2017
+None of the resigned or retired Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting
+Period.
+June 1965
+Assistant to the President
+Male
+November 1967
+Since October 2019
+65.00
+23.80
+88.80
+Liu Yuejin
+Assistant to the President
+Male
+April 1967
+Since June 2021
+11.52
+44.02
+Zhao Guodong
+2 2 2
+No
+No
+Appointed as an Assistant to the
+Zhang Di
+Assistant to the President
+Chief Investment Officer
+President since December 2021,
+Female January 1968
+No
+Chief Investment Officer
+since January 2022
+Xu Chongmiao
+Liu Fengji
+Compliance Officer
+Person in Charge of Audit
+Male
+Male
+No
+149.09
+125.30
+Since July 2019
+-7 February 2021
+Position
+Gender Date of Birth
+Term
+Salary/
+Remuneration
+paid in RMB
+ten thousands
+Other benefits,
+social insurance,
+Total
+housing
+provident
+emoluments
+received from
+the Company
+Whether
+during
+fund and
+enterprise
+annuity
+the Reporting
+received
+emolument
+February 1967
+Female
+Vice President
+Yang Hong
+ten thousands
+(before tax)
+October 1969
+October 1969
+in RMB
+ten thousands
+the Company
+Period in RMB
+fund paid by
+parties of
+from connected
+the Company
+Since July 2018
+23.79
+24.67
+Remuneration
+Name
+housing
+provident fund
+and enterprise
+Total
+emolument
+received from
+Whether
+the Company
+received
+emolument
+Previous Position
+Gender Date of Birth
+Term
+paid in RMB
+ten thousands
+annuity fund
+the Reporting
+Period in RMB
+the Company
+ten thousands
+during
+Non-executive Director Male
+68.34
+Liu Huimin
+31 July 2017
+- 23 February 2022
+November 1958
+Salary
+Male
+Chairman of the Board
+Executive Director
+Wang Bin
+Reason for changes
+the Company
+parties of
+from connected
+3 December 2018
+Other benefits,
+social insurance,
+paid by
+RESIGNATION AND RETIREMENT OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+93.01
+No
+Since December 2021
+No
+Total
+1,159.07
+258.41
+1,417.48
+Notes:
+None of the current Directors, Supervisors and senior management of the Company held any shares of the Company during the Reporting Period.
+2. According to the "Procedural Rules for the Board Meetings of China Life Insurance Company Limited", Directors of the Company serve for a term of
+three years and may be re-elected. However, Independent Directors may not serve for more than six years. According to the Articles of Association,
+Supervisors of the Company serve for a term of three years and may be re-elected.
+3.
+The positions of the Directors, Supervisors and senior management in this report reflect their positions as at the date of this report. The emoluments
+are calculated based on their terms of office during the Reporting Period.
+4. According to the requirements of the relevant remuneration policies of the Company, the final amount of emoluments of the current Directors,
+Supervisors and senior management of the Company are subject to review and approval. The result of the review will be disclosed when the final
+amount is confirmed.
+5.
+6.
+1.
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Niu Kailong served as a Non-employee
+Representative Supervisor of the Company from 14 October 2021.
+8.
+On 30 June 2021, the 2020 Annual General Meeting was convened by the Company for the election of the seventh session of the Board.
+Given that Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his role and duties as a Director, Mr. Yuan Changqing,
+a Non-executive Director of the Company, was elected at the sixth meeting of the seventh session of the Board of Directors of the Company on 13
+January 2022 to assume the role and duties of the Chairman of the Board.
+On 30 June 2021, the 2020 Annual General Meeting was convened by the Company for the election of the seventh session of the Board of Supervisors,
+and the first meeting of the seventh session of the Board of Supervisors was convened on the same day for the election of Mr. Jia Yuzeng as the
+Chairman of the seventh session of the Board of Supervisors of the Company.
+Ms. Huang Xiumei was elected as an Executive Director of the seventh session of the Board of the Company at the 2020 Annual General Meeting of
+the Company. Pursuant to the "Provisions on the Administration of the Qualifications for the Directors, Supervisors and Senior Managers of Insurance
+Companies", the appointment of Ms. Huang Xiumei as an Executive Director of the seventh session of the Board of the Company became effective on
+1 July 2021.
+Annual Report 2021 | Corporate Governance 69
+As elected by the 2019 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Lam Chi Kuen served as an Independent Director
+of the Company from 29 June 2021.
+As elected by the 2020 Annual General Meeting of the Company and upon approval by the CBIRC, Mr. Zhai Haitao served as an Independent Director of
+the Company from 14 October 2021.
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+As elected by the sixth extraordinary meeting of the third session of the employee representative meeting of the Company and upon approval by the
+CBIRC, Mr. Lai Jun served as an Employee Representative Supervisor of the Company from 14 October 2021.
+As considered by the thirty-fifth meeting of the sixth session of the Board of the Company and upon approval by the CBIRC, Mr. Liu Yuejin served as an
+Assistant to the President of the Company from June 2021.
+As considered and approved by the thirty-fifth meeting of the sixth session of the Board and the fourth meeting of the seventh session of the Board of
+the Company and upon approval by the CBIRC, Ms. Zhang Di served as an Assistant to the President of the Company from December 2021 and the Chief
+Investment Officer from January 2022.
+As considered and approved by the fourth meeting of the seventh session of the Board of the Company, Mr. Liu Fengji served as a temporary Person
+in Charge of Audit of the Company from October 2021. Upon approval by the CBIRC, he became the Person in Charge of Audit of the Company from
+December 2021.
+7.
+Attendance records of the resigned Directors at the
+shareholders' general meetings convened during the
+Reporting Period:
+2
+Number of
+shareholders'
+1
+general
+Number of
+meetings
+attended
+in
+person
+1
+Lam Chi Kuen
+Zhai Haitao
+2
+2
+Independent Director
+2
+Name of Director
+Independent Director
+Type of Director
+Non-executive Director
+required
+Independent Director
+0
+0
+0
+Liu Huimin
+0
+0
+Non-executive Director
+Yin Zhaojun
+1
+2
+Executive Director
+Wang Bin
+for the year
+to attend
+meetings
+Leung Oi-Sie Elsie
+shareholders'
+2
+2
+Non-executive Director
+Yuan Changqing
+for the year
+to attend
+required
+0
+meetings
+Name of Director
+general
+Number of
+meetings
+attended
+in person
+Number of
+0
+Attendance records of the current Directors at the
+shareholders' general meetings convened during the
+Reporting Period:
+Type of Director
+Su Hengxuan
+Executive Director
+2
+Independent Director
+Tang Xin
+1
+2
+Non-executive Director
+Wang Junhui
+0
+1
+Executive Director
+Huang Xiumei
+2
+2
+Executive Director
+Li Mingguang
+2
+2
+Independent Director
+Five proposals, including the "Proposal in relation to
+the Composition of Specialized Committees of
+the Seventh Session of the Board of Directors of
+the Company", were considered and approved.
+The "Proposal in relation to the Solvency Report of
+the Company for the Second Quarter of 2021" was
+considered and approved.
+Chang Tso Tung Stephen Independent Director
+Robinson Drake Pike
+the seventh session of the Board
+22 July 2021
+Second meeting of
+the seventh session of the Board
+30 June 2021
+First meeting of
+Third meeting of
+the sixth session of the Board
+36th meeting of
+the sixth session of the Board
+28 April 2021
+35th meeting of
+the sixth session of the Board
+25 March 2021
+26 May 2021
+25 August 2021
+the seventh session of the Board
+Fourth meeting of
+84 Annual Report 2021 | Corporate Governance
+Note: For details of the above Board resolutions, please refer to the announcements regarding the Board resolutions as published by the Company on the
+website of the SSE (www.sse.com.cn).
+23 proposals, including the "Proposal in relation to
+the Asset Strategic Allocation Plan of the Company for
+the Years from 2022 to 2024", were considered and
+approved.
+15 proposals, including the "Proposal in relation to
+the Third Quarter Report of the Company for 2021",
+were considered and approved.
+12 proposals, including the "Proposal in relation to
+the Financial Report of the Company for the First Half of
+2021", were considered and approved.
+Four proposals, including the "Proposal in relation to
+the Participation by the Company in the Capital Increase
+of CGB", were considered and approved.
+Ten proposals, including the "Proposal in relation to the
+'First Quarter Report of the Company for 2021'", were
+considered and approved.
+42 proposals, including the "Proposal in relation to
+the Financial Report of the Company for the Year 2020",
+were considered and approved.
+Three proposals, including the "Proposal in relation to
+the 'Product Tracing Report of the Company for 2020"",
+were considered and approved.
+The "Proposal in relation to the Solvency Report of the
+Company for the Fourth Quarter of 2020" was considered
+and approved.
+the seventh session of the Board
+16 December 2021
+Fifth meeting of
+the seventh session of the Board
+28 October 2021
+34th meeting of
+1
+the sixth session of the Board
+33rd meeting of
+4 persons
+2 persons
+3 persons
+Executive
+Director
+Non-executive Independent
+Director
+Director
+Directors by type:
+Directors by location:
+The Company has developed a well-established procedure
+for nomination and election of Directors, under which
+the Board shall, when nominating Directors, consider
+their professional ability and conduct, and also take
+into account the requirement for diversity of the Board
+members. Complementarity among the Board members in
+aspects including but not limited to gender, age, culture,
+educational background, professional experience, skills
+and knowledge will be considered in the selection of
+candidates for Directors. Currently, the Board comprises
+nine members with extensive experience in various
+fields, such as finance and insurance, macro economy,
+financial accounting, law and management. The diversified
+composition of the Board is as follows:
+85
+Annual Report 2021 | Corporate Governance
+Currently, the Board of the Company comprises nine
+members, including three Executive Directors, two Non-
+executive Directors and four Independent Directors.
+The number of Independent Directors complies with the
+minimum requirement of three Independent Directors
+and the requirement that at least one-third of the Board
+be represented by Independent Directors under the
+regulatory rules of the industry and its listed jurisdictions.
+All members of the Board have devoted sufficient time
+in dealing with the affairs of the Board and attended
+the relevant training courses organized by external
+regulatory authorities and the Company according to
+regulatory requirements. They have referred to regulatory
+documents on a regular basis so as to keep themselves
+informed of the regulatory development in a timely
+manner. The Company has applied director's liability
+insurances for its Directors, which provide protection
+to Directors for liabilities that might arise in the course
+of their performance of duties according to law and
+facilitate Directors to fully perform their duties. So far as
+the Company is aware, no financial, business, family or
+other material relationship exists among members of the
+Board of Directors, the Board of Supervisors or the senior
+management.
+Company's corporate governance policies, approving the
+Company's development strategies and operation plans,
+formulating and supervising the Company's financial
+policies, annual budgets and financial reports, providing
+an objective evaluation on the Company's operating
+results in its financial reports and other disclosure
+documents, dealing with senior management personnel
+matters, arranging for Directors and senior management
+to attend various training courses, attaching importance
+to the enhancement of their professional quality,
+reviewing the compliance policies of the Company,
+assessing the internal control systems of the Company
+and reviewing the compliance by the Company with the
+Corporate Governance Code. The day-to-day management
+and operation of the Company are delegated to the
+management. The responsibilities of Non-executive
+Directors and Independent Directors include, without
+limitation, regularly attending meetings of the Board
+and the specialized Board committees of which they are
+members, providing opinions at meetings of the Board and
+the specialized Board committees, resolving any potential
+conflict of interest, serving on the Audit Committee, the
+Nomination and Remuneration Committee and other
+specialized Board committees, and inspecting, supervising
+and reporting on the performance of the Company. The
+Board is accountable to the shareholders of the Company
+and reports to them.
+The Board is the standing decision-making body of
+the Company and its main duties include: performing
+the function of corporate governance of the Company,
+convening shareholders' general meetings, implementing
+resolutions passed at such meetings, improving the
+BOARD
+In 2021, Independent Directors of the Board of the
+Company possessed extensive experience in various
+fields, such as macro economy, finance and insurance,
+legal compliance, accounting and auditing. The Company
+also complies with the requirement of the Listing Rules
+of the HKSE that at least one of its Independent Directors
+has appropriate professional qualifications or accounting
+qualifications or related financial management expertise.
+As required under the Listing Rules of the SSE and the
+HKSE, the Company has obtained a written confirmation
+from each of its Independent Directors in respect of their
+independence, and the Company is of the opinion that
+all of the Independent Directors are independent of the
+Company and strictly perform their duties as Independent
+Directors. Pursuant to the Articles of Association,
+Directors shall be elected at the shareholders' general
+meeting for a term of three years and may be re-elected
+on expiry of the three-year term. However, Independent
+Directors may not serve for more than six years.
+Directors by gender:
+Male
+7 persons
+22 January 2021
+Date of the meeting Resolutions adopted at the meeting
+the sixth session of the Board
+32nd meeting of
+Session of the meeting
+Board meetings convened during the Reporting Period are as follows:
+86 Annual Report 2021 | Corporate Governance
+3 persons
+6 persons
+Hong Kong, China
+Mainland China
+Regular Board meetings are held mainly to review the
+quarterly, interim and annual reports of the Company
+and to deal with other related matters. The practice
+of obtaining Board consent through the circulation of
+written resolutions does not constitute a regular Board
+meeting. An ad-hoc Board meeting may be convened in
+urgent situations if requisitioned by any of the following:
+shareholders representing over one-tenth of voting
+shares, Directors constituting more than one-third of the
+total number of Directors, the Board of Supervisors, more
+than two Independent Directors, the Chairman of the
+Board or the President of the Company. If the resolution
+to be considered at such ad-hoc Board meetings has been
+circulated to all the Directors and more than half of the
+Directors having voting rights approve such resolution by
+signing the resolution in writing, the ad-hoc Board meeting
+need not be physically convened and such resolution in
+writing shall become an effective resolution.
+Meetings of the Board are held both on a regular and an
+ad-hoc basis. Regular meetings are convened at least
+four times a year for the examination and approval of
+proposals, such as annual report, interim report, quarterly
+reports, related financial reports, and major business
+operations of the year. Meetings are convened by the
+Chairman of the Board and a notice is given to all Directors
+14 days before such meetings. Agendas and related
+documents are sent to the Directors at least 3 days prior
+to such meetings. In 2021, all notices, agendas and related
+documents in respect of such regular Board meetings
+were sent in compliance with the above requirements.
+By fully reviewing all the relevant proposals, the Board
+has confirmed that the information contained in its
+periodic reports and financial reports is true, accurate
+and complete and contains no false representations,
+misleading statements or material omissions, and no
+event or situation which would have material adverse
+impacts on the Company's ongoing operation has been
+found.
+2 persons
+Female
+25 February 2021
+Four proposals, including the amendments to the Articles
+of Association, amendments to the "Procedural Rules for
+the Shareholders' General Meetings" and the execution of
+an agreement for connected transactions with CLI, were
+considered and approved by a combination of on-site and
+online voting at the First Extraordinary General Meeting
+2021 held in Beijing on 16 December 2021.
+If a Director is materially interested in a matter to be
+considered by the Board, the Director having such conflict
+of interest shall have no voting right on the matter to be
+considered and shall not be counted in the quorum for
+the Board meeting. All Directors shall have access to
+the advice and services of the Board Secretary and the
+Company Secretary. Detailed minutes of Board meetings
+regarding matters considered by the Board and decisions
+reached, including any concerns raised by Directors
+or dissenting views expressed, are kept by the Board
+Secretary. Minutes of Board meetings are available upon
+reasonable notice for inspection and comment upon by
+Directors.
+Twenty-four proposals, including the "Proposal in relation
+to the Report of the Board of Directors of the Company
+for the Year 2020", the "Proposal in relation to the Report
+of the Board of Supervisors of the Company for the Year
+2020", the "Proposal in relation to the Financial Report of
+the Company for the Year 2020", the "Proposal in relation
+to the Profit Distribution Plan of the Company for the Year
+2020", the "Proposal in relation to the Remuneration of
+Directors and Supervisors of the Company", the proposal
+in relation to the election of Executive Directors, Non-
+executive Directors and Independent Directors of the
+seventh session of the Board of the Company and the
+proposal in relation to the election of Non-employee
+Representative Supervisors of the seventh session of the
+Board of Supervisors of the Company, were considered
+Unit: Persons
+Management and administration
+Sales and sales management
+Finance and auditing
+Class of Expertise
+Structure of Expertise
+As at the end of the Reporting Period, the composition of
+the employees of the Company and its major subsidiaries
+is as follows:
+EMPLOYEES AND BRANCHES
+Employees
+Number of
+Employees
+Actual payment of remuneration to Directors, Supervisors
+and senior management: during the Reporting Period,
+the remuneration actually received by all Directors,
+Supervisors and senior management (including the
+resigned Directors, Supervisors and senior management)
+from the Company totaled RMB15.1979 million. In
+accordance with the relevant requirements of the
+measures for the administration of remuneration of the
+Company, the standard for performance-based bonus
+(as part of the compensation) payable to Directors,
+Supervisors and senior management of the Company in
+2021 has not yet been determined.
+Decision-making procedures for the remuneration of
+Directors, Supervisors and senior management: the
+remuneration of Directors and Supervisors are approved
+by shareholders at general meetings, whereas the
+remuneration of senior management is approved by the
+Board of Directors.
+REMUNERATION OF DIRECTORS, SUPERVISORS
+AND SENIOR MANAGEMENT
+80 Annual Report 2021 | Corporate Governance
+Since March 2021
+Since August 2016
+Since December 2017
+Basis for determination of the remuneration of Directors,
+Supervisors and senior management: the remuneration
+of Directors, Supervisors and senior management
+are determined based on the operating results of the
+Company and the performance appraisal conducted by the
+Board of Directors, and in accordance with the measures
+for the administration of remunerations of the Company.
+19,275
+46,555
+4,696
+College Diploma
+68,671
+5,889
+Number of
+Employees
+Unit: Persons
+Master and above
+Bachelor
+Education Level
+Education Level
+Total
+103,262
+3,773
+5,134
+Other expertise and technicians
+Others
+23,829
+Insurance verification, claim processing
+and customer services
+(in preparation) and President of
+China Life Institute of Finance
+24,715
+Planning Department/Office of
+the Board of Directors
+Niu Kailong
+Mr. Xu Chongmiao, born in 1969, Chinese
+Ms. Zhang became an Assistant to the President of the Company in December 2021.
+She has been the Chief Investment Officer of the Company since January 2022.
+Ms. Zhang joined the Company in 2001, and successively served as an Assistant to
+the General Manager, the Deputy General Manager, the Deputy General Manager
+(responsible for daily operations), and the General Manager of the Investment
+Management Department and the General Manager of the Investment Management
+Center of the Company from 2010. Prior to joining the Company, she worked at
+companies including Beijing Zhongbaoxin Real Estate Development Company Limited
+and PICC Trust and Investment Company, etc. Ms. Zhang graduated from Northern
+Jiaotong University, majoring in transportation management and engineering with a
+bachelor's degree in engineering.
+Ms. Zhang Di, born in 1968, Chinese
+87
+Currently, the seventh session of the Board comprises the
+following members: Mr. Su Hengxuan, Mr. Li Mingguang
+and Ms. Huang Xiumei, all being Executive Directors, Mr.
+Yuan Changqing and Mr. Wang Junhui, all being Non-
+executive Directors, and Mr. Tang Xin8, Ms. Leung Oi-
+Sie Elsie, Mr. Lam Chi Kuen and Mr. Zhai Haitao, all being
+Independent Directors, with Mr. Yuan Changqing, a Non-
+executive Director of the Company, performing duties as
+the acting Chairman of the Board. Due to the adjustment
+of work arrangements, Mr. Yin Zhaojun and Mr. Liu Huimin
+successively resigned from their positions as Directors.
+Due to consecutively serving as Independent Directors for
+six years, Mr. Chang Tso Tung Stephen and Mr. Robinson
+Drake Pike successively resigned from their positions as
+Directors. Due to the failure to perform his duties as a
+Director, Mr. Wang Bin resigned from his positions as the
+Chairman of the Board and an Executive Director of the
+Company.
+In 2021, all members of the Board developed and
+refreshed their knowledge and skills by attending
+special training courses covering topics such as macro
+economy and the development of the insurance
+industry. All members of the Board of Directors of the
+Company attended the training programs on anti-money
+laundering and a training course on the "Standards for
+Mr. Xu became the Compliance Officer of the Company in July 2018. He has been
+the General Manager of the Legal and Compliance Department and the Legal Officer
+of the Company since September 2014. From 2006 to 2014, he successively served
+as the Deputy General Manager of the Legal Affairs Department, the Deputy General
+Manager of the Legal and Compliance Department and the Legal Officer at the general
+manager level of the Company. From 2000 to 2006, he successively served as the
+Deputy Division Chief of the Regulations Division of the Development and Research
+Department and a senior regulations researcher of the Legal Affairs Department of
+the Company. Mr. Xu graduated from Fudan University in August 1991, majoring in
+economic law with a bachelor's degree in law, and from Renmin University of China
+in July 1996 and July 2005, respectively, majoring in economic law with master's and
+doctoral degrees in law. Mr. Xu is admitted as a lawyer and certified public accountant
+in the PRC.
+the Corporate Governance of Banking and Insurance
+Institutions" offered by the Insurance Association of
+China. Mr. Li Mingguang, an Executive Director of
+the Company, attended a special training course for
+directors and supervisors of listed companies within
+Beijing as organized by the LCAB. Ms. Huang Xiumei, an
+Executive Director of the Company, attended a special
+training course on financial risk prevention and control
+of companies and a special training course for directors
+and supervisors of listed companies within Beijing, as
+organized by LCAB. Mr. Wang Junhui, a Non-Executive
+Director of the Company, attended a special training
+course for directors and supervisors of listed companies
+within Beijing as organized by LCAB. Ms. Leung Oi-
+Sie Elsie and Mr. Lam Chi Kuen, all being Independent
+Directors of the Company, attended a follow-up training
+course for independent directors of listed companies as
+organized by the SSE.
+8
+9
+The Board of the Company received a resignation letter from Mr. Tang Xin, an Independent Director of the Company, on 6 March 2022. As Mr. Tang Xin
+had consecutively served as an Independent Director for six years, he tendered his resignation for such position to the Board of the Company pursuant
+to the relevant regulatory requirements. Since the resignation of Mr. Tang Xin will result in the number of Independent Directors of the Company falling
+below the minimum number required by the relevant regulations and the Articles of Association, Mr. Tang Xin will continue to perform his duties as an
+Independent Director until the qualification of a new Independent Director is approved by the CBIRC.
+As Mr. Wang Bin, a former Executive Director of the Company, was unable to perform his duties as a Director nor participate in a Director self-
+assessment in the evaluation of the performance of duties by Directors for 2021, he was excluded from the scope of such evaluation.
+88
+Annual Report 2021 | Corporate Governance
+The Company has consistently improved its corporate
+governance structure, regulated the acts of Directors in
+performing their duties, and optimized the mechanism
+for supervising and evaluating the performance of
+duties by Directors. Pursuant to the "Measures for the
+Evaluation of the Performance of Duties by Directors
+and Supervisors of Banking and Insurance Institutions
+(for Trial Implementation)" published by the CBIRC, the
+"Operational Guidance for Evaluating the Performance of
+Duties by Directors of Insurance Companies" issued by
+the Insurance Association of China, the "Measures for the
+Evaluation of the Performance of Duties by Directors and
+Supervisors of the Company" released by the Company
+and other requirements, and after taking into account the
+actual situation of its corporate governance, the Company
+conducted an evaluation of the performance of duties by
+Directors. Based on the self-assessment of Directors and
+the evaluation of the Board of Supervisors, all members of
+the Board of the Company were evaluated as competent
+in their performance of duties in 2021.
+Mr. Liu Fengji, born in 1969, Chinese
+Mr. Liu became the Person in Charge of Audit of the Company in December 2021.
+He served as a temporary Person in Charge of Audit of the Company from October to
+December 2021, and is the General Manager of the Audit Department of the Company.
+Mr. Liu joined the Company in 1992, and successively served as an Assistant to the
+General Manager of the Company's Tianjin Branch, the Deputy General Manager of
+Ningxia Hui Autonomous Region Branch, the Person in Charge, the Deputy General
+Manager (responsible for daily operations) and the General Manager of Qinghai Branch,
+and the General Manager of Tianjin Branch from 2011 to 2021. Mr. Liu graduated from
+Tianjin Institute of Finance and Economics in 1992, majoring in finance (insurance
+direction) with a bachelor's degree in economics, and from Nankai University in 2013,
+majoring in business administration for senior management with a master's degree in
+business administration.
+Annual Report 2021 | Corporate Governance
+Wang Junhui
+China Life Insurance (Group) Company Vice President
+Su Hengxuan
+Yuan Changqing
+Since May 2017
+Term
+China Life Insurance (Group) Company Vice Chairman, President
+Position
+Name of shareholders
+Name
+POSITIONS HELD BY CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IN
+SHAREHOLDERS OF THE COMPANY
+Mr. Heng is the managing partner of Morison Heng, Certified Public Accountants. Mr.
+Heng holds a Master of Science degree of the Imperial College of Science, Technology
+and Medicine, the University of London. Mr. Heng is a member of The Hong Kong
+Institute of Certified Public Accountants and a fellow of The Association of Chartered
+Certified Accountants. Mr. Heng has over 15 years of experience in accounting and
+auditing for private and public companies and financial consultancy. Mr. Heng serves
+as an Independent Non-executive Director of Lee & Man Chemical Company Limited,
+Matrix Holdings Limited, Best Food Holding Company Limited and Veson Holdings
+Limited, all of which are listed on the main board of the HKSE.
+Mr. Heng Victor Ja Wei, born in 1977, British
+COMPANY SECRETARY
+79
+China Life Insurance (Group) Company Chief Investment Officer
+China Life Insurance (Group) Company General Manager of the Strategic
+and approved by a combination of on-site and online
+voting, and the "Duty Report of the Independent Directors
+of the Board of Directors of the Company for the Year
+2020" and the "Report on the Overall Status of Connected
+Transactions of the Company for the Year 2020" were
+debriefed and reviewed at the 2020 Annual General
+Meeting held in Beijing on 30 June 2021.
+Secondary School
+Unit: Persons
+The Company has made information disclosure in a
+timely, open and transparent manner pursuant to the
+requirements of the listing rules of its listed jurisdictions.
+The Company has continuously improved its management
+of investor relations and enriched its communication with
+investors in both form and substance, thus ensuring that
+all shareholders enjoy equal rights and have access to
+information about the Company in an open, fair, true and
+accurate manner.
+The Company has consistently made improvements to
+its systems relating to corporate governance. Pursuant to
+the relevant regulatory requirements and after taking into
+account its actual operation, the Company has formulated
+the "Measures for the Evaluation of the Performance of
+Duties by Directors and Supervisors" and the "Provisional
+Measures for the Administration of Undertakings of
+Substantial Shareholders" to further strengthen the
+evaluation and management of the performance of duties
+by Directors and Supervisors and the administration of
+undertakings of substantial shareholders.
+The Board of Supervisors of the Company has carried out
+its work and performed its duties in accordance with the
+Articles of Association and the "Procedural Rules for the
+Board of Supervisors Meetings". Members of the Board of
+Supervisors attended the shareholders' general meetings
+and the Board of Supervisors meetings, participated in the
+Board meetings and the meetings of the specialized Board
+committees based on their work allocation, and conducted
+investigations on local branches to have an in-depth
+understanding of the implementation of the decisions
+made by the Board, so as to diligently perform their role of
+supervision.
+and Assets and Liabilities Management Committee, and
+the Connected Transactions Control Committee. These
+specialized Board committees conduct studies on specific
+matters, hold meetings both on a regular and an ad-
+hoc basis, communicate with the senior management,
+provide advice and recommendations for the Board's
+consideration, and deal with matters entrusted or
+authorized by the Board, for the purposes of improving the
+Board's efficiency and intensifying the Board's functions.
+The Company has actively promoted the establishment
+of corporate governance, continuously improved its
+corporate governance structure and enhanced its scientific
+decision-making ability. In order to improve the decision-
+making efficiency of the specialized Board committees,
+the Board has established five specialized Board
+committees, i.e. the Audit Committee, the Nomination
+and Remuneration Committee, the Risk Management and
+Consumer Rights Protection Committee, the Strategy
+In accordance with the regulatory requirements of its
+listed jurisdictions and the relevant provisions of its
+Articles of Association, the Company has continuously
+improved the decision-making mechanism of the Board.
+The Board is accountable to shareholders of the Company
+with respect to the assets and resources entrusted to it
+by the shareholders, and performs its duties on corporate
+governance. All members of the Board have taken
+initiatives to look into the Company's affairs and have
+had a comprehensive understanding of the Company's
+businesses. They have devoted sufficient time in
+performing their duties as Directors with due care and in
+a diligent and efficient manner. By setting up mechanisms
+including regular reporting of business development
+strategies and marketing tactics, the management of the
+Company can periodically report the business operations,
+development strategies and marketing tactics to the
+Board, which provides a basis for the Board's decision-
+making.
+The Company has intensified its management of
+subsidiaries on an ongoing basis. The Board considered
+and approved the "Proposal in relation to the Nomination
+of the Candidates for Directors of the Fifth Session of
+the Board of Directors of China Life Asset Management
+Company Limited", the "Proposal in relation to the
+Nominiation of the Candidates for Directors of China Life
+Pension Company Limited" and the "Proposal in relation
+to the Provision of Shareholders' Letters of Undertaking to
+Banking and Insurance Institutions".
+The Company has set up a corporate governance structure
+with well-defined duties and responsibilities strictly in
+accordance with relevant laws, regulations and regulatory
+requirements, including the Company Law and the
+Securities Law. The corporate governance structure of the
+Company generally meets the regulatory requirements
+of its listed jurisdictions and the relevant provisions.
+The Company has carried out its corporate governance
+procedures strictly in accordance with relevant laws,
+regulations and regulatory requirements, including the
+Company Law and the Securities Law, as well as the
+requirements of its Articles of Association and procedural
+rules. Shareholders' general meetings, Board meetings
+and Board of Supervisors meetings of the Company have
+been functioning independently and coordinately.
+Board Secretary
+Company Secretary
+Board of Directors' Office/
+Investor Relations
+Department
+Annual Report 2021 | Corporate Governance
+82
+Including branches at the provincial or prefecture level, sub-branches, sales offices and sales & services offices.
+(Corporate Governance Structure Chart)
+Control Committee
+With the establishment of a corporate governance system
+with reasonably designed structure, well-developed
+mechanism, strict rules and regulations, as well as high
+efficiency in operation as its core objectives, the Company
+constantly promotes the development of its corporate
+governance, strictly performs its obligation of information
+disclosure, enhances its transparency and actively serves
+the interest of public investors so as to enhance its image
+and position in the capital market.
+Annual Report 2021 | Corporate Governance 83
+-
+During the Reporting Period, the Company won the
+Tianma Award- "Best Board of Directors" for the first
+time in the 12th China Listed Company Investor Relations
+assessment and selection hosted by Securities Times.
+It was also awarded Grade A in the assessment by the
+SSE of information disclosure of listed companies for the
+year 2020-2021, the "Most Respected Enterprise in Asia
+(Insurance Industry)" by Institutional Investor, the "Best
+Listed Company" by New Fortune Magazine, the "Best
+Investor Activity" by Investor Relations Magazine, the
+"Best Listed Company" and the "Listed Company with
+the Best Investment Value for the 14th Five-Year Plan
+Period" in the 11th China Securities 2021 Golden Bauhinia
+Awards, as well as the "Most Progress in Investor
+Relations Award" by Hong Kong Investor Relations
+Association.
+16 December 2021
+30 June 2021
+Date of publication of
+resolutions
+www.sse.com.cn
+www.hkexnews.hk
+www.e-chinalife.com
+www.e-chinalife.com
+www.sse.com.cn
+www.hkexnews.hk
+Index for websites on which
+resolutions were published
+First Extraordinary General Meeting 2021 16 December 2021
+30 June 2021
+2020 Annual General Meeting
+Date of the meeting
+Session of the meeting
+Shareholders' general meetings convened during the Reporting Period are as follows:
+The shareholders' general meeting, as an organ of the
+highest authority of the Company, exercises its duties
+and functions in accordance with relevant laws. Its
+duties and powers include the election, appointment and
+removal of Directors and Non-employee Representative
+Supervisors, review and approval of the reports of the
+Board of Directors and the Board of Supervisors, review
+and approval of the annual budget and final accounts of the
+Company, and any other matters required by the Articles
+of Association to be approved by way of resolution of the
+shareholders' general meeting. The Company ensures
+that all shareholders are equally treated so as to ensure
+that the rights of all shareholders are protected, including
+the right of access to information in relation to, and the
+right to vote in respect of, major matters of the Company.
+The Company has the ability to operate and manage its
+business autonomously, and is separate and independent
+from its controlling shareholder in its business operations,
+personnel, assets and financial matters.
+Shareholders' General Meeting
+Connected
+Transactions
+1,455
+Strategy and Assets and
+Liabilities Management
+Committee
+Nomination and
+Remuneration
+Committee
+25
+the Company and its major
+Resigned and retired employees of
+103,262
+Employees in total
+the Company's major subsidiaries
+subsidiaries for which
+1,803
+103,262
+Total
+101,459
+Number of employees of the Company
+2,532
+Others
+Number of employees of
+extra costs have to be incurred
+Annual Report 2021 | Corporate Governance
+81
+Board of
+Supervisors
+Board of
+Directors
+Shareholders'
+General
+Meeting
+Audit
+Committee
+7
+the Company can operate in a more systematic manner,
+make decisions in a more scientific way, and boost the
+confidence of investors.
+The Company implements good corporate governance
+policies and firmly believes that through fostering sound
+corporate governance, further enhancing its transparency
+and establishing an effective system of accountability,
+REPORT OF CORPORATE GOVERNANCE
+OVERVIEW OF CORPORATE GOVERNANCE
+As at 31 December 2021, the Company had approximately
+19,000 branches.
+Branches
+system that covers source cultivation, follow-up cultivation
+and whole-process cultivation, continued to further develop
+the systems for training courses and training management,
+stepped up its efforts to build a team of part-time lecturers,
+pushed forward the integration of talents selection,
+cultivation, utilization and retention, and consistently
+enhanced the suitability and effectiveness of education and
+training plans for employees, with a view to facilitating the
+business development of the Company and the healthy
+team development of cadre employees.
+In 2021, the Company prioritized morals and also
+emphasized on capabilities, pursued the problem-
+based approach for offering targeted training courses
+for employees, adopted a classified and hierarchical
+management system to cover all employees, and focused
+on reforms and innovation for joint development and
+sharing. The Company integrated real situations into its
+education and training and put stringent management into
+practice, concentrated on the development of a quality
+Training Plans
+The Company has established a remuneration and incentive
+system with reference to employee's positions, the
+Company's performance and market conditions.
+Remuneration Policy for Employees
+Risk Management
+and Consumer Rights
+Protection Committee
+Annual Report 2021 | Corporate Governance