Statistics show that, seven institutions, including Ping'an Pension Insurance Co Ltd, Pacific Annuity Insurance Company, China Life Insurance Co Ltd, and Industrial and Commerce Bank of China obtained two out of the four licenses for annuity management. For example, China Merchants Bank is both a pension fund custodian and a bookkeeper.

These institutions take care of the respective links in annuity management. Such a long management chain is costly and lowers the efficiency of supervision.

"The system is inefficient for making use of resources and increases the costs of management and operations," said Zhao Weixing, general manager of Ping An Pension.

"The regulator should approve qualified institutions with more licenses, which is better for operating one-stop services. We have submitted the application for the other two licenses," Zhao added.

A CIRC official also said the inefficient management system also slowed down the development of China's corporate annuity market. "CIRC will adjust the current management system and integrate institutions' licenses," he said.

Foreign insurers are also allowed to provide annuity products, as part of China's commitments to the World Trade Organization. Many overseas banks and joint venture insurers, such as the Hongkong and Shanghai Banking Corporation, Citibank, Generali China Life Insurance Co Ltd and AEGON-CNOOC Life Insurance Co Ltd, have intentions to tap the lucrative market.

"China's corporate annuity market is still in its fledging stages. All the systems are fresh. Only a few enterprises have established corporate annuity and the taxation policies are still improving, putting overseas and Chinese insurers on an equal footing," explained a general manager of an overseas insurer.

Insiders say that allowing foreign financial institutions to operate corporate annuity will trigger more intense competition, as they are more experienced in the area. For example, AEGON, AEGON-CNOOC Life's foreign partner, is well-known in the corporate annuity field in the United States.

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