China's State Council, the cabinet, said in a circular that the country's insurers can invest their funds overseas to expand their investment horizons.

"It is an important move and will benefit the development of the industry. China doesn't have enough financial products for domestic insurers to invest," Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), told Xinhua.

The circular, entitled the Ten Suggestions on the Reform and Development of the Insurance Industry of the State Council, says that insurers are encouraged to directly or indirectly invest in the capital market with the investment proportion increased step by step, to invest in more types of securities products, to invest in real estate and venture capital on a trial basis and to purchase shares in commercial banks.

"There has been no official document of the central government relating to the insurance industry for 20 years. This document will play a major role in making the industry to make a breakthrough," said Hao Yansu, director of the insurance department in the elite Central University of Finance and Economics.

Official figures show that the total assets of China's insurance industry has topped 1.6 trillion yuan (200 billion U.S. dollars) .

To improve their investment earnings, insurers were given the go-ahead to channel 5 percent to 10 percent of their combined yuan-denomination equity funds into overseas markets in April this year.

The cap is expected to rise to 15 percent, Wu said.