Chinese regulators have approved plans for a joint venture between U.S. life insurer MetLife Inc. and the owner of the Beijing International Airport, MetLife said Thursday.
The U.S. company has a 50 percent stake in the 500 million yuan (US$60.5 million) venture to sell life insurance, according to terms approved by the China Insurance Regulatory Commission, said William J. Toppeta, president of international operations for New York-based Metlife.
Capital Airports Holding Co., a state company that owns the Beijing airport, holds the other half.
The joint venture, to be called Sino-U.S. MetLife, will begin operations almost immediately, Toppeta told Dow Jones Newswires.
“We have recruited 40 telemarketers to begin telemarketing business in Beijing, and that will happen fairly quickly,” he said.
Foreign insurers are not allowed a majority stake in joint ventures in China under investment rules agreed to by the World Trade Organization. Regulations limit the MetLife joint venture to selling individual life insurance in Beijing.
Local insurance providers had objected to the joint venture’s reported plans to monopolize the lucrative flight accident insurance market at the Beijing airport, one of China’s busiest. Chinese passengers routinely buy 20 yuan (US$2.40) accident insurance before boarding flights.
However, Capital Airports’ general manager, Li Peiying, told reporters Thursday that the joint venture would not get favored access to the airport life insurance market. Such issues are decided by government regulators, he said.
Toppeta said MetLife did not base its choice of Capital Airport as a partner on the issue of flight insurance.
“I would honestly say to you that that was a small part of this decision,” he said, adding “the main issue is finding someone you can work with and whom you’re compatible with.”
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