"Banks and insurers are already investing across the two industries on a trial basis. Cooperation between insurance firms and fund management companies is not far off," Yuan Li, spokesman of the China Insurance Regulatory Commission (CIRC), said at an annual industry conference in Beijing on Friday.

On Tuesday, the China Banking Regulatory Commission (CBRC) and the CIRC signed a memorandum of understanding on investment in insurance firms by banks and vice versa. Detailed guidelines are expected soon.

Wu Dingfu, chairman of the CIRC, said cooperation between the insurance, banking and securities sectors will be further strengthened this year.

"We are still considering how large a stake financial institutions can take in insurance firms," said Yuan Li, adding that banks will be able to invest in insurers "in line with existing regulations". Non-financial companies can currently take a stake of up to 20 percent in an insurer, Yuan said.

Bank of Communications Co Ltd and Bank of Beijing Co Ltd have filed applications to invest in insurers, the China Securities Journal cited sources as saying.

"Fund management firms run by banks have been booming in the past two years. Insurers can also expect the fund management door to open soon," said Wang Xiaogang, an analyst at Orient Securities. "A number

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