US insurer American International Group, Inc. (NYSE: AIG) said it has entered into a non-binding term sheet with respect to the proposed establishment of a joint venture insurance agency company between the company and China-based PICC Life.
According to AIG, the plan calls for the JV to distribute life insurance and other insurance products through a specialized agency force on a nationwide basis with a focus on major cities in China and to engage in reinsurance and other related business cooperation.
In addition, AIG said it has agreed to subscribe for approximately USD 500m worth of H shares of PICC Group in its initial public offering in Hong Kong.
AIG has agreed not to dispose of more than 25 % of such shares without PICC Group’s prior consent for a period of five years, except that AIG will be permitted to sell all of its H shares without such consent after six months if definitive legal documentation for the proposed joint venture has not been executed by May 31, 2013 or upon the occurrence of certain events in connection with the proposed joint venture.
The company currently owns approximately 9.9% of PICC Property and Casualty company Ltd., a subsidiary of the PICC Group with publicly listed shares in Hong Kong.