China Life Insurance : Announcement - Renewal of Continuing Connected Transactions under the Cooperation Framework Agreement for Investment Managem

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中國人壽保險股份有限公司

CHINA LIFE INSURANCE COMPANY LIMITED

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2628)

ANNOUNCEMENT

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS UNDER THE COOPERATION FRAMEWORK AGREEMENT FOR INVESTMENT MANAGEMENT WITH INSURANCE FUNDS

Reference is made to the announcement of the Company dated 26 April 2018 in relation to the Existing Framework Agreement entered into between the Company and China Life Capital. The Existing Framework Agreement will expire on 31 December 2019.

The Board wishes to announce that the Company proposes to enter into the New Framework Agreement with China Life Capital by 31 December 2019, pursuant to which the Company will continue to subscribe in the capacity of the limited partner for the Fund Products of which China Life Capital or any of its subsidiaries serves as the general partner, and/or the Fund Products of which China Life Capital serves as the manager.

CLIC, the controlling shareholder of the Company, currently holds approximately 68.37% of the issued share capital of the Company, and is a connected person of the Company. China Life Capital, an indirect wholly-owned subsidiary of CLIC, is an associate of CLIC and also a connected person of the Company. As such, the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

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Given that the applicable percentage ratios in respect of the annual caps for the subscription by the Company in the capacity of the limited partner of the Fund Products of which China Life Capital or any of its subsidiaries serves as the general partner are more than 0.1% but less than 5%, such transactions are subject to the reporting, announcement and annual review requirements, but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules. Given that the applicable percentage ratios in respect of the annual caps for the management fee charged by China Life Capital as the general partner or the manager of the Fund Products are less than 0.1%, the arrangement for the payment of management fee is exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the announcement of the Company dated 26 April 2018 in relation to the Existing Framework Agreement entered into between the Company and China Life Capital. The Existing Framework Agreement will expire on 31 December 2019.

The Board wishes to announce that the Company proposes to enter into the New Framework Agreement with China Life Capital by 31 December 2019, pursuant to which the Company will continue to subscribe in the capacity of the limited partner for the Fund Products of which China Life Capital or any of its subsidiaries serves as the general partner, and/or the Fund Products of which China Life Capital serves as the manager.

PRINCIPAL TERMS OF THE NEW FRAMEWORK AGREEMENT

Parties

• The Company
• China Life Capital

Investment Management Model

Pursuant to the New Framework Agreement, the Company will subscribe in the capacity of the limited partner for the Fund Products of which China Life Capital or any of its subsidiaries serves (including individually and jointly with third parties) as the general partner, and/or the Fund Products of which China Life Capital serves as the manager (including the fund manager and co-manager).

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Subscription of the Fund Products

The Company will enter into specific agreements with the counterparties including China Life Capital (or its subsidiaries) in respect of the subscription of specific Fund Products, and such specific agreements shall be subject to the principles set out in the New Framework Agreement. Upon execution of the specific agreements, the Company shall make its capital contribution as required by the payment notice of the general partner, and the date of payment of the capital contribution as required by the payment notice shall be no earlier than 10 working days after the issuance of such payment notice. The capital contribution to be made by the Company will be funded by the internal resources of the Company.

Management of the Fund Products

As the general partner or the manager of the Fund Products, China Life Capital (or its subsidiaries) will provide daily operation, investment management, and consulting services to the Fund Products. The management fee will be paid to the general partner or the manager in respect of the provision of such services on an annual, semi-annual or quarterly basis, which shall be borne by all the limited partners. The management fee to be borne by the Company as the limited partner shall be calculated based on the amount of its capital contribution to the Fund Products and with reference to the following fee rates:

1. With respect to core funds (which refer to the Fund Products, the underlying assets of which are the projects that have been put into operation and have generated stable cash flow and are basically not required for upgrade or renovation) or any other projects similar to them in investment management, the annual management fee rate shall be within the range between 0.1% and 0.3%;
2. With respect to value-added funds (which refer to the Fund Products, the underlying assets of which are the projects that have been put into operation and have started to generate cash flow but can be partially upgraded or renovated to increase their value), asset securitization products or any other projects similar to them in investment management, the annual management fee rate shall not exceed 1%;
3. With respect to opportunistic funds (which refer to the Fund Products, the underlying assets of which are the projects that have not been fully constructed, or the projects that have been completely constructed but can be materially upgraded or renovated to increase their value significantly, or the projects that have been completely constructed but have been in business difficulties due to indebtedness, operations or other reasons), equity investments or any other projects similar to them in investment management, the annual management fee rate shall not exceed 1.5%.

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If there is any independent third party subscribing for a Fund Product in the capacity of the limited partner simultaneously when the Company subscribes for the same Fund Product as the limited partner, and the amount of capital contribution by such independent third party accounts for 20% or more of the total capital contribution to the Fund Product by all the limited partners, then the management fee rate for the Fund Product borne by the Company may match the rate available to the independent third party, but the annual management fee rate shall not exceed 1.5% in any event.

Investment Scope of the Fund Products

The investment scope of the Fund Products shall include real estate, warehousing logistics, apartments for long-term lease, urban renewal, infrastructure assets, corporate shareholdings in relation to the operation of such underlying assets and asset securitization products in relation to such assets (including, but not limited to, asset-backed securities, real estate investment trusts, quasi-real estate investment trusts, etc.).

Profit Distribution

The profits from the Fund Products shall be distributed to the Company as the limited partner in a way that is not inferior to the following principles of distribution and order of priority:

1. the funds of the Fund Products available for distribution shall be first distributed to the limited partners and the general partner, until the amount they have received is equal to the amount of their capital contributions;
2. the balance (if any) shall be distributed to the limited partners, until the limited partners have obtained the preferred returns calculated at an annualized compound internal rate of return of 8% based on the distribution amount under item (a) above;
3. the balance (if any) shall be distributed to the general partner, until the amount it has received accounts for 20% of the aggregate distribution amount under item (b) above and this item (c);
4. any balance after the above distribution shall be distributed between the limited partners and the general partner at the ratio of 80:20.

Term

Upon signing by the parties, the New Framework Agreement will take effect from 1 January 2020 and expire on 31 December 2022.

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ANNUAL CAPS

Historical Figures

For the year ended 31 December 2018 and the six months ended 30 June 2019, the management fees charged by China Life Capital as the general partner or the manager of the Fund Products were RMB11.75 million and RMB15.66 million, respectively. For the same periods, the Company did not subscribe in the capacity of the limited partner for the Fund Products of which China Life Capital or any of its subsidiaries serves as the general partner.

Annual Caps

For the three years ending 31 December 2022, the annual caps for the subscription by the Company in the capacity of the limited partner of the Fund Products of which China Life Capital or any of its subsidiaries serves as the general partner, as well as the annual caps for the management fee charged by China Life Capital as the general partner or the manager of the Fund Products are as follows:

					RMB in million
	For the year	For the year	For the year
	ending	ending	ending
	31 December 2020	31 December 2021	31 December 2022
Annual cap for the subscription of the	5,000	5,000	5,000
Fund Products by the Company
Annual cap for the management fee borne	200	200	200
by the Company

In determining the annual caps for the subscription of the Fund Products, the Company has taken into account the investment budgets of fund reserve projects and other projects for the next three years as provided by China Life Capital, as well as the needs of the Company for allocation of its asset portfolios. The funds for the subscription of the Fund Products by the Company under the New Framework Agreement will come from the assets entrusted by the Company to CLI for investment and management under the Entrusted Investment and Management Agreement for Alternative Investments with Insurance Funds entered into between the Company and CLI on 31 December 2018, and will be included in the annual caps on the amount of entrusted assets under such agreement. China Life Capital is a wholly-owned subsidiary of CLI. The Entrusted Investment and Management Agreement for Alternative Investments with Insurance Funds and the continuing connected transactions contemplated thereunder have been approved by the independent shareholders of the Company on 6 June 2018. Please refer to the circular of the Company dated 18 May 2018 for further details of such transactions.

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