Nov. 26 (Bloomberg) -- ING Groep NV's Chinese insurance venture filed a complaint with regulators about Citigroup Inc.'s local insurance business hiring its employees.

CitiInsurance Life Insurance Co., which plans to start business as early as March, has hired sales, training and information-technology managers from Pacific Antai Life Insurance Co., said Le Jianjun, a spokesman at ING's China venture. Pacific Antai has complained to regulators in Shanghai. Citigroup's spokeswoman Wan Li said recruitment is fully market-oriented, and declined to comment further.

``Such disputes happened in the past, but this is the worst scenario I have even seen,'' said Shen Jianzhong, an official at the Shanghai Insurance Association. ``Such conflict is inevitable as more insurers are setting up. If it's too nasty, the interests of policy holders will be affected.''

Citigroup, American International Group Inc. and other overseas life insurers are stepping up investment in China, where the government will scrap all business and geographical restrictions on them next month, part of a pledge made when China entered the World Trade Organization three years ago.

Allianz AG, Germany's largest insurer, said its China venture will expand its business outside Shanghai to at least ten new cities by 2010, as well as hire more managers and salespeople. China this year has licensed 11 insurers in Shanghai to bolster the local industry ahead of fiercer competition.

``It is difficult to recruit suitable managers for our planned branches,'' said Hans-Joerg Probst, deputy General Manager of Allianz Dazhong yesterday. ``They need to understand the local markets and fit our corporate culture.''

New insurers usually woo insurance professionals from existing rivals by paying better compensation and offering higher positions, in a bid to gain market share in the shortest time possible.

To contact the reporter on this story: Samuel Shen in Shanghai Sshen3@bloomberg.net

Last Updated: November 26, 2004 00:31 EST