Dec. 25 (Bloomberg) -- China Life Insurance Co., the underwriter of half the nation's policies, may raise as much as 28.3 billion yuan ($3.6 billion) in a domestic stock offering.

The company plans to sell shares for 18.16 yuan to 18.88 yuan apiece, Beijing-based China Life said in a statement today. The sale, and listing in Shanghai, would be the first by an insurer in the world's most populous nation and fastest-growing major economy.

The offering reflects Chinese Premier Wen Jiabao's effort to encourage the nation's largest publicly traded companies to raise funds at home. China Life's $3 billion sale of so-called `H' shares was the world's biggest initial public offering in 2003.

``China Life is a strong company that can benefit from the industry's growth,'' said Lu Yizheng, who oversees the equivalent of $700 million at Citic-Prudential Fund Management Co. in Shanghai. ``It's the government's policy to direct H share companies to raise capital in the domestic market and we'll see more of it next year.''

The proposed sale values China Life at 94.1 times to 97.8 times 2005 earnings, according to the company's statement, higher than four other Chinese insurers traded in Hong Kong. The company didn't provide a valuation against 2006 income. The price range represents a discount of between 23 percent and 26 percent of China Life's Dec. 22 closing price on the Hong Kong exchange.

China Life shares rose 3.8 percent on Dec. 22 to HK$24.35, or 7.32 times the insurer's book value. That makes it the world's sixth-most expensive publicly traded life insurance company by that measure, according to data compiled by Bloomberg.

The company's shares have risen 18 percent in Hong Kong since Dec. 15, when the China Securities Regulatory Commission approved the public offering in Shanghai.

The stock has more than tripled this year, making it the best performer in the 37-member Hang Seng China Enterprises Index tracking state-owned Chinese companies traded in Hong Kong.

China Galaxy Securities Co. and China International Capital Corp. will manage China Life's domestic share sale.

Ping An Insurance Group Co. of China and China Insurance International Holdings Co. are among domestic rivals that may also offer shares domestically.

``The pricing is reasonable because the company has considered the interests of the domestic investors,'' said Citic- Prudential's Lu. ``The domestic stock market has enough capital to welcome China Life and Ping An.''

To contact the reporter on this story: Zhang Shidong in Shanghai at at szhang5@bloomberg.net

Last Updated: December 24, 2006 23:47 EST