Nov. 30 (Bloomberg) -- Chinese insurers will use their overseas investment quota mostly to buy shares in the Hong Kong market, the country's insurance regulator said today.

Twenty insurers, including China Life Insurance Co., Ping An Insurance (Group) Co., PICC Property & Casualty Co. and China Reinsurance Co., have received licenses for the so-called qualified domestic institutional investor, or QDII, program, said Yuan Li, spokesman for the China Insurance Regulatory Commission, at a quarterly press briefing in Beijing today.

There is no cap on the QDII program for insurers, he said, without elaborating.

China's insurance watchdog wants firms to invest more of their $393 billion of assets overseas after the nation's CSI 300 Index more than doubled this year, sparking concerns of a stock bubble.

Ping An announced yesterday that it bought a 4.2 percent stake in Fortis, Belgium's biggest financial-services company, for 1.81 billion euros ($2.7 billion), the largest overseas acquisition by a Chinese insurer.

Insurance companies are also being encouraged to make overseas acquisitions, Yuan said today.

The nation's financial institutions, including insurers, banks and fund management firms, have been approved to invest more than $40 billion overseas under the QDII program.

In July, China's industry regulator raised the cap for insurers' overseas investments to 15 percent of assets from 5 percent. Insurers may invest in products including stocks, equity funds, bonds and currency-market funds, according to rules issued that month. They may also buy equity stakes abroad.

China's government on Aug. 20 announced a pilot program under which nationals with a Bank of China Ltd. account in Tianjin would be allowed to buy Hong Kong equities, spurring the city's Hang Seng Index to surge as much as 55 percent since then.

To contact the reporter on this story: Josephine Lau in Beijing at jlau22@bloomberg.net

Last Updated: November 29, 2007 23:50 EST