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China's insurance funds will be allowed to be invested indirectly in infrastructure projects, as well as in the Bohai Industry Investment Fund, a senior official of the insurance watchdog said here Friday.

"This is another major breakthrough in expanding investment channels for insurance funds," said Wu Dingfu, president of the China Insurance Regulatory Commission (CIRC), at a national insurance work conference held here.

The move, approved by the State Council recently, will provide great support for the insurance capital, Wu said.

He added the CIRC adopted various measures to expand investment channels for insurance funds in 2005, such as allowing insurance funds to invest directly in the stock market and increasing commercial banks' financial bonds and short-term finance bonds.

The expansion of investment channels will be of great significance in helping bring into full play the role of the insurance industry in raising funds, supporting the nation's economic construction and enhancing the influence of the industry in the country's national economic development, Wu noted.

However, he said the policy should be implemented based on risk control and carried out steadily.

CIRC statistics showed the total assets of China's insurance companies have surpassed 1.5 trillion yuan, or 324.01 billion yuan more than early last year,

Wu revealed that insurance capital's returns increased steadily last year, with an investment return rate of 3.6 percent, up 0.7 percentage points from 2004.