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The Agricultural Bank of China, one of the Big Four banks in China, has received approval to purchase a 51 percent stake in Jiahe Life Insurance Co Ltd, according to an ABC statement released on Tuesday.

It is the largest cooperation between banks and insurance companies by transaction value so far in China, National Business Daily reported on Wednesday.

Jiahe Life will be renamed Agricultural Bank Life and will also relocate its headquarters in Beijing.

The two sides had already signed an equity acquisition agreement on February 11, last year. Jiahe Life is selling 1.04 billion private placement shares to the Agricultural Bank with a total capital value of 2.59 billion yuan ($470 million). Each share is costing 2.5 yuan.

The transaction was approved after 21 months by China Banking Regulatory Commission and China Insurance Regulatory Commission.

The acquisition has attracted much attention because the Agricultural Bank ranks first among banks as an insurance agent both by commission income and by market share.

The bank realized premiums of 54.39 billion yuan just for new insurance policies and earned fee incomes of 2.4 billion yuan in the first half of this year.

Other insurance companies will be affected by the acquisition.

Founded in December 2005, Jiahe Life is a national life insurance company headquartered in Beijing. It has 273 branches around China.

Solvency was a big problem that blocked Jiahe’s development. According to statistics, its solvency was only 71.26 percent in 2010, far lower than the regulated level of 150 percent. However in 2011, its solvency hit minus 86 percent.

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