Before the Insurance Law was launched in 1995, there were only three Chinese insurance companies and three foreign insurers in the market - The People's Insurance Company (Group) of China, Ping An, China Pacific Insurance Co, AIA, AIU and Tokio Marine & Nichido Fire Insurance Co.

The first round of the insurance entities' expansion came in 1996 when five new domestic players were given the go-ahead, including Taikang Life Insurance Co, New China Life Insurance Co, Huatai Insurance, Yong An Insurance and Sinosafe Insurance. Also at the same year, Manulife-Sinochem Life Insurance Co Ltd, the country's first joint venture insurance company between Canada's Manulife Financial and China Foreign Economic and Trade Trust & Investment Company, a member of the State-owned chemical industry giant Sinochem Corporation, was also set up.

As more insurance companies were established, regulating the industry was also on the government's agenda. On November 18, 1998, the China Insurance Regulatory Commission (CIRC), the insurance sector's regulator, was established. Before that, the People's Bank of China supervised the industry.

Among China's financial sector, the insurance industry was the first to be fully opened to foreign investors in line with China's commitments to the World Trade Organization.

Since December 11, 2004, in addition to compulsory insurance, foreign insurers have been allowed to run other areas of the insurance business, such as health insurance, group insurance and pensions. Meanwhile, all the geographical limits on foreign insurers' business expansions were also lifted. By the end of 2007, there were 43 foreign insurers from 15 countries and regions that had established 134 operations in China.