The only remaining restraint is that foreign insurers must team up with Chinese partners and the stake ceiling allowed by the regulator for foreign insurers is 50 percent. However, because of historical reasons, AIG and Allianz beat the regulator to the altar - so they could set their own terms of endearment. AIG runs its wholly owned subsidiaries in China while Allianz has a controlling - 51 per cent - stake in the joint venture.

With the sector growing at an average of 30 percent annually in the past two decades, an increasing number of foreign insurance giants have hopped on the bandwagon, but many don't find it easy to deal with this specific rule.

While the regulation attempts to protect China's emerging insurance sector, it is also a significant factor in the rising divorce rate among joint ventures.

Commonwealth Bank of Australia, the foreign shareholder in China Life-CMG Assurance Co, is in talks to partner a large-scale Chinese enterprise. The talks stem from the fact that the controlling shareholder, China Life Insurance Co plans to sell its stake in the joint venture to avoid competing with the joint venture as both are involved in the life insurance business.

Sources said that Bank of Communications is contacting China Life-CMG Assurance about taking the 51 percent stake.

Pacific-Antai Life Insurance Co, a joint venture between ING Group and Beijing Capital Group, also faces a similar stake swap.