NCL's external auditors in 2004 and 2005, including PwC and Deloitte, had to delay their audit reports due to difficulty pinning down some of NCL's investments.

China's insurance regulator places strict rules on capital utilization for insurers, which are discouraged from making risky investments. And although the regulator issued a rule in March allowing some qualified insurers to make indirect investments into infrastructure projects, it is still in the pilot phase.

Life insurers cannot invest more than 5 per cent of their total assets, and investments in the real estate sector are currently prohibited.

"Guan Guoliang acknowledged his mistake and resigned under pressure from the insurance watchdog and the weight of public opinion," Xinhua News Agency quoted an insider as saying.

Guan, a graduate of Dongbei University of Finance and Economics was elected chairman of NCL in 1998 when he was 38. His tenure was due to end on December 13, 2005. But due to an internal power struggle, the board had not elected a new chairman.

Established in 1996, NCL is the country's fourth-largest life insurer after China Life Insurance, Ping An Insurance and China Pacific Insurance. With a registered capital of 1.2 billion yuan (US$154 million), NCL posted strong growth this year. Its premiums hit a record high of nearly 26 billion yuan (US$3.33 billion) by December 25 this year, up 24 per cent year-on-year.

The company has 15 shareholders, including some renowned State-owned enterprises and international big names in the insurance sector, such as Baosteel, Shenhua Coal, Zurich Insurance, IFC and ING.

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