The insurance arm of HSBC Holdings, Europe's biggest bank, has received approval from China's insurance regulator to form a joint venture insurance company, the South China Morning Post said on Thursday.

HSBC is the first insurer to receive approval to form an insurance joint venture under the closer economic partnership arrangement between Hong Kong and the Chinese mainland, the newspaper said.

The move also marks the latest foray by the European bank into insurance markets across Asia. On Wednesday HSBC said it would open an insurance business in Taiwan Province, and earlier this year it announced it was taking stakes or forming joint ventures to tap insurance markets in India and Vietnam.

HSBC Insurance will form a 50-50 venture with National Trust, a Beijing-registered trust and investment firm, to establish individual insurance business, particularly life insurance, nationwide, it said.

The new venture, to be headquartered in Shanghai, could begin operation as early as the second half of next year, it said. "The minimum capital requirement for getting a nationwide licence is about 500 million yuan , however, the actual amount involved in the initial stage still has to be decided, it said.

The new venture will sell insurance services mainly through HSBC's banking network and National Trust's business channels, and could also distribute its insurance products through the branch network of Bank of Communications , in which HSBC holds an 18.6 percent stake, it said.

HSBC has more than 40 branches and sub-branches in Chinese mainland, it added.

Insurance premiums in Chinese mainland rose more than 20 percent to 371.8 billion yuan (US$49.5 billion) in the first half of this year.