15:35     CHINA INSURANCE<00966> - Announcement (2)                           

    4.        Other principal terms of the Agreement                          
                                                                              
    Under the Agreement, the Properties will be sold on an "as is" basis.     
    The Purchaser agreed to handle and complete all the relevant legal        
    procedures in relation to the transfer of ownership of the Properties     
    (including, if the Purchaser subsequently sells any part of the           
    Properties to one or more third parties, the relevant legal procedures    
    in relation to transfer of ownership from the Vendor to such third        
    parties), and to bear all the costs and expenses in relation to           
    transfer of ownership.                                                    
                                                                              
    The Purchaser and the Vendor may enter into supplemental agreements to    
    govern terms and conditions relating to transfer of any part of the       
    Properties which is not covered in the Agreement.                         
                                                                              
    REASONS FOR AND BENEFITS OF THE DISPOSAL                                  
                                                                              
    The Vendor is principally engaged in reinsurance business and property    
    holding is not its core business. The Group intends to make use of the    
    proceeds received from the Disposal as its general working capital and    
    expects to invest the proceeds in appropriate assets to optimize its      
    returns on the investments held.                                          
                                                                              
    The Directors (including the independent non-executive Directors)         
    consider that the Disposal is in the ordinary and usual course of         
    business of the Group, and that the terms of the Disposal are on          
    normal commercial terms, fair and reasonable, on terms no less            
    favourable to the Group than those available from independent third       
    parties, and in the interests of the Group and the shareholders of the    
    Company as a whole.                                                       
                                                                              
    As the Properties are disposed of at its net book value as at 31          
    December 2004, the Disposal will not result in any gain or loss to the    
    Group.                                                                    
                                                                              
    USE OF PROCEEDS                                                           
                                                                              
    The net proceeds from the Disposal will be used by the Group as           
    general working capital.                                                  
                                                                              
    NON-EXEMPT CONNECTED TRANSACTION                                          
                                                                              
    As at the date of this announcement, CIHK is a substantial shareholder    
    holding approximately 54.54% interest in the Company. Since the           
    Purchaser is a subsidiary of CIHK, the Purchaser is an associate of       
    CIHK and thus a connected person of the Company under the Listing         
    Rules. In relation to the Disposal, since each of the applicable          
    percentage ratios calculated pursuant to the Listing Rules is less        
    than 2.5%, the Disposal constitutes a non-exempt connected transaction    
    of the Company under Listing Rule 14A.32. The Company is only subject     
    to the reporting and announcement requirements set out in Listing         
    Rules 14A.45 to 14A.47 and is exempt from independent shareholders'       
    approval requirements. Details of the Disposal will be published in       
    the next annual report of the Company.                                    
                                                                              
    GENERAL                                                                   
                                                                              
    The Vendor is principally engaged in the reinsurance business. The        
    principal activity of the Company is investment holding. The principal    
    activities of the Group are the underwriting of all classes of non-       
    life and life reinsurance, and direct life insurance. The Group also      
    carries on asset management, insurance intermediaries business and to     
    support its insurance activities, holds money market, fixed income,       
    equity and property investments. The Purchaser is engaged in the          
    business of investment, property mortgage and money lending.              
                                                                              
    DEFINITIONS                                                               
                                                                              
    "Agreement"        the agreement dated 10 May 2005 entered into           
    between the Vendor and Purchaser in relation to the Disposal              
                                                                              
    "associate"        has the meaning ascribed to it under the Listing       
    Rules                                                                     
                                                                              
    "Board"        the board of Directors                                     
                                                                              
    "CIHK"        China Insurance H.K. (Holdings) Company Limited, a          
    company incorporated in Hong Kong with limited liability and a            
    substantial shareholder of the Company which holds approximately          
    54.54% interest in the Company as at the date of this announcement        
                                                                              
    "Company"        China Insurance International Holdings Company