China plans to set up an insurance exchange in Shanghai as part of efforts to build the city into an international financial centre, the state media said on Monday, citing top insurance regulator Wu Dingfu.

Wu, chairman of the China Insurance Regulatory Commission (CIRC), also said there was limited scope to increase the proportion of assets insurers can use to buy stocks and mutual funds, the official China Securities Journal said.

However, there was significant room to lift the ceiling on direct financing by insurance companies, the official newspaper said.

Wu made the remarks on the sidelines of the annual meeting of parliament.

Wu did not give details on the planned Shanghai insurance exchange, but previous local media reports said that the exchange would offer risk securitisation products, catastrophe bonds and insurance derivatives at a later date.

China currently limits the proportion of their assets that insurers may invest in stocks and equity funds combined to a maximum of 25 percent.

The CIRC is also considering raising the ceiling on investments in unsecured bonds, Thomson Reuters publication IFR reported last week, which could see more cash flowing into the corporate debt market.