China Life Provides Update on Status under the Holding Foreign Companies Accountable Act

Rhea-AI Summary

China Life Insurance Company Limited (LFC) received provisional designation as a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act (HFCAA) by the SEC on May 4, 2022. This designation highlights the use of a public accounting firm not subject to PCAOB inspection for its 2021 financial audit. If LFC remains under this designation for three consecutive years, its shares may be prohibited from trading in the U.S. The Company commits to complying with regulatory requirements in both China and the U.S.

Positive

• The Company is committed to compliance with laws and regulations in both China and the U.S.
• LFC continues to monitor market developments closely.

Negative

• Designation under HFCAA indicates potential trading restrictions for LFC shares if the situation persists for three years.
• Use of an uninspected registered public accounting firm raises concerns about audit reliability.

BEIJING, May 5, 2022 /PRNewswire/ -- China Life Insurance Company Limited (the "Company") (NYSE: LFC; HKSE: 2628; SSE: 601628) today provides an update on its status under the Holding Foreign Companies Accountable Act (the "HFCAA"). The Company was provisionally named by the United States Securities and Exchange Commission (the "SEC") as a Commission-Identified Issuer under the HFCAA on May 4, 2022, New York time, following the Company's filing of the annual report on Form 20-F for the fiscal year ended December 31, 2021 with the SEC on April 29, 2022.

The Company understands that the SEC made such identification pursuant to the HFCAA and its implementation rules, and this indicates that the SEC determines that the Company used a registered public accounting firm that is not currently subject to inspection by the Public Company Accounting Oversight Board of the United States (PCAOB) to issue the audit opinion for its financial statements for the fiscal year ended December 31, 2021.

In accordance with the HFCAA, the SEC shall prohibit a company's shares or American depositary shares from being traded on a national stock exchange or in the over-the-counter trading market in the United States if the company has been identified as a Commission-Identified Issuer under the HFCAA by the SEC for three consecutive years.

The Company will continue to strictly comply with applicable laws and regulations in both China and the United States and monitor market developments. The Company will timely perform its disclosure obligations pursuant to regulatory requirements.

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SOURCE China Life

FAQ

What does the HFCAA designation mean for LFC?

The HFCAA designation means LFC may face trading restrictions in the U.S. if it remains a Commission-Identified Issuer for three consecutive years.

When was LFC identified as a Commission-Identified Issuer?

LFC was identified as a Commission-Identified Issuer under the HFCAA on May 4, 2022.

What could happen if LFC does not comply with HFCAA requirements?

If LFC fails to comply with HFCAA requirements for three years, its shares could be prohibited from trading on U.S. exchanges.

What audit firm did LFC use for its 2021 financial statements?

LFC used a registered public accounting firm not subject to PCAOB inspection for the audit opinion on its 2021 financial statements.