China's insurance regulator will liberalise the marine insurance industry in the country and is using the Shanghai free-trade zone as a testbed, local reports said.

The South China Morning Post quoted Shanghai-based analyst Chen Xingyu as saying that the China Insurance Regulatory Commission's recent move to cut red tape would streamline the supervision and operation of the marine insurance business in the trade zone.

The regulator had announced last month that insurance companies could apply for approvals for new marine insurance products from the Shanghai Institute of Marine Insurance, for the first time allowing insurers to file applications with an industry association rather than the regulator.

Insurers in the free-trade zone will also be able to set up branches in the zone without prior approval, which is also no longer required for the appointment of senior executives in branches in the zone. "The move is a clear step to cutting red tape and delegating power, which is positive to the marine insurance business, as more flexibility is allowed," Chen was quoted as saying.