"A priority would be to improve the quality of stocks in the market, to prepare for opening them to foreign investors," said Yao Maogong, chief trader at Shanghai International Trust & Investment Co.
The Chinese government is expected to give its approval for the nation's largest insurers to raise funds through selling stocks.
Until now, all but a handful of Chinese insurers have been owned, managed and funded by the government.
People's Insurance, the nation's biggest property insurer, last week appointed China's biggest investment bank to manage a stock sale it has planned for June.
"The share sale would open the way for more insurers to tap the capital market and set an example for reforms of the industry," the insurer's general manager Tang Yunxiang said in a Jan. 9 statement on its Internet web site.
Several other insurers planning to sell stocks will be looking to People's Insurance for the cue to tap the equity market.
China Life, the nation's biggest life insurer, last week asked Credit Suisse First Boston Inc, Deutsche Bank AG and four other foreign investment banks to Beijing to help it plan a stock sale abroad.
New China Life Insurance Co, one of five Chinese insurers which aren't owned or managed by the government, is planning to sell shares on the Shanghai Stock Exchange this year.
Ping An Insurance Co, in which foreign investors such as Goldman Sachs Group Inc already own 25 percent, is also planning to sell stocks overseas.
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