China's top banking and insurance regulator announced on Wednesday it had recently given approval for the establishment of a new pension insurance company.

Registered in Beijing with a registered capital of 11.15 billion yuan ($1.72 billion), the to-be-formed pension insurance company has 17 initiators, including 10 commercial banks' wealth management subsidiaries, the China Banking and Insurance Regulatory Commission said .

The banks' wealth management subsidiaries take a total stake of 66.81 percent, the Insurance Association of China said in an announcement on Aug 18.

Setting up the new pension insurance company is part of China's efforts to further promote the development of its third-pillar pension market and encourage the participation of more market entities, including banks, experts said.

The insurer may aim to increase the supply of the old-age financial market in China by integrating insurance with wealth management solutions, said Wang Guojun, a finance professor at the University of International Business and Economics in Beijing.

The wealth management subsidiaries holding shares of the company will be allowed to design wealth management products that also function to protect clients against certain risks, including the loss of income due to retirement, Wang said.

Whether the new insurer will grow into a large business depends on policies to further promote the development of financial services for the purpose of providing old-age security, he said.

The number of people aged 65 and above nationwide reached 190.64 million, accounting for 13.5 percent of the population of the Chinese mainland, according to the 2020 results of the country's census.

Given the circumstances, China should build its third-pillar pension market into a market shared by various types of financial institutions, including insurers, banks, trust companies and fund management companies, said Yang Zeyun, a finance lecturer at Beijing Union University.