Don't believe everything you read in the South China Morning Post.  A Big 4 auditor sent an article to us and said it's causing problems because the SCMP got the facts backward.  China is making dual-listed insurers use China standards.  We can't link to it because the SCMP is behind a paywall, but here's the dead-wrong headline and lede:

Dual-listed insurers to adopt HK accounting
New rule will eliminate differences in results
Daniel Ren in Shanghai
Dec 31, 2009

The mainland insurance regulator will require insurers trading on both the Hong Kong and
Shanghai stock exchanges to report their earnings this year using a single set of accounting standards.  Under the rule announced yesterday, mainland insurers including China Life (SEHK: 2628, announcements, news) Insurance, Ping An Insurance (Group) (SEHK: 2318) and China Pacific Insurance Group will report using Hong Kong accounting standards. The move is designed to bring the mainland's accounting standards in line with international practice.

In fact, China Accounting Standards (CAS) and IFRS are almost completely converged now, but a few differences remain.  One of them is the treatment of policy acquisition costs by insurers.  Hong Kong standards allow them to be capitalized and amortized.  CAS require them to be expensed when
incurred.

Chinese insurance companies dual-listed in China and in Hong Kong have been reporting one set of numbers in the statements for investors in China listed A shares and another in their statements for Hong Kong listed H shares. They capitalized the costs for A share reporting and expensed them for A share reporting. 

As a result, H share statements show more capital than A share statements -- never mind the income statement impact.  Chinese authorities are disallowing that as of the 2009 reporting year.

The capital impact will be huge for some insurers, with billions of dollars disappearing from the H share balance sheets.  Chinese regulators required the insurers to disclose the potential impact in their 2008 annual reports, so this should't come as a complete surprise.  The easiest way to get the annual reports is to use the search feature at  HKEXNews.  Sometimes the company websites are slow.  One thing the SCMP got right -- the names of the companies and their codes. 

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