The negotiations have been going on for the past month, and the mainland insurer is aiming for the swap to take place before its US$1 billion (HK$7.8 billion) Hong Kong initial public offering.

The IPO is tentatively set for the second half of next year.

After three years of talks, Carlyle and Prudential Financial in December paid US$410 million for a 24.98 percent stake in the life assurance division of China Pacific - China Pacific Life Insurance - China's third-largest life insurer in terms of premiums paid.

Prudential bought its stake in China Pacific Life through Carlyle, but specific details were not disclosed.

But China Pacific had "a mutual agreement with Carlyle even before the private equity firm bought that stake in the life insurer that it could, at some point, swap its stake in the unit for a smaller stake in the parent," said a person close to the situation.

Talks are at an early stage, with no guarantee Carlyle will agree, the person said.

Carlyle declined to comment, while China Pacific was not immediately available for comment.

The life unit and a general insurance arm will be the two units that will be included in China Pacific's listing of a quarter of its equity in Hong Kong.

According to people familiar with the deal, the insurance group was meeting banks in Shanghai Tuesday to select underwriters to lead the deal.

Earlier in the year, the group chose UBS for the deal.

"They've changed the management, which is why they're redoing the mandate," one person said.

Gao Guofu, general manager of Shanghai Chengtou Corp, a Shanghai municipal government-controlled construction investment company, was named party secretary of China Pacific Insurance in early August.

As the top Communist Party official at China Pacific Insurance, Gao becomes the company's most senior executive.

In most cases, the party secretary at state-run companies also serves as company chairman. Wang Guoliang, who was chairman for eight years, left in August.

In February, general insurer Insurance Australia Group said it signed an "exclusive memorandum of understanding" with another of the group's units, China Pacific Property Insurance, to negotiate buying a 24.9 percent stake. The deal is still awaiting regulatory approval.

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