Bank of Communications Co Ltd and Bank of Beijing Co Ltd have filed applications to invest in insurance companies, the official China Securities Journal reported on Monday, citing sources close to the matter.

The report added that the China Banking Regulatory Commission and China Insurance Regulatory Commission will sign a memorandum of understanding soon on investment in insurance firms by banks, with detailed implementation guidelines expected shortly afterward.

Last week, Caijing magazine reported that China's State Council, or cabinet, has given its approval for commercial banks to obtain stakes in insurance companies. The report said regulators will select three or four banks for trial investments in insurance firms.

China has long kept the banking, securities and insurance sectors separate, fearing that combined operations would increase the risks in the financial system. But it has begun relaxing regulations recently, allowing some overlap in operations for financial holding companies.

A separate source told the China Securities Journal that China Construction Bank Corp has withdrawn plans to set up an insurance joint venture with Ping An Insurance (Group) Co of China Ltd.

The bank also plans to submit an application to invest in existing insurance companies, the report added.