China Postal Group (CPG) plans to set up an insurance company which will be the country's first insurer with sole investment from the postal sector, Wu Dingfu, chairman of China Insurance Regulatory Commission (CIRC), said Tuesday.

Wu said the commission is currently dealing with the application submitted by the CPG for establishing an insurance company.

The company would be set up by the CPG and its plentiful subsidiaries across the country, and would provide insurance services involving relatively small amount of money as some Japanese insurers do, according to Wu.

About 20,000 insurance companies operating in Japan are mainly engaged in one-year life and medicare insurance and two-year property insurance, which usually set an upper limit to the compensation amount.

China's postal sector, boasting 36,000 outlets nationwide, simply serves as the sales agent of insurance products for the moment, but was urged to explore further cooperation with the insurance sector.

Statistics show that nearly 14 percent of the country's insurance agents come from the postal sector by the end of March.

The CPG has earlier made a step toward the financial reform in establishing the China Postal Savings Bank with total registered capital of 20 billion yuan (2.6 billion U.S. dollars), which becomes the country's fifth largest bank.