China will allow shareholders in the country's insurers to own stakes as large as 51 percent, increasing the limit to attract strategic investors and boost the industry's capital strength.

The combined holdings of a single investor and its affiliated parties can exceed 20 percent if they meet requirements including total assets of at least 10 billion yuan ($1.6 billion), the China Insurance Regulatory Commission said on its website on Tuesday.

"Appropriately" loosening equity holdings in Chinese insurers can help companies attract strategic investors, enhance shareholder responsibilities and improve the efficiency of corporate governance, the regulator said.