The China Insurance Regulatory Commission said on Wednesday that it is working closely with the Ministry of Finance on regulations for individual tax-deferred commercial endowment insurance, in the run-up to a pilot program which is to take place before its wider introduction.

Endowment insurance is a form of life insurance, involving a payment plan, that pays the face value to the insured either at the end of the contract period or on the insured's demise.

Tax-deferred endowment insurance is where the insured pays for premiums before tax payments and pays their personal income tax only after the endowment benefits are collected.

"The time and condition of having the pilot is mature and we are working hard to perfect regulations, to guarantee fairness and funds security," said Yuan Xucheng, director of the CIRC's life insurance supervision department.

The State Council on Tuesday released a statement on stepping up the pace of developing commercial endowment insurance, in which it confirmed that an individual tax-deferred commercial endowment insurance pilot will start before the end of 2017.

Yuan said the CIRC would select qualified insurance companies to participate in the pilot, through a strict vetting and approval process.

Hao Yansu, director of the school of insurance at the Central University of Finance and Economics, said carrying out a tax-deferred commercial endowment insurance pilot was a welcome development, but it should be convenient for people to join.

"As there are many ministries and commissions involved in the pilot, the procedures can be complicated," Hao said.

"It is necessary to develop internet operations to facilitate insurance applicants."

Hao also said it was important to encourage insurance companies to participate in the pilot.

According to Yuan, China's aging population has become a serious issue. By the end of 2016, China had 230 million people aged over 60, accounting for 16.7 percent of the nation's population.

"Developing commercial endowment insurance is significant for perfecting China's multi-level aging security system, dealing with aging population issue and promoting social stability," said the statement released by the State Council.

The statement said China will encourage the innovation of commercial endowment insurance products and services, supporting insurance institutions to develop personalized and differentiated insurance products for individuals, families and enterprises.

"China will promote commercial endowment insurance funds, for them to have a safe and steady operation," the statement said.

"Commercial endowment insurance funds can participate in the nation's important programs steadily and make overseas investments in a prudent way."