SHANGHAI, Jan 30 MetLife's China venture said on Tuesday it is in talks to form a busines

SHANGHAI, Jan 30 (Reuters) MetLife's China venture said on Tuesday it is in talks to form a business partnership with Citigroup Inc. to boost its insurance sales in the country.

Bob Pei, chief executive of United MetLife Insurance Co., a 50/50 venture between MetLife, the top U.S. life insurer, and Shanghai Alliance Investment Ltd., told Reuters the insurance venture was considering selling its products through Citigroup's branches in China this year.

''We are still in talks with Citigroup for such a plan, and we hope local consumers can buy our insurance products at Citigroup's counters after the bank is registered as a local bank,'' said Pei, a former Citigroup executive.

Last month, China granted approvals to nine foreign banks, including Citigroup, to prepare for local incorporation -- a step that must be taken if the foreign banks want to provide full-fledged local currency services to Chinese residents.

MetLife has already teamed up with Chinese banks, including Industrial and Commercial Bank and Pudong Development Bank, to help the New York-based insurer sell policies in China, Pei said.

MetLife became the largest life insurance seller in the United States after purchasing Travelers Life&Annuity from Citigroup for $11.8 billion in July 2005.

Shanghai-based United MetLife was launched in 2006 with the help of Shanghai Alliance, a major investment arm of the Shanghai city government and is run by Jiang Mianheng, son of former Chinese President Jiang Zemin.

Pei said he was satisfied with the performance of the joint venture in 2006, when it collected about 160 million yuan ($20.57 million) in insurance premiums.

''The bank-insurance model is a very important sales channel to us as we don't have as big a network as those banks have in China,'' said Pei.

''But we don't rely on bancassurance for sales only,'' he said, adding that United MetLife was also promoting its insurance sales through telephone marketing and trained agents.

BEYOND SHANGHAI China has become a huge magnet for foreign insurers due to its growth potential. Among China's 1.3 billion people, fewer than 4 percent have life insurance coverage.

Foreign insurers such as AIG and AXA are gaining wider access to the market since China joined the World Trade Organization in 2001.

China's ''Big Three'' domestic insurers, including the country's largest life underwriter, China Life, still control more than 50 percent of the nascent insurance market.

United MetLife aims to set up branches in at least two mainland cities, including Nanjing, capital of Jiangsu province, near Shanghai, he said.

The Nanjing branch will be set up by the end of March, he said but declined to name the other city.

''We are going to expand beyond Shanghai,'' Pei said.

($1=7.77 Yuan) REUTERS PV HS1730