HONG KONG (Reuters) -China has approved separate insurance units to be set up by BNP Paribas and Prudential Financial ( PRU ), a regulator said on Friday, as it looks to further open up the world's second-largest insurance market to foreign companies.

China's National Financial Regulatory Administration (NFRA) has approved the creation of a joint venture between BNP and Volkswagen Financial Services, Li Yunze, the head of the regulator said at a financial forum in Beijing.

U.S.-based Prudential Financial ( PRU ) has also been approved to set up an insurance asset management firm in Beijing, Li said.

"Next, we will support Beijing's financial opening up as always," Li added.

Insurance has been one of the fastest-growing financial sectors in China. Total insurance assets reached $4.2 trillion at the end of 2023, according to official data, second only to the United States.

Separately, China's securities regulator said at the same forum that it encouraged foreign institutions to invest and do business in the country.