(Reuters) - New China Life Insurance Co Ltd, 15 percent owned by Swiss insurer Zurich Financial (ZURN.VX), has received regulatory approval for the Shanghai leg of its planned $2.6 billion Shanghai-Hong Kong dual listing, local media reported on Wednesday.

In a widely expected move, the China Securities Regulatory Commission (CSRC) has given its nod to China's third-biggest life insurer's plans to sell up to 158.54 million shares in Shanghai, the 21st Century Business Herald reported, citing sources.

The CSRC, which is expected to announce the outcome of its review later on Wednesday, was not immediately available for comment.

The company, controlled by Central Huijin, a unit of China's sovereign wealth fund, did not give a fundraising target but a source with direct knowledge of the matter has said the firm is aiming to raise about 6 billion yuan ($945.4 million) in Shanghai and 10 billion yuan in Hong Kong.

The insurer plans to sell as many as 358.4 million shares in Hong Kong, with an option to expand it by another 15 percent, according to a draft prospectus.

Companies in Greater China are lining up to sell shares in initial public offerings in coming months, braving jittery markets with deals worth more than $10 billion in total, as they take advantage of the steep market rebound in the past month.

New China Life said it would use the IPO proceeds to replenish capital, as it has not met the regulator's requirements on adequacy ratios.

The company, which competes with bigger rivals China Life (601628.SS)(2628.HK) and Ping An Insurance (601318.SS)(2318.HK), posted a 15 percent drop in net profit last year, as Chinese insurers suffer from rising competition and a volatile stock market.

New China Life has lined up a number of cornerstone investors for the deal and was planning to start premarketing the deal once regulatory approvals were granted, IFR, a Thomson Reuters publication reported last month.

China International Capital Corp and UBS Securities are the lead underwriters of the IPO.