China Planning Key Step in Anbang Sale by Removing Toxic Assets

The Chinese government is taking a major step in its efforts to sell a strategic stake in Anbang Insurance Group Co., the acquisitive insurer it took over last year amid a fraud investigation into its former chairman.

Under a plan overseen by the industry regulator, most of Anbang’s businesses will be moved into a newly created company called Dajia Baoxian, people with knowledge of the matter said. Some policies sold by Anbang’s property insurance unit won’t be transferred to the new entity, the people said, asking not to be identified discussing sensitive information.

To make Anbang’s business more palatable to ...