SHANGHAI (Reuters) - China has allowed insurance companies to invest in venture capital funds, a move aimed at supporting the country's small- and medium-sized enterprises (SME), the insurance regulator said on Monday.

The China Insurance Regulatory Commission said in a statement posted on its website that insurers would be allowed to invest in selected venture capital that met regulatory requirements.

Previously, insurers were allowed to invest in SMEs via the stock market and asset-backed projects. Their total investment in the sector stands at over 50 billion yuan, the official Shanghai Securities News reported.

China has been gradually widening insurers' investment channels to help them spread their risk through diversification.

Earlier in the year, China allowed insurers to invest in firms listed on the Nasdaq-style ChiNext board on the Shenzhen stock exchange.