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TMI BlogForeign Exchange Management (Insurance) Regulations, 2015X X X X Extracts X X X X X X X X Extracts X X X X ..... rce with effect from December 29, 2015. 2. The Memorandum of Foreign Exchange Management Regulations relating to General/Health Insurance (GIM) and Life Insurance (LIM) in India have also been suitably modified and are annexed at Annex I and Annex II, respectively. 3. AD Category I banks may bring the contents of the circular to the notice of their constituents and customers concerned. 4. The Master Direction No. 9 dated January 01, 2016 on Insurance, is being updated to reflect the changes. 5. The Directions contained in this circular have been issued under Section 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law. Yours faithfully, (Shekhar Bhatnagar) Chief General Manager-in-charge Annex I Major changes effected in the revised General/ Health Insurance Manual (GIM) Sl. No. Subject matter Changes 1. Policies allowed to be placed in foreign exchange. All general/health insurance policies permitted by IRDAI are allowed to be placed in foreign exchange. No RBI permission is required for issuance/renewal of any insurance policy. 2. Payment of insurance pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policies from insurers outside India subject to IRDAI Guidelines and Central Government rules provided the premium is paid by the units out of their foreign exchange balances. iii. No person shall take out or renew any policy of insurance in respect of any property in India or any ship or other vessel or aircraft registered in India with an insurer whose principal place of business is outside India without permission of Insurance Regulatory and Development Authority of India (IRDAI). iv. A person resident in India may take or continue to hold a general /health insurance policy other than the ones referred in (i) to (iii) above, issued by an insurer outside India, provided that, the policy is held, under a specific or general permission of the Central Government. v. A person resident in India may continue to hold any general/health insurance policy issued by an insurer outside India when such person was resident outside India. In case the premium due on a general/health insurance policy has been paid by making remittance from India, the policy holder shall repatriate to India through normal banking channels, the maturity proceeds or amount of any claim due on the policy, if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident outside India. For resident beneficiaries the claim may be settled in INR equivalent of foreign currency due. Under no circumstances payment in foreign currency be made to a resident beneficiary; v) In case of settlement of claims of import into India, Insurance company is satisfied that:- (a) Remittance in foreign exchange is not already made by Importer and (b) If Import is made against Import Licence, the amount of insurance policy premium is endorsed on the import licence; vi) In case of settlement of insurance claims of export from India, Insurance company is satisfied that the payment is received in foreign exchange by the Indian exporter; vii) In case of settlement of insurance claims in respect of assets located outside India owned by residents of India, permission of Reserve Bank of India for holding the property had been obtained, (wherever necessary); viii) Claims arising outside India against policies issued under Employers' Liability Act and Merchant Shipping Act may be paid in appropriate foreign currency. Remittances will be allowed for meeting specific claims on application by the Insurers furnishing full details of the claims; ix) In case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of premium settled by the individual insurer, along with a certificate to the effect that the amount of reinsurance business is within the overall limit approved by the insurer's Board and that the risks covered under the reinsurance arrangements are within the scope of the Reinsurance Programme, approved by the insurer's Board in compliance with IRDAI Regulations. iii) A certificate from the Chartered Accountant of the broker, prepared on the basis of certificates and statements obtained from the insurers, to the effect that the proposed remittance of reinsurance premium sought, is in agreement with the various statements/certificates obtained from the insurer/s. iv) Copy of approval letter from IRDAI for placing business outside India by direct insurance brokers. 11. Foreign Currency Accounts Abroad Insurers may open, hold and maintain with a bank outside India foreign currency accounts for facilitating transactions and expenses relating/incidental to general/health insurance / reinsurance business undertaken in foreign countries in accordance with regulations laid down. Insurers should endeavour to keep in their foreign currency accounts only the minimum balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom foreign currency funds held by them abroad or from their Resident Foreign Currency (RFC) account with authorised dealers in India. (ii) Policies denominated in foreign currency or rupees may be issued to foreign nationals not permanently resident in India provided the premium is paid out of foreign currency funds or from their income earned in India or repatriable superannuation/ pension fund in India. (iii) Conversion of Rupee policies on the lives of persons resident in India into foreign currency or transfer of records of such policies to a country outside India is not permitted without prior approval of Reserve Bank. b) Residents outside India (i) Insurer in India may issue policies denominated in foreign currency through their offices in India or abroad to residents outside India provided the premium are collected in foreign currency from abroad or out of NRE/FCNR accounts of the insured or his family members held in India. (ii) For policies denominated in rupees issued to residents outside India, funds held in NRO accounts can be accepted towards payment of premium. (iii) Policies issued to Indian nationals and persons of Indian origin resident abroad by overs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be allowed to be remitted abroad, if the claimant so desires. 3. Commission to overseas Agents Insurer in India may pay commission to their agents who are permanently resident outside India regardless of the fact that part of the business booked by them may be on the lives of persons resident in India and relative premium are paid in rupees in India. Remittances of commission from India to such agents abroad will be governed by instructions contained in Government Notification No.G.S.R. 381(E) dated May 3, 2000 relating to Current Account transactions as amended from time to time. 4. Reinsurance In terms of the existing instructions, reinsurance arrangements for the insurance companies registered with IRDAI are to be decided by the companies themselves on an annual basis which is to be approved by the respective insurance company's Board in compliance with IRDAI Regulations. Authorised dealers, designated by these insurance companies may allow remittances falling due under such approved reinsurance arrangements by the insurer in accordance with the terms and conditions laid down by their Boards. 5. Foreign Currency accounts Insurer in India may open, hold and maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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