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Foreign Exchange Management (Insurance) Regulations, 2015

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..... revised notification has come into force 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 polic .....

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..... 3. General/ Health Insurance policies from Insurers outside India. i. A person resident in India may take or continue to hold a health insurance policy issued by an insurer outside India provided aggregate remittance including amount of premium does not exceed the limits prescribed by RBI under the Liberalised Remittance Scheme (LRS) from time to time. ii. Units located in SEZs may take or continue to hold general/health insurance 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 t .....

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..... claims is assured in foreign currency subject to following conditions. i) The claim has been admitted by the competent authority of the insurer; ii) The claim has been settled as per the surveyor s report wherever applicable, and other substantiating documents; iii) Claims on account of reinsurance are being lodged with the reinsurers and will be received as per reinsurance agreement; iv) The remittance is being made under the policy to the beneficiary who is 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 .....

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..... rers in accordance with the terms and conditions laid down by their Boards. 10. Remittance of Reinsurance Premium by IRDAI licensed brokers Wherever IRDAI licensed brokers arrange the reinsurance on behalf of insurers, brokers may remit the premium through the branch of the authorised dealer designated by the insurer in terms of para 9 above subject to the production of undernoted documents: i) Relative debit notes from overseas insurance company and/or Broker. ii) Detailed statement 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 o .....

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..... er shall repatriate to India through normal banking channels, the maturity proceeds or amount of any claim due on the policy, within a period of seven days from the receipt thereof. C. Life insurance policies by insurer in India. 1. Issuance of policies and collection of premium. a) Residents (i) Policies may be issued in foreign currency to resident persons of Indian nationality or origin who have returned to India after being resident outside India, provided the premium are paid out of remittances from 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 .....

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..... /maturity proceeds/ surrender value in respect of rupee life insurance policies issued to Indians resident outside India for which premium have been collected in non-repatriable rupees may be paid only in rupees by credit to NRO account of the beneficiary. This would also apply in cases of death claims being settled in favour of resident outside India assignees/ nominees. (v) Claims/maturity proceeds/ surrender value in respect of rupee policies issued to foreign nationals not permanently resident in India may be paid in rupees or may 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 .....

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