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Foreign Exchange Management (Insurance) Regulations 2015

FEMA - 18 [(1)/12 (R)] - Dated:- 17-11-2016 - RBI/2016-17/137 A.P. (DIR New Series) Circular No.18 [(1)/12 (R)] November 17, 2016 To All Category - I Authorised Dealer Banks Madam/ Sir Attention of Authorised Dealers (ADs) is invited to A.D (M.A. Series) Circular No. 11 dated May 16, 2000 in terms of which ADs were advised of various Rules, Regulations, Notifications/ Directions issued under the Foreign Exchange Management Act, 1999 (hereinafter referred to as the Act). On a review, it is felt n .....

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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 chang .....

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lth 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 premium by Indian Resident Payment of insurance premium in foreign currency by Indian Resident is no longer required irrespective of currency for settlement of claim. 3. Payment of insurance premium by Resident outside India Resident outside India may obtain general/health insurance policy on payment of insuran .....

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vestments abroad Overseas investment by Insurance companies enabled. 6. Quarterly report by insurance companies on settlement of claims of policies issued with permission of RBI. Quarterly Report discontinued. GIM Memorandum of Foreign Exchange Management Regulations Relating to General /Health Insurance in India 1. Definitions i. "Person resident in India" and "Foreign Currency" will have the same meaning as defined under Foreign Exchange Management Act, 1999. ii. Insurers m .....

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er or an authorised money-changer. Appropriate documentary evidence may be insisted upon at the time of accepting payment. 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 S .....

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ry 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 .....

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is required to be obtained only from the Insurers in India. 5. General/ Health Insurance policies by Indian Residents Resident of India may take general/health insurance policy permitted by IRDAI from Indian insurer on payment of premium in INR, where claims arising under the policies outside India are to be settled in foreign currency. 6. General/Health Insurance policies by Residents outside India. Resident outside India may take general/health insurance policy as permitted by IRDAI from Indi .....

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, Nepalese and Bhutanese firms, companies or other organizations in these two countries are treated as resident in India for purpose of transactions in INR. Payment of claims to such persons against general/health insurance policies may be freely made in INR. Payments in foreign currency towards claims under general/health insurance policies will require prior approval of Reserve Bank, except where premium thereon was also collected in foreign currency. 8. Settlement of claims in foreign currenc .....

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s 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 .....

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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 cashless international health insurance products remittances may be allowed to the hospital which has provided the treatment/Third Party Administrator with which the insurer or the hospi .....

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of Indian exporters even in cases where title to the goods has passed to foreign buyer, if a request to that effect has been made by the claimant resident outside India. A certificate indicating full particulars of the transaction including number of relative EDF form (wherever applicable) and amount paid in settlement of claim should be issued to the exporter to enable the latter to obtain necessary approval from Reserve Bank for making replacement shipments; (c) Authorised dealers have been p .....

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e respective insurer's Board in compliance with IRDAI Regulations. Authorised dealer, designated by these insurers may allow remittances falling due under such approved reinsurance arrangements by the insurers 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 deale .....

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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 Curren .....

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nvestments Abroad General/health insurers may invest freely, out of their funds abroad, without prior approval of Reserve Bank of India subject to the following conditions: (i) Statutory requirement of host country concerned; and, (ii) IRDAI guidelines, if any, and in accordance with applicable FEMA regulations relating to investment abroad. Annex II LIM Memorandum of Foreign Exchange Management Regulations Relating to Life Insurance in India A. Definitions i. "Person resident in India" .....

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which does not exceed three years. iv. Insurer in India means Life insurers registered with Insurance Regulatory and Development Authority of India (IRDAI) to carry out Life insurance business in India. B. Life insurance policy from insurer outside India by Residents i. A person resident in India may take or continue to hold a life insurance policy issued by an insurer outside India, provided that the policy is held under a specific or general permission of the Reserve Bank of India. ii. A perso .....

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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 permanent .....

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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 overseas offices of Insurer in India may be transferred .....

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ted by authorised dealers provided the policy holder undertakes to repatriate to India the maturity proceeds or any claim amounts due on the policy through normal banking channels with in a period of seven days from the receipt thereof. 2. Settlement of claims (i) The basic rule for settlement of claims on rupee life insurance policies in favour of claimants resident outside India is that payments in foreign currency will be permitted only in proportion in which the amount of premium has been pa .....

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dents who were outside India, and are the beneficiaries of insurance claims/maturity or surrender value settled in foreign currency in respect of policies issued by Insurer in India may be permitted to credit the proceeds to the RFC Account opened by them on their becoming residents. (iv) Claims/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 .....

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tly 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 arrangeme .....

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