Insurance abroad
Insurance abroad
‘Insurance’ is defined as a ‘capital account transaction’, as the commitments are for a very long period. The restrictions are contained in Foreign Exchange Management (Insurance) Regulations, 2000.
A person resident in India cannot take any general or life insurance policy issued by an insurer outside India without permission of RBI.
However, there is permission to continue to hold a policy in some cases.
A unit located in Special Economic Zone (SEZ) can take general insurance policy from insurers outside India, provided that the premium is paid by the unit out of foreign exchange balances. – RBI circular No. 47 dated 17-5-2002.
General Insurance
(1) A person resident in India may take or continue to hold a general insurance policy issued by an insurer outside India, provided that the policy is held under a specific or general permission of Central Government. If payment is made by making remittance from India, the maturity proceeds or amount of claim shall be repatriated to India within seven days.
(2) A person resident in India may continue to hold any general insurance policy issued by an insurer outside India when such person was resident outside India. If payment is made by making remittance from India, the maturity proceeds or amount of claim shall be repatriated to India within seven days.
Payment of import through ocean transport by Government or a PSU on CIF basis (i.e. other than f.o.b. and f.a.s. basis) requires approval of Ministry of Transport (Director General of Shipping) [Thus, they are required to arrange for insurance and freight from Indian service providers only].
Health Insurance – No permission is required for payment for securing insurance for health from a company abroad [amendment w.e.f. 13-9-2004]
Life Insurance
(1) 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 RBI. If payment is made by making remittance from India, the maturity proceeds or amount of claim shall be repatriated to India within seven days.
(2) A person resident in India may continue to hold any life insurance policy issued by an insurer outside India when such person was resident outside India. If payment is made by making remittance from India, the maturity proceeds or amount of claim shall be repatriated to India within seven days.
Insurance by Indian insurance company in foreign currency
Insurance can be general insurance or life insurance.
General insurance – Detailed instructions are contained in GIM – Memorandum of Exchange Control Regulations Relating to General Insurance in India. New set of instructions have been issued vide RBI circular No. 18 dated 12-9-2002.
The Indian General Insurance companies can issue policies in respect of
(a) Marine Insurance on shipments between India and other countries or even between two points outside India
(b) Insurance of assets outside India owned by residents in India
(c) Insurance cover on baggage or valuables in transit between India and other countries or between two countries outside India.
(d) War risks, civil commotion etc. on marine hulls
(e) Personal Accident Insurance to persons going abroad (f) Overseas medical insurance scheme for Indians travelling abroad.
In case of marine and aviation insurance by foreign shipping and aviation companies, premium can be collected in foreign currency and claims can be settled in foreign currency without prior approval of RBI. – RBI circular No. 36 dated 2-4-2002.
Life insurance – Detailed instructions are contained in LIM – Memorandum of Exchange Control Regulations Relating to Life Insurance in India, issued vide circular No. 72 dated 17-1-2003.
Indian insurance company can issue policy to non-residents or returning Indians. Deferred annuity rupee policies for period of at least seven years can be issued to foreign nationals.