|
Settlement of insurance claims in foreign currency
In
terms of paragraph B.3 of GIM requests for issue of general insurance policies
in foreign currency other than those covered by the provisions of GIM are
required to be referred to RBI. Approvals are granted by RBI on merits of the
case and insurance companies are permitted to issue policies denominated in
foreign currency and receive premium in foreign currency. Settlement of claims
in foreign currency in respect of such policies can now be permitted by
insurance companies subject to the following conditions: -
i. the policy has been issued
in foreign currency with specific approval of RBI;
ii. the claim has been made for
the loss occurred during the policy period;
iii. the claim has been admitted by
the competent authority of the insurance company;
iv. the claim has been settled as per
the surveyors report and other substantiating documents;
v. claims on account of
reinsurance are being lodged with the reinsureres and will be received as per
reinsurance agreement;
vi.
the remittances is being made to the non-resident beneficiary under the
policy. For resident beneficiaries the claim may be
settled in Rupee equivalent of foreign currency due. Under no
circumstances payment in foreign currency be made to a
resident beneficiary; and
vii. while reporting the transaction in
R-Returns RBI approval for issue of policy may be quoted.
2.
Authorised Dealers may accordingly allow remittances towards settlement
of claims subject to compliance of the conditions stipulated in paragraph 1
above by the Indian insurance companies. Authorised Dealers may also bring the
contents of this circular to the notice of their constituents concerned.
3.
The directions contained in this circular have been issued under Section
10(4) & Section 11(I) of Foreign Exchange Management Act, 1999 (42 of 1999).
|