Private Insurers Get Level Field On Remittances

Private general insurance players will no longer have to wait three to four weeks for Reserve Bank of India (RBI) to grant approval in the remittance of premium abroad and the settlement of claims in foreign currency.

This follows the central bank proposing a modification in the Memorandum of Exchange Control Regulations relating to General Insurance in India (GIM) under the Foreign Exchange Management (Insurance)Regulations, 2000, that brings private general insurance companies under the same fold as public sector general insurers.

The central bank on Thursday told authorised dealers that board of directors of insurance companies registered with the Insurance Regulatory and Development Authority (IRDA) will be able to decide on reinsurance arrangements, and make remittances under these approved arrangements without having to refer to the RBI.

This brings private general insurance companies on a level playing field with public sector general insurers, as the modified regulations are now applicable to all companies. Authorised dealers (ADs) designated by insurance companies, which are mainly banks, are now permitted to make remittances falling under such approved reinsurance arrangements without reference to the central bank, stated the circular sent out to ADs.

Tata AIG General Insurance Company chief executive (India) Dalip Verma told Business Standard: