The Reserve Bank of India (RBI) has revised the scope of the life insurance memorandum (LIM) to include all domestic life insurance companies. Hitherto the LIM covered only the Life Insurance Corporation of India. The apex bank also announced a host of measures that not allow policies to be issued in foreign currency to overseas Indians as well.
The central bank said that under FEMA, resident beneficiaries of foreign currency life insurance policies will be permitted to retain the proceeds in foreign currency in Resident Foreign Currency (RFC) accounts.
In the revised LIM, proceeds of policies denominated in foreign currency or rupee policies for which premia are paid in foreign currency or out of non-resident external /foreign currency non-resident accounts are now permitted to be credited to NRE/FCNR account of non-resident without prior approval of the Reserve Bank.
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The restrictions on the issue of rupee policies maturing within seven years to foreign nationals not permanently resident in India has been withdrawn. The restrictions with regard to export of policies have been withdrawn under the revised LIM.
The re-insurance arrangement of life insurance companies registered with IRDA is to be decided by the company