Irdai directs insurers to comply with Fema rules on options

Insurers need to comply with norms related to pricing, pertaining to put and call options in Fema

The Insurance Regulatory and Development Authority of India (Irdai) has asked insurance companies with foreign joint venture (JV) partners to examine whether these agreements with ‘option clauses’ comply with Foreign Exchange Management Act (Fema) norms. If there is any gap in the agreements, then the insurers should amend it to ensure compliance, the regulator said.

The insurers need to comply with the norms related to pricing, pertaining to put and call options in the Fema rules, Irdai said.

Some insurance companies had approached the regulator with queries whether JV agreements signed before rules were amended were in compliance with the