All Head Offices/Principal Offices of
Authorised Dealers in Foreign Exchange.

Dear Sirs,

REMITTANCE OF LIFE INSURANCE PREMIUM

Attention of the Authorised Dealers is invited to FE Circular No.16 of 2002 in terms of which remittances of re-insurance premia on policies issued in respect of accidental death risks was allowed. To further liberalize the forex regime, it has now been decided to remove restriction of “accidental death risks only” and hence to allow remittance of re-insurance premia on life insurance policies for sums over Rs 3.5 lacs without any restriction whatsoever. Accordingly Para 23 Chapter XV of Foreign Exchange Manual (Eighth edition – 2002) has been amended as reproduced below:-

“Reinsurance – Life.

Remittance of reinsurance premia both under treaty and facultative cover arising from the life insurance policies is not permissible except in the following cases:

Reinsurance premia on policies reinsured before 29th December, 1970.

Reinsurance premia on policies issued and reinsured on or after 25th May, 1973 for sums over Rs 3.5 lacs.

Remittances in respect of (a) and (b) above will be allowed by the State Bank in accordance with the procedure set out in the following paragraph No.24”.

2. Please bring the above changes to the notice of your constituents.