NRI Repatriation & Insurance Issues

As India evolves into a major destination for investment, there
has been a natural spark amongst the NRI community to return to
India. And as they repatriate with investment options, some of them
are caught in the dilemma of their future course of investment plans.

As, an NRI from Boston Vishal Shekhar says, that like many of his
friends he would also like to return to India in the near future.
However, there are the issues of insurance policies which he is
finding difficult to decide. He is confused as his friend are contemplating
taking out insurance policies in the US though they are returning
to India.

Actually, there are several policy announcements recently made
pertaining to insurance policies issued by insurance companies registered
with the Insurance Regulation and Development Authority in India.
As per the rules and regulations, policies can be issued in foreign
currency to resident PIOs who have returned to India after a stint
of being NRI, provided the premia are paid out of remittances from
foreign currency funds held by them abroad or from their Resident
Foreign Currency (RFC) account with banks in India.

However, conversion of rupee policies on the lives of resident
Indians into foreign currency or transfer of records of such policies
to a country outside India is not permitted without prior approval
of the RBI. Insurers may issue policies denominated in foreign currency
through their offices in India or abroad to non-residents, provided
the premia are collected in foreign currency from abroad or out
of the Non-Resident accounts of the insured or his family members
held in India.

Photo: Nariman Point Cityscape by Saadabdullah007, licensed under CC BY-SA 3.0, via Wikimedia Commons.