Mumbai: Beneficiaries of foreign currency claims have been allowed to retain the settled amount in dollars. Besides, companies have been allowed to sell to non-residents and buy reinsurance directly.

The Reserve Bank of India (RBI) has issued the new Memorandum of Exchange Control Regulations relating to life insurance in India or the Life Insurance Memorandum (LIM). It says Indian residents can retain life insurance benefits received in foreign currency in their resident foreign currency account.

Authorised dealers have been allowed to release foreign exchange to all life insurance companies where the reinsurance agreements are approved by the board and after informing the Insurance Regulatory and Development Authority (IRDA).

Insurance companies can now settle claims in foreign currency favouring residents and credit it to their RFC accounts. Earlier, residents were not permitted to retain any receipts in foreign currency and any receipts had to be surrendered to authorised dealer within seven days.

The RBI has also permitted credit of foreign currency claims favouring non-residents to NRE/FCNR accounts. In the revised memorandum, the proceeds of policies denominated in foreign currency or the rupee policies for which premia are paid in foreign currency or out of NRE/FCNR accounts are now permitted to be credited to NRE/FCNR account of non-residents without prior RBI approval.