{"id":15436,"date":"2019-04-17T10:49:06","date_gmt":"2019-04-17T05:19:06","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=15436"},"modified":"2021-02-08T16:07:12","modified_gmt":"2021-02-08T10:37:12","slug":"rbi-reinsurance-brokers-allowed-to-open-foreign-currency-accounts","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/rbi-reinsurance-brokers-allowed-to-open-foreign-currency-accounts\/","title":{"rendered":"RBI: Reinsurance Brokers allowed to Open Foreign Currency Accounts"},"content":{"rendered":"<p>On\n11<sup>th<\/sup> Apri 2019, the Reserve Bank of India (RBI) has revamped the\nregulations allowing the reinsurance brokers to open the non-interest bearing\nforeign currency accounts with banks for undertaking transactions. These\nregulations were awaited for a long time by our insurance sector.<\/p>\n\n\n\n<p>In this update, we&rsquo;ll look into the recent changes in Insurance Regulatory and Development Authority (IRDA) regulations and Reserve Bank of India (RBI) notifications allowing reinsurance brokers to open foreign currency accounts, its aims, how will it affect the reinsurer broker in the Indian <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>IRDAI Regulations &amp; RBI\nNotifications for Reinsurance Brokers <\/strong><\/h2>\n\n\n\n<p>Insurance and Reinsurance companies are regulated under the IRDAI in India. The primary legislation governing the Indian Insurance sector is the Insurance Act, 1938 and the IRDA Act, 1999. The IRDAI issues various regulation from time to time, for the proper functioning of the reinsurer brokers in India.<\/p>\n\n\n\n<ul><li>In this regard, earlier, the IRDAI has issued a notification and then RBI issued the Foreign Exchange Management (Foreign Currency Accounts by the person resident in India) Regulations, 2015, which talked about the opening of foreign currency accounts by reinsurance and composite <a href=\"https:\/\/enterslice.com\/insurance-broker-license\">insurance brokers<\/a>. Under this notification clause 2(iii), a foreign currency account is a bank account in a currency other than the currency of India\/Nepal\/Bhutan.<\/li><li>Under the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018, section 2(k), an &ldquo;Insurance Broker&rdquo; is a person who is a direct broker, a reinsurance broker or a composite broker for the time being registered by the Authority, as the case may be, unless expressly stated to the contrary.        <\/li><li>Further Section 2(p) talks about Reinsurance Broker, it means &ldquo;an  Insurance Broker, registered by the Authority who for a remuneration  and\/or a Fee, solicits and arranges reinsurance for its clients with  insurers and\/or reinsurers located in India and\/or abroad; and\/or  provides claims consultancy, Risk Management services or other similar  services, permitted under these regulations.&rdquo;                                              <\/li><\/ul>\n\n\n\n<p class=\"text-highlight-2\"><strong>These regulations are recently revised on the <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a> of the recommendations of the Ram Prasad Panel- said sources at IRDAI.<\/strong><\/p>\n\n\n\n<p><strong>Amendments for Reinsurance Brokers<\/strong><\/p>\n\n\n\n<p>The authorized dealers were informed under Foreign Exchange Management (Foreign Currency Accounts by the person resident in India) Regulations, 2015 vide <strong>Notification No. FEMA 10(R)\/2015-RB<\/strong><sup><a href=\"https:\/\/www.rbi.org.in\/Scripts\/NotificationUser.aspx?Id=10261&amp;Mode=0\"><strong>[1]<\/strong><\/a><\/sup> dated January 21, 2016, that the laws are amended from time to time and the relevant directions are issued for the smooth functioning of the insurance and reinsurance sector. <\/p>\n\n\n\n<p>The\nrecent changes in the insurance sector brought forth the Foreign Exchange\nManagement (Foreign Currency Accounts by a person resident in India)\n(<a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Amendment<\/a>) Regulations, 2019. <\/p>\n\n\n\n<p><strong>Foreign\nExchange Management (Foreign Currency Accounts by a person resident in India)\n(Amendment) Regulations, 2019<\/strong><\/p>\n\n\n\n<p>In February 2019, under the Foreign Exchange Management Act, 1999 Section 9 and section 47 (2)(e), the RBI made amendments to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 [Notification No. FEMA 10(R)\/2015-RB dated January 21, 2016] and brought out Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations, 2019<\/p>\n\n\n\n<p><strong>Amended\nRegulation 4: <\/strong><\/p>\n\n\n<p class=\"text-highlight-2\"><strong>&ldquo;2.) An authorized dealer in India may, subject to the directions as may be issued by the Reserve Bank, allow ship-manning \/ crew managing agencies in India and reinsurance and composite insurance brokers registered with IRDA to open and maintain non-interest bearing foreign currency accounts in India for the purpose of undertaking transactions in the ordinary course of their business.&rdquo;<\/strong><\/p>\n\n\n<p>According to this notification, RBI has advised the entire category I Authorized Dealers and the Authorized Banks to open an interest free foreign currency account for reinsurance brokers in India. The reinsurance brokers registered with the IRDA can open and maintain the non-interest bearing foreign currency accounts with an authorized bank for undertaking the transactions in the ordinary course of their business. This notification was issued in furtherance of the <strong><a href=\"https:\/\/enterslice.com\/foreign-exchange-regulations\">Foreign Exchange<\/a><\/strong> Management (Foreign Currency Accounts by the person resident in India) Regulations, 2015.<\/p>\n\n\n\n<p><strong>Aim of these IRDAI Regulations and\nRBI notification <\/strong><\/p>\n\n\n\n<p>These\ndirections and revised regulations aim to maximize the reinsurance business in\nIndia and keep in pace with the changing market scenario. <\/p>\n\n\n\n<p><strong>Effect of Amendment on reinsurance\nbrokers<\/strong><\/p>\n\n\n\n<p>The\nreinsurance brokers have evolved from being merely a middle man which helps reinsurance\ncontracting parties to a highly synchronized and indispensable part of the reinsurance\nsector in India. These regulations will open new gates for the reinsurance\nbrokers which will, in turn, be profitable for the Indian market scenario.<\/p>\n\n\n\n<p>For more information on this,\nyou can contact our team of experts at <a href=\"https:\/\/enterslice.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Enterslice<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 11th Apri 2019, the Reserve Bank of India (RBI) has revamped the regulations allowing the reinsurance brokers to open the non-interest bearing foreign currency accounts with banks for undertaking transactions. These regulations were awaited for a long time by our insurance sector. In this update, we&rsquo;ll look into the recent changes in Insurance Regulatory [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":15444,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2080],"tags":[2531],"acf":{"service_id":"115"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Reinsurance Brokers allowed to open foreign currency accounts<\/title>\n<meta name=\"description\" content=\"The reinsurance brokers to open the non-interest bearing foreign currency accounts with banks for undertaking transactions. 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These regulations were awaited.l\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/rbi-reinsurance-brokers-allowed-to-open-foreign-currency-accounts\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-04-17T05:19:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-02-08T10:37:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/Reinsurance-Brokers.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":493,"readingTime":3,"nextPost":{"id":15445,"slug":"minor-as-a-partner-under-the-partnership-act-1932"},"prevPost":{"id":15429,"slug":"share-purchase-agreement"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/Reinsurance-Brokers.jpg","postTerms":"IRDA License","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/15436"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=15436"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/15436\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/15444"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=15436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=15436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=15436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}