NRIs and PIOs may soon buy life insurance policies for themselves and their family members based in India and abroad from companies set up in the IFSC.
In an effort to promote India’s underperforming insurance sector, the International Financial Services Centres Authority (IFSCA) Expert Committee has recommended boosting international insurance activity under the IFSC. According to the recommendations, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) may soon buy life insurance policies for themselves and their family members based in India and abroad from companies set up in the IFSC. Also, they can pay the premium in the currency of their choice, said a statement by the Ministry of Finance. After returning to India, NRIs and PIOs can buy portable life insurance policies that offer flexibility to pay the premium in INR or in foreign currency.
It has further been recommended to allow Indian residents to buy overseas health insurance for themselves and their dependents from insurance companies or intermediaries in the IFSC for medical treatment anywhere in the world. The recommendations also have a provision of allowing insurance companies in the IFSC to offer personal accident cover, baggage loss, documents loss cover, and travel health insurance anywhere in the world. While it is advised to encourage foreign reinsurance brokers to set up base in IFSC to create a vibrant insurance market, it is believed that IFSC can emerge as an aviation insurance hub for the world.
The Expert Committee believed that the IFSC can become an engine of economic growth for India as there is an immense global opportunity for the insurance sector. The Indian insurance sector is underperforming compared to that of developed and emerging economies and insurance penetration and density are especially low in India, it added. Pradip Shah, Chairman of the Expert Committee said that Gujarat International Finance Tec-City (GIFT) IFSC promises to offer a cost-effective and tax-efficient jurisdiction for insurance companies to set up operations there.
Meanwhile, the Committee was constituted by the IFSCA to make recommendations on promoting international retail business in International Financial Services Centre (IFSC). The Committee was expected to provide a roadmap for the future growth of international retail business in IFSC.