The Insurance Regulatory and Development Authority of India on 17th October 2022, has notified the guidelines on “Establishment and Closure of Liaison Office in India by an Insurance Company registered outside India”. These guidelines shall be effective from the date of issue and shall supersede all the earlier instructions/guidelines issued on the subject by the Authority.
The Overseas Insurer applying for opening of Liaison Office (LO) should have a financially sound track record. A profit making track record during the immediately preceding three financial years in the home country and net worth of not less than USD 65 million shall be the minimum requirement for applying for opening a Liaison office in India.
The LO shall not carry on any activity other than the activity for which approval has been granted by IRDAI. The entire expenses of the LO in India will be met exclusively out of the inward foreign remittances received from the Overseas Insurer through normal banking channels.
The Principal Officer of LO in India shall act as a Nodal officer and shall be responsible for ensuring compliance of these guidelines and any other directions issued by the Authority from time to time. Name, Address, Contact No. and E-mail Id of the Principal Officer shall be informed to the Authority within 15 days from the date of appointment. Any change in the Principal Officer / change in contact details of Principal Officer shall be informed to the Authority within 15 days from the date of such change.
LO shall maintain only one bank account for its receipts and payments. If the existing LOs have opened multiple bank accounts as on the date of these guidelines, such accounts shall be closed within 3 months or seek specific approval from IRDAI justifying the reasons to have multiple bank accounts.
Further a Proper books of accounts and records reflecting the funds received from HO and expenses incurred by the LO shall also be maintained. A Balance Sheet, Statement of Income and Expenditure and a Statement of Receipts and Payments (Cash Flow Statement) signed by an independent Chartered Accountant and the Principal Officer of the Liaison Office in India shall be furnished to the Authority within 60 days from the end of every financial year.