IRDA to permit insurance company to set up of liaison offices in India

Are you planning to set up an Insurance Liaison Office in India. Well from now on you don't have to go to RBI to take the permission. Now this permission will be given by IRDA i.e. Insurance Regulatory and Development Authority. But make sure that you adhere to the following conditions otherwise you might be fined and even you could be asked to go out of India.

The conditions are as follows:

1. The Liaison Office in India shall not carry on any activity other than the activity for which approval has been granted by the IRDA/RBI.
2. The Liaison Office in India shall not, without the prior permission of IRDA/RBI, undertake any new activity or carry on by itself or in partnership or by otherwise associating with others, any activity of a trading, commercial or industrial nature other than the activity for which the approval has been granted by the IRDA/RBI, as the case may be.
3. The Liaison Office in India shall not enter into any business contracts in its own name without prior permission of IRDA/RBI.
4. No commission/fees will be charged or any other remuneration received/income earned by the Liaison Office in India for liaison activities, /services consultancy services or any other services rendered by it in India, either directly or indirectly, unless approved by the IRDA.
5. The entire expenses of the Liaison Office in India will be met exclusively out of the funds received from abroad through normal banking channels.
6. The Liaison Office in India shall not borrow or lend any money from/to any person in India nor shall it accept deposits in India.
7. The Liaison Office, in India shall not acquire, hold, (otherwise than by way of lease for a period not exceeding five years) transfer or dispose of any immovable property in India without obtaining prior permission of the Reserve Bank of India under the Foreign Exchange Management (Acquisition and Transfer of immovable property in India) Regulations, 2000, as amended from time to time.
8. The Liaison Office in India shall furnish to the IRDA, on an annual basis, a certificate from the auditor that the Office has complied with the terms and conditions stipulated in the letter of approval issued by the IRDA/RBI and that all the expenses are met by way of approved means.
9. For Liaison Offices established with IRDA or RBI approval, the closure will be allowed by IRDA under intimation to RBI.
10. The Liaison Office in India will not render any consultancy or any other services directly/indirectly by charging any fees such services or otherwise.
11. The Liaison Office in India will not have signing/commitment powers, except to the extent required for normal functioning of the office, on behalf of the Head Office.
12. The Foreign Insurance Company whichCompany which has opened a Liaison Office in India under this General Permission may open a head office account in the books of their Liaison Office/s in India, subject to the conditions that the credits to the account should represent the funds received from Head Office through normal banking channels for meeting the expenses of the Liaison Office. Debits to this account wouldcould be raised only for meeting the local expenses of the Liaison Office.
13. The activities/affairs of these offices may be verified/ examined by IRDA/RBI/Government of India by carrying out a scrutiny as and when found necessary.
14. The Liaison office in India shall have to strictly obey and respect the laws in force in India and there shall be no compromise or excuse for the ignorance of the Indian legal system in any manner.

If you follow this, then it is a surity that you will not face any problems from the regulatory side.