The Delhi High Court has dismissed the plea of a company which sought permission to sell health insurance policies on behalf of a Ukrainian firm.
Radiant Overseas approached the court after it was denied permission by the Insurance Regulatory and Development Authority (IRDA) to issue and market policies on behalf of Ukrainian firm Ukrinmedstrakh.
While dismissing the plea, Justice S. Muralidhar ruled that overseas companies cannot do insurance business in India through an agent without IRDA’s permission.
The court said the company needed to obtain a licence from the insurance regulator.
‘When a company, though incorporated outside India, gets itself registered in India and does business in a place in India through its agent authorised to accept insurance proposals, to pay claims and to do other business incidental to the work of the agency, the company carries on business at the place of business in India,’ the court observed.
The petitioner had entered into an agreement with Ukrinmedstrakh to act as its agent and to collect premiums for the Ukrainian company, which was providing cashless medical insurance to people travelling to that country.
The Indian company received premia in rupees and paid to the foreign company in dollars.
The company contended that as per the law, it is the government of India that permits a company to remit payments to a foreign company for the health premium collected by it. As the company had obtained permission from the government, the IRDA rules were not applicable in its case, it claimed.
This contention was rejected by the court, which said that since Radiant Overseas was collecting the premia and delivering certificates, it could not be said to be an agent of the foreign company.
In 1997, the Radiant Overseas entered into a broker’s agreement with Ukrinmedstrakh to act as its agent. This was pursuant to the policy of the Ukrainian government for mandatory medical cover for foreign citizens who temporarily visit the country.