Managing Foreign Currency Insurance Accounts

Описание: Special Foreign Currency Insurance Account

Purpose:

A Special Foreign Currency Insurance Account is created to handle foreign currency transactions related to insurance. Specifically:

1. Deposits: Money can be deposited into this account to pay for insurance or reinsurance premiums (PREMIA) in foreign currency.

2. Claims: The account can also receive insurance or reinsurance claims in foreign currency from policies taken outside Pakistan.

3. Approval Needed:

The Controller of Insurance must approve it, or

If the insurer is in Pakistan, approval from the State Bank is required.

4. Unused Funds: Any money in this account that is not needed for foreign exchange expenses should be sent back (repatriated) to Pakistan and converted into Pakistani Rupees.

Example of Special Foreign Currency Insurance Account:

1. A Pakistani company has a factory in another country and takes an insurance policy there.

2. The insurance premium is $10,000.

3. The company deposits $10,000 into the Special Foreign Currency Insurance Account to pay the insurer.

4. Later, if the company makes an insurance claim and receives $2,000 from the foreign insurer, that money is credited to the same account.

5. If after paying premiums, $1,000 is left in the account and it’s not needed for any foreign insurance payments, the company sends that $1,000 back to Pakistan and converts it into Pakistani Rupees.