The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA came into force on the 1st day of June, 2000. consolidate and amend the law relating to foreign exchange [image file=Image00005.gif] facilitating external trade and payments [image file=Image00005.gif] promoting the orderly development and maintenance of foreign exchange market in India [image file=Image00005.gif] 49 sections in the Act [image file=Image00005.gif] The Act also provides provisions for payment of premium on marine policies covering exports, imports, shipments between countries outside India, claims on exports, claims on imports, and claims on policies covering merchanting trade (trade between two countries outside India) [image file=Image00005.gif] In addition the Rules provides for guidelines for settlement of Overseas Mediclaim by Overseas TPA/Service Provider in the currency of the respective country and its reimbursement by the Indian Insurer who had collected premium in Indian currency.Act: General Insurance Business (Nationalization) Act, 1972 : This Act came into force on 1st January, 1973 with the following objective: To provide for the acquisition and transfer of shares of Indian Insurance companies and undertakings of other existing Insurers.To serve better the needs of the economy by securing the development of general Insurance business in the best interests of the community.To ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment.For the regulation and control of such business and for maters connected therewith or incidental thereto.Act: Indian Contract Act, 1872 : A Contract of Insurance is an agreement whereby one party, called the insurer, undertakes, in return for an agreed consideration, called the premium to pay the other party, namely, the insured, a sum of money or its equivalent in kind upon the occurrence of a specified event resulting in loss to him. Insurance contracts like other contracts are governed by the general principles of the Law of Contract as codified in the Indian Contract Act, 1872. As in other contracts, the essential elements in a contract of insurance are (i) Offer and acceptance, (ii) Consideration (iii) Agreement between the parties (iv) Capacity of the parties, and (v) Legality of the contract. These are codified and governed by the Indian Contract Act.