KARACHI, Aug 1: The State Bank has allowed the insurance companies to issue health/medical insurance policy in foreign currency to those intending to visit 15 European countries that are clubbed together as Schengen Countries.

A circular issued by the central bank on Monday says that of late the European Union has directed to all Schengen Countries to ensure that all visitors intending to visit their country must show adequate proof of health/medical insurance policy to cover them in the country of visit.

According to information downloaded from the website of the Schengen Visa the name “Schengen” originates from a small town in Luxembourg. In June 1985, seven European Union countries signed a treaty to end internal border checkpoints and controls. More countries have joined the treaty over the past years. At present, there are 15 Schengen countries, all in Europe.

These are: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Italy, Greece, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden. All these countries except Norway and Iceland are European Union members.

According to the SBP circular, insurance companies in Pakistan will issue health/medical insurance policy only in favour of travellers to Schengen Countries for a period covering the stay of the visitors.

The circular says though the policy will be denominated in foreign currency, the premia will be payable in Pak rupees.

In case of settlement of claim, insurance companies will be allowed to remit the funds abroad through inter-bank system. The circular says that banks may allow remittance of claims arising under the above policies.