News 151 views March 22, 2019

IRDAI Directs Insurers to Return Unclaimed Insurance Deposits to Policyholders

With nearly Rs. 15000 crores of unclaimed insurance amount left in the coffers of various insurance companies, the Insurance Regulatory Development Authority of India (IRDAI) is busy devising ways to return the money to the policyholders or their nominees, depending on the kind of insurance policy and the nature of benefits.

Explaining the Sources of Unclaimed Amounts with Insurers- IRDAI News

For amounts left unclaimed in pension schemes, the IRDAI has directed the various life insurance companies to make lump-sum payments to the policyholders or their registered dependants. It is not clear as to why insurance companies have failed to disburse the policyholders’ money lying with them. In many cases, the policyholders had died suddenly, thus, leaving their nominees bereft of any knowledge regarding the insurance policies they had bought. However, in case of policyholders who had bought pension schemes from various insurance companies, the money lied with the insurers simply because the maturity amount that had accumulated was not sufficient enough to be doled out as an annuity by them. There are other kinds of insurance policies too where policyholders have left the maturity amount unclaimed with the insurers.

IRDAI to Come Up With a Mechanism to Disburse Unclaimed Money

Considering the humongous amount due to the policyholders, the IRDAI is currently designing measures to ensure that the money is disbursed to the policyholders or their beneficiaries at the earliest. As per statistics updated on March 31, 2018, 23 life insurance companies are currently holding a total amount of Rs. 15,166.47 crores of which Rs. 10, 509 crores is lying with the LIC while the remaining amount Rs. 4,657.45 crore lies with the private market players. However, insurers have been directed to submit updated details of the respective unclaimed amounts and inform about the same to the insurance regulator at least two times a year.

As an initial measure to enable policyholders to claim the amount, the IRDAI has requested life insurance companies to come up with a search facility on their respective sites so that their insurance customers or their dependents could learn about the unclaimed amount by citing their Aadhar or PAN.