There is Rs 21,540 crore of unclaimed amount with Life Insurance Corporation of India (LIC) at the end of September 2021, according to draft papers for listing filed by the insurance company with SEBI.
In FY21, the unclaimed amount was Rs 18,495 crore compared to Rs 16,053 crore in FY20. In FY19, unclaimed funds amounted to Rs 13,844 crore.
Cheques issued out of the unclaimed amount but not encashed by the policyholders stood at 64 lakh as on September 30 FY21. In March FY 2020, the number was 55 lakh.
The unclaimed funds includes unclaimed amount and interest accrued on unclaimed amount which belongs to crores of policyholders across India, who failed to claim their policies after its maturing period or their family members have forgotten to claim the amount after the insured person's death.
Income on unclaimed amount of policyholders is credited to unclaimed funds and is accounted for on an accrual basis.
Interest on unclaimed costs amounted to Rs 850 crore in 2021, and Rs 876 crore in 2020. It was Rs 746 crore in 2019.
When a dividend has not been claimed within 30 days from the declaration date, LIC opens a special account called the "Unpaid Dividend Account" and transfers the unpaid amount to the bank.
Any money transferred to the Unpaid Dividend Account which is unclaimed for seven years is transferred to "Investors Education and Protection Fund" established under the Companies Act, 2013.
LIC issued approximately 21 million individual policies in India, representing 75 per cent market share in new separate policy issuances. The second-largest player in the industry, in comparison, issued 1.66 million individual policies for fiscal 2021 and had a 5.9 per cent market share.
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