Unclaimed money with life insurance firms rises 250%
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Unclaimed money with life insurance firms rises 250%

At the end of 2012-13, unclaimed money with life insurance companies was Rs 4,866 crore compared to Rs 1,373 crore in 2009-10.

  • February 18, 2014  
  • |  
  • UPDATED   20:47 IST
Unclaimed funds with life insurance firms rises 250%

Unclaimed money with life insurance companies has grown over 250% in the four-year period from 2009-10 to 2012-13, the Insurance Regulatory and Development Authority (IRDA) of India said in a circular on Tuesday.

At the end of 2012-13, unclaimed money with life insurance companies was Rs 4,866 crore compared to Rs 1,373 crore in 2009-10.

According to the insurance regulator, the rise in unclaimed amount is largely because of dependents not being aware of existence of a life insurance policy. Among other reasons that the IRDA said is leading to growing unclaimed amount are delay in settlement of claim and change in address of the insured.

"In few cases, change of address in not duly intimated to the insurer, in absence of which cheques/demand draft issued by the insurer towards maturity payment is not received by the insured," observed IRDA in the circular.

In order to ensure timely payout to policy holders, IRDA has asked insurance companies to make various disclosures such as the amount which remained unclaimed for more than six months from the due date of settlement, nature of the unclaimed amount (death claim, maturity benefit, etc), details of action taken (for payment of the unclaimed money) by the insurer and the status of the unclaimed amount.

Initially, insurers have been told to upload this information on their website by 31 March 2014. Subsequently, they have been advised to put up this information every six month by 30 September and 31 March every year.