IRDA orders to disburse the amount have fallen on companies’ deaf ears.
As many as 23 insurance companies are sitting on unclaimed funds worth over Rs 15,000 crore despite the Insurance Regulatory Development Authority (IRDA) asking them repeatedly to disburse the amount to beneficiaries. This unclaimed amount has increased more than six times in the last six years.
As on 31 March 2018, out of the total unclaimed amount of Rs 15,167 crore, Life Insurance Corporation (LIC) is sitting on Rs 10,509 crore, while 22 private sectors insurance companies account for the remaining Rs 4,657 crore.
Interestingly, the unclaimed amount was only Rs 2,476 crore in 2012, which means that it has increased more than six times in six years.
While ICICI Prudential Life Insurance Company has Rs 807 crore of unclaimed insurance claims, Reliance Nippon Life Insurance has an unclaimed amount of Rs 696 crore, SBI Life Insurance (Rs 678 crore) and HDFC Standard Life Insurance (Rs 659.3 crore).
The IRDA has been asking these insurance companies to identify the policyholders or beneficiaries and disburse the claims at the earliest. However, sources said, no significant progress has been made in this regard.
The matter was raised in the Lok Sabha recently following which Union Minister of State for Finance Shiv Pratap Shukla said that the IRDA has asked the life insurance companies to provide a search facility on their website to enable policyholders or beneficiaries or dependents to find out whether any unclaimed amounts due to them are lying with these companies.
For this purpose, the policyholders/beneficiaries are required to enter the details such as policy number, PAN of the policyholder, name, date of birth of the policyholder or Aadhaar number, in a window provided on the website of the insurer to find out the unclaimed amount. The insurers have also been advised to update information regarding unclaimed amounts on their websites on a half-yearly basis.
The Board level Committee for Policyholder Protection of every insurer is entrusted with the responsibility of monitoring the timely payout of all dues to policyholders. It also oversees the steps taken by the insurers to reduce unclaimed amounts as part of the standard procedures on customer service. Despite this, the unclaimed amount has been increasing every year.
Earlier this year, the IRDA ruled that all sums of money remaining unclaimed for 10 years as on 30 September 2017, will be transferred to the Senior Citizen’s Welfare Fund.
The regulator directed all insurance companies to collect details of such accounts and transfer the money into the fund, which will be used for the welfare of senior citizens, financial security, health care, nutrition, old age home.