Unclaimed insurance money.

1. UNCLAIMED INSURANCE MONEY.
PRESENTED BY,
RIYA RAWAT
MBA (BANKING AND FINANCE)
Amity University, Mumbai

2. What is unclaimed insurance amount?
 Unclaimed amount is money that is due to policyholders or beneficiaries in the form
of death claim, maturity claim, survival benefits, premiums refunds or indemnity
claims—including accrued interest—but has not been claimed for more than 6
months since the settlement date.
 Insurers can invest this money in debt products like money market instruments, liquid
mutual funds and fixed deposits; and the investment income needs to be paid to the
policyholder or beneficiary if she makes a claim in the future. Any penalty can be
adjusted against this investment income. The insurer can deduct a charge from this
fund to manage it, but the costs are capped at 20 basis points. In order to make your
job easier, insurers now allow you to spot your unclaimed money on their websites,
where you need to look under the tab titled unclaimed amount of policyholders. Click
the tab and on the page that opens, enter the details such as name of the
policyholder, policy number, Permanent Account Number (PAN), Aadhaar number and
date of birth to know details of any unclaimed amount. The policyholder’s name and
date of birth are compulsory fields, whereas PAN and policy number can be optional.
To save the insurers the trouble of putting out details of very small claim, the rules
allow companies to publish details only if the unclaimed amount is Rs1,000 or more.

3. .
 Once you have identified the money, you can approach the insurer directly
or follow the steps listed on the website. To reduce unclaimed amounts,
the regulator has made electronic payments mandatory with the exception
of small premium ticket size of up to Rs10,000. Also, the rules make it clear
that even after 10 years, insurers will need to display information about
any unclaimed amount of Rs1,000 or more on their respective websites.
 However, policyholders and beneficiaries are eligible to claim the unpaid
dues (unclaimed money) up to 25 years from the date of transfer of the
same to the Senior Citizen’s Welfare Fund.
 Do note that if no claim is made for a period of 25 years after the transfer,
you will have to forfeit the money and it will belong to the government.

5. .
 Unclaimed insurance money is the amount due to the policyholders or
beneficiaries but has not been claimed for more than 6 months after the
settlement date. The claim amount can be in the form of death claim,
maturity claim, and premium refunds (including accrued interest).
 According to the Insurance Regulatory and Development Authority (IRDAI)
data, as much as Rs 15,167 Crores, which is policyholder’s money, is lying
unclaimed with 23 life insurers.
 Out of the total unclaimed amounts as on March 31st 2018, Life Insurance
Corporation (LIC) is sitting on Rs 10,509 Crores, while the 22 private sector
insurers account for the remaining Rs 4,657.45 Crores.

6. .
 Among private insurers, ICICI Prudential Life Insurance has Rs 807.4 Crores of unclaimed
amounts of policyholders, followed by Reliance Nippon Life Insurance at Rs 696.12
Crores, SBI Life Insurance Co at Rs 678.59 Crores and HDFC Standard Life Insurance Co
at Rs 659.3 Crores.
 The unclaimed insurance money of policyholders has been increasing. In the year 2012-
13, the unclaimed amount for the entire industry was Rs 4,865.81 Crores. There has been
a 25% increase year-on-year over the past five years.
 The IRDAI has asked insurers to take proper steps to identify the policyholders or
beneficiaries and disburse the claims.
 All the life insurers have been asked by IRDAI to provide a search facility on their
websites to permit policyholders or dependents to identify, if there are any unclaimed
amounts due to them, lying with these insurers.
 There will be a separate window on the website of the insurer to find out unclaimed
amounts. Policyholders or dependents should enter details such as policy number, the
name of the policyholder, PAN of the policyholder, date of birth or Aadhaar number of
the policyholder, to find the unclaimed amounts. The information pertaining to
unclaimed amounts on websites of insurers should be updated on a half-yearly basis.

7. .
 All the life insurers have been asked by IRDAI to provide a search facility
on their websites to permit policyholders or dependents to identify, if
there are any unclaimed amounts due to them, lying with these insurers.
 There will be a separate window on the website of the insurer to find out
unclaimed amounts. Policyholders or dependents should enter details
such as policy number, the name of the policyholder, PAN of the
policyholder, date of birth or Aadhaar number of the policyholder, to find
the unclaimed amounts. The information pertaining to unclaimed amounts
on websites of insurers should be updated on a half-yearly basis.

8. Reasons why amounts are unclaimed
 Nominees are not aware of the policy
The main reason why most of the amounts go unclaimed is
because nominees are not aware of the policy availed by the
policyholder. In some cases, nominees won't be having policy
documents to make a claim. To avoid such situations, it is
advisable to let nominees know about the insurance policy
availed and also where the policy documents are stored.

9. .
 Change in address
If the claim amount is paid via cheque, the change in the address of the
policyholder or claimants may lead to delays in the process. To avoid this
headache, you should update the address in the insurer's records.
 Misplacement of cheque
 Misplacement of the cheque can lead to a delay in receiving the claim.
Now many insurers settle claims through electronic transfer of funds. So, it
is advisable for all the policyholders to opt for electronic transfer of funds.
For the policies issued after 2014, insurers insist on electronic transfer of
funds.

10. The unclaimed insurance amount reported by
the life and non-life insurance companies is as
follows:

11.  As per the IRDA’s latest report, unclaimed money worth nearly
Rs 15,167 crores (as on March 31, 2018) is lying idle with Life
Insurance Companies.
The Unclaimed List is as below:
 LIC – Rs 10,509 Cr
ICICI Pru – Rs 807.4 Cr
Reliance – Rs 696.12 Cr
SBI Life – Rs 678.59 Cr
HDFC Life – Rs 659.3 Cr

12. Steps to Look for Unclaimed and Outstanding
Amounts as a LIC Policyholder

13. .
 You can find the path to check your unclaimed as well as outstanding LIC policy
dues by simply going to the home page of the LIC website.
 Here, you will need to go to the bottom part of the page and look for the multiple
bottom links.
 Next, you have to click on ‘Unclaimed Amounts of Policyholders’.
 You will now arrive at the page with the heading ‘Unclaimed and Outstanding
Amounts to Policyholders’. This section of the LIC website can be used to know if
any amount from your LIC policy is lying without being claimed.
 You will be required to enter a few details and they are – Your policy number, name
of policyholder, your date of birth in DD/MM/YYYY format, and PAN card number.
 In this form, your name and date of birth will be the mandatory fields. After filling
the form, you need to click on ‘Submit’.

14. New rules about unclaimed insurance
money
 If no insurance claim is made for a period of 25 years after the transfer, you will have
to forfeit the money and it will belong to the government
 According to the Insurance Regulatory and Development Authority of India’s (Irdai)
circular, which was released on 25 July, unclaimed monies of insurance companies will
move to the Senior Citizens Welfare Fund, which has been created by the
government, after lying unclaimed for 10 years from the date it was payable to the
policyholder or the beneficiary.
The government had created this fund Through the Finance Acts, 2015 and 2016, to
promote the welfare of senior citizens, in which notified institutions have to transfer
unclaimed monies. These institutions include: postal savings scheme and Employees
Provident Fund schemes. In an amendment in April this year, the government also
added insurance companies to this list.
 The government had created this fund Through the Finance Acts, 2015 and 2016, to
promote the welfare of senior citizens, in which notified institutions have to transfer
unclaimed monies. These institutions include: postal savings scheme and Employees
Provident Fund schemes. In an amendment in April this year, the government also
added insurance companies to this list.