Unclaimed sums at both life and nonlife insurance companies belonging to policyholders and their beneficiaries have reached nearly INR120 billion (US$1.87 billion) at 30 June 2017, an increase of 2.8% compared to INR116.7 billion unclaimed at 31 March 2016.
The unclaimed money could be from death or maturity claims, survival benefits, premium refunds and other sums, according to data collated across life and general insurance companies by DNA Money.
The lion's share of over INR110 billion unclaimed at 30 June was with life insurance companies. More than half of it – INR60 billion belongs to LIC, the biggest life insurer in the country. General insurance companies have a combined unclaimed balance of about INR9 billion.
Anilkumar Singh, chief actuarial officer, Aditya Birla Sun Life Insurance said: “Unclaimed funds are due to change of address of the customer, instruments getting lost, incorrect bank account details, branch details undergoing a change, etc."
The IRDAI has directed all insurance companies to post unclaimed insurance money on their respective websites, where the unclaimed sum is at least INR1,000.
In July, the insurance regulator issued a new rule directing that amounts unclaimed for more than 10 years as of 30 September 2017 will have to be deposited into a fund meant for senior citizens, the Senior Citizens’ Welfare Fund by 1 March next year. Thereafter, insurers will have to transfer such unclaimed sums every financial year to the Fund. However, policyholders and beneficiaries are eligible to claim the unpaid amounts for up to 25 years from the date of transfer of the same to the Senior Citizen’s Welfare Fund. If no claim is lodged during the 25 years, the money will belong to the government.