Unclaimed insurance amount: Whose money is it, anyway?

Aug 22 2014, 09:44 IST
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From October, all a policyholder needs to do is fill out his name, policy number, PAN and date of birth on the website. (File Photo) From October, all a policyholder needs to do is fill out his name, policy number, PAN and date of birth on the website. (File Photo)
SummaryIrda has embarked on a drive to ensure unclaimed amounts with insurers reach the rightful owner.

In a move that will benefit policyholders, the Insurance Regulatory and Development Authority (Irda) has asked insurers to display information on any unclaimed amount above R1,000 on their websites. From October, all a policyholder needs to do is fill out his name, policy number, PAN and date of birth on the website and, if the information in any two fields matches with the insurer's records, the unclaimed amount lying with the company will be displayed.

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The unclaimed amount includes money payable to a policyholder as death claim or maturity claim, survival benefits, premium due for refund and premium deposited but not adjusted against premium or indemnity claims. Any amount unclaimed beyond six months from the due date for settlement will be displayed on the website. According to the regulator's August 14 circular issued to all insurers, excluding General Insurance Corporation of India, the information regarding unclaimed amount will have to be updated every six months on the insurance company's website.

For new policies, Irda has made it mandatory for insurers to ask for bank details of the proposer in the proposal form itself. To authenticate the details, the insurer will need to take a cancelled cheque from the poposer, except in cases where the payment of the new business premium is done through a cheque from his own bank account. The insurer will have to retain a copy of the cheque issued by the proposer. Moreover, the insurance company will have to provide an option to the insured to change the bank account or modify bank details, without charging any fee.

All payments due to the insured will be made though the electronic clearing system (ECS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGC), Interbank Mobile Payment Services (IMPS), Automated Clearing House or any other electronic mode permitted by the Reserve Bank of India.

However, the regulator has listed some exemptions where one need not disclose the bank account details. All term insurance policies (without return of premium) are exempted from sharing of bank details. In the case of a death claim, bank details of the nominee will be taken by the insurer at the time of the claim. The policyholder will not have to furnish bank details in cases where the bank account is not linked to RBI's core-banking solutions, as is the case with cooperative or regional rural banks. Also, one would

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