Friday, February 21, 2014

Unclaimed amount with life insurance companies rises 250%

The unclaimed amount with life insurance companies has grown 250% in the four-year period from 2009-10 to 2012-13, mainly because of lack of awareness, delay in claims settlement and change in address, the Insurance Regulatory and Development Authority (IRDA) said in a circular on Tuesday.

The unclaimed amount jumped to Rs 4,866 crore in 2012-13 from Rs 1,373 crore in year 2009-10.

As per the circular, the unclaimed amount rises 60% in 2012-13 from Rs 3,037.46 crore in the previous year.

The regulator mentioned that the rise in unclaimed amount is largely because of dependents not being aware of existence of a life insurance policy among other reasons including delay in settlement of claim and change in address of the life insured.

Further, the regulator said that in another big reason for not settling claims is change in address, where the policyholders do not informed the insurance company, due to which cheques/demand draft issued by the insurance company towards maturity payment is not received by the policyholder.

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.

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