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Insurance Unclaimed insurance amounts to be used for the benefit of senior citizens

Unclaimed insurance amounts to be used for the benefit of senior citizens

Insurance firms (both life and non-life) are holding close to Rs. 12,000 crore of unclaimed funds as on March 31, 2016.
Team Cafemutual Feb 9, 2018

IRDAI has asked insurers to transfer the unclaimed amount of policyholders to a special fund for the elderly, titled ‘Senior Citizens’ Welfare Fund’, before March 1, 2018.

Unclaimed amount includes any amount payable to policy holder/nominee such as death claim, maturity claim, survival benefit, premium due for refund, and so on. It is essentially the amount that has remained unclaimed beyond six months from the due date for settlement of the claim amount.

The circular stated, “All insurers having unclaimed amounts of policyholders for a period of more than 10 years as on September 30, 2017 need to transfer the same to the Senior Citizens' Welfare Fund (SCWF) on or before March 1, 2018.”

It further advised insurers to collect the details of such accounts in the prescribed format in which they have to transfer the unclaimed amounts from the Department of Financial Services.

Insurers need to identify the unclaimed amounts on an annual basis and make transfers to the fund before March 1 every year.

The government began operating this fund in 2015 as a part of the Finance Act. Initially, deposits unclaimed for over seven years of EPF and PPF were diverted to this fund. Now, even unclaimed insurance amounts will be transferred to it.

As per the data by the Lok Sabha, the approximate unclaimed amount with life insurers was Rs.10,527 crore as on March 31, 2016. In case of non-life insurance, the unclaimed amount stood at Rs.1,198 crore in March 2016.


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