IRDA mandates insurers to disclose details of unclaimed amount from October 2014.
In an effort to arrest the growth of unclaimed money, IRDA has instructed insurance companies to disclose the details of unclaimed amount on their respective websites. The unclaimed amounts are accumulated through non-encashment of maturity proceeds by investors.
The regulator has asked insurance companies to disclose details of those policies where payment exceeds Rs 1,000. The regulation will come into effect from October 1, 2014.
In a circular, the regulator said, “All insurers are required to display the information about any unclaimed amount above Rs.1,000 of policyholders on their respective websites.”
In order to increase transparency, IRDA has asked insurers to set up a mechanism through which policyholders can get access to policy details by keying in their basic information like name and date of birth. IRDA has instructed insurers to update such information on a half-yearly basis. The insurers have to provide search option in such disclosure for the convenience of policyholders.
IRDA data shows that the unclaimed amount lying idle with insurance companies increased by 60% to Rs. 4,866 crore in FY 2012-13 from Rs 3,038 crore in FY 2011-12. In FY 2009-10, the unclaimed amount was Rs 1,373 crore. The regulator attributed this to lack of awareness, delay in claim settlement process and change in address of policyholders.
Earlier in April, IRDA had mandated insurance companies to settle insurance claims through electronic payment mode. However, the regulator has asked insurance companies to make e-payment of those policies where payment exceeds Rs 10,000 (life insurance) and Rs 25,000 (non-life insurance).
Meanwhile, IRDA has directed insurance companies to get bank account details while issuing new policies. Insurers will have to collect proof of bank account (cancelled cheque) from policyholders. Policyholders can update their bank account details at any point of time. Term plans are exempted from this requirement.