The IRDAI says that increases in unclaimed amounts with insurers are a regulatory concern. To address the issue, the regulator has amended the “Master Circular on Unclaimed Amounts of Policyholders”.
The insurers are also urged to step up their efforts to find the legitimate owner of outstanding payments and make sure that funds are distributed quickly.
According to an IRDAI circular dated 16 February 2024, the regulator says that it has held discussions with the insurers from which it understands that one of the reasons for the increase in the unclaimed amounts is cases where the consumers are traceable but insurers are not in a position to pay the claim for various reasons, including:
-
litigation involving an insurance policy;
-
rival claims or open title;
-
freezing/blocking of insurance policies by any government agency;
-
benefits payable under in-force insurance policies which became unclaimed due to the lapse of a six-month window for payments;
-
consumers have not claimed annuity options and maturity proceeds from pension and insurance products;
-
consumers are out of the country and time needs to be taken to settle the insurance proceeds.
The IRDAI listed several changes to the master circular. Insurers are also advised to step up efforts to trace the rightful recipients of unpaid amounts and ensure efficient disbursement to them.
