Lok Sabha Question No. 7 (STARRED), answered on 2025-02-03
Subject: Unclaimed Insurance Funds
Ministry: FINANCE
Asked by: Shri Vijayakumar Alias Vijay Vasanth, Shri Manickam Tagore B

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA STARRED QUESTION NO. *7

TO BE ANSWERED ON MONDAY, 03 rd  FEBRUARY, 2025/MAGHA 14, 1946 (SAKA)

## UNCLAIMED INSURANCE FUNDS

## *7. SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH: SHRI MANICKAM TAGORE B :

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has any data on the total amount of unclaimed insurance funds in the country and if so, the details thereof along with the amount claimed by beneficiaries from that amount during the last three years; (b) the number of life insurance policies which are currently unclaimed along with the average amount due to each policy holder; (c) whether the Government has taken any steps to raise awareness about unclaimed insurance funds and if so, the proposed legislation or regulatory changes made to simplify  the  process  of  claiming  unclaimed  insurance  funds  and  reduce  unclaimed policies; (d) whether the nominees are required to search each insurer's website individually to locate unclaimed funds and if so,  the  reasons  therefor  along  with  the  steps  taken  by  the Government to create a centralized database to facilitate the beneficiaries; (e)  the  number  of  insurance  companies  which  are  currently  complying  with  IRDAI guidelines to list unclaimed amounts of 1000 or more on their websites; (f)  whether  the  Government  plans  to  address  concerns  around  data  privacy  and security in the process of claiming unclaimed insurance funds along with the number of e-insurance accounts opened through CDSL or NSDL and the way by which it has impacted the number of unclaimed insurance funds; (g)  the  measures  taken  to  prevent  insurance  companies  from  rejecting  claims  for unclaimed funds due to minor discrepancies in documentation; and (h) the average time taken by the insurers to process claims for unclaimed funds along
- with the details of penalties defined for delays in processing claims?

## Answer

## THE FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

(a) to (h) : A Statement is laid on the Table of the House.

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Statement as referred to in reply to part (a) to (h) of Lok Sabha Starred Question No.  *7  for  February  03,  2025/  14  Magha,  1946  (Saka)  regarding  'Unclaimed Insurance Funds' by Shri Vijayakumar Alias Vijay Vasanth and Shri Manickam Tagore B, Hon'ble Members of Parliament

- (a)  & (b) : IRDAI has provided the details of unclaimed insurance funds with insurers in India as below:

| Date                  | 31.3.2022   | 31.3.2023   | 31.3.2024   |
|-----------------------|-------------|-------------|-------------|
| Amount (Rs in crore ) | 25,403      | 23,699      | 21,718      |

IRDAI has further informed that it does not maintain data regarding amounts claimed by beneficiaries out of unclaimed amount, data on number of life insurance policies that are currently unclaimed and average unclaimed amount per life policy.

(c)  Various  regulatory  measures  prescribed  by  IRDAI  are  in  place  towards  reducing unclaimed funds and raising awareness amongst the policyholders regarding the same. Some of these are as below:

- i.  Policyholder Protection, Grievance Redressal and Claims monitoring Committee, a Board Level Committee at insurance companies, has been mandated to review the settlement  of  unclaimed  amounts  on  quarterly  basis,  including  the  number  and amounts of claims and the steps taken by the company to identify policyholders or beneficiaries.
- ii.  IRDAI's Bima Bharosa portal provides access to website links of all insurers where details of unclaimed amounts held by them are displayed.
- iii.  In  order  to  ensure  that  accumulation  of  unclaimed  funds  with  the  insurers  is reduced, IRDAI has mandated that nominee details such as name, mobile no., email id, address are obtained at the time of policy issuance.

(d) Nominees/beneficiaries have been facilitated with a search facility in the respective websites of insurers to check for any unclaimed amounts due to them based on fields like name and date of birth of policyholders, PAN of policyholders and policy number. Based on the above information, the person can approach the insurer for claiming the amount.

- (e) IRDAI has confirmed that all insurance companies are complying with its guidelines.

(f)  IRDAI  has  issued 'IRDAI Information and  Cyber  Security Guidelines dated 24.04.2023, which addresses the matters related to data privacy and security related aspects. As of 31 st  March, 2024, a total of 1.83 crore Electronic Insurance Accounts (eIAs)  have  been  created.  IRDAI  has  introduced  mandatory  issuance  of  e-insurance through Protection of Policyholders' Interests, Operations and Other Allied Matters of Insurers Regulations, 2024. E-insurance policies, are more accessible to policyholders, potentially increasing the likelihood of policyholders being aware of their policies and enabling them to prefer claims when necessary.

(g) & (h) IRDAI has informed that it does not maintain data on average time taken by insurers to process claims on unclaimed amount.  However, it has put in place several measures  to  ensure  timely  settlement  of  all  claims  including  claims  on  unclaimed amount.  Further, there exist regulatory provisions to penalize insurance companies for delayed settlement of claims including interest payments. The following provisions are specified by IRDAI in this regard:

- i.  All insurers shall credit the investment income accruing on the unclaimed amounts to the respective identified unclaimed account.
- ii.  All  insurers  shall  pay  the  identified  unclaimed amount along with the investment income  so  credited,  to  the  consumers  whenever  a  claim  is  made  as  per  the procedure.
- iii. Further,  the  Authority  has  specified  timeline  for  payment  of  the  claim  and  other benefits.  All  the  insurers  are  required  to  settle  the  claims  within  the  specified timelines.

To facilitate smoother and speedier claim settlements, IRDAI has prescribed documents required  for  settlement  of  insurance  claims.  Insurers  are  required  to  display  this information on their websites for information of claimants or beneficiaries.  Insurers are also  instructed  not  to  reject  or  close  a  claim  for  want  of  documents  or  for  delayed intimation of claim.

With regard to penalties on delay in processing of claims, insurers are required to pay interest at the bank rate plus two percent to the claimant for the period of delay. Such interest shall be paid by the insurers suo-moto along with the claim amount, which is applicable to all claims, including unclaimed amounts.

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