The Insurance Regulatory and Development Authority of India (IRDAI) is now working to find a way to return the funds either to the policyholders or the original beneficiaries.
Of the overall INR151.7bn in unclaimed funds, INR105.1bn is held by India’s largest life insurer, Life Insurance Corporation of India, with the remaining INR46.6bn held by other private insurers.
The IRDAI has already asked that the funds are returned as lump-sum payments.
The regulator has also asked insurers to set up a search feature on their respective websites so that policyholders or their nominees can easily find out if they have unclaimed funds.
Claimants will be able to do so by inputting their Aadhaar (a 12-digit unique identification number) or permanent account number (Pan).
There are many reasons why insurance money is left unclaimed. For instance, the policyholder could have passed away; or, in the case of pension schemes, the amount of money accumulated was not enough to buy an annuity from the insurer.
Life insurers are required to update the IRDAI about any unclaimed funds at least twice a year.