Plea to use unclaimed insurance money: HC seeks govt's reply

Plea to use unclaimed insurance money: HC seeks govt's reply New Delhi: The Delhi High Court has asked the Centre to respond to a plea seeking direction to set up a mechanism for "utilising" unclaimed insurance money lying with various companies.

Justice Rajiv Shakdher issued notices to the Finance Ministry and the Insurance Regulatory and Development (IRDA) asking them to file their reply by April 26 on the issue and for framing guidelines in this regard.

The petition filed by the Society for Consumers and Investors Protection, a registered society of investors, claimed that over Rs 5,000 crore was lying with 24 insurance companies as "unclaimed deposits" till March 2012, according to information received under RTI Act from the IRDA.

"The total amount of unclaimed money of the policy holders as on March 31, 2012, is Rs 4,453.27 crore in life insurance companies and Rs 679.25 crore in non-life insurances and the regulatory authority has directed the companies that unclaimed amount of policy holders will not be appropriated/ written back in any circumstances by the insurers," the petition filed through advocate Gautam Das said.
The petitioner alleged that "they (ministry and IRDA) have not issued any guidelines, instructions regarding use of the unclaimed policy money or even the period after which the unclaimed money will no be refunded to the claimant of the legalised deposits.

"It is failure on the part of the insurance companies to play proactive role in reaching out the legally competent claimants/legal heirs...," the petitioner said and sought the court "to direct the respondents (finance ministry and IRDA) to work out a proposal, how to utilise the unclaimed amount after failure of genuine efforts in finding out the claimants within a specific period."

The society said countries like New Zealand and Canada have their legislations to protect the unclaimed property of the public and sought a direction for such legislation.

The petitioner suggested for a separate account named "National Unclaimed Money Account" for this purpose and said "create a mechanism so that the amount computed or documented be transferred to the account".

PTI