Unclaimed Amounts of Policyholders
Money owed but not collected. Here is how insurers must hold it, account for it and hand it on.
Unclaimed amounts of policyholders are money an insurer owes but has not been able to pay: a maturity, survival benefit, claim or refund that nobody has collected. The insurer must keep this money safe, invest it in a separate fund, credit income to it, and pay it out with that income whenever the rightful person claims it. If it stays unclaimed for 10 years, it moves to the Government's Senior Citizens' Welfare Fund (SCWF), and it can still be claimed for 25 years after that.
The rules come from IRDAI's Master Circular on Unclaimed Amounts of Policyholders dated 17 November 2020, as modified on 16 February 2024. IRDAI's 2024 master circular on protection of policyholders' interests repeats the key points for consumers.
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What Counts as Unclaimed
Clause 2(1) of the 2020 master circular, as modified on 16 February 2024.
- Unclaimed amount
- Any amount held by an insurer but payable to consumers, including income accrued on it, that remains unpaid beyond twelve months from its due date because the consumer cannot be contacted by any means. (Before 16 February 2024 the test was six months from the due date or settlement date, whichever was earlier.)
- Due date
- The date on which an amount or claim is due for payment under the policy's terms and conditions and/or the regulatory framework.
- Non-contactable
- A consumer who has not responded to any of the insurer's communications. Where a consumer cannot be traced at all, the amount stays unclaimed.
- Consumer
- The proposer, policyholder, life assured, nominee, beneficiary or anyone else with a financial interest in the policy under its terms.
- Litigation and others
- A separate sub-heading inside unclaimed amounts for money held back, whatever the contact status, because of litigation under the policy, rival claims or open title, or a government agency freezing or blocking the policy.
Sources and Exclusions
- check_circleUnclaimed amounts can arise from death claims, health claims, maturity claims, survival benefits, surrenders and foreclosures, premium due for refund, premium deposits not adjusted against premium, and indemnity claims (Explanation 1, unchanged in 2024).
- check_circleA cheque the insurer issued but the policyholder never cashed is credited back to unclaimed amounts once the cheque's validity expires. Its age keeps running from the original date.
- check_circleNot unclaimed since 16 February 2024: amounts under annuity policies and under all in-force policies, including reduced paid-up and fully paid-up policies on the due date, and amounts on claims the consumer has started.
The Timeline
| Stage | Rule |
|---|---|
| Due date + 12 months, consumer not contactable | Becomes an unclaimed amount, held in the unclaimed fund and earning income |
| Every half year (31 March, 30 September) | Insurer updates its website list of unclaimed amounts of ₹1,000 or more, within 60 days |
| More than 10 years unclaimed as on 30 September | Transferred to the Senior Citizens' Welfare Fund on or before 1 March of that financial year |
| Within 7 days of the transfer | Insurer intimates IRDAI in Form D |
| Up to 25 years after transfer to SCWF | The policyholder or beneficiary can still claim, through the insurer |
| No claim after 25 years | The amount escheats (passes) to the Central Government under Section 126 of the Finance Act, 2015 |
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Accounting and Disclosure
Paras 6 to 9 of the 2020 master circular. This is the part IC-26 tests.
- check_circleNo write-back: an insurer may never appropriate or write back any part of unclaimed amounts. IRDAI's 2024 actuarial, finance and investment master circular repeats this.
- check_circleOne segregated fund: all unclaimed amounts sit in a single fund invested only in money market instruments, liquid mutual funds and/or fixed deposits of scheduled banks, or other instruments IRDAI permits.
- check_circleLife insurers run it as a segregated fund with its own SFIN (fund identification number), valued under the IRDAI (Investment) Regulations, 2016.
- check_circleBalance sheet: the fund's value is shown under the schedule of current assets, and "Unclaimed Amounts of Policyholders" under current liabilities. The statutory auditor checks that the two reconcile. LIC, for example, discloses the assets in Schedule 12 "Advances and Other Assets".
- check_circleIncome: investment income is credited to the unclaimed fund and paid to the claimant with the principal. It is shown as a separate line, net of fund administration expenses. LIC accounts for it on an accrual basis and shows it under "Interest, Dividend & Rent - Gross" in the Revenue Account.
- check_circleFund administration expenses: may be recovered quarterly, up to 20 basis points a year on the fund at the start of each quarter.
- check_circleSolvency: unclaimed liabilities, the income on them and the investments backing them are all left out of the available solvency margin.
- check_circleNotes to accounts: an age-wise analysis (Form A) and the year's movement (Form C: opening balance, income credited, additions, claims settled, transfer to SCWF, closing balance) are disclosed in the annual report.
Governance and Reporting
- check_circleThe Board's Policyholder Protection Committee reviews unclaimed amounts every quarter: ageing (Form A), progress of settlement (Form B) and steps taken to trace people.
- check_circleThe Audit Committee oversees compliance when it examines the quarterly financial statements, and a concurrent auditor verifies the fund and its income every quarter.
- check_circleForms A, B and C go to IRDAI quarterly, certified by the CEO and Compliance Officer. Since February 2024, insurers also file a monthly statement by the 15th.
- check_circlePayments go by electronic mode (NEFT, RTGS, IMPS, ECS and similar), and insurers collect bank details at the proposal stage, to stop amounts going unclaimed in the first place.
How a Policyholder Checks and Claims
- 1
Search
Use IRDAI's Bima Bharosa unclaimed amount page (bimabharosa.irdai.gov.in), which links to every insurer's search, or the insurer's own website. Every insurer must provide this search.
- 2
Enter details
Policy number, PAN, name and date of birth of the policyholder. IRDAI's 2024 policyholder master circular says matching any two of these identifies the amount.
- 3
Claim
Follow the insurer's claim process. The insurer pays the amount with the investment income credited to it.
- 4
After transfer to SCWF
Still claim through the same insurer, up to 25 years after the transfer.
Exam Traps
The SCWF transfer is after 10 years, not 5, 7 or 15; the deadline is 1 March, counted on amounts unclaimed as on 30 September. The claim window after transfer is 25 years. Unclaimed money is never written back to income. Its income belongs to the claimant, not the insurer, apart from fund administration expenses capped at 20 basis points a year. Unclaimed assets are excluded from the solvency margin. Check which definition a question uses: twelve months since February 2024, six months before.
FAQs
What is an unclaimed amount of policyholders?expand_more
Money an insurer owes a policyholder or beneficiary, with income on it, that is still unpaid more than twelve months after its due date because the insurer cannot contact them (IRDAI definition since 16 February 2024).
After how many years do unclaimed amounts go to the Senior Citizens' Welfare Fund?expand_more
After 10 years. Amounts unclaimed for more than 10 years as on 30 September are transferred to the SCWF on or before 1 March of that financial year.
Can I still claim money transferred to the SCWF?expand_more
Yes, for up to 25 years from the date of transfer, through the insurer that transferred it. After that the amount passes to the Central Government.
How do I check an unclaimed amount in LIC or any other insurer?expand_more
Every insurer must offer a search on its website for unclaimed amounts of ₹1,000 or more, updated every half year. IRDAI's Bima Bharosa site links to all of them. You need your policy number, PAN, name and date of birth.
Where do unclaimed amounts appear in a life insurer's accounts?expand_more
The investments are shown under current assets (LIC: Schedule 12, Advances and Other Assets) and the liability as "Unclaimed Amounts of Policyholders" under current liabilities. Age-wise analysis and the year's movement are in the notes to accounts.
Can an insurer keep the income earned on unclaimed money?expand_more
No. Income is credited to the unclaimed fund and paid to the claimant. The insurer may only recover fund administration expenses, up to 20 basis points a year.
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