Transfer unclaimed accruals to fund: IRDA :

• Transfer unclaimed accruals to fund: IRDA :

Senior citizens welfare fund to benefit Context :

• Insurance companies can no longer retain unclaimed amounts of policyholders if those accruals are more than 10 years old. Such sums need to be, instead, transferred to the Senior Citizens’ Welfare Fund (SCWF) of the Centre.

Introduction :

• All insurers having unclaimed amounts of policyholders for a period of more than 10 years as on September 30, 2017 need to transfer the same to the SCWF on or before March 1, 2018.
• The direction from the Insurance Regulatory and Development Authority of India has come in the backdrop of the amendment made in April to the Senior Citizens’ Welfare Fund Rules.
• The amendment expanded the purview beyond the unclaimed amounts in small savings and other savings schemes of the Centre, PPF, and EPF.
• It brought in unclaimed amount lying with banks, including cooperative banks and RRBs, dividend accounts, deposits and debentures of companies coming under the Companies Act, insurance companies and Coal Mines PF.
• Sectoral watchdog Insurance Regulatory and Development Authority of India (Irdai) has asked insurance companies to get details of such accounts and the prescribed format in which the unclaimed deposits have to be submitted from Department of Financial Services

Key points :

• The Centre brought in Senior Citizens’ Welfare Fund Act, 2015 (SCWF) as part of the Finance Act, 2015, which mandates transfer of unclaimed amounts of policyholders to the fund (SCWF) after a period of 10 years.
• There are rules under the SCWF, specifying about the entities required to transfer such amounts to the fund and its administration. The rules apply to all life, general and health insurers.