IRDAI Circulars

IRDAI’s Latest Changes: Unclaimed Policyholder Funds (Nov 17, 2020)

IRDAI's Latest Changes

There has been a modification done by IRDAI (Insurance Regulatory and Development Authority of India) in its master circular (ref. IRDAI/Life/CIR/Mics/41/2024), i.e. master circular number- IRDAI/F&A/CIR/Misc/202/11/2020 dated 17th Nov. 2024. There is an increase in the unclaimed amount with the insurers, which has become a regulatory concern. Based on the discussion between the IRDAI and the insurers, it is paramount to understand that it has become one of the reasons for the increase in the unclaimed amount, as mentioned below in the cases where the consumers are easily traceable but the insurers are not in the situation to pay the claim for the variety of reasons as follows below:

  1. Caused by any litigation under the insurance policy
  2. Caused by the rival claim amount or open title
  3. Caused by freezing or blocking of insurance policies by any government agency
  4. Also, in the case where the benefits paid during the policy with regards to the insurance policies were in force either by the reduced paid or by fully paid-up policies on the due date, but the unclaimed amount shifted due to 6 months window for the payment
  5. Also, for the consumers who have not claimed annuity options and maturity proceeds from the pension and also the insurance products
  6. Also, for the customers who have resided in India and have taken time to settle the net proceeds.

Updates to 2020 Circular: Unclaimed Policyholder Funds

The IRDAI has advised the insurers to magnify their efforts in tacking the legal receipt of the unpaid amounts and to make sure that the disbursement method of the same unpaid amount is efficient. These are the following modifications done in the circular number IRDAI 1 /F&A/CIR/Misc/202/11/2020 dated 17th November 2024 such as:

  • to the Due date, which means the date on which any amount or claim is due for payment as per the terms and conditions of the insurance policy and/or the extent the regulatory framework
  • There is a modification to the extent done in Clause 2(1) (f) of the master circular related to the unclaimed amounts, which means any amount held by the insurer company but payable to the consumers includes the income raised thereon on account of their non-contactability by any means and the leftover unpaid beyond 12 months from the due date of such amount as mentioned. There has been a proviso clause attached to this clause mentioned above as Provided, irrespective of the status of contact ability, the following pending amounts shall be held under the separate sub-heading as ‘Litigation and others’ under the unclaimed amount of money till the similar time the payments are made as follows:
    • Caused by any litigation under the insurance policy
    • Caused by the rival claims or open title
    • This is caused by the freezing or blocking of insurance policies by government agencies.
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Also further another proviso in the same clause as mentioned above that the payable amount shall not be considered as an unclaimed amount of money such as:

  1. Policies related to annuity and also all the in-force insurance policies, which include reduced paid up and fully paid up on the due date.
  2. Concerning the claims initiated by the consumer.

(Note- No changes have been made in Explanation-1&2 of the same clause mentioned above, but changes have been done for Explanation-3& 4 of the same clauses, as a consumer shall be considered non-contactable when the consumer has responded to any of the insurer’s communication and all the amounts where the consumers are not traceable, shall continue to be part of the unclaimed amount of money respectively)

  • There has been modification done in Clause 2(1) (f) of the master circular with the addition of a new clause to this same clause as Clause-2(1) (g), which includes consumer for the motive of this circular shall mean proposer, policyholder, life assured, beneficiary, nominee or any other who has the same financial interest in the insurance policy according to the terms and conditions of the insurance policy so required.


In the end, it can be concluded that the insurers have to make all the possible efforts to recover the amount of these dues at the earliest opportunity and also may follow the measures as suggested under Annexure-1 of this same circular and submit the statements according to the terms of Annexure-2 by the 15th of every upcoming month. The modification made in this circular has been made applicable from the date of release of this new circular (ref. IRDAI/Life/CIR/Mics/41/2024).

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