Insurance funds pile up for want of bank account

    Life insurers are seeing policyholder funds pile up unclaimed following the regulator’s diktat that all maturity benefits should be directly transferred to a bank account. Insurers are now hoping that universal bank accounts under the Jan Dhan Yojana will help address the issue.

   While a large number of pending payments are in respect of small accounts, there are some chunky payouts where the policyholder has not provided his account number. Insurers feel that these could be cases of undeclared income as there is no rationale for large policyholders to not share their account number. “Although it is only since April that it has become mandatory to make payments through electronic transfer, the amounts have been piling up,” said the CEO of a private life insurance company.

   Data released by the government in response to a Parliament....