As per the new direction from IRDA, 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.
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 saving schemes of the Centre, PPF and EPF.
It brought in the 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.
The Centre brought in Senior Citizens’ Welfare Fund Act, 2015 (SCWF) as part of the Finance Act, 2015, which mandates the transfer of unclaimed amounts of policyholders to the fund (SCWF) after a period of 10 years.
The fund will be administered by an Inter-Ministerial Committee, headed by a Chairperson. The Committee will be competent to spend money from the fund for satisfying various objectives.
The accounts of the fund will be open to audit by CAG, regularly. The Central Government will present the annual report and the one furnished by CAG to be laid before the Parliament.