New Delhi: The Delhi High Court has issued notices to the Union of India
through the Department of Financial Service, Ministry of Finance and the
Insurance Regulatory & Development Authority (IRDA) alleging financial
irregularities by various insurance companies that are sitting over above Rs
5000 crore as unclaimed funds for discontinued, dormant and lapsed policies
based on a writ petition filed by the Society for Consumers’ and Investors’
Protection
According to Dr G S Sood, President SCIP, "The problem of unclaimed funds
is a very serious issue plaguing not just the insurance industry but the entire
financial world -- considering the fact that nearly Rs 26,000 crores are lying
unclaimed in banks and provident fund accounts."
The petition filed by advocate Gautam Das on behalf of Society for Consumers’
and Investors’ Protection (SCIP) a Consumer Advocacy Group recognized by the
Ministry of Corporate Affairs, Securities and Exchange Board of India (SEBI)
and Telecom Regulatory Authority of India (TRAI) -- came up for hearing in the
court of Justice Rajiv Shakdher. The Society is the only NGO in India working
for Investor Protection that is accepted as a member by the World Federation of
Investors.
In a petition under article 226 of the constitution of India-- the Society for
Consumer's and Investor's Protection has sought the High Court’s direction to
IRDA to formulate guidelines for systematic accounting of the actual amount
lying unclaimed with various private and public, life and non life insurance
companies, provide details of insured -- who are the beneficiaries of the said
amount.
Alternately the petitioner has prayed that the government may consider enacting
legislation for dealing with unclaimed funds and property like that in New
Zealand, Canada and California to protect the unclaimed money of the public
from being misused, siphoned through vague, hazy funds created in fictitious
names
The Society for Consumers’ & Investors’ Protection (SCIP) is involved in
wide activities for consumer protection and investor education at the national
level. It regularly take up consumer and investor grievances with concerned
companies and regulators besides organizing investor education programs and
workshops to update consumers and investors about the latest rules relating to
investors protection and other developments having an impact on them.
In the process of its investor awareness programmes and workshops, the
Petitioner was flooded with request from individuals and organizations who
complained about unclaimed money running into thousands of crores lying with
various public & private insurance companies for some reason or other like
failure of the insurance companies to search, find and making payment of the
said amount to the legally competent claimants.
The society hence filed an RTI and was shocked to learn from the IRDA reply
that the total amount of unclaimed money of policy holders as on 31st March
2011 was Rs. 4453.27 Crores for Life Insurance Companies and Rs. 679.25 Crores
for Non- Life Insurance Companies.
The case comes up for next hearing on 26 April 2013
