"Unlike SEBI's investor protection fund, there was no mechanism in the insurance space to deal with unclaimed amounts. Irda's initiatives will make insurers more responsible towards managing such cases. Majority of claims disbursed constitute maturity proceeds, and not death benefits. During the policy tenure, policyholders move residences and if the address is not updated, it is difficult to track them," said P Nandagopal, managing director and CEO, IndiaFirst Life Insurance, explaining the need for such a framework.

Except for the postponement of date of implementation, the changes are minor in the new directive."As per the modification, insurers will need to display information on any unclaimed amount above 1,000 on their websites. The policy` holder now only needs to fill out his name, policy number, PAN and date of birth on the website and if the information in any two fields matches with the insurers records, the unclaimed amount with the company will be displayed," said Vighnesh Shahane, CEO and whole time director, IDBI Federal Life Insurance.

In addition to that in case of new policies, insurers have been asked to obtain the bank details right at the inception stage."Many a times, cheques for the claim amount get misplaced or remain undelivered, resulting in unclaimed amount. A direct transfer to bank accounts will eliminate such leakages," said Sanjay Datta, chief, underwriting and claims, ICICI Lombard.

To authenticate the bank account information, insurance firms can ask insurance-seekers to furnish a cancelled cheque, unless they have issued a cheque for the first premium from the same account. A copy of the cheque will have to be preserved by the insurer. The regulator has also barred insurers from charging fee for changing the bank account or modifying the account details.

"There are some exemptions also listed by the regulator where one may not disclose the bank account details. All term insurance policies (without return of premium) are exempted from sharing of bank details. In case of death claim, bank details of the nominee will be taken by the insurer at the time of the claim," says Shahane. Insurance companies are now required to make all payments to policyholders, including claim disbursal, through electronic payment modes.