SECP bars insurance firms writing back unclaimed insurance benefit

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) barred the insurance companies from writing back or appropriating the unclaimed insurance benefit amounts in any circumstances, according to a document.

The unclaimed insurance benefits are the amounts, which have become payable in accordance with the terms and conditions of an insurance policy but have not been claimed by the policyholders or their beneficiaries.

The SECP through a circular has advised the insurers to provide age-wise breakup of unclaimed insurance benefits to the commission, to be disclosed in their financial statements.

All life insurers are required to carry out a search process within three months from the date when the maturity benefits become due under a life insurance contract, it said. The search process will include among others, contacting the policyholders and their beneficiaries through letters, telephonic call and other communication modes assisting them in processing the maturity claims.

For this purpose, an insurer may establish and subsequently use a procedure to utilise the database of the National Database Regulatory Authority (Nadra) for getting up to-date information about the policyholders and their beneficiaries, it said.

All life insurers are required to carry out a search process within three months from the end of December 31st each year to determine if a policyholder has expired. This search process will be carried out in respect of life insurance policies, which have become inactive due to non-payment of premium during the preceding year, it said.

All insurers are required to place on their website an updated list of all policyholders’ names who have not claimed or encashed their benefits. Furthermore, all the insurers will place on their website an information request form and contact details of the officer concerned who would provide information pertaining to existence / status of an insurance policy to the insured or the legal heir.

All insurers are required to publish an advertisement twice every year, in two national daily newspapers (English and Urdu) of wide circulation at the prominent place in respect of unclaimed maturity benefits payable, according to the circular.