Here is how you can lay claim to those long-forgotten assets

A couple of weeks after she got the letter, Gupta (55) decided to check its veracity with GLC Wealth Advisory, the firm that had mailed her. It opened up a world of riches. “I went to their office. People there helped me with the documentation to reclaim my money,” says Gupta. Yet, it took more than a year for Gupta to lay her hands on that small fortune.

For Gupta, this would not have been possible but for the services of GLC Wealth, a Delhi-based financial and legal advisory . The firm identifies and traces investors who have forgotten their investments in shares, real estate, and government securities, among others, and never claimed them.

Notably, all shares, dividends, debentures and accumulated interest that have remained unclaimed for seven years or more get transferred to the Investor Education and Protection Fund (IEPF), a repository set up under the Companies Act, 1956. Provisional data from IEPF puts the unclaimed balance at the end of January at ₹5,675 crore. Government data shows that total unclaimed deposits (money lying unclaimed in bank accounts for years) transferred to the Reserve Bank of India (RBI) by public sector banks totalled ₹35,012 crore as of February.

IEPF has a searchable database but it requires multiple data points such as account number, depository client ID or folio number. If such details are not available, investors would have to scour company websites or even hire the services of a private agency.

Unclaimed insurance protection

Unclaimed assets are not limited to banks and stock markets. It extends to insurance policies as well. Insurance repository CAMSRep estimates the unclaimed insurance amount at ₹20,000-22,000 crore, covering around 7 million policies. “LIC alone accounts for ₹15,000-17,000 crore, across 5 million policies,” says Vivek Bengani, CAMSRep’s chief executive officer.

Unclaimed insurance money, per Insurance Regulatory and Development Authority of India’s (Irdai’s) definition, is any amount payable to the policyholder as death claim, maturity claim or survival benefits that remain unclaimed beyond six months from the date of its settlement.

While all insurers are mandated to post unclaimed insurance information on their websites, there is no single database that compiles information from all insurers. Even private recovery platforms prefer to stick to other unclaimed assets over insurance. Irdai has been nudging insurers to take steps to release the unclaimed amount. It is here that CAMSRep’s contact tracing tool is a big help.

“We start with a broad search on the web to seek alternate contacts. We put algorithms on the available data to see if alternate email IDs or mobile numbers can be found. We sift through a lot of junk data. Once we have possible matches identified, we run extensive communication tools using all possible means, even approaching family members in person or via calls to inform them about the unclaimed benefit. This is the validation process. Once we establish contact, we collect bank details of the beneficiaries and share the entire data with the insurance company,” says Bengani.

CAMSRep is already working with a dozen insurers and has so far processed ₹850 crore across 2.5 lakh policies. Of this, ₹100 crore worth of unclaimed benefits have been resolved for about 40,000 policyholders in the last 12 months.

ICICI Prudential Life Insurance achieved a 10% efficacy running this pilot project with CAMSRep. The insurer also engages with credit bureau agencies,the Insurance Information Bureau, distribution channels and its own branches to reach out to policyholders. “With ongoing engagements at multiple levels, we were able to pay out over ₹597 crore in FY22 and over ₹1,003 crore in FY23 to beneficiaries,” says Amish Banker, senior executive vice president, customer service and operations at ICICI Pru Life.

LIC, too, is evaluating the CAMSRep service. “If it comes on board, the resolution will get a huge fillip,” says Bengani. Meanwhile, the repository is evaluating collaborating with India Post to enrich its database and deploy AI tools.

Vineet Arora, chief operating officer, HDFC Life, says policy proceeds are credited to a beneficiary’s account within three or four days on receipt of information and validation. “As on 31 March, the unclaimed amount was ₹490 crore, which is a reduction of 26% from ₹663 crore a year earlier.”

A majority of the unclaimed insurance money relates to maturity claims. “There are more maturity claims than death claims. Besides, many people are unaware of different insurance benefits they are eligible for. For example, credit cards offer life/personal accident insurance, travel insurance, medical insurance, and insurance against credit card fraud, among others. There could be embedded insurance in lifestyle products,” says Bengani of CAMSRep.

Insurance expert Sashidharan Nair says the industry has already initiated a special drive to locate maximum beneficiaries based on available data, and results of these initiative will be known in a few months. “One of the ways would be to engage an external agency and paying them a percentage of the accrued interest,” says Nair.

Meanwhile, every new policy is coming up with an e-insurance account that makes it easier to update contact information and fetch policy documents.

Claiming your money

Claiming what is rightfully yours is a complex process (see graphic), but private recovery platforms such as Jeevantika Consultancy Services, MUDS Management and Garg Law Chamber help people recover unclaimed shares, dividends and deposits. They have created their own databases to aid the process.

For example, Jeevantika Consultancy Services has created a web portal that allows anyone to look up unclaimed shares data based on details such as name, place and the stock name. “We have put 15 lakh folios worth ₹35,000 crore across 200 companies in a searchable format on the website,” says Vijai Mantri, co-founder, Jeevantika Consultancy Services.

The company charges a flat fee of ₹25,000 if the unclaimed amount is less than ₹2 lakh and 10% of the unclaimed amount if it is more than ₹10 lakh. “We take the payment only after the case is resolved,” he says.

Ankit Garg, chief executive officer and co-founder, Garg Law Chamber, has a dedicated team to collate information from public records. “We do in-depth analysis and research online to figure out who the right legal heirs are and where they are based. After background check, verification and due diligence, we reach out to the company to get the unclaimed money processed,” he says.

The entire process takes anywhere up to three years . IEPF data shows that of the 105,000 applications received for unclaimed money since November 2017, only 31,440 were approved as on 30 November 2022.

In the case of mutual funds, there is hardly any public data on unclaimed redemption amounts and dividends pending with asset management companies (AMCs). “If someone has documentary evidence of their investments in mutual funds (MFs), we help them retrieve it. Unclaimed redemption amounts and dividends are reclaimed from the AMCs by submitting claim forms with KYC documents, whereas any income earned on the deployment of unclaimed amount after three years of redemption are utilized for the education of investors” says Sanchit Garg, chief executive officer and co-founder of GLC Wealth LLP.

Much needs to be done to streamline the process for eligible beneficiaries to redeem their unclaimed assets. The Association of Registered Investment Advisers has sought to make nominations mandatory for all financial assets among its many recommendations. For now though, one can only pin their hopes on the government and regulators to set up common IT portals across financial assets and digitize the process.

Updated: 13 Jul 2023, 12:26 AM IST