Customers now get seven years to reunite with unclaimed monies
The Government will revert the Life Insurance Act's three-year threshold for unclaimed life insurance monies back to seven years.
In 2012 the Government changed the policy to three years meaning life insurance policies deemed to be unclaimed monies would be transferred to the Government if they were inactive for three years.
"Under the three-year rule there was no nexus between re-uniting people with unclaimed monies and the significant costs and administrative burden that were imposed on the industry," Financial Services Council chief executive, Sally Loane, said.
"It is critical that government policies support access and retention of life insurance for all Australians."
The Australian Bankers' Association (ABA) chief executive Steven Münchenberg said that the ABA had warned the Government prior to the 2012 change that it would result in a significant increase in customers finding money that had been moved to the government even when it was not ‘lost'.
"That has now been the experience for many customers, as has been reported extensively in the media over the past four years," Münchenberg said.
"Restoring the time that monies can be held in bank accounts without being deemed ‘unclaimed' to seven years will provide customers with greater certainty that their money will be in the bank when they want it."
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