Life assurance policies that have not been touched by their holders for years are to be handed over to the State from 2004 onward.
Under a Bill published yesterday by the Minister for Finance, Mr McCreevy, life assurance companies will be obliged to transfer monies contained within dormant life assurance policies to the State's Dormant Accounts Fund.
The first such transfer is scheduled to occur in April, 2004, with the resulting money to be used for "charitable and social purposes".
The legislation, if enacted, will be broadly similar to provisions implemented last year with respect to dormant bank, building society and post office accounts.
The first money from those accounts is due to pass to the State in April of next year. It has been estimated that these accounts could yield €170 million, but no figures are as yet available as reactivations continue.
In the case of life assurance policies, dormancy will kick in where no customer-initiated communication has occurred on a fixed-term product for five years after the expiry of the term or, if later, five years after the last contact made by the policyholder.
For policies that do not have a specified term, dormancy will apply where 15 years have passed without contact initiated by the customer.
All insurance companies in the Republic will fall under the legislation. They will be obliged to contact holders of dormant policies worth €500 or more and to inform them of how their policies can be reactivated. The firms will also be obliged to place annual notices in national daily newspapers so that holders of smaller policies might be aware of the situation.
Even after dormant monies have been transferred to the State, rightful policyholders still retain the right to pursue any money due to them. Insurance companies will be required to maintain a "Register of Unclaimed Policies" to facilitate such a procedure.
The legislation will apply to all life assurance policies taken out by Irish residents, apart from those that relate to occupational pension schemes, group health insurance, disability benefit schemes and sponsored superannuation schemes.
