IRDA – PAN must for payment of premium above Rs. 50,000 in cash

Insurance Regulatory and Development Authority (IRDA) said that quoting PAN number would be mandatory for making cash payments of more than Rs 50,000 in insurance premium from November 1st 2011.

Acceptance Stage
To ensuring that premiums are paid out of clearly identifiable sources of funds, it has been decided to permit premium/proposal deposits remittances in cash beyond Rs. 50000/- per transaction subject to the customer quoting PAN. Insurers shall verify the authenticity of the details of PAN so obtained.In case of customers not required to have PAN orwith only agricultural income, Form 60/61 prescribed under the provisions of Income Tax Rulesshall be obtained.

Payout Stage
In life insurance business, no payments should be allowed to third parties except in cases like superannuation/gratuity accumulations and payments to legal heirs in case of death benefits. Payments in all cases shall be made after due verification of the bona fide beneficiary. Payments exceeding Rs. 10000/- per claim should be made through account payee cheques, electronic payment methods such as ECS, NEFT systems approved by the Reserve Bank of India.