Treasury plans to review its unclaimed life insurance money regulations after admitting the regulatory costs are a burden on the industry.

It comes after the timeframe for transferring unclaimed money was reduced from seven to three years.

Finance Minister Mathias Cormann says the changes caused substantial disruption to account-holders.

“While many businesses have largely adapted their systems and a number of regulatory changes have been made to exempt a number of accounts from the three-year period, questions remain as to whether the policy is appropriate,” he says in the consultation paper.

“This paper provides an opportunity for a broad discussion on the role of the unclaimed monies provisions, with a focus on bank accounts and life insurance.”

Senator Cormann says the Government wants to reduce the regulatory burden, and the move is in line with its commitment to cut red tape.

“It is not clear the current arrangements strike an appropriate balance between reuniting people with their money and the costs the recent changes have imposed on account-holders and industry,” he said.

Treasury wants feedback on compliance and administrative costs incurred meeting the regulations, including spending on equipment to deal with unclaimed money.

The cost of delays approving transfer of money should also be included in submissions.

Treasury proposes three options: staying with the three-year period; moving to a five-year timeframe; or returning to the seven-year period.

Concerns have also been raised about publishing money owners’ full details.

Treasury accepts publishing fewer details would make it harder for people to reclaim money, but this must be balanced with the Australian Privacy Principles.

The closing date for submissions on the discussion paper is July 11.