Posted on Wednesday, 4th January 2012 by Keane Unclaimed Property Team

On January 1, 2012, Delaware published two proposed unclaimed property regulations numbered 959 and 965.  The first details new due diligence requirements, the second sets forth, in detail, audit appeals procedures.

Regulation 965 is titled, “Regulation on Practice and Procedure for Establishing Running of the Full Period of Dormancy for Certain Securities and Related Property.”  While the title purports to address the abandonment of securities property, the regulation, in fact, seeks to create a brand new obligation to perform due diligence in Delaware with respect only to “Securities and Related Property.”

“Securities and Related Property” is defined to mean Property that consists of:

1. Intangible ownership interests in corporations, whether or not represented by a stock certificate, bonds and other securities
2. Dividends, cash, stock and other distributions made (or attempted to be made) by issuers of securities in respect of the securities issued
3. Certificates of membership in a corporation or association
4. Funds deposited by a Holder with fiscal agents or fiduciaries for payment to Owners of dividends, coupon interest and liquidation value of stocks and bonds
5. Funds to redeem stocks and bonds

The new due diligence obligation does not include non-securities related properties or general ledger items.  As such, it appears that this is an effort on the part of Delaware regulators to respond to the backlash caused by the wave of Kelmar (Delaware initiated) audits across the securities arena over the past 18 months.

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Posted on Wednesday, 21st December 2011 by Keane Unclaimed Property Team

On December 16, 2011, Kentucky Representative Robert R. Damron proposed a new law known as the Unclaimed Life Insurance Benefits Act. The proposed law would impose requirements on life insurance companies similar to those found in the model law passed by the National Conference of Insurance Legislators (NCOIL) at the end of November – which requires life insurers to match Social Security Death Master File (DMF) records, or an equally comprehensive service, with in-force life insurance policies and retained asset accounts (RAAs) each quarter.

Kentucky’s proposed law includes the following requirements:

• Like NCOIL’s model law, life insurance companies would be required to perform a comparison between its in-force life insurance policies and RAAs against the DMF, or equally comprehensive service. This comparison must be performed on a quarterly basis at minimum.
• If during this process, the life insurance company identifies a match with one of its insureds, they must complete a good faith, documented effort to confirm the death and determine whether benefits are due. This must be done within 90 days.
• If benefits are due, the insurer must use good faith efforts to locate the beneficiary(ies) and provide appropriate claim forms or instructions on how to make a claim. When permitted by law, the life insurance company may disclose some personal information about the insured or beneficiary to help identify other potential beneficiaries or entitled heirs. Life insurance companies would not be permitted to charge insureds, account holders, or beneficiaries any fees associated with the search or verification processes.
• The benefits from a life insurance policy or RAA (plus any applicable accrued interest) would be payable to the designated beneficiaries or account owners. In the event that they cannot be found, the benefits would escheat to the state as unclaimed property.

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Posted on Wednesday, 29th June 2011 by Keane Unclaimed Property Team

Please be advised that on June 16, 2011, SB 136 was passed and became Nevada unclaimed property law. This bill introduces dramatically new and unique unclaimed property provisions for the state. Specifically, the bill includes a provision that reduces certain dormancy periods to two years.

The dormancy change was added by a Committee amending the bill shortly before it was sent to the Governor to be signed. The new law became effective immediately on June 16, 2011. Read More »

Posted on Wednesday, 29th June 2011 by Keane Unclaimed Property Team

Please be advised that on June 23, 2011, the Governor of North Carolina signed HB 692 into law reducing dormancy periods and amending the requirements of the North Carolina unclaimed property report. The changes are as follows:

1. The dormancy period for “wages and other compensation for personal services” has been reduced from 2 years to 1 year.
2. This bill makes the following North Carolina unclaimed property reporting changes:

1. Removes the NAUPA reference from the statute so that electronic formats are now simply "prescribed by the Treasurer."

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Posted on Wednesday, 1st June 2011 by Keane Unclaimed Property Team

As reported earlier, the New York State abandoned property laws changed recently when the Legislature passed its budget bill for 2011-2012 via Senate Bill 2811.

The bill includes multiple changes to the New York Abandoned Property Law that affect holders required to file with New York for the next reporting cycle.   The New State Comptroller’s Office of Unclaimed Funds has also added an alert to its website summarizing the recent changes.

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Posted on Friday, 13th May 2011 by Keane Unclaimed Property Team

State Enforcement Update From Keane  – May 13, 2011

On April 25th 2011, Keane reported that California’s State Controller announced a large settlement with life insurer, John Hancock, regarding an insurance company unclaimed property audit.   In his announcement, State Controller Chiang asserted that insurers are not doing enough analysis of dormant accounts; and therefore are engaging in a practice of improperly failing to pay death benefits to the beneficiaries of life insurance policies.  It appears that the issues uncovered during California’s audit concerning the life insurer’s practices and compliance with unclaimed property laws have caused an escalation of the attention paid by the States to the insurance industry.  It has now been reported that 37 states have hired the third party audit firm, Verus, to determine whether life insurers are doing enough to find out whether life insurance policy insureds have died, locate the beneficiaries when the insureds have died, and turn unclaimed property over to the appropriate state agencies.
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Posted on Wednesday, 13th April 2011 by Keane Unclaimed Property Team

Signed into law in July 2010, the Dodd-Frank Act directed the SEC to publicize rules implementing its measures.  The following is the summary of the SEC’s proposed rules which were published in the Federal Register on March 18, 2011, regarding required changes to Regulation 17Ad-17:

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Posted on Thursday, 16th December 2010 by Keane Unclaimed Property Team

WINTER 2011 (Current through 12/13/10)

Gift Card Escheatment Regulations

CALIFORNIA GIFT CARD ESCHEATMENT
SB 885
Introduced 1/19/2010, Passed 8/25/2010, Vetoed by Governor 9/24/2010
This bill would require that a gift certificate with a cash value of less than $10 be redeemable in cash for its cash value, and would require that a gift certificate contain a statement to that effect. This bill would also delete the exceptions to the prohibition on the sale of a gift certificate that contains a dormancy fee. Read More »

Posted on Friday, 12th November 2010 by Keane Unclaimed Property Team

As states become more aggressive with abandoned property laws and guidelines, they continue to make changes to legislation in an effort to generate more revenue. On September 30, Tennessee proposed new administrative rules for unclaimed property that if passed will directly affect businesses operating in the state.

The proposed changes apply to Organizations and Individuals Required to Report, Reporting Forms, Alternative Reporting Forms Accepted by the State and Agreements Relative to Unclaimed Property.

Organizations and Individuals Required to Report: The current rule for organizations and individuals states that business employing less than 25 employees do not have to report unclaimed property. The proposed rule would delete this exception making it mandatory for all businesses in the state to report this information. Read More »

Posted on Friday, 8th October 2010 by Keane Unclaimed Property Team

Michigan’s new reporting bill, HB 6421 – introduced on September 8th, was signed into law by the Governor on October 5, 2010.  The details are summarized below:

• General dormancy period from 5 to 3 years.
• Money orders from 7 years to 3 years.
• Any sum payable on a check, draft, or similar instrument from 5 years to 3 years.
• Demand, savings, matured time deposits including any automatically renewable deposits, from 5 to 3 years.
• Trust accounts and accounts under the Gifts to Minors Act, from 15 years to 3 years.
• Funds owed under any life or endowment insurance policy, from 5 to 3 years.
• Gift Cards, from 5 years to 3 years.

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