Posted on Wednesday, 5th October 2011 by Keane Unclaimed Property Team

Over the past few months, Keane has blogged about some of the issues that have recently come to light in the life insurance industry – and how many life insurance companies have found themselves under scrutiny from a beneficiary communication and unclaimed property perspective. As a result, the life insurance industry is starting to see some regulatory changes that will impact the way they communicate with policyholders and beneficiaries. In fact, just last week, California passed two laws intended to tighten consumer protections on retained asset accounts (RAAs).

One of the laws, S.B. 599, repeals the current law that had previously allowed insurers to require beneficiaries to receive their life insurance proceeds only through an RAA. The new law now requires life insurers to obtain a beneficiary’s written declaration as to how he/she wants to receive a benefit payment. California State Insurance Commissioner Dave Jones asked the state legislature to pass this law because of the issues RAA accounts can present. Retained asset accounts appear similar to a checking account, however retailers do not readily accept RAA drafts, and some RAAs have minimum draft requirements. In addition, RAAs are not protected by federal deposit insurance, making the accounts not only hard to access, but also not ideal from a consumer perspective.

Under the new law, insurers can also set up an RAA if the beneficiary fails to make a decision and if the declaration form clearly disclosed that the default benefits payment mechanism was an RAA.

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Posted on Thursday, 15th September 2011 by Keane Unclaimed Property Team

The following is the second part of our two part piece about unclaimed property audits and the Oil & Gas Industry. View the first part here

Oil & Gas Industry Factors

In addition to the common red flags listed in the previous article, there are some risk factors specific to the oil and gas industry — specifically with mineral proceeds, suspense accounts and credit balances.

Mineral Proceeds

The payment of mineral proceeds provides very unique challenges related to unclaimed property. For example, the large volume and small dollar amounts for some royalty payments can make them hard to track and more likely to go unclaimed. Additionally, many states have special rules around reporting unclaimed royalties. For example, in excess of 20 states have some form of a current pay rule, which generally requires payment of certain mineral proceeds before the expiration of a complete dormancy period. Once the abandonment period for the first such payment has run, all subsequent payments due, held, or owing for that owner become reportable as unclaimed property – despite the fact that the dormancy period for all payments in the series has not been satisfied.

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Posted on Wednesday, 20th July 2011 by Keane Unclaimed Property Team

This week, members of the National Conference of Insurance Legislators’ (NCOIL) Life Insurance & Financial Planning Committee announced they are revising the 2010 Beneficiaries’ Bill of Rights Model to require insurers to periodically check the Social Security Death Master File database to identify dead life insurance policy holders and dead owners of retained asset accounts (RAA). This move comes on the heels of the audits by Verus Financial, which at least 35 states have joined to investigate unclaimed property handling practices at life insurance companies.  The committee is also considering making changes to the existing model law that would require insurers to use the same review procedures for both annuities and life insurance.

In the same vein, it was recently announced that New York state insurance regulators are ordering life insurers to use the Social Security Death Master File for insurers who may have died and report on the effectiveness of the search. This requirement is being issued as a result of recent reports alleging that some life insurers have been using the Death Master File to try to locate annuity benefits recipients who have died – but have not been using the database to try to find life insurance policy insureds who have died.

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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 Friday, 20th May 2011 by Keane Unclaimed Property Team

Recently, Keane appeared in Disclosures Magazine, and on the radio show Marketplace Money.

What role does a CPA play in the compliance process? How can CPAs ensure that their clients’ organizations are not at risk of audit? Laura Lane, Vice President of Keane’s National Consulting and Advisory Services group, recently answered these types of questions in an article titled, “Money Pit: How to Track and Ensure Unclaimed Property Compliance,” featured in the May/June 2011 issue of Disclosures Magazine.

In the article, Lane explains the basics of unclaimed property and addresses the fact that in light of the fiscal crisis, most states are increasing audit intensity in an effort to raise revenue without imposing tax hikes on residents. Furthermore, Lane states that because this has become a commonality among states, CPAs should become familiar with and learn about unclaimed property so that they can help their clients make better financial decisions for their organizations.

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Posted on Friday, 6th May 2011 by Keane Unclaimed Property Team

On Tuesday, May 3rd, Texas substantially amended HB 257 proposing, among other things, to adjust the due dates for Texas unclaimed property rules, reporting, and delivery.  Previously, Texas’ reporting due date was November 1st with a cut-off date of June 30th.  The amended bill proposes a due date of July 1st with a cut-off date of March 1st.  Accordingly, Texas’ due diligence statute is amended to match the new deadline.

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Posted on Thursday, 7th April 2011 by Keane Unclaimed Property Team

Please be advised that on March 31, 2011, New York passed the budget bill S2811, which replaced the identical New York Abandoned Property Law A4011. The new law, effective immediately and due with the next reporting cycle, provides the following:

New York S2811 lowered the dormancy periods from 5 years to 3 years for the following property types:

• Money or securities held in escrow, but excluding escrow accounts for which the duty or obligation for which such amount was deposited has not been performed and such performance is still required.

• Amounts due on deposits held by a banking organization or any amount to which a shareholder of a savings and loan or a credit union is entitled.

• Accumulations of interest or other increments held by a bank for payment of an interest in a bond and mortgage apportioned or transferred by it.

More New York Abandoned Property Law Updates

In addition to adjusting dormancy periods, S2811 also amended New York’s reporting provisions. There following are major changes to keep in mind for your next report to New York:

1. Publication requirements: Every banking organization must publish on or before September 1st of each year a notice naming potential owners of unclaimed property being held by the banking organization. Every insurance company must publish on or before May 1st of each year a notice naming potential owners of unclaimed property being held by the company. These provisions provide a little more flexibility in that the previous requirement mandated publication within 30 days of filing a report.

2. Negative and Preliminary reports no longer required: Negative and preliminary reporting requirements are removed for banks, utility companies, insurance companies and condemnation awards reports. The bill further confirms the reporting deadlines and cut-off dates.  Once the statutory due diligence and publication requirements have been satisfied, the report and remittance would be due for banking institutions by November 10th and for life insurance companies by September 10th.

3. Miscellaneous:  The Verification and Checklist (AC2709) notarization requirement was lifted.  NY State law still mandates that all unclaimed funds valued at $20 and higher follow the statutory due diligence requirements.  The State Controller’s Office posts all owners entitled to property valued at $20 and higher on their website for at least one year. Gift cards remain at a 5 year dormancy period.  

Please note we will continue to track any changes regarding new legislation in our unclaimed property blog and our quarterly unclaimed property newsletter, Keanotes.

Should you have any questions or require additional information, you may also contact me directly via email at dzumoff@KeaneUP.com.

Sincerely,

Debbie L. Zumoff
Chief Compliance Officer
Keane

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Posted on Wednesday, 23rd March 2011 by Keane Unclaimed Property Team

Kelmar Associates, LLC has recently (first few months of 2011) been demanding significantly more information from holders with an emphasis on potential equity and debt related properties during its escheatment audits. Previously, Kelmar’s Initial Document Requests (IDRs) commonly asked some limited scope questions about the Holder’s contractual relationship, experience or history with their transfer agent. Kelmar’s auditing procedures are now requesting more detailed and comprehensive information concerning the Holder’s securities-related property types.

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Posted on Monday, 21st March 2011 by Keane Unclaimed Property Team

Last week, the Seattle Post-Intelligencer reported that Costco is suing the State of Washington over $3.2 million in unclaimed rebates. The lawsuit is in response to an order mandated by the state in February that Costco owed more than $3 million in unused rebates. The state says the funds belong in a state-managed program for consumers who want to claim the rebates. In Costco’s suit, however, the company alleges it should not have to turn over the requested funds as it engaged a third party rebate house to manage its rebate program. Because the company does not retain the amounts at issue, it doesn’t believe it owes the state anything.

The $3.2 million represents unclaimed Costco rebate from 2004 to 2010, plus interest.

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Posted on Monday, 28th February 2011 by Keane Unclaimed Property Team

Reporting unclaimed property in Indiana? If so, pay attention! Today, February 28, 2011, is the deadline for unclaimed property reports under the Indiana Amnesty Program. Early last fall, the Office of the Indiana Attorney General instituted a one-time only unclaimed property amnesty program to help organizations holding unclaimed property come into compliance with the Unclaimed Property Reporting Act, without consequence of accrued payment and applicable penalties. Holders wishing to participate in this program had to have enrolled by October 31, 2010.

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