Thursday, July 28, 2011

Did You Know? NFL Lockout Edition

Earlier this week, the National Football League and its Players' Association agreed on a new collective bargaining agreement, meaning that football should go on uninterrupted for the next 10 years everywhere from New York to Los Angeles Oakland.  The recent dispute between the NFL and its players, of course, largely centered around money.  The NFL and the players each argued that the other was getting too much of it.

What does this have to do with unclaimed property?  Well, if the NFL and the Players' Association want to bring in more revenue, they can start by collecting the amounts they are already owed.  The National Football League and the Players' Association both have money waiting for them at the New York Office of Unclaimed Funds and the Washington DC CFO's Office, respectively.  The New York Giants also have money waiting for them in New Jersey, which is, of course, the state in which they (as well as the Jets) are located.

Kenyan Financial Institutions Express Concern Regarding Proposed Unclaimed Assets Law

As we've mentioned earlier, Kenya is considering adoption of an unclaimed property law that is very similar to the Uniform Unclaimed Property Act.  Not everyone is happy about this development.  According to an article in The Daily Nation, Kenyan banks and insurance companies are "alarmed" about several aspects of the law, including its potential retroactivity, and provisions allowing the government to sell unclaimed property to the highest bidder after three years.

Also of significant concern to the potential holders is an apparent conflict in Kenyan law that could result in companies continuing to be liable to owners of unclaimed property even after it has been reported and remitted to the government.  Although the proposed legislation does provide for indemnification of the holder (as do the U.S. uniform acts) the would-be holders seem to want greater assurance that they will not be subject to double liability.

Monday, July 25, 2011

Rhode Island Changes State Notice Requirements - Check the Fine Print

On July 12, the Governor of Rhode Island approved Senate Bill 725, which makes some changes concerning the state's publication of notice to owners of unclaimed property.  Pursuant to the old version of the law, the state was required to publish notice once per year in a newspaper in general circulation in each county of an owner's last known address.  Under the revised law, the state will publish those notices twice per year, but the advertisements will be limited to no more than 1/4 of a page.

Friday, July 22, 2011

California Issues Quarterly Newsletter; Veiled Threats

The California State Controller's office has issued its most recent quarterly newsletter for holders of unclaimed property.  The newsletter contains a listing of common reporting errors made by holders of unclaimed property, as well as a helpful listing of upcoming dates and deadlines.

The primary substance of the newsletter, however, is a reminder from California about the appropriate "rules of jurisdiction."  While the entry purports to provide a "remind[er]" about the jurisdictional reporting rules, it is also clear that California issuing a thinly-veiled warning to holders that all California property (no matter how de minimis) should be reported to California as opposed to other states. 

Among the warnings:
  • Even if a another state is willing to receive "incidental" California items, California will still assess an "interest penalty";
  • Late reports will be subject to a "late filing interest assessment";
  • Other states cannot indemnify a holder for California property delivered to another state.
The latter warning is odd.  Technically, whether or not the receiving state can indemnify a holder for anything is, quite obviously, up to the receiving state.  Nonetheless, the point is that California will not abandon its pursuit of a holder simply in light of evidence that Califonria property was reported elsewhere.

Thursday, July 21, 2011

North Dakota Holding $32 Million

According to an article posted on the Forum of Fargo-Moorhead (ND), the State of North Dakota is currently holding about $32 million in unclaimed funds for its residents.  While the amount held and returned by North Dakota are smaller than others in dollars, the state does very well in returning money by percentage.  According to the article, "In fiscal year 2010, the state took in $3.8 million in unclaimed property and paid out $1.5 million."  That's a nearly 40% rate of returned property.

Tuesday, July 19, 2011

Factors That Trigger Unclaimed Property Audits

One of the topics that most unclaimed property want to know (but are afraid to ask) is:   What factors lead to a state's decision to commence an audit?  Obviously, there are a multitude of factors that influence this decision, and from time to time, the audit of a particular holder may be completely random, or part of an industry-wide "sweep" of many holders in the same line of business.

While certainly not an exhaustive list, Section 1301:10-3-04(E) of the Ohio Administrative Code has a non-exclusive list of factors that may be used by the Director "in determining whether reasonable cause exists to believe" that a holder should be audited.  Among the factors are:
  • the size of the holder;
  • the "types and amounts" of accounts reported (and, presumably, whether some types of accounts are not being reported);
  • the holder's past reporting history, "relative to other entities of the same size or industry";
  • significant merger, acquisition, or disposition activity;
  • owner complaints regarding due diligence (or lack thereof);
  • failure to perform due diligence or provide complete reporting information; and
  • the filing of negative reports in consecutive years.
If many of the items below apply to your company, an unclaimed property audit may be in your future.

Tuesday, July 12, 2011

Show Me State Continues to Break Records for Owner Reunification

Missouri State Treasurer Clint Zweifel is no stranger to us at Escheatable (see here, here, and here for examples).  In fact, Treasurer Zweifel was featured in our very first installment of Meet Your Escheator, a question an answer session with state unclaimed property officials (Ed. Note: stay tuned for the next intallment, coming soon!).

Generally, we have featured the Missouri Unclaimed Property Division for its concerted efforts to pay out unclaimed property.  That's not a typo.

In our recent interview with Treasurer Zweifel, he indicated that his priority was "returning as much property as I can as quickly as possible."  It appears that the Treasurer's efforts are making an impact.  According to the Associated Press, "returned a record $36 million of money and items to people during the 2011 fiscal year" an increase of 4% from last year (which was also a recordbreaking year). 

While nearly all state unclaimed property offices work dilligently to bring in unclaimed funds, Missouri is one of a handful of states that seems to be putting as much thought and energy into paying out unclaimed funds to their rightful owners.

Monday, July 11, 2011

Life Insurance Probe Scorecard - Nevada Brings in $1M and Investigation Expands to 20

The life insurance probe continues.  As we've mentioned a few times (as recently as last week), a number of states (35 at last count) were looking into the death benefit payment practices of life insurers. In particular, the investigation seems to be focused on whether the insurers are properly determining when death benefits are due to beneficiaries. The states allege that the insurers have traditionally actively researched death index information for annuity products (i.e., where the insurer was paying benefits until the policyholder died) but not using those same sources to determine when life insurance benefits became payable to beneficiaries.

We know that at least one company paid California $20 million  to settle unclaimed property claims, as well as $3 million to Florida, and that the investigation has expanded to at least 35 states and 10 insurers.  Now, we can chalk up another settlement.  According to Fox 5 Las Vegas, Nevada "will receive approximately $1 million as the result of an agreement with insurer John Hancock over unclaimed life insurance and annuity contracts."  More worthy of attention is the article's mention that the investigation now includes 20 insurers.

Thus far, the current stats are:
- states involved: 35 (not sure if it is 35 plus D.C., or 35 including D.C., we've seen it both ways)
- insurance companies under investigation: 20
- settlements:  at least $24 million
- potential exposure:  unknown (but possibly in the billions - with a b)

Also worth noting, last week the New York State Insurance Department issued a directive requiring all 172 life insurers authorized to do business in New York to use the Social Security Administration's Master File to identify death benefit payments that may be due.

Wednesday, July 6, 2011

Life Insurance Probe Continues - New York Gets In On The (Martin?) Act

As mentioned a few times before, a number of states (35 at last count) were looking into the death benefit payment practices of life insurers.  In particular, the investigation seems to be focused on whether the insurers are properly determining when death benefits are due to beneficiaries.  The states allege that the insurers have traditionally actively researched death index information for annuity products (i.e., where the insurer was paying benefits until the policyholder died) but not using those same sources to determine when life insurance benefits became payble to beneficiaries.

According to an article published yesterday on, the New York State Attorney General's office has issued subpoenas to 10 insurers (presumably the same ones under investigation by California) seeking "documents and information related to the companies’ procedures around abandoned property."  The article also raises the spectre that New York could use the 1921 Martin Act to gather information and punish violations.  In the Martin Act sounds familiar, it's because that same law was previously used by a well-known New York Attorney General to aggressively investigate allegations of securities fraud.

Tuesday, July 5, 2011

Illinois Unclaimed Property Vault Opening July 11th

As we've discussed elsewhere, the contents of abandoned safe deposit boxes are often forwarded to the state as unclaimed property.  Among the coins, jewelry, memorabilia, and papers are other . . . special items.  Ever wonder what the state is holding?  Well, if you are in Springfield, Illinois during the week of July 11th, you'll get your chance to find out.

According to WJBC ("The Voice of Central Illinois") Illinois State Treasurer Dan Rutherford is opening the state's unclaimed property vault for tours during the week of July 11 (from 9 am to 4 pm).  No word on whether each tour goer will be allowed to take a souvenir.

Friday, July 1, 2011

Did You Know? - Going to Mars

It's time again for Did You Know? On DYK days here at Escheatable, we try provide you with interesting information regarding the unclaimed property laws to amaze your friends and frighten your enemies.

This trip to Mars is brought to you by unclaimed dividends.
According to this article in the San Francisco Chronicle, the State of California is holding $6.1 billion in unclaimed property (bringing in some $633 million in the past year).   To put that number is perspective, $6.1 billion is: