Wednesday, November 30, 2011

Unclaimed Property News Roundup:

Big Badger State Reclaim -- Who says that unclaimed property can only be a modest amount of money?  According to the Chicago Tribune, one Wisconsin woman received nearly a quarter of a million dollars in unclaimed municipal bonds from the Wisconsin Department of Treasury.


Louisiana to Release Annual Unclaimed Property List -- According to NBC 33 News in Baton Rouge, Louisiana, State Treasurer John Kennedy will release the newest list of unclaimed property owners in the Pelican State

Kenyan Unclaimed Property Law Awaiting Presidential Approval -- According to The Standard of Nairobi, Kenya, that country's proposed Unclaimed Financial Assets Bill is awaiting sign off by Kenya's President.  As we noted earlier, the proposed law is very broad in scope and appears to be based upon the Uniform Unclaimed Property Acts in use in the United States.

Pennsylvania Luring Holiday Shoppers -- Fox 43 (Harrisburg, PA), is reporting that Pennsylvania State Treasurer Rob McCord is pitching the Pennsylvania Treasury's eBay site as a "convenient alternative" to the long lines and hassles of traditional retail stores.

Tuesday, November 29, 2011

A New Jersey Gift Card Update

Regular readers (Hi Mom!) know that we've been following the progress of New Jersey's recent gift card legislation from the State Assembly, to the Treasury Department, and, ultimately, to the courts.  When we last left our story, the U.S. Court of Appeals for the Third Circuit enjoined (in English, temporarily suspended) application of parts of the new law, pending a decision by that Court.  That case has been argued, and is currently under consideration by the court -- meaning that a decision can come at any time.  Of course, the timing of the ruling could be important because the holidays are a particularly busy time for gift card sellers.

According to a recent article in NJ Biz, the President of the NJ Retail Merchants Association (one of the plaintiffs in the underlying lawsuit) has gone on record indicating that he does not expect the challenged gift card laws to be in force during the holiday shopping season.  (For detail as to which parts of the law were enjoined, see here).

In other news, some members of the New Jersey Assembly have a bill pending that would reverse all of the changes enacted as part of the 2010 gift card law.  Before anyone gets too excited, however, we note that the bill has been pending for more than a year.

We will continue to follow the Garden State saga.

Monday, November 28, 2011

Washington State Looks to Generate Revenue By Selling Others' Stocks

The Washington State Department of Revenue recently published a proposal to immediately convert securities to cash upon receipt by the DOR.  As the proposal indicates, the current law requires DOR to wait at least three years before selling stocks that are reported as unclaimed property.  The Department anticipates that it will incur $1.3 million in commissions and fee payments to sell the stocks in connection with this "revenue generating" activity.

Assuming that the stocks are sold at market value, how will this increase revenue (especially in light of the commissions apparently charged by DOR's stockbrokers)?  Well, while unclaimed securities are reported to the custody of the state, the state can't use those shares as general revenue (you can't build roads or schools with shares of stock).  By selling the stock immediately, the state is hoping to use the money immediately (while paying the sale price -- less fees -- to the owner).

This is an example of particularly owner-unfriendly regulation.  The proposed rule allows the state to immediately sell securities (given the current market, likely at a low price) and forces the holder to pay "administrative costs" to obtain the property.  Moreover, it is particularly inconsistent with the state's role as mere custodian (as opposed to title owner) of the property.  While states are (quite understandably) looking to generate more revenue and are aggressively enforcing unclaimed property laws to that end, they should not be changing the rules to the detriment of the rightful owner.

Wednesday, November 23, 2011

Examples of Unclaimed Property: Uncashed Checks, Dormant Accounts, Suitcases Full of Cash

Gone are the days when unclaimed property laws applied only to dormant bank accounts and unredeemed insurance policies.  Today's laws are increasingly broad, and apply to nearly every type of property you can imagine (and, by virtue of the catch-all "all other property" provision, even some types of property you can't imagine).

Nonetheless, there does not seem to be any provision of the Australian unclaimed property laws that expressly cover suitcases containing "roughly $1.28 million in $50 bills."  According to Yahoo's blog The Sideshow, that's exactly what someone left in a Sydney cafe on Tuesday.  Police are investigating.


Happy Thanksgiving to our U.S. readers.  As well as a happy St. George's Day, Labor Thanksgiving Day, and Dan Državnosti elsewhere.

Thursday, November 17, 2011

New Quebec Unclaimed Property Act

While our focus here is generally on U.S. escheat laws, there is a whole developing world of unclaimed property regulation out there.  In Canada, for example, certain provinces have unclaimed property laws, while others do not.  One of the provinces that does is Quebec, which passed a new unclaimed property law this summer. 

The new law applies to a variety of property types, including
  • bank deposits,
  • checks (actually, cheques), 
  • securities, 
  • demutualization proceeds, 
  • trust property, 
  • property held in safe deposit boxes,
  • insurance proceeds,
  • pension funds, and
  • other property to be determined by regulation
Most of these items are subject to a 3 year dormancy period.  The new law also provides for audits and penalties for noncompliance.

Tuesday, November 15, 2011

Unclaimed Property News Roundup:

Illinois Launches "Operation Reunite" For Veterans -- According to the Chicago Sun-Times, Illinois State Treasurer Dan Rutherford has commenced a new initiative to return medals and other military items to veterans.  According to the article, the Illinois Treasurer has over 200 military items, including 15 Purple Hearts, a Navy Cross, and other awards and artifacts.  For more information on Operation Reunite, check out the Treasurer's website.

Wisconsin Collects $20 Million --  According to the blog of the Wisconsin State Treasury, the Badger State raked in more than $20 million during the past reporting period.  Interestingly, the Treasury also produced this video to assist holders with the reporting process.

New Yorker Missing $1.7 Million -- Nina Pineda of Channel 7 "Eyewitness News" in New York City recently published an article (with video) about unclaimed property held by the New York State Office of Unclaimed Funds.  According to the article, the OUF is holding more than $1.7 million for one lucky New Yorker.  Perhaps unsurprisingly, the last known address of that individual (who is not being disclosed) was in Manhattan.

Maine & ACS Present:  A History of Unclaimed Property Law -- About a month ago, the Maine State Treasury & ACS Unclaimed Property Clearinghouse hosted an Unclaimed Property Holder Seminar.  The slides that accompanied that presentation give a good concise history of the development of unclaimed property laws.  If you are interested in the history of unclaimed property law (and, really, who isn't?) you should check it out.

Wednesday, November 9, 2011

Meet Your (New) Escheators - Unclaimed Property Related Election Results

Tuesday was election day.  While there were not many well publicized or nationally watched races this year, there were nonetheless some elections that will have an effect on unclaimed property administration. Specifically, two states -- Kentucky and Mississippi -- held elections for State Treasurer (which, in both states runs the unclaimed property office).

In Kentucky, incumbent Todd Hollenbach won reelection to another term.  If Mr. Hollenbach's name sounds familiar, it is because he was the named defendant in the lawsuit brought by American Express challenging Kentucky's decision to shorten the dormancy period for travelers checks to 7 years down from 15.

In Mississippi, Lynn Fitch was elected to be the next State Treasurer.

Louisiana was also originally slated to have an election for State Treasurer this year, but incumbent John Neely Kennedy was unopposed.

Tuesday, November 8, 2011

Unclaimed Property News Roundup

Some miscellaneous items while you're still basking in you post-fall reporting freedom:

Delaware Publishes Unclaimed Property Owner List -- On October 28, Delaware published its most recent list of unclaimed property being held by the state.  As we noted last year at this time, because of Delaware's interpretation of the priority rules of Texas v. New Jersey (in particular, that foreign-owned property held by Delaware incorporated entities is escheatable to Delaware) this is probably bigger news to large non-U.S. companies than it necessarily is for Delaware residents.

Oklahoma Publishes FY 2011 Reclaim Stats -- Oklahoma has recently published a chart showing the amounts it paid in FY 2011.  According to the information the state paid out amounts as little as $0.03 and at least one claim in excess of $1 million.  While total reclaim dollar amounts were not disclosed the unclaimed property department of the Sooner State apparently paid out on more than 12,000 claims in the past year.

Monday, November 7, 2011

New York Regulators Team Up to Investigate Unpaid Life Insurance Benefits & A Scorecard Update

According to an article in Friday's Wall Street Journal, the NY Attorney General's Office (the state's highest ranking law enforcement official) and the NY Comptroller's Office (the regulator responsible for administering the state's unclaimed property laws) are both investigating the Empire State's life insurance companies to determine whether death benefits are being paid on a timely basis.  As we mentioned in July, the controversy revolves around the insurers' use (or, more to the point, alleged non-use) of the macabre sounding "Social Security Death Index" to determine whether or not life insurance benefits have become payable.  Though state laws generally do not explicitly require the use of the SSN index, some regulators have complained that insurers use the SSN Index to stop paying annuities (i.e., products that pay out until death), but don't use that same information with regard to the payment of life insurance benefits (i.e., those products that pay out upon death).

As the Journal article points out, insurance regulators in New York sent a request letter to all insurance companies in the state asking them to check their policy lists against the Index.  According to the Journal, the regulators are considering making resort to the SSN index a permanent regulatory requirement.  The regulators have issued a press release concerning their joint investigation.

In separate (but related) news, the Rutland (VT) Herald is reporting that Vermont expects to get in excess of $500,000 from a settlement with a national life insurance company regarding the death benefit investigation.

Friday, November 4, 2011

What Have We Learned?

Congratulations!  Another fall reporting cycle is completed.  For many (if not most) there was likely a mad dash at the finish to incorporate items from new or changed business units, new reporting and/or administrative procedures, and efforts to comply with updated or changed laws.  Everyone in the unclaimed property holder reporting business is certainly entitled to a rest.  (Though for those of you who work for states, your work is just beginning).

Now that you have a moment to breathe, it is also time to take stock of your process and consider how improvements can be made to streamline and/or improve the process for next year.  Perhaps in the rush to meet reporting deadlines, you had discussions with contacts in management, or the legal department, or risk management, who now have an idea (perhaps for the first time) of what you do for the company.  Since you are on the radar, now is the time to request whatever assistance you may need to make your process better.  Similarly, you may have recently learned some things about your company's business practices that have an impact on how unclaimed property is identified, tracked or reported.  Now is the time to put that knowledge to use and incorporate it into your procedures and best practices.

Enjoy some rest; then get back to work :)